[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 1998 Edition]
[From the U.S. Government Printing Office]


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          20



          Employees' Benefits



          PART 500 TO END

                         Revised as of April 1, 1998

          CONTAINING
          A CODIFICATION OF DOCUMENTS
          OF GENERAL APPLICABILITY
          AND FUTURE EFFECT
          AS OF APRIL 1, 1998
 
          With Ancillaries
          Published by
          the Office of the Federal Register
          National Archives and Records
          Administration
          as a Special Edition of
          the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 1998



               For sale by U.S. Government Printing Office
 Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328



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                            Table of Contents



                                                                    Page
  Explanation.................................................       v


  Title 20:
    Chapter IV--Employees' Compensation Appeals Board, 
        Department of Labor...................................       3
    Chapter V--Employment and Training Administration, 
        Department of Labor...................................      11
    Chapter VI--Employment Standards Administration, 
        Department of Labor...................................     657
    Chapter VII--Benefits Review Board, Department of Labor...     859
    Chapter VIII--Joint Board for the Enrollment of Actuaries.     877
    Chapter IX--Office of the Assistant Secretary for 
        Veterans' Employment and Training, Department of Labor     909
  Finding Aids:
    Table of CFR Titles and Chapters..........................     919
    Alphabetical List of Agencies Appearing in the CFR........     935
    List of CFR Sections Affected.............................     945



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   Cite this Code:  CFR

   To cite the regulations in this volume use title, part and
   section number. Thus,  20 CFR 501.1 refers to title 20, part
   501, section 1.

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 1998), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
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instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I), and Acts Requiring Publication 
in the Federal Register (Table II). A list of CFR titles, chapters, and 
parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
[email protected].

SALES

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ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, The United States 
Government Manual, the Federal Register, Public Laws, Weekly Compilation 
of Presidential Documents and the Privacy Act Compilation are available 
in electronic format at www.access.gpo.gov/nara (``GPO Access''). For 
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(toll-free). E-mail, [email protected].

[[Page vii]]

    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
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site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 1998.



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                               THIS TITLE

    Title 20--Employees' Benefits is composed of three volumes. The 
first volume, containing parts 1-399, includes all current regulations 
issued by the Office of Workers' Compensation Programs, Department of 
Labor and the Railroad Retirement Board. The second volume, containing 
parts 400-499, includes all current regulations issued by the Social 
Security Administration. The third volume, containing part 500 to End, 
includes all current regulations issued by the Employees' Compensation 
Appeals Board, the Employment and Training Administration, the 
Employment Standards Administration, the Benefits Review Board, the 
Office of the Assistant Secretary for Veterans' Employment and Training 
(all of the Department of Labor) and the Joint Board for the Enrollment 
of Actuaries. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of April 1, 1998.

    Redesignation tables appear in the Finding Aids section of the first 
and second volumes and an Index to chapter III appears in the second 
volume.

    For this volume, Ruth Reedy Green was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

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[[Page 1]]



                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains part 500 to end)

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  Editorial Note: Other regulations issued by the Department of Labor 
appear in title 20, chapter I, title 29, subtitle A and chapters II, IV, 
V and XVII, title 41, chapters 50 and 60 and title 48, chapter 29.
                                                                    Part

Chapter iv--Employees' Compensation Appeals Board, 
  Department of Labor.......................................         501


Chapter v--Employment and Training Administration, 
  Department of Labor.......................................         601


Chapter vi--Employment Standards Administration, Department 
  of Labor..................................................         701


Chapter vii--Benefits Review Board, Department of Labor.....         801


Chapter viii--Joint Board for the Enrollment of Actuaries...         900


Chapter ix--Office of the Assistant Secretary for Veterans' 
  Employment and Training, Department of Labor..............        1001

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CHAPTER IV--EMPLOYEES' COMPENSATION APPEALS BOARD, DEPARTMENT OF LABOR




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Part                                                                Page
501             Rules of procedure..........................           5

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PART 501--RULES OF PROCEDURE--Table of Contents




Sec.
501.1  Definitions.
501.2  Scope and applicability of rules; composition and jurisdiction of 
          the Board.
501.3  Application for review.
501.4  Transmittal of record.
501.5  Oral argument.
501.6  Decisions.
501.7  Petition for reconsideration.
501.8  Docket of proceedings; inspection of docket and records.
501.9  Regulation of proceedings.
501.10  Number of copies of pleadings and related documents; service; 
          computation of time.
501.11  Appearances.
501.12  Intervention.
501.13  Place of proceedings.

    Authority:  Sec. 32, 39 Stat. 749, 5 U.S.C. 8145; sec. 3, 
Reorganization Plan No. 2 of 1946, 60 Stat. 1095; 3 CFR 1943-48 Comp., 
p. 1064; sec. 2, Reorganization Plan No. 19 of 1950, 64 Stat. 1272; 3 
CFR 1949-53 Comp., p. 1010.

    Source:  27 FR 12186, Dec. 8, 1962, unless otherwise noted.



Sec. 501.1  Definitions.

    (a) Act means the Federal Employees' Compensation Act and any 
statutory extension or application thereof.
    (b) Board means the Employees' Compensation Appeals Board.
    (c) Office means the Office of Workers' Compensation Programs and in 
the case of employees of the Canal Zone Government and of the Panama 
Canal Company, the Governor of the Canal Zone.
    (d) Director means the Director of the Office and in the case of 
employees of the Canal Zone Government and of the Panama Canal Company, 
the Governor of the Canal Zone.
    (e) Party means any person admitted and named as a party on the 
docket of the Board, including any intervenors.
    (f) Counsel includes any person who is a member in good standing of 
the bar of the Supreme Court of the United States or the highest court 
of any State, territory, or the District of Columbia.
[27 FR 12186, Dec. 8, 1962, as amended at 29 FR 13519, Oct. 1, 1964]



Sec. 501.2  Scope and applicability of rules; composition and jurisdiction of the Board.

    (a) The regulations in this part provide the rules of practice of 
the Board in hearing and deciding appeals from final decisions of the 
Office.
    (b) The Board consists of three members appointed by the Secretary 
of Labor, one of whom is designated as Chairman of the Board and 
administrative officer.
    (c) The Board has jurisdiction to consider and decide appeals from 
the final decision of the Office in any case arising under the Act. The 
Board may review all relevant questions of law, fact, and discretion in 
such cases. There shall be no appeal with respect to any interlocutory 
matter disposed of by the Office during the pendency of a case. The 
review of a case shall be limited to the evidence in the case record 
which was before the Office at the time of its final decision.



Sec. 501.3  Application for review.

    (a) Who may file. Any person adversely affected by a final decision 
of the Director, or his duly authorized representative, may file an 
application for review of such decision by the Board.
    (b) Place of filing. Any application for review shall be filed with 
the Clerk of the Board, Employees' Compensation Appeals Board, U.S. 
Department of Labor, Washington, DC 20210.
    (c) Form of application; contents. An application for review should 
be filed with the Board upon Form AB-1 (Application for Review). Any 
application made without the use of the form shall contain the following 
information: The full name and address of the applicant, the name of the 
injured or deceased employee, the employing establishment, the case file 
number assigned to the case by the Office, a description of the 
particular injury involved, the date of the injury, the place of injury, 
and the date of the decision being appealed. If the applicant is being 
represented by another person in the proceeding, the name and address of 
such representative should be stated. Each application shall include a 
succinct statement indicating the contentions of the applicant and 
describing with particularity

[[Page 6]]

any findings of fact, conclusions of law, or exercise of (or failure to 
exercise) discretion complained of. Any application containing 
incomplete information shall be returned to the applicant with a 
description of the additional information needed and a reasonable 
opportunity for furnishing any such information shall be allowed.
    (d) Time for filing. (1) Except as provided in paragraph (d)(2) of 
this section, any application for review by a person residing within the 
United States or Canada must be filed within 90 days from the date of 
issuance of the final decision of the Director, and any application for 
review by a person residing outside the United States or Canada must be 
filed within 180 days from the date of issuance.
    (2) For good cause shown, the Board may in its discretion waive a 
failure to file an application within the time limitations provided in 
paragraph (d)(1) of this section, but for no longer than one year from 
the date of issuance of the final decision of the Director.
    (3) Date of filing--(i) Date or receipt. Except as otherwise 
provided in this section, a notice of appeal is considered to have been 
filed only as of the date it is received in the office of the clerk of 
the Board.
    (ii) Date of mailing. If the notice is sent by mail and the fixing 
of the date of delivery as the date of filing would render the appeal 
untimely, it will be considered to have been filed as of the date of 
mailing. The date appearing on the postmark (when available and legible) 
shall be prima facie evidence of the date of mailing. If there is no 
postmark or it is not legible, other evidence, such as, but not limited 
to, certified mail receipts, certificate of service and affidavits, may 
be used to establish the date of mailing.
    (e) Briefs and supporting statements. Any application for review may 
be accompanied by a brief or supporting statement.
[27 FR 12186, Dec. 8, 1982, as amended at 53 FR 49491, Dec. 7, 1988]



Sec. 501.4  Transmittal of record.

    (a) The Board shall serve upon the Director a copy of each 
application for review and any brief or supporting statement 
accompanying it. Within 60 days from the date of such service, the 
Director, through his legal representative, the Solicitor of Labor, 
shall transmit to the Board the record of the proceeding to which the 
application refers and a statement in support of his decision, or other 
pleading, as appropriate, signed on his behalf by his legal 
representative.
    (b) On application of the Director, the Board may in its discretion 
extend the 60-day time for submittal to the Board of the record of 
proceedings and accompanying statement or pleading.
[42 FR 62471, Dec. 13, 1977]



Sec. 501.5  Oral argument.

    (a) Notice. Whenever any party requests an opportunity to present 
oral argument the Board shall schedule the case for argument. Each party 
shall be notified at least 10 days before the date of argument. The 
notice shall state the issues to be heard, as determined by the Board.
    (b) Time allowed. Generally not more than 1 hour shall be allowed 
for oral argument by any party although in appropriate cases the Board 
may in its discretion extend or shorten the time allowed.
    (c) Failure to respond to notice. Failure to respond to a notice of 
oral argument shall not prejudice the rights of any party to the 
proceeding. The Board in its discretion may set the case for further 
argument upon notice or it may proceed to dispose of the appeal pursuant 
to Sec. 501.6.



Sec. 501.6  Decisions.

    (a) The decision of the Board shall contain a written opinion 
setting forth the reasons for the action taken and an appropriate order. 
The decision may consist of affirmance, reversal, remand for further 
development of the evidence, or other appropriate action. A copy of the 
decision shall be sent by the Board to all parties in interest. The case 
record shall be returned to the Director with a copy of the decision.
    (b) A decision of not less than two members shall be the decision of 
the Board.
    (c) The decision of the Board shall be final as to the subject 
matter appealed and such decision shall not be subject to review, except 
by the Board.

[[Page 7]]

    (d) The decision of the Board shall be final upon the expiration of 
30 days from the date of the filing of the order, unless the Board shall 
in its order fix a different period of time or reconsideration by the 
Board is granted.



Sec. 501.7  Petition for reconsideration.

    (a) Procedure for filing. A petition for reconsideration of a 
decision of the Board may be filed with the Board within 30 days from 
the date of the order, or, if another period is specified in the order, 
then prior to the time when the order becomes final. The petition shall 
state the grounds relied upon, including any matters claimed to have 
been erroneously decided and shall specify the alleged errors. The 
petition may be in letter form.
    (b) Answer; procedure for disposition of petitions. Upon the filing 
of a petition for reconsideration, each of the other parties to the 
proceeding may file an answer thereto within such time as may be fixed 
by the Board. If reconsideration should be granted, reargument upon 
reasonable notice may be allowed in the discretion of the Board. After 
reconsideration of a case the Board shall either grant or deny the 
petition.



Sec. 501.8  Docket of proceedings; inspection of docket and records.

    (a) Maintenance of docket. A docket of all proceedings shall be 
maintained by the Board. Each proceeding shall be assigned a number in 
chronological order upon the date on which an application for review is 
received. Each proceeding shall be generally considered in the order in 
which it is docketed, although for good cause shown the Board may 
advance the order in which a particular case is to be considered. 
Correspondence or further applications in connection with any pending 
case shall refer to the docket number of that case.
    (b) Inspection of docket and records. The docket of the Board shall 
be open to public inspection. The Board shall publish its decisions in 
such form as to be readily available for inspection, and shall allow the 
public inspection thereof at the permanent location of the Board. 
Inspection of the papers and documents included in the case record of 
any proceeding before the Board shall be permitted or denied in 
accordance with the standards provided in Sec. 1.22 of this title. The 
Chairman of the Board shall exercise the functions prescribed in 29 CFR 
70.74a.
[27 FR 12186, Dec. 8, 1962, as amended at 37 FR 26710, Dec. 15, 1972]



Sec. 501.9  Regulation of proceedings.

    The proceedings shall be conducted under the supervision of the 
Chairman or Acting Chairman, who shall regulate such matters as the 
granting of continuances, acceptance of briefs and other procedural 
matters.



Sec. 501.10  Number of copies of pleadings and related documents; service; computation of time.

    (a) Except as provided in paragraph (b) of this section, any 
application, pleading, petition, brief or other memorandum shall be 
filed in duplicate (original and 1 copy) with the Board; the Board shall 
serve the copy upon the other party.
    (b) Instead of filing the duplicate of any such document with the 
Board, the party submitting it may serve the duplicate or copy directly 
upon the Director and make a notation to that effect upon the copy filed 
with the Board.
    (c) Any notice or order required under this part to be given or 
served shall be by certified or registered mail or by personal service.
    (d) Computation of Time. (1) In computing any period of time 
prescribed or allowed by these rules or by direction of the Board, the 
first day counted shall be the day after the event from which the time 
period begins to run, and the last day for filing shall be included in 
the computation. If the last day for filing falls on a Saturday, Sunday, 
or Federal holiday, the first working day thereafter shall be the last 
day for timely filing. For purposes of computing the time for filing a 
notice of appeal or a petition for reconsideration, the event which 
commences the running of the time period shall be construed as occurring 
on the date the relevant decision is issued, and not the date the 
decision is actually received.
    (2) Whenever a paper is served on the Board by mail, paragraph 
(d)(1) of this section will be deemed complied with if the envelope 
containing the paper is

[[Page 8]]

postmarked within the time period allowed, computed as in paragraph 
(d)(1) of this section. If there is no postmark, or it is not legible, 
other evidence, such as, but not limited to, certified mail receipts, 
certificate of service and affidavits, may be used to establish the date 
of mailing.
    (3) A waiver or an extension of the time limitations for filing a 
paper, other than a notice of appeal or a petition for reconsideration, 
may be requested by motion.
[27 FR 12186, Dec. 8, 1962, as amended at 53 FR 49491, Dec. 7, 1988]



Sec. 501.11  Appearances.

    (a) Representation. In any proceeding before the Board, a party may 
appear in person, or by counsel or any other duly authorized person, 
including any accredited representative of an employee organization. No 
person shall be recognized as representing an appellant or intervenor 
unless there shall be filed with the Board a statement in writing, 
signed by the party to be represented, authorizing such representation. 
Such representative when accepted shall continue to be recognized unless 
he should abandon such capacity, withdraw, or the appellant or 
intervenor directs otherwise.
    (b) Former members of the Board; other employees of the Department 
of Labor. A former member of the Board shall not be allowed to 
participate as counsel or other representative before the Board in any 
proceeding until two years from the termination of his status as a Board 
member. The practice of other former employees of the Department of 
Labor are governed by 29 CFR 2.2 and 2.3.
    (c) Debarment of counsel or other representative. Whenever in any 
proceeding the Board finds that a person acting as counsel or other 
representative for any party to the proceeding is guilty of unethical or 
unprofessional conduct, the Board may order that such person be excluded 
from further acting as counsel or other representative in such 
proceeding. An appeal may be taken to the Secretary of Labor from such 
an order, but the proceeding shall not be delayed or suspended pending 
disposition of the appeal, although the Board may suspend the proceeding 
for a reasonable time for the purpose of enabling the party to obtain 
different counsel or other representative. Whenever the Board has issued 
an order precluding a person from further acting as counsel or other 
representative in a proceeding, the Board shall within a reasonable time 
thereafter submit to the Secretary of Labor a report of the facts and 
circumstances surrounding the issuance of the order, and shall recommend 
what action the Secretary of Labor should take in regard to the 
appearance of such person as counsel or other representative in other 
proceedings before the Board. Before any action is taken debarring such 
person as counsel or representative from other proceedings, he shall be 
furnished notice and opportunity to be heard on the matter.
    (d) Fees. No claim for legal or other service rendered in respect to 
a proceeding before the Board to or on account of any person, shall be 
valid unless approved by the Board or by a member thereof. No contract 
for a stipulated fee or for a fee upon a contingent basis shall be 
recognized by the Board, and no fee for service shall be approved except 
upon an application to the Board supported by a sufficient statement of 
the extent and character of the necessary work done before the Board on 
behalf of the interested party. Except where such representation is 
gratuitous, the fee approved by the Board, or by a member thereof, shall 
be reasonably commensurate with the actual necessary work performed by 
such representative, taking into account the capacity in which the 
representative has appeared, the amount of the compensation involved, 
and the circumstances of the appellant.



Sec. 501.12  Intervention.

    The Board may permit any person whose rights may be affected by any 
proceeding before the Board to intervene therein whenever such person 
shows in a written petition to intervene that such rights are so 
affected. The petition should state with precision and particularity (a) 
the rights affected; and (b) the nature of any argument he intends to 
make.

[[Page 9]]



Sec. 501.13  Place of proceedings.

    The Board shall sit in Washington, DC.

[[Page 11]]



 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR




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Part                                                                Page
601             Administrative procedure....................          13
602             Quality control in the Federal-State 
                    unemployment insurance system...........          18
603             Income and eligibility verification system..          26
606             Tax credits under the Federal Unemployment 
                    Tax Act; advances under Title XII of the 
                    Social Security Act.....................          29
609             Unemployment compensation for Federal 
                    civilian employees......................          38
614             Unemployment compensation for ex-
                    servicemembers..........................          50
615             Extended benefits in the Federal-State 
                    Unemployment Compensation Program.......          71
616             Interstate arrangement for combining 
                    employment and wages....................          90
617             Trade adjustment assistance for workers 
                    under the Trade Act of 1974.............          94

618-621

[Reserved]

625             Disaster unemployment assistance............         154
626             Introduction to the regulations under the 
                    Job Training Partnership Act............         179
627             General provisions governing programs under 
                    Titles I, II, and III of the act........         189
628             Programs under Title II of the Job Training 
                    Partnership Act.........................         232

629-630

[Reserved]

631             Programs under Title III of the Job Training 
                    Partnership Act.........................         252
632             Indian and Native American employment and 
                    training programs.......................         271

633             Migrant and seasonal farmworker programs....         302

634             Labor market information programs under 
                    Title IV, Part E of the Job Training 
                    Partnership Act.........................         317
636             Complaints, investigations and hearings.....         317

[[Page 12]]

637             Programs under Title V of the Job Training 
                    Partnership Act.........................         326
638             Job Corps program under Title IV-B of the 
                    Job Training Partnership Act............         329
639             Worker adjustment and retraining 
                    notification............................         349
640             Standard for benefit payment promptness--
                    unemployment compensation...............         359
641             Senior community service employment program.         362
645             Provisions governing welfare-to-work grants.         381
646             Provisions governing the Indian and Native 
                    American welfare-to-work grant programs.         399
650             Standard for appeals promptness--
                    unemployment compensation...............         407
651             General provisions governing the Federal-
                    State Employment Service System.........         409
652             Establishment and functioning of State 
                    employment services.....................         413
653             Services of the Employment Service System...         419
654             Special responsibilities of the Employment 
                    Service System..........................         437
655             Temporary employment of aliens in the United 
                    States..................................         446
656             Labor certification process for permanent 
                    employment of aliens in the United 
                    States..................................         599
657

Provisions governing grants to State agencies for employment services 
activities [Reserved]

658             Administrative provisions governing the Job 
                    Service System..........................         627

[[Page 13]]



PART 601--ADMINISTRATIVE PROCEDURE--Table of Contents




 Subpart A--Approval, Certification and Findings With Respect to State 
  Laws and Plans of Operation for Normal and Additional Tax Credit and 
                             Grant Purposes

Sec.
601.1  General.
601.2  Approval of State unemployment compensation laws.
601.3  Findings with respect to State laws and plans of operation.
601.4  Certification for tax credit.
601.5  Withholding payments and certifications.

                 Subpart B--Grants, Advances and Audits

601.6  Grants for administration of unemployment insurance and 
          employment service.
601.7  [Reserved]
601.8  Agreement with Postmaster General.
601.9  Audits.

    Authority:  5 U.S.C. 301; 26 U.S.C. Chapter 23; 29 U.S.C. 49k; 38 
U.S.C. Chapters 41 and 42; 39 U.S.C. 3202(a)(1)(E) and 3202 note; 42 
U.S.C. 1302; and Secretary of Labor's Order No. 4-75, 40 FR 18515.

    Source:  15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, unless 
otherwise noted.



 Subpart A--Approval, Certification and Findings With Respect to State 
  Laws and Plans of Operation for Normal and Additional Tax Credit and 
                             Grant Purposes



Sec. 601.1  General.

    (a) State unemployment compensation laws are approved and certified 
as provided in section 3304 of the Internal Revenue Code of 1954; 
findings are made regarding reduced rates permitted by a State law 
(section 3303(a) of the Internal Revenue Code of 1954) and such laws are 
certified as provided in section 3303(b) of the Internal Revenue Code of 
1954; findings are made regarding the inclusion of specified provisions 
(section 303(a) of the Social Security Act) in State laws approved under 
section 3304(a) of the Internal Revenue Code of 1954; findings are made 
whether the States have accepted the provisions of the Wagner-Peyser Act 
and whether their plans of operation for public employment offices 
comply with the provisions of said Act.
    (b) Normal and additional tax credit is given to taxpayers against 
taxes imposed by section 3301 of the Internal Revenue Code of 1954.
    (c) Grants of funds are made to States for administration of their 
employment security laws if their unemployment compensation laws and 
their plans of operation for public employment offices meet required 
conditions of Federal law. (Section 303(a) of the Social Security Act; 
section 3304(a) of the Internal Revenue Code of 1954; sections 6, 7, and 
8 of the Wagner-Peyser Act.)
    (d) As used throughout this Part, the terms ``Secretary'' or 
``Secretary of Labor'' shall refer to the Secretary of Labor, U.S. 
Department of Labor, or his or her designee.
[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 61 
FR 19983, May 3, 1996]



Sec. 601.2  Approval of State unemployment compensation laws.

    States may at their option submit their unemployment compensation 
laws for approval (section 3304(a) of the Internal Revenue Code of 
1954).
    (a) Submission. The States submit to the Regional Administrator, 
Employment and Training Administration (RAETA) two copies of the State 
unemployment compensation law properly certified by an authorized State 
official to be true and complete, together with a written request for 
approval.
    (b) Review of State law. The RAETA reviews the State law and 
forwards one copy to the central office of the Employment and Training 
Administration with his comments. The central office reviews the RAETA's 
comments and analyzes the State law from the standpoint of the 
requirements of section 3304(a) of the Internal Revenue Code of 1954.
    (c) Approval. The Secretary of Labor determines whether the State 
law contains the provisions required by section 3304(a) of the Internal 
Revenue Code of 1954. If the State law is approved, the Secretary 
notifies the Governor of the State within 30 days of the submission of 
such law.
    (d) Certification. On December 31 of each taxable year the Secretary 
of

[[Page 14]]

Labor certifies, for the purposes of normal tax credit (section 
3302(a)(1) of the Internal Revenue Code of 1954), to the Secretary of 
the Treasury each State the law of which he has previously approved. 
(See also Sec. 601.5.)

(Approved by the Office of Management and Budget under control number 
1205-0222)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984; 50 FR 51241, Dec. 16, 1985]



Sec. 601.3  Findings with respect to State laws and plans of operation.

    For purposes of grants, findings are made regarding the inclusion in 
State unemployment compensation laws, approved under section 3304(a) of 
the Internal Revenue Code of 1954, of provisions required by section 
303(a) of the Social Security Act (see Sec. 601.2); findings are also 
made whether a State has accepted the provisions of the Wagner-Peyser 
Act and whether its plan of operation for public employment offices 
complies with the provisions of said act. For purposes of additional tax 
credit, findings are made regarding reduced rates of contributions 
permitted by the State law (section 3303(a) (1) of the Internal Revenue 
Code of 1954).

So that the Secretary of Labor may be enabled to determine the status of 
State laws and plans of operation, all relevant State materials, such as 
statutes, executive and administrative orders, legal opinions, rules, 
regulations, interpretations, court decisions, etc., are required to be 
submitted currently.
    (a) Submission. The States submit currently to the RAETA two copies 
of relevant State material, properly certified by an authorized State 
official to be true and complete.
    (b) Review. The RAETA reviews the State material and forwards one 
copy to the central office with his comments. The central office reviews 
the material from the standpoint of its conformity with section 303(a) 
of the Social Security Act, section 3303(a) of the Internal Revenue Code 
of 1954, or the Wagner-Peyser Act, as the case may be.
    (c) Findings. The Secretary makes findings as provided in the cited 
sections of the Federal law. In the event that the Secretary is unable 
to make the findings required for certification for payment or for 
certification of the law for purposes of additional tax credit, further 
discussions with State officials are undertaken.

(Approved by the Office of Management and Budget under control number 
1205-0222)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984; 50 FR 51241, Dec. 16, 1985]



Sec. 601.4  Certification for tax credit.

    (a) Within 30 days after submittal of a State unemployment 
compensation law for such purpose, the Secretary certifies to the State 
agency, in accordance with the provisions of section 3303(b)(3) of the 
Internal Revenue Code of 1954, his findings regarding reduced rates of 
contributions allowable under such law. On December 31 of each taxable 
year the Secretary certifies to the Secretary of the Treasury the law of 
each State, certified with respect to such year under section 3304 of 
the Internal Revenue Code of 1954 (see Sec. 601.2), which he finds 
allows reduced rates with respect to such taxable year only in 
accordance with the provisions of section 3303(a) of the Internal 
Revenue Code of 1954.
    (b) With regard to certification for payment, see Sec. 601.6.



Sec. 601.5  Withholding payments and certifications.

    (a) When withheld. Payment of funds to States or yearend 
certification of State laws, or both, are withheld when the Secretary 
finds, after reasonable notice and opportunity for hearing:
    (1) That any provision required by section 303(a) of the Social 
Security Act is no longer included in the State unemployment 
compensation law; or
    (2) That the State unemployment compensation law has been so changed 
as no longer to meet the conditions required by section 3303(a) of the 
Internal Revenue Code of 1954 (section 3303(b)(3) of the Internal 
Revenue Code); or
    (3) That the State unemployment compensation law has been so amended 
as no longer to contain the provisions specified in section 3304(a) or 
has failed to comply substantially with any such provision and such 
finding has become

[[Page 15]]

effective (section 3304(c) of the Internal Revenue Code of 1954); or
    (4) That in the administration of the State unemployment 
compensation law there has been a failure to comply substantially with 
required provisions of such law (section 303(b)(2) of the Social 
Security Act and section 3303(b)(3) of the Internal Revenue Code of 
1954); or
    (5) That in the administration of the State unemployment 
compensation law there has been a denial, in a substantial number of 
cases, of benefits due under such law, except that there may be no such 
finding until the question of entitlement has been decided by the 
highest judicial authority given jurisdiction under such State law 
(section 303(b)(1) of the Social Security Act); or
    (6) That a State fails to make its unemployment compensation records 
available to the Railroad Retirement Board or fails to cooperate with 
Federal agencies charged with the administration of unemployment 
compensation laws (section 303(c) of the Social Security Act); or
    (7) That a State no longer has a plan of operation for public 
employment offices complying with the provisions of the Wagner-Peyser 
Act; or
    (8) That a State agency has not properly expended, in accordance 
with an approved plan of operation, the Federal monies paid it for 
administration of its public employment service.
    (b) Informal discussion. Such hearings are generally not called, 
however, until after every reasonable effort has been made by regional 
and central office representatives to resolve the question involved by 
conference and discussion with State officials. Formal notification of 
the date and place of a hearing does not foreclose further negotiations 
with State officials.
    (c) Notice of noncertification. If, at any time during the taxable 
year, the Secretary of Labor has reason to believe that a State whose 
unemployment compensation law he has previously approved may not be 
certified, he promptly notifies the Governor of the State to that effect 
(section 3304(d) of the Internal Revenue Code of 1954).
    (d) Notice of hearing. Notice of hearing is sent by the Secretary of 
Labor to the State employment security agency. The notice sets forth the 
purpose of the hearing, the time, date, and place at which the hearing 
will be held, and the rules of procedure which will be followed. At a 
hearing the State is given an opportunity to present arguments and all 
relevant evidence, written or oral. The Secretary makes the necessary 
determination or findings, on the basis of the record of such hearings. 
A notice of the Secretary's determination or finding is sent to the 
State employment security agency.
    (e) Civil Rights Act issues. To the extent that any proposed 
withholding of funds involves circumstances within the scope of title VI 
of the Civil Rights Act of 1964 and the regulations promulgated 
thereunder, the procedure set forth in 29 CFR part 31 shall be 
applicable.
    (f) Tax credit reductions. (1) Section 3302(c)(2) of the Internal 
Revenue Code of 1954 prescribes the conditions under which the total 
credits otherwise allowable under section 3302 for a taxable year in the 
case of a taxpayer subject to the unemployment compensation law of a 
State shall be reduced on account of an outstanding balance of advances 
made to the State pursuant to title XII of the Social Security Act. As 
amended by section 110(a) of the Emergency Compensation and Special 
Unemployment Assistance Extension Act of 1975 (Pub. L. 94-45, approved 
June 30, 1975; 89 Stat. 236, 239), and as further amended by title II of 
the Emergency Unemployment Compensation Extension Act of 1977 (Pub. L. 
95-19, approved April 12, 1977; 91 Stat. 39, 43), the incremental 
reductions in total credits will not apply to a State with respect to 
the taxable years beginning on January 1, 1975, January 1, 1976, January 
1, 1977, January 1, 1978, and January 1, 1979, if the Secretary of Labor 
finds as to each such year that the State has studied and taken 
appropriate action with respect to the financing of its unemployment 
compensation program so as substantially to accomplish the purpose of 
restoring the fiscal soundness of the State's unemployment account in 
the Unemployment Trust Fund and permitting the repayment within a 
reasonable time of any advances made to

[[Page 16]]

the State's account pursuant to title XII of the Social Security Act.
    (2) The Secretary of Labor's finding with respect to a State as to 
any of the taxable years 1975, 1976, 1977, 1978, and 1979 will be based 
on his determination as to whether the State has taken appropriate 
action resulting in:
    (i) Amendment of its unemployment compensation law, effective in or 
prior to the taxable year with respect to which the finding is made, or 
effective at the beginning of the succeeding taxable year, increasing 
the State's unemployment tax rate, increasing the State's unemployment 
tax base, or changing the State's experience rating formula, or a 
combination of such changes, so as to be estimated by the Secretary to 
achieve for the taxable year with respect to which the finding is made 
or for the period following the effective date of the amendment:
    (A) An average employer tax rate, computed as a percentage of the 
total wages in employment covered by the State's unemployment 
compensation law, which exceeds the State's average annual benefit cost 
rate, computed as a percentage of the total wages in employment covered 
by the State's unemployment compensation law, for the ten calendar years 
immediately preceding the year with respect to which the finding is 
made; and
    (B) An effective minimum employer tax rate which is not less than 
1.0 percent of the wages of any employer which are subject to tax under 
the Federal Unemployment Tax Act for the same year; and
    (C) An effective maximum employer tax rate which exceeds 2.7 percent 
of the wages of any employer which are subject to tax under the Federal 
Unemployment Tax Act for the same year, or provision for no reduced rate 
of contributions for any employer subject to the State unemployment 
compensation law; or
    (ii)(A) Amendment of its unemployment compensation law increasing 
the State's unemployment tax rate, increasing the State's unemployment 
tax base, or changing the State's experience rating formula, or a 
combination of such changes, so as to be estimated by the Secretary of 
Labor to result in increasing contributions to the State's unemployment 
fund, for the taxable year with respect to which the finding is made, 
and the allocation from such increased contributions of a sum sufficient 
to make the repayment in the amount and within the time limit prescribed 
in paragraph (f)(2)(ii)(B) of this section; and
    (B) Repayment to the Treasury of the United States, for credit to 
the Federal unemployment account in the Unemployment Trust Fund, prior 
to November 10 of the taxable year with respect to which the finding is 
made, of an amount equal to the amount of the additional tax which would 
be payable by all taxpayers subject to the unemployment compensation law 
of the State for that taxable year if (1) for any year prior to 1978, 
the reduction in total credits prescribed by section 3302(c)(2)(A) of 
the Internal Revenue Code of 1954 for that taxable year was applied 
without regard to the amendment added by section 110(a) of the Emergency 
Compensation and Special Unemployment Assistance Extension Act of 1975, 
and (2) for any year after 1977, the reduction in total credits 
prescribed by the applicable provisions of section 3302(c)(2) of the 
Internal Revenue Code of 1954 for that taxable year was applied without 
regard to the amendment added by section 110(a) of the Emergency 
Compensation and Special Unemployment Assistance Extension Act of 1975; 
and
    (C) Determination by the Secretary that unemployment reserves and 
income from contributions in the State unemployment fund will be 
adequate to meet benefit payment obligations without title XII advances 
during the 6-month period beginning November 1 of the year in which such 
determination is made.
    (3)(i) An application for deferral under this paragraph (f) must be 
requested and filed with the Secretary of Labor by the Governor of a 
State no later than July 1 of the taxable year for which such deferral 
is requested. Such application shall be in such form, and shall be 
accompanied by such documentation, as the Secretary of Labor shall 
prescribe.
    (ii) A finding by the Secretary of Labor with respect to a State 
shall be made as of November 10 of the taxable

[[Page 17]]

year with respect to which the finding is made, and such finding shall 
be published in the Federal Register together with the reasons for the 
finding.
[30 FR 6942, May 22, 1965, as amended at 43 FR 13828, Mar. 31, 1978]



                 Subpart B--Grants, Advances and Audits



Sec. 601.6  Grants for administration of unemployment insurance and employment service.

    Grants of funds for administration of State unemployment insurance 
and public employment service programs are made to States under section 
302(a) of the Social Security Act, the Wagner-Peyser Act, and the 
Appropriation Acts.
    (a) Requests for funds. The forms and instructions used by State 
agencies in requesting funds are available upon request from the 
Employment and Training Administration, Department of Labor, Washington, 
DC 20210, and at the regional offices. The forms and instructions call 
for detailed information for each budgetary period concerning the 
specific amounts requested for personal services and other current 
expenses of State agencies, supported by workload and unit-cost 
estimates. Supplementary budget requests are processed in the same 
manner as regular requests. The Administration's representatives in the 
regional offices furnish assistance to the State agencies in preparing 
requests for funds.
    (b) Processing of requests. State agencies send their requests for 
funds to the RAETA who reviews the requests and forwards them to the ETA 
National Office with his recommendation as to the amounts necessary for 
proper and efficient administration of the State unemployment 
compensation law and employment service program.

The ETA National Office appraises the requests and the recommendations 
of the regional representatives from a nationwide point of view, 
examining each State's request in the light of the experience of other 
States to insure equitable treatment among the States in the allocation 
of funds made available by Congress for the administration of State 
unemployment compensation laws and public employment service programs.
    (c) Action by ETA National Office. If the ETA National Office 
approves the State's budget request, the State agency is notified; and, 
provided the conditions precedent to grants continue during the 
budgetary period, certifications for payment, under the approved budget, 
stating the amounts, are made by the ETA National Office to the 
Secretary of the Treasury quarterly. Upon denial of a request, in whole 
or in part, the State agency is notified and the RAETA is instructed to 
negotiate with the State with a view to removing the basis for denial.

(Approved by the Office of Management and Budget under control number 
1205-0132)

[15 FR 5886, Aug. 31, 1950, as amended at 42 FR 4724, Jan. 25, 1977; 49 
FR 18295, Apr. 30, 1984]



Sec. 601.7  [Reserved]



Sec. 601.8  Agreement with Postmaster General.

    The Secretary of Labor and the Postmaster General have been directed 
by the Congress (title II of the Labor-Federal Security Agency 
Appropriation Act, 1950) to prescribe a mutually satisfactory procedure 
whereby official State employment security postal matter will be handled 
without the prepayment of postage. In lieu of such prepayments, the 
Secretary periodically certifies to the Secretary of the Treasury for 
payment to the U.S. Postal Service the amount necessary to cover the 
cost of State agency mailings. The amount of payment is based on a 
formula agreed upon by the Secretary of Labor and the U.S. Postal 
Service.
[15 FR 5886, Aug. 31, 1950, as amended at 42 FR 4724, Jan. 25, 1977]



Sec. 601.9  Audits.

    The Department of Labor's audit regulations at 41 CFR 29-70.207-2(h) 
and (i), 41 CFR 29-70.207-3, and 41 CFR 29-70.207-4 shall apply with 
respect to employment service and unemployment insurance programs.
[46 FR 7766, Jan. 23, 1981]

[[Page 18]]



PART 602--QUALITY CONTROL IN THE FEDERAL-STATE UNEMPLOYMENT INSURANCE SYSTEM--Table of Contents




                      Subpart A--General Provisions

Sec.
602.1  Purpose.
602.2  Scope.

                     Subpart B--Federal Requirements

602.10  Federal law requirements.
602.11  Secretary's interpretation.

                    Subpart C--State Responsibilities

602.20  Organization.
602.21  Standard methods and procedures.
602.22  Exceptions.

                   Subpart D--Federal Responsibilities

602.30  Management.
602.31  Oversight.

               Subpart E--Quality Control Grants to States

602.40  Funding.
602.41  Proper expenditure of Quality Control granted funds.
602.42  Effect of failure to implement Quality Control program.
602.43  No incentives or sanctions based on specific error rates.

Appendix A To Part 602--Standard For Claim Determinations--Separation 
          Information

    Authority:  42 U.S.C. 1302.

    Source:  52 FR 33528, Sept. 3, 1987, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 602.1  Purpose.

    The purpose of this part is to prescribe a Quality Control (QC) 
program for the Federal-State unemployment insurance (UI) system, which 
is applicable to the State UI programs and the Federal unemployment 
benefit and allowance programs administered by the State Employment 
Security Agencies (SESA) under agreements between the States and the 
Secretary of Labor (Secretary). QC will be a major tool to assess the 
timeliness and accuracy of State administration of the UI program. It is 
designed to identify errors in claims processes and revenue collections 
(including payments in lieu of contributions and Extended Unemployment 
Compensation Account collections), analyze causes, and support the 
initiation of corrective action.



Sec. 602.2  Scope.

    This part applies to all State laws approved by the Secretary under 
the Federal Unemployment Tax Act (section 3304 of the Internal Revenue 
Code of 1954, 26 U.S.C. section 3304), to the administration of the 
State laws, and to any Federal unemployment benefit and allowance 
program administered by the SESAs under agreements between the States 
and the Secretary. QC is a requirement for all States, initially being 
applicable to the largest permanently authorized programs (regular UI 
including Combined-Wage-Claims) and federally-funded programs 
(Unemployment Compensation for Ex-Servicemen and Unemployment 
Compensation for Federal Employees). Other elements of the QC program 
(e.g., interstate, extended benefit programs, benefit denials, and 
revenue collections) will be phased in under a schedule determined by 
the Department in consultation with State agencies.



                     Subpart B--Federal Requirements



Sec. 602.10  Federal law requirements.

    (a) Section 303(a)(1) of the Social Security Act (SSA), 42 U.S.C. 
503(a)(1), requires that a State law include provision for:

    Such methods of administration . . . as are found by the Secretary 
of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.

    (b) Section 303(a)(6), SSA, 42 U.S.C. 505(a)(6), requires that a 
State law include provision for:

    The making of such reports, in such form and containing such 
information, as the Secretary of Labor may from time to time require, 
and compliance with such provisions as the Secretary of Labor may from 
time to time find necessary to assure the correctness and verification 
of such reports.

    (c) Section 303(b), SSA, 42 U.S.C. 503(b), provides in part that:

[[Page 19]]

    Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that in the administration of the 
law there is--

                                * * * * *

    (2) a failure to comply substantially with any provision specified 
in subsection (a);

the Secretary of Labor shall notify such State agency that further 
payments will not be made to the State until the Secretary of Labor is 
satisfied that there is no longer any such denial or failure to comply. 
Until he is so satisfied, he shall make no further certification to the 
Secretary of the Treasury with respect to such State . . . . 

    (d) Certification of payment of granted funds to a State is withheld 
only when the Secretary finds, after reasonable notice and opportunity 
for hearing to the State agency--

    (1) That any provision required by section 303(a) of the Social 
Security Act is no longer included in the State unemployment 
compensation law, or
    (2) That in the administration of the State unemployment 
compensation law there has been a failure to comply substantially with 
any required provision of such law.



Sec. 602.11  Secretary's interpretation.

    (a) The Secretary interprets section 303(a)(1), SSA, to require that 
a State law provide for such methods of administration as will 
reasonably ensure the prompt and full payment of unemployment benefits 
to eligible claimants, and collection and handling of income for the 
State unemployment fund (particularly taxes and reimbursements), with 
the greatest accuracy feasible.
    (b) The Secretary interprets sections 303(a)(1) and 303(a)(6), SSA, 
to authorize the Department of Labor to prescribe standard definitions, 
methods and procedures, and reporting requirements for the QC program 
and to ensure accuracy and verification of QC findings.
    (c) The Secretary interprets section 303(b)(2), SSA to require that, 
in the administration of a State law, there shall be substantial 
compliance with the provisions required by sections 303(a) (1) and (6). 
Further, conformity of the State law with those requirements is required 
by section 303(a) and Sec. 601.5(a) of this chapter.
    (d) To satisfy the requirements of sections 303(a) (1) and (6), a 
State law must contain a provision requiring, or which is construed to 
require, the establishment and maintenance of a QC program in accordance 
with the requirements of this part. The establishment and maintenance of 
such a QC program in accordance with this part shall not require any 
change in State law concerning authority to undertake redeterminations 
of claims or liabilities or the finality of any determination, 
redetermination or decision.



                    Subpart C--State Responsibilities



Sec. 602.20  Organization.

    Each State shall establish a QC unit independent of, and not 
accountable to, any unit performing functions subject to evaluation by 
the QC unit. The organizational location of this unit shall be 
positioned to maximize its objectivity, to facilitate its access to 
information necessary to carry out its responsibilities, and to minimize 
organizational conflict of interest.



Sec. 602.21  Standard methods and procedures.

    Each State shall:
    (a) Perform the requirements of this section in accordance with 
instructions issued by the Department, pursuant to Sec. 602.30(a) of 
this part, to ensure standardization of methods and procedures in a 
manner consistent with this part;
    (b) Select representative samples for QC study of at least a minimum 
size specified by the Department to ensure statistical validity (for 
benefit payments, a minimum of 400 cases of weeks paid per State per 
year);
    (c) Complete prompt and in-depth case investigations to determine 
the degree of accuracy and timeliness in the administration of the State 
UI law and Federal programs with respect to benefit determinations, 
benefit payments, and revenue collections; and conduct other 
measurements and studies necessary or appropriate for carrying out the 
purposes of this part; and in conducting investigations each State 
shall:
    (1) Inform claimants in writing that the information obtained from a 
QC investigation may affect their eligibility

[[Page 20]]

for benefits and inform employers in writing that the information 
obtained from a QC investigation of revenue may affect their tax 
liability,
    (2) Use a questionnaire, prescribed by the Department, which is 
designed to obtain such data as the Department deems necessary for the 
operation of the QC program; require completion of the questionnaire by 
claimants in accordance with the eligibility and reporting authority 
under State law,
    (3) Collect data identified by the Department as necessary for the 
operation of the QC program; however, the collection of demographic data 
will be limited to those data which relate to an individual's 
eligibility for UI benefits and necessary to conduct proportions tests 
to validate the selection of representative samples (the demographic 
data elements necessary to conduct proportions tests are claimants' date 
of birth, sex, and ethnic classification); and
    (4) Conclude all findings of inaccuracy as detected through QC 
investigations with appropriate official actions, in accordance with the 
applicable State and Federal laws; make any determinations with respect 
to individual benefit claims in accordance with the Secretary's 
``Standard for Claim Determinations--Separation Information'' in the 
Employment Security Manual, part V, sections 6010-6015 (appendix A of 
this part);
    (d) Classify benefit case findings resulting from QC investigations 
as:
    (1) Proper payments, underpayments, or overpayments in benefit 
payment cases, or
    (2) Proper denials or underpayments in benefit denial cases;
    (e) Make and maintain records pertaining to the QC program, and make 
all such records available in a timely manner for inspection, 
examination, and audit by such Federal officials as the Secretary may 
designate or as may be required or authorized by law;
    (f) Furnish information and reports to the Department, including 
weekly transmissions of case data entered into the automated QC system 
and annual reports, without, in any manner, identifying individuals to 
whom such data pertain; and
    (g) Release the results of the QC program at the same time each 
year, providing calendar year results using a standardized format to 
present the data as prescribed by the Department; States will have the 
opportunity to release this information prior to any release by the 
Department.

(Approved by the Office of Management and Budget under Control Number 
1205-0245)



Sec. 602.22  Exceptions.

    If the Department determines that the QC program, or any constituent 
part of the QC program, is not necessary for the proper and efficient 
administration of a State law or in the Department's view is not cost 
effective, the Department shall use established procedures to advise the 
State that it is partially or totally excepted from the specified 
requirements of this part. Any determination under this section shall be 
made only after consultations with the State agency.



                   Subpart D--Federal Responsibilities



Sec. 602.30  Management.

    (a) The Department shall establish required methods and procedures 
(as specified in Sec. 602.21 of this part); and provide technical 
assistance as needed on the QC process.
    (b) The Department shall consider and explore alternatives to the 
prescribed sampling, study, recordkeeping, and reporting methodologies. 
This shall include, but not be limited to, testing the obtaining of 
information needed for QC by telephone and mail rather than in face-to-
face interviews.
    (c) The Department shall maintain a computerized data base of QC 
case data which is transmitted to the Department under Sec. 602.21, 
which will be combined with other data for statistical and other 
analysis such as assessing the impact of economic cycles, funding 
levels, and workload levels on program accuracy and timeliness.



Sec. 602.31  Oversight.

    The Department shall review QC operational procedures and samples, 
and validate QC methodology to ensure uniformity in the administration 
of the

[[Page 21]]

QC program and to ensure compliance with the requirements of this part. 
The Department shall, for purposes of determining eligibility for grants 
described in Sec. 602.40, annually review the adequacy of the 
administration of a State's QC program.



               Subpart E--Quality Control Grants to States



Sec. 602.40  Funding.

    (a) The Department shall use established procedures to notify States 
of the availability of funds for the operation of QC programs in 
accordance with this part.
    (b) The Department may allocate additional resources, if available, 
to States for analysis of date generated by the QC program, to increase 
the number of claims sampled in areas where more information is needed, 
for pilot studies for the purpose of expanding the QC program, and for 
corrective action.



Sec. 602.41  Proper expenditure of Quality Control granted funds.

    The Secretary may, after reasonable notice and opportunity for 
hearing to the State agency, take exception to and require repayment of 
an expenditure for the operation of a QC program if it is found by the 
Secretary that such expenditure is not necessary for the proper and 
efficient administration of the QC program in the State. See sections 
303(a)(8), 303(a)(9) and 303(b)(2), SSA, and 20 CFR 601.5. For purposes 
of this section, an expenditure will be found not necessary for proper 
and efficient administration if such expenditure fails to comply with 
the requirements of subpart C of this part.
[52 FR 33528, Sept. 3, 1987, as amended at 52 FR 34343, Sept. 10, 1987]



Sec. 602.42  Effect of failure to implement Quality Control program.

    Any State which the Secretary finds, after reasonable notice and 
opportunity for hearing, has not implemented or maintained a QC program 
in accordance with this part will not be eligible for any grants under 
title III of the Social Security Act until such time as the Secretary is 
satisfied that there is no longer any failure to conform or to comply 
substantially with any provision specified in this part. See sections 
303(a)(1), 303(a)(6), and 303(b)(2), SSA, and 20 CFR 601.5.



Sec. 602.43  No incentives or sanctions based on specific error rates.

    Neither sanctions nor funding incentives shall be used by the 
Department to influence the achievement of specified error rates in 
State UI programs.

 Appendix A to Part 602--Standard for Claim Determinations--Separation 
                               Information

         Employment Security Manual (Part V, Sections 6010-6015)

    6010  Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. . . .
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011  Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012  Criteria for Review of State Law Conformity with Federal 
Requirements:

[[Page 22]]

    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013  Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria:
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices.
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation of his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------


    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it (1) results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g.,

[[Page 23]]

as to the amount computed as the appropriate reduction, etc.); or (b) 
there is a change in the State law (or in the application thereof) 
affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
there is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits.
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a

[[Page 24]]

change in the State law or in the application of the law, an explanation 
of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions.
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanation of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)

[[Page 25]]

    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ____ to ____ of the ________ (name 
of pamphlet or booklet) heretofore furnished to you.''
    6014   Separation Information Requirements Designed To Meet 
Department of Labor Criteria:
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the workers will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker.
    1. Information required to be given. Employers are required to give 
their employees information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015  Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of

[[Page 26]]

the alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in section 6012, he 
will so notify the State agency. If the Administrator of the Bureau does 
not so conclude, he will submit the matter to the Secretary. If the 
Secretary concludes that the alternative provisions satisfy the criteria 
in section 6012, the State agency will be so notified. If the Secretary 
concludes that there is a question as to whether the alternative 
provisions satisfy the criteria, the State agency will be advised that 
unless the State law provisions are appropriately revised, a notice of 
hearing will be issued as required by the Code of Federal Regulations, 
title 20, section 601.5.



PART 603--INCOME AND ELIGIBILITY VERIFICATION SYSTEM--Table of Contents




Sec.
603.1  Purpose.

          Subpart A--Income and Eligibility Verification System

603.2  Definitions.
603.3  Eligibility condition for claimants.
603.4  Notification to claimants.
603.5  Disclosure of information.
603.6  Agreement between State unemployment compensation agency and 
          requesting agency.
603.7  Protection of confidentiality.
603.8  Obtaining information from other agencies and crossmatching with 
          wage information.
603.9  Effective date of rule.

                   Subpart B--Quarterly Wage Reporting

603.20  Effective date of rule.
603.21  Alternative system.

    Authority:  Sec. 1102, Social Security Act, ch. 531, 49 Stat. 647, 
as amended (42 U.S.C 1302); Reorganization Plan No. 2 of 1949, 63 Stat. 
1065, 14 FR 5225.

    Source:  51 FR 7207, Feb. 28, 1986, unless otherwise noted.



Sec. 603.1  Purpose.

    (a) Section 2651 of Public Law 98-369 (the Deficit Reduction Act of 
1984) amended title XI of the Social Security Act to include a 
requirement that States have an income and eligibility verification 
system in effect which would be used in verifying eligibility for, and 
the amount of, benefits available under several Federally assisted 
programs including the Federal-State unemployment compensation program. 
The Act requires that employers in each State make quarterly wage 
reports to a State agency, which may be the State unemployment 
compensation agency, and that wage information and benefit information 
obtained from other agencies be used in verifying eligibility for 
benefits. The requirement of quarterly wage reporting may be waived if 
the Secretary of Labor (in consultation with the Secretary of Health and 
Human Services and the Secretary of Agriculture) determines the State 
has in effect an alternative system which is as effective and timely as 
quarterly wage reporting for the purposes of providing employment 
related income and eligibility data.
    (b) Section 2651(d) of Public Law 98-396 added a new section 303(f) 
of the Social Security Act (42 U.S.C. 503(f)), to provide that the 
agency charged with the administration of the State unemployment 
compensation law shall provide that information shall be requested and 
exchanged for purposes of income and eligibility verification in 
accordance with a State system which meets the requirements of section 
1137 of the Social Security Act, as added by Public Law 98-369. The 
regulations in this part are issued to implement this requirement.



          Subpart A--Income and Eligibility Verification System



Sec. 603.2  Definitions.

    For the purposes of this part:
    (a) State unemployment compensation agency means the agency charged 
with the administration of the unemployment compensation law approved by 
the Secretary of Labor under section 3304 of the Internal Revenue Code 
of 1954 (26 U.S.C. 3304).
    (b) Wage information means information about wages as defined in the 
State's unemployment compensation law and includes the Social Security 
Number (or numbers, if more than one) and quarterly wages of an 
employee, and the name, address, State, and (when known) Federal 
employer identification number of an employer reporting wages under a 
State unemployment compensation law, except that in a State in which 
wages are not required

[[Page 27]]

to be reported under the unemployment compensation law, ``wage 
information'' means:
    (1) That wage information which is reported under provisions of 
State law which fulfill the requirements of section 1137 of the Social 
Security Act; or
    (2) That information which is obtained through an alternative system 
which fulfills the requirements of section 1137 of the Social Security 
Act.
    (c) Claim information means information regarding:
    (1) Whether an individual is receiving, has received or has applied 
for unemployment compensation;
    (2) The amount of compensation the individual is receiving or is 
entitled to receive;
    (3) The individual's current (or most recent) home address; and
    (4) Whether the individual has refused an offer of work and, if so, 
a description of the job offered including the terms, conditions, and 
rate of pay.
    (5) Any other information contained in the records of the State 
unemployment compensation agency which is needed by the requesting 
agency to verify eligiblity for, and the amount of, benefits.
    (d) Requesting agency means:
    (1) Any State or local agency charged with the responsibility of 
enforcing the provisions of the Aid to Families with Dependent Children 
program under a State plan approved under part A of title IV of the 
Social Security Act;
    (2) Any State or local agency charged with the responsibility of 
enforcing the provisions of the Medicaid program under a State plan 
approved under title XIX of the Social Security Act;
    (3) Any State or local agency charged with the responsibility of 
enforcing the provisions of the Food Stamp program under the Food Stamp 
Act of 1977;
    (4) Any State or local agency charged with the responsibility of 
enforcing a program under a plan approved under title I, X, XIV, or XVI 
of the Social Security Act;
    (5) Any State or local child support enforcement agency charged with 
the responsibility of enforcing child support obligations under a plan 
approved under part D of title IV of the Social Security Act; and
    (6) The Secretary of Health and Human Services in establishing or 
verifying eligibility or benefit amounts under titles II and XVI of the 
Social Security Act (section 1137(a)).



Sec. 603.3  Eligibility condition for claimants.

    (a) The State unemployment compensation agency shall require, as a 
condition of eligibility for unemployment benefits, that each claimant 
for benefits furnish to the agency his/her social security number (or 
numbers if he/she has more than one such number), and the agency shall 
utilize such numbers in the administration of the unemployment 
compensation program so as to associate the agency's records pertaining 
to each claimant with the claimant's social security number(s).
    (b) If the State agency determines that a claimant has refused or 
failed to provide a Social Security Number, then that individual shall 
be ineligible to participate in the unemployment compensation program.
    (c) Any claimant held ineligible for not supplying a social security 
number may become eligible upon providing the State agency with such 
number retroactive to the extent permitted under State law. (Section 
1137(a)(1)).



Sec. 603.4  Notification to claimants.

    Claimants shall be notified at the time of filing an initial claim 
for benefits through a written statement on or provided with the initial 
claim form and periodically thereafter that information available 
through the income and eligibility verification system will be requested 
and utilized by requesting agencies as defined in Sec. 603.2(d) (section 
1137(a)(6)). Provisions of a printed notice on or attached to any 
subsequent additional claims will satisfy the requirement for periodic 
notice thereafter.



Sec. 603.5  Disclosure of information.

    The State unemployment compensation agency will disclose to 
authorized requesting agencies, as defined in Sec. 603.2(d), which have 
entered into an agreement in accordance with this part, wage and claim 
information as defined herein contained in the records of such State 
agency as is deemed by

[[Page 28]]

the requesting agency to be needed in verifying eligibility for, and the 
amount of, benefits. Standardized formats established by the Secretary 
of Health and Human Services (in consultation with the Secretary of 
Agriculture) will be adhered to by the State unemployment compensation 
agency. (Section 1137(a)(4)).



Sec. 603.6  Agreement between State unemployment compensation agency and requesting agency.

    (a) The State unemployment compensation agency will enter into 
specific written agreements with any requesting agency as defined in 
this part.
    (b) The agreements will include, but need not be limited, to the 
following:
    (1) The purposes for which requests will be made and the specific 
information needed;
    (2) Identification of all agency officials, by position, with 
authority to request information;
    (3) Methods and timing of the requests for information, including 
the format to be used, and the period of time needed to furnish the 
requested information;
    (4) Basis for establishing the reporting periods for which 
information will be provided;
    (5) Provisions for determining appropriate reimbursement from the 
requesting agency for the costs incurred in providing data, including 
any new developmental costs associated with furnishing data to the 
requesting agency and calculated in accordance with the provisions of 
OMB Circular A-87;
    (6) Safeguards to ensure that information obtained from the State 
unemployment compensation agency will be protected against unauthorized 
access or disclosure. At a minimum, such procedures will comply with the 
requirements of Sec. 603.7.
    (c) The requirements in paragraphs (a) and (b) of this section shall 
also apply to requesting agencies receiving information from a State 
unemployment compensation agency in another State and shall be 
administered by the State unemployment compensation agency disclosing 
the information (section 1137(a)(4) and (a)(7)).



Sec. 603.7  Protection of confidentiality.

    (a) State unemployment compensation agencies shall require 
requesting agencies receiving information under this part to comply with 
the following measures to protect the confidentiality of the information 
against unauthorized access or disclosure:
    (1) The information shall be used only to the extent necessary to 
assist in the valid administrative needs of the program receiving such 
information and shall be disclosed only for these purposes as defined in 
this agreement;
    (2) The requesting agency shall not use the information for any 
purposes not specifically authorized under an agreement that meets the 
requirements of Sec. 603.6;
    (3) The information shall be stored in a place physically secure 
from access by unauthorized persons;
    (4) Information in electronic format, such as magnetic tapes or 
discs, shall be stored and processed in such a way that unauthorized 
persons cannot retrieve the information by means of computer, remote 
terminal or other means;
    (5) Precautions shall be taken to ensure that only authorized 
personnel are given access to on-line files;
    (6)(i) The requesting agency shall instruct all personnel with 
access to the information regarding the confidential nature of the 
information, the requirements of this part, and the sanctions specified 
in State unemployment compensation laws against unauthorized disclosure 
of information covered by this part, and any other relevant State 
statutes, and
    (ii) The head of each State agency shall sign an acknowledgment on 
behalf of the entire agency attesting to the agency's policies and 
procedures regarding confidentiality.
    (b) Any requesting agency is authorized to redisclose the 
information only as follows:
    (1) Any wage or claim information may be given to the individual who 
is the subject of the information;
    (2) Information about an individual may be given to an attorney or 
other duly authorized agent representing the individual if the 
individual has given written consent and the information is needed in 
connection with a claim for

[[Page 29]]

benefits against the requesting agency; and
    (3) Any wage or claim information may be given to another requesting 
agency as defined in this part or to any criminal or civil prosecuting 
authorities acting for or on behalf of the requesting agency if 
provision for such redisclosure is contained in the agreement between 
the requesting agency and the State unemployment compensation agency.
    (c) The requesting agency shall permit the State unemployment 
compensation agency to make onsite inspections to ensure that the 
requirements of State unemployment compensation laws and Federal 
statutes and regulations are being met (section 1137(a)(5)(B).



Sec. 603.8  Obtaining information from other agencies and crossmatching with wage information.

    (a) The State unemployment compensation agency shall obtain such 
information from the Social Security administration and any requesting 
agency as may be needed in verifying eligibility for, and the amount of, 
benefits.
    (b) To the extent that such information shall be determined likely 
to be productive in identifying ineligibility for benefits and 
preventing incorrect payments, the State unemployment compensation 
agency shall crossmatch quarterly wage information with unemployment 
benefit payment information (section 1137(a)(2)).
    (c) To the extent necessary, the United States Department of Labor 
may amplify on the requirements for state compliance with this section 
in instructions issued and published for comment in the Federal Register 
under the provisions of section 1137(a)(2) of the Social Security Act.



Sec. 603.9  Effective date of rule.

    The effective date of this subpart A rule is May 29, 1986, after 
consultation with the Secretary of Health and Human Services and the 
Secretary of Agriculture, may by waiver grant a delay in this effective 
date if the State submits within 90 days of publication of this rule in 
final form a plan describing a good faith effort to comply with the 
requirements of section 1137 (a) and (b) of the Social Security Act 
through but not beyond September 30, 1986.



                   Subpart B--Quarterly Wage Reporting



Sec. 603.20  Effective date of rule.

    The requirement that employers in a State report quarterly wage 
information to a State agency (which may be the State unemployment 
compensation agency), is effective September 30, 1988 (section 
1137(a)(3)).



Sec. 603.21  Alternative system.

    The Secretary of Labor (in consultation with the Secretary of Health 
and Human Services and the Secretary of Agriculture) may waive the 
provision that employers in a State are required to make quarterly wage 
reports to a State agency if the Secretary determines that the State has 
in effect an alternative system which is as effective and timely for 
purposes of providing employment related income and eligibility data for 
the purposes described in section 1137 of the Social Security Act. 
Criteria for such waiver and the date for submitting requests for such 
waiver will be issued, if necessary, by the United States Department of 
Labor and published for comment in the Federal Register.



PART 606--TAX CREDITS UNDER THE FEDERAL UNEMPLOYMENT TAX ACT; ADVANCES UNDER TITLE XII OF THE SOCIAL SECURITY ACT--Table of Contents




                           Subpart A--General

Sec.
606.1  Purpose and scope.
606.2  Total credits allowable.
606.3  Definitions.
606.4  Redelegation of authority.
606.5  Verification of estimates and review of determinations.
606.6  Information, reports, and studies.

               Subpart B--Tax Credit Reduction [Reserved]

               Subpart C--Relief from Tax Credit Reduction

606.20  Cap on tax credit reduction.
606.21  Criteria for cap.
606.22  Application for cap.
606.23  Avoidance of tax credit reduction.

[[Page 30]]

606.24  Application for avoidance.
606.25  Waiver of and substitution for additional tax credit reduction.
606.26  Application for waiver and substitution.

                     Subpart D--Interest on Advances

606.30  Interest rates on advances.
606.31  Due dates for payment of interest. [Reserved]
606.32  Types of advances subject to interest.
606.33  No payment of interest from unemployment fund. [Reserved]
606.34  Reports of interest payable. [Reserved]
606.35  Order of application for repayments. [Reserved]

                 Subpart E--Relief from Interest Payment

606.40  May/September delay.
606.41  High unemployment deferral.
606.42  High unemployment delay.
606.43  Maintenance of solvency effort.
606.44  Notification of determinations.

    Authority:  42 U.S.C. 1102; 26 U.S.C. 7805(a); Secretary's Order No. 
4-75 (40 FR 18515).

    Source:  53 FR 37429, Sept. 26, 1988, unless otherwise noted.



                           Subpart A--General



Sec. 606.1  Purpose and scope.

    (a) In general. The regulations in this part 606 are issued to 
implement the tax credit provisions of the Federal Unemployment Tax Act, 
and the loan provisions of title XII of the Social Security Act. The 
regulations on tax credits cover all of the subjects of 3302 of the 
Federal Unemployment Tax Act (FUTA), except subsections (c)(3) and (e). 
The regulations on loans cover all of the subjects in title XII of the 
Social Security Act.
    (b) Scope. This part 606 covers general matters relating to this 
part in this subpart A, and in the following subparts includes specific 
subjects described in general terms as follows:
    (1) Subpart B describes the tax credit reductions under the Federal 
Unemployment Tax Act, which relate to outstanding balances of advances 
made under title XII of the Social Security Act.
    (2) Subpart C describes the various forms of relief from tax credit 
reductions, and the criteria and standards for grant of such relief in 
the form of--
    (i) A cap on tax credit reduction,
    (ii) Avoidance of tax credit reduction, and
    (iii) Waiver of and substitution for additional tax credit 
reduction.
    (3) Subpart D describes the interest rates on advances made under 
title XII of the Social Security Act, dues dates for payment of 
interest, and other related matters.
    (4) Subpart E describes the various forms of relief from payment of 
interest, and the criteria and standards for grant of such relief in the 
form of--
    (i) May/September delay of interest payments,
    (ii) High unemployment deferral of interest payments,
    (iii) High unemployment delay of interest payments, and
    (iv) Maintenance of solvency effort required to retain a deferral 
previously granted.



Sec. 606.2  Total credits allowable.

    The total credits allowed to an employer subject to the tax imposed 
by section 3301 of the Federal Unemployment Tax Act shall not exceed 5.4 
percent with respect to taxable years beginning after December 31, 1984.



Sec. 606.3  Definitions.

    For the purposes of the Acts cited and this part--
    (a) Act means as appropriate the Federal Unemployment Tax Act (26 
U.S.C. 3301-3311), or title XII of the Social Security Act (42 U.S.C. 
1321-1324).
    (b) Advance means a transfer of funds to a State unemployment fund, 
for the purpose of paying unemployment compensation, from the Federal 
unemployment account in the Unemployment Trust Fund, pursuant to section 
1202 of the Social Security Act.
    (c) Benefit-cost ratio for cap purposes for a calendar year is the 
percentage obtained by dividing--
    (1) The total dollar sum of--
    (i) All compensation actually paid under the State law during such 
calendar year, including in such total sum all regular, additional, and 
extended compensation, as defined in section 205 of the Federal-State 
Extended Unemployment Compensation Act of 1970, and excluding from such 
total sum--

[[Page 31]]

    (A) Any such compensation paid for which the State is entitled to 
reimbursement or was reimbursed under the provisions of any Federal Law, 
and
    (B) Any such compensation paid which is attributable to services 
performed for a reimbursing employer, and which is not included in the 
total dollar amount reported under paragraph (c)(1)(i)(A) of this 
section, and
    (ii) Any interest paid during such calendar year on any advance, by
    (2) The total wages (as defined in Sec. 606-3(l)) with respect to 
such calendard year. If any percentage determined by this computation 
for a calendar year is not a multiple of 0.1 percent, such percentage 
shall be reduced to the nearest multiple of 0.1 percent.
    (d) Contributions means payments required by a State law to be made 
into an unemployment fund by any person on account of having individuals 
in his employ, to the extent that such payments are made by him without 
being deducted or deductible from the remuneration of individuals in his 
employ.
    (e) Federal unemployment tax means the excise tax imposed under 
section 3301 of the Federal Unemployment Tax Act on employers with 
respect to having individuals in their employ.
    (f) Fiscal year means the Federal fiscal year which begins on 
October 1 of a year and ends on September 30, of the next succeeding 
year.
    (g) FUTA referes to the Federal Unemployment Tax Act.
    (h) State unemployment fund or unemployment fund means a special 
fund established under a State law for the payment of unemployment 
compensation to unemployed individuals, and which is an ``unemployment 
fund'' as defined in section 3306(f) of the Federal Unemployment Tax 
Act.
    (i) Taxable year means the calendar year.
    (j) Unemployment tax rate means, for any taxable year and with 
respect to any State, the percentage obtained by dividing the total 
amount of contributions paid into the State unemployment fund with 
respect to such taxable year by total wages as defined in Sec. 606.3(l).
    (k) Wages, taxable means the total sum of remuneration which is 
subject to contributions under a State law.
    (l) Wages, total means the total sum of all remuneration covered by 
a State law, disregarding any dollar limitation on the amount of 
remuneration which is subject to contributions under the State law.



Sec. 606.4  Redelegation of authority.

    (a) Redelegation to UIS Director. The Director, Unemployment 
Insurance Service (hereinafter ``UIS Director''), is redelegated 
authority to make the determinations required under this part. This 
redelegation is contained in Employment and Training Order No. 1-84, 
published in the Federal Register on November 14, 1983 (48 FR 51870).
    (b) Delegation by Governor. The Governor of a State, as used in this 
part, refers to the highest executive official of a State. Wherever in 
this part an action is required by or of the Governor of a State, such 
action may be taken by the Governor or may be taken by a delegatee of 
the Governor if the Department is furnished appropriate proof of an 
authoritative delegation of authority.



Sec. 606.5  Verification of estimates and review of determinations.

    The Department of Labor (hereinafter ``Department'') shall verify 
all information and data provided by a State under this part, and the 
State shall comply with such provisions as the Department considers 
necessary to assure the correctness and verification of such information 
and data. The State agency of a State affected by a determination made 
by the UIS director under this part may seek review of such 
determination by a higher level official of the Employment and Training 
Administration.



Sec. 606.6  Information, reports, and studies.

    A State shall furnish to the Secretary of Labor such information and 
reports and conduct such studies as the Secretary determines are 
necessary or appropriate for carrying out the purposes of this part, 
including any additional information or data the UIS Director may 
require for the purposes of making determinations under subparts C and E 
of this part. This collection has been approved by the Office of

[[Page 32]]

Management and Budget under control number 1205-0205.



               Subpart B--Tax Credit Reduction [Reserved]



               Subpart C--Relief from Tax Credit Reduction



Sec. 606.20  Cap on tax credit reduction.

    (a) Applicability. Subsection (f) of section 3302 of FUTA authorizes 
a limitation (cap) on the reduction of tax credits by reason of an 
outstanding balance of advances, if the UIS Director determines with 
respect to a State, on or before November 10 of a taxable year, that--
    (1) No action was taken by the State during the 12-month period 
ending on September 30 of such taxable year which has resulted, or will 
result, in a reduction in the State's unemployment tax effort, as 
defined in Sec. 606.21(a);
    (2) No action was taken by the State during the 12-month period 
ending on September 30 of such taxable year which has resulted, or will 
result, in a net decrease in the solvency of the State unemployment 
compensation system, as defined in Sec. 606.21(b);
    (3) The State unemployment tax rate (as defined in Sec. 606.3(j)) 
for the taxable year equals or exceeds the average benefit-cost ratio 
(as defined in Sec. 606.3(c)) for the calendar years in the five-
calendar year period ending with the calendar year immediately preceding 
the taxable year for which the cap is requested, under the rules 
specified in Sec. 606.21 (c) and (d); and
    (4) The outstanding balance of advances to the State on September 30 
of the taxable year was not greater than the outstanding balance of 
advances to the State on September 30 of the third preceding taxable 
year.
    (b) Maximum tax credit reduction. If a State qualifies for a cap, 
the maximum tax credit reduction for the taxable year shall not exceed 
0.6 percent, or, if higher, the tax credit reduction that was in effect 
for the taxable year preceding the taxable year for which the cap is 
requested.
    (c) Year not taken into account. If a State qualifies for a cap for 
any year, the year and January 1 of the year to which the cap applies 
will not be taken into account for purposes of determining reduction of 
tax credit for subsequent taxable years.
    (d) Partial caps. Partial caps obtained under subsection (f)(8) are 
no longer available. Nevertheless, for the purposes of applying section 
3302(c)(2) to subsequent taxable years, partial cap credits earned will 
be taken into account for purposes of determining reduction of tax 
credits. Also, the taxable year to which the partial cap applied (and 
January 1 thereof) will be taken into account for purposes of 
determining reduction of tax credits for subsequent taxable years.



Sec. 606.21  Criteria for cap.

    (a) Reduction in unemployment tax effort. (1) For purposes of 
paragraph (a)(1) of Sec. 606.20, a reduction in a State's unemployment 
tax effort will have occurred with respect to a taxable year if any 
action is or was taken (legislative, judicial, or administrative,) that 
is effective during the 12-month period ending on September 30 of such 
taxable year, which has resulted in or will result in a reduction of the 
amount of contributions paid or payable or the amounts that were or 
would have been paid or payable but for such action.
    (2) Actions that will result in a reduction in tax effort include, 
but are not limited to, a reduction in the taxable wage base, the tax 
rate schedule, tax rates, or taxes payable (including surtaxes) that 
would not have gone into effect but for the legislative, judicial, or 
administrative action taken. Notwithstanding the foregoing criterion, a 
reduction in unemployment tax effort resulting from any provision of the 
State law enacted prior to August 13, 1981, will not be taken into 
account as a reduction in the State's unemployment tax effort for the 
purposes of this section.
    (b) Net decrease in solvency. For purposes of paragraph (a)(2) of 
Sec. 606.20, a net decrease in the solvency of the State's unemployment 
compensation system will have occurred with respect to a taxable year if 
any action is or was taken (legislative, judicial, or administrative), 
that is effective during the 12-month period ending on September 30 of 
such taxable year, which has

[[Page 33]]

resulted in or will result in an increase in benefits without at least 
an equal increase in taxes, or a decrease in taxes without at least an 
equal decrease in benefits. Notwithstanding the foregoing criterion, a 
decrease in solvency resulting from any provision of the State law 
enacted prior to August 13, 1981, will not be taken into account as a 
reduction in solvency of the State's unemployment compensation system 
for the purposes of this section.
    (c) State unemployment tax rate. For purposes of paragraph (a)(3) of 
Sec. 606.20, the State unemployment tax rate is defined in 
Sec. 606.3(j). If such percentage is not a multiple of 0.1 percent, the 
percentage shall remain unrounded.
    (d) State five-year average benefit cost ratio. For purposes of 
paragraph (a)(3) of Sec. 606.20, the average benefit cost ratio for the 
five preceding calendar years is the percentage determined by dividing 
the sum of the benefit cost ratios for the five years by five. If such 
percentage is not a multiple of 0.1 percent, the percentage shall remain 
unrounded.



Sec. 606.22  Application for cap.

    (a) Application. (1) The Governor of the State shall make 
application, addressed to the Secretary of Labor, no later than July 1 
of a taxable year with respect to which a State requests a cap on tax 
credit reduction. The Governor is required to notify the Department on 
or before October 15 of such taxable year of any action occurring after 
the date of the initial application and effective prior to October 1 of 
such year that would impact upon the State's application.
    (2) The UIS Director will make a determination on the application on 
or before November 10 of such taxable year, will notify the applicant 
and the Secretary of the Treasury of such determination, and will cause 
notice of such determination to be published in the Federal Register.
    (b) Anticipated impact statement. In support of the application by 
the Governor, there shall be submitted with the application (on or 
before October 15), for the purposes of the criteria described in 
Secs. 606.20(a) (1) and (2) and 606.21 (a) and (b), a description of all 
statutory provisions enacted or amended, regulations adopted or revised, 
administrative policies and procedures adopted or revised, and judicial 
decisions given effect, which are effective during the 12-month period 
ending on September 30 of the taxable year for which a cap on tax credit 
reduction is requested, and an anticipated impact statement (AIS) for 
each such program action in the following respect--
    (1) The estimated dollar effect on each program action upon 
expenditures for compensation from the State unemployment fund and for 
the amounts of contributions paid or payable in such 12-month period, 
including the effect of interaction among program actions, and with 
respect to program actions for which dollar impact cannot be estimated 
or is minor or negligible, indicate whether the impact is positive or 
negative;
    (2) If a program action has no such dollar effect, an explanation of 
why there is or will be no such effect;
    (3) A description of assumptions and methodology used and the basis 
for the financial estimate of the impact of each program action 
described in paragraphs (b)(1) and (b)(2) of this section; and
    (4) A comparision of the program actions described in paragraphs 
(b)(1) and (b)(2) of this section with the program actions prior to the 
Federal fiscal year (as defined in Sec. 606.3(f)) which ends on such 
September 30.
    (c) Unemployment tax rate. With respect to the unemployment tax rate 
criterion described in Secs. 606.20(a)(3) and 606.21(c), the application 
shall include an estimate for the taxable year with respect to which a 
cap on tax credit reduction is requested and actual data for the prior 
two years as follows:
    (1) The amount of taxable wages as defined in Sec. 606.3(k);
    (2) The amount of total wages as defined in Sec. 606.3(l); and
    (3) The estimated distribution of taxable wages, as defined in 
Sec. 606.3(k), by tax rate under the State law.
    (d) Benefit cost ratio. With respect to the benefit cost ratio 
criterion described in Secs. 606.20(a)(3) and 606.21(d), the application 
shall include for each of the five calendar years prior to the taxable 
year for which a cap on tax

[[Page 34]]

credit reduction is requested, the following data:
    (1) The total dollar sum of compensation actually paid under the 
State law during the calendar year, including in such total sum all 
regular, additional, and extended compensation as defined in section 205 
of the Federal-State Extended Unemployment Compensation Act of 1970, but 
excluding from such total sum--
    (i) The total dollar amount of such compensation paid for which the 
State is entitled to reimbursement or was reimbursed under the 
provisions of any Federal law;
    (ii) The total dollar amount of such compensation paid which is 
attributable to services performed for a reimbursing employer, and which 
is not included in the total amount reported under paragraph (d)(1)(i) 
of this section;
    (2) The total dollar amount of interest paid during the calendar 
year on any advance; and
    (3) The total dollar amount of wages (as defined in Sec. 606.3(l)) 
with respect to such calendar year.
    (e) Documentation required. Copies of the sources of or authority 
for each program action described in paragraph (b) of this section shall 
be submitted with each application for a cap on tax credit reduction. In 
addition, a notation shall be made on each AIS of where all figures 
referred to are contained in reports required by the Department or in 
other data sources.
    (f) State contact person. The Department may request additional 
information or clarification of information submitted bearing upon an 
application for a cap on tax credit reduction. To expedite requests for 
such information, the name and telephone number of an appropriate State 
official shall be included in the application by the Governor.



Sec. 606.23  Avoidance of tax credit reduction.

    (a) Applicability. Subsection (g) of section 3302 of FUTA authorizes 
a State to avoid a tax credit reduction for a taxable year by meeting 
the three requirements of subsection (g). These requirements are met if 
the UIS Director determines that:
    (1) Advances were repaid by the State during the one-year period 
ending on November 9 of the taxable year in an amount not less than the 
sum of--
    (i) The potential additional taxes (as estimated by the UIS 
Director) that would be payable by the State's employers if paragraph 
(2) of section 3302(c) of FUTA were applied for such taxable year (as 
estimated with regard to the cap on tax credit reduction for which the 
State qualifies under Secs. 606.20 to 606.22 with respect to such 
taxable year), and
    (ii) Any advances made to such State during such one-year period 
under title XII of the Social Security Act;
    (2) There will be adequate funds in the State unemployment fund (as 
estimated by the UIS Director) sufficient to pay all benefits when due 
and payable under the State law during the three-month period beginning 
on November 1 of such taxable year without receiving any advance under 
title XII of the Social Security Act; and
    (3) There is a net increase (as estimated by the UIS Director) in 
the solvency of the State unemployment compensation system for the 
taxable year and such net increase equals or exceeds the potential 
additional taxes for such taxable year as estimated under paragraph 
(a)(1)(i) of this section.
    (b) Net increase in solvency. (1) The net increase in solvency for a 
taxable year, as determined for the purposes of paragraph (a)(3) of this 
section, must be attributable to legislative changes made in the State 
law after the later of--
    (i) September 3, 1982, or
    (ii) The date on which the first advance is taken into account in 
determining the amount of the potential additional taxes.
    (2) The UIS Director shall determine the net increase in solvency by 
first estimating the difference between revenue receipts and benefit 
outlays under the law in effect for the year for which avoidance is 
requested, as if the relevant changes in State law referred to in 
paragraph (b)(1) of this section were not in effect for such year. The 
UIS Director shall then estimate the difference between revenue receipts 
and benefit outlays under the law in effect for the year for which the 
avoidance is

[[Page 35]]

requested, taking into account the relevant changes in State law 
referred to in paragraph (b)(1) of this section. The amount (if any) by 
which the second estimated difference exceeds the first estimated 
difference shall constitute the net increase in solvency for the 
purposes of this section.
    (c) Year taken into account. If a State qualifies for avoidance for 
any year, that year and January 1 of that year to which the avoidance 
applies will be taken into account for purposes of determining reduction 
of tax credits for subsequent taxable years.



Sec. 606.24  Application for avoidance.

    (a) Application. (1) The Governor of the State shall make 
application, addressed to the Secretary of Labor, no later than July 1 
of a taxable year with respect to which a State requests avoidance of 
tax credit reduction. The Governor is required to notify the Department 
on or before October 15 of such taxable year of any action impacting 
upon the State's application occurring subsequent to the date of the 
initial application and on or before November 10.
    (2) The UIS Director will make a determination on the application as 
of November 10 of such taxable year, will notify the applicant and the 
Secretary of the Treasury of such determination, and will cause notice 
of such determination to be published in the Federal Register.
    (b) Information. (1) The application shall include a statement of 
the amount of advances repaid and to be repaid during the one-year 
period ending on November 9 of the taxable year for which avoidance is 
requested. If the amount repaid as of the date of the application is 
less than the amount required to satisfy the provisions of 
Sec. 606.23(a)(1), the Governor shall provide a report later of the 
additional repayments that have been made in the remainder of the one-
year period ending on November 9 of the taxable year, for the purposes 
of meeting the provisions of Sec. 606.23(a)(1).
    (2) The application also shall include estimates of revenue 
receipts, benefit outlays, and end-of-month fund balance for each month 
in the period beginning with September of the taxable year for which 
avoidance is requested through the subsequent January. Actual data for 
the comparable period of the preceding year also shall be included in 
the application in order to determine the reasonableness of such 
estimates.
    (3) The application also shall include a description of State law 
changes, effective for the taxable year for which the avoidance is 
requested, which resulted in a net increase in the solvency of the State 
unemployment compensation system, and documentation which supports the 
State's estimate of the net increase in solvency for such taxable year.



Sec. 606.25  Waiver of and substitution for additional tax credit reduction.

    A provision of subsection (c)(2) of section 3302 of FUTA provides 
that, for a State that qualifies, the additional tax credit reduction 
applicable under subparagraph (C), beginning in the fifth consecutive 
year of a balance of outstanding advances, shall be waived and the 
additional tax credit reduction applicable under subparagraph (B) shall 
be substituted. The waiver and substitution are granted if the UIS 
Director determines that the State has taken no action, effective during 
the 12-month period ending on September 30 of the year for which the 
waiver and substitution are requested, which has resulted or will result 
in a net decrease in the solvency of the State unemployment compensation 
system as determined for the purposes of Secs. 606.20(a)(2) and 
606.21(b).



Sec. 606.26  Application for waiver and substitution.

    (a) Application. The Governor of the State shall make application 
addressed to the Secretary of Labor, no later than July 1 of a taxable 
year with respect to which a State requests waiver and substitution. Any 
such application shall contain the supportive data and information 
required by Sec. 606.22(b) for the purposes of Secs. 606.20(a)(2) and 
606.21(b). The Governor is required to notify the Department on or 
before October 15 of such taxable year of action occurring after the 
date of the initial application and effective prior to October 1 of such 
year that would impact upon the State's application.

[[Page 36]]

    (b) Notification of determination. The UIS Director will make a 
determination on the application as of November 10 of the taxable year, 
will notify the applicant and the Secretary of the Treasury of the 
resulting tax credit reduction to be applied, and will cause notice of 
such determination to be published in the Federal Register.



                     Subpart D--Interest on Advances



Sec. 606.30  Interest rates on advances.

    Advances made to States pursuant to title XII of the Social Security 
Act on or after April 1, 1982, shall be subject to interest payable on 
the due dates specified in Sec. 606.31.\1\ The interest rate for each 
calendar year will be 10 percent or, if less, the rate determined by the 
Secretary of the Treasury and announced to the States by the Department.
---------------------------------------------------------------------------


    \1\ (Editorial note: This section will be added at a later date.)
---------------------------------------------------------------------------



Sec. 606.31  Due dates for payment of interest. [Reserved]



Sec. 606.32  Types of advances subject to interest.

    (a) Payment of interest. Except as otherwise provided in paragraph 
(b) of this section each State shall pay interest on any advance made to 
such State under title XII of the Social Security Act.
    (b) Cash flow loans. Advances repaid in full prior to October 1 of 
the calendar year in which made are deemed cash flow loans and shall be 
free of interest; provided, that the State does not receive an 
additional advance after September 30 of the same calendar year. If such 
additional advance is received by the State, interest on the completely 
repaid earlier advance(s) shall be due and payable not later than the 
day following the date of the first such additional advance. The 
administrator of the State agency shall notify the Secretary of Labor no 
later than September 10 of those loans deemed to be cash flow loans and 
not subject to interest. This notification shall include the date and 
amount of each loan made in January through September and a copy of 
documentation sent to the Secretary of the Treasury requesting loan 
repayment transfer(s) from the State's account in the Unemployment Trust 
Fund to the Federal unemployment account in such Fund.



Sec. 606.33  No payment of interest from unemployment fund. [Reserved]



Sec. 606.34  Reports of interest payable. [Reserved]



Sec. 606.35  Order of application for repayments. [Reserved]



                 Subpart E--Relief from Interest Payment



Sec. 606.40  May/September delay.

    Subsection (b)(3)(B) of section 1202 of the Social Security Act 
permits a State to delay payment of interest accrued on advances made 
during the last five months of the Federal fiscal year (May, June, July, 
August, and September) to no later than December 31 of the next 
succeeding calendar year. If the payment is delayed, interest on the 
delayed payment will accrue from the normal due date (i.e., September 
30) and in the same manner as if the interest due on the advance(s) was 
an advance made on such due date. The Governor of a State which has 
decided to delay such interest payment shall notify the Secretary of 
Labor no later than September 1 of the year with respect to which the 
delay is applicable.



Sec. 606.41  High unemployment deferral.

    (a) Applicability. Subsection (b)(3)(C) of section 1202 of the 
Social Security Act permits a State to defer payment of, and extend the 
payment for, 75 percent of interest charges otherwise due prior to 
October 1 of a year if the UIS Director determines that high 
unemployment conditions existed in the State.
    (b) High unemployment defined. For purposes of this section, high 
unemployment conditions existed in the State if the State's rate of 
insured unemployment (as determined for purposes of 20 CFR 615.12) under 
the State law with respect to the period consisting of the first six 
months of the preceding calendar year equalled or exceeded 7.5 percent; 
this means that in

[[Page 37]]

weeks 1 (that week which includes January 1 of the year) through 26 of 
such preceding calendar year, the rate of insured unemployment reported 
by the State and accepted by the Department under 20 CFR part 615 must 
have averaged a percentage equalling or exceeding 7.5 percent.
    (c) Schedule of deferred payments. The State must pay prior to 
October 1 one-fourth of the interest due, and must pay a minimum of one-
third of the deferred amount prior to October 1 in each of the three 
years following the year in which deferral was granted; at the State's 
option payment of deferred interest may be accelerated.
    (d) Related criteria. Timely payment of one-fourth of the interest 
due prior to October 1 is a precondition to obtaining deferral of 
payment of 75 percent of the interest due. No interest shall accrue on 
such deferred interest.
    (e) Application for deferral and determination. (1) The Governor of 
a State which has decided to request such deferral of interest payment 
shall apply to the Secretary of Labor no later than July 1 of the 
taxable year for which the deferral is requested.
    (2) The UIS Director will determine whether deferral is or is not 
granted on the basis of the Department's records of reports of the rates 
of insured unemployment and information obtained from the Department of 
the Treasury as to the timely and full payment of one-fourth of the 
interest due.



Sec. 606.42  High unemployment delay.

    (a) Applicability. Paragraph (9) of section 1202 (b) of the Social 
Security Act permits a State to delay for a period not exceeding nine 
months the interest payment due prior to October 1 if, for the most 
recent 12-month period prior to such October 1 for which data are 
available, the State had an average total unemployment rate of 13.5 
percent or greater.
    (b) Delayed due date. An interest payment delayed under paragraph 
(9) must be paid in full not later than the last official Federal 
business day prior to the following July 1; at the State's option 
payment of delayed interest may be accelerated. No interest shall accrue 
on such delayed payment.
    (c) Application for delay in payment and determination. (1) The 
Governor of a State which has decided to request delay in payment of 
interest under paragraph (9) shall apply to the Secretary of Labor no 
later than July 1 of the taxable year for which the delay is requested.
    (2) The UIS Director will determine whether delay is or is not 
granted on the basis of seasonally unadjusted civilian total 
unemployment rate data published by the Department's Bureau of Labor 
Statistics.



Sec. 606.43  Maintenance of solvency effort.

    (a) Applicability. Legislative-action interest deferrals obtained 
under subsection (b)(8) (A) through (C) of section 1202 of the Social 
Security Act are no longer available. Nevertheless, States must maintain 
their solvency effort with respect to any such deferrals approved in 
1983, 1984, and 1985 in order for the deferral to continue to apply in 
each subsequent year of deferral.
    (b) Determination regarding maintenance of solvency effort. (1) The 
UIS Director shall determine if there is a net reduction in solvency 
effort by first estimating revenue receipts and benefit outlays under 
the law in effect in the 12-month period ending on September 30 of the 
year for which continuation of deferral is requested as if it were 
effective in the base year (12-month period for which the first deferral 
was granted).
    (2) The UIS Director shall then compare revenue receipts and benefit 
outlays for the base year (previously estimated at the time of the 
original deferral) with revenue receipts and benefit outlays estimated 
in paragraph (b)(1) of this section.
    (3) If the sum of--
    (i) The percentage increase in revenue receipts from the base year 
to the year for which the continuation of deferral is requested (as 
estimated in paragraph (b)(1) of this section), and
    (ii) The percentage decrease in benefit outlays from the base year 
to the year for which the continuation of deferral is requested (as 
estimated in paragraph (b)(1) of this section),

is equal to or greater than the sum of such percentages achieved for the 
12-

[[Page 38]]

month period ending on September 30 of the year for which the latest 
deferral was obtained, the State will have maintained its solvency 
effort, but if less, then a reduction in solvency effort will have 
occurred.
    (4) Notwithstanding the results of the calculation in paragraph 
(b)(3) of this section, if there is no increase in revenue receipts or 
no decrease in benefit outlays between the base year and the year for 
which continuation of deferral is requested, then a reduction in 
solvency effort will have occurred.
    (c) Effect of determination. (1) If the UIS Director determines that 
a State has maintained its solvency effort, continuation of deferral 
will be granted, and the State will be required to timely pay the 
deferred interest payable prior to October 1 of the year with respect to 
which such determination is made.
    (2) If the UIS Director determines that a State failed to maintain 
its solvency effort, all deferred interest shall be due and payable 
prior to October 1 of the year with respect to which such determination 
is made.
    (d) Application and information. (1) The Governor of a State which 
has decided to request continuation of a previously approved deferral of 
interest payments shall apply to the Secretary of Labor no later than 
July 1 of the year for which continuation is requested. The Governor is 
required to notify the Department on or before September 1 of such 
taxable year of any action impacting upon the State's application which 
has occurred or will occur subsequent to the date of the initial 
application and on or before September 30.
    (2) In support of the application by the Governor, there shall be 
submitted for the purposes of the estimates required in paragraph (b) of 
this section documentation as specified in Sec. 606.22 (b)(1) through 
(4), (c) and (f) and bearing upon the application for continuation of 
deferral, in terms of the relevant comparison between revenue receipts 
and benefit outlays.



Sec. 606.44  Notification of determinations.

    The UIS Director will make determinations under Secs. 606.41, 
606.42, and 606.43 on or before September 10 of the taxable year, will 
promptly notify the applicants and the Secretary of the Treasury of such 
determinations, and will cause notice of such determinations to be 
published in the Federal Register. The UIS Director also will inform the 
Secretary of the Treasury and cause notice to be published in the 
Federal Register of information with respect to delayed payment of 
interest as provided in Sec. 606.40.



PART 609--UNEMPLOYMENT COMPENSATION FOR FEDERAL CIVILIAN EMPLOYEES--Table of Contents




                      Subpart A--General Provisions

Sec.
609.1  Purpose and application.
609.2  Definitions of terms.

                Subpart B--Administration of UCFE Program

609.3  Eligibility requirements for UCFE.
609.4  Weekly and maximum benefit amounts.
609.5  Claims for UCFE.
609.6  Determinations of entitlement; notices to individual.
609.7  Appeal and review.
609.8  The applicable State for an individual.
609.9  Provisions of State law applicable to UCFE claims.
609.10  Restrictions on entitlement.
609.11  Overpayments; penalties for fraud.
609.12  Inviolate rights to UCFE.
609.13  Recordkeeping; disclosure of information.
609.14  Payments to States.
609.15  Public access to Agreements.
609.16  Administration in absence of an Agreement.
609.17  Information, reports, and studies.

             Subpart C--Responsibilities of Federal Agencies

609.20  Information to Federal civilian employees.
609.21  Findings of Federal agency.
609.22  Correcting Federal findings.
609.23  Furnishing additional information.
609.24  Reconsideration of Federal findings.
609.25  Furnishing other information.
609.26  Liaison with Department.

    Authority:  5 U.S.C. 8508; Secretary's Order No. 4-75, 40 FR 18515; 
(5 U.S.C. 301). Interpret and apply secs. 8501-8508 of title 5, United 
States Code.

    Source:  47 FR 54687, Dec. 3, 1982, unless otherwise noted.

[[Page 39]]



                      Subpart A--General Provisions



Sec. 609.1  Purpose and application.

    (a) Purpose. Subchapter I of chapter 85, title 5 of the United 
States Code, as amended by Pub. L. 94-566, 90 Stat. 2667, 5 U.S.C. 8501-
8508, provides for a permanent program of unemployment compensation for 
unemployed Federal civilian employees. The unemployment compensation 
provided for in subchapter I is hereinafter referred to as unemployment 
compensation for Federal employees, or UCFE. The regulations in this 
part are issued to implement the UCFE Program.
    (b) First rule of construction. The Act and the implementing 
regulations in this part shall be construed liberally so as to carry out 
the purposes of the Act.
    (c) Second rule of construction. The Act and the implementing 
regulations in this part shall be construed so as to assure insofar as 
possible the uniform interpretation and application of the Act 
throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor (hereafter Department), 
not later than 10 days after issuance, a copy of each judicial or 
administrative decision ruling on an individual's entitlement to payment 
of UCFE or to credit for a waiting period. On request of the Department, 
a State agency shall forward to the Department a copy of any 
determination or redetermination ruling on an individual's entitlement 
to UCFE or waiting period credit.
    (2) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part, the Department may at any time 
notify the State agency of the Department's view. Thereafter the State 
agency shall issue a redetermination or appeal if possible, and shall 
not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part, the Department may at any time notify the State agency 
of the Department's view. If the determination, redetermination, or 
decision in question denies UCFE to a claimant, the steps outlined in 
paragraph (d)(2) of this section shall be followed by the State agency. 
If the determination, redetermination, or decision in question awards 
UCFE to a claimant, the benefits are ``due'' within the meaning of 
section 303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1), and 
therefore must be paid promptly to the claimant. However, the State 
agency shall take the steps outlined in paragraph (d)(2) of this 
section, and payments to the claimant may be temporarily delayed if 
redetermination or appeal action is taken not more than one business day 
following the day on which the first payment otherwise would be issued 
to the claimant; and the redetermination action is taken or appeal is 
filed to obtain a reversal of the award of UCFE and a ruling consistent 
with the Department's view; and the redetermination action or appeal 
seeks an expedited redetermination or appeal within not more than two 
weeks after the redetermination action is taken or the appeal is filed. 
If redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding UCFE or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the claimant.
    (4)(i) If any determination, redetermination, or decision, referred 
to in paragraph (d)(2) or paragraph (d)(3) of this section, is treated 
as a precedent for any future UCFE claim or claim

[[Page 40]]

under the UCX Program (part 614 of this chapter), the Secretary will 
decide whether the Agreement with the State entered into under the Act 
shall be terminated.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part, including any 
determination, redetermination, or decision referred to in paragraph 
(d)(3) of this section, the Secretary will decide whether the State 
shall be required to restore the funds of the United States for any sums 
paid under such a determination, redetermination, or decision, and 
whether, in the absence of such restoration, the Agreement with the 
State shall be terminated and whether other action shall be taken to 
recover such sums for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (d)(2) of paragraph (d)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.



Sec. 609.2  Definitions of terms.

    For the purposes of the Act and this part:
    (a) Act means subchapter I of chapter 85, title 5, United States 
Code, 5 U.S.C. 8501-8508.
    (b) Agreement means the agreement entered into pursuant to the Act 
between a State and the Secretary under which the State agency of the 
State agrees to make payments of unemployment compensation in accordance 
with the Act and the regulations and procedures thereunder prescribed by 
the Department.
    (c) Based period means the base period as defined by the applicable 
State law for the benefit year.
    (d) Benefit year means the benefit year as defined by the applicable 
State law, and if not so defined the term means the period prescribed in 
the agreement with the State or, in the absence of an Agreement, the 
period prescribed by the Department.
    (e) Federal agency means any department, agency, or governmental 
body of the United States, including any instrumentality wholly or 
partially owned by the United States, in any branch of the Government of 
the United States, which employs any individual in Federal civilian 
service.
    (f) Federal civilian service means service performed in the employ 
of any Federal agency, except service performed--
    (1) By an elective official in the executive or legislative branches 
of the Government of the United States;
    (2) As a member of the Armed Forces or the Commissioned Corps of the 
National Oceanic and Atmospheric Administration;
    (3) By Foreign Service personnel for whom special separation 
allowances are provided under chapter 14 of title 22 of the United 
States Code;
    (4) Outside the 50 States, the Commonwealth of Puerto Rico, the 
Virgin Islands, and the District of Columbia, by an individual who is 
not a citizen of the United States;
    (5) By an individual excluded by regulations of the Office of 
Personnel Management from civil service retirement coverage provided by 
subchapter III of chapter 83 of title 5 of the United States Code 
because the individual is paid on a contract or fee basis;
    (6) By an individual receiving nominal pay and allowances of $12 or 
less a year;
    (7) In a hospital, home, or other institution of the United States 
by a patient or inmate thereof;
    (8) By a student-employee as defined by 5 U.S.C. 5351; that is: (i) 
A student nurse, medical or dental intern, resident-in-training, student 
dietitian, student physical therapist, or student occupational 
therapist, assigned or attached to a hospital, clinic, or medical or 
dental laboratory operated by an agency as defined in section 5351; or
    (ii) Any other student-employee, assigned or attached primarily for 
training purposes to such a hospital, clinic, or medical or dental 
laboratory operated by such an agency, who is designated by the head of 
the agency with the approval of the Office of Personnel Management;

[[Page 41]]

    (9) By an individual serving on a temporary basis in case of fire, 
storm, earthquake, flood, or other similar emergency;
    (10) By an individual employed under a Federal relief program to 
relieve the individual from unemployment;
    (11) As a member of a State, county, or community committee under 
the Agricultural Stabilization and Conservation Service or of any other 
board, council, committee, or other similar body, unless such body is 
composed exclusively of individuals otherwise in the full-time employ of 
the United States;
    (12) By an officer or member of the crew on or in connection with an 
American vessel which is: (i) Owned by or bareboat chartered to the 
United States, and
    (ii) The business of which is conducted by a general agent of the 
Secretary of Commerce; and
    (iii) If contributions on account of such service are required under 
section 3305(g) of the Internal Revenue Code of 1954 (26 U.S.C. 3305(g)) 
to be made to an unemployment fund under a State law;
    (13) By an individual excluded by any other Federal law from 
coverage under the UCFE Program; or
    (14) By an individual whose service is covered by the UCX Program to 
which part 614 of this chapter applies.
    (g) Federal employee means an individual who has performed Federal 
civilian service.
    (h) Federal findings means the facts reported by a Federal agency 
pertaining to an individual as to: (1) Whether or not the individual has 
performed Federal civilian service for such an agency;
    (2) The period or periods of such Federal civilian service;
    (3) The individual's Federal wages; and
    (4) The reasons for termination of the individual's Federal civilian 
service.
    (i) Federal wages means all pay and allowances, in cash and in kind, 
for Federal civilian service.
    (j) First claim means an initial claim for unemployment compensation 
under the UCFE Program, the UCX Program (part 614 of this chapter), a 
State law, or some combination thereof, whereby a benefit year is 
established under an applicable State law.
    (k) Official station means the State (or country, if outside the 
United States) designated on a Federal employee's notification of 
personnel action terminating the individual's Federal civilian service 
(Standard Form 50 or its equivalent) as the individual's ``duty 
station.'' If the form of notification does not specify the Federal 
employee's ``duty station'', the individual's official station shall be 
the State or country designated under ``name and location of employing 
office'' on such form or designated as the individual's place of 
employment on an equivalent form.
    (l) Secretary means the Secretary of Labor of the United States.
    (m) State means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.
    (n) State agency means the agency of the State which administers the 
applicable State law and is administering the UCFE Program in the State 
pursuant to an Agreement with the Secretary.
    (o)(1) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1954, 26 U.S.C. 3304, if the State is certified under section 
3304(c) of the Internal Revenue Code of 1954, 26 U.S.C. 3304(c).
    (2) Applicable State law means the State law made applicable to a 
UCFE claimant by Sec. 609.8.
    (p)(1) Unemployment compensation means cash benefits (including 
dependents' allowances) payable to individuals with respect to their 
unemployment, and includes regular, additional, emergency, and extended 
compensation.
    (2) Regular compensation means unemployment compensation payable to 
an individual under any State law, but not including additional 
compensation or extended compensation.
    (3) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors.

[[Page 42]]

    (4) Emergency compensation means supplementary unemployment 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Extended compensation means unemployment compensation payable to 
an individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970, as 
amended, 26 U.S.C. 3304 note, and part 615 of this chapter, with respect 
to the payment of extended compensation.
    (q) Week means, for purposes of eligibility for and payment of UCFE, 
a week as defined in the applicable State law.
    (r) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to all employment 
and earnings, and in the same manner and to the same extent for the 
purposes of the UCFE Program, as if the individual filing for UCFE were 
filing a claim for State unemployment compensation.



                Subpart B--Administration of UCFE Program



Sec. 609.3  Eligibility requirements for UCFE.

    An individual shall be eligible to receive a payment of UCFE or to 
waiting period credit with respect to a week of unemployment if:
    (a) The individual has Federal civilian service and Federal wages in 
the base period under the applicable State law;
    (b) The individual meets the qualifying employment and wage 
requirements of the applicable State law, either on the basis of Federal 
civilian service and Federal wages alone or in combination with service 
and wages covered under a State law or under the UCX Program (part 614 
of this chapter);
    (c) The individual has filed an initial claim for UCFE and, as 
appropriate, has filed a timely claim for waiting period credit or a 
payment of UCFE with respect to that week of unemployment; and
    (d) The individual is totally, part-totally, or partially 
unemployed, and is able to work, available for work, and seeking work 
within the meaning of or as required by the applicable State law, and is 
not subject to disqualification under this part or the applicable State 
law, with respect to that week of unemployment.



Sec. 609.4  Weekly and maximum benefit amounts.

    (a) Total unemployment. The weekly amount of UCFE payable to an 
eligible individual for a week of total unemployment shall be the amount 
that would be payable to the individual as unemployment compensation for 
a week of total unemployment as determined under the applicable State 
law.
    (b) Partial and part-total unemployment. The weekly amount of UCFE 
payable for a week of partial or part-total unemployment shall be the 
amount that would be payable to the individual as unemployment 
compensation for a week of partial or part-total unemployment as 
determined under the applicable State law.
    (c) Maximum amount. The maximum amount of UCFE which shall be 
payable to an eligible individual during and subsequent to the 
individual's benefit year shall be the maximum amount of all 
unemployment compensation that would be payable to the individual as 
determined under the applicable State law.
    (d) Computation rules. (1) The weekly and maximum amounts of UCFE 
payable to an individual under the UCFE Program shall be determined 
under the applicable State law to be in the same amount, on the same 
terms, and subject to the same conditions as the State unemployment 
compensation which would be payable to the individual under the 
applicable State law if the individual's Federal civilian service and 
Federal wages assigned or transferred under this part to the State had 
been included as employment and wages covered by that State law.
    (2) All Federal civilian service and Federal wages for all Federal 
agencies shall be considered employment with a single employer for 
purposes of the UCFE Program.

[[Page 43]]



Sec. 609.5  Claims for UCFE.

    (a) First claims. A first claim for UCFE shall be filed by an 
individual in any State agency of any State (or Canada) according to the 
applicable State law, and on a form prescribed by the Department which 
shall be furnished to the individual by the State agency where the claim 
is filed.
    (b) Weekly claims. Claims for waiting week credit and payments of 
UCFE for weeks of unemployment shall be filed in any State agency (or 
Canada) at the times and in the manner as claims for State unemployment 
compensation are filed under the applicable State law, and on forms 
prescribed by the Department which shall be furnished to the individual 
by the State agency where the claim is filed.
    (c) Secretary's standard. The procedure for reporting and filing 
claims for UCFE and waiting period credit shall be consistent with this 
part 609 and the Secretary's ``Standard for Claim Filing, Claimant 
Reporting, Job Finding and Employment Services'' (Employment Security 
Manual, part V, sections 5000 et seq.).



Sec. 609.6  Determinations of entitlement; notices to individual.

    (a) Determination of first claim. The State agency whose State law 
applies to an individual under Sec. 609.8 shall, promptly upon the 
filing of a first claim for UCFE, determine whether the individual is 
eligible and whether a disqualification applies, and, if the individual 
is found to be eligible, the individual's benefit year and the weekly 
and maximum amounts of UCFE payable to the individual.
    (b) Determinations of weekly claims. The State agency promptly 
shall, upon the filing of a claim for payment of UCFE or waiting period 
credit with respect to a week, determine whether the individual is 
entitled to a payment of UCFE or waiting period credit with respect to 
such week, and, if entitled, the amount of UCFE or waiting period credit 
to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to State unemployment 
compensation under the applicable State law shall apply to 
determinations pertaining to UCFE.
    (d) Notices to individual. The State agency promptly shall give 
notice in writing to the individual of any determination or 
redetermination of a first claim, and, except as may be authorized under 
paragraph (g) of this section, of any determination or redetermination 
of any weekly claim which denies UCFE or waiting period credit or 
reduces the weekly amount or maximum amount initially determined to be 
payable. Each notice of determination or redetermination shall include 
such information regarding the determination or redetermination and 
notice of right to reconsideration or appeal, or both, as is furnished 
with written notices of determinations and redeterminations with respect 
to claims for State unemployment compensation; and where information 
furnished by a Federal agency was considered in making the 
determination, or redetermination, the notice thereof shall include an 
explanation of the right of the individual to seek additional 
information pursuant to Sec. 609.23 and/or a reconsideration of Federal 
findings pursuant to Sec. 609.24.
    (e) Obtaining information for claim determinations. (1) Information 
required for the determination of claims for UCFE shall be obtained by 
the State agency from claimants, employers, and others, in the same 
manner as information is obtained for claim purposes under the 
applicable State law, but information (including additional and 
reconsidered Federal findings) shall be obtained from the Federal agency 
that employed the UCFE claimant as prescribed in Secs. 609.21 through 
609.25. On request by a UCFE claimant, the State agency shall seek 
additional information pursuant to Sec. 609.23 and reconsideration of 
Federal findings pursuant to Sec. 609.24.
    (2) If Federal findings have not been received from a Federal agency 
within 12 days after the request for information was submitted to the 
Federal agency, the State agency shall determine the individual's 
entitlement to UCFE on the basis of an affidavit completed by the 
individual on a form prescribed by the Department. In addition,

[[Page 44]]

the individual shall submit for examination by the State agency any 
documents issued by the Fedeal agency (for example, Standard Form 50 or 
W-2) verifying that the individual performed services for and received 
wages from such Federal agency.
    (3) If Federal findings received by a State agency after a 
determination has been made under this section contain information which 
would result in a change in the individual's eligibility for or 
entitlement to UCFE, the State agency promptly shall make a 
redetermination and notify the individual, as provided in this section. 
All payments of UCFE made prior to or after such redetermination shall 
be adjusted in accordance therewith.
    (f) Promptness. Full payment of UCFE when due shall be consistent 
with this part 609 and shall be made with the greatest promptness that 
is administratively feasible, but the provisions of part 640 of this 
chapter (relating to promptness of benefit payments) shall not be 
applicable to the UCFE Program.
    (g) Secretary's standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for UCFE, 
shall be consistent with this part 609 and with the Secretary's 
``Standard for Claim Determinations--Separation Information'' 
(Employment Security Manual, part V, sections 6010 et seq.).



Sec. 609.7  Appeal and review.

    (a) Applicable State law. The provisions of the applicable State law 
concerning the right of appeal and fair hearing from a determination or 
redetermination of entitlement to State unemployment compensation shall 
apply to determinations and redeterminations of eligibility for or 
entitlement to UCFE and waiting period credit. Any such determination or 
redetermination shall be subject to appeal and review only in the manner 
and to the extent provided in the applicable State law with respect to 
determinations and redeterminations of entitlement to State unemployment 
compensation.
    (b) Rights of appeal and fair hearing. The provisions on right to 
appeal and opportunity for a fair hearing with respect to claims for 
UCFE shall be consistent with this part and with sections 303(a)(1) and 
303(a)(3) of the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (c) Promptness on appeals. (1) Decisions on appeals under the UCFE 
Program shall accord with the Secretary's ``Standard for Appeals 
Promptness--Unemployment Compensation'' in part 650 of this chapter, and 
with Sec. 609.1(d).
    (2) Any provision of an applicable State law for advancement or 
priority of unemployment compensation cases on judicial calenders, or 
otherwise intended to provide for the prompt payment of unemployent 
compensation when due, shall apply to proceedings involving claims for 
UCFE.
    (d) Appeal and review by Federal agency. If a Federal agency 
believes that a State agency's determination or redetermination of an 
individual's eligibility for or entitlement to UCFE is incorrect, the 
Federal agency may seek appeal and review of such determination or 
redetermination in the same manner as an interested employer may seek 
appeal and review under the applicable State law.



Sec. 609.8  The applicable State for an individual.

    (a) The applicable State. The applicable State for an individual 
shall be the State to which the individual's Federal civilian service 
and Federal wages are assigned or transferred under this section. The 
applicable State law for the individual shall be the State law of such 
State.
    (b) Assignment of service and wages. (1) An individual's Federal 
civilian service and Federal wages shall be assigned to the State in 
which the individual had his or her last official station prior to 
filing a first claim unless:
    (i) At the time a first claim is filed the individual resides in 
another State in which, after separation from Federal civilian service, 
the individual performed service covered under the State law, in which 
case all of the individual's Federal civilian service and wages shall be 
assigned to the latter State; or
    (ii) Prior to filing a first claim an individual's last official 
station was outside the States, in which case all of the

[[Page 45]]

individual's Federal civilian service and Federal wages shall be 
assigned to the State in which the individual resides at the time the 
individual files a first claim, provided the individual is personally 
present in a State when the individual files the first claim.
    (2) Federal civilian service and wages assigned to a State in error 
shall be reassigned for use by the proper State agency. An appropriate 
record of a reassignment shall be made by the State agency which makes 
the reassignment.
    (3) Federal civilian service and Federal wages assigned to a State 
shall be transferred to another State where such transfer is necessary 
for the purposes of a combined-wage claim filed by an individual.
    (c) Assignment deemed complete. All of an individual's Federal 
civilian service and Federal wages shall be deemed to have been assigned 
to a State upon the filing of a first claim. Federal civilian service 
and Federal wages shall be assigned to a State only in accordance with 
paragraph (b) of this section.
    (d) Use of assigned service and wages. All assigned Federal civilian 
service and Federal wages shall be used only by the State to which 
assigned or transferred in accordance with paragraph (b) of this 
section.



Sec. 609.9  Provisions of State law applicable to UCFE claims.

    (a) Particular provisions applicable. 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. The 
provisions of the applicable State law which shall apply include, but 
are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals and Federal agencies, as appropriate, 
including notice to each individual of each determination and 
redetermination of eligibility for or entitlement to UCFE;
    (4) Determinations and redeterminations;
    (5) Ability to work, availability for work, and search for work; and
    (6) Disqualifications.
    (b) IBPP. The Interstate Benefit Payment Plan shall apply, where 
appropriate, to individuals filing claims for UCFE.
    (c) Wage combining. The State's provisions complying with the 
Interstate Arrangement for Combining Employment and Wages (part 616 of 
this chapter) shall apply, where appropriate, to individuals filing 
claims for UCFE.
    (d) Procedural requirements. The provisions of the applicable State 
law which apply hereunder to claims for and the payment of UCFE shall be 
applied consistently with the requirements of title III of the Social 
Security Act and the Federal Unemployment Tax Act which are pertinent in 
the case of State unemployment compensation, including but not limited 
to those standards and requirements specifically referred to in the 
provisions of this part, except as provided in paragraph (f) of 
Sec. 609.6.



Sec. 609.10  Restrictions on entitlement.

    (a) Disqualification. If the week of unemployment for which an 
individual claims UCFE is a week to which a disqualification for State 
unemployment compensation applies under the applicable State law, or 
would apply but for the fact that the individual has no right to such 
compensation, the individual shall not be entitled to a payment of UCFE 
for that week.
    (b) Allocation of terminal annual leave payments. Lump-sum terminal 
annual leave payments shall not be allocated by a Federal agency and 
shall be allocated by a State agency in the same manner as similar 
payments to individuals employed by private employers are allocated 
under the applicable State law. In a State in which a private employer 
has an option as to the period to which such payments shall be 
allocated, such payments shall be allocated to the date of separation 
from employment.

[[Page 46]]



Sec. 609.11  Overpayments; penalties for fraud.

    (a) False statements and representations. Section 8507(a) of the Act 
provides that if a State agency, the Department, or a court of competent 
jurisdiction finds that an individual--
    (1) Knowingly has made, or caused to be made by another, a false 
statement or representation of a material fact, or knowingly has failed, 
or caused another to fail, to disclose a material fact; and
    (2) As a result of that action has received an amount as UCFE to 
which the individual was not entitled; the individual shall repay the 
amount to the State agency or the Department. Instead of requiring 
repayments, the State agency or the Department may recover the amount by 
deductions from UCFE payable to the individual during the 2-year period 
after the date of the finding. A finding by a State agency or the 
Department may be made only after an opportunity for a fair hearing, 
subject to such further review as may be appropriate under Sec. 609.7.
    (b) Prosecution for fraud. Section 1919 of title 18, United States 
Code, provides that whoever makes a false statement or representation of 
a material fact knowing it to be false, or knowingly fails to disclose a 
material fact, to obtain or increase for himself or for any other 
individual any payment authorized to be paid under chapter 85 of title 
5, United States Code, or under an agreement thereunder, shall be fined 
not more than $1,000 or imprisoned not more than one year, or both.
    (c) Absence of fraud. If a State agency or court of competent 
jurisdiction finds that an individual has received a payment of UCFE to 
which the individual was not entitled under the Act and this part, which 
was not due to a false statement or representation as provided in 
paragraph (a) or (b) of this section, the individual shall be liable to 
repay to the applicable State the total sum of the payment to which the 
individual was not entitled, and the State agency shall take all 
reasonable measures authorized under any State law or Federal law to 
recover for the account of the United States the total sum of the 
payment to which the individual was not entitled.
    (d) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any overpayment which is not repaid by the 
individual, by deductions from any UCFE payable to the individual under 
the Act and this part, or from any unemployment compensation payable to 
the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) A State agency shall also recover, insofar as is possible, the 
amount of any overpayment of UCFE made to the individual by another 
State, by deductions from any UCFE payable by the State agency to the 
individual under the Act and this part, or from any unemployment 
compensation payable to the individual under any Federal unemployment 
compensation law administered by the State agency, or from any 
assistance or allowance payable to the individual with respect to 
unemployment under any other Federal law administered by the State 
agency.
    (3) Recoupment of fraudulent overpayments referred to in paragraph 
(a) of this section shall be limited to the 2-year period stated in that 
paragraph. Recoupment of fraudulent overpayments referred to in 
paragraph (b) of this section, and nonfraudulent overpayments referred 
to in paragraph (c) of this section shall be subject to any time 
limitation on recoupment provided for in the State law that applies to 
the case.
    (e) Debts due the United States. UCFE payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person except 
pursuant to a court order for child support or alimony in accordance 
with the law of the State and section 459 of the Social Security Act, 42 
U.S.C. 659.
    (f) Application of State law. (1) Except as indicated in paragraph 
(a) of this section, any provision of State law

[[Page 47]]

that may be applied for the recovery of overpayments or prosecution for 
fraud, and any provision of State law authorizing waiver of recovery of 
overpayments of unemployment compensation, shall be applicable to UCFE.
    (2) In the case of any finding of false statement or representation 
under the Act and paragraph (a) of this section, or prosecution for 
fraud under 18 U.S.C. 1919 or pursuant to paragraph (f)(1) of this 
section, the individual shall be disqualified or penalized in accordance 
with the provisions of the applicable State law relating to fraud in 
connection with a claim for State unemployment compensation.
    (g) Final decision. Recovery of any overpayment of UCFE shall not be 
enforced by the State agency until the determination or redetermination 
establishing the overpayment has become final, or if appeal is taken 
from the determination or redetermination, until the decision after 
opportunity for a fair hearing has become final.
    (h) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (g) of Sec. 609.6 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 609.7 shall apply to determinations and 
redeterminations made pursuant to this section.
    (i) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of UCFE shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to State unemployment 
compensation and consistent with the Secretary's ``Standard for Fraud 
and Overpayment Detection'' (Employment Security Manual, part V, section 
7510 et seq.).
    (j) Recovered overpayments. An amount repaid or recouped under this 
section shall be--
    (1) Deposited in the fund from which payment was made, if the 
repayment was to a State agency; or
    (2) Returned to the Treasury of the United States and credited to 
the current applicable appropriation, fund, or account from which 
payment was made, if the repayment was to the Department.



Sec. 609.12  Inviolate rights to UCFE.

    Except as specifically provided in this part, the rights of 
individuals to UCFE shall be protected in the same manner and to the 
same extent as the rights of persons to State unemployment compensation 
are protected under the applicable State law. Such measures shall 
include protection of applicants for UCFE from waiver, release, 
assignment, pledge, encumbrance, levy, execution, attachment, and 
garnishment of their rights to UCFE, except as provided in Sec. 609.11. 
In the same manner and to the same extent, individuals shall be 
protected from discrimination and obstruction in regard to seeking, 
applying for, and receiving any right to UCFE.



Sec. 609.13  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the UCFE Program as the Department 
requires, and will make all such records available for inspection, 
examination, and audit by such Federal officials or employees as the 
Department may designate or as may be required by law.
    (b) Disclosure of Information. Information in records maintained by 
a State agency in administering the UCFE Program shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
State unemployment compensation and the entitlement of individuals 
thereto may be disclosed under the applicable State law. This provision 
on the confidentiality of information maintained in the administration 
of the UCFE Program shall not apply, however, to the Department or for 
the purposes of Secs. 609.11 or 609.13, or in the case of information, 
reports and studies required pursuant to Secs. 609.17 or 609.25, or 
where the result would be inconsistent with the Freedom of Information 
Act (5 U.S.C. 552), the Privacy Act of 1974 (5 U.S.C. 552a), or 
regulations of the Department promulgated thereunder.



Sec. 609.14  Payments to States.

    (a) State entitlement. Each State is entitled to be paid by the 
United States

[[Page 48]]

with respect to each individual whose base period wages included Federal 
wages, an amount bearing the same ratio to the total amount of 
compensation paid to such individual as the amount of the individual's 
Federal wages in the individual's base period bears to the total amount 
of the individual's base period wages.
    (b) Payment. Each State shall be paid, either in advance or by way 
of reimbursement, as may be determined by the Department, the sum that 
the Department estimates the State is entitled to receive under the Act 
and this part for each calendar month. The sum shall be reduced or 
increased by the amount which the Department finds that its estimate for 
an earlier calendar month was greater or less than the sum which should 
have been paid to the State. An estimate may be made on the basis of a 
statistical, sampling, or other method agreed on by the Department and 
the State agency.
    (c) Certification by the Department. The Department, from time to 
time, shall certify to the Secretary of the Treasury the sum payable to 
each State under this section. The Secretary of the Treasury, before 
audit or settlement by the General Accounting Office, shall pay the 
State in accordance with the certification from the funds for carrying 
out the purposes of the Act and this part.
    (d) Use of money. Money paid a State under the Act and this part may 
be used solely for the purposes for which it is paid. Money so paid 
which is not used solely for these purposes shall be returned, at the 
time specified by the Agreement, to the Treasury of the United States 
and credited to the current applicable appropriation, fund, or account 
from which payments to states under the Act and this part may be made.



Sec. 609.15  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec. 609.16  Administration in absence of an Agreement.

    (a) Administering Program. The Department shall administer the UCFE 
Program through personnel of the Department or through other 
arrangements under procedures prescribed by the Department, in the case 
of any State which does not have an Agreement with the Secretary as 
provided for in 5 U.S.C. 8502. The procedures prescribed by the 
Department under this section shall be consistent with the Act and this 
part.
    (b) Applicable State law. On the filing by an individual of a claim 
for UCFE in accordance with arrangements under this section, UCFE shall 
be paid to the individual, if eligible, in the same amount, on the same 
terms, and subject to the same conditions as would be paid to the 
individual under the applicable State law if the individual's Federal 
civilian service and Federal wages had been included as employment and 
wages under the State law. Any such claim shall include the individual's 
Federal civilian service and Federal wages, combined with any service 
and wages covered by State law. However, if the individual, without 
regard to his or her Federal civilian service and Federal wages, has 
employment or wages sufficient to qualify for compensation during the 
benefit year under that State law, then payments of UCFE under this 
section may be made only on the basis of the individual's Federal 
civilian service and Federal wages.
    (c) Fair hearing. An individual whose claim for UCFE is denied under 
this section is entitled to a fair hearing under rules of procedure 
prescribed by the Department. A final determination by the Department 
with respect to entitlement to UCFE under this section is subject to 
review by the courts in the same manner and to the same extent as is 
provided by section 205(g) of the Social Security Act, 42 U.S.C. 405(g).

[[Page 49]]



Sec. 609.17  Information, reports, and studies.

    State agencies shall furnish to the Department such information and 
reports and conduct such studies as the Department determines are 
necessary or appropriate for carrying out the purposes of the UCFE 
Program.



             Subpart C--Responsibilities of Federal Agencies



Sec. 609.20  Information to Federal civilian employees.

    Each Federal agency shall:
    (a) Furnish information to its employees as to their rights and 
responsibilities under the UCFE Program and 18 U.S.C. 1919; and
    (b) Furnish a completed copy of a form approved by the Department, 
``Notice to Federal Employee About Unemployment Compensation,'' in 
accordance with instructions thereon, to each employee at the time of 
separation from Federal civilian service, when transferred from one 
payroll office to another, or when the office responsible for 
distribution of the form is advised that an individual is in nonpay 
status for seven consecutive days or more.



Sec. 609.21  Findings of Federal agency.

    (a) Answering request. Within four workdays after receipt from a 
State agency of a request for Federal findings on a form furnished by 
the State agency, and prescribed by the Department, a Federal agency 
shall make such Federal findings, complete all copies of the form, and 
transmit the completed copies to the State agency. If documents 
necessary for completion of the form have been assigned to an agency 
records center or the Federal Records Center in St. Louis, the Federal 
agency shall obtain the necessary information from the records center. 
Any records center shall give priority to such a request.
    (b) Failure to meet time limit. If a completed form containing the 
Federal agency's findings cannot be returned within four workdays of 
receipt, the Federal agency immediately shall inform the State agency, 
and shall include an estimated date by which the completed form will be 
returned.
    (c) Administrative control. Each Federal agency shall maintain a 
control of all requests for Federal findings received by it, and the 
Federal agency's response to each request. The records shall be 
maintained so as to enable the Federal agency to ascertain at any time 
the number of such forms that have not been returned to State agencies, 
and the dates of the Federal agency's receipt of such unreturned forms.



Sec. 609.22  Correcting Federal findings.

    If a Federal agency ascertains at any time within one year after it 
has returned a completed form reporting its findings, that any of its 
findings were erroneous, it shall promptly correct its error and forward 
its corrected findings to the State agency.



Sec. 609.23  Furnishing additional information.

    On receipt of a request for additional information from a State 
agency, a Federal agency shall consider the information it supplied 
initially in connection with such request and shall review its findings. 
The Federal agency promptly shall forward to the State agency such 
additional findings as will respond to the request. The Federal agency 
shall, if possible, respond within four workdays after the receipt of a 
request under this section.



Sec. 609.24  Reconsideration of Federal findings.

    On receipt of a request for reconsideration of Federal findings from 
a State agency, the Federal agency shall consider the initial 
information supplied in connection with such request and shall review 
its findings. The Federal agency shall correct any errors or omissions 
in its findings and shall affirm, modify, or reverse any or all of its 
findings in writing. The Federal agency promptly shall forward its 
reconsidered findings to the requesting authority. The Federal agency 
shall, if possible, respond within four workdays after the receipt of a 
request under this section.

[[Page 50]]



Sec. 609.25  Furnishing other information.

    (a) Additional Information. In addition to the information required 
by Secs. 609.21, 609.22, 609.23, and 609.24, a Federal agency shall 
furnish to a State agency or the Department, within the time requested, 
any information which it is not otherwise prohibited from releasing by 
law, which the Department determines is necessary for the administration 
of the UCFE Program.
    (b) Reports. Federal agencies shall furnish to the Department or 
State agencies such reports containing such information as the 
Department determines are necessary or appropriate for carrying out the 
purposes of the UCFE Program.



Sec. 609.26  Liaison with Department.

    To facilitate the Department's administration of the UCFE Program, 
each Federal agency shall designate one or more of its officials to be 
the liaison with the Department. Each Federal agency will inform the 
Department of its designation(s) and of any change in a designation.



PART 614--UNEMPLOYMENT COMPENSATION FOR EX-SERVICEMEMBERS--Table of Contents




                      Subpart A--General Provisions

Sec.
614.1  Purpose and application.
614.2  Definitions of terms.

                Subpart B--Administration of UCX Program

614.3  Eligibility requirements for UCX.
614.4  Weekly and maximum benefit amounts.
614.5  Claims for UCX.
614.6  Determinations of entitlement; notices to individual and Federal 
          military agency.
614.7  Appeal and review.
614.8  The applicable State for an individual.
614.9  Provisions of State law applicable to UCX claims.
614.10  Restrictions on entitlement.
614.11  Overpayments; penalties for fraud.
614.12  Schedules of remuneration.
614.13  Inviolate rights to UCX.
614.14  Recordkeeping; disclosure of information.
614.15  Payments to States.
614.16  Public access to Agreements.
614.17  Administration in absence of an Agreement.
614.18  Information, reports, and studies.

   Subpart C--Responsibilities of Federal Military Agencies and State 
                                Agencies

614.20  Information to ex-servicemembers.
614.21  Findings of Federal military agency.
614.22  Correcting Federal findings.
614.23  Finality of findings.
614.24  Furnishing other information.
614.25  Liaison with Department


Appendix ``A'' to Part 614--Standard for Claim Filing, Claimant 
          Reporting, Job Finding, and Employment Services
Appendix ``B'' to Part 614--Standard for Claim Determination--Separation 
          Information
Appendix ``C'' to Part 614--Standard for Fraud and Overpayment Detection

    Authority:  5 U.S.C. 8508; Secretary's Order No. 4-75 (40 FR 18515).

    Source:  47 FR 54697, Dec. 3, 1982, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 614.1  Purpose and application.

    (a) Purpose. Subchapter II of chapter 85, title 5 of the United 
States Code (5 U.S.C. 8521-8525) provides for a permanent program of 
unemployment compensation for unemployed individuals separated from the 
Armed Forces. The unemployment compensation provided for in subchapter 
II is hereinafter referred to as Unemployment Compensation for Ex-
servicemembers, or UCX. The regulations in this part are issued to 
implement the UCX Program.
    (b) First rule of construction. The Act and the implementing 
regulations in this part shall be construed liberally so as to carry out 
the purposes of the Act.
    (c) Second rule of construction. The Act and the implementing 
regulations in this part shall be construed so as to assure insofar as 
possible the uniform interpretation and application of the Act 
throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor (hereafter Department), 
not later than 10 days after issuance, a copy of each judicial or 
administrative decision ruling on an individual's entitlement to

[[Page 51]]

payment of UCX or to credit for a waiting period. On request of the 
Department, a State agency shall forward to the Department a copy of any 
determination or redetermination ruling on an individual's entitlement 
to UCX or waiting period credit.
    (2)(i) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part, the Department may at any time 
notify the State agency of the Department's view. Thereafter, the State 
agency shall issue a redetermination or appeal if possible, and shall 
not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (ii) If the Department believes that a State agency has failed to 
use, or use in a timely manner, the crossmatch mechanism at the claims 
control center designated by the Department, the Department may at any 
time notify the State of the Department's view. Thereafter, the State 
agency shall take action to ensure that operable procedures for the 
effective utilization of the claims control center are in place and 
adhered to. In any case of any determination, redetermination, or 
decision that is not legally warranted under the Act or this part had 
the State used, or used in a timely manner, the crossmatch mechanism at 
the claims control center designated by the Department, State agency 
shall take the steps outlined in paragraph (d)(2)(i) of this section.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part, the Department may at any time notify the State agency 
of the Department's view. If the determination, redetermination, or 
decision in question denies UCX to a claimant, the steps outlined in 
paragraph (2) above shall be followed by the State agency. If the 
determination, redetermination, or decision in question awards UCX to a 
claimant, the benefits are ``due'' within the meaning of section 
303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1), and therefore 
must be paid promptly to the claimant. However, the State agency shall 
take the steps outlined in paragraph (d)(2) of this section, and 
payments to the claimant may be temporarily delayed if redetermination 
or appeal action is taken not more than one business day following the 
day on which the first payment otherwise would be issued to the 
claimant; and the redetermination action is taken or appeal is filed to 
obtain a reversal of the award of UCX and a ruling consistent with the 
Department's view; and the redetermination action or appeal seeks an 
expedited redetermination or appeal within not more than two weeks after 
the redetermination action is taken or the appeal is filed. If 
redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding UCX or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the claimant.
    (4)(i) If any determination, redetermination, or decision, referred 
to in paragraph (d)(2) or paragraph (d)(3) of this section, is treated 
as a precedent for any future UCX claim or claim under the UCFE Program 
(part 609 of this chapter), the Secretary will decide whether the 
Agreement with the State entered into under the Act shall be terminated.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part, including any 
determination, redetermination, or decision referred to in paragraph 
(d)(2) or in paragraph (d)(3) of this section, the Secretary will decide 
whether the State shall be required to restore the funds of the United 
States for any sums paid under

[[Page 52]]

such a determination, redetermination, or decision, and whether, in 
absence of such restoration, the Agreement with the State shall be 
terminated and whether other action shall be taken to recover such sums 
for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (d)(2) or paragraph (d)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.

(Approved by the Office of Management and Budget under control number 
1205-0163)

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40553, Oct. 17, 1988; 53 
FR 43799, Oct. 26, 1988; 57 FR 59799, Dec. 15, 1992]



Sec. 614.2  Definitions of terms.

    For purposes of the Act and this part:
    (a) Act means subchapter II of chapter 85 of title 5 of the United 
States Code, 5 U.S.C. 8521-8525.
    (b) Agreement means the Agreement entered into pursuant to 5 U.S.C. 
8502 between a State and the Secretary under which the State agency of 
the State agrees to make payments of unemployment compensation in 
accordance with the Act and the regulations and procedures thereunder 
prescribed by the Department.
    (c) Base period means the base period as defined by the applicable 
State law for the benefit year.
    (d) Benefit year means the benefit year as defined by the applicable 
State law, and if not so defined the term means the period prescribed in 
the Agreement with the State or, in the absence of an Agreement, the 
period prescribed by the Department.
    (e) Ex-servicemember means an individual who has performed Federal 
military service.
    (f) Federal military agency means any of the Armed Forces of the 
United States, including the Army, Air Force, Navy, Marine Corps, and 
Coast Guard, and the National Oceanic and Atmospheric Administration 
(Department of Commerce).
    (g) Federal military service means active service (not including 
active duty in a reserve status unless for a continuous period of 90 
days or more) in the Armed Forces or the Commissioned Corps of the 
National Oceanic and Atmospheric Administration if with respect to that 
service--
    (1) The individual was discharged or released under honorable 
conditions (and, if an officer, did not resign for the good of the 
service); and
    (2)(i) The individual was discharged or released after completing 
his/her first full term of active service which the individual initially 
agreed to serve, or
    (ii) The individual was discharged or released before completing 
such term of active service--
    (A) For the convenience of the Government under an early release 
program,
    (B) Because of medical disqualification, pregnancy, parenthood, or 
any service-incurred injury or disability,
    (C) Because of hardship, or
    (D) Because of personality disorders or inaptitude but only if the 
service was continuous for 365 days or more.
    (h) Federal military wages means all pay and allowances in cash and 
in kind for Federal military service, computed on the basis of the pay 
and allowances for the pay grade of the individual at the time of his or 
her latest discharge or release from Federal/military service, as 
determined in accordance with the Schedule of Remuneration applicable at 
the time the individual files his or her first claim for compensation 
for a benefit year.
    (i) First claim means an initial claim for unemployment compensation 
under the UCX Program, the UCFE Program (part 609 of this chapter), or a 
State law, or some combination thereof, first filed by an individual 
after the individual's latest discharge or release from Federal military 
service, whereby a benefit year is established under an applicable State 
law.
    (j) Military document means an official document or documents issued 
to an individual by a Federal military agency relating to the 
individual's Federal military service and discharge or release from such 
service.

[[Page 53]]

    (k) Period of active service means a period of continuous active 
duty (including active duty for training purposes) in a Federal military 
agency or agencies, beginning with the date of entry upon active duty 
and ending on the effective date of the first discharge or release 
thereafter which is not qualified or conditional.
    (l) Schedule of Remuneration means the schedule issued by the 
Department from time to time under 5 U.S.C. 8521(a)(2) and this part, 
which specifies for purposes of the UCX Program, the pay and allowances 
for each pay grade of servicemember.
    (m) Secretary means the Secretary of Labor of the United States.
    (n) State means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.
    (o) State agency means the agency of the State which administers the 
applicable State unemployment compensation law and is administering the 
UCX Program in the State pursuant to an Agreement with the Secretary.
    (p)(1) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1986, 26 U.S.C. 3304, if the State is certified under section 
3304(c) of the Internal Revenue Code of 1986, 26 U.S.C. 3304(c).
    (2) Applicable State law means the State law made applicable to a 
UCX claimant by Sec. 614.8.
    (q)(1) Unemployment compensation means cash benefits (including 
dependents' allowances) payable to individuals with respect to their 
unemployment, and includes regular, additional, emergency, and extended 
compensation.
    (2) Regular compensation means unemployment compensation payable to 
an individual under any State law, but not including additional 
compensation or extended compensation.
    (3) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors.
    (4) Emergency compensation means supplementary unemployment 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Extended compensation means unemployment compensation payable to 
an individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970, as 
amended, 26 U.S.C. 3304 note, and part 615 of this chapter, with respect 
to the payment of extended compensation.
    (r) Unemployment Compensation for Ex-Servicemember means the 
unemployment compensation payable under the Act to claimants eligible 
for the payments, and is referred to as UCX.
    (s) Week means, for purposes of eligibility for and payment of UCX, 
a week as defined in the applicable State law.
    (t) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to all employment 
and earnings, and in the same manner and to the same extent for the 
purposes of the UCX Program, as if the individual filing for UCX were 
filing a claim for State unemployment compensation.
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 53 
FR 43799, Oct. 26, 1988; 57 FR 59799, Dec. 15, 1992]



                Subpart B--Administration of UCX Program



Sec. 614.3  Eligibility requirements for UCX.

    An individual shall be eligible to receive a payment of UCX or 
waiting period credit with respect to a week of unemployment if:
    (a) The individual has Federal military service and Federal military 
wages in the base period under the applicable State law;
    (b) The individual meets the qualifying employment and wage 
requirements of the applicable State law, either on the basis of Federal 
military service and Federal military wages alone or in combination with 
service and wages covered under a State law or under the UCFE Program 
(part 609 of this chapter);

[[Page 54]]

    (c) The individual has filed an initial claim for UCX and, as 
appropriate, has filed a timely claim for waiting period credit or 
payment of UCX with respect to that week of unemployment; and
    (d) The individual is totally, part-totally, or partially 
unemployed, and is able to work, available for work, and seeking work 
within the meaning of or as required by the applicable State law, and is 
not subject to disqualification under this part or the applicable State 
law, with respect to that week of unemployment.
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 57 
FR 59799, Dec. 15, 1992]



Sec. 614.4  Weekly and maximum benefit amounts.

    (a) Total unemployment. The weekly amount of UCX payable to an 
eligible individual for a week of total unemployment shall be the amount 
that would be payable to the individual as unemployment compensation for 
a week of total unemployment as determined under the applicable State 
law.
    (b) Partial and part-total unemployment. The weekly amount of UCX 
payable for a week of partial or part-total unemployment shall be the 
amount that would be payable to the individual as unemployment 
compensation for a week of partial or part-total unemployment as 
determined under the applicable State law.
    (c) Maximum amount. The maximum amount of UCX which shall be payable 
to an eligible individual during and subsequent to the individual's 
benefit year shall be the maximum amount of all unemployment 
compensation that would be payable to the individual as determined under 
the applicable State law.
    (d) Computation rules. The weekly and maximum amounts of UCX payable 
to an individual under the UCX Program shall be determined under the 
applicable State law to be in the same amount, on the same terms, and 
subject to the same conditions as the State unemployment compensation 
which would be payable to the individual under the applicable State law 
if the individual's Federal military service and Federal military wages 
assigned or transferred under this part to the State had been included 
as employment and wages covered by that State law, subject to the use of 
the applicable Schedule of Remuneration.
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 57 
FR 59800, Dec. 15, 1992]



Sec. 614.5  Claims for UCX.

    (a) First claims. A first claim for UCX shall be filed by an 
individual in any State agency of any State according to the applicable 
State law, and on a form prescribed by the Department which shall be 
furnished to the individual by the State agency where the claim is 
filed.
    (b) Weekly claims. Claims for waiting week credit and payments of 
UCX for weeks of unemployment shall be filed in any State agency (or 
Canada) at the times and in the manner as claims for State unemployment 
compensation are filed under the applicable State law, and on forms 
prescribed by the Department which shall be furnished to the individual 
by the State agency where the claim is filed.
    (c) Secretary's standard. The procedures for reporting and filing 
claims for UCX and waiting period credit shall be consistent with this 
part 614 and the Secretary's ``Standard for Claim Filing, Claimant 
Reporting, Job Finding and Employment Services'' in the Employment 
Security Manual, part V, sections 5000-5004 (appendix A of this part).
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988]



Sec. 614.6  Determinations of entitlement; notices to individual and Federal military agency.

    (a) Determinations of first claim. Except for findings of a Federal 
military agency and the applicable Schedule of Remuneration which are 
final and conclusive under Sec. 614.23, the State agency whose State law 
applies to an individual under Sec. 614.8 shall, promptly upon the 
filing of a first claim for UCX, determine whether the individual is 
otherwise eligible, and, if the individual is found to be eligible, the 
individual's benefit year and the weekly and maximum amounts of UCX 
payable to the individual.

[[Page 55]]

    (b) Determinations of weekly claims. The State agency promptly 
shall, upon the filing of a claim for a payment of UCX or waiting period 
credit with respect to a week, determine whether the individual is 
entitled to a payment of UCX or waiting period credit respect to such 
week, and, if entitled, the amount of UCX or waiting period credit to 
which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to State unemployment 
compensation under the applicable State law shall apply to 
determinations pertaining to UCX.
    (d) Notices to individual and Federal military agency. (1) The State 
agency promptly shall give notice in writing to the individual of any 
determination or redetermination of a first claim, and, except as may be 
authorized under paragraph (g) of this section, of any determination or 
redetermination of any weekly claim which denies UCX or waiting period 
credit or reduces the weekly amount or maximum amount initially 
determined to be payable. Each notice of determination or 
redetermination shall include such information regarding the 
determination or redetermination and notice of right to reconsideration 
or appeal, or both, as is furnished with written notices of 
determinations and redeterminations with respect to claims for State 
unemployment compensation. Such notice shall include the findings of any 
Federal military agency utilized in making the determination or 
redetermination, and shall inform the individual of the finality of 
Federal findings and the individual's right to request correction of 
such findings as is provided in Sec. 614.22.
    (2) A notice of claim filing and subsequent notices of monetary and 
nonmonetary determinations on a UCX claim shall be sent to each Federal 
military agency for which the individual performed Federal military 
service during the appropriate base period, together with notice of 
appeal rights of the Federal military agency to the same extent that 
chargeable employers are given such notices under State law and practice 
unless an alternate mechanism is established by the Department of Labor 
in lieu of such notices.
    (e) Obtaining information for claim determinations. (1) Information 
required for the determination of claims for UCX shall be obtained by 
the State agency from claimants, employers, and others, in the same 
manner as information is obtained for claim purposes under the 
applicable State law, but Federal military findings shall be obtained 
from military documents, the applicable Schedule of Remuneration, and 
from Federal military agencies as prescribed in Secs. 614.21 through 
614.24.
    (f) Promptness. Full payment of UCX when due shall be consistent 
with this part and shall be made with the greatest promptness that is 
administratively feasible, but the provisions of part 640 of this 
chapter (relating to promptness of benefit payments) shall not be 
applicable to the UCX Program.
    (g) Secretary's standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals appying for UCX 
and to appropriate Federal military agencies shall be consisent with 
this part 614 and the Secretary's ``Standard for Claim Determinations-
Separation Information'' in the Employment Security Manual, part V, 
sections 6010-6015 (Appendix B of this part).
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988]



Sec. 614.7  Appeal and review.

    (a) Applicable State Law. The provisions of the applicable State law 
concerning the right of appeal and fair hearing from a determination or 
redetermination of entitlement to State unemployment compensation 
(exclusive of findings which are final and conclusive under Sec. 614.25) 
shall apply to determinations and redeterminations of eligibility for or 
entitlement to UCX and waiting period credit. Any such determination or 
redetermination shall be subject to appeal and review only in the manner 
and to the extent provided in the applicable State law with respect to 
determinations and redeterminations of entitlement to State unemployment 
compensation.


[[Page 56]]


(Section 614.24 governs appeals of findings of the Veterans 
Administration)

    (b) Rights of appeal and fair hearing. The provisions on right of 
appeal and opportunity for a fair hearing with respect to claims for UCX 
shall be consistent with this part and with sections 303(a)(1) and 
303(a)(3) of the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (c) Promptness on appeals. (1) Decisions on appeals under the UCX 
Program shall accord with the Secretary's ``Standard for Appeals 
Promptness--Unemployment Compensation'' in part 650 of this chapter, and 
with Sec. 614.1(d).
    (2) Any provision of an applicable State law for advancement or 
priority of unemployment compensation cases on judicial calendars, or 
otherwise intended to provide for the prompt payment of unemployment 
compensation when due, shall apply to proceedings involving claims for 
UCX.
    (d) Appeal and review by Federal military agency. If a Federal 
military agency believes that a State agency's determination or 
redetermination of an individual's eligibility for or entitlement to UCX 
is incorrect, the Federal military agency may seek appeal and review of 
such determination or redetermination in the same manner as an 
interested employer may seek appeal and review under the applicable 
State law.



Sec. 614.8  The applicable State for an individual.

    (a) The applicable State. The applicable State for an individual 
shall be the State to which the individual's Federal military service 
and Federal military wages are assigned or transferred under this 
section. The applicable State law for the individual shall be the State 
law of such State.
    (b) Assignment of service and wages. (1) When an individual files a 
first claim, all of the individual's Federal military service and 
Federal military wages shall be deemed to be assigned to the State in 
which such claim is filed, which shall be the ``Paying State'' in the 
case of a combined-wage claim. (Sec. 616.6(e) of this chapter.)
    (2) Federal military service and Federal military wages assigned to 
a State in error shall be reassigned for use by the proper State agency. 
An appropriate record of the reassignment shall be made by the State 
agency which makes the reassignment.
    (c) Assignment deemed complete. All of an individual's Federal 
military service and Federal military wages shall be deemed to have been 
assigned to a State upon the filing of a first claim. Federal military 
service and Federal military wages shall be assigned to a State only in 
accordance with paragraph (b) of this section.
    (d) Use of assigned service and wages. All assigned Federal military 
service and Federal military wages shall be used only by the State to 
which assigned in accordance with paragraph (b) of this section, except 
that any Federal military service and Federal military wages which are 
not within the base period of the State to which they were assigned 
shall be subject to transfer in accordance with part 616 of this chapter 
for the purposes of any subsequent Combined-Wage Claim filed by the 
individual.



Sec. 614.9  Provisions of State law applicable to UCX claims.

    (a) Particular provisions applicable. 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, UCX and claims for waiting period credit. The 
provisions of the applicable State law which shall apply include, but 
are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals, as appropriate, including notice to each 
individual of each determination and redetermination of eligibility for 
or entitlement to UCX;
    (4) Determinations and redeterminations;
    (5) Ability to work, availability for work, and search for work; and
    (6) Disqualifications, except in regard to separation from any 
Federal military agency.

[[Page 57]]

    (b) IBPP. The Interstate Benefit Payment Plan shall apply, where 
appropriate, to individuals filing claims for UCX.
    (c) Wage combining. The State's provisions complying with the 
Interstate Arrangement for Combining Employment and Wages (part 616 of 
this chapter) shall apply, where appropriate, to individuals filing 
claims for UCX.
    (d) Procedural requirements. The provisions of the applicable State 
law which apply hereunder to claims for and the payment of UCX shall be 
applied consistently with the requirements of title III of the Social 
Security Act and the Federal Unemployment Tax Act which are pertinent in 
the case of State unemployment compensation, including but not limited 
to those standards and requirements specifically referred to in the 
provisions of this part, except as provided in paragraph (f) of 
Sec. 614.6.



Sec. 614.10  Restrictions on entitlement.

    (a) Disqualification. If the week of unemployment for which an 
individual claims UCX is a week to which a disqualification for State 
unemployment compensation applies under the applicable State law, the 
individual shall not be entitled to a payment of UCX for that week. As 
provided in Sec. 614.9(a), no disqualification shall apply in regard to 
separation from any Federal military agency.
    (b) Effect of ``days lost''. The continuity of a period of an 
individual's Federal military service shall not be deemed to be 
interrupted by reason of any ``days lost'' in such period, but ``days 
lost'' shall not be counted for purposes of determining:
    (1) Whether an individual has performed Federal military service;
    (2) Whether an individual meets the wage and employment requirements 
of a State law; or
    (3) The amount of an individual's Federal military wages.
    (c) Allocation of military accrued leave. A State agency shall 
allocate the number of days of unused military leave specified in an ex-
servicemember's military document, for which a lump-sum payment has been 
made, in the same manner as similar payments by private employers to 
their employees are allocated under the applicable State law, except 
that the applicable Schedule of Remuneration instead of the lump-sum 
payment shall be used to determine the amount of the claimant's Federal 
military wages. In a State in which a private employer has an option as 
to the period to which such payments shall be allocated, such payments 
shall be allocated to the date of the individual's latest discharge or 
release from Federal military service. An allocation under this 
paragraph shall be disregarded in determining whether an individual has 
had a period of active service constituting Federal military service.
    (d) Education and training allowances. An individual is not entitled 
to UCX under the Act or this part for a period with respect to which the 
individual receives:
    (1) A subsistence allowance for vocational rehabilitation training 
under chapter 31 of title 38 of the United States Code, 38 U.S.C. 1501 
et seq., or under part VIII of Veterans Regulation Numbered 1(a); or
    (2) An educational assistance allowance or special training 
allowance under chapter 35 of title 38 of the United States Code, 38 
U.S.C. 1700 et seq.



Sec. 614.11  Overpayments; penalties for fraud.

    (a) False statements and representations. Section 8507(a) of the Act 
provides that if a State agency, the Department, or a court of competent 
jurisdiction finds that an individual--
    (1) Knowingly has made, or caused to be made by another, a false 
statement or representation of a material fact, or knowingly has failed, 
or caused another to fail, to disclose a material fact; and
    (2) As a result of that action has received an amount as UCX to 
which the individual was not entitled; the individual shall repay the 
amount to the State agency or the Department. Instead of requiring 
repayment, the State agency or the Department may recover the amount by 
deductions from UCX payable to the individual during the 2-year period 
after the date of the finding. A finding by a State agency or the 
Department may be made only after an opportunity for a fair hearing,

[[Page 58]]

subject to such further review as may be appropriate under Sec. 614.7.
    (b) Prosecution for fraud. Section 1919 of title 18, United States 
Code, provides that whoever makes a false statement or representation of 
a material fact knowing it to be false, or knowingly fails to disclose a 
material fact, to obtain or increase for himself or for any other 
individual any payment authorized to be paid under chapter 85 of title 
5, United States Code, or under an agreement thereunder, shall be fined 
not more than $1,000 or imprisoned not more than one year, or both.
    (c) Absence of fraud. If a State agency or court of competent 
jurisdiction finds that an individual has received a payment of UCX to 
which the individual was not entitled under the Act and this part, which 
was not due to a false statement or representation as provided in 
paragraph (a) or (b) of this section, the individual shall be liable to 
repay to the applicable State the total sum of the payment to which the 
individual was not entitled, and the State agency shall take all 
reasonable measures authorized under any State law or Federal law to 
recover for the account of the United States the total sum of the 
payment to which the individual was not entitled.
    (d) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any overpayment which is not repaid by the 
individual, by deductions from any UCX payable to the individual under 
the Act and this part, or from any unemployment compensation payable to 
the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) A State agency shall also recover, insofar as is possible, the 
amount of any overpayment of UCX made to the individual by another State 
by deductions from any UCX payable by the State agency to the individual 
under the Act and this part, or from any unemployment compensation 
payable to the individual under any Federal unemployment compensation 
law administered by the State agency, or from any assistance or 
allowance payable to the individual with respect to unemployment under 
any other Federal law administered by the State agency.
    (3) Recoupment of fraudulent overpayments referred to in paragraph 
(a) of this section shall be limited to the 2-year period stated in that 
paragraph. Recoupment of fraudulent overpayments referred to in 
paragraph (b) of this section, and nonfraudulent overpayments referred 
to in paragraph (c) of this section shall be subject to any time 
limitation on recoupment provided for in the State law that applies to 
the case.
    (e) Debts due the United States. UCX payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person except 
pursuant to a court order for child support or alimony in accordance 
with the law of the State and section 459 of the Social Security Act, 42 
U.S.C. 659.
    (f) Application of State law. (1) Except as indicated in paragraph 
(a) of this section, any provision of State law that may be applied for 
the recovery of overpayments or prosecution for fraud, and any provision 
of State law authorizing waiver of recovery of overpayments of 
unemployment compensation, shall be applicable to UCX.
    (2) In the case of any finding of false statement of representation 
under the Act and paragraph (a) of this section, or prosecution for 
fraud under 18 U.S.C. 1919 or pursuant to paragraph (f)(1) of this 
section, the individual shall be disqualified or penalized in accordance 
with the provision of the applicable State law relating to fraud in 
connection with a claim for State unemployment compensation.
    (g) Final decision. Recovery of any overpayment of UCX shall not be 
enforced by the State agency until the determination or redetermination 
establishing the overpayment has become final, or if appeal is taken 
from the determination or redetermination, until the decision after 
opportunity for a fair hearing has become final.

[[Page 59]]

    (h) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (g) of Sec. 614.6 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 614.7 shall apply to determinations and 
redeterminations made pursuant to this section.
    (i) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of UCX shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to State unemployment 
compensation and consistent with this part 614 and the Secretary's 
``Standard for Fraud and Overpayment Detection'' in the Employment 
Security Manual, part V, sections 7510-7515 (Appendix C of this part), 
and provide for timely use of any crossmatch mechanism established by 
the Department.
    (j) Recovered overpayments. An amount repaid or recouped under this 
section shall be--
    (1) Deposited in the fund from which payment was made, if the 
repayment was to a State agency; or
    (2) Returned to the Treasury of the United States and credited to 
the current applicable appropriation, fund, or account from which 
payment was made, if the repayment was to the Department.
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40555, Oct. 17, 1988]



Sec. 614.12  Schedules of remuneration.

    (a) Authority. Section 8521(a)(2) of chapter 85, title 5 of the 
United States Code, 5 U.S.C. 8521(a)(2), requires the Secretary of Labor 
to issue from time to time, after consultation with the Secretary of 
Defense, a Schedule of Remuneration specifying the pay and allowances 
for each pay grade of members of the Armed Forces.
    (b) Elements of schedule. A schedule reflects representative amounts 
for appropriate elements of the pay and allowances, whether in cash or 
kind, for each pay grade of members of the Armed Forces, with a 
statement of the effective date of the schedule. Benefit amounts for the 
UCX Program are computed on the basis of the Federal military wages for 
the pay grade of the individual at the time of the individual's latest 
discharge or release from Federal military service, as specified in the 
schedule applicable at the time the individual files his or her first 
claim for compensation for the benefit year.
    (c) Effective date. Any new Schedule of Remuneration shall take 
effect beginning with the first week of the calendar quarter following 
the calendar quarter in which such schedule is issued, and shall remain 
applicable until a subsequent schedule becomes effective. Prior 
schedules shall continue to remain applicable for the periods they were 
in effect.
    (d) Publication. Any new Schedule of Remuneration shall be issued by 
the Secretary of Labor to the State agencies and the Federal military 
agencies. Promptly after the issuance of a new Schedule of Remuneration 
it shall be published as a notice in the Federal Register.



Sec. 614.13  Inviolate rights to UCX.

    Except as specifically provided in this part, the rights of 
individuals to UCX shall be protected in the same manner and to the same 
extent as the rights of persons to State unemployment compensation are 
protected under the applicable State law. Such measures shall include 
protection of applicants for UCX from waiver, release, assignment, 
pledge, encumbrance, levy, execution, attachment, and garnishment of 
their rights to UCX, except as provided in Sec. 614.11. In the same 
manner and to the same extent, individuals shall be protected from 
discrimination and obstruction in regard to seeking, applying for, and 
receiving any right to UCX.



Sec. 614.14  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the UCX Program as the Department 
requires, and will make all such records available for inspection, 
examination, and audit by such Federal officials or employees as the 
Department may designate or as may be required by law.
    (b) Disclosure of information. Information in records maintained by 
a State

[[Page 60]]

agency in administering the UCX Program shall be kept confidential, and 
information in such records may be disclosed only in the same manner and 
to the same extent as information with respect to State unemployment 
compensation and the entitlement of individuals thereto may be disclosed 
under the applicable State law. This provision on the confidentiality of 
information maintained in the administration of the UCX Program shall 
not apply, however, to the Department or for the purposes of 
Secs. 614.11 or 614.14, or in the case of information, reports and 
studies required pursuant to Secs. 614.18 or 614.26, or where the result 
would be inconsistent with the Freedom of Information Act, 5 U.S.C. 552, 
the Privacy Act of 1974, 5 U.S.C. 552a, or regulations of the Department 
promulgated thereunder.



Sec. 614.15  Payments to States.

    (a) State entitlement. Each State is entitled to be paid by the 
United States with respect to each individual whose base period wages 
included Federal military wages, an amount bearing the same ratio to the 
total amount of compensation paid to such individual as the amount of 
the individual's Federal military wages in the individual's base period 
bears to the total amount of the individual's base period wages.
    (b) Payment. Each State shall be paid, either in advance or by way 
of reimbursement, as may be determined by the Department, the sum that 
the Department estimates the State is entitled to receive under the Act 
and this part for each calendar month. The sum shall be reduced or 
increased by the amount which the Department finds that its estimate for 
an earlier calendar month was greater or less than the sum which should 
have been paid to the State. An estimate may be made on the basis of a 
statistical, sampling, or other method agreed on by the Department and 
the State agency.
    (c) Certification by the Department. The Department, from time to 
time, shall certify to the Secretary of the Treasury the sum payable to 
each State under this section. The Secretary of the Treasury, before 
audit or settlement by the General Accounting Office, shall pay the 
State in accordance with the certification from the funds for carrying 
out the purposes of the Act and this part.
    (d) Use of money. Money paid a State under the Act and this part may 
be used solely for the purposes for which it is paid. Money so paid 
which is not used solely for these purposes shall be returned, at the 
time specified by the Agreement, to the Treasury of the United States 
and credited to the current applicable appropriation, fund, or account 
from which payments to States under the Act and this part may be made.



Sec. 614.16  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec. 614.17  Administration in absence of an Agreement.

    (a) Administering program. The Department shall administer the UCX 
Program through personnel of the Department or through other 
arrangements under procedures prescribed by the Department, in the case 
of any State which does not have an Agreement with the Secretary as 
provided for in 5 U.S.C. 8502. The procedures prescribed by the 
Department under this section shall be consistent with the Act and this 
part.
    (b) Applicable State law. On the filing by an individual of a claim 
for UCX in accordance with arrangements under this section, UCX shall be 
paid to the individual, if eligible, in the same amount, on the same 
terms, and subject to the same conditions as would be paid to the 
individual under the applicable State law if the individual's Federal 
military service and Federal military wages had been included as 
employment and wages under the State law. Any such claims shall include 
the individual's Federal military service and Federal military wages, 
combined with any service and wages covered by State law. However, if 
the individual,

[[Page 61]]

without regard to his or her Federal military service and Federal 
military wages, has employment or wages sufficient to qualify for 
compensation during the benefit year under that State law, then payments 
of UCX under this section may be made only on the basis of the 
individual's Federal military service and Federal military wages.
    (c) Fair hearing. An individual whose claim for UCX is denied under 
this section is entitled to a fair hearing under rules of procedures 
prescribed by the Department. A final determination by the Department 
with respect to entitlement to UCX under this section is subject to 
review by the courts in the same manner and to the same extent as is 
provided by section 205(g) of the Social Security Act, 42 U.S.C. 405(g).



Sec. 614.18  Information, reports, and studies.

    State agencies shall furnish to the Department such information and 
reports and conduct such studies as the Department determines are 
necessary or appropriate for carrying out the purposes of the UCX 
Program.



   Subpart C--Responsibilities of Federal Military Agencies and State 
                                Agencies



Sec. 614.20  Information to ex-servicemembers.

    At the time of discharge or release from Federal military service, 
each Federal military agency shall furnish to each ex-servicemember 
information explaining rights and responsibilities under the UCX Program 
and 18 U.S.C. 1919, and military documents necessary for filing claims 
for UCX.



Sec. 614.21  Findings of Federal military agency.

    (a) Findings in military documents. Information contained in a 
military document furnished to an ex-servicemember shall constitute 
findings to which Sec. 614.23 applies as to:
    (1) Whether the individual has performed active service in the Armed 
Forces or the Commissioned Corps of the National Oceanic and Atmospheric 
Administration;
    (2) The beginning and ending dates of the period of active service 
and ``days lost'' during such period;
    (3) The type of discharge or release terminating the period of 
active service;
    (4) The individuals' pay grade at the time of discharge or release 
from active service; and
    (5) The narrative reason or other reason for separation from active 
service.
    (b) Discharges not under honorable conditions. A military document 
which shows that an individual's discharge or release was under other 
than honorable conditions shall also be a finding to which Sec. 614.23 
applies.
[53 FR 40555, Oct. 17, 1988]



Sec. 614.22  Correcting Federal findings.

    (a) Request for correction. (1) If an individual believes that a 
finding specified in Sec. 614.21 is incorrect or that information as to 
any finding has been omitted from a military document, the individual 
may request the issuing Federal military agency to correct the military 
document. A request for correction may be made through the State agency, 
which shall forward such request and any supporting information 
submitted by the individual to the Federal military agency.
    (2) The Federal military agency shall promptly forward to the 
individual or State agency making the request the corrected military 
document. Information contained in a corrected military document issued 
pursuant to such a request shall constitute the findings of the Federal 
military agency under Sec. 614.21.
    (3) If a determination or redetermination based on a finding as to 
which correction is sought has been issued by a State agency before a 
request for correction under this paragraph is made, the individual who 
requested such correction shall file a request for redetermination or 
appeal from such determination or redetermination with the State agency, 
and shall inform the State agency of the request for correction.
    (4) An individual who files a request for correction of findings 
under this paragraph shall promptly notify the State agency of the 
action of the Federal military agency on such request.

[[Page 62]]

    (b) State agency procedure when request made. (1) If a determination 
of entitlement has not been made when an individual notifies a State 
agency of a request for correction under paragraph (a) of this section, 
the State agency may postpone such determination until the individual 
has notified the State agency of the action of the Federal military 
agency on the request.
    (2) If a determination of entitlement has been made when an 
individual notifies a State agency that a request for correction of 
Federal findings has been made, or if an individual notifies a State 
agency prior to a determination of entitlement that a request has been 
made but such determination is not postponed by the State agency, the 
individual may file a request for redetermination or appeal in 
accordance with the applicable State law.
    (3) Except as provided in paragraph (c) of this section, no 
redetermination shall be made or hearing scheduled on an appeal until 
the individual has notified the State agency of the action of the 
Federal military agency on a request for correction under paragraph (a) 
of this section.
    (c) State agency procedure when request answered. On receipt of 
notice of the action of a Federal military agency on a request for 
correction of its findings, a State agency shall:
    (1) Make a timely determination or redetermination of the 
individual's entitlement, or
    (2) Promptly schedule a hearing on the individual's appeal.

If such notice is not received by a State agency within one year of the 
date on which an individual first filed a claim, or such notice is not 
given promptly by an individual, a State agency without further 
postponement may make such determination or redetermination or schedule 
such hearing.
    (d) Findings corrected without request. Information as to any 
finding specified in Sec. 614.21 contained in a corrected military 
document issued by a Federal military agency on its own motion shall 
constitute the findings of such agency under Sec. 614.21, if notice 
thereof is received by a State agency before the period for 
redetermination or appeal has expired under the State law. On timely 
receipt of such notice a State agency shall take appropriate action 
under the applicable State law to give effect to the corrected findings.



Sec. 614.23  Finality of findings.

    The findings of a Federal military agency referred to in 
Secs. 614.21 and 614.22, and the Schedules of Remuneration issued by the 
Department pursuant to the Act and Sec. 614.12, shall be final and 
conclusive for all purposes of the UCX Program, including appeal and 
review pursuant to Sec. 614.7 or Sec. 614.17.
[53 FR 40555, Oct. 17, 1988]



Sec. 614.24  Furnishing other information.

    (a) Additional information. In addition to the information required 
by Secs. 614.21 and 614.22, a Federal military agency shall furnish to a 
State agency or the Department, within the time requested, any 
information which it is not otherwise prohibited from releasing by law, 
which the Department determines is necessary for the administration of 
the UCX Program.
    (b) Reports. Federal military agencies shall furnish to the 
Department or State agencies such reports containing such information as 
the Department determines are necessary or appropriate for carrying out 
the purposes of the UCX Program.
[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40555, Oct. 17, 1988]



Sec. 614.25  Liaison with Department

    To facilitate the Department's administration of the UCX program, 
each Federal military agency shall designate one or more of its 
officials to be the liaison with the Department. Each Federal military 
agency will inform the Department of its designation(s) and of any 
change in a designation.
[53 FR 40555, Oct. 17, 1988]

[[Page 63]]

    Appendix ``A'' to Part 614--Standard for Claim Filing, Claimant 
             Reporting, Job Finding, and Employment Services

        Employment Security Manual (Part V, Sections 5000-5004) *
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    * Revises subgrouping 5000-5004.
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                        5000-5099  CLAIMS FILING

5000  Standards for Claim Filing, Claimant Reporting, Job Finding, and 
          Employment Services
    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for:
    ``Payment of unemployment compensation solely through public 
employment offices or such other agencies as the Secretary may 
approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law provide 
for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    B. Secretary's interpretation of Federal law requirements.
    1. The Secretary interprets section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act to 
require that a State law provide for payment of unemployment 
compensation solely through public employment offices or claims offices 
administered by the State employment security agency if such agency 
provides for such coordination in the operations of its public 
employment offices and claims offices as will insure: (a) The payment of 
benefits only to individuals who are unemployed and who are able to work 
and available for work, and (b) that individuals claiming unemployment 
compensation (claimants) are afforded such placement and other 
employment services as are necessary and appropriate to return them to 
suitable work as soon as possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for:
    a. Such contact by claimants with public employment offices or 
claims offices or both, (1) as will reasonably insure the payment of 
unemployment compensation only to individuals who are unemployed and who 
are able to work and available for work, and (2) that claimants are 
afforded such placement and other employment services as are necessary 
and appropriate to facilitate their return to suitable work as soon as 
possible; and
    b. Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such State law.

5001  Claim Filing and Claimant Reporting Requirements Designed to 
          Satisfy Secretary's Interpretation
    A. Claim filing--total or part-total unemployment.
    1. Individuals claiming unemployment compensation for total or part-
total unemployment are required to file a claim weekly or biweekly, in 
person or by mail, at a public employment office or a claims office 
(these terms include offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person:
    a. His new claim with respect to a benefit year, or his continued 
claim for a waiting week or for his first compensable week of 
unemployment in such year; and
    b. Any other claim, when requested to do so by the claims personnel 
at the office at which he files his claim(s) because questions about his 
right to benefits are raised by circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirement; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances:
    a. He is located in an area requiring the expenditure of an 
unreasonable amount of time or money in traveling to the nearest 
facility established by the State agency for filing claims in person;
    b. Conditions make it impracticable for the agency to take claims in 
person;
    c. He has returned to full-time work on or before the scheduled date 
for his filing a claim, unless the agency makes provision for

[[Page 64]]

in-person filing at a time and place that does not interfere with his 
employment;
    d. The agency finds that he has good cause for failing to file a 
claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

5002  Requirement for Job Finding, Placement, and other Employment 
          Services Designed to Satisfy Secretary's Interpretation
    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency:
    1. The claims personnel are required to give each claimant such 
necessary and appropriate assistance as they reasonably can in finding 
suitable work and at their discretion determine when more complete 
placement and employment services are necessary and appropriate for a 
claimant; and if they determine more complete services are necessary and 
appropriate, the claims personnel are to refer him to employment service 
personnel in the public employment office in which he has been filing 
claim(s), or, if he has been filing in a claims office, in the public 
employment office most accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him, in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.
    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel are required to 
so arrange and coordinate the contacts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files

[[Page 65]]

his claim(s): (1) His failure to apply for or accept work to which he 
was referred by such personnel or when known, by any other nonfee-
charging placement facility such as a union or a professional 
association; and (2) any information which becomes available to it that 
may have a bearing on the claimant's ability to work or availability for 
work, or on the suitability of work to which he was referred or which 
was offered to him.

5004  Evaluation of Alternative State Provisions. If the State law 
          provisions do not conform to the ``suggested State law 
          requirements'' set forth in sections 5001 and 5002, but the 
          State law contains alternative provisions, the Manpower 
          Administrator, in collaboration with the State agency, will 
          study the actual or anticipated effect of the alternative 
          provisions. If the Manpower Administrator concludes that the 
          alternative provisions satisfy the requirements of the Federal 
          law as construed by the Secretary (see section 5000 B) he will 
          so notify the State agency. If he does not so conclude, he 
          will submit the matter to the Secretary. If the Secretary 
          concludes that the alternative provisions satisfy such 
          requirements, the State agency will be so notified. If the 
          Secretary concludes that there is a question as to whether the 
          alternative provisions satisfy such requirements, the State 
          agency will be advised that unless the State law provisions 
          are appropriately revised, a notice of hearing will be issued 
          as required by the Code of Federal Regulations, title 20, 
          section 601.3.
[53 FR 40555, Oct. 17, 1988; 53 FR 43799, Oct. 26, 1988]

Appendix ``B'' to Part 614--Standard for Claim Determination--Separation 
                               Information

         Employment Security Manual (Part V, Sections 6010-6015)

6010-6019  Standard for Claim Determinations--Separation Information *
---------------------------------------------------------------------------


    * Revises subgrouping 6010-6019
---------------------------------------------------------------------------

6010  Federal Law Requirements. Section 303(a)(1) of the Social Security 
          Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *.
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

6011  Secretary's Interpretation of Federal Law Requirements. The 
          Secretary interprets the above sections to require that a 
          State law include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.

6012  Criteria for Review of State Law Conformity with Federal 
          Requirements
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
6013  Claim Determinations Requirements Designed To Meet Department of 
          Labor Criteria
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:

[[Page 66]]

    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
the claimant or the employer. In addition to the agency's own records, 
this information may be obtained from the worker, the employer, or other 
sources. If the information obtained in the first instance discloses no 
essential disagreement and provides a sufficient basis for a fair 
determination, no further investigation is necessary. If the information 
obtained from other sources differs essentially from that furnished by 
the claimant, the agency, in order to meet its responsibility, is 
required to inform the claimant of such information from other sources 
and to afford the claimant an opportunity to furnish any further facts 
he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------


    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it: (1) Results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) There is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
There is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on

[[Page 67]]

the basis of the same facts: (a) That claimant is unable to work, 
unavailable for work, or is disqualified under the labor dispute 
provision; and (b) reducing claimant's weekly benefit amount because of 
income other than earnings or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determinaton.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly amount plus earnings, whichever is provided by the 
State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits.
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in

[[Page 68]]

order to effectuate a protest, redetermination, or appeal, he must be so 
advised and advised also that he must request a written notice of 
determination before he takes any such action.
    (2) Other deductions.
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains: (i) The several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given with his notice of monetary determination..
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ------ (name of 
pamphlet or booklet) heretofore furnished to you.''

[[Page 69]]

6014  Separation Information Requirements Designed To Meet Department of 
          Labor Criteria
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods invovled, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the empolyer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker.
    1. Information required to be given. Employees are required to give 
their employers information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to: 
(a) The name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.

6015  Evaluation of Alternative State Provisions with Respect to Claim 
          Determinations and Separation Information. If the State law 
          provisions do not conform to the suggested requirements set 
          forth in sections 6013 and 6014, but the State law contains 
          alternative provisions, the Bureau of Employment Security, in 
          collaboration with the State agency, will study the actual or 
          anticipated effects of the alternative provisions. If the 
          Administrator of the Bureau concludes that the alternative 
          provisions satisfy the criteria in section 6012, he will so 
          notify the State agency. If the Administrator of the Bureau 
          does not so conclude, he will submit the matter to the 
          Secretary. If the Secretary concludes that the alternative 
          provisions satisfy the criteria in section 6012, the State 
          agency will be so notified. If the Secretary concludes that 
          there is a question as to whether the alternative provisions 
          satisfy the criteria, the State agency will be advised that 
          unless the State law provisions are appropriately revised, a 
          notice of hearing will be issued as required by the Code of 
          Federal Regulations, title 20, Sec. 601.5.
[53 FR 40557, Oct. 17, 1988; 53 FR 43799, Oct. 26, 1988]

[[Page 70]]

Appendix ``C'' to Part 614--Standard for Fraud and Overpayment Detection

         Employment Security Manual (Part V, Sections 7510-7515)

7510-7519  Standard for Fraud and Overpayment Detection

7510  Federal Law Requirements. Section 303(a)(1) of the Social Security 
          Act requires that a State law include provision for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure for all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * * ''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

7511  The Secretary's Interpretation of Federal Law Requirements. The 
          Secretary of Labor interprets the above sections to require 
          that a State law include provision for such methods of 
          administration as are, within reason, calculated (1) to detect 
          benefits paid through error by the agency or through willful 
          misrepresentation or error by the claimant or others, and (2) 
          to deter claimants from obtaining benefits through willful 
          misrepresentation.
7513  Criteria for Review of State Conformity With Federal Requirements. 
          In detemining State conformity with the above requirements of 
          the Internal Revenue Code and the Social Security Act, as 
          interpreted by the Secretary of Labor, the following criteria 
          will be applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explantaion: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agent for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are commonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan
    A. of investigation based on a sample post-audit will be considered 
as partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated? *
---------------------------------------------------------------------------


    * Revises section 7513 as issued 5/5/50.
---------------------------------------------------------------------------

    Explanation. To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking

[[Page 71]]

for willful misrepresentation can be evaluated only if records are kept 
of the results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants? *
    Explanation. To meet this criterion, the State agency must issue 
adequate material on claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution an posters placed in local offices are appropriate 
media for such information.

7515  Evalauation of Alternative State Provisions with Respect to 
          Erroneous and Illegal Payments. If the methods of 
          administration provided for by the State law do not conform to 
          the suggested methods of meeting the requirements set forth in 
          section 7511, but a State law does provide for alternative 
          methods of administration designed to accomplish the same 
          results, the Bureau of Employment Security, in collaboration 
          with the State agency, will study the actual or anticipated 
          effect of the alternative methods of administration. If the 
          Bureau concludes that the alternative methods satisfy the 
          criteria in section 7513, it will so notify the State agency. 
          If the Bureau does not so conclude, it will submit to the 
          Secretary the results of the study for his determination of 
          whether the State's alternative methods of administration meet 
          the criteria.*
---------------------------------------------------------------------------


    * Revises section 7513 as issued 5/5/50.
---------------------------------------------------------------------------



PART 615--EXTENDED BENEFITS IN THE FEDERAL-STATE UNEMPLOYMENT COMPENSATION PROGRAM--Table of Contents




Sec.
615.1  Purpose.
615.2  Definitions.
615.3  Effective period of the program.
615.4  Eligibility requirements for Extended Benefits.
615.5  Definition of ``exhaustee.''
615.6  Extended Benefits; weekly amount.
615.7  Extended Benefits; maximum amount.
615.8  Provisions of State law applicable to claims.
615.9  Restrictions on entitlement.
615.10  Special provisions for employers.
615.11  Extended Benefit Periods.
615.12  Determination of ``on'' and ``off'' indicators.
615.13  Announcement of the beginning and ending of Extended Benefit 
          Periods.
615.14  Payments to States.
615.15  Records and reports.

    Authority:  26 U.S.C. 7805; 42 U.S.C. 1102; Secretary's Order No. 4-
75 (40 FR 18515).

    Source:  53 FR 27937, July 25, 1988, unless otherwise noted.



Sec. 615.1  Purpose.

    The regulations in this part are issued to implement the ``Federal-
State Extended Unemployment Compensation Act of 1970'' as it has been 
amended, which requires, as a condition of tax offset under the Federal 
Unemployment Tax Act (26 U.S.C. 3301 et seq.), that a State unemployment 
compensation law provide for the payment of extended unemployment 
compensation during periods of high unemployment to eligible individuals 
as prescribed in the Act. The benefits provided under State law, in 
accordance with the Act and this part, are hereafter referred to as 
Extended Benefits, and the program is referred to as the Extended 
Benefit Program.



Sec. 615.2  Definitions.

    For the purposes of the Act and this part--
    (a) Act means the ``Federal-State Extended Unemployment Compensation 
Act of 1970'' (title II of Pub. L. 91-373; 84 Stat. 695, 708), approved 
August 10,

[[Page 72]]

1970, as amended from time to time, including the 1980 amendments in 
section 416 of Pub. L. 96-364 (94 Stat. 1208, 1310), approved September 
26, 1980, and in sections 1022 and 1024 of Pub. L. 96-499 (94 Stat. 
2599, 2656, 2658) approved December 5, 1980, and the 1981 amendments in 
sections 2401 through 2404 and section 2505(b) of Pub. L. 97-35 (95 
Stat. 357, 874-875, 884) approved August 13, 1981, and the 1982 
amendment in section 191 of Pub. L. 97-248 (96 Stat. 324, 407) approved 
September 3, 1982, and the 1983 amendment in section 522 of Pub. L. 98-
21 (97 Stat. 65, 148) approved April 20, 1983.
    (b) Base period means, with respect to an individual, the base 
period as determined under the applicable State law for the individual's 
applicable benefit year.
    (c)(1) Benefit year means, with respect to an individual, the 
benefit year as defined in the applicable State law.
    (2) Applicable benefit year means, with respect to an individual, 
the current benefit year if, at the time an initial claim for Extended 
Benefits is filed, the individual has an unexpired benefit year only in 
the State in which such claim is filed, or, in any other case, the 
individual's most recent benefit year. For this purpose, the most recent 
benefit year for an individual who has unexpired benefit years in more 
than one State when an initial claim for Extended Benefits is filed, is 
the benefit year with the latest ending date or, if such benefit years 
have the same ending date, the benefit year in which the latest 
continued claim for regular compensation was filed. The individual's 
most recent benefit year which expires in an Extended Benefit Period is 
the applicable benefit year if the individual cannot establish a second 
benefit year or is precluded from receiving regular compensation in a 
second benefit year solely by reason of a State law provision which 
meets the requirement of section 3304(a)(7) of the Internal Revenue Code 
of 1986 (26 U.S.C. 3304(a)(7)).
    (d) Compensation and unemployment compensation means cash benefits 
(including dependents' allowances) payable to individuals with respect 
to their unemployment, and includes regular compensation, additional 
compensation and extended compensation as defined in this section.
    (e) Regular compensation means compensation payable to an individual 
under a State law, and, when so payable, includes compensation payable 
pursuant to 5 U.S.C. chapter 85, but does not include extended 
compensation or additional compensation.
    (f) Additional compensation means compensation totally financed by a 
State and payable under a State law by reason of conditions of high 
unemployment or by reason of other special factors and, when so payable, 
includes compensation payable pursuant to 5 U.S.C. chapter 85.
    (g) Extended compensation means the extended unemployment 
compensation payable to an individual for weeks of unemployment which 
begin in an Extended Benefit Period, under those provisions of a State 
law which satisfy the requirements of the Act and this part with respect 
to the payment of extended unemployment compensation, and, when so 
payable, includes compensation payable pursuant to 5 U.S.C. chapter 85, 
but does not include regular compensation or additional compensation. 
Extended compensation is referred to in this part as Extended Benefits.
    (h) Eligibility period means, with respect to an individual, the 
period consisting of--
    (1) The weeks in the individual's applicable benefit year which 
begin in an Extended Benefit Period, or with respect to a single benefit 
year, the weeks in the benefit year which begin in more than one 
Extended Benefit Period, and
    (2) If the applicable benefit year ends within an Extended Benefit 
Period, any weeks thereafter which begin in such Extended Benefit 
Period, but an individual may not have more than one eligibility period 
with respect to any one exhaustion of regular benefits, or carry over 
from one eligibility period to another any entitlement to Extended 
Benefits.
    (i) Sharable compensation means:
    (1) Extended Benefits paid to an eligible individual under those 
provisions of a State law which are consistent with the Act and this 
part, and that does

[[Page 73]]

not exceed the smallest of the following:
    (i) 50 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 13 times the individual's weekly amount of Extended Benefits 
payable for a week of total unemployment, as determined pursuant to 
Sec. 615.6(a); or
    (iii) 39 times the individual's weekly benefit amount, referred to 
in (ii), reduced by the regular compensation paid (or deemed paid) to 
the individual during the applicable benefit year; and
    (2) Regular compensation paid to an eligible individual with respect 
to weeks of unemployment in the individual's eligibility period, but 
only to the extent that the sum of such compensation, plus the regular 
compensation paid (or deemed paid) to the individual with respect to 
prior weeks of unemployment in the applicable benefit year, exceeds 26 
times and does not exceed 39 times the average weekly benefit amount 
(including allowances for dependents) for weeks of total unemployment 
payable to the individual under the State law in such benefit year: 
Provided, that such regular compensation is paid under provisions of a 
State law which are consistent with the Act and this part.
    (3) Notwithstanding the preceding provisions of this paragraph, 
sharable compensation shall not include any regular or extended 
compensation with respect to which a State is not entitled to a payment 
under section 202(a)(6) or 204 of the Act or Sec. 615.14 of this part.
    (j)(1) Secretary means the Secretary of Labor of the United States.
    (2) Department means the United States Department of Labor, and 
shall include the Employment and Training Administration, the agency of 
the United States Department of Labor headed by the Assistant Secretary 
of Labor for Employment and Training to whom has been delegated the 
Secretary's authority under the Act in Secretary's Order No. 4-75 (40 FR 
18515) and Secretary's Order No. 14-75.
    (k)(1) State means the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the U. S. Virgin Islands.
    (2) Applicable State means, with respect to an individual, the State 
with respect to which the individual is an ``exhaustee'' as defined in 
Sec. 615.5, and in the case of a combined wage claim for regular 
compensation, the term means the ``paying State'' as defined in 
Sec. 616.6(e) of this chapter.
    (3) State agency means the State Employment Security Agency of a 
State which administers the State law.
    (l)(1) State law means the unemployment compensation law of a State, 
approved by the Secretary under section 3304(a) of the Internal Revenue 
Code of 1986 (26 U.S.C. 3304(a)).
    (2) Applicable State law means the law of the State which is the 
applicable State for an individual.
    (m)(1) Week means, for purposes of eligibility for and payment of 
Extended Benefits, a week as defined in the applicable State law.
    (2) Week means, for purposes of computation of Extended Benefit 
``on'' and ``off'' and ``no change'' indicators and insured unemployment 
rates and the beginning and ending of Extended Benefit Periods, a 
calendar week.
    (n)(1) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to the Extended 
Benefit Program as if the individual filing a claim for Extended 
Benefits were filing a claim for regular compensation, except as 
provided in paragraph (n)(2) of this section.
    (2) Week of unemployment in section 202(a)(3)(A) of the Act means a 
week of unemployment, as defined in paragraph (n)(1) of this section, 
for which the individual claims Extended Benefits or sharable regular 
benefits.
    (o) For the purposes of section 202(a)(3) of the Act--
    (1) Employed, for the purposes of section 202(a)(3)(B)(ii) of the 
Act, and employment, for the purposes of section 202(a)(4) of the Act, 
means service performed in an employer-employee relationship as defined 
in the State law; and that law also shall govern whether that service 
must be covered by it, must consist of consecutive weeks, and must 
consist of more weeks of work

[[Page 74]]

than are required under section 202(a)(3)(B) of the Act;
    (2) Individual's capabilities, for the purposes of section 
202(a)(3)(C), means work which the individual has the physical and 
mental capacity to perform and which meets the minimum requirements of 
section 202(a)(3)(D);
    (3) Reasonably short period, for the purposes of section 
202(a)(3)(C), means the number of weeks provided by the applicable State 
law;
    (4) Average weekly benefit amount, for the purposes of section 
202(a)(3)(D)(i), means the weekly benefit amount (including dependents' 
allowances payable for a week of total unemployment and before any 
reduction because of earnings, pensions or other requirements) 
applicable to the week in which the individual failed to take an action 
which results in a disqualification as required by section 202(a)(3)(B) 
of the Act;
    (5) Gross average weekly remuneration, for the purposes of section 
202(a)(3)(D)(i), means the remuneration offered for a week of work 
before any deductions for taxes or other purposes and, in case the 
offered pay may vary from week to week, it shall be determined on the 
basis of recent experience of workers performing work similar to the 
offered work for the employer who offered the work;
    (6) And, as used in section 202(a)(3)(D)(ii), shall be interpreted 
to mean ``or'';
    (7) Provisions of the applicable State law, as used in section 
202(a)(3)(D)(iii), include statutory provisions and decisions based on 
statutory provisions, such as not requiring an individual to take a job 
which requires traveling an unreasonable distance to work, or which 
involves an unreasonable risk to the individual's health, safety or 
morals; and such provisions shall also include labor standards and 
training provisions required under sections 3304(a)(5) and 3304(a)(8) of 
the Internal Revenue Code of 1986 and section 236(e) of the Trade Act of 
1974;
    (8) A systematic and sustained effort, for the purposes of section 
202(a)(3)(E), means--
    (i) A high level of job search activity throughout the given week, 
compatible with the number of employers and employment opportunities in 
the labor market reasonably applicable to the individual,
    (ii) A plan of search for work involving independent efforts on the 
part of each individual which results in contacts with persons who have 
the authority to hire or which follows whatever hiring procedure is 
required by a prospective employer in addition to any search offered by 
organized public and private agencies such as the State employment 
service or union or private placement offices or hiring halls,
    (iii) Actions by the individual comparable to those actions by which 
jobs are being found by people in the community and labor market, but 
not restricted to a single manner of search for work such as registering 
with and reporting to the State employment service and union or private 
placement offices or hiring halls, in the same manner that such work is 
found by people in the community,
    (iv) A search not limited to classes of work or rates of pay to 
which the individual is accustomed or which represent the individual's 
higher skills, and which includes all types of work within the 
individual's physical and mental capabilities, except that the 
individual, while classified by the State agency as provided in 
Sec. 615.8(d) as having ``good'' job prospects, shall search for work 
that is suitable work under State law provisions which apply to 
claimants for regular compensation (which is not sharable),
    (v) A search by every claimant, without exception for individuals or 
classes of individuals other than those in approved training, as 
required under section 3304(a)(8) of the Internal Revenue Code of 1986 
or section 236(e) of the Trade Act of 1974,
    (vi) A search suspended only when severe weather conditions or other 
calamity forces suspension of such activities by most members of the 
community, except that
    (vii) The individual, while classified by the State agency as 
provided in Sec. 615.8(d) as having ``good'' job prospects, if such 
individual normally obtains customary work through a hiring hall, shall 
search for work that is suitable work under State law provisions which 
apply to claimants for regular compensation (which is not sharable);

[[Page 75]]

    (9) Tangible evidence of an active search for work, for the purposes 
of section 202(a)(3)(E), means a written record which can be verified, 
and which includes the actions taken, methods of applying for work, 
types of work sought, dates and places where work was sought, the name 
of the employer or person who was contacted and the outcome of the 
contact;
    (10) Date of a disqualification, as used in section 202(a)(4), means 
the date the disqualification begins, as determined under the applicable 
State law;
    (11) Jury duty, for purposes of section 202(a)(3)(A)(ii), means the 
performance of service as a juror, during all periods of time an 
individual is engaged in such service, in any court of a State or the 
United States pursuant to the law of the State or the United States and 
the rules of the court in which the individual is engaged in the 
performance of such service; and
    (12) Hospitalized for treatment of an emergency or life-threatening 
condition, as used in section 202(a)(3)(A)(ii), has the following 
meaning: ``Hospitalized for treatment'' means an individual was admitted 
to a hospital as an inpatient for medical treatment. Treatment is for an 
``emergency or life threatening condition'' if determined to be such by 
the hospital officials or attending physician that provide the treatment 
for a medical condition existing upon or arising after hospitalization. 
For purposes of this definition, the term ``medical treatment'' refers 
to the application of any remedies which have the objective of effecting 
a cure of the emergency or life-threatening condition. Once an 
``emergency condition'' or a ``life-threatening condition'' has been 
determined to exist by the hospital officials or attending physician, 
the status of the individual as so determined shall remain unchanged 
until release from the hospital.
    (p)(1) Claim filed in any State under the interstate benefit payment 
plan, as used in section 202(c), means any interstate claim for a week 
of unemployment filed pursuant to the Interstate Benefit Payment Plan, 
but does not include--
    (i) A claim filed in Canada,
    (ii) A visiting claim filed by an individual who has received 
permission from his/her regular reporting office to report temporarily 
to a local office in another State and who has been furnished intrastate 
claim forms on which to file claims, or
    (iii) A transient claim filed by an individual who is moving from 
place to place searching for work, or an intrastate claim for Extended 
Benefits filed by an individual who does not reside in a State that is 
in an Extended Benefit Period,
    (2) The first 2 weeks, as used in section 202(c), means the first 
two weeks for which the individual files compensable claims for Extended 
Benefits under the Interstate Benefit Payment Plan in an agent State in 
which an Extended Benefit Period is not in effect during such weeks, and
    (q) Benefit structure as used in section 204(a)(2)(D), for the 
requirement to round down to the ``nearest lower full dollar amount'' 
for Federal reimbursement of sharable regular and sharable extended 
compensation means all of the following:
    (1) Amounts of regular weekly benefit payments,
    (2) Amounts of additional and extended weekly benefit payments,
    (3) The State maximum or minimum weekly benefit,
    (4) Partial and part-total benefit payments,
    (5) Amounts payable after deduction for pensions, and
    (6) Amounts payable after any other deduction required by State law.



Sec. 615.3  Effective period of the program.

    An Extended Benefit Program conforming with the Act and this part 
shall be a requirement for a State law effective on and after January 1, 
1972, pursuant to section 3304(a)(11) of the Internal Revenue Code of 
1986, (26 U.S.C. 3304(a)(11)). Continuation of the program by a State in 
conformity and substantial compliance with the Act and this part, 
throughout any 12-month period ending on October 31 of a year subsequent 
to 1972, shall be a condition of the certification of the State with 
respect to such 12-month period under section 3304(c) of the Internal 
Revenue Code of 1986 (26 U.S.C. 3304(c)). Conformity with the Act and 
this part in the payment of regular compensation

[[Page 76]]

and Extended Benefits to any individual shall be a continuing 
requirement, applicable to every week as a condition of a State's 
entitlement to payment for any compensation as provided in the Act and 
this part.



Sec. 615.4  Eligibility requirements for Extended Benefits.

    (a) General. An individual is entitled to Extended Benefits for a 
week of unemployment which begins in the individual's eligibility period 
if, with respect to such week, the individual is an exhaustee as defined 
in Sec. 615.5, files a timely claim for Extended Benefits, and satisfies 
the pertinent requirements of the applicable State law which are 
consistent with the Act and this part.
    (b) Qualifying for Extended Benefits. The State law shall specify 
whether an individual qualifies for Extended Benefits by earnings and 
employment in the base period for the individual's applicable benefit 
year as required by section 202(a)(5) of the Act, (and if it does not 
also apply this requirement to the payment of sharable regular benefits, 
the State will not be entitled to a payment under Sec. 615.14), as 
follows:
    (1) One and one-half times the high quarter wages; or
    (2) Forty times the most recent weekly benefit amount, and if this 
alternative is adopted, it shall use the weekly benefit amount 
(including dependents' allowances) payable for a week of total 
unemployment (before any reduction because of earnings, pensions or 
other requirements) which applied to the most recent week of regular 
benefits; or
    (3) Twenty weeks of full-time insured employment, and if this 
alternative is adopted, the term ``full-time'' shall have the meaning 
provided by the State law.



Sec. 615.5  Definition of ``exhaustee.''

    (a)(1) ``Exhaustee'' means an individual who, with respect to any 
week of unemployment in the individual's eligibility period:
    (i) Has received, prior to such week, all of the regular 
compensation that was payable under the applicable State law or any 
other State law (including regular compensation payable to Federal 
civilian employees and Ex-Servicemembers under 5 U.S.C. chapter 85) for 
the applicable benefit year that includes such week; or
    (ii) Has received, prior to such week, all of the regular 
compensation that was available under the applicable State law or any 
other State law (including regular compensation available to Federal 
civilian employees and Ex-Servicemembers under 5 U.S.C. chapter 85) in 
the benefit year that includes such week, after the cancellation of some 
or all of the individual's wage credits or the total or partial 
reduction of the individual's right to regular compensation; or
    (iii) The applicable benefit year having expired prior to such week 
and the individual is precluded from establishing a second (new) benefit 
year, or the individual established a second benefit year but is 
suspended indefinitely from receiving regular compensation, solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1954 (26 U.S.C. 3304(a)(7)): 
Provided, that, an individual shall not be entitled to Extended Benefits 
based on regular compensation in a second benefit year during which the 
individual is precluded from receiving regular compensation solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(7)); 
or
    (iv) The applicable benefit year having expired prior to such week, 
the individual has insufficient wages or employment, or both, on the 
basis of which a new benefit year could be established in any State that 
would include such week; and
    (v) Has no right to unemployment compensation for such week under 
the Railroad Unemployment Insurance Act or such other Federal laws as 
are specified by the Department pursuant to this paragraph; and
    (vi) Has not received and is not seeking for such week unemployment 
compensation under the unemployment compensation law of Canada, unless 
the Canadian agency finally determines that the individual is not 
entitled to unemployment compensation under the Canadian law for such 
week.

[[Page 77]]

    (2) An individual who becomes an exhaustee as defined above shall 
cease to be an exhaustee commencing with the first week that the 
individual becomes eligible for regular compensation under any State law 
or 5 U.S.C. chapter 85, or has any right to unemployment compensation as 
provided in paragraph (a)(1)(v) of this section, or has received or is 
seeking unemployment compensation as provided in paragraph (a)(1)(vi) of 
this section. The individual's Extended Benefit Account shall be 
terminated upon the occurrence of any such week, and the individual 
shall have no further right to any balance in that Extended Benefit 
Account.
    (b) Special Rules. For the purposes of paragraphs (a)(1)(i) and 
(a)(1)(ii) of this section, an individual shall be deemed to have 
received in the applicable benefit year all of the regular compensation 
payable according to the monetary determination, or available to the 
individual, as the case may be, even though--
    (1) As a result of a pending appeal with respect to wages or 
employment or both that were not included in the original monetary 
determination with respect to such benefit year, the individual may 
subsequently be determined to be entitled to more or less regular 
compensation, or
    (2) By reason of a provision in the State law that establishes the 
weeks of the year in which regular compensation may be paid to the 
individual on the basis of wages in seasonal employment--
    (i) The individual may be entitled to regular compensation with 
respect to future weeks of unemployment in the next season or off 
season, as the case may be, but such compensation is not payable with 
respect to the week of unemployment for which Extended Benefits are 
claimed, and
    (ii) The individual is otherwise an exhaustee within the meaning of 
this section with respect to rights to regular compensation during the 
season or off season in which that week of unemployment occurs, or
    (3) Having established a benefit year, no regular compensation is 
payable during such year because wage credits were cancelled or the 
right to regular compensation was totally reduced as the result of the 
application of a disqualification.
    (c) Adjustment of week. If it is subsequently determined as the 
result of a redetermination or appeal that an individual is an exhaustee 
as of a different week than was previously determined, the individual's 
rights to Extended Benefits shall be adjusted so as to accord with such 
redetermination or decision.



Sec. 615.6  Extended Benefits; weekly amount.

    (a) Total unemployment. (1) The weekly amount of Extended Benefits 
payable to an individual for a week of total unemployment in the 
individual's eligibility period shall be the amount of regular 
compensation payable to the individual for a week of total unemployment 
during the applicable benefit year. If the individual had more than one 
weekly amount of regular compensation for total unemployment during such 
benefit year, the weekly amount of extended compensation for total 
unemployment shall be one of the following which applies as specified in 
the applicable State law:
    (i) The average of such weekly amounts of regular compensation,
    (ii) The last weekly benefit amount of regular compensation in such 
benefit year, or
    (iii) An amount that is reasonably representative of the weekly 
amounts of regular compensation payable during such benefit year.
    (2) If the method in paragraph (a)(1)(iii) of this section is 
adopted by a State, the State law shall specify how such amount is to be 
computed. If the method in paragraph (a)(1)(i) of this section is 
adopted by a State, and the amount computed is not an even dollar 
amount, the amount shall be raised or lowered to an even dollar amount 
as provided by the applicable State law for regular compensation.
    (b) Partial and part-total unemployment. The weekly amount of 
Extended Benefits payable for a week of partial or part-total 
unemployment shall be determined under the provisions of the applicable 
State law which apply to regular compensation, computed on the

[[Page 78]]

basis of the weekly amount of Extended Benefits payable for a week of 
total unemployment as determined pursuant to paragraph (a) of this 
section.



Sec. 615.7  Extended Benefits; maximum amount.

    (a) Individual account. An Extended Benefit Account shall be 
established for each individual determined to be eligible for Extended 
Benefits, in the sum of the maximum amount potentially payable to the 
individual as computed in accordance with paragraph (b) of this section.
    (b) Computation of amount in individual account. (1) The amount 
established in the Extended Benefit Account of an individual, as the 
maximum amount potentially payable to the individual during the 
individual's eligibility period, shall be equal to the lesser of--
    (i) 50 percent of the total amount of regular compensation 
(including dependents' allowances) payable to the individual during the 
individual's applicable benefit year; or
    (ii) 13 times the individual's weekly amount of Extended Benefits 
payable for a week of total unemployment, as determined pursuant to 
Sec. 615.6(a); or
    (iii) 39 times the individual's weekly benefit amount referred to in 
(ii), reduced by the regular compensation paid (or deemed paid) to the 
individual during the individual's applicable benefit year.
    (2) If the State law so provides, the amount in the individual's 
Extended Benefit Account shall be reduced by the aggregate amount of 
additional compensation paid (or deemed paid) to the individual under 
such law for prior weeks of unemployment in such benefit year which did 
not begin in an Extended Benefit Period.
    (c) Changes in accounts. (1) If an individual is entitled to more or 
less Extended Benefits as a result of a redetermination or an appeal 
which awarded more or less regular compensation or Extended Benefits, an 
appropriate change shall be made in the individual's Extended Benefit 
Account pursuant to an amended determination of the individual's 
entitlement to Extended Benefits.
    (2) If an individual who has received Extended Benefits for a week 
of unemployment is determined to be entitled to more regular 
compensation with respect to such week as the result of a 
redetermination or an appeal, the Extended Benefits paid shall be 
treated as if they were regular compensation up to the greater amount to 
which the individual has been determined to be entitled, and the State 
agency shall make appropriate adjustments between the regular and 
extended accounts. If the individual is entitled to more Extended 
Benefits as a result of being entitled to more regular compensation, an 
amended determination shall be made of the individual's entitlement to 
Extended Benefits. If the greater amount of regular compensation results 
in an increased duration of regular compensation, the individual's 
status as an exhaustee shall be redetermined as of the new date of 
exhaustion of regular compensation.
    (3) If an individual who has received Extended Benefits for a week 
of unemployment is determined to be entitled to less regular 
compensation as the result of a redetermination or an appeal, and as a 
consequence is entitled to less Extended Benefits, any Extended Benefits 
paid in excess of the amount to which the individual is determined to be 
entitled after the redetermination or decision on appeal shall be 
considered an overpayment which the individual shall have to repay on 
the same basis and in the same manner that excess payments of regular 
compensation are required to be repaid under the applicable State law. 
If such decision reduces the duration of regular compensation payable to 
the individual, the claim for Extended Benefits shall be backdated to 
the earliest date, subsequent to the date when the redetermined regular 
compensation was exhausted and within the individual's eligibility 
period, that the individual was eligible to file a claim for Extended 
Benefits. Any such changes shall be made pursuant to an amended 
determination of the individual's entitlement to Extended Benefits.
    (d) Reduction because of trade readjustment allowances. Section 
233(d) of the Trade Act of 1974 (and section

[[Page 79]]

204(a)(2)(C) of the Act), requiring a reduction of Extended Benefits 
because of the receipt of trade readjustment allowances, shall be 
applied as follows:
    (1) The reduction of Extended Benefits shall apply only to an 
individual who has not exhausted his/her Extended Benefits at the end of 
the benefit year;
    (2) The amount to be deducted is the product of the weekly benefit 
amount for Extended Benefits multiplied by the number of weeks for which 
trade readjustment allowances were paid (regardless of the amount paid 
for any such week) up to the close of the last week that begins in the 
benefit year; and
    (3) The amount to be deducted shall be deducted from the balance of 
Extended Benefits not used as of the close of the last week which begins 
in the benefit year.



Sec. 615.8  Provisions of State law applicable to claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part, the terms 
and conditions of the applicable State law which apply to claims for, 
and the payment of, regular compensation shall apply to claims for, and 
the payment of, Extended Benefits. The provisions of the applicable 
State law which shall apply to claims for, and the payment of, Extended 
Benefits include, but are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals and employers, as appropriate;
    (4) Determinations, redeterminations, and appeal and review;
    (5) Ability to work and availability for work, except as provided 
otherwise in this section;
    (6) Disqualifications, including disqualifying income provisions, 
except as provided by paragraph (c) of this section;
    (7) Overpayments, and the recovery thereof;
    (8) Administrative and criminal penalties;
    (9) The Interstate Benefit Payment Plan;
    (10) The Interstate Arrangement for Combining Employment and Wages, 
in accordance with part 616 of this chapter.
    (b) Provisions not to be applicable. The State law and regulations 
shall specify those of its terms and conditions which shall not be 
applicable to claims for, or payment of, Extended Benefits. Among such 
terms and conditions shall be at least those relating to--
    (1) Any waiting period;
    (2) Monetary or other qualifying requirements, except as provided in 
Sec. 615.4(b); and
    (3) Computation of weekly and total regular compensation.
    (c) Terminating disqualifications. A disqualification in a State 
law, as to any individual who voluntarily left work, was suspended or 
discharged for misconduct, gross misconduct or the commission or 
conviction of a crime, or refused an offer of or a referral to work, as 
provided in sections 202(a) (4) and (6) of the Act--
    (1) As applied to regular benefits which are not sharable, is not 
subject to any limitation in sections 202(a) (4) and (6);
    (2) As applied to eligibility for Extended Benefits, shall require 
that the individual be employed again subsequent to the date of the 
disqualification before it may be terminated, even though it may have 
been terminated on other grounds for regular benefits which are not 
sharable; and if the State law does not also apply this provision to the 
payment of what would otherwise be sharable regular benefits, the State 
will not be entitled to a payment under the Act and Sec. 615.14 in 
regard to such regular compensation; and
    (3) Will not apply in regard to eligibility for Extended Benefits in 
a subsequent eligibility period.
    (d) Classification and determination of job prospects. (1) As to 
each individual who files an initial claim for Extended Benefits (or 
sharable regular compensation), the State agency shall classify the 
individual's prospects for obtaining work in his/her customary 
occupation within a reasonably short period, as ``good'' or ``not 
good,'' and shall promptly (not later than the end of the week in which 
the initial claim is filed) notify the individual in writing

[[Page 80]]

of such classification and of the requirements applicable to the 
individual under the provisions of the applicable State law 
corresponding to section 202(a)(3) of the Act and this part. Such 
requirements shall be applicable beginning with the week following the 
week in which the individual is furnished such written notice.
    (2) If an individual is thus classified as having good prospects, 
but those prospects are not realized by the close of the period the 
State law specifies as a reasonably short period, the individual's 
prospects will be automatically reclassified as ``not good'' or 
classified as ``good'' or ``not good'' depending on the individual's job 
prospects as of that date.
    (3) Whenever, as part of a determination of an individual's 
eligibility for benefits, an issue arises concerning the individual's 
failure to apply for or accept an offer of work (sections 
202(a)(3)(A)(i) and (F) of the Act and paragraphs (e) and (f) of this 
section), or to actively engage in seeking work (sections 
202(a)(3)(A)(ii) and (E) of the Act and paragraph (g) of this section), 
a written appealable determination shall be made which includes a 
finding as to the individual's job prospects at the time the issue 
arose. The reasons for allowing or denying benefits in the written 
notice of determination shall explain how the individual's job prospects 
relate to the decision to allow or deny benefits.
    (4) If an individual's job prospects are determined in accordance 
with the preceding paragraph (3) to be ``good,'' the suitability of work 
will be determined under the standard State law provisions applicable to 
claimants for regular compensation which is not sharable; and if 
determined to be ``not good,'' the suitability of work will be 
determined under the definition of suitable work in the State law 
provisions corresponding to sections 202(a)(3) (C) and (D) of the Act 
and this part. Any determination or classification of an individual's 
job prospects is mutually exclusive, and only one suitable work 
definition shall be applied to a claimant as to any failure to accept or 
apply for work or seek work with respect to any week.
    (e) Requirement of referral to work. (1) The State law shall 
provide, as required by section 202(a)(3)(F) of the Act and this part, 
that the State agency shall refer every claimant for Extended Benefits 
to work which is ``suitable work'' as provided in paragraph (d)(4) of 
this section, beginning with the week following the week in which the 
individual is furnished a written notice of classification of job 
prospects as required by paragraphs (d)(1) and (h) of this section.
    (2) To make such referrals, the State agency shall assure that each 
Extended Benefit claimant is registered for work and continues to be 
considered for referral to job openings as long as he/she continues to 
claim benefits.
    (3) In referring claimants to available job openings, the State 
agency shall apply to Extended Benefit claimants the same priorities, 
policies, and judgments as it does to other applicants, except that it 
shall not restrict referrals only to work at higher skill levels, prior 
rates of pay, customary work, or preferences as to work or pay for 
individuals whose prospects of obtaining work in their customary 
occupations have been classified as or determined to be ``not good.''
    (4) For referral purposes, any work which does not exceed the 
individual's capabilities shall be considered suitable work for an 
Extended Benefit claimant whose job prospects have been classified as or 
determined to be ``not good'', except as modified by this paragraph (e).
    (5) For Extended Benefit claimants whose prospects of obtaining work 
in their customary occupations have been classified as or determined to 
be ``not good'', work shall not be suitable, and referral to a job shall 
not be made, if--
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment benefits (SUB) (as defined in section 
501(c)(17)(D) of the Internal Revenue Code of 1986) payable to the 
individual,
    (ii) The work is not offered in writing or is not listed with the 
State employment service,

[[Page 81]]

    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, without regard 
to any exemption, or any applicable State or local minimum wage, or
    (iv) Failure to accept or apply for the work would not result in a 
denial of compensation under the provisions of the applicable State law 
as defined in Sec. 615.2(o)(7).
    (6) In addition, if the State agency classifies or determines that 
an individual's prospects for obtaining work in his/her customary 
occupation within a reasonably short period are ``good,'' referral shall 
not be made to a job if such referral would not be made under the State 
law provisions applicable to claimants for regular benefits which are 
not sharable, and such referrals shall be limited to work which the 
individual is required to make a ``systematic and sustained effort'' to 
search for as defined in Sec. 615.2(o)(8).
    (7) For the purposes of the foregoing paragraphs of this paragraph 
(e), State law applies regarding whether members of labor organizations 
shall be referred to nonunion work in their customary occupations.
    (8) If the State law does not also apply this paragraph (e) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec. 615.14 in regard to such regular compensation.
    (f) Refusal of work. (1) The State law shall provide, as required by 
section 202(a)(3)(A)(i) of the Act and this part, that if an individual 
who claims Extended Benefits fails to accept an offer of work or fails 
to apply for work to which he/she was referred by the State agency--
    (i) If the individual's prospects for obtaining work in his/her 
customary occupation within a reasonably short period are determined to 
be ``good,'' the State agency shall determine whether the work is 
suitable under the standard State law provisions which apply to 
claimants for regular compensation which is not sharable, and if 
determined to be suitable the individual shall be ineligible for 
Extended Benefits for the week in which the individual fails to apply 
for or accept an offer of suitable work and thereafter until the 
individual is employed in at least four weeks with wages from such 
employment totalling not less than four times the individual's weekly 
benefit amount, as provided by the applicable State law; or
    (ii) If the individual's prospects for obtaining work in his/her 
customary occupation are determined to be ``not good,'' the State agency 
shall determine whether the work is suitable under the applicable State 
law provisions corresponding to sections 202(a)(3) (C) and (D) of the 
Act and paragraphs (e)(5) and (f)(2) of this section, and if determined 
to be suitable the individual shall be ineligible for Extended Benefits 
for the week in which the individual fails to apply for or accept an 
offer of suitable work and thereafter until the individual is employed 
in at least four weeks with wages from such employment totalling not 
less than four times the individual's weekly benefit amount, as provided 
by the applicable State law.
    (2) For an individual whose prospects of obtaining work in his/her 
customary occupation within the period specified by State law are 
classified or determined to be ``not good,'' the term ``suitable work'' 
shall mean any work which is within the individual's capabilities, 
except that work shall not be suitable if--
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment benefits (SUB) (as defined in section 
501(c)(17)(D) of the Internal Revenue Code of 1986) payable to the 
individual,
    (ii) The work is not offered in writing or is not listed with the 
State employment service, or
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, without regard 
to any exemption, or any applicable State or local minimum wage,
    (iv) Failure to accept or apply for the work would not result in a 
denial of compensation under the provisions of the applicable State law 
as defined in Sec. 615.2(o)(7).

[[Page 82]]

    (3) For the purposes of the foregoing paragraphs of this paragraph 
(f), State law applies regarding whether members of labor organizations 
shall be referred to nonunion work in their customary occupations.
    (4) If the State law does not also apply this paragraph (f) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec. 615.14 in regard to such regular compensation.
    (g) Actively seeking work. (1) The State law shall provide, as 
required by sections 202(a)(3) (A)(ii) and (E) of the Act and this part, 
that an individual who claims Extended Benefits shall be required to 
make a systematic and sustained effort (as defined in Sec. 615.2(o)(8)) 
to search for work which is ``suitable work'' as provided in paragraph 
(d)(4) of this section, throughout each week beginning with the week 
following the week in which the individual is furnished a written notice 
of classification of job prospects as required by paragraphs (d)(1) and 
(h) of this section, and to furnish to the State agency with each claim 
tangible evidence of such efforts.
    (2) If the individual fails to thus search for work, or to furnish 
tangible evidence of such efforts, he/she shall be ineligible for 
Extended Benefits for the week in which the failure occurred and 
thereafter until the individual is employed in at least four weeks with 
wages from such employment totalling not less than four times the 
individual's weekly benefit amount, as provided by the applicable State 
law.
    (3)(i) A State law may provide that eligibility for Extended 
Benefits be determined under the applicable provisions of State law for 
regular compensation which is not sharable, without regard to the active 
search provisions otherwise applicable in paragraph (g)(1) of this 
section, for any individual who fails to engage in a systematic and 
sustained search for work throughout any week because such individual 
is--
    (A) Serving on jury duty, or
    (B) Hospitalized for treatment of an emergency or life-threatening 
condition.
    (ii) The conditions in (i) (A) and (B) must be applied to 
individuals filing claims for Extended Benefits in the same manner as 
applied to individuals filing claims for regular compensation which is 
not sharable compensation.
    (4) For the purposes of the foregoing paragraphs of this paragraph 
(g), State law applies regarding whether members of labor organizations 
shall be required to seek nonunion work in their customary occupations.
    (5) If the State law does not also apply this paragraph (g) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec. 615.14 in regard to such regular compensation.
    (h) Information to claimants. The State agency shall assure that 
each Extended Benefit claimant (and claimant for sharable regular 
compensation) is informed in writing--
    (1) Of the State agency's classification of his/her prospects for 
finding work in his/her customary occupation within the time set out in 
paragraph (d) as ``good'' or ``not good,''
    (2) What kind of jobs he/she may be referred to, depending on the 
classification of his/her job prospects,
    (3) What kind of jobs he/she must be actively engaged in seeking 
each week depending on the classification of his/her job prospects, and 
what tangible evidence of such search must be furnished to the State 
agency with each claim for benefits, and
    (4) The resulting disqualification if he/she fails to apply for work 
to which referred, or fails to accept work offered, or fails to actively 
engage in seeking work or to furnish tangible evidence of such search 
for each week for which Extended Benefits or sharable regular benefits 
are claimed, beginning with the week following the week in which such 
information is furnished in writing to the individual.



Sec. 615.9  Restrictions on entitlement.

    (a) Disqualifications. If the week of unemployment for which an 
individual claims Extended Benefits is a week to which a 
disqualification for regular compensation applies, including a reduction 
because of the receipt of disqualifying income, or would apply but

[[Page 83]]

for the fact that the individual has exhausted all rights to such 
compensation, the individual shall be disqualified in the same degree 
from receipt of Extended Benefits for that week.
    (b) Additional compensation. No individual shall be paid additional 
compensation and Extended Benefits with respect to the same week. If 
both are payable by a State with respect to the same week, the State law 
may provide for the payment of Extended Benefits instead of additional 
compensation with respect to the week. If Extended Benefits are payable 
to an individual by one State and additional compensation is payable to 
the individual for the same week by another State, the individual may 
elect which of the two types of compensation to claim.
    (c) Interstate claims. An individual who files claims for Extended 
Benefits under the Interstate Benefit Payment Plan, in a State which is 
not in an Extended Benefit Period for the week(s) for which Extended 
Benefits are claimed, shall not be paid more than the first two weeks 
for which he/she files such claims.
    (d) Other restrictions. The restrictions on entitlement specified in 
this section are in addition to other restrictions in the Act and this 
part on eligibility for and entitlement to Extended Benefits.



Sec. 615.10  Special provisions for employers.

    (a) Charging contributing employers. (1) Section 3303(a)(1) of the 
Internal Revenue Code of 1986 (26 U.S.C. 3303(a)(1)) does not require 
that Extended Benefits paid to an individual be charged to the 
experience rating accounts of employers.
    (2) A State law may, however, consistently with section 3303(a)(1), 
require the charging of Extended Benefits paid to an individual; and if 
it does, it may provide for charging all or any portion of such 
compensation paid.
    (3) Sharable regular compensation must be charged as all other 
regular compensation is charged under the State law.
    (b) Payments by reimbursing employers. If an employer is reimbursing 
the State unemployment fund in lieu of paying contributions pursuant to 
the requirements of State law conforming with sections 3304(a)(6)(B) and 
3309(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(6)(B) 
and 3309(a)(2)), the State law shall require the employer to reimburse 
the State unemployment fund for not less than 50 percent of any sharable 
compensation that is attributable under the State law to service with 
such employer; and as to any compensation which is not sharable 
compensation under Sec. 615.14, the State law shall require the employer 
to reimburse the State unemployment fund for 100 percent, instead of 50 
percent, of any such compensation paid.



Sec. 615.11  Extended Benefit Periods.

    (a) Beginning date. Except as provided in paragraph (d) of this 
section, an Extended Benefit Period shall begin in a State on the first 
day of the third calendar week after a week for which there is a State 
``on'' indicator in that State.
    (b) Ending date. Except as provided in paragraph (c) of this 
section, an Extended Benefit Period in a State shall end on the last day 
of the third week after the first week for which there is a State 
``off'' indicator in that State.
    (c) Duration. An Extended Benefit Period which becomes effective in 
any State shall continue in effect for not less than 13 consecutive 
weeks.
    (d) Limitation. No Extended Benefit Period may begin in any State by 
reason of a State ``on'' indicator before the 14th week after the ending 
of a Prior Extended Benefit Period with respect to such State.



Sec. 615.12  Determination of ``on'' and ``off'' indicators.

    (a) Standard State indicators. (1) There is a State ``on'' indicator 
in a State for a week if the head of the State agency determines, in 
accordance with this section, that, for the period consisting of that 
week and the immediately preceding 12 weeks, the rate of insured 
unemployment (not seasonally adjusted) under the State law--
    (i) Equalled or exceeded 120 percent of the average of such rates 
for the corresponding 13-week periods ending in each of the preceding 
two calendar years, and
    (ii) Equalled or exceeded 5.0 percent.

[[Page 84]]

    (2) There is a State ``off'' indicator in a State for a week if the 
head of the State agency determines, in accordance with this section, 
that, for the period consisting of that week and the immediately 
preceding 12 weeks, the rate of insured unemployment (not seasonally 
adjusted) under the State law--
    (i) Was less than 120 percent of the average of such rates for the 
corresponding 13 week periods ending in each of the preceding two 
calendar years, or
    (ii) Was less than 5.0 percent.
    (3) The standard State indicators in this paragraph (a) shall apply 
to weeks beginning after September 25, 1982.
    (b) Optional State indicators. (1)(i) A State may, in addition to 
the State indicators in paragraph (a) of this section, provide by its 
law that there shall be a State ``on'' indicator in the State for a week 
if the head of the State agency determines, in accordance with this 
section, that, for the period consisting of that week and the 
immediately preceding 12 weeks, the rate of insured unemployment (not 
seasonally adjusted) under the State law equalled or exceeded 6.0 
percent even though it did not meet the 120 percent factor required 
under paragraph (a).
    (ii) A State which adopts the optional State indicator must also 
provide that, when it is in an Extended Benefit Period, there will not 
be an ``off'' indicator until (A) the State rate of insured unemployment 
is less than 6.0 percent, and (B) either its rate of insured 
unemployment is less than 5.0 percent or is less than 120 percent of the 
average of such rates for the corresponding 13-week periods ending in 
each of the preceding two calendar years.
    (2) The optional State indicators in this paragraph (b) shall apply 
to weeks beginning after September 25, 1982.
    (c) Computation of rate of insured unemployment--(1) Equation. Each 
week the State agency head shall calculate the rate of insured 
unemployment under the State law (not seasonally adjusted) for purposes 
of determining the State ``on'' and ``off'' and ``no change'' 
indicators. In making such calculations the State agency head shall use 
a fraction, the numerator of which shall be the weekly average number of 
weeks claimed in claims filed (not seasonally adjusted) in the State in 
the 13-week period ending with the week for which the determination is 
made, and the denominator of which shall be the average monthly 
employment covered by the State law for the first four of the last six 
calendar quarters ending before the close of the 13-week period. The 
quotient obtained is to be computed to four decimal places, and is not 
otherwise rounded, and is to be expressed as a percentage by multiplying 
the resultant decimal fraction by 100.
    (2) Counting weeks claimed. To determine the average number of weeks 
claimed in claims filed to serve as the numerator under paragraph 
(c)(1), the State agency shall include claims for all weeks for regular 
compensation, including claims taken as agent State under the Interstate 
Benefit Payment Plan. It shall exclude claims--
    (i) For Extended Benefits under any State law,
    (ii) For additional compensation under any State law, and
    (iii) Under any Federal law except joint claims which combine 
regular compensation and compensation payable under 5 U.S.C. chapter 85.
    (3) Method of computing the State 120 percent factor. The rate of 
insured unemployment for a current 13-week period shall be divided by 
the average of the rates of insured unemployment for the corresponding 
13-week periods in each of the two preceding calendar years to determine 
whether the rate is equal to 120 percent of the average rate for the two 
years. The quotient obtained shall be computed to four decimal places 
and not otherwise rounded, and shall be expressed as a percentage by 
multiplying the resultant decimal fraction by 100. The average of the 
rates for the corresponding 13-week periods in each of the two preceding 
calendar years shall be one-half the sum of such rates computed to four 
decimal places and not otherwise rounded. To determine which are the 
corresponding weeks in the preceding years--
    (i) The weeks shall be numbered starting with week number 1 as the 
first week ending in each calendar year.
    (ii) The 13-week period ending with any numbered week in the current 
year

[[Page 85]]

shall correspond to the period ending with that same numbered week in 
each preceding year.
    (iii) When that period in the current year ends with week number 53, 
the corresponding period in preceding years shall end with week number 
52 if there is no week number 53.
    (d) Amendment of State indicator rates. (1) Because figures used for 
determinations under this section may contain errors and because it is 
not practical to apply any correction in a State ``on'' or ``off'' or 
``no change'' indicator retroactively either to recover amounts paid or 
to adjudicate claims for past periods in which claimants failed to make 
the required active search for work, any determination by the head of a 
State agency of an ``on'' or ``off'' or ``no change'' indicator shall 
not be corrected more than three weeks after the close of the week to 
which it applies. If any figure used in the computation of a rate of 
insured unemployment is later found to be wrong, the correct figure 
shall be used to redetermine the rate of insured unemployment and of the 
120 percent factor for that week and all subsequent weeks, but no 
determination of previous ``on'' or ``off'' or ``no change'' indicator 
shall be affected unless the redetermination is made within the time the 
indicator may be corrected under the first sentence of this paragraph 
(d)(1). Any change hereunder shall be subject to the concurrence of the 
Department as provided in paragraph (e) of this section.
    (2) Any determination of the rate of insured unemployment and its 
effect on an ``on'' or ``off'' or ``no change'' indicator may be 
challenged by appeal or by other proceedings, as shall be provided by 
State law, but the implementation of any change in the indicator from 
one week to another shall not be stayed or postponed. In a hearing on 
any such challenge the issue may be limited to the accuracy of the 
determination of the rate of insured unemployment. If an error in that 
rate affecting the ``on'' or ``off'' or ``no change'' indicator is 
discovered in such a hearing or other proceeding, its retroactive effect 
shall be limited as provided in paragraph (d)(1).
    (e) Notice to Secretary. Within 10 calendar days after the end of 
any week with respect to which the head of a State agency has determined 
that there is an ``on,'' or ``off,'' or ``no change'' indicator in the 
State, the head of the State agency shall notify the Department of the 
determination. The notice shall state clearly the State agency head's 
determination of the specific week for which there is a State ``on'' or 
``off'' or ``no change'' indicator. The notice shall include also the 
State agency head's findings supporting the determination, with a 
certification that the findings are made in accordance with the 
requirements of this Sec. 615.15. Determinations and findings made as 
provided in this section shall be accepted by the Department, but the 
head of the State agency shall comply with such provisions as the 
Department may find necessary to assure the correctness and verification 
of notices given under this paragraph. A notice shall not become final 
for purposes of the Act and this part until such notice is accepted by 
the Department.



Sec. 615.13  Announcement of the beginning and ending of Extended Benefit Periods.

    (a) State indicators. Upon receipt of the notice required by 
Sec. 615.12(e) which is acceptable to the Department, the Department 
shall publish in the Federal Register a notice of the State agency 
head's determination that there is an ``on'' or an ``off'' indicator in 
the State, as the case may be, the name of the State and the beginning 
or ending of the Extended Benefit Period, whichever is appropriate. The 
Department shall also notify appropriate news media, the heads of all 
other State agencies, and the Regional Administrators of the Employment 
and Training Administration of the State agency head's determination of 
such State ``on'' or ``off'' indicator and of its effect.
    (b) Publicity by State. Whenever a State agency head determines that 
there is an ``on'' indicator in the State by reason of which an Extended 
Benefit Period will begin in the State, or an ``off'' indicator by 
reason of which an Extended Benefit Period in the State will end, the 
head of the State agency shall promptly announce the determination 
through appropriate news

[[Page 86]]

media in the State and notify the Department in accordance with 
Sec. 615.12(e). Such announcement shall include the beginning or ending 
date of the Extended Benefit Period, whichever is appropriate. In the 
case of an Extended Benefit Period that is about to begin, the 
announcement shall describe clearly the unemployed individuals who may 
be eligible for Extended Benefits during the period, and in the case of 
an Extended Benefit Period that is about to end, the announcement shall 
also describe clearly the individuals whose entitlement to Extended 
Benefits will be terminated.
    (c) Notices to individuals. (1) Whenever there has been a 
determination that an Extended Benefit Period will begin in a State, the 
State agency shall provide prompt written notice of potential 
entitlement to Extended Benefits to each individual who has established 
a benefit year in the State that will not end prior to the beginning of 
the Extended Benefit Period, and who exhausted all rights under the 
State law to regular compensation before the beginning of the Extended 
Benefit Period.
    (2) The State agency shall provide such notice promptly to each 
individual who begins to claim sharable regular benefits or who exhausts 
all rights under the State law to regular compensation during an 
Extended Benefit Period, including exhaustion by reason of the 
expiration of the individual's benefit year.
    (3) The notices required by paragraphs (c) (1) and (2) of this 
section shall describe those actions required of claimants for sharable 
regular compensation and Extended Benefits and those disqualifications 
which apply to such benefits which are different from those applicable 
to other claimants for regular compensation which is not sharable.
    (4) Whenever there has been a determination that an Extended Benefit 
Period will end in a State, the State agency shall provide prompt 
written notice to each individual who is currently filing claims for 
Extended Benefits of the forthcoming end of the Extended Benefit Period 
and its effect on the individual's right to Extended Benefits.



Sec. 615.14  Payments to States.

    (a) Sharable compensation. (1) The Department shall promptly upon 
receipt of a State's report of its expenditures for a calendar month 
reimburse the State in the amount of the sharable compensation the State 
is entitled to receive under the Act and this part.
    (2) The Department may instead advance to a State for any period not 
greater than one day the amount the Department estimates the State will 
be entitled to be paid under the Act and this part for that period.
    (3) Any payment to a State under this section shall be based upon 
the Department's determination of the amount the State is entitled to be 
paid under the Act and this part, and such amount shall be reduced or 
increased, as the case may be, by any amount by which the Department 
finds that a previous payment was greater or less than the amount that 
should have been paid to the State.
    (4) Any payment to a State pursuant to this paragraph (a) shall be 
made by a transfer from the extended unemployment compensation account 
in the Unemployment Trust Fund to the account of the State in such Fund, 
in accordance with section 204(e) of the Act.
    (b) Payments not to be made to States. Because a State law must 
contain provisions fully consistent with sections 202 and 203 of the 
Act, the Department shall make no payment under paragraph (a) of this 
section, whether or not the State is certified under section 3304(c) of 
the Internal Revenue Code of 1986--
    (1) In respect of any regular or extended compensation paid to any 
individual for any week if the State does not apply--
    (i) The provisions of the State law required by section 202(a)(3) 
and this part, relating to failure to accept work offered or to apply 
for work or to actively engage in seeking work, as to weeks beginning 
after October 31, 1981, except for any State which the State legislature 
did not meet in 1981 as to weeks beginning after October 1, 1982 or the 
provisions of State law required by section 202(a)(4) and this part, 
relating to terminating a disqualification, as to weeks beginning after 
March 31, 1981;

[[Page 87]]

    (ii) The provisions of the State law required by section 202(a)(5) 
and this part, relating to qualifying employment, as to weeks beginning 
after September 25, 1982; or
    (2) In respect of any regular or extended compensation paid to any 
individual for any week which was not payable by reason of the provision 
of the State law required by section 202(c) and this part, as to weeks 
which begin after May 31, 1981, or May 31, 1982, as determined by the 
Department with regard to each State.
    (c) Payments not to be reimbursed. The Department shall make no 
payment under paragraph (a) of this section, whether or not the State is 
certified under section 3304(c) of the Internal Revenue Code of 1986, in 
respect of any regular or extended compensation paid under a State law--
    (1) As provided in section 204(a)(1) of the Act and this part, if 
the payment made was not sharable extended compensation or sharable 
regular compensation;
    (2) As provided in section 204(a)(2)(A) of the Act, if the State is 
entitled to reimbursement for the payment under the provisions of any 
Federal law other than the Act;
    (3) As provided in section 204(a)(2)(B) of the Act, if for the first 
week in an individual's eligibility period with respect to which 
Extended Benefits or sharable regular benefits are paid to the 
individual, that first week begins after December 5, 1980, and the State 
law provides for the payment (at any time or under any circumstances) of 
regular compensation to any individual for the first week of 
unemployment in any such individual's benefit year; except that--
    (i) In the case of a State with respect to which the Department 
finds that legislation is required in order to end the payment (at any 
time or under any circumstances) of regular compensation for any such 
first week of unemployment, this paragraph (c)(3) shall not apply to the 
first week in an individual's eligibility period which began before the 
end of the first regularly scheduled session of the State legislature 
that ends after January 4, 1981, as determined by the Department; and
    (ii) In the case of a State law which is changed so that regular 
compensation is not paid at any time or under any circumstances with 
respect to the first week of unemployment in any individual's benefit 
year, this paragraph (c)(3) shall not apply to any week which begins 
after the effective date of such change in the State law; and
    (iii) In the case of a State law which is changed so that regular 
compensation is paid at any time or under any circumstances with respect 
to the first week of unemployment in any individual's benefit year, this 
paragraph (c)(3) shall apply to all weeks which begin after the 
effective date of such change in the State law;
    (4) As provided in section 204(a)(2)(C) of the Act and this part, 
for any week with respect to which Extended Benefits are not payable 
because of the payment of trade readjustment allowances, as provided in 
section 233(d) of the Trade Act of 1974, and Sec. 615.7(d). This 
paragraph (c)(4) applies to any week which begins after October 31, 
1982, or 1983, as determined by the Department in regard to each State;
    (5) As provided in section 204(a)(2)(D) of the Act and this part, if 
the State does not provide for a benefit structure under which benefits 
are rounded down to the next lower dollar amount, for the 50 percent 
Federal share of the amount by which sharable regular or Extended 
Benefits paid to any individual exceeds the nearest lower full dollar 
amount. This paragraph (c)(5) shall apply to any sharable regular 
compensation or Extended Benefits paid to individuals whose eligibility 
periods begin on or after October 1, 1983, unless a later date, as 
determined by the Department, applies in a particular State under the 
grace period of section 191(b)(2) of Pub. L. 97-248;
    (6) As provided in section 204(a)(3) of the Act, to the extent that 
such compensation is based upon employment and wages in service 
performed for governmental entities or instrumentalities to which 
section 3306(c)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 
3306(c)(7)) applies, in the proportion that wages for such service in 
the base period bear to the total base period wages;

[[Page 88]]

    (7) If the payment made was not sharable extended compensation or 
sharable regular compensation because the payment was not consistent 
with the requirements of--
    (i) Section 202(a)(3) of the Act, and Sec. 615.8 (e), (f), or (g);
    (ii) Section 202(a)(4) of the Act, and Sec. 615.8(c); or
    (iii) Section 202(a)(5) of the Act, and Sec. 615.4(b);
    (8) If the payment made was not sharable extended compensation or 
sharable regular compensation because there was not in effect in the 
State an Extended Benefit Period in accord with the Act and this part; 
or
    (9) For any week with respect to which the claimant was either 
ineligible for or not entitled to the payment.
    (d) Effectuating authorization for reimbursement. (1) If the 
Department believes that reimbursement should not be authorized with 
respect to any payments made by a State that are claimed to be sharable 
compensation paid by the State, because the State law does not contain 
provisions required by the Act and this part, or because such law is not 
interpreted or applied in rules, regulations, determinations or 
decisions in a manner that is consistent with those requirements, the 
Department may at any time notify the State agency in writing of the 
Department's view. The State agency shall be given an opportunity to 
present its views and arguments if desired.
    (2) The Department shall thereupon decide whether the State law 
fails to include the required provisions or is not interpreted and 
applied so as to satisfy the requirements of the Act and this part. If 
the Department finds that such requirements are not met, the Department 
shall notify the State agency of its decision and the effect thereof on 
the State's entitlement to reimbursement under this section and the 
provisions of section 204 of the Act.
    (3) Thereafter, the Department shall not authorize any payment under 
paragraph (a) of this section in respect of any sharable regular or 
extended compensation if the State law does not contain all of the 
provisions required by sections 202 and 203 of the Act and this part, or 
if the State law, rules, regulations, determinations or decisions are 
not consistent with such requirements, or which would not have been 
payable if the State law contained the provisions required by the Act 
and this part or if the State law, rules, regulations, determinations or 
decisions had been consistent with such requirements. Loss of 
reimbursement for such compensation shall begin with the date the State 
law was required to contain such provisions, and shall continue until 
such time as the Department finds that such law, rules and regulations 
have been revised or the interpretations followed pursuant to such 
determinations and decisions have been overruled and payments are made 
or denied so as to accord with the Federal law requirements of the Act 
and this part, but no reimbursement shall be authorized with respect to 
any payment that did not fully accord with the Act and this part.
    (4) A State agency may request reconsideration of a decision issued 
pursuant to paragraph (d)(2) above, within 10 calendar days of the date 
of such decision, and shall be given an opportunity to present views and 
arguments if desired.
    (5) Concurrence of the Department in any State law provision, rule, 
regulation, determination or decision shall not be presumed from the 
absence of notice issued pursuant to this section or from a 
certification of the State issued pursuant to section 3304(c) of the 
Internal Revenue Code of 1986.
    (6) Upon finding that a State has made payments for which it claims 
reimbursement that are not consistent with the Act or this part, such 
claim shall be denied; and if the State has already been paid such claim 
in advance or by reimbursement, it shall be required to repay the full 
amount to the Department. Such repayment may be made by transfer of 
funds from the State's account in the Unemployment Trust Fund to the 
Extended Unemployment Compensation Account in the Fund, or by offset 
against any current advances or reimbursements to which the State is 
otherwise entitled, or the amount repayable may be recovered for the 
Extended Unemployment Compensation Account by other means and

[[Page 89]]

from any other sources that may be available to the United States or the 
Department.
    (e) Compensation under Federal unemployment compensation programs. 
The Department shall promptly reimburse each State which has paid 
sharable compensation based on service covered by the UCFE and UCX 
Programs (parts 609 and 614 of this chapter, respectively) pursuant to 5 
U.S.C. chapter 85, an amount which represents the full amount of such 
sharable compensation paid under the State law, or may make advances to 
the State. Such amounts shall be paid from the Federal Employees 
Compensation Account established for those programs, rather than from 
the Extended Unemployment Compensation Account.
    (f) Combined-wage claims. If an individual was paid benefits under 
the Interstate Arrangement for Combining Employment and Wages (part 616 
of this chapter) any payment required by paragraph (a) of this section 
shall be made to the States which contributed the wage credits.
    (g) Interstate claims. Where sharable compensation is paid to an 
individual under the provisions of the Interstate Benefit Payment Plan, 
any payment required by paragraph (a) of this section shall be made only 
to the liable State.



Sec. 615.15  Records and reports.

    (a) General. State agencies shall furnish to the Secretary such 
information and reports and make such studies as the Secretary decides 
are necessary or appropriate for carrying out the purposes of the Act 
and this part.
    (b) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Extended Benefit Program as the 
Department requires, and will make all such records available for 
inspection, examination and audit by such Federal officials or employees 
as the Secretary or the Department may designate or as may be required 
by law.
    (c) Weekly report of Extended Benefit data. Each State shall file 
with the Department within 10 calendar days after the end of each 
calendar week a weekly report entitled ETA 539, Extended Benefit Data. 
The report shall include:
    (1) The data reported on the form ETA 539 for the week ending 
(date). Week-ending dates shall always be the Saturday ending date of 
the calendar week beginning at 12:01 a.m. Sunday and ending 12:00 p.m. 
Saturday.
    (2)(i) The number of continued weeks claimed for regular 
compensation in claims filed during the week ending (date). The report 
shall include intrastate continued weeks claimed and interstate 
continued weeks claimed (taken as agent State) but shall exclude 
interstate continued weeks claimed (received as liable State) and 
continued weeks claimed for regular compensation filed solely under 5 
U.S.C. chapter 85; and
    (ii) The report of the number of continued weeks claimed filed in 
the State for regular compensation shall not be adjusted for 
seasonality.
    (3) The average weekly number of weeks claimed in claims filed in 
the most recent calendar week and the immediately preceding 12 calendar 
weeks.
    (4) The rate of insured unemployment for the current 13-week period.
    (5) The average of the rates of insured unemployment in 
corresponding 13-week periods in the preceding two years.
    (6) The current rate of insured unemployment as a percentage of the 
average of the rates in the corresponding 13-week periods in the 
preceding two years.
    (7) The 12 month average monthly employment covered by the State law 
for the first 4 of the last 6 complete calendar quarters ending prior to 
the end of the last week of the current 13-week period to which the 
insured unemployment data relate. Such covered employment shall exclude 
Federal civilian and military employment covered by 5 U.S.C. chapter 85.
    (8) The date that a State Extended Benefit Period begins or ends, or 
a report that there is no change in the existing Extended Benefit Period 
status.
    (d) Methodology. The State agency head shall submit to the 
Department, for approval, the method used to identify and select the 
weeks claimed which are used in the determination of an ``on'' or 
``off'' or ``no change'' indicator. Any change proposed in the method of 
identification and selection

[[Page 90]]

of such weeks claimed constitutes a new plan which must be submitted to 
and approved by the Department prior to implementing the new plan.

(Approved by the Office of Management and Budget under control number 
1205-0028)



PART 616--INTERSTATE ARRANGEMENT FOR COMBINING EMPLOYMENT AND WAGES--Table of Contents




Sec.
616.1  Purpose of arrangement.
616.2  Consultation with the State agencies.
616.3  Interstate cooperation.
616.4  Rules, regulations, procedures, forms--resolution of 
          disagreements.
616.5  Effective date.
616.6  Definitions.
616.7  Election to file a Combined-Wage Claim.
616.8  Responsibilities of the paying State.
616.9  Responsibilities of transferring States.
616.10  Reuse of employment and wages.
616.11  Amendment of arrangement.

    Authority:  Sec. 3304(a)(9)(B), 84 Stat. 702; 26 U.S.C. 
3304(a)(9)(B); Secretary's Order No. 20-71, August 13, 1971.

    Source:  36 FR 24992, Dec. 28, 1971, unless otherwise noted.



Sec. 616.1  Purpose of arrangement.

    This arrangement is approved by the Secretary under the provisions 
of section 3304(a)(9)(B) of the Federal Unemployment Tax Act to 
establish a system whereby an unemployed worker with covered employment 
or wages in more than one State may combine all such employment and 
wages in one State, in order to qualify for benefits or to receive more 
benefits.



Sec. 616.2  Consultation with the State agencies.

    As required by section 3304(a)(9)(B), this arrangement has been 
developed in consultation with the State unemployment compensation 
agencies. For purposes of such consultation in its formulation and any 
future amendment the Secretary recognizes, as agents of the State 
agencies, the duly designated representatives of the Interstate 
Conference of Employment Security Agencies.



Sec. 616.3  Interstate cooperation.

    Each State agency will cooperate with every other State agency by 
implementing such rules, regulations, and procedures as may be 
prescribed for the operation of this arrangement. Each State agency 
shall identify the paying and the transferring State with respect to 
Combined-Wage Claims filed in its State.



Sec. 616.4  Rules, regulations, procedures, forms--resolution of disagreements.

    All State agencies shall operate in accordance with such rules, 
regulations, and procedures, and shall use such forms, as shall be 
prescribed by the Secretary in consultation with the State unemployment 
compensation agencies. All rules, regulations, and standards prescribed 
by the Secretary with respect to intrastate claims will apply to claims 
filed under this arrangement unless they are clearly inconsistent with 
the arrangement. The Secretary shall resolve any disagreement between 
State agencies concerning the operation of the arrangement, with the 
advice of the duly designated representatives of the State agencies.



Sec. 616.5  Effective date.

    This arrangement shall apply to all new claims (to establish a 
benefit year) filed under it after December 31, 1971.



Sec. 616.6  Definitions.

    These definitions apply for the purpose of this arrangement and the 
procedures issued to effectuate it.
    (a) State. ``State'' includes the States of the United States of 
America, the District of Columbia, and the Commonwealth of Puerto Rico, 
and includes the Virgin Islands effective on the day after the day on 
which the Secretary approves under section 3304(a) of the Internal 
Revenue Code of 1954 (26 U.S.C. 3304(a)), an unemployment compensation 
law submitted to the Secretary by the Virgin Islands for approval.
    (b) State agency. The agency which administers the unemployment 
compensation law of a State.
    (c) Combined-Wage Claim. A claim filed under this arrangement.
    (d) Combined-Wage Claimant. A claimant who has covered wages under 
the

[[Page 91]]

unemployment compensation law of more than one State and who has filed a 
claim under this arrangement.
    (e) Paying State. (1) The State in which a Combined-Wage Claimant 
files a Combined-Wage Claim, if the claimant qualifies for unemployment 
benefits in that State on the basis of combined employment and wages.
    (2) If the State in which a Combined-Wage Claimant files a Combined-
Wage Claim is not the Paying State under the criterion set forth in 
paragraph (e)(1) of this section, or if the Combined-Wage Claim is filed 
in Canada or the Virgin Islands, then the Paying State shall be that 
State where the Combined-Wage Claimant was last employed in covered 
employment among the States in which the claimant qualifies for 
unemployment benefits on the basis of combined employment and wages: 
Provided, That, this paragraph (e)(2) shall read as if the Virgin 
Islands was not referred to therein, effective on the day after the day 
on which the Secretary approves under section 3304(a) of the Internal 
Revenue Code of 1954 (26 U.S.C. 3304(a)), an unemployment compensation 
law submitted to the Secretary by the Virgin Islands for approval.
    (f) Transferring State. A State in which a Combined-Wage Claimant 
had covered employment and wages in the base period of a paying State, 
and which transfers such employment and wages to the paying State for 
its use in determining the benefit rights of such claimant under its 
law.
    (g) Employment and wages. ``Employment'' refers to all services 
which are covered under the unemployment compensation law of a State, 
whether expressed in terms of weeks of work or otherwise. ``Wages'' 
refers to all remuneration for such employment.
    (h) Secretary. The Secretary of Labor of the United States.
    (i) Base period and benefit year. The base period and benefit year 
applicable under the unemployment compensation law of the paying State.
[36 FR 24992, Dec. 28, 1971, as amended at 39 FR 45215, Dec. 31, 1974; 
43 FR 2625, Jan. 17, 1978]



Sec. 616.7  Election to file a Combined-Wage Claim.

    (a) Any unemployed individual who has had employment covered under 
the unemployment compensation law of two or more States, whether or not 
he is monetarily qualified under one or more of them, may elect to file 
a Combined-Wage Claim. He may not so elect, however, if he has 
established a benefit year under any State or Federal unemployment 
compensation law and:
    (1) The benefit year has not ended, and
    (2) He still has unused benefit rights based on such benefit 
year.\1\
---------------------------------------------------------------------------


    \1\ The Federal-State Extended Unemployment Compensation Act of 
1970, title II, Public Law 91-373, section 202(a)(1), limits the payment 
of extended benefits with respect to any week to individuals who have no 
rights to regular compensation with respect to such week under any State 
unemployment compensation law or to compensation under any other Federal 
law and in certain other instances. This provision precludes any 
individual from receiving any Federal-State extended benefits with 
respect to any week for which he is eligible to receive regular benefits 
based on a Combined Wage Claim. (See section 5752, part V of the 
Employment Security Manual.)
---------------------------------------------------------------------------

    (b) For the purposes of this arrangement, a claimant will not be 
considered to have unused benefit rights based on a benefit year which 
he has established under a State or Federal unemployment compensation 
law if:
    (1) He has exhausted his rights to all benefits based on such 
benefit year; or
    (2) His rights to such benefits have been postponed for an 
indefinite period or for the entire period in which benefits would 
otherwise be payable; or
    (3) Benefits are affected by the application of a seasonal 
restriction.
    (c) If an individual elects to file a Combined-Wage Claim, all 
employment and wages in all States in which he worked during the base 
period of the paying State must be included in such combining, except 
employment and wages which are not transferrable under the provisions of 
Sec. 616.9(b).
    (d) A Combined-Wage Claimant may withdraw his Combined-Wage Claim 
within the period prescribed by the law of the paying State for filing 
an appeal, protest, or request for redetermination

[[Page 92]]

(as the case may be) from the monetary determination of the Combined-
Wage Claim, provided he either:
    (1) Repays in full any benefits paid to him thereunder, or
    (2) Authorizes the State(s) against which he files a substitute 
claim(s) for benefits to withhold and forward to the paying State a sum 
sufficient to repay such benefits.
    (e) If the Combined-Wage Claimant files his claim in a State other 
than the paying State, he shall do so pursuant to the Interstate Benefit 
Payment Plan.



Sec. 616.8  Responsibilities of the paying State.

    (a) Transfer of employment and wages--payment of benefits. The 
paying State shall request the transfer of a Combined-Wage Claimant's 
employment and wages in all States during its base period, and shall 
determine his entitlement to benefits (including additional benefits, 
extended benefits and dependents' allowances when applicable) under the 
provisions of its law based on employment and wages in the paying State, 
if any, and all such employment and wages transferred to it hereunder. 
The paying State shall apply all the provisions of its law to each 
determination made hereunder, even if the Combined-Wage Claimant has no 
earnings in covered employment in that State, except that the paying 
State may not determine an issue which has previously been adjudicated 
by a transferring State. Such exception shall not apply, however, if the 
transferring State's determination of the issue resulted in making the 
Combined-Wage Claim possible under Sec. 616.7(b)(2). If the paying State 
fails to establish a benefit year for the Combined-Wage Claimant, or if 
he withdraws his claim as provided herein, it shall return to each 
transferring State all employment and wages thus unused.
    (b) Notices of determination. The paying State shall give to the 
claimant a notice of each of its determinations on his Combined-Wage 
Claim that he is required to receive under the Secretary's Claim 
Determinations Standard and the contents of such notice shall meet such 
Standard. When the claimant is filing his Combined-Wage Claims in a 
State other than the paying State, the paying State shall send a copy of 
each such notice to the local office in which the claimant filed such 
claims.
    (c) Redeterminations. (1) Redeterminations may be made by the paying 
State in accordance with its law based on additional or corrected 
information received from any source, including a transferring State, 
except that such information shall not be used as a basis for changing 
the paying State if benefits have been paid under the Combined-Wage 
Claim.
    (2) When a determination is made, as provided in paragraph (a) of 
this section, which suspends the use of wages earned in employment with 
an educational institution during a prescribed period between successive 
academic years or terms or other periods as prescribed in the law of the 
paying State in accordance with section 3304(a)(6)(A)(i)-(iv) of the 
Internal Revenue Code of 1954, the paying State shall furnish each 
transferring State involved in the combined-Wage Claim an adjusted 
determination used to recompute each State's proportionate share of any 
charges that may accumulate for benefits paid during the period of 
suspended use of school wages. Wages which are suspended shall be 
retained by the paying State for possible future reinstatement to the 
Combined-Wage Claim and shall not be returned to the transferring State.
    (d) Appeals. (1) Except as provided in paragraph (d)(3) of this 
section, where the claimant files his Combined-Wage Claim in the paying 
State, any protest, request for redetermination or appeal shall be in 
accordance with the law of such State.
    (2) Where the claimant files his Combined-Wage Claim in a State 
other than the paying State, or under the circumstances described in 
paragraph (d)(3) of this section, any protest, request for 
redetermination or appeal shall be in accordance with the Interstate 
Benefit Payment Plan.
    (3) To the extent that any protest, request for redetermination or 
appeal involves a dispute as to the coverage of the employing unit or 
services in a transferring State, or otherwise involves the amount of 
employment and wages subject to transfer, the protest,

[[Page 93]]

request for redetermination or appeal shall be decided by the 
transferring State in accordance with its law.
    (e) Recovery of prior overpayments. If there is an overpayment 
outstanding in a transferring State and such transferring State so 
requests, the overpayment shall be deducted from any benefits the paying 
State would otherwise pay to the claimant on his Combined-Wage Claim 
except to the extent prohibited by the law of the paying State. The 
paying State shall transmit the amount deducted to the transferring 
State or credit the deduction against the transferring State's required 
reimbursement under this arrangement. This paragraph shall apply to 
overpayments only if the transferring State certifies to the paying 
State that the determination of overpayment was made within 3 years 
before the Combined-Wage Claim was filed and that repayment by the 
claimant is legally required and enforceable against him under the law 
of the transferring State.
    (f) Statement of benefit charges. (1) At the close of each calendar 
quarter, the paying State shall send each transferring State a statement 
of benefits charged during such quarter to such State as to each 
Combined-Wage Claimant.
    (2) Except as provided in paragraphs (c)(2), (f)(3), and (f)(5) of 
this section, each such charge shall bear the same ratio to the total 
benefits paid to the Combined-Wage Claimant by the paying State as the 
claimant's wages transferred by the transferring State bear to the total 
wages used in such determination. Each such ratio shall be computed as a 
percentage, to three or more decimal places.
    (3) Charges to the transferring State shall not include the costs of 
any benefits paid which are funded or reimbursed from the Federal 
Unemployment Benefits and Allowances account in the U.S. Department of 
Labor appropriation, including:
    (i) Benefits paid pursuant to 5 U.S.C. 8501-8525; and
    (ii) Benefits which are reimbursable under part B of title II of the 
Emergency Jobs and Unemployment Assistance Act of 1974 (Pub. L. 93-567).
    (4) With respect to benefits paid after December 31, 1978, except as 
provided in paragraphs (f)(3) and (f)(5) of this section, all 
transferring States will be charged by the paying State for Extended 
Benefits in the same manner as for regular benefits.
    (5) With respect to new claims establishing a benefit year effective 
on and after July 1, 1977, the United States shall be charged directly 
by the paying State, in the same manner as is provided in paragraphs 
(f)(1) and (f)(2) of this section, in regard to Federal civilian service 
and wages and Federal military service and wages assigned or transferred 
to the paying State and included in Combined-Wage Claims in accordance 
with this part and parts 609 and 614 of this chapter. With respect to 
new claims effective before July 1, 1977, prior law shall apply.

(26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 4-75, (40 FR 18515))
[36 FR 24992, Dec. 28, 1971, as amended at 43 FR 2625, Jan. 17, 1978; 45 
FR 47109, July 11, 1980]



Sec. 616.9  Responsibilities of transferring States.

    (a) Transfer of employment and wages. Each transferring State shall 
promptly transfer to the Paying State the employment and wages the 
Combined-Wage Claimant had in covered employment during the base period 
of the paying State. Any employment and wages so transferred shall be 
transferred without restriction as to their use for determination and 
benefit payments under the provisions of the paying State's law.
    (b) Employment and wages not transferable. Employment and wages 
transferred to the paying State by a transferring State shall not 
include:
    (1) Any employment and wages which have been transferred to any 
other paying State and not returned unused, or which have been used in 
the transferring State as the basis of a monetary determination which 
established a benefit year.
    (2) Any employment and wages which have been canceled or are 
otherwise unavailable to the claimant as a result of a determination by 
the transferring State made prior to its receipt of the request for 
transfer, if such determination has become final or is in the process of 
appeal but is still pending. If the

[[Page 94]]

appeal is finally decided in favor of the Combined-Wage Claimant, any 
employment and wages involved in the appeal shall forthwith be 
transferred to the paying State and any necessary redetermination shall 
be made by such paying State.
    (c) Reimbursement of paying State. Each transferring State shall, as 
soon as practicable after receipt of a quarterly statement of charges 
described herein, reimburse the paying State accordingly.

(26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 4-75, (40 FR 18515))
[36 FR 24992, Dec. 28, 1971, as amended at 45 FR 47109, July 11, 1980]



Sec. 616.10  Reuse of employment and wages.

    Employment and wages which have been used under this arrangement for 
a determination of benefits which establishes a benefit year shall not 
thereafter be used by any State as the basis for another monetary 
determination of benefits.



Sec. 616.11  Amendment of arrangement.

    Periodically the Secretary shall review the operation of this 
arrangement, and shall propose such amendments to the arrangement as he 
believes are necessary or appropriate. Any State unemployment 
compensation agency or the ICESA may propose amendments to the 
arrangement. Any proposal shall constitute an amendment to the 
arrangement upon approval by the Secretary in consultation with the 
State unemployment compensation agencies. Any such amendment shall 
specify when the change shall take effect, and to which claims it shall 
apply.



PART 617--TRADE ADJUSTMENT ASSISTANCE FOR WORKERS UNDER THE TRADE ACT OF 1974--Table of Contents




                           Subpart A--General

Sec.
617.1  Scope.
617.2  Purpose.
617.3  Definitions.
617.4  Benefit information to workers.

             Subpart B--Trade Readjustment Allowances (TRA)

617.10  Applications for TRA.
617.11  Qualifying requirements for TRA.
617.12  Evidence of qualification.
617.13  Weekly amounts of TRA.
617.14  Maximum amount of TRA.
617.15  Duration of TRA.
617.16  Applicable State law.
617.17  Availability and active search for work.
617.18  Disqualifications.
617.19  Requirement for participation in training.

                    Subpart C--Reemployment Services

617.20  Responsibilities for the delivery of reemployment services.
617.21  Reemployment services and allowances.
617.22  Approval of training.
617.23  Selection of training methods and programs.
617.24  Preferred training.
617.25  Limitations on training under subpart C of this part.
617.26  Liable and agent State responsibilities.
617.27  Subsistence payments.
617.28  Transportation payments.
617.29  Application of EB work test.

                    Subpart D--Job Search Allowances

617.30  General.
617.31  Applications.
617.32  Eligibility.
617.33  Findings required.
617.34  Amount.
617.35  Time and method of payment.

                    Subpart E--Relocation Allowances

617.40  General.
617.41  Applications.
617.42  Eligibility.
617.43  Time of relocation.
617.44  Findings required.
617.45  Amount.
617.46  Travel allowance.
617.47  Moving allowance.
617.48  Time and method of payment.

                      Subpart F--Job Search Program

617.49  Job Search Program.

         Subpart G--Administration by Applicable State Agencies

617.50  Determinations of entitlement; notices to individuals.
617.51  Appeals and hearings.
617.52  Uniform interpretation and application.
617.53  Subpoenas.

[[Page 95]]

617.54  State agency rulemaking.
617.55  Overpayments; penalties for fraud.
617.56  Inviolate rights to TAA.
617.57  Recordkeeping; disclosure of information.
617.58  Unemployment insurance.
617.59  Agreements with State agencies.
617.60  Administration requirements. [Reserved]
617.61  Information, reports, and studies.
617.62  Transitional procedures.
617.63  Savings clause.
617.64  Termination of TAA program benefits.
617.65  Transition procedures for amendments in sections 2671 and 2672 
          of Pub. L. 98-369 (Deficit Reduction Act of 1984).
617.66  Transition procedures for amendments in sections 13002 through 
          13009 of Pub. L. 99-272 (the Consolidated Omnibus Budget 
          Reconciliation Act of 1985).
617.67  Transition guidelines for the 1988 amendments.

Appendix A to Part 617--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 617--Standard for Claim Determinations--Separation 
          Information
Appendix C to Part 617--Standard for Fraud and Overpayment Detection

    Authority:  19 U.S.C. 2320; Secretary's Order No. 3-81, 46 FR 31117.

    Source:  51 FR 45848, Dec. 22, 1986, unless otherwise noted.



                           Subpart A--General



Sec. 617.1  Scope.

    The regulations in this part 617 pertain to:
    (a) Adjustment assistance, such as counseling, testing, training, 
placement, and other supportive services for workers adversely affected 
under the terms of chapter 2 of title II of the Trade Act of 1974, as 
amended (hereafter referred to as the Act);
    (b) Trade readjustment allowances (hereafter referred to as TRA) and 
other allowances such as allowances while in training, job search and 
relocation allowances; and
    (c) Administrative requirements applicable to State agencies to 
which such individuals may apply.



Sec. 617.2  Purpose.

    The Act created a program of trade adjustment assistance (hereafter 
referred to as TAA) to assist individuals, who became unemployed as a 
result of increased imports, return to suitable employment. The TAA 
program provides for reemployment services and allowances for eligible 
individuals. The regulations in this part 617 are issued to implement 
the Act.



Sec. 617.3  Definitions.

    For the purposes of the Act and this part 617:
    (a) Act means chapter 2 of title II of the Trade Act of 1974, Pub. 
L. 93-618, 88 Stat. 1978, 2019-2030 (19 U.S.C. 2271-2322), as amended.
    (b) Adversely affected employment means employment in a firm or 
appropriate subdivision of a firm, including workers in any agricultural 
firm or subdivision of an agricultural firm, if workers of such firm or 
appropriate subdivision are certified under the Act as eligible to apply 
for TAA.
    (c) Adversely affected worker means an individual who, because of 
lack of work in adversely affected employment:
    (1) Has been totally or partially separated from such employment; or
    (2) Has been totally separated from employment with the firm in a 
subdivision of which such adversely affected employment exists.
    (d) Appropriate week means the week in which the individual's first 
separation occurred.
    (e) Average weekly hours means a figure obtained by dividing:
    (1) Total hours worked (excluding overtime) by a partially separated 
individual in adversely affected employment in the 52 weeks (excluding 
weeks in such period during which the individual was sick or on 
vacation) preceding the individual's first qualifying separation, by
    (2) The number of weeks in such 52 weeks (excluding weeks in such 
period during which the individual was sick or on vacation) in which the 
individual actually worked in such employment.
    (f) Average weekly wage means one-thirteenth of the total wages paid 
to an individual in the individual's high quarter. The high quarter for 
an individual is the quarter in which the total wages paid to the 
individual were highest among the first four of the last five completed 
calendar quarters preceding the individual's appropriate week.

[[Page 96]]

    (g) Average weekly wage in adversely affected employment means a 
figure obtained by dividing:
    (1) Total wages earned by a partially separated individual in 
adversely affected employment in the 52 weeks (excluding the weeks in 
that period the individual was sick or on vacation) preceding the 
individual's first qualifying separation, by
    (2) The number of weeks in such 52 weeks (excluding the weeks in 
that period the individual was sick or on vacation) the individual 
actually worked in such employment.
    (h) Benefit period means, with respect to an individual:
    (1) The benefit year and any ensuing period, as determined under the 
applicable State law, during which the individual is eligible for 
regular compensation, additional compensation, extended compensation, or 
federal supplemental compensation, as these terms are defined by 
paragraph (oo) of this section; or
    (2) The equivalent to such a benefit year or ensuing period provided 
for under the Federal unemployment insurance law.
    (i) Bona fide application for training means an individual's signed 
and dated application for training filed with the State agency 
administering the TAA training program, on a form necessarily containing 
the individual's name, petition number, local office number, and 
specific occupational training. This form shall be signed and dated by a 
State agency representative upon receipt.
    (j)(1) Certification means a certification of eligibility to apply 
for TAA issued under section 223 of the Act with respect to a specified 
group of workers of a firm or appropriate subdivision of a firm.
    (2) Certification period means the period of time during which total 
and partial separations from adversely affected employment within a firm 
or appropriate subdivision of a firm are covered by the certification.
    (k) Commuting area means the area in which an individual would be 
expected to travel to and from work on a daily basis as determined under 
the applicable State law.
    (l) Date of separation means:
    (1) With respect to a total separation--
    (i) For an individual in employment status, the last day worked; and
    (ii) For an individual on employer-authorized leave, the last day 
the individual would have worked had the individual been working; and
    (2) With respect to a partial separation, the last day of the week 
in which the partial separation occurred.
    (m) Eligibility period means the period of consecutive calendar 
weeks during which basic or additional TRA is payable to an otherwise 
eligible individual, and for an individual such eligibility period is--
    (1) Basic TRA. (i) With respect to a first qualifying separation (as 
defined in paragraph (t)(3)(i)(A) of this section) that occurs on a day 
that precedes August 23, 1988, the 104-week period beginning with the 
first week following the week with respect to which the individual first 
exhausts all rights to regular compensation (as defined in paragraph 
(oo)(1) of this section) in such individual's first benefit period (as 
described in Sec. 617.11(a)(1)(iv)) or Sec. 617.11(a)(2)(iv), whichever 
is applicable), and
    (ii) With respect to a total qualifying separation (as defined in 
paragraph (t)(3)(i)(B) of this section) that occurs on or after August 
23, 1988--or before August 23, 1988, if the individual also had a prior 
first qualifying separation under the same certification--the 104-week 
period beginning with the first week following the week in which such 
total qualifying separation occurred;
    Provided, that, an individual who has a second or subsequent total 
qualifying separation within the certification period of the same 
certification shall be determined to have a new 104-week eligibility 
period based upon the most recent such total qualifying separation; but 
the rule of this proviso shall not be applicable in the case of an 
individual who had a total qualifying separation before August 23, 1988, 
and also had a prior first qualifying separation (as referred to in 
paragraph (m)(1)(i) of this section) within the certification period of 
the same certification, if the individual's 104-week eligibility period 
based upon the total qualifying separation (as referred to in paragraph 
(m)(1)(i) of this section) would end on a

[[Page 97]]

date earlier than the ending date of the individual's eligibility period 
which is based upon the prior first qualifying separation; and
    (2) Additional TRA. With respect to additional weeks of TRA, and any 
individual determined under this part 617 to be entitled to additional 
TRA, the consecutive calendar weeks that occur in the 26-week period 
that--
    (i) Immediately follows the last week of entitlement to basic TRA 
otherwise payable to the individual, or
    (ii) Begins with the first week of training approved under this part 
617, if such training begins after the last week described in paragraph 
(m)(2)(i) of this section, or
    (iii) Begins with the first week in which such training is approved 
under this part 617, if such training is so approved after the training 
has commenced; but approval of training under this part 617 after the 
training has commenced shall not imply or justify approval of a payment 
of basic or additional TRA with respect to any week which ended before 
the week in which such training was approved, nor approval of payment of 
any costs of training or any costs or expenses associated with such 
training (such as travel or subsistence) which were incurred prior to 
the date of the approval of such training under this part 617.
    (n) Employer means any individual or type of organization, including 
the Federal government, a State government, a political subdivision, or 
an instrumentality of one or more governmental entities, with one or 
more individuals performing service in employment for it within the 
United States.
    (o) Employment means any service performed for an employer by an 
officer of a corporation or an individual for wages.
    (p) Exhaustion of UI means exhaustion of all rights to UI in a 
benefit period by reason of:
    (1) Having received all UI to which an individual was entitled under 
the applicable State law or Federal unemployment compensation law with 
respect to such benefit period; or
    (2) The expiration of such benefit period.
    (q) Family means the following members of an individual's household 
whose principal place of abode is with the individual in a home the 
individual maintains or would maintain but for unemployment:
    (1) A spouse;
    (2) An unmarried child, including a stepchild, adopted child, or 
foster child, under age 21 or of any age if incapable of self-support 
because of mental or physical incapacity; and
    (3) Any other person whom the individual would be entitled to claim 
as a dependent for income tax purposes under the Internal Revenue Code 
of 1954.
    (r) First benefit period means the benefit period established after 
the individual's first qualifying separation or in which such separation 
occurs.
    (s) First exhaustion of UI means the first time in an individual's 
first benefit period that the individual exhausts all rights to UI; 
first exhaustion shall be deemed to be complete at the end of the week 
the exhaustion occurs.
    (t)(1) First separation means, for an individual to qualify as an 
adversely affected worker for the purposes of TAA program benefits 
(without regard to whether the individual also qualifies for TRA), the 
individual's first total or partial separation within the certification 
period of a certification, irrespective of whether such first separation 
also is a qualifying separation as defined in paragraph (t)(2) of this 
section;
    (2) Qualifying separation means, for an individual to qualify as an 
adversely affected worker and for basic TRA--
    (i) Prior to August 23, 1988, the individual's first (total or 
partial) separation within the certification per-iod of a certification, 
with respect to which the individual meets all of the requirements of 
Sec. 617.11(a)(1) (i) through (iv), and which qualifies as a first 
qualifying separation as defined in paragraph (t)(3)(i)(A) of this 
section, and
    (ii) At any time before, on, or after August 23, 1988, any total 
separation of the individual within the certification period of a 
certification (other than a first qualifying separation as defined in 
paragraph (t)(3)(i)(A) of this section), with respect to which the 
individual meets all of the requirements in Sec. 617.11(a)(2) (i) 
through (iv), and which

[[Page 98]]

qualifies as a total qualifying separation as defined in paragraph (B) 
of (t)(3)(i)(B) of this section;
    (3) ``First qualifying separation'' means--
    (i) For the purposes of determining an individual's eligibility 
period for basic TRA--
    (A) With respect to a separation that occurs before August 23, 1988, 
the individual's first (total or partial) separation within the 
certification period of a certification, with respect to which the 
individual meets all of the requirements of Sec. 617.11(a)(1) (i) 
through (iv), and
    (B) With respect to a separation that occurs before, on, or after 
August 23, 1988 (other than a first qualifying separation as defined in 
paragraph (t)(3)(i)(A) of this section), the first total separation of 
the individual within the certification period of a certification, with 
respect to which the individual meets all of the requirements in 
Sec. 617.11(a)(2) (i) through (iv); and
    (ii) For the purposes of determining the weekly and maximum amounts 
of basic TRA payable to an individual, with respect to a separation that 
occurs before, on, or after August 23, 1988, the individual's first 
(total or partial) separation within the certification period of a 
certification if, with respect to such separation, the individual meets 
the requirements of Sec. 617.11(a)(1) (i), (ii) and (iv) or 
Sec. 617.11(a)(2) (i), (ii) and (iv).
    (u) Head of family means an individual who maintains a home for a 
family. An individual maintains a home if over half the cost of 
maintenance is furnished by the individual or would be furnished but for 
unemployment.
    (v) Impact date means the date stated in a certification issued 
under the Act on which total or partial separations began or threatened 
to begin in a firm or a subdivision of a firm.
    (w) Job search program means a job search workshop or job finding 
club.
    (x) Job search workshop means a short (1 to 3 days) seminar designed 
to provide participants with knowledge that will enable the participants 
to find jobs. Subjects should include, but not be limited to, labor 
market information, resume writing, interviewing techniques, and 
techniques for finding job openings.
    (y) Job finding club means a job search workshop which includes a 
period of 1 to 2 weeks of structured, supervised activity in which 
participants attempt to obtain jobs.
    (z) Layoff means a suspension of or separation from employment by a 
firm for lack of work, initiated by the employer, and expected to be for 
a definite or indefinite period of not less than seven consecutive days.
    (aa) Liable State and Agent State are defined as follows:
    (1) Liable State means, with respect to any individual, the State 
whose State law is the applicable State law as determined under 
Sec. 617.16 for all purposes of this Part 617.
    (2) Agent State means, with respect to any individual, any State 
other than the State which is the liable State for such individual.
    (bb) On-the-job training means training provided by an employer to 
an individual who is employed by the employer.
    (cc) Partial separation means that during a week ending on or after 
the impact date specified in the certification under which an adversely 
affected worker is covered, the individual had:
    (1) Hours of work reduced to 80 percent or less of the individual's 
average weekly hours in adversely affected employment; and
    (2) Wages reduced to 80 percent or less of the individual's average 
weekly wage in such adversely affected employment.
    (dd) Regional Administrator means the appropriate Regional 
Administrator of the Employment and Training Administration, United 
States Department of Labor (hereafter Department).
    (ee) Remuneration means remuneration as defined in the applicable 
State law.
    (ff) Secretary means the Secretary of Labor, U.S. Department of 
Labor, or his or her designee.
    (gg) Separate maintenance means maintaining another (second) 
residence, in addition to the individual's regular place of residence, 
while attending a training facility outside the individual's commuting 
area.

[[Page 99]]

    (hh) State means the States of the United States, the District of 
Columbia, and the Commonwealth of Puerto Rico, and the term ``United 
States'' when used in a geographical sense includes such Commonwealth.
    (ii) State agency means the State Employment Security Agency; the 
employment service of the State; any State agency carrying out title III 
of the Job Training Partnership Act; or any other State or local agency 
administering job training or related programs with which the Secretary 
has an agreement to carry out any of the provisions of the Act.
    (jj) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1954 (26 U.S.C. 3304).
    (kk) Suitable work means, with respect to an individual:
    (1) Suitable work as defined in the applicable State law for 
claimants for regular compensation (as defined in paragraph (oo)(1) of 
this section); or
    (2) Suitable work as defined in applicable State law provisions 
consistent with section 202(a)(3) of the Federal-State Extended 
Unemployment Compensation Act of 1970;

whichever is applicable, but does not in any case include self-
employment or employment as an independent contractor.
    (ll) Total separation means a layoff or severance of an individual 
from employment with a firm in which, or in a subdivision of which, 
adversely affected employment exists.
    (mm) Trade adjustment assistance (TAA) means the services and 
allowances provided for achieving reemployment of adversely affected 
workers, including TRA, training and other reemployment services, and 
job search allowances and relocation allowances.
    (nn) Trade readjustment allowance (TRA) means a weekly allowance 
payable to an adversely affected worker with respect to such worker's 
unemployment under subpart B of this part 617.
    (oo) Unemployment insurance (UI) means the unemployment compensation 
payable to an individual under any State law or Federal unemployment 
compensation law, including chapter 85, title 5 of the United States 
Code, and the Railroad Unemployment Insurance Act. ``UI'' includes 
``regular compensation,'' ``additional compensation,'' ``extended 
compensation,'' and ``federal supplemental compensation,'' defined as 
follows:
    (1) Regular compensation means unemployment compensation payable to 
an individual under any State law, and, when so payable, includes 
unemployment compensation payable pursuant to chapter 85, title 5 of the 
United States Code, but does not include extended compensation, 
additional compensation, or federal supplemental compensation;
    (2) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors 
and, when so payable, includes unemployment compensation payable 
pursuant to chapter 85, title 5 of the United States Code; and
    (3) Extended compensation means the extended unemployment 
compensation payable to an individual for weeks of unemployment which 
begin in an Extended Benefit Period, under those provisions of a State 
law which satisfy the requirements of the Federal-State Extended 
Unemployment Compensation Act of 1970 and regulations governing the 
payment of extended unemployment compensation, and, when so payable, 
includes unemployment compensation payable pursuant to chapter 85, title 
5 of the United States Code, but does not include regular compensation, 
additional compensation, or federal supplemental compensation. Extended 
compensation is also referred to in this part 617 as Extended Benefits 
or EB.
    (4) Federal supplemental compensation means the supplemental 
unemployment compensation payable to individuals who have exhausted 
their rights to regular and extended compensation, and which is payable 
under the Federal Supplemental Compensation Act of 1982 or any similar 
Federal law enacted before or after the 1982 Act.
    (pp) Wages means all compensation for employment for an employer, 
including commissions, bonuses, and the

[[Page 100]]

cash value of all compensation in a medium other than cash.
    (qq) Week means a week as defined in the applicable State law.
    (rr) Week of unemployment means a week of total, part total, or 
partial unemployment as determined under the applicable State law or 
Federal unemployment compensation law.
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32348, Aug. 24, 1988; 
59 FR 926, 927, Jan. 6, 1994; 61 FR 19983, May 3, 1996]



Sec. 617.4  Benefit information to workers.

    (a) Providing information to workers. State agencies shall provide 
full information to workers about the benefit allowances, training, and 
other employment services available under subparts B through E of this 
part 617 and about the petition and application procedures, and the 
appropriate filing dates, for such allowances, training and services.
    (b) Providing assistance to workers. State agencies shall provide 
whatever assistance is necessary to enable groups of workers, including 
unorganized workers, to prepare petitions or applications for program 
benefits.
    (c) Providing information to State vocational education agencies and 
others. State agencies shall inform the State Board for Vocational 
Education or equivalent agency and other public or private agencies, 
institutions, and employers, as appropriate, of each certification 
issued under section 223 of the Act and of projections, if available, of 
the needs for training under section 236 of the Act as a result of such 
certification.
    (d) Written and newspaper notices. (1) Written notices to workers. 
(i) Upon receipt of a certification issued by the Department of Labor, 
the State agency shall provide a written notice through the mail of the 
benefits available under subparts B through E of this part 617 to each 
worker covered by a certification issued under section 223 of the Act 
when the worker is partially or totally separated or as soon as possible 
after the certification is issued if such workers are already partially 
or totally separated from adversely affected employment.
    (ii) The State agency will satisfy this requirement by obtaining 
from the firm, or other reliable source, the names and addresses of all 
workers who were partially or totally separated from adversely affected 
employment before the certification was received by the agency, and 
workers who are thereafter partially or totally separated within the 
certification period. The State agency shall mail a written notice to 
each such worker of the benefits available under the TAA Program. The 
notice must include the following information:
    (A) Worker group(s) covered by the certification, and the article(s) 
produced as specified in the copy of the certification furnished to the 
State agency.
    (B) Name and the address or location of workers' firm.
    (C) Impact, certification, and expiration dates in the certification 
document.
    (D) Benefits and reemployment services available to eligible 
workers.
    (E) Explanation of how workers apply for TAA benefits and services.
    (F) Whom to call to get additional information on the certification.
    (G) When and where the workers should come to apply for benefits and 
services.
    (2) Newspaper notices. (i) Upon receipt of a copy of a certification 
issued by the Department affecting workers in a State, the State agency 
shall publish a notice of such certification in a newspaper of general 
circulation in areas in which such workers reside. Such a newspaper 
notice shall not be required to be published, however, in the case of a 
certification with respect to which the State agency can substantiate, 
and enters in its records evidence substantiating, that all workers 
covered by the certification have received written notice required by 
paragraph (d)(1) of this section.
    (ii) A published notice must include the following kinds of 
information:
    (A) Worker group(s) covered by the certification, and the article(s) 
produced as specified in the copy of the certification furnished to the 
State agency.
    (B) Name and the address or location of workers' firm.

[[Page 101]]

    (C) Impact, certification, and expiration dates in the certification 
document.
    (D) Benefits and reemployment services available to eligible 
workers.
    (E) Explanation of how and where workers should apply for TAA 
benefits and services.
    (e) Advice and assistance to workers. In addition to the information 
and assistance to workers as required under paragraphs (a) and (b) of 
this section, State agencies shall--
    (1) Advise each worker who applies for unemployment insurance under 
the State law of the benefits available under subparts B through E of 
this part and the procedures and deadlines for applying for such 
benefits.
    (2) Facilitate the early filing of petitions under section 221 of 
the Act and Sec. 617.4(b) for any workers that the agency considers are 
likely to be eligible for benefits. State agencies shall utilize 
information received by the State's dislocated worker unit to facilitate 
the early filing of petitions under section 221 of the Act by workers 
potentially adversely affected by imports.
    (3) Advise each adversely affected worker to apply for training 
under Sec. 617.22(a) before, or at the same time as, the worker applies 
for trade readjustment allowances under subpart B of this part.
    (4) Interview each adversely affected worker, as soon as 
practicable, regarding suitable training opportunities available to the 
worker under Sec. 617.22(a) and review such opportunities with the 
worker.
[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 927, Jan. 6, 1994]



             Subpart B--Trade Readjustment Allowances (TRA)



Sec. 617.10  Applications for TRA.

    (a) Before and after certification. An individual covered under a 
certification or a petition for certification may apply to a State 
agency for TRA. A determination shall be made at any time to the extent 
necessary to establish or protect an individual's entitlement to TRA or 
other TAA, but no payment of TRA or other TAA may be made by a State 
agency until a certification is made and the State agency determines 
that the individual is covered thereunder.
    (b) Timing of applications. An initial application for TRA, and 
applications for TRA for weeks of unemployment beginning before the 
initial application for TRA is filed, may be filed within a reasonable 
period of time after publication of the determination certifying the 
appropriate group of workers under section 223 of the Act. However, an 
application for TRA for a week of unemployment beginning after the 
initial application is filed shall be filed within the time limit 
applicable to claims for regular compensation under the applicable State 
law. For purposes of this paragraph (b), a reasonable period of time 
means such period of time as the individual had good cause for not 
filing earlier, which shall include, but not be limited to, the 
individual's lack of knowledge of the certification or misinformation 
supplied the individual by the State agency.
    (c) Applicable procedures. Applications shall be filed in accordance 
with this subpart B and on forms which shall be furnished to individuals 
by the State agency. The procedures for reporting and filing 
applications for TRA shall be consistent with this part 617 and the 
Secretary's ``Standard for Claim Filing, Claimant Reporting, Job Finding 
and Employment Services'', Employment Security Manual, part V, sections 
5000 et seq. (Appendix A of this part).
    (d) Advising workers to apply for training. State agencies shall 
advise each worker of the qualifying requirements for entitlement to TRA 
and other TAA benefits at the time the worker files an initial claim for 
State UI, and shall advise each adversely affected worker to apply for 
training under subpart C of this part before, or at the same time, the 
worker applies for TRA, as required by Sec. 617.4(e)(1) and (3).
[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 928, 943, Jan. 6, 1994



Sec. 617.11  Qualifying requirements for TRA.

    (a) Basic qualifying requirements for entitlement--(1) Prior to 
November 21, 1988. To qualify for TRA for any week of unemployment that 
begins prior to

[[Page 102]]

November 21, 1988, an individual must meet each of the following 
requirements of paragraphs (a)(1) (i) through (vii) of this section:
    (i) Certification. The individual must be an adversely affected 
worker covered under a certification.
    (ii) Separation. The individual's first qualifying separation (as 
defined in paragraph (t)(3)(i) of Sec. 617.3) before application for TRA 
must occur:
    (A) On or after the impact date of such certification; and
    (B) Before the expiration of the two-year period beginning on the 
date of such certification, or, if earlier, before the termination date, 
if any, of such certification.
    (iii) Wages and employment. (A) In the 52-week period (i.e., 52 
consecutive calendar weeks) ending with the week of the individual's 
first qualifying separation, the individual must have had at least 26 
weeks of employment at wages of $30 or more a week in adversely affected 
employment with a single firm or subdivision of a firm. Evidence that an 
individual meets this requirement shall be obtained as provided in 
Sec. 617.12. Employment and wages covered under more than one 
certification may not be combined to qualify for TRA.
    (B)(1) For the purposes of paragraph (a)(1)(iii) of this section, 
any week in which such individual--
    (i) is on employer-authorized leave from such adversely affected 
employment for purposes of vacation, sickness, injury, maternity, or 
inactive duty or active duty military service for training, or
    (ii) does not work in such adversely affected employment because of 
a disability compensable under a workers' compensation law or plan of a 
State or the United States, or
    (iii) had adversely affected employment interrupted to serve as a 
full-time representative of a labor organization in such firm or 
subdivision,

shall be treated as a week of employment at wages of $30 or more;
    (2) Provided, that--
    (i) not more than 7 weeks in the case of weeks described in 
paragraph (a)(1)(iii)(B)(1)(i) or paragraph (a)(1)(iii)(B)(1)(iii) of 
this section, or both, and (ii) not more than 26 weeks described in 
paragraph (a)(1)(iii)(B)(1)(ii) of this section,

may be treated as weeks of employment for purposes of paragraph 
(a)(1)(iii) of this section.
    (C) Wages and employment creditable under paragraph (a)(1)(iii) of 
this section shall not include employment or wages earned or paid for 
employment which is contrary to or prohibited by any Federal law.
    (iv) Entitlement to UI. The individual must have been entitled to 
(or would have been entitled to if the individual had applied therefor) 
UI for a week within the benefit period--
    (A) in which the individual's first qualifying separation occurred, 
or
    (B) which began (or would have begun) by reason of the filing of a 
claim for UI by the individual after such first qualifying separation.
    (v) Exhaustion of UI. The individual must:
    (A) Have exhausted all rights to any UI to which the individual was 
entitled (or would have been entitled to if the individual had applied 
therefor); and
    (B) Not have an unexpired waiting period applicable to the 
individual for any such UI.
    (vi) Extended Benefit work test. (A) The individual must--
    (1) Accept any offer of suitable work, as defined in Sec. 617.3(kk), 
and actually apply for any suitable work the individual is referred to 
by the State agency, and
    (2) Actively engage in seeking work and furnish the State agency 
tangible evidence of such efforts each week, and
    (3) Register for work and be referred by the State agency to 
suitable work,

in accordance with those provisions of the applicable State law which 
apply to claimants for Extended Benefits and which are consistent with 
Part 615 of this Chapter.
    (B) The Extended Benefit work test shall not apply to an individual 
with respect to claims for TRA for weeks of unemployment beginning prior 
to the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the Extended 
Benefit work test requirements of paragraph (a)(1)(vi) of

[[Page 103]]

this section and Sec. 617.17. Prior to such notification and advice, the 
individual shall not be subject to the Extended Benefit work test 
requirements, nor to any State timely filing requirement, but shall be 
required to be unemployed and able to work and available for work with 
respect to any such week except as provided for workers in approved 
training in Sec. 617.17(b)(1).
    (vii) Job search program participation. (A) The individual is 
enrolled in, participating in, or has successfully completed a job 
search program which meets the requirements of Sec. 617.49(a); or the 
State agency has determined that no acceptable job search program is 
reasonably available under the criteria set forth in Sec. 617.49(c).
    (B) The job search program requirement shall not apply to an 
individual with respect to claims for TRA for weeks of unemployment 
beginning prior to the filing of an initial claim for TRA, nor for any 
week which begins before the individual is notified that the individual 
is covered by a certification issued under the Act and is fully informed 
of the job search program requirement of paragraph (a)(1)(vii) of this 
section and Sec. 617.49.
    (C) The job search program requirement shall not apply to an 
individual, as a qualifying requirement for TRA, with respect to any 
week ending after November 20, 1988, but cooperating State agencies are 
encouraged to continue to utilize job search programs after November 20, 
1988, as an effective tool to assist adversely affected workers in 
finding suitable employment, particularly unemployed workers who have 
completed training or for whom the training requirement has been waived 
under Sec. 617.19.
    (2) On and after November 21, 1988. To qualify for TRA for any week 
of unemployment that begins on or after November 21, 1988, an individual 
must meet each of the following requirements of paragraphs (a)(2) (i) 
through (vii) of this section:
    (i) Certification. The individual must be an adversely affected 
worker covered under a certification.
    (ii) Separation. The individual's first qualifying separation (as 
defined in paragraph (t)(3)(i) of Sec. 617.3) before application for TRA 
must occur:
    (A) On or after the impact date of such certification; and
    (B) Before the expiration of the two-year period beginning on the 
date of such certification, or, if earlier, before the termination date, 
if any, of such certification.
    (iii) Wages and employment. (A) In the 52-week period (i.e., 52 
consecutive calendar weeks) ending with the week of the individual's 
first qualifying separation, or any subsequent total qualifying 
separation under the same certification, the individual must have had at 
least 26 weeks of employment at wages of $30 or more a week in adversely 
affected employment with a single firm or subdivision of a firm. 
Evidence that an individual meets this requirement shall be obtained as 
provided in Sec. 617.12. Employment and wages covered under more than 
one certification may not be combined to qualify for TRA.
    (B)(1) For the purposes of paragraph (a)(2)(iii) of this section, 
any week in which such individual--
    (i) Is on employer-authorized leave from such adversely affected 
employment for purposes of vacation, sickness, injury, maternity, or 
inactive duty or active duty military service for training, or
    (ii) Does not work in such adversely affected employment because of 
a disability compensable under a workers' compensation law or plan of a 
State or the United States, or
    (iii) Had adversely affected employment interrupted to serve as a 
full-time representative of a labor organization in such firm or 
subdivision, or
    (iv) Is on call-up for the purpose of active duty in a reserve 
status in the Armed Forces of the United States (if such week began 
after August 1, 1990), provided such active duty is ``Federal service'' 
as defined in part 614 of this chapter,

shall be treated as a week of employment at wages of $30 or more;
    (2) Provided, that--
    (i) Not more than 7 weeks in the case of weeks described in 
paragraph (a)(2)(iii)(B)(1) (i) or (iii) of this section, or both, and
    (ii) Not more than 26 weeks described in paragraph (a)(2)(iii)(B)(1) 
(ii) or (iv) of this section,

[[Page 104]]


may be treated as weeks of employment for purposes of paragraph 
(a)(2)(iii) of this section.
    (C) Wages and employment creditable under paragraph (a)(2)(iii) of 
this section shall not include employment or wages earned or paid for 
employment which is contrary to or prohibited by any Federal law.
    (iv) Entitlement to UI. The individual must have been entitled to 
(or would have been entitled to if the individual had applied therefor) 
UI for a week within the benefit period--
    (A) in which the individual's first qualifying separation occurred, 
or
    (B) which began (or would have begun) by reason of the filing of a 
claim for UI by the individual after such first qualifying separation.
    (v) Exhaustion of UI. The individual must:
    (A) Have exhausted all rights to any UI to which the individual was 
entitled (or would have been entitled if the individual had applied 
therefor); and
    (B) Not have an unexpired waiting period applicable to the 
individual for any such UI.
    (vi) Extended Benefit work test. (A) The individual must--
    (1) Accept any offer of suitable work, as defined in Sec. 617.3(kk), 
and actually apply for any suitable work the individual is referred to 
by the State agency, and
    (2) Actively engage in seeking work and furnish the State agency 
tangible evidence of such efforts each week, and
    (3) Register for work and be referred by the State agency to 
suitable work,

in accordance with those provisions of the applicable State law which 
apply to claimants for Extended Benefits and which are consistent with 
part 615 of this chapter.
    (B) The Extended Benefit work test shall not apply to an individual 
with respect to claims for TRA for weeks of unemployment beginning prior 
to the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the Extended 
Benefit work test requirements of paragraph (a)(2)(vi) of this section 
and Sec. 617.17. Prior to such notification and advice, the individual 
shall not be subject to the Extended Benefit work test requirements, nor 
to any State timely filing requirement, but shall be required to be 
unemployed and able to work and available for work with respect to any 
such week except as provided in Sec. 617.17(b)(2) for workers enrolled 
in, or participating in, a training program approved under 
Sec. 617.22(a).
    (vii) Participation in training. (A) The individual must--
    (1) Be enrolled in or participating in a training program approved 
pursuant to Sec. 617.22(a), or
    (2) Have completed a training program approved under Sec. 617.22(a), 
after a total or partial separation from adversely affected employment 
within the certification period of a certification issued under the Act, 
or
    (3) Have received from the State agency a written statement under 
Sec. 617.19 waiving the participation in training requirement for the 
individual.
    (B) The participation in training requirement of paragraph 
(a)(2)(vii) of this section shall not apply to an individual with 
respect to claims for TRA for weeks of unemployment beginning prior to 
the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the 
participation in training requirement of paragraph (a)(2)(vii) of this 
section and Sec. 617.19.
    (C) The participation in training requirement of paragraph 
(a)(2)(vii) of this section shall apply, as a qualifying requirement for 
TRA, to an individual with respect to claims for TRA for weeks of 
unemployment commencing on or after November 21, 1988, and beginning 
with the first week following the week in which a certification covering 
the individual is issued under the Act, unless the State agency has 
issued a written statement to the individual under Sec. 617.19 waiving 
the participation in training requirement for the individual.
    (D) For purposes of paragraph (a)(2)(vii) of this section, the 
following definitions shall apply:
    (1) Enrolled in Training. A worker shall be considered to be 
enrolled in

[[Page 105]]

training when the worker's application for training is approved by the 
State agency and the training institution has furnished written notice 
to the State agency that the worker has been accepted in the approved 
training program which is to begin within 30 calendar days of the date 
of such approval. (A waiver under Sec. 617.19 shall not be required for 
an individual who is enrolled in training as defined herein.)
    (2) Completed Training. A worker shall be considered to have 
completed a training program if the training program was approved, or 
was approvable and is approved, pursuant to Sec. 617.22, and the 
training was completed subsequent to the individual's total or partial 
separation from adversely affected employment within the certification 
period of a certification issued under the Act, and the training 
provider has certified that all the conditions for completion of the 
training program have been satisfied.
    (3) Special rules for workers separated in 1981 to 1986 period. (i) 
Basic conditions. Under section 1425(b) of the Omnibus Trade and 
Competitiveness Act of 1988 (the ``OTCA'') (Pub. L. 100-418) the time 
limit on the eligibility period for basic TRA in section 233(a)(2) of 
the Act (before and after the amendment by Public Law 100-418), and the 
210-day time limit in section 233(b) of the Act on the filing of a bona 
fide application for training in order to qualify for additional TRA, 
are set aside and shall be disregarded for any individual separated from 
adversely affected employment in the period which began on August 13, 
1981, and ended on April 7, 1986: Provided, That, any such individual 
must meet all of the following requirements of paragraphs (a)(3)(i)(A) 
through (E) of this section to qualify for TRA for any week.
    (A) Period of separation. The separation of the individual must have 
occurred on a date within the period which began on August 13, 1981 and 
ended on April 7, 1986.
    (B) Total separation required. Such separation must be a ``total 
separation'' as defined in Sec. 617.3(ll), and a ``total qualifying 
separation'' as defined in Sec. 617.3(t)(3)(i)(B); and, for the purposes 
of determining whether an individual has been continuously unemployed, 
as defined in Sec. 617.3(t)(3)(i)(E), only the last such total 
separation within the August 13, 1981 to April 7, 1986 period shall be 
taken into account.
    (C) Other standard requirements. The individual must, with respect 
to such total separation, meet all of the requirements of paragraphs 
(a)(2)(i) through (v) of this section.
    (D) Participation in training. (1) The individual must meet the 
requirements of paragraph (a)(2)(vii) of this section, with respect to 
being enrolled in or participating in a training program approved 
pursuant to Sec. 617.22(a), as to each week TRA is claimed, and not be 
ineligible under Sec. 617.18(b)(2) for failure to begin participation in 
such training or for ceasing to participate in such training.
    (2) With respect to participation in training, as required under 
paragraph (a)(3) of this section, the break in training provisions of 
Sec. 617.15(d) shall be applicable, and the waiver of participation 
provisions in Sec. 617.19 shall not be applicable.
    (E) Continuously unemployed. (1) The individual must have been 
continuously unemployed since the date of the individual's total 
separation referred to in paragraph (a)(2)(vii)(B) of this section, not 
taking into account for the purposes of this determination any work in 
which the individual was employed in seasonal employment, odd jobs, or 
part-time, temporary employment.
    (2) For purposes of Sec. 617.11(a)(3)(i)(E)(1), continuously 
unemployed shall mean the individual has not been engaged in any 
employment, except for seasonal employment, odd-jobs, or part-time, 
temporary employment. Employment shall be considered:
    (i) Seasonal employment when seasonality provisions of the 
applicable State law are applicable to such employment; or
    (ii) An odd job when the established period of employment occurs 
within five (5) consecutive days or less; or
    (iii) Part-time, temporary employment when a termination date of one 
hundred fifty (150) days or less was established at the time of 
employment, and the average weekly hours for the job,

[[Page 106]]

over the period of employment, was less than 30 hours per week.
    (ii) TRA payments prospective only. The provisions of paragraph 
(a)(3) of this section apply to payments of TRA only for weeks which 
begin after August 23, 1988, and with respect to training in which the 
individual becomes enrolled and begins participation before or after 
such date, and which is approved under Sec. 617.22(a) before or after 
such date. No payment of TRA may be authorized under paragraph (a)(3) of 
this section for any week which ends before such training is approved 
under Sec. 617.22(a).
    (iii) Other special rules. (1) Although the last total qualifying 
separation of an individual will be used for the purposes of the 
determination under paragraph (a)(3)(i)(B) of this section, the 
individual's first qualifying separation (as defined in paragraph 
(t)(3)(ii) of Sec. 617.3) must be used to determine the weekly and 
maximum amounts payable to the individual in accordance with 
Secs. 617.13 and 617.14.
    (2) No individual shall be determined to be eligible for TRA under 
paragraph (a)(3) of this section if the individual has previously 
received all of the basic and additional TRA to which the individual was 
entitled.
    (3) The 26-week eligibility period for additional TRA is applicable 
under paragraph (a)(3) of this section, as such term is defined in 
paragraph (m)(2) of Sec. 617.3.
    (4) Special rules for oil and gas workers--retroactive--(i) Basic 
conditions. Under section 1421(a)(1)(B) of the OTCA, individuals 
employed by independent firms engaged in exploration or drilling for oil 
and natural gas who were separated after September 30, 1985, may be 
entitled, retroactively, to TAA program benefits, but only if, as to any 
such individual, all of the conditions in the following provisions of 
paragraph (a)(4) of this section are met.
    (ii) Prior certification. Individuals covered by this paragraph 
(a)(4) do not include any individual covered under a certification (made 
with respect to the same firm or subdivision of a firm) that was issued 
under section 223 of the Act without regard to the amendments to section 
222 of the Act (relating to oil and gas workers) made by section 1421 
(a)(1)(A) of the OTCA.
    (iii) Petition. (A) To apply for a certification under section 223 
covering workers referred to in section 1421 (a)(1)(B) of the OTCA, a 
petition must have been filed in the Office of Trade Adjustment 
Assistance after August 23, 1988, and on or before November 18, 1988, by 
or on behalf of a group of workers of such a firm or subdivision of a 
firm.
    (B) A petition, to be valid, may not be signed by or on behalf of an 
individual referred to in paragraph (a)(4)(ii) of this section.
    (iv) Certification. (A) As provided in section 1421(a) (1)(B) of the 
OTCA, a certification issued pursuant to section 223 of the Act will not 
be subject to the one-year limitation on the impact date which is 
specified in section 223(b) of the Act, but the impact date of any such 
certification may not be a date earlier than October 1, 1985.
    (B) A certification shall not be issued under the authority of 
section 1421(a)(1)(B) of the OTCA if a certification could have been 
issued under section 223 of the Act before or after the amendment made 
by section 1421(a)(1)(A) of the OTCA.
    (v) Coverage of certification. Individuals covered by a 
certification issued under the authority of section 1421(a)(1)(B) of the 
OTCA will be eligible to apply for TAA program benefits as follows:
    (A) Basic and additional TRA, retroactively and prospectively, 
subject to the conditions stated in paragraph (a)(4) of this section;
    (B) Training, prospectively, subject to the conditions stated in 
subpart C of this part;
    (C) Job search allowances, prospectively, subject to the conditions 
stated in subpart D of this part; and
    (D) Relocation allowances, prospectively, subject to the conditions 
stated in subpart E of this part.
    (vi) TRA entitlement. To qualify for TRA for any week, an individual 
must meet all of the following requirements of paragraphs (a)(4)(vi)(A) 
through (D) of this section;

[[Page 107]]

    (A) Certification. The individual must be an adversely affected 
worker covered under a certification issued pursuant to section 223 of 
the Act and under the authority of section 1421(a)(1)(B) of the OTCA.
    (B) Date of separation. The date of the individual's most recent 
total separation (as defined in Sec. 617.3) must be a date after 
September 30, 1985, and within the certification period of the 
certification under which the worker is covered. Separations occurring 
prior to October 1, 1985, shall be disregarded for the purposes of 
determining whether an individual experienced a total separation after 
September 30, 1985.
    (C) Other standard requirements. (1) With respect to weeks of 
unemployment that begin after September 30, 1985, but prior to November 
21, 1988, the individual must, with respect to the separation referred 
to in paragraph (a)(4)(vi)(B) of this section, meet all of the 
requirements of paragraph (a)(1)(i) through (vii) of this section, and
    (2) With respect to weeks of unemployment that begin on or after 
November 21, 1988, the individual must meet all of the requirements of 
paragraphs (a)(2)(i) through (vii) of this section.
    (D) Other special rules. (1) Although an individual's most recent 
total or partial separation after September 30, 1985 must be used for 
the purposes of this paragraph (a)(4)(vi)(B) of this section, the 
individual's first qualifying separation (as defined in paragraph 
(t)(3)(ii) of Sec. 617.3) must be used to determine the weekly and 
maximum amounts payable to the individual in accordance with 
Secs. 617.13 and 617.14.
    (2) The 60-day preclusion rule in paragraph (b)(1) of this section 
shall not be applicable to an individual covered by a certification 
referred to in paragraph (a)(4)(vi)(A) of this section, and who is 
eligible for TRA under the provisions of paragraph (a)(4) of this 
section.
    (3) The 26-week eligibility period for additional TRA (as defined in 
paragraph (m)(2) of Sec. 617.3) is applicable under paragraph (a)(4) of 
this section.
    (b) First week of entitlement. The first week any individual may be 
entitled to a payment of basic TRA shall be the later of:
    (1) The first week beginning more than 60 days after the date of the 
filing of the petition which resulted in the certification under which 
the individual is covered (except in the case of oil and gas workers to 
whom paragraph (a)(4) of this section applies); or
    (2) The first week beginning after the individual's exhaustion of 
all rights to UI including waiting period credit, as determined under 
Sec. 617.11(a)(1)(v) or Sec. 617.11(a)(2), as appropriate.
[59 FR 928, Jan. 6, 1994]



Sec. 617.12  Evidence of qualification.

    (a) State agency action. When an individual applies for TRA, the 
State agency having jurisdiction under Sec. 617.50(a) shall obtain 
information necessary to establish:
    (1) Whether the individual meets the qualifying requirements in 
Sec. 617.11;
    (2) The individual's average weekly wage; and
    (3) For an individual claiming to be partially separated, the 
average weekly hours and average weekly wage in adversely affected 
employment.
    (b) Insufficient data. If information specified in paragraph (a) of 
this section is not available from State agency records or from any 
employer, the State agency shall require the individual to submit a 
signed statement setting forth such information as may be required for 
the State agency to make the determinations required by paragraph (a) of 
this section.
    (c) Verification. A statement made under paragraph (b) of this 
section shall be certified by the individual to be true to the best of 
the individual's knowledge and belief and shall be supported by evidence 
such as Forms W-2, paycheck stubs, union records, income tax returns, or 
statements of fellow workers, and shall be verified by the employer.
    (d) Determinations. The State agency shall make the necessary 
determinations on the basis of information obtained pursuant to this 
section, except that if, after reviewing information obtained under 
paragraph (b) of this section against other available data, including 
agency records, it concludes that such information is not reasonably 
accurate, it shall make appropriate adjustments and shall make the

[[Page 108]]

determination on the basis of the adjusted data.



Sec. 617.13  Weekly amounts of TRA.

    (a) Regular allowance. The amount of TRA payable for a week of total 
unemployment (including a week of training approved under subpart C of 
this part 617 or under the provisions of the applicabIe State law) shall 
be an amount equal to the most recent weekly benefit amount of UI 
(including dependents' allowances) payable to the individual for a week 
of total unemployment preceding the individual's first exhaustion of UI 
following the individual's first qualifying separation: Provided, that 
in a State in which weeks of UI are paid in varying amounts related to 
wages with separate employers, the weekly amount of TRA shall be 
calculated as it would be to pay extended compensation: Provided, 
further, that where a State calculates a base amount of UI and 
calculates dependents' allowances on a weekly supplemental basis. TRA 
weekly benefit amounts shall be calculated in the same manner and under 
the same terms and conditions as apply to claimants for UI, except that 
the base amount shall not change.
    (b) Increased allowance. An individual in training approved under 
subpart C of this part 617 who is thereby entitled for any week to TRA 
and a training allowance under any other Federal law for the training of 
workers shall be paid in the amount computed under paragraph (a) of this 
section or, if greater, the amount to which the individual would be 
entitled under such other Federal law if the individual applied for such 
allowance, as provided in section 232(b) of the Act. A payment under 
this paragraph (b) shall be in lieu of any training allowance to which 
the individual is entitled under such other Federal law.
    (c) Reduction of amount. An amount of TRA payabIe under paragraph 
(a) or (b) of this section for any week shall be reduced (but not below 
zero) by:
    (1) Income that is deductible from UI under the disqualifying income 
provisions of the applicable State law or Federal unemployment 
compensation law;
    (2) The amount of a training allowance (other than a training 
allowance referred to in paragraph (b) of this section) under any 
Federal law that the individual receives for such week, as provided in 
section 232(c) of the Act. This paragraph (c) shall apply to Veterans 
Educational Assistance, Pell Grants, Supplemental Educational 
Opportunity Grants, and other training allowances under any Federal law 
other than for the training of workers; and
    (3) Any amount that would be deductible from UI for days of absence 
from training under the provisions of the applicable State law which 
apply to individuals in approved training.
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32349, Aug. 24, 1988]



Sec. 617.14  Maximum amount of TRA.

    (a) General rule. Except as provided under paragraph (b) of this 
section, the maximum amount of TRA payable to an individual under a 
certification shall be the amount determined by:
    (1) Multiplying by 52 the weekly amount of TRA payable to such 
individual for a week of total unemployment, as determined under 
Sec. 617.13(a); and
    (2) Subtracting from the product derived under paragraph (a)(1) of 
this section, the total sum of UI to which the individual was entitled 
(or would have been entitled if the individual had applied therefor) in 
the individual's first benefit period described in Sec. 617.11(a)(1)(iv) 
or, as appropriate, Sec. 617.11(a)(2)(iv). The individual's full 
entitlement shall be subtracted under this paragraph, without regard to 
the amount, if any, that was actually paid to the individual with 
respect to such benefit period.
    (b) Exceptions. The maximum amount of TRA determined under paragraph 
(a) of this section will not include:
    (1) The amount of dependents' allowances paid as a supplement to the 
base weekly amount determined under Sec. 617.13(a);
    (2) The amount of the difference between the individual's weekly 
increased allowances determined under Sec. 617.13(b) and the 
individual's weekly amount determined under Sec. 617.13(a); and

[[Page 109]]

    (3) The amounts paid for additional weeks determined under 
Sec. 617.15(b);

but nothing in this paragraph (b) shall affect an individual's 
eligibility for such supplemental, increased or additional allowances.
    (c) Reduction for Federal training allowance. (1) If a training 
allowance referred to in Sec. 617.13(c)(2) is paid to an individual for 
any week of unemployment with respect to which the individual would be 
entitled (determined without regard to any disqualification under 
Sec. 617.18(b)(2)) to TRA, if the individual applied for TRA for such 
week, each week shall be deducted from the total number of weeks of TRA 
otherwise payable to the individual.
    (2) If the training allowance referred to in paragraph (c)(1) of 
this section is less than the amount of TRA otherwise payable to the 
individual for such week, the individual shall, when the individual 
applies for TRA for such week, be paid TRA in an amount not to exceed 
the amount equal to the difference between the individual's regular 
weekly TRA amount, as determined under Sec. 617.13(a), and the amount of 
the training allowance paid to the individual for such week, as provided 
in section 232(c) of the Act.
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32349, Aug. 24, 1988; 
54 FR 22277, May 23, 1989; 59 FR 931, Jan. 6, 1994]



Sec. 617.15  Duration of TRA.

    (a) Basic weeks. An individual shall not be paid basic TRA for any 
week beginning after the close of the 104-week eligibility period (as 
defined in Sec. 617.3(m)(1)), which is applicable to the individual as 
determined under Secs. 617.3 (m)(1), 617.3(t), and 617.67(e).
    (b) Additional weeks. (1) To assist an individual to complete 
training approved under subpart C of this part, payments may be made as 
TRA for up to 26 additional weeks in the 26-week eligibility period (as 
defined in Sec. 617.3(m)(2)) which is applicable to the individual as 
determined under Secs. 617.3(m)(2) and 617.67(f).
    (2) To be eligible for TRA for additional weeks, an individual must 
make a bona fide application for such training--
    (i) within 210 days after the date of the first certification under 
which the individual is covered, or
    (ii) if later, within 210 days after the date of the individual's 
most recent partial or total separation (as defined in Secs. 617.3(cc) 
and 617.3(ll)) under such certification.
    (3) Except as provided in paragraph (d) of this section, payments of 
TRA for additional weeks may be made only for those weeks in the 26-week 
eligibility period during which the individual is actually participating 
fully in training approved under Sec. 617.22(a).
    (c) Limit. The maximum TRA payable to any individual on the basis of 
a single certification is limited to the maximum amount of basic TRA as 
determined under Sec. 617.14 plus additional TRA for up to 26 weeks as 
provided in paragraph (b) of this section.
    (d) Scheduled breaks in training. (1) An individual who is otherwise 
eligible will continue to be eligible for basic and additional weeks of 
TRA during scheduled breaks in training, but only if a scheduled break 
is not longer than 14 days, and the following additional conditions are 
met:
    (i) The individual was participating in the training approved under 
Sec. 617.22(a) immediately before the beginning of the break; and
    (ii) The break is provided for in the published schedule or the 
previously established schedule of training issued by the training 
provider or is indicated in the training program approved for the 
worker; and, further
    (iii) The individual resumes participation in the training 
immediately after the break ends.
    (2) A scheduled break in training shall include all periods within 
or between courses, terms, quarters, semesters and academic years of the 
approved training program.
    (3) No basic or additional TRA will be paid to an individual for any 
week which begins and ends within a scheduled break that is 15 days or 
more.
    (4) The days within a break in a training program that shall be 
counted in determining the number of days of the break for the purposes 
of paragraph (d) of this section shall include all calendar days 
beginning with the first day of the break and ending with the last

[[Page 110]]

day of the break, as provided for in the schedule of the training 
provider, except that any Saturday, Sunday, or official State or 
National holiday occurring during the scheduled break in training, on 
which training would not normally be scheduled in the training program 
if there were no break in training, shall not be counted in determining 
the number of days of the break for the purposes of paragraph (d) of 
this section.
    (5) When the worker is drawing basic TRA, the maximum amount of TRA 
payable is not affected by the weeks the worker does not receive TRA 
while in a break period, but the weeks will count against the 104-week 
eligibility period.
    (6) When the worker is drawing additional weeks of TRA to complete 
training, any weeks for which TRA is not paid will count against the 
continuous 26-week eligibility period and the number of weeks payable.
[59 FR 931, Jan. 6, 1994]



Sec. 617.16  Applicable State law.

    (a) What law governs. The applicable State law for any individual, 
for all of the purposes of this part 617, is the State law of the 
State--
    (1) In which the individual is entitled to UI (whether or not the 
individual has filed a claim therefor) immediately following the 
individual's first separation (as defined in paragraph (t)(1) of 
Sec. 617.3), or
    (2) If the individual is not so entitled to UI under the State law 
of any State immediately following such first separation, or is entitled 
to UI under the Railroad Unemployment Insurance Act (RRUI), the State 
law of the State in which such first separation occurred.
    (b) Change of law. The State law determined under paragraph (a) of 
this section to be the applicable State law for an individual shall 
remain the applicable State law for the individual until the individual 
becomes entitled to UI under the State law of another State (whether or 
not the individual files a claim therefor).
    (c) UI entitlement. (1) An individual shall be deemed to be entitled 
to UI under a State law if the individual satisfies the base period 
employment and wage qualifying requirements of such State law.
    (2) In the case of a combined-wage claim (Part 616 of this chapter), 
UI entitlement shall be determined under the law of the paying State.
    (3) In case of a Federal UI claim, or a joint State and Federal UI 
claim (Parts 609 and 614 of this Chapter), UI entitlement shall be 
determined under the law of the State which is the applicable State for 
such claims.
    (d) RRUI claimants. If an individual is entitled to UI under the 
Railroad Unemployment Insurance Act, the applicable State law for 
purposes of paragraphs (a) and (b) of this section is the law of the 
State in which the individual's first qualifying separation occurs.
    (e) Liable State. The State whose State law is determined under this 
section to be the applicable State law for any individual shall be the 
liable State for the individual for all purposes of this part 617. Any 
State other than the liable State shall be an agent State.
[59 FR 932, Jan. 6, 1994]



Sec. 617.17  Availability and active search for work.

    (a) Extended Benefit work test applicable. Except as provided in 
paragraph (b) of this section, an individual shall, as a basic condition 
of entitlement to basic TRA for a week of unemployment--
    (1) be unemployed, as defined in the applicable State law for UI 
claimants, and
    (2) be able to work and available for work, as defined in the 
applicable State law for UI claimants, and
    (3) satisfy the Extended Benefit work test in each week for which 
TRA is claimed, as set forth in Secs. 617.11(a)(1) (vi) and 
617.11(a)(2)(vi).
    (b) Exceptions--(1) Prior to November 21, 1988. The conditions 
stated in paragraphs (a) and (b) of this section shall not be applicable 
to an individual actually participating in training approved under the 
applicable State law or under Sec. 617.22(a), or during a scheduled 
break in the training program if (as determined for the purposes of 
Sec. 617.15 (d)) the individual participated in the training immediately 
before the beginning of the break and resumes participation in the 
training immediately

[[Page 111]]

after the break ends, unless the individual is ineligible or subject to 
disqualification under the applicable State law or Sec. 617.18 (b)(2).
    (2) On and after November 21, 1988. The conditions stated in 
paragraphs (a)(2) and (a)(3) of this section shall not be applicable to 
an individual who is enrolled in or participating in a training program 
approved under Sec. 617.22 (a), or during a break in the training 
program if (as determined for the purposes of Sec. 617.15(d)) the 
individual participated in the training immediately before the beginning 
of the break and resumes participation in the training immediately after 
the break ends.
[59 FR 932, Jan. 6, 1994]



Sec. 617.18  Disqualifications.

    (a) State law applies. Except as stated in paragraph (b) of this 
section and Sec. 617.55(b), an individual shall not be paid TRA for any 
week of unemployment the individual is or would be disqualified to 
receive UI under the disqualification provisions of the applicable State 
law, including the provisions of the applicable State law which apply to 
EB claimants and which are consistent with section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970.
    (b) Disqualification of trainees--(1) State law inapplicable. A 
State law shall not be applied to disqualify an individual from 
receiving either UI or TRA because the individual:
    (i) Is enrolled in or is participating in a training program 
approved under Sec. 617.22(a); or
    (ii) Refuses work to which the individual has been referred by the 
State agency, if such work would require the individual to discontinue 
training, or if added to hours of training would occupy the individual 
more than 8 hours a day or 40 hours a week, except that paragraph 
(b)(1)(ii) of this section shall not apply to an individual who is 
ineligible under paragraph (b)(2) of this section; or
    (iii) Quits work, if the individual was employed in work which was 
not suitable (as defined in Sec. 617.22(a)(1)), and it was reasonable 
and necessary for the individual to quit work to begin or continue 
training approved for the individual under Sec. 617.22(a).
    (2) Trainees ineligible. (i) An individual who, without justifiable 
cause, fails to begin participation in a training program which is 
approved under Sec. 617.22(a), or ceases to participate in such 
training, or for whom a waiver is revoked pursuant to Sec. 617.19(c), 
shall not be eligible for basic TRA, or any other payment under this 
part 617, for the week in which such failure, cessation, or revocation 
occurred, or any succeeding week thereafter until the week in which the 
individual begins or resumes participation in a training program that is 
approved under Sec. 617.22(a).
    (ii) For purposes of this section and other provisions of this Part 
617, the following definitions shall be used:
    (A) Failed to begin participation. A worker shall be determined to 
have failed to begin participation in a training program when the worker 
fails to attend all scheduled training classes and other training 
activities in the first week of the training program, without 
justifiable cause.
    (B) Ceased participation. A worker shall be determined to have 
ceased participation in a training program when the worker fails to 
attend all scheduled training classes and other training activities 
scheduled by the training institution in any week of the training 
program, without justifiable cause.
    (C) Justifiable cause. For the purposes of paragraph (b)(2) of this 
section, the term ``justifiable cause'' means such reasons as would 
justify an individual's conduct when measured by conduct expected of a 
reasonable individual in like circumstances, including but not limited 
to reasons beyond the individual's control and reasons related to the 
individual's capability to participate in or complete an approved 
training program.
    (c) Disqualification while in OJT. In no case may an individual 
receive TRA for any week with respect to which the worker is engaged in 
on-the-job training.
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32350, Aug. 24, 1988; 
59 FR 932, Jan. 6, 1994]



Sec. 617.19  Requirement for participation in training.

    (a) In general--(1) Basic requirement. (i) All individuals otherwise 
entitled to

[[Page 112]]

basic TRA, for all weeks beginning on and after November 21, 1988, must 
either be enrolled in or participating in a training program approved 
under Sec. 617.22(a), or have completed a training program approved 
under Sec. 617.22(a), as provided in Sec. 617.11(a)(2)(vii), in order to 
be entitled to basic TRA payments for any such week (except for 
continuation of payments during scheduled breaks in training of 14 days 
or less under the conditions stated in Sec. 617.15(d)). The training 
requirement of paragraph (a)(1)(i) of this section shall be waived in 
writing on an individual basis, solely in regard to entitlement to basic 
TRA, if approval of training for the individual is not feasible or is 
not appropriate, as determined in accordance with paragraph (a)(2) of 
this section.
    (ii) As a principal condition of entitlement to additional TRA 
payments, all individuals must actually be participating in a training 
program approved under Sec. 617.22(a), for all weeks beginning before 
November 21, 1988, and for all weeks beginning on and after November 21, 
1988 (except for continuation of payments during breaks in training 
under the conditions stated in Sec. 617.15(d)). Paragraph (a)(2) of this 
section is not applicable in regard to additional TRA, and the 
participation in training requirement of paragraph (a)(1)(ii) of this 
section may not be waived under any circumstances.
    (2) Waiver of participation requirement. When it is determined, in 
accordance with paragraph (a)(2) of this section, that it is not 
feasible or is not appropriate (as such terms are defined in paragraph 
(b) of this section) to approve a training program for an individual 
otherwise entitled to basic TRA, the individual shall be furnished a 
formal written notice of waiver, with an explanation of the reason(s) 
for the waiver and a statement of why training is not feasible or is not 
appropriate in the case of such individual. At a minimum, the written 
statement furnished to the individual shall contain information required 
by Sec. 617.50(e) as well as the following information:
    (i) Name and social security number of the individual;
    (ii) Petition number under which the worker was certified;
    (iii) A statement why the agency has determined that it is not 
feasible or is not appropriate to approve training for the individual at 
that time, and the reason(s) for the finding;
    (iv) A statement that the waiver will be revoked at any time that 
feasible and appropriate training becomes available;
    (v) Any other advice or information the State agency deems 
appropriate in informing the individual;
    (vi) Signature block (with signature) for the appropriate State 
official; and
    (vii) Signature block (with signature) for the worker's 
acknowledgement of receipt.
    (3) Denial of a waiver. In any case in which a determination is made 
to deny to any individual a waiver of the participation requirement, the 
individual shall be furnished a formal written notice of denial of 
waiver, which shall contain all of the information required of formal 
written notices under paragraph (a)(2) of this section.
    (4) Procedure. Any determination under paragraph (a)(2) or paragraph 
(a)(3) of this section shall be a determination to which Secs. 617.50 
and 617.51 apply, including the requirement that any written notice 
furnished to an individual shall include notice of the individual's 
appeal rights as is provided in Sec. 617.50(e).
    (b) Reasons for issuing a waiver. (1) For the purposes of paragraphs 
(a)(2) and (a)(3) of this section, a waiver of the participation in 
training requirement shall be issued to an individual only upon a 
supported finding that approval of a Sec. 617.22(a) training program for 
that individual is not feasible or is not appropriate at that time.
    (i) Feasible and appropriate. For the purposes of this section:
    (A) Feasible. The term feasible means:
    (1) training is available at that time which meets all the criteria 
of Sec. 617.22(a);
    (2) the individual is so situated as to be able to take full 
advantage of the training opportunity and complete the training; and
    (3) funding is available to pay the full costs of the training and 
any transportation and subsistence expenses which are compensable.

[[Page 113]]


The funding referred to in paragraph (b)(1)(i)(A)(3) of this section 
includes not only TAA program funds but also all other funds available 
under any of the provisions of the Job Training Partnership Act 
(including Title III) or any other Federal, State or private source that 
may be utilized for training approvable under Sec. 617.22(a). Further, 
the individual's situation in respect to undertaking training (as 
referred to in paragraph (b)(1)(i)(A)(2) of this section) shall include 
taking into account personal circumstances that preclude the individual 
from being able to participate in and complete the training program, 
such as the availability of transportation, the ability to make 
arrangements for necessary child care, and adequate financial resources 
if the weeks of training exceeds the duration of UI and TRA payments.
    (B) Appropriate. The term appropriate means being suitable or 
compatible, fitting, or proper. Appropriate, therefore, refers to 
suitability of the training for the worker (including whether there is a 
reasonable prospect which is reasonably foreseeable that the individual 
will be reemployed by the firm from which separated), and compatibility 
of the training for the purposes of the TAA Program. In these respects, 
suitability of training for the individual is encompassed within the 
several criteria in Sec. 617.22 (a), and compatibility with the program 
is covered by the various provisions of subpart C of this part which 
describe the types of training approvable under Sec. 617.22(a) and the 
limitations thereon.
    (ii) Basis for application. Whether training is feasible or 
appropriate at any given time is determined by finding whether, at that 
time, training suitable for the worker is available, the training is 
approvable under subpart C of this part including the criteria in 
Sec. 617.22(a), the worker is so situated as to be able to take full 
advantage of the training and satisfactorily complete the training, full 
funding for the training is available from one or more sources in 
accordance with Secs. 617.24 and 617.25, the worker has the financial 
resources to complete the training when the duration of the training 
program exceeds the worker's eligibility for TRA, and the training will 
commence within 30 days of approval.
    (2) Particular applications. The reasons for any determination that 
training is not feasible or is not appropriate shall be in accord with 
the following:
    (i) Not feasible because--
    (A) The beginning date of approved training is beyond 30 days, as 
required by the definition for ``Enrolled in training'' in 
Sec. 617.11(a)(2)(vii)(D),
    (B) Training is not reasonably available to the individual,
    (C) Training is not available at a reasonable cost,
    (D) Funds are not available to pay the total costs of training, or
    (E) Personal circumstances such as health or financial resources, 
preclude participation in training or satisfactory completion of 
training,
    (F) Other (explain).
    (ii) Not appropriate because--
    (A)(1) The firm from which the individual was separated plans to 
recall the individual within the reasonably foreseeable future (State 
agencies must verify planned recalls with the employer),
    (2) Planned recall. For the purpose of determining whether the 
recall or reemployment of an individual is reasonably foreseeable (for 
the purposes of this section and Sec. 617.22), either a specific or 
general type of recall (as set out) shall be deemed to be sufficient.
    (i) Specific recall. A specific recall is where an individual or 
group of individuals who was separated from employment is identified and 
notified by the employer to return to work within a specified time 
period.
    (ii) General recall. A general recall is where the employer 
announces an intention to recall an individual or group of individuals, 
or by other action reasonably signals an intent to recall, without 
specifying any certain date or specific time period.
    (iii) Reasonably foreseeable. For purposes of determining whether 
training should be denied and a training waiver granted, because of a 
planned recall that is reasonably foreseeable, such a planned recall 
includes a specific recall and also includes a general recall (as 
defined in paragraph (b)(2)(ii)(A)(2) of this section) if the general 
recall in

[[Page 114]]

each individual's case is reasonably expected to occur before the 
individual exhausts eligibility for any regular UI payments for which 
the individual is or may become entitled. A general recall, in which the 
timing of the recall is reasonably expected to occur after the 
individual's exhaustion of any regular UI to which the individual is or 
may become entitled, shall not be treated as precluding approval of 
training, but shall be treated as any other worker separation for these 
purposes.
    (B) The duration of training suitable for the individual exceeds the 
individual's maximum entitlement to basic and additional TRA payments 
and the individual cannot assure financial responsibility for completing 
the training program,
    (C) The individual possesses skills for ``suitable employment'' and 
there is a reasonable expectation of employment in the foreseeable 
future, or
    (D) Other (explain).
    (3) Waivers and able and available. An individual who has been 
furnished a written notice of waiver under paragraph (a)(2) of this 
section (or denial of waiver under paragraph (a)(3) of this section) 
shall be subject to all of the requirements of Sec. 617.17(a), which 
shall continue until the individual is enrolled in a training program as 
required by paragraph (a)(2)(vii) of Sec. 617.11.
    (c) Waiver review and revocations. (1) State agencies must have a 
procedure for reviewing regularly (i.e., every 30 days or less) all 
waivers issued under this section to individuals, to ascertain that the 
conditions upon which the waivers were granted continue to exist. In any 
case in which the conditions have changed--i.e., training has become 
feasible and appropriate--then the waiver must be revoked, and a written 
notice of revocation shall be furnished to the individual involved.
    (2) In addition to the periodic reviews required by paragraph (c)(1) 
of this section, State agencies must have a procedure for revoking 
waivers in individual cases promptly whenever a change in circumstances 
occurs. For example, a written notice of revocation shall be issued to 
the individual concurrent with the approval of the training in which the 
individual has enrolled (if such training is scheduled to commence 
within 30 days), and shall not be issued prior to such approval.
    (3) State agencies may incorporate a revocation section in the 
waiver form or on a separate revocation form. Any determination under 
paragraph (c) of this section shall be a determination to which 
Secs. 617.50 and 617.51 apply. The information included in a written 
notice of revocation issued under this paragraph (c) shall include all 
of the information required for written notices issued under paragraph 
(a)(2) of this section.
    (d) Recordkeeping and reporting. (1) State agencies must develop 
procedures for compiling and reporting on the number of waivers issued 
and revoked, by reason, as specified in paragraphs (b) and (c) of this 
section, and report such data to the Department of Labor as requested by 
the Department.
    (2) State agencies are not required to forward copies of individual 
waiver and revocation notices to the Department of Labor, unless 
specifically requested by the Department. However, each State agency 
shall retain a copy of every individual waiver and revocation notice 
issued by the State, for such period of time as the Department requires.

(Approved by the Office of Management and Budget under control number 
1205-0016)

[59 FR 932, Jan. 6, 1994]



                    Subpart C--Reemployment Services



Sec. 617.20  Responsibilities for the delivery of reemployment services.

    (a) State agency referral. Cooperating State agencies shall be 
responsible for:
    (1) Advising each adversely affected worker to apply for training 
with the State agency responsible for reemployment services, while the 
worker is receiving UI payments, and at the time the individual files an 
initial claim for TRA; and
    (2) Referring each adversely affected worker to the State agency 
responsible for training and other reemployment services in a timely 
manner.
    (b) State agency responsibilities. The responsibilities of 
cooperating State

[[Page 115]]

agencies under subpart C of this part include, but are not limited to:
    (1) Interviewing each adversely affected worker regarding suitable 
training opportunities reasonably available to each individual under 
subpart C of this part, reviewing such opportunities with each 
individual, informing each individual of the requirement for 
participation in training as a condition for receiving TRA, and 
accepting each individual's application for training. Such training may 
be approved for any adversely affected worker at any time after a 
certification is issued and the worker is determined to be covered 
without regard to whether the worker has exhausted all rights to 
unemployment insurance;
    (2) Registering adversely affected workers for work;
    (3) Informing adversely affected workers of the reemployment 
services and allowances available under the Act and this Part 617, the 
application procedures, the filing date requirements for such 
reemployment services and the training requirement for receiving TRA;
    (4) Determining whether suitable employment, as defined in 
Sec. 617.22(a)(1), is available;
    (5) Providing counseling, testing, placement, and supportive 
services;
    (6) Providing or procuring self-directed job search training, when 
necessary;
    (7) Providing training, job search and relocation assistance;
    (8) Developing a training plan with the individual;
    (9) Determining which training institutions offer training programs 
at a reasonable cost and with a reasonable expectation of employment 
following the completion of such training, and procuring such training;
    (10) Documenting the standards and procedures used to select 
occupations and training institutions in which training is approved;
    (11) Making referrals and approving training programs;
    (12) Monitoring the progress of workers in approved training 
programs;
    (13) Developing, and periodically reviewing and updating 
reemployment plans for adversely affected workers;
    (14) Developing and implementing a procedure for reviewing training 
waivers and revocations at least every 30 days to determine whether the 
conditions under which they are issued have changed; and
    (15) Coordinating the administration and delivery of employment 
services, benefits, training, and supplemental assistance for adversely 
affected workers with programs under the Act and under Title III of the 
Job Training Partnership Act.
[59 FR 934, Jan. 6, 1994]



Sec. 617.21  Reemployment services and allowances.

    Reemployment services and allowances shall include, as appropriate, 
the services and allowances as set forth in this section, provided that 
those services included within the scope of paragraphs (a) through (e) 
of this section shall be provided for under any other Federal law other 
than the Act.
    (a) Employment registration. To ensure, so far as practical, that 
individuals are placed in jobs which utilize their highest skills and 
that applicants qualified for job openings are appropriately referred, 
applications for registration shall be taken on adversely affected 
workers who apply for reemployment services.
    (b) Employment counseling. When local job opportunities are not 
readily available, counseling shall be used to assist individuals to 
gain a better understanding of themselves in relation to the labor 
market so that they can more realistically choose or change an 
occupation or make a suitable job adjustment.
    (c) Vocational testing. Testing shall be used to determine which 
individual skills or potentials can be developed by appropriate 
training.
    (d) Job development. A State agency shall develop jobs for 
individuals by soliciting job interviews from public or private 
employers and shall work with potential employers to customize or 
restructure particular jobs to meet individual needs.
    (e) Supportive services. Supportive services shall be provided so 
individuals can obtain or retain employment or participate in employment 
and training programs leading to eventual

[[Page 116]]

placement in permanent employment. Such services may include work 
orientation, basic education, communication skills, child care, and any 
other services necessary to prepare an individual for full employment in 
accordance with the individual's capabilities and employment 
opportunities.
    (f) On-the-job training (OJT). OJT is training, in the public or 
private sector, and may be provided to an individual who meets the 
conditions for approval of training, as provided in Sec. 617.22(a), and 
who has been hired by the employer, while the individual is engaged in 
productive work which provides knowledge or skills essential to the full 
and adequate performance of the job.
    (g) Classroom training. This training activity is any training of 
the type normally conducted in a classroom setting, including vocational 
education, and may be provided to individuals when the conditions for 
approval of training are met, as provided in Sec. 617.22(a), to impart 
technical skills and information required to perform a specific job or 
group of jobs. Training designed to enhance the employability of 
individuals by upgrading basic skills, through the provision of courses 
such as remedial education or English-as-a-second-language, shall be 
considered as remedial education approvable under Sec. 617.22(a) if the 
criteria for approval of training under Sec. 617.22(a) are met.
    (h) Self-directed job search. Self-directed job search programs 
shall be initiated to assist individuals in developing skills and 
techniques for finding a job. Such programs vary in design and operation 
and call for a carefully structured approach to individual needs. There 
are basic elements or activities common to all approaches. These 
include:
    (1) Job search workshop. A short (1-3 days) seminar designed to 
provide participants with knowledge on how to find jobs, including labor 
market information, applicant resume writing, interviewing techniques, 
and finding job openings.
    (2) Job finding club. Encompasses all elements of the Job Search 
Workshop plus a period (1-2 weeks) of structured, supervised application 
where participants actually seek employment.
    (i) Job search allowances. The individual, if eligible, shall be 
provided job search allowances under subpart D of this part 617 to 
defray the cost of seeking employment outside of the commuting area.
    (j) Relocation allowances. The individual, if eligible, shall be 
provided relocation allowances under subpart E of this part 617 to 
defray the cost of moving to a new job outside of the commuting area.
[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 934, Jan. 6, 1994]



Sec. 617.22  Approval of training.

    (a) Conditions for approval. Training shall be approved for an 
adversely affected worker if the State agency determines that:
    (1) There is no suitable employment (which may include technical and 
professional employment) available for an adversely affected worker.
    (i) This means that for the worker for whom approval of training is 
being considered under this section, no suitable employment is available 
at that time for that worker, either in the commuting area, as defined 
in Sec. 617.3(k), or outside the commuting area in an area in which the 
worker desires to relocate with the assistance of a relocation allowance 
under subpart E of this part, and there is no reasonable prospect of 
such suitable employment becoming available for the worker in the 
foreseeable future. For the purposes of paragraph (a)(1) of this section 
only, the term ``suitable employment'' means, with respect to a worker, 
work of a substantially equal or higher skill level than the worker's 
past adversely affected employment, and wages for such work at not less 
that 80 percent of the worker's average weekly wage.
    (2) The worker would benefit from appropriate training. (i) This 
means that there is a direct relationship between the needs of the 
worker for skills training or remedial education and what would be 
provided by the training program under consideration for the worker, and 
that the worker has the mental and physical capabilities to undertake, 
make satisfactory progress in, and complete the training. This includes

[[Page 117]]

the further criterion that the individual will be job ready on 
completion of the training program.
    (3) There is a reasonable expectation of employment following 
completion of such training. (i) This means that, for that worker, given 
the job market conditions expected to exist at the time of the 
completion of the training program, there is, fairly and objectively 
considered, a reasonable expectation that the worker will find a job, 
using the skills and education acquired while in training, after 
completion of the training. Any determination under this criterion must 
take into account that ``a reasonable expectation of employment'' does 
not require that employment opportunities for the worker be available, 
or offered, immediately upon the completion of the approved training. 
This emphasizes, rather than negates, the point that there must be a 
fair and objective projection of job market conditions expected to exist 
at the time of completion of the training.
    (4) Training approved by the Secretary is reasonably available to 
the worker from either governmental agencies or private sources (which 
may include area vocational education schools, as defined in section 
195(2) of the Vocational Education Act of 1963, and employers). (i) This 
means that training is reasonably accessible to the worker within the 
worker's commuting area at any governmental or private training (or 
education) provider, particularly including on-the-job training with an 
employer, and it means training that is suitable for the worker and 
meets the other criteria in paragraph (a) of this section. It also means 
that emphasis must be given to finding accessible training for the 
worker, although not precluding training outside the commuting area if 
none is available at the time within the worker's commuting area. 
Whether the training is within or outside the commuting area, the 
training must be available at a reasonable cost as prescribed in 
paragraph (a)(6) of this section.
    (ii) In determining whether or not training is reasonably available, 
first consideration shall be given to training opportunities available 
within the worker's normal commuting area. Training at facilities 
outside the worker's normal commuting area should be approved only if 
such training is not available in the area or the training to be 
provided outside the normal commuting area will involve less charges to 
TAA funds.
    (5) The worker is qualified to undertake and complete such training. 
(i) This emphasizes the worker's personal qualifications to undertake 
and complete approved training. Evaluation of the worker's personal 
qualifications must include the worker's physical and mental 
capabilities, educational background, work experience and financial 
resources, as adequate to undertake and complete the specific training 
program being considered.
    (ii) Evaluation of the worker's financial ability shall include an 
analysis of the worker's remaining weeks of UI and TRA payments in 
relation to the duration of the training program. If the worker's UI and 
TRA payments will be exhausted before the end of the training program, 
it shall be ascertained whether personal or family resources will be 
available to the worker to complete the training. It must be noted on 
the worker's record that financial resources were discussed with the 
worker before the training was approved.
    (iii) When adequate financial resources will not be available to the 
worker to complete a training program which exceeds the duration of UI 
and TRA payments, the training shall not be approved and consideration 
shall be given to other training opportunities available to the worker.
    (6) Such training is suitable for the worker and available at a 
reasonable cost. (i) Such training means the training being considered 
for the worker. Suitable for the worker means that paragraph (a)(5) of 
this section is met and that the training is appropriate for the worker 
given the worker's capabilities, background and experience.
    (ii) Available at a reasonable cost means that training may not be 
approved at one provider when, all costs being considered, training 
substantially similar in quality, content and results can be obtained 
from another provider at a lower total cost within a similar time frame. 
It also means that training may not be approved when the

[[Page 118]]

costs of the training are unreasonably high in comparison with the 
average costs of training other workers in similar occupations at other 
providers. This criterion also requires taking into consideration the 
funding of training costs from sources other than TAA funds, and the 
least cost to TAA funding of providing suitable training opportunities 
to the worker. Greater emphasis will need to be given to these elements 
in determining the reasonable costs of training, particularly in view of 
the requirements in Sec. 617.11(a) (2) and (3) that TRA claimants be 
enrolled in and participate in training.
    (iii) For the purpose of determining reasonable costs of training, 
the following elements shall be considered:
    (A) Costs of a training program shall include tuition and related 
expenses (books, tools, and academic fees), travel or transportation 
expenses, and subsistence expenses;
    (B) In determining whether the costs of a particular training 
program are reasonable, first consideration must be given to the lowest 
cost training which is available within the commuting area. When 
training, substantially similar in quality, content and results, is 
offered at more than one training provider, the lowest cost training 
shall be approved; and
    (C) Training at facilities outside the worker's normal commuting 
area that involves transportation or subsistence costs which add 
substantially to the total costs shall not be approved if other 
appropriate training is available.
    (b) Allowable amounts for training. In approving a worker's 
application for training, the conditions for approval in paragraph (a) 
of this section must be found to be satisfied, including assurance that 
the training is suitable for the worker, is at the lowest reasonable 
cost, and will enable the worker to obtain employment within a 
reasonable period of time. An application for training shall be denied 
if it is for training in an occupational area which requires an 
extraordinarily high skill level and for which the total costs of the 
training are substantially higher than the costs of other training which 
is suitable for the worker.
    (c) Previous approval of training under State law. Training 
previously approved for a worker under State law or other authority is 
not training approved under paragraph (a) of this section. Any such 
training may be approved under paragraph (a) of this section, if all of 
the requirements and limitations of paragraph (a) of this section and 
other provisions of Subpart C of this part are met, but such approval 
shall not be retroactive for any of the purposes of this Part 617, 
including payment of the costs of the training and payment of TRA to the 
worker participating in the training. However, in the case of a 
redetermination or decision reversing a determination denying approval 
of training, for the purposes of this Part 617 such redetermination or 
decision shall be given effect retroactive to the issuance of the 
determination that was reversed by such redetermination or decision; but 
no costs of training may be paid unless such costs actually were 
incurred for training in which the individual participated, and no 
additional TRA may be paid with respect to any week the individual was 
not actually participating in the training.
    (d) Applications. Applications for, selection for, approval of, or 
referral to training shall be filed in accordance with this subpart C 
and on forms which shall be furnished to individuals by the State 
agency.
    (e) Determinations. Selection for, approval of, or referral of an 
individual to training under this subpart C, or a decision with respect 
to any specific training or non-selection, non-approval, or non-referral 
for any reason shall be a determination to which Secs. 617.50 and 617.51 
apply.
    (f) Length of training and hours of attendance. The State agency 
shall determine the appropriateness of the length of training and the 
hours of attendance as follows:
    (1) The training shall be of suitable duration to achieve the 
desired skill level in the shortest possible time;
    (2) Length of training. The maximum duration for any approvable 
training program is 104 weeks (during which training is conducted) and 
no individual shall be entitled to more than one training program under 
a single certification.

[[Page 119]]

    (3) Training program. (i) For purposes of this Part 617, a training 
program may consist of a single course or group of courses which is 
designed and approved by the State agency for an individual to meet a 
specific occupational goal.
    (ii) When an approved training program involves more than one course 
and involves breaks in training (within or between courses, or within or 
between terms, quarters, semesters and academic years), all such breaks 
in training are subject to the ``14-day break in training'' provision in 
Sec. 617.15(d), for purposes of receiving TRA payments. An individual's 
approved training program may be amended by the State agency to add a 
course designed to satisfy unforeseen needs of the individual, such as 
remedial education or specific occupational skills, as long as the 
length of the amended training program does not exceed the 104-week 
training limitation in paragraph (f)(2) of this section.
    (4) Full-time training. Individuals in TAA approved training shall 
attend training full time, and when other training is combined with OJT 
attendance at both shall be not less than full-time. The hours in a day 
and days in a week of attendance in training shall be full-time in 
accordance with established hours and days of training of the training 
provider.
    (g) Training of reemployed workers. Adversely affected workers who 
obtain new employment which is not suitable employment, as described in 
Sec. 617.22(a)(1), and have been approved for training may elect to:
    (1) Terminate their jobs, or
    (2) Continue in full- or part-time employment, to undertake such 
training, and shall not be subject to ineligibility or disqualification 
for UI or TRA as a result of such termination or reduction in 
employment.
    (h) Fees prohibited. In no case shall an individual be approved for 
training under this subpart C for which the individual is required to 
pay a fee or tuition.
    (i) Training outside the United States. In no case shall an 
individual be approved for training under this subpart C which is 
conducted totally or partially at a location outside the United States.
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32350, Aug. 24, 1988; 
59 FR 935, Jan. 6, 1994]



Sec. 617.23  Selection of training methods and programs.

    (a) State agency responsibilities. If suitable employment as 
described in Sec. 617.22(a)(1), is not otherwise available to an 
individual or group of individuals, it is the responsibility of the 
State agency to explore, identify, develop and secure training 
opportunities and to establish linkages with other public and private 
agencies, Private Industry Councils (PICs), employers, and Job Training 
Partnership Act (JTPA) service delivery area (SDA) grant recipients, as 
appropriate, which return adversely affected workers to employment as 
soon as possible.
    (b) Firm-specific retraining program. To the extent practicable 
before referring an adversely affected worker to approved training, the 
State agency shall consult with the individual's adversely affected firm 
and certified or recognized union, or other authorized representative, 
to develop a retraining program that meets the firm's staffing needs and 
preserves or restores the employment relationship between the individual 
and the firm. The fact that there is no need by other employers in the 
area for individuals in a specific occupation for which training is 
undertaken shall not preclude the development of an individual 
retraining program for such occupation with the adversely affected firm.
    (c) Methods of training. Adversely affected workers may be provided 
either one or a combination of the following methods of training:
    (1) Insofar as possible, priority will be given to on-the-job 
training, which includes related education necessary to acquire skills 
needed for a position within a particular occupation, in the firm or 
elsewhere pursuant to Secs. 617.24, 617.25, and 617.26, including 
training for which the firm pays the costs. This ensures that on-the-job 
training provides the skills necessary for the individual to obtain 
employment in an occupation rather than a particular job at a specific 
site; and

[[Page 120]]

    (2) Institutional training, with priority given to providing the 
training in public area vocational education schools if it is determined 
that such schools are at least as effective and efficient as other 
institutional alternatives, pursuant to Secs. 617.24, 617.25, and 
617.26.
    (d) Standards and procedures. The State agency shall document the 
standards and procedures used to select occupations and training 
institutions in which training is approved. Such occupations and 
training shall offer a reasonable expectation (not necessarily a prior 
guarantee) of employment following such training.
    (1) Standards. The State agency shall approve training in 
occupations for which an identifiable demand exists either in the local 
labor market or in other labor markets for which relocation planning has 
been implemented. If practicable, placement rates and employer reviews 
of curriculum shall be used as guides in the selection of training 
institutions.
    (2) Procedures. In determining the types of training to be provided, 
the State agency shall consult with local employers, appropriate labor 
organizations, Job Service Improvement Program Committees, JTPA SDA 
grant recipients, PICs, local educational organizations, local 
apprenticeship programs, local advisory councils established under the 
Carl D. Perkins Vocational Education Act, and post-secondary 
institutions.
    (3) Exclusions. In determining suitable training the State agency 
shall exclude certain occupations, where:
    (i) Lack of employment opportunities exist as substantiated by job 
orders and other pertinent labor market data; or
    (ii) The occupation provides no reasonable expectation of permanent 
employment.



Sec. 617.24  Preferred training.

    Training programs that may be approved under Sec. 617.22(a) include, 
but are not limited to--
    (a) On-the-job training,
    (b) Any training program provided by a State pursuant to Title III 
of the Job Training Partnership Act,
    (c) Any training program approved by a private industry council 
established under the Job Training Partnership Act,
    (d) Any program of remedial education,
    (e) Any training program (other than a training program described in 
paragraph (c) of Sec. 617.25) for which all, or any portion, of the 
costs of training the worker are paid--
    (1) Under any other Federal or State program other than this Subpart 
C, or
    (2) From any other source other than this section, but not including 
sources personal to the individual, such as self, relatives, or friends, 
and
    (f) Any other training program approved by the Department.
[59 FR 936, Jan. 6, 1994]



Sec. 617.25  Limitations on training under Subpart C of this part.

    The second sentence of amended section 236(a)(1) of the Act provides 
that an adversely affected worker shall be entitled to have payment of 
the costs of training approved under the Act paid on the worker's 
behalf, subject, however, ``to the limitations imposed by'' section 236. 
The limitations in section 236 which are implemented in this section 
concern the restrictions on approval of training which are related 
directly or indirectly to the conditions on training which are 
approvable or on the funding of training costs.
    (a) On-the-job training. The costs of on-the-job training approved 
Subpart C of this part for a worker, which are paid from TAA funds, 
shall be paid in equal monthly installments. Such costs may be paid from 
TAA funds, and such training may be approved under subpart C of this 
part, however, only if the State agency determines that:
    (1) No currently employed individual is displaced by such eligible 
worker, including partial displacement such as a reduction in the hours 
of non-overtime work, wages, or employment benefits;
    (2) Such training does not impair existing contracts for services or 
collective bargaining agreements;
    (3) In the case of training which would be inconsistent with the 
terms of a collective bargaining agreement, written concurrence has been 
obtained from the concerned labor organization;

[[Page 121]]

    (4) No other individual is on layoff from the same or any 
substantially equivalent job for which such eligible worker is being 
trained;
    (5) The employer has not terminated the employment of any regular 
employee or otherwise reduced the work force with the intention of 
filling the vacancy so created by hiring the eligible worker;
    (6) The job for which the eligible worker is being trained is not 
being created in a promotional line that will infringe in any way upon 
the promotional opportunities of currently employed individuals;
    (7) Such training is not for the same occupation from which the 
worker was separated and with respect to which such worker's group was 
certified pursuant to section 222 of the Act;
    (8) The employer certifies to the State agency that the employer 
will continue to employ the eligible worker for at least 26 weeks after 
completing the training if the worker desires to continue such 
employment and the employer does not have due cause to terminate such 
employment;
    (9) The employer has not received payment under this Subpart C or 
under any other Federal law for any other on-the-job training provided 
by such employer which failed to meet the requirements of paragraphs 
(a)(1) through (a)(6) of this section or such other Federal law; and
    (10) The employer has not taken, at any time, any action which 
violated the terms of any certification described in paragraph (a)(8) of 
this section made by the employer with respect to any other on-the-job 
training provided by the employer for which the employer has received a 
payment under Subpart C of this part (or the prior provisions of Subpart 
C of this part).
    (b) Other authority and restrictions on funding--
    (1) In general. Section 236(a) contains several provisions which 
allow the costs of a training program approved under the Act to be 
paid--
    (i) Solely from TAA funds,
    (ii) Solely from other public or private funds, or
    (iii) Partly from TAA funds and partly from other public or private 
funds,

but also precludes the use of TAA funds or funds under another Federal 
law where such use of funds would result in duplication of payment of 
training costs. Those authorities and restrictions are spelled out in 
paragraph (b) of this section: Provided, that, private funds may not 
include funds from sources personal to the individual, such as self, 
relatives, or friends.
    (2) Section 236(a)(5)(E) of the Act. (i) In general. Paragraph 
(5)(E) of section 236(a) of the Act specifies one of the types of 
training programs approvable under the Act, as including a program 
(other than a training program described in section 236(a)(7) (paragraph 
(b)(5) of this section)) for which all, or any portion, of the costs of 
the training program are paid--
    (A) Under any Federal or State program other than the Act, or
    (B) From any source other than TAA funds.
    (ii) Application. Paragraph (E) of section 236(a)(5) of the Act thus 
authorizes prearrangements between cooperating State agencies 
administering the TAA program and the authorities administering any 
other Federal, State, or private funding source, to agree upon any mix 
of TAA funds and other funds for paying the costs of a training program 
approved under Subpart C of this part. Any such prearrangement must 
contain specific commitments from the other authorities to pay the costs 
they agree to assume.
    (3) Section 236(a)(6) of the Act. (i) In general. Paragraph (6) of 
section 236(a) of the Act is related to section 236(a)(5)(E) in 
providing that the costs of a training program approved under the Act 
are not required to be paid from TAA funds to the extent that such costs 
are paid under any Federal or State program other than the Act or from 
any source other than the Act.
    (ii) Application. (A) Although paragraph (6) of section 236(a) of 
the Act is expressed in terms of the costs not being required to be paid 
from TAA funds, it authorizes the mixing of TAA funds and funds from any 
other Federal, State or private source. Therefore, sharing the future 
costs of training is authorized where prior costs were paid from another 
Federal, State

[[Page 122]]

or private source, but this does not authorize reimbursement from TAA 
funds of any training costs which were incurred and for which payment 
became due prior to the approval of the training program under Subpart C 
of this part. In utilizing the authority under paragraph (b)(3) of this 
section for sharing training costs, prearrangements shall be entered 
into as required under paragraph (b)(2) of this section before any TAA 
funds are obligated.
    (B) Paragraph (6) of section 236(a) contains a special restriction 
on the authority derived thereunder to use TAA funds in sharing training 
costs. Therefore, before approving any training program under Subpart C 
of this part, which may involve sharing of the training costs under the 
authority of paragraph (b)(3) of this section, the cooperating State 
agencies for the TAA program shall require the worker to enter into a 
written agreement with the State under which TAA funds will not be 
applied for or used to pay any portion of the costs of the training the 
worker has reason to believe will be paid by any other governmental or 
private source.
    (4) Section 236(a)(4) of the Act. (i) In general. (A) Paragraph (4) 
of section 236(a) of the Act (paragraph (3) of section 236(a) before 
August 23, 1988) continues to provide, as it did before the addition of 
paragraphs (5)(E), (6), and (7) to section 236(a), that:
    (1) When the costs of training are paid from TAA funds under subpart 
C of this part, no other payment for such costs of training may be made 
under any other Federal law; and
    (2) When the payment of the costs of training has already been made 
under any other Federal law, or the costs are reimbursable under any 
other Federal law and a portion of the costs has already been paid under 
such other Federal law, payment of such training costs may not be made 
from TAA funds.
    (B) Paragraph (4) of section 236(a) also requires that: The 
provisions of paragraphs (b)(4)(i) (A)(1) and (A)(2) of this section 
shall not apply to, or take into account, any funds provided under any 
other provision of Federal law which are used for any purpose other than 
the direct payment of the identical costs incurred in training the 
adversely affected worker under the TAA Program, even if such other use 
has the effect of indirectly paying or reducing any portion of the costs 
involved in training the adversely affected worker.
    (ii) Application. (A) Although the prohibition on duplicate payments 
in the first part of section 236(a)(4) remains fully implemented in this 
section, the second part of section 236(a)(4) on the sharing of costs 
from TAA funds and other Federal fund sources is modified by the 
explicit provisions of paragraphs (5)(E) and (6) of section 236(a), as 
set forth in paragraphs (b)(2) and (b)(3) of this section.
    (B) When the direct costs of a training program approvable under 
subpart C of this part are payable from TAA funds and are also wholly or 
partially payable under another Federal law, or under any State law or 
from private, nongovernmental sources, the TAA Program agencies shall 
establish procedures which ensure that TAA funds shall not be utilized 
to duplicate funds available from another source, but this preclusion of 
duplication does not prohibit and shall not discourage sharing of costs 
under prearrangements authorized under paragraphs (b)(2) and (b)(3) of 
this section.
    (C)(1) Therefore, pursuant to paragraph (4) of section 236(a), 
paragraph (b)(4) of this section continues to prohibit duplicate payment 
of training costs, which is consistent with the general prohibition 
expressed in subpart C of this part, against any use of TAA funds to 
duplicate payment of training costs in any circumstances. Paragraph 
(b)(4) of this section also continues to prohibit taking into account, 
in determining whether training costs are payable from TAA funds, any 
payments to the worker under any other Federal law which may have the 
effect of indirectly paying all or a portion of the training costs. Such 
indirect payments include Veterans Educational Assistance, Pell Grants, 
and Supplemental Educational Opportunity Grants, which are paid to the 
individual. However, any payments to the individual under these programs 
are deductible from TRA payable to the individual under 
Sec. 617.13(c)(2).

[[Page 123]]

    (2) When payments of Veterans Educational Assistance, Pell Grants, 
and Supplemental Educational Opportunity Grants are made to the training 
provider, instead of the individual, and are used for training costs, 
such payments shall be taken into account as direct payment of the 
training costs under other Federal law for the purposes of this section.
    (5) Section 236(a)(7) of the Act. (i) In general. Paragraph (7) of 
section 236(a) of the Act provides that a training program shall not be 
approved under the Act if--
    (A) all or a portion of the costs of such training program are paid 
under any nongovernmental plan or program,
    (B) the adversely affected worker has a right to obtain training or 
funds for training under such plan or program, and
    (C) such plan or program requires the worker to reimburse the plan 
or program from funds provided under the Act, or from wages paid under 
such training program, for any portion of the costs of such training 
program paid under the plan or program.
    (ii) Application. Paragraph (7) of section 236(a), which is 
implemented in paragraph (b)(5) of this section, reinforces the 
prohibition in Sec. 617.22(h) against approval of a training program 
under subpart C of this part if the worker is required to pay a fee or 
tuition. The provisions of paragraph (b) and paragraph (h) of this 
section shall be given effect as prohibiting the approval under subpart 
C of this part of any training program if the worker would be requested 
or required, at any time or under any circumstances, to pay any of the 
costs of a training program, however small, from any TAA funds given to 
the worker or from any other funds belonging to the worker from any 
source whatever. Aside from this stringent limitation, however, 
paragraph (7) of section 236(a) of the Act implicitly authorizes 
training approved under this subpart C to be wholly or partly funded 
from nongovernmental (i.e., employer, union or other private) sources.
[59 FR 936, Jan. 6, 1994]



Sec. 617.26  Liable and agent State responsibilities.

    (a) Liable State. The liable State means, for any individual, the 
State which administers the applicable State law (as determined under 
Sec. 617.16). The liable State is responsible for making all 
determinations, redeterminations, and decisions on appeals on all claims 
for program benefits under this part 617, including waivers and 
revocations of waivers pursuant to Sec. 617.19, subsistence payments 
pursuant to Sec. 617.27, and transportation payments pursuant to 
Sec. 617.28. Upon receiving a copy of a certification issued by the 
Department, with respect to an affected firm in the State, the liable 
State also is responsible for publishing newspaper notices as provided 
in Sec. 617.4(d), furnishing information and assistance to workers as 
provided in Sec. 617.4, furnishing reemployment services under subparts 
C, D, and E of this part to all eligible workers covered by such 
certification, and carrying out other activities and functions required 
by the State's Agreement with the Secretary entered into pursuant to 
Sec. 617.59. All determinations pertaining to any individual's 
eligibility for or entitlement to any program benefit under this part 
617 shall be subject to the provisions of Secs. 617.50 and 617.51.
    (b) Agent State. Agent State means, for any individual, any State 
other than the liable State for the individual. Agent States shall be 
responsible for cooperating fully with the liable State and assisting 
the liable State in carrying out its activities and functions. These 
agent State responsibilities shall be part of the activities and 
functions undertaken by the agent States under their Agreements entered 
into pursuant to Sec. 617.59. Agent State responsibilities include 
cooperating with liable States in taking applications and claims for 
TAA, providing reemployment services to certified workers in accordance 
with subparts B, C, D and E of this part, providing interstate claimants 
with TAA program information and assistance, assisting applicants or 
claimants to file claims for TAA program benefits and services, 
cooperating with the liable State by providing information needed to 
issue determinations, redeterminations, and decisions

[[Page 124]]

on appeals, and procuring and paying the cost of any approved training, 
including subsistence and transportation costs, according to 
determinations issued by the liable State.
[59 FR 938, Jan. 6, 1994]



Sec. 617.27  Subsistence payments.

    (a) Eligibility. A trainee under this subpart C shall be afforded 
supplemental assistance necessary to pay costs of separate maintenance 
when the training facility is located outside the commuting area, but 
may not receive such supplemental assistance for any period for which 
the trainee receives such a payment under the JTPA, or any other law, or 
for any day referred to under Sec. 617.28(c)(3) pursuant to which a 
transportation allowance is payable to the individual, or to the extent 
the individual is entitled to be paid or reimbursed for such expenses 
from any other source.
    (b) Amount. Subsistence payments shall not exceed the lesser of:
    (1) The individual's actual per diem expenses for subsistence; or
    (2) 50 percent of the prevailing per diem rate authorized under the 
Federal travel regulations (see 41 CFR part 101-7) for the locale of the 
training.
    (c) Applications. Applications for subsistence payments shall be 
filed in accordance with this subpart C and on forms which shall be 
furnished to trainees by the State agency. Such payments shall be made 
on completion of a week of training, except that at the beginning of a 
training project a State agency may advance a payment for a week if it 
determines that such advance is necessary to enable a trainee to accept 
training. An adjustment shall be made if the amount of an advance is 
less or more than the amount to which the trainee is entitled under 
paragraph (b) of this section. A determination as to an application made 
under this section shall be subject to Secs. 617.50 and 617.51.
    (d) Unexcused absences. No subsistence payment shall be made to an 
individual for any day of unexcused absence as certified by the 
responsible training facility.



Sec. 617.28  Transportation payments.

    (a) Eligibility. A trainee under this subpart C shall be afforded 
supplemental assistance necessary to pay transportation expenses if the 
training is outside the commuting area, but may not receive such 
assistance if transportation is arranged for the trainee as part of a 
group and paid for by the State agency or to the extent the trainee 
receives a payment of transportation expenses under another Federal law, 
or to the extent the individual is entitled to be paid or reimbursed for 
such expenses from any other source.
    (b) Amount. A transportation allowance shall not exceed the lesser 
of:
    (1) The actual cost for travel by the least expensive means of 
transportation reasonably available between the trainee's home and the 
training facility; or
    (2) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations. See 41 CFR part 101-7.
    (c) Travel included. Travel for which a transportation allowance 
shall be paid includes travel:
    (1) At the beginning and end of the training program;
    (2) When the trainee fails for good cause, as described in 
Sec. 617.18(b)(2), to complete the training program; and
    (3) For daily commuting, in lieu of subsistence, but not exceeding 
the amount otherwise payable as subsistence for each day of commuting.
    (d) Applications. Applications for transportation payments shall be 
filed in accordance with this subpart C and on forms which shall be 
furnished to trainees by the State agency. Payments may be made in 
advance. An adjustment shall be made if the amount of an advance is less 
or more than the amount to which the trainee is entitled under paragraph 
(b) of this section. A determination as to an application made under 
this section shall be subject to Secs. 617.50 and 617.51.



Sec. 617.29  Application of EB work test.

    (a) Registration for employment. Adversely affected workers who have 
exhausted all rights to UI and who otherwise qualify for TRA under 
Sec. 617.11,

[[Page 125]]

shall, except as provided in paragraph (b) of this section:
    (1) Register for work and be referred to work by the State agency in 
the same manner as required for EB claimants under the applicable State 
law provisions which are consistent with section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970; and
    (2) Be subject to the work test requirements for EB claimants under 
the applicable State law provisions which are consistent with section 
202(a)(3) of the Federal-State Extended Unemployment Compensation Act of 
1970.
    (b) Exceptions. Paragraph (a) of this section shall not apply to any 
week an individual is undergoing training approved under this subpart C.



                    Subpart D--Job Search Allowances



Sec. 617.30  General.

    A job search allowance shall be granted an adversely affected worker 
to assist the individual in securing a job within the United States as 
provided in this subpart D.



Sec. 617.31  Applications.

    (a) Forms. Applications for job search allowances shall be filed in 
accordance with this subpart D and on forms which shall be furnished to 
individuals by the State agency.
    (b) Submittal. An application may be submitted to a State agency at 
any time by an individual who has been totally or partially separated 
whether or not a certification covering the individual has been made. 
However, an application must be submitted to a State agency before the 
job search begins for the job search allowance to be granted, and the 
job search may not be approved until after the individual is covered 
under a certification.
    (c) Time limits. Notwithstanding paragraph (b) of this section, a 
job search allowance application may be approved only if submitted 
before:
    (1) The 365th day after the date of the certification under which 
the individual is covered, or the 365th day after the date of the 
individual's last total separation, whichever is later; or
    (2) The 182d day after the concluding date of training approved 
under subpart C of this part 617, or approved under the regulations 
superseded by this part 617.



Sec. 617.32  Eligibility.

    (a) Conditions. Job search allowance eligibility requires:
    (1) A timely filed application;
    (2) Total separation from adversely affected employment at the time 
the job search commences;
    (3) Registration with the State agency which shall furnish the 
individual such reemployment services as are appropriate under subpart C 
of this part 617.
    (4) A determination by the State agency that the individual has no 
reasonable expectation of securing suitable employment in the commuting 
area, and has a reasonable expectation of obtaining suitable employment 
of long-term duration outside the commuting area and in the area where 
the job search will be conducted. For the purposes of this section, the 
term ``suitable employment'' means suitable work as defined in 
Sec. 617.3(kk) (1) or (2), whichever is applicable to the individual; 
and
    (5) Completion of the job search within a reasonable period not 
exceeding 30 days after the day on which the job search began.
    (b) Completion of job search. A job search is deemed completed when 
the individual either secures employment or has contacted each employer 
to whom referred by the State agency in connection with a job search.
    (c) Verification of employer contacts. The State agency shall verify 
contacts with employers certified by the individual.
[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 938, Jan. 6, 1994]



Sec. 617.33  Findings required.

    (a) Findings by liable State. Before final payment of a job search 
allowance may be approved, the following findings shall be made by the 
liable State:
    (1) The individual meets the eligibility requirements for a job 
search allowance specified in Sec. 617.32(a) (1) through (4);

[[Page 126]]

    (2) The application for a job search allowance was submitted by the 
individual within the time limits specified in Sec. 617.31(c); and
    (3) The individual completed the job search within the time limits 
stated in Sec. 617.32(a)(5), and the requirements of paragraphs (b) and 
(c) of Sec. 617.32 have been met.
    (b) Agent State. (1) When an individual files an application for a 
job search allowance with respect to a job search conducted in a State 
other than the liable State, the State agency of the State in which the 
individual conducts the job search shall serve as the agent State and be 
responsible for assisting the individual in conducting the job search 
and in filing an application for a job search allowance with the liable 
State, and for assisting the liable State by furnishing to it any 
information required for the liable State's determination of the claim.
    (2) The agent State shall cooperate fully with the liable State in 
carrying out its activities and functions with regard to such 
applications.
[59 FR 938, Jan. 6, 1994]



Sec. 617.34  Amount.

    (a) Computation. The amount of a job search allowance shall be 90 
percent of the total costs of each of the following allowable 
transportation and subsistence items:
    (1) Travel. The more cost effective mode of travel reasonably 
available shall be approved by using:
    (i) The actual cost of round trip travel by the most economical 
public transportation the individual reasonably can be expected to take 
from the individual's residence to the area of job search; or
    (ii) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for such 
roundtrip travel by the usual route from the individual's residence to 
the area of job search.
    (2) Lodging and meals. The cost allowable for lodging and meals 
shall not exceed the lesser of:
    (i) The actual cost to the individual of lodging and meals while 
engaged in the job search; or
    (ii) 50 percent of the prevailing per diem allowance rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
locality where the job search is conducted.
    (b) Limit. The total job search allowances paid to an individual 
under a certification may not exceed $800, regardless of the number of 
job searches undertaken by the individual. The amounts otherwise payable 
under paragraph (a) of this section shall be reduced by any amounts the 
individual is entitled to be paid or reimbursed for such expenses from 
any other source.
[51 FR 45848, Dec. 22, 1986, as amended at 51 FR 45869, Dec. 22, 1986; 
53 FR 32351, Aug. 24, 1988; 59 FR 939, Jan. 6, 1994]



Sec. 617.35  Time and method of payment.

    (a) Determinations. A State agency shall promptly make and record 
determinations necessary to assure entitlement of an individual to a job 
search allowance at any time, before or after a certification covering 
the individual is made. No job search allowance may be paid or advanced 
to an individual until the State agency determines that the individual 
is covered under a certification. A State agency shall make payment as 
promptly as possible upon determining that the individual is covered 
under a certification and is otherwise eligible.
    (b) Payment. Unless paragraph (a) of this section applies, a job 
search allowance shall be paid promptly after an individual completes a 
job search and complies with paragraph (d) of this section.
    (c) Advances. A State agency may advance an individual (except an 
individual not yet covered under a certification) 60 percent of the 
estimated amount of the job search allowance payable on completion of 
the job search, but not exceeding $360, within 5 days prior to 
commencement of a job search. Such advance shall be deducted from any 
payment under paragraph (b) of this section.
    (d) Worker evidence. On completion of a job search, the individual 
shall certify on forms furnished by the State agency as to employer 
contacts made and amounts expended daily for lodging and meals. Receipts 
shall be required for all lodging and purchased transportation expenses 
incurred by the individual pursuant to the job

[[Page 127]]

search. An adjustment shall be made if the amount of an advance is less 
or more than the amount to which the individual is entitled under 
Sec. 617.34.



                    Subpart E--Relocation Allowances



Sec. 617.40  General.

    A relocation allowance shall be granted an adversely affected worker 
to assist the individual and the individual's family, if any, to 
relocate within the United States as stated in this subpart E. A 
relocation allowance may be granted an individual only once under a 
certification. A relocation allowance shall not be granted to more than 
one member of a family with respect to the same relocation. If 
applications for a relocation allowance are made by more than one member 
of a family as to the same relocation, the allowance shall be paid to 
the head of the family if otherwise eligible.



Sec. 617.41  Applications.

    (a) Forms. Applications for a relocation allowance shall be filed in 
accordance with this subpart E and on forms which shall be furnished by 
the State agency.
    (b) Submittal. An application may be submitted to the State agency 
at any time by an individual who has been totally or partially separated 
regardless of whether a certification covering the individual has been 
made. However, an application must be submitted to a State agency before 
the relocation begins for the relocation allowance to be granted, and 
the relocation may not be approved until after the individual is covered 
under a certification.
    (c) Time limits. Notwithstanding paragraph (b) of this section, an 
application for a relocation allowance may not be approved unless 
submitted before:
    (1) The 425th day after the date of the certification under which 
the individual is covered, or the 425th day after the date of the 
individual's last total separation, whichever is later; or
    (2) The 182d day after the concluding date of training approved 
under subpart C of this part 617, or approved under the regulations 
superseded by this part 617.



Sec. 617.42  Eligibility.

    (a) Conditions. Eligibility for a relocation allowance requires:
    (1) A timely filed application;
    (2) Total separation from adversely affected employment at the time 
relocation commences;
    (3) No prior receipt of a relocation allowance under the same 
certification;
    (4) Relocation within the United States and outside the individual's 
present commuting area;
    (5) Registration with the State agency which shall furnish the 
individual such reemployment services as are appropriate under subpart C 
of this part 617;
    (6) A determination by the State agency that the individual has no 
reasonable expectation of securing suitable employment in the commuting 
area, and has obtained suitable employment affording a reasonable 
expectation of employment of long-term duration, or a bona fide offer of 
such suitable employment, outside the commuting area and in the area of 
intended relocation. For the purposes of this section, the term 
``suitable employment'' means suitable work as defined in Sec. 617.3(kk) 
(1) and (2), whichever is applicable to the individual; and
    (7) Relocation beginning within a reasonable period, as determined 
under Sec. 617.43(b), and completion of such relocation within a 
reasonable period of time as determined in accordance with Federal 
travel regulations and Sec. 617.43(a).
    (b) Job search. Applications for a relocation allowance and a job 
search allowance may not be approved concurrently, but the prior payment 
of a job search allowance shall not otherwise preclude the payment of a 
relocation allowance.
[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 939, Jan. 6, 1994]



Sec. 617.43  Time of relocation.

    (a) Applicable considerations. In determining whether an 
individual's relocation is completed in a reasonable period of time, a 
State agency, among other factors, shall consider whether:
    (1) Suitable housing is available in the area of relocation;

[[Page 128]]

    (2) The individual can dispose of the individual's residence;
    (3) The individual or a family member is ill; and
    (4) A member of the individual's family is attending school and when 
the member can best be transferred to a school in the area of 
relocation.
    (b) Time limits. The reasonable period for actually beginning a 
relocation move shall expire 182 days after the date of application for 
a relocation allowance, or 182 days after the conclusion of training 
approved under subpart C of this part 617, or approved under the 
regulations in former 29 CFR part 91, in effect prior to its 
redesignation as this 20 CFR part 617 and its concurrent revision.



Sec. 617.44  Findings required.

    (a) Findings by liable State. Before final payment of a relocation 
allowance may be approved, the following findings shall be made by the 
liable State:
    (1) The individual meets the eligibility requirements for a 
relocation allowance specified in Sec. 617.42(a) (1) to (6) and 
Sec. 617.42(b).
    (2) The application for a relocation allowance was submitted by the 
individual within the time limits specified in Sec. 617.41(c);
    (3) The individual began and completed the relocation within the 
limitations specified in Sec. 617.42(a)(7) and Sec. 617.43; and
    (4) The liable State has verified (directly or through the agent 
State) with the employer, and finds, that the individual has obtained 
suitable employment affording a reasonable expectation of employment of 
long-term duration, or a bona fide offer of such suitable employment, in 
the area of intended relocation, in accordance with Sec. 617.42(a)(6).
    (b) Agent State. (1) When an individual relocates in a State other 
than the liable State, the State agency of the State in which the 
individual relocates shall serve as the agent State and be responsible 
for:
    (i) Assisting the individual in relocating to the State, and in 
filing an application for a relocation allowance with the liable State, 
and
    (ii) Assisting the liable State by furnishing to it any information 
required for the liable State's determination on the claim.
    (2) The agent State shall cooperate with the liable State in 
carrying out its activities and functions with regard to such 
applications. When requested by the liable State, the agent State shall 
verify with the employer and report to the liable State whether the 
individual has obtained suitable employment affording a reasonable 
expectation of employment of long-term duration, or a bona fide offer of 
such suitable employment.
[59 FR 939, Jan. 6, 1994]



Sec. 617.45  Amount.

    (a) Items allowable. The amount payable as a relocation allowance 
shall include the following items:
    (1) 90 percent of the travel expenses for the individual and family, 
if any, from the individual's place of residence to the area of 
relocation, as determined under Sec. 617.46;
    (2) 90 percent of the expenses of moving household goods and 
personal effects of the individual and family, if any, not to exceed the 
maximum number of pounds net weight authorized under the Federal travel 
regulations (see 41 CFR part 101-7), between such locations, as 
determined under Sec. 617.47; and
    (3) A lump sum payment, equal to 3 times the individual's average 
weekly wage, not to exceed $800.
    (b) Reduction. The amount otherwise payable under paragraphs (a)(1) 
and (a)(2) of this section shall be reduced by any amount the individual 
is entitled to be paid or reimbursed for such expenses from any other 
source.
[51 FR 45848, Dec. 22, 1986, as amended at 51 FR 45869, Dec. 22, 1986]



Sec. 617.46  Travel allowance.

    (a) Computation. The amount of travel allowance (including lodging 
and meals) payable under Sec. 617.45(a)(1) shall be 90 percent of the 
total costs of each of the following allowable transportation and 
subsistence items:

[[Page 129]]

    (1) Transportation. The more cost effective mode of transportation 
reasonably available shall be approved by using:
    (i) The actual cost of transportation for the individual and family, 
if any, by the most economical public transportation the individual and 
family reasonably can be expected to take from the individual's old 
residence to the individual's new residence in the area of relocation; 
or
    (ii) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
usually traveled route from the individual's old residence to the 
individual's new residence in the area of relocation. No additional 
mileage shall be payable for family members traveling on the same trip 
in the same vehicle.
    (2) Lodging and meals. The cost allowable for lodging and meals for 
an individual or each member of the individual's family shall not exceed 
the lesser of:
    (i) The actual cost to the individual for lodging and meals while in 
travel status; or
    (ii) 50 percent of the prevailing per diem allowance rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
locality to which the relocation is made.
    (b) Separate travel. If, for good cause, a member or members of an 
individual's family must travel separately to the individual's new 
residence, 90 percent of the total costs of such separate travel, 
computed in accordance with paragraph (a) of this section, shall be 
included in calculating the total amount the individual is entitled to 
be paid under this subpart E. For purposes of this paragraph (b), good 
cause means such reasons as would justify the family member's inability 
to relocate with the other members of the individual's family, including 
but not limited to reasons related to the family member's health, 
schooling or economic circumstances.
    (c) Limitation. In no case may the individual be paid a travel 
allowance for the individual or a member of the individual's family more 
than once in connection with a single relocation.
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32351, Aug. 24, 1988]



Sec. 617.47  Moving allowance.

    (a) Computation. The amount of a moving allowance payable under 
Sec. 617.45(a)(2) shall be 90 percent of the total of the allowable 
costs under either (1), (2), or (3) of this paragraph, and 90 percent of 
the total allowable costs under (4) of this paragraph:
    (1) Commercial carrier. Allowable costs for moving household goods 
and personal effects of an individual and family, if any, shall not 
exceed the maximum number of pounds net weight authorized under the 
Federal travel regulations (see 41 CFR part 101-7) by commercial carrier 
from the individual's old residence to the individual's new residence in 
the area of relocation, including reasonable and necessary accessorial 
charges, by the most economical commercial carrier the individual 
reasonably can be expected to use. Before undertaking such move, the 
individual must submit to the State agency an estimate from a commercial 
carrier as to the cost thereof. Accessorial charges shall include the 
cost of insuring such goods and effects for their actual value or 
$10,000, whichever is least, against loss or damage in transit, if a bid 
from a licensed insurer is obtained by the individual and approved by 
the State agency before departure. If a State agency finds it is more 
economical to pay a carrier an extra charge to assume the responsibility 
of a common carrier for such goods and effects, 90 percent of such extra 
charge, but not exceeding $50, shall be paid in lieu of the cost of 
insurance.
    (2) Trailer or rental truck--(i) Trailer. If household goods and 
personal effects are moved by trailer, the allowable costs shall be:
    (A) If the trailer is hauled by private vehicle, the cost per mile 
for the use of the private vehicle at the prevailing mileage rate 
authorized under the Federal travel regulations (see 41 CFR part 101-7) 
for the usually traveled route from the individual's old residence to 
the individual's new residence in the area of relocation; and

[[Page 130]]

    (B) lf the trailer is rented, and of the type customarily used for 
moving household goods and personal effects, the rental fee for each day 
reasonably required to complete the move; or
    (C) The actual charge if hauling is by commercial carrier,
    (ii) Rental truck. If household goods and personal effects are moved 
by rental truck of the type customarily used for moving household goods 
and personal effects, the allowable costs shall be:
    (A) The rental fee for each day reasonably required to complete the 
move; and
    (B) The necessary fuel for such rental truck paid by the individual.
    (3) House trailer. If a house trailer or mobile home was used as the 
individual's place of residence in the old area and will be so used in 
the new area, the allowable costs of moving such house trailer or mobile 
home shall be:
    (i) The commercial carrier's charges for moving the house trailer or 
mobile home;
    (ii) Charges for unblocking and reblocking;
    (iii) Ferry charges, bridge, road, and tunnel tolls, taxes, fees 
fixed by a State or local authority for permits to transport the unit in 
or through its jurisdiction, and retention of necessary flagmen; and
    (iv) The cost of insuring the house trailer or mobile home, and the 
personal effects of the individual and family, against loss or damage in 
transit, in accordance with the provisions in paragraph (a)(1) of this 
section.
    (4) Temporary storage. If temporary storage of household goods and 
personal effects is necessary, the cost of such temporary storage for a 
period not to exceed 60 days.
    (b) Travel. Payments under this section shall be in addition to 
payments for travel expenses for the individual and family, if any, 
under Sec. 617.45(a)(1), except that the allowable cost for a private 
vehicle used to haul a trailer may not be paid under this section if any 
cost with respect to such private vehicle is payable under any other 
provisions of this subpart E.



Sec. 617.48  Time and method of payment.

    (a) Determinations. A State agency shall promptly make and record 
determinations necessary to assure an individual's entitlement to a 
relocation allowance at any time, before or after a certification 
covering the individual is made. No relocation allowance may be paid or 
advanced to an individual until the State agency determines that the 
individual is covered under a certification. A State agency shall make 
payment as promptly as possible upon determining that the individual is 
covered under a certification and is otherwise eligible.
    (b) Travel and moving allowances. Allowances computed under 
Secs. 617.46 and 617.47 shall be paid as follows:
    (1) Travel--(i) Transportation and subsistence. The amounts 
estimated under Sec. 617.46 at 90 percent of the lowest allowable costs 
shall be paid in advance at the time an individual departs from the 
individual's residence to begin relocation or within 10 days prior 
thereto. An amount payable for a family member approved for separate 
travel shall be paid to the individual at the time of such family 
member's departure or within 10 days prior thereto.
    (ii) Worker evidence. On completion of a relocation, the individual 
shall certify on forms furnished by the State agency as to the amount 
expended daily for lodging and meals. Receipts shall be required for all 
lodging and purchased transportation expenses incurred by the individual 
and family, if any, pursuant to the relocation. An adjustment shall be 
made if the amount of an advance is less or more than the amount to 
which the individual is entitled under Sec. 617.46.
    (2) Moving. The amount estimated under Sec. 617.47 at 90 percent of 
the lowest allowable costs shall be paid:
    (i) Commercial carrier. (A) If household goods and personal effects 
are moved by commercial carrier, 90 percent of the amount of the 
estimate submitted by the individual under Sec. 617.47(a)(1) and 
approved by the State agency for covering the cost of such move, and 90 
percent of the other charges approved by the State agency under 
Sec. 617.47(a)(1) shall be advanced by check or checks payable to the 
carrier and insurer, and delivered to the individual at the time

[[Page 131]]

of the scheduled shipment or within 10 days prior thereto. On completion 
of the move, the individual shall promptly submit to the State agency a 
copy of the bill of lading prepared by the carrier, including a receipt 
evidencing payment of moving costs. The individual shall with such 
submittal reimburse the State agency the amount, if any, by which the 
advance made under this paragraph (b)(2)(i) exceeds 90 percent of the 
actual moving costs approved by the State agency. The individual shall 
be paid the difference if the amount advanced was less than 90 percent 
of the actual moving costs approved by the State agency.
    (B) If more economical, a State agency may make direct arrangements 
for moving and insuring an individual's household goods and personal 
effects with a carrier and insurer selected by the individual and may 
make payment of 90 percent of moving and insurance costs directly to the 
carrier and insurer. No such arrangement shall release a carrier from 
liability otherwise provided by law or contract for loss or damage to 
the individual's goods and effects. The United States shall not be or 
become liable to either party for personal injury or property loss 
damage under any circumstances.
    (ii) Trailer or rental truck--(A) Private vehicle with trailer. If 
the move is by private vehicle and trailer, the allowable cost for the 
use of the private vehicle shall be made at the time payment is made 
under paragraph (b)(1) of this section.
    (B) Rental trailer or rental truck. If the move is by rental trailer 
or rental truck:
    (1) The individual shall submit an estimate of the rental cost from 
the rental agency; and
    (2) 90 percent of such estimated rental cost may be advanced by 
check payable to the order of the individual and the rental agency at 
the time payment is made under paragraph (b)(1) of this section; and
    (3) On completion of the move the individual shall submit promptly 
to the State agency a receipted bill itemizing and evidencing payment of 
the rental charges for the trailer or truck and fuel costs, and shall 
reimburse the State agency for the amount, if any, by which the advance 
made for the trailer or truck exceeds 90 percent of the rental charges 
approved by the State agency. If the amount of the advance was less than 
90 percent of the rental charges, the individual shall be paid the 
difference.
    (iii) House trailer. If a house trailer or mobile home is moved by 
commercial carrier, the individual shall submit to the State agency an 
estimate of the cost of the move by the commercial carrier. A check for 
90 percent of the amount of the estimate, if approved, payable to the 
individual and the carrier, may be delivered to the individual at the 
time of the scheduled move or within 10 days prior thereto.
    (c) Lump sum allowance. The lump sum allowance provided in 
Sec. 617.45(a)(3) shall be paid when arrangements are completed for 
relocation of the individual and family, if any, but not more than 10 
days before the earlier of the individual's anticipated departure from 
the individual's residence to begin relocation or the anticipated date 
of shipment of the individual's household goods and personal effects.
    (d) Relocation completed. A relocation is completed when an 
individual and family, if any, and their household goods and personal 
effects arrive at the individual's residence in the area of relocation. 
If no household goods and personal effects are moved, a relocation is 
completed when the individual and family, if any, arrive in the area of 
relocation and establish a residence in the new area. The later arrival 
of a family member approved for separate travel shall not alter the date 
a relocation was completed.



                      Subpart F--Job Search Program



Sec. 617.49  Job Search Program.

    (a) Program requirements. (1) A worker, after being separated from 
adversely affected employment, must participate in an approved job 
search program (JSP), or have completed a JSP, as a condition for 
receiving TRA, except where the State agency determines that an 
acceptable JSP is not reasonably available.
    (2) A TRA claimant is subject to participation in a JSP as a 
condition for

[[Page 132]]

receiving TRA for weeks of unemployment which begin after the date the 
claimant is notified of the requirement and has filed an initial claim 
for TRA. The claimant is not subject to the JSP as a condition for 
receiving TRA for weeks which begin prior to that date.
    (3) When the State agency determines that the worker has failed to 
begin participation in an approved JSP, or ceased to participate in such 
a JSP before completion, and there is no justifiable cause for such 
failure or cessation, no TRA may be paid to the worker for weeks 
beginning with the week that failure or cessation occurred when it is 
determined that such failure or cessation was without justifiable cause. 
TRA may be paid thereafter to an otherwise eligible worker only for 
weeks beginning with the week the worker begins or resumes participation 
in an approved JSP or complete the JSP. For purposes of this paragraph 
(a)(3), justifiable cause means such reasons as would justify an 
individual's conduct when measured by conduct expected of a reasonable 
individual in like circumstances, including but not limited to reasons 
beyond the individual's control and reasons related to the individual's 
capability to enroll in an approved JSP or complete the JSP.
    (4) A worker in training approved under Secs. 617.22 through 617.26, 
or approved by the State agency under State law, is excepted from the 
JSP qualifying requirement while the worker is attending and making 
satisfactory progress in the training. This exception applies whether 
training begins before or after entitlement to basic TRA commences, and 
also applies after training begins for a worker who is attending a JSP 
program. Exceptions to the JSP qualifying requirement must be documented 
in the worker's claim file by the State agency.
    (b) Approved JSPs. A job search program may be approved if:
    (1) The JSP is provided through the JTPA, the public employment 
service, or any other Federal or State funded program, and complies with 
paragraphs (w), (x), and (y) of Sec. 617.3.
    (2) The JSP is sponsored by a company or firm from which the worker 
has been separated, and complies with paragraphs (w), (x), and (y) of 
Sec. 617.3.
    (c) Determination of reasonably available. (1) Reasonably available 
means an existing approved JSP that is located in the worker's normal 
commuting area, as defined in Sec. 617.3, and has sufficient capacity to 
accommodate the worker.
    (2) When the State determines that a JSP is not reasonably available 
for a worker, the requirement is not a condition of qualifying for TRA 
for the weeks involved. When a determination is made with respect to a 
worker, the State agency must document its determination, and the weeks 
involved, in the worker's claim file, prior to making TRA payments to 
the worker.
    (3) The State agency may issue a blanket waiver of the JSP 
qualifying requirement for TRA for groups of workers, where deemed 
appropriate, when it is determined that there is no functioning JSP.
    (4) All determinations that a JSP is not reasonably available should 
extend only for that period of time that a JSP is not reasonably 
available, and the exception for workers in approved training should 
extend until the completion of training. If the State determines that a 
JSP is reasonably available at a later date, then the JSP qualifying 
requirement must be met for entitlement to basic TRA for weeks of 
unemployment beginning with the week in which JSP becomes reasonably 
available.
    (d) JSP allowances. Subsistence and transportation costs shall be 
approved for workers participating in JSPs when deemed appropriate and 
within available State funding levels. Costs incurred may not exceed 
those allowable for training under Secs. 617.27 and 617.28, if, and 
when, the State refers a worker to a JSP outside the normal commuting 
area.
    (e) Termination of requirement. The job search program requirement 
set out in this section shall not be a condition of entitlement to TRA 
for any week which begins after November 20, 1988.
[53 FR 32351, Aug. 24, 1988, as amended at 54 FR 22277, May 23, 1989; 59 
FR 939, Jan. 6, 1994]

[[Page 133]]



         Subpart G--Administration by Applicable State Agencies



Sec. 617.50  Determinations of entitlement; notices to individuals.

    (a) Determinations of initial applications for TRA or other TAA. The 
State Agency whose State law is the applicable State law under 
Sec. 617.16 shall upon the filing of an initial application for TRA or 
other TAA promptly determine the individual's entitlement to such TRA or 
other TAA under this part 617, and may accept for such purposes 
information and findings supplied by another State agency under this 
part 617.
    (b) Determinations of subsequent applications for TRA or other TAA. 
The State agency shall, upon the filing of an application for payment of 
TRA, or subsistence and transportation under Secs. 617.27 and 617.28, 
with respect to a week, promptly determine whether the individual is 
eligible for a payment of TRA, or subsistence and transportation, with 
respect to such week, and, if eligible, the amount of TRA, or 
subsistence and transportation, for which the individual is eligible. In 
addition, the State agency promptly shall, upon the filing of a 
subsequent application for job search allowances (where the total of 
previous job search allowances paid the individual was less than $600), 
determine whether the individual is eligible for job search allowances, 
and, if eligible, the amount of job search allowances for which the 
individual is eligible.
    (c) Redeterminations. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to a claim for UI under 
the applicable State law shall apply to determinations pertaining to all 
forms of TAA under this part 617.
    (d) Use of State law. In making determinations or redeterminations 
under this section, or in reviewing such determinations or 
redeterminations under Sec. 617.51, a State agency shall apply the 
regulations in this part 617. As to matters committed by this part 617 
to the applicable State law, a State agency, a hearing officer, or a 
State court shall apply the applicable State law and regulations 
thereunder, including procedural requirements of such State law or 
regulations, except so far as such State law or regulations are 
inconsistent with this part 617 or the purpose of this part 617: 
Provided, that, no provision of State law or regulations on good cause 
for waiver of any time limit, or for late filing of any claim, shall 
apply to any time limitation referred to or specified in this part 617, 
unless such State law or regulation is made applicable by a specific 
provision of this part 617.
    (e) Notices to individual. The State agency shall notify the 
individual in writing of any determination or redetermination as to 
entitlement to TAA. Each determination or redetermination shall inform 
the individual of the reason for the determination or redetermination 
and of the right to reconsideration or appeal in the same manner as 
determinations of entitlement to UI are subject to redetermination or 
appeal under the applicable State law.
    (f) Promptness. Full payment of TAA when due shall be made with the 
greatest promptness that is administratively feasible.
    (g) Procedure. Except where otherwise required by the Act or this 
part 617, the procedures for making and furnishing determinations and 
written notices of determinations to individuals, shall be consistent 
with the Secretary's ``Standard for Claim Determinations--Separation 
Information,'' Employment Security Manual, part V, sections 6010-6015 
(appendix B of this part).
[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 939, 943, Jan. 6, 1994]



Sec. 617.51  Appeals and hearings.

    (a) Applicable State law. A determination or redetermination under 
this part 617 shall be subject to review in the same manner and to the 
same extent as determinations and redeterminations under the applicable 
State law, and only in that manner and to that extent. Proceedings for 
review of a determination or redetermination may be consolidated or 
joined with proceedings for review of a determination or redetermination 
under the State law where convenient or necessary. Procedures as to the 
right of appeal and opportunity for fair hearing shall be consistent 
with sections 303(a) (1) and (3) of the

[[Page 134]]

Social Security Act (42 U.S.C. 503(a) (1) and (3)).
    (b) Appeals promptness. Appeals under paragraph (a) of this section 
shall be decided with a degree of promptness meeting the Secretary's 
``Standard on Appeals Promptness--Unemployment Compensation'' (part 650 
of this chapter). Any provisions of the applicable State law for 
advancement or priority of UI cases on judicial calendars, or otherwise 
intended to provide for prompt payment of UI when due, shall apply to 
proceedings involving entitlement to TAA under this part 617.



Sec. 617.52  Uniform interpretation and application.

    (a) First rule of construction. The Act and the implementing 
regulations in this part 617 shall be construed liberally so as to carry 
out the purpose of the Act.
    (b) Second rule of construction. The Act and the implementing 
regulations in this part 617 shall be construed so as to assure insofar 
as possible the uniform interpretation and application of the Act and 
this part 617 throughout the United States.
    (c) Effectuating purpose and rules of construction. (1) To 
effectuate the purpose of the Act and this part 617 and to assure 
uniform interpretation and application of the Act and this part 617 
throughout the United States, a State agency shall forward, not later 
than 10 days after issuance, to the Department a copy of any judicial or 
administrative decision ruling on an individual's entitlement to TAA 
under this part 617. On request of the Department, a State agency shall 
forward to the Department a copy of any determination or redetermination 
ruling on an individual's entitlement to TAA under this part 617.
    (2) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part 617, the Department may at any 
time notify the State agency of the Department's view. Thereafter, the 
State agency shall issue a redetermination or appeal if possible, and 
shall not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part 617, the Department may at any time notify the State 
agency of the Department's view. If the determination, redetermination, 
or decision in question denies TAA to an individual, the steps outlined 
in paragraph (c)(2) of this section shall be followed by the State 
agency. If the determination, redetermination, or decision in question 
awards TAA to an individual, the benefits are ``due'' within the meaning 
of section 303(a)(1) of the Social Security Act (42 U.S.C. 503(a)(1)), 
and therefore must be paid promptly to the individual. However, the 
State agency, shall take the steps outlined in paragraph (c)(2) of this 
section, and payments to the individual may be temporarily delayed if 
redetermination or appeal action is taken not more than one business day 
following the day on which the first payment otherwise would be issued 
to the individual; and the redetermination action is taken or appeal is 
filed to obtain a reversal of the award of TAA and a ruling consistent 
with the Department's view; and the redetermination action or appeal 
seeks an expedited redetermination or appeal within not more than two 
weeks after the redetermination action is taken or the appeal is filed. 
If redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding TAA or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the individual.

[[Page 135]]

    (4) (i) If any determination, redetermination, or decision, referred 
to in paragraph (c)(2) or paragraph (c)(3) of this section, is treated 
as a precedent for any future application for TAA, the Secretary will 
decide whether the Agreement with the State entered into under the Act 
and this part 617 shall be terminated and Sec. 617.59(f) applied.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part 617, including 
any determination, redetermination, or decision referred to in paragraph 
(c)(2) or paragraph (c)(3) of this section, the Secretary will decide 
whether the State shall be required to restore the funds of the United 
States for any sums paid under such a determination, redetermination, or 
decision, and whether, in the absence of such restoration, the Agreement 
with the State shall be terminated and Sec. 617.59(f) applied and 
whether other action shall be taken to recover such sums for the United 
States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (c)(2) or paragraph (c)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired. 
Such request shall be made to the Secretary and may include views and 
arguments on the matters to be decided by the Secretary under paragraph 
(c)(4) of this section.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.

(Approved by the Office of Management and Budget under control number 
1205-0222)



Sec. 617.53  Subpoenas.

    A State agency may issue subpoenas for attendance of witnesses and 
production of records on the same terms and conditions as under the 
State law. Compliance may be enforced on the same terms and conditions 
as under the State law, or, if a State court declines to enforce a 
subpoena issued under this section, the State agency may petition for an 
order requiring compliance with such subpoena to the United States 
District Court within the jurisdiction of which the relevant proceeding 
under this part 617 is conducted.



Sec. 617.54  State agency rulemaking.

    A State agency may establish supplemental procedures not 
inconsistent with the Act or this part 617 or procedures prescribed by 
the Department to further effective administration of this part 617. The 
exact text of such supplemental procedure or procedures, certified as 
accurate by a responsible official, employee, or counsel of the State 
agency, shall be submitted to the Department, on a form supplied by the 
Department. No supplemental procedure shall be effective unless and 
until approved by the Department. Approval may be granted on a temporary 
basis, not to exceed 90 days, in cases of administrative necessity. On 
reasonable notice to a State agency, approval of a supplemental 
procedure may be withdrawn at any time. If public notice and opportunity 
for hearing would be required under a State law for adoption of a 
similar or analogous procedure involving UI, such public notice and 
opportunity for hearing shall be afforded by the State agency as to the 
supplemental procedure.

(Approved by the Office of Management and Budget under control number 
1205-0222)



Sec. 617.55  Overpayments; penalties for fraud.

    (a) Determination and repayment. (1) If a State agency or a court of 
competent jurisdiction determines that any person or individual has 
received any payment under this part 617 to which the person or 
individual was not entitled, including a payment referred to in 
paragraph (b) or paragraph (c) of this section, such person or 
individual shall be liable to repay such amount to the State agency, and 
the State agency shall recover any such overpayment in accordance with 
the provisions of this part 617; except that the State agency may waive 
the recovery of any such overpayment if the State agency determines, in 
accordance with the guidelines prescribed in paragraph (a)(2) of this 
section, that:

[[Page 136]]

    (i) The payment was made without fault on the part of such person or 
individual; and
    (ii) Requiring such repayment would be contrary to equity and good 
conscience.
    (2)(i)(A) In determining whether fault exists for purposes of 
paragraph (a)(1)(i) of this section, the following factors shall be 
considered:
    (1) Whether a material statement or representation was made by the 
person or individual in connection with the application for TAA that 
resulted in the overpayment, and whether the person or individual knew 
or should have known that the statement or representation was 
inaccurate.
    (2) Whether the person or individual failed or caused another to 
fail to disclose a material fact, in connection with an application for 
TAA that resulted in the overpayment, and whether the person or 
individual knew or should have known that the fact was material.
    (3) Whether the person or individual knew or could have been 
expected to know, that the person or individual was not entitled to the 
TAA payment.
    (4) Whether, for any other reason, the overpayment resulted directly 
or indirectly, and partially or totally, from any act or omission of the 
person or individual or of which the person or individual had knowledge, 
and which was erroneous or inaccurate or otherwise wrong.
    (5) Whether there has been a determination of fraud under paragraph 
(b) of this section or section 243 of the Act.
    (B) An affirmative finding on any one of the factors in paragraphs 
(a)(2)(i)(A) of this section precludes waiver of overpayment recovery.
    (ii)(A) In determining whether equity and good conscience exists for 
purposes of paragraph (a)(1)(ii) of this section, the following factors 
shall be considered:
    (1) Whether the overpayment was the result of a decision on appeal, 
whether the State agency had given notice to the person or individual 
that the case has been appealed and that the person or individual may be 
required to repay the overpayment in the event of a reversal on appeal, 
and whether recovery of the overpayment will not cause extraordinary and 
lasting financial hardship to the person or individual.
    (2) Whether recovery of the overpayment will not cause extraordinary 
financial hardship to the person or individual, and there has been no 
affirmative finding under paragraph (a)(2)(ii)(A) of this section with 
respect to such person or individual and such overpayment.
    (B) An affirmative finding on either of the foregoing factors in 
paragraphs (a)(2)(ii)(A) of this section precludes waiver of overpayment 
recovery.
    (C)(1) For the purpose of paragraph (a)(2)(ii) of this section, an 
extraordinary financial hardship shall exist if recovery of the 
overpayment would result directly in the person's or individual's loss 
of or inability to obtain minimal necessities of food, medicine, and 
shelter for a substantial period of time; and an extraordinary and 
lasting financial hardship shall be extraordinary as described above and 
may be expected to endure for the foreseeable future.
    (2) In applying this test in the case of attempted recovery by 
repayment, a substantial period of time shall be 30 days, and the 
foreseeable future shall be at least three months. In applying this test 
in the case of proposed recoupment from other benefits, a substantial 
period of time and the foreseeable future shall be the longest potential 
period of benefit entitlement as seen at the time of the request for a 
waiver determination. In making these determinations, the State agency 
shall take into account all potential income of the person or individual 
and the person's or individual's firm, organization, or family and all 
cash resources available or potentially available to the person or 
individual and the person's or individual's firm, organization, or 
family in the time period being considered.
    (3) Determinations granting or denying waivers of overpayments shall 
be made only on request for a waiver determination. Such request shall 
be made on a form which shall be furnished to the person or individual 
by the State agency. Notices of determination of overpayments shall 
include an accurate description of the waiver provisions of paragraph 
(a) of this section, if the State agency has

[[Page 137]]

elected to allow waivers of TAA overpayments.
    (4) Each State shall have the option to establish a policy as to 
whether the waiver provisions of this section shall be applied to TAA 
overpayments. A State's decision on its policy shall not be controlled 
by whether it waives UI overpayments, but the State's decision shall be 
published for the information of the public and the Department.
    (5)(i) Unless an overpayment is otherwise recovered, or is waived 
under paragraph (a) of this section, the State agency shall recover the 
overpayment by deduction from any sums payable to such person or 
individual under:
    (A) This part 617;
    (B) Any Federal unemployment compensation law administered by the 
State agency; or
    (C) Any other Federal law administered by the State agency which 
provides for the payment of unemployment assistance or an allowance with 
respect to unemployment.
    (ii) In addition, a State agency may recover the overpayment from 
unemployment insurance payable to such person or individual under the 
State law.
    (b) Fraud. If a State agency or a court of competent jurisdiction 
finds that any person or individual:
    (1) Knowingly has made, or caused another to make, a false statement 
or representation of a material fact; or
    (2) Knowingly has failed, or caused another to fail, to disclose a 
material fact; and as a result of such false statement or 
representation, or of such nondisclosure, such individual has received 
any payment under this part 617 to which the person or individual was 
not entitled, such person or individual shall, in addition to any other 
penalty provided by law, be ineligible for any further payments under 
this part 617.
    (c) Training, job search and relocation allowances. (1) If an 
individual fails, with good cause, to complete training, a job search, 
or a relocation, any payment or portion of a payment made under this 
part 617 to such individual or any person that is not properly and 
necessarily expended in attempting to complete such training, job 
search, or relocation, shall constitute an overpayment.
    (2) If an individual fails, without good cause, to complete 
training, a job search, or a relocation, any payment made under this 
part 617 to such individual or any person shall constitute an 
overpayment.
    (3) Such overpayment shall be recovered or waived as provided in 
paragraph (a) of this section.
    (d) Final determination. Except for overpayments determined by a 
court of competent jurisdiction, no repayment may be required, and no 
deduction may be made, under this section until a determination under 
paragraph (a) of this section by the State agency has been made, notice 
of the determination and an opportunity for a fair hearing thereon has 
been given to the person or individual concerned, and the determination 
has become final.
    (e) Deposit. Any amount recovered by a State agency under this 
section shall be deposited into the Federal fund or account from which 
payment was made.
    (f) Procedural requirements. (1) The provisions of paragraphs (c), 
(e), and (g) of Sec. 617.50 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 617.51 shall apply to determinations and 
redeterminations made pursuant to this section.
    (g) Fraud detection and prevention. State procedures for the 
detection and prevention of fraudulent overpayments of TAA shall be, as 
a minimum, commensurate with the procedures adopted by the State with 
respect to State unemployment compensation and consistent with the 
Secretary's ``Standard for Fraud and Overpayment Detection,'' Employment 
Security Manual, Part V, sections 7510-7515 (Appendix C of this part).
    (h) Debts due the United States or Others. (1) Notwithstanding any 
provision of this part 617, TAA payable to a person or an individual 
under this part 617 shall be applied by the State agency for the 
recovery by offset of any debt due the United States from the person or 
individual.
    (2) TAA shall not be applied or used by the State agency in any 
manner for the payment of any debt of any person or individual to any 
State or any other

[[Page 138]]

entity or person, except that TRA payable to an individual shall be 
payable to someone other than the individual if required by State law 
and Federal law to satisfy the individual's obligation for child support 
or alimony.
    (i) Definition of person. For purposes of this section, a person 
includes any employer or other entity or organization as well as the 
officers and officials thereof who may bear individual responsibility.
[59 FR 939, Jan. 6, 1994, as amended at 59 FR 943, Jan. 6, 1994]



Sec. 617.56  Inviolate rights to TAA.

    Except as specifically provided in this part 617, the rights of 
individuals to TAA shall be protected in the same manner and to the same 
extent as the rights of persons to UI are protected under the applicable 
State law. Such measures shall include protection of applicants for TAA 
from waiver, release, assignment, pledge, encumbrance, levy, execution, 
attachment, and garnishment of their rights to TAA, except as provided 
in Sec. 617.55. In the same manner and to the same extent, individuals 
shall be protected from discrimination and obstruction in regard to 
seeking, applying for, and receiving any right to TAA.



Sec. 617.57  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Act as the Secretary requires 
and will make all such records available for inspection, examination and 
audit by such Federal officials as the Secretary may designate or as may 
be required by law. Such recordkeeping will be adequate to support the 
reporting of TAA activity on reporting form ETA 563 approved under OMB 
control number 1205-0016.
    (b) Disclosure of information. Information in records maintained by 
a State agency in administering the Act shall be kept confidential, and 
information in such records may be disclosed only in the same manner and 
to the same extent as information with respect to UI and the entitlement 
of individuals thereto may be disclosed under the applicable State law. 
Such information shall not, however, be disclosed to an employer or any 
other person except to the extent necessary to obtain information from 
the employer or other person for the purposes of this part 617. This 
provision on the confidentiality of information maintained in the 
administration of the Act shall not apply, however, to the Department or 
for the purposes of Sec. 617.55 or paragraph (a) of this section, or in 
the case of information, reports and studies required pursuant to 
Sec. 617.61, or where the result would be inconsistent with the Freedom 
of Information Act (5 U.S.C. 552), the Privacy Act of 1974 (5 U.S.C. 
552a), or regulations of the Department promulgated thereunder (see 29 
CFR parts 70 and 70a).



Sec. 617.58  Unemployment insurance.

    Unemployment insurance payable to an adversely affected worker shall 
not be denied or reduced for any week by reason of any right to a 
payment of TAA under the Act and this part 617.



Sec. 617.59  Agreements with State agencies.

    (a) Authority. Before performing any function or exercising any 
jurisdiction under the Act and this part 617, a State or State agency 
(as defined in Sec. 617.3(ii)) shall execute an Agreement with the 
Secretary meeting the requirements of the Act.
    (b) Execution. An Agreement under paragraph (a) of this section 
shall be signed on behalf of a State or State agency by an authorized 
official of the State or such State agency, and the signature shall be 
dated. The authority of the State or State agency official shall be 
certified by the Attorney General of the State or counsel for the State 
agency, unless the Agreement is signed by the Governor of the State. An 
agreement will be executed on behalf of the United States by the 
Secretary.
    (c) Public access to Agreements. The State agency will make 
available to any individual or organization an accurate copy of the 
Agreement with the Agency for inspection and copying. Copies of an 
Agreement may be furnished on request to any individual or organization 
upon payment of the same

[[Page 139]]

charges, if any, as apply to the furnishing of copies of other records 
of the State agency.
    (d) Amended Agreement. A State or State agency shall execute an 
amended Agreement with the Secretary prior to administering any 
amendments to the TAA provisions of the Trade Act of 1974.
    (e) Agent of United States. In making determinations, 
redeterminations, and in connection with proceedings for review thereof, 
a State or State agency which has executed an Agreement as provided in 
this section shall be an agent of the United States and shall carry out 
fully the purposes of the Act and this part 617.
    (f) Breach. If the Secretary finds that a State or State agency has 
not fulfilled its commitments under its Agreement under this section, 
section 3302(c)(3) of the Internal Revenue Code of 1986 shall apply. A 
State or State agency shall receive reasonable notice and opportunity 
for hearing before a finding is made under section 3302(c)(3) whether 
there has been a failure to fulfill the commitments under the Agreement.
    (g) Secretary's review of State agency compliance. The appropriate 
Regional Administrator shall be initially responsible for the periodic 
monitoring and reviewing of State and State agency compliance with the 
Agreement entered into under this section.
    (h) Program coordination. State agencies providing employment 
services, training and supplemental assistance under Subpart C of this 
part shall, in accordance with their Agreements under this section, 
coordinate such services and payments with programs and services 
provided by State Service Delivery Areas, Private Industry Councils, and 
substate grantees under the Job Training Partnership Act and with the 
State agency administering the State law.
    (i) Administration absent State Agreement. In any State in which no 
Agreement under this section is in force, the Secretary shall administer 
the Act and this part 617 and pay TAA hereunder through appropriate 
arrangements made by the Department, and for this purpose the Secretary 
or the Department shall be substituted for the State or cooperating 
State agency wherever appropriate in this part 617. Such arrangements 
shall include the requirement that TAA be administered in accordance 
with this part 617, and the provisions of the applicable State law 
except to the extent that such State law is inconsistent with any 
provision of this part 617 or section 303 of the Social Security Act (42 
U.S.C. 503) or section 3304(a) of the Internal Revenue Code of 1986 (26 
U.S.C. 3304(a)), and shall also include provision for a fair hearing for 
any individual whose application for TAA is denied. A final 
determination under paragraph (i) of this section as to entitlement to 
TAA shall be subject to review by the courts in the same manner and to 
the same extent as is provided by section 205(g) of the Social Security 
Act (42 U.S.C. 405(g)).
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32351, Aug. 24, 1988; 
59 FR 941, Jan. 6, 1994]



Sec. 617.60  Administration requirements. [Reserved]



Sec. 617.61  Information, reports, and studies.

    A State agency shall furnish to the Secretary such information and 
reports and conduct such studies as the Secretary determines are 
necessary or appropriate for carrying out the purposes of the Act and 
this part 617.



Sec. 617.62  Transitional procedures.

    The procedures for administering the Trade Act of 1974 before and 
after the amendments made by title XXV of the Omnibus Budget 
Reconciliation Act of 1981 (Pub. L. 97-35) are as follows:
    (a) TRA. The provisions contained in subpart B of this part 617 
shall apply with respect to the qualifying requirements for TRA for 
adversely affected workers who are separated on or after October 1, 
1981, and were not entitled to TRA for any week of unemployment 
beginning before October 1, 1981. In addition, such provisions shall 
apply to TRA payable for weeks of unemploymant beginning after September 
30, 1981, to adversely affected workers separated before October 1, 
1981. Any adversely affected worker entitled to TRA for any week of 
unemployment beginning before October 1,

[[Page 140]]

1981, shall be entitled to TRA as follows:
    (1) Weeks before October 1, 1981. For weeks of unemployment 
beginning before October 1, 1981, TRA eligibility shall be determined 
under the provisions of the law and regulations in effect before the 
amendments made by title XXV of the Omnibus Budget Reconciliation Act of 
1981 (Pub. L. 97-35).
    (2) Weeks after September 30, 1981. (i) Basic weeks (UI exhaustion). 
For any week of unemployment beginning after September 30, 1981, TRA 
eligibility for an individual who has exhausted all rights to UI prior 
to such week shall be determined under subpart B of this part 617, 
except that the maximum amount of basic TRA payable to the individual 
for any such week of unemployment shall be an amount equal to the 
product of the amount of TRA payable to the individual for a week of 
total unemployment (as determined under Sec. 617.13(a)) multiplied by a 
factor determined by subtracting from fifty-two the sum of:
    (A) The number of weeks preceding the first week which begins after 
September 30, 1981, including all weeks in the individual's first 
benefit period, and which are within the period covered by the same 
certification as such week of unemployment, for which the individual was 
entitled to a payment of TRA or UI (or would have been entitled to a 
payment of TRA or UI if the individual had applied therefor); plus
    (B) The number of weeks preceding such first week that are 
deductible under section 232(d) of the Trade Act of 1974 in effect 
before the amendments made by the Omnibus Budget Reconciliation Act of 
1981.
    (C) The amount of TRA payable to an individual under this paragraph 
(a)(2)(i) shall be subject to adjustment on a week-to-week basis as may 
be required by Sec. 617.13(b).
    (ii) Basic weeks UI entitlement. For any week of unemployment 
beginning after September 30, 1981, TRA eligibility for an individual 
who still has entitlement to UI shall be discontinued until the 
individual exhausts all rights to UI as provided in Sec. 6.17.11(a)(5). 
After exhaustion of all rights to UI, payment of TRA shall be determined 
under subpart B of this part 617, except that the maximum amount of 
basic TRA payable to the individual for ensuing weeks of unemployment 
shall be an amount equal to the remainder of:
    (A) The maximum amount of basic TRA as computed under paragraph 
(a)(2)(i) of this section; minus
    (B) The total sum of UI to which the individual was entitled (or 
would have been entitled if the individual had applied therefor) for 
weeks beginning after September 30, 1981.
    (iii) Additional weeks. With respect to any week of unemployment 
beginning after September 30, 1981, for an individual who is in training 
approved under section 236 of the Trade Act of 1974, and who was 
receiving TRA for basic or additional weeks beginning before October 1, 
1981, the weekly amount of TRA for any additional weeks beginning after 
September 30, 1981, shall be determined under subpart B of this part 
617.
    (3) Transitional eligibility period. (i) Basic weeks. Any individual 
who was eligible for a basic TRA payment for any week beginning before 
October 1, 1981, shall not be eligible for a basic TRA payment for any 
week beginning after September 30, 1981, and which begins more than 52 
weeks after the individual has exhausted all rights to regular 
compensation in the first benefit period (as provided in 
Sec. 617.15(a)).
    (ii) Additional weeks. Any individual who was eligible for a TRA 
payment for an additional week beginning before October 1, 1981, shall 
not be eligible for a TRA payment for any additional week beginning 
after September 30, 1981, unless such additional week begins wtthin:
    (A) 26 weeks after the last week of the individual's entitlement to 
basic TRA, or
    (B) 78 weeks after the individual exhausted regular compensation in 
the first benefit period, whichever occurs first (as provided in 
Sec. 617.15).
    (b) Training, other reemployment services, and allowances. (1) 
Applications for training filed before October 1, 1981, concerning the 
approval of such training after September 30, 1981, shall be determined 
under subpart C of this part 617.
    (2) Applications for transportation and subsistence payments while 
in training, and job search and relocation

[[Page 141]]

allowances filed after September 30, 1981, shall be determined under the 
applicable subpart C, D, or E of this part 617.
    (3) Individuals who have had self-financed training approved prior 
to October 1, 1981, shall not be reimbursed for training and related 
expenses incurred while in such training. However, such individuals may 
have their eligibility for approved training considered under the 
criteria outlined in the amended section 236 of the Act and in 
Sec. 617.22, and, if approved, shall be entitled to have post-approval 
training costs paid.
    (c) Fraud and recovery of overpayments. The fraud and overpayment 
recovery provisions of this subpart G shall take effect on August 13, 
1981, and shall apply to all overpayments outstanding on that date or 
determined on or after that date.
    (d) Required amendments to State law. The provisions of section 
2514(a)(2)(D) of the Omnibus Budget Reconciliation Act of 1981 (Pub. L. 
97-35) (relating to amendment of State laws) shall apply to State laws 
for the purposes of certifications under section 3304(c) of the Internal 
Revenue Code of 1984 on October 31 of any taxable year after 1981; 
except that, in any State in which the legislature of that State--
    (1) Does not meet in a session which begins after August 13, 1981, 
and before September 1, 1982, and
    (2) If in session on August 13, 1981, and does not remain in session 
for at least 25 calendar days thereafter, the date of ``1981'' in this 
paragraph (d) shall be deemed to be ``1982.''
[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32352, Aug. 24, 1988]



Sec. 617.63  Savings clause.

    The amendments to the Act made by title XXV of the Omnibus Budget 
Reconciliation Act of 1981 (Pub. L. 97-35) shall not abate or otherwise 
affect entitlement to TAA under the Trade Act of 1974 or any appeal 
which was pending on October 1, 1981, or on the date of enactment of any 
such amendment, as applicable, or prevent any appeal from any 
determination thereunder which did not become final prior to such 
applicable date if appeal or petition is filed within the time allowed 
for appeal or petition.



Sec. 617.64  Termination of TAA program benefits.

    The following rules are applicable to the termination of TAA 
benefits under the Act:
    (a) No application for TRA, or transportation or subsistence payment 
while in training approved under subpart C of this part 617, shall be 
approved, and no payment of TRA or payment for transportation or 
subsistence occurring on or before the termination date shall be made 
after the termination date specified in the Act, unless the claim for 
TRA or an invoice for transportation and subsistence is presented to the 
State agency and a final determination is made on the amount payable on 
or before the termination date in the Act.
    (b) No payment of job search or relocation allowances shall be made 
after the termination date specified in the Act, unless an application 
for such allowances was approved, such job search or relocation was 
completed, and a final determination made on the amount payable for such 
benefits by the State agency on or before the termination date in the 
Act.
    (c) No training under subpart C of this part shall be approved 
unless a determination regarding the approval of such training was made 
on or before the termination date in the Act, and such training 
commenced on or before such termination date. Consistent with the 
requirements of section 236(a)(1) of the Act, and the termination 
provisions of paragraph (c) of this section, a final determination must 
be made on the invoice for the training costs by the State agency on or 
before the termination date specified in the Act to cover tuition 
related expenses. Determinations on tuition bills shall be limited to 
the training term, quarter, semester or other period beginning on or 
before the termination date in the Act. The training period should be in 
accord with normal billing practices of the training provider and/or 
State agency approval practices.
[59 FR 941, Jan. 6, 1994]

[[Page 142]]



Sec. 617.65  Transition procedures for amendments in sections 2671 and 2672 of Pub. L. 98-369 (Deficit Reduction Act of 1984).

    The procedures for administering the Trade Act of 1974 as amended by 
the Deficit Reduction Act of 1984 are as follows:
    (a) TRA. (1) The provisions in subpart B of this part 617 shall 
apply to workers who would lose additional weeks of TRA payments because 
of delays in approving applications for training. Workers who filed 
timely, bona fide applications for training shall be eligible to receive 
additional weeks of TRA payments beginning the first week of training 
when their applications for training are approved on or after July 18, 
1984, and the first week of such training begins later than the first 
week which follows the last week of entitlement to basic TRA.
    (2) Workers whose applications for training were approved prior to 
July 18, 1984, are covered under the provisions of the Trade Act of 1974 
as in effect prior to July 18, 1984, and are not entitled to additional 
weeks of TRA by reason of the amendment in section 2671 of the Deficit 
Reduction Act of 1984 or Sec. 617.15(b) of this part.
    (b) Job Search Allowances. (1) The provisions in subpart D of this 
part 617 shall apply to timely applications for job search allowances 
that are approved on or after July 18, 1984.
    (2) Workers whose applications for job search allowances that were 
filed timely but were approved before July 18, 1984, in the aggregate 
authorized amount of $600, are covered under the provisions of the Trade 
Act of 1974 in effect prior to July 18, 1984, and are not entitled to 
receive the increase in the allowance level provided in section 2672(a) 
of the Deficit Reduction Act of 1984 and Sec. 617.34(b) of this part.
    (c) Relocation allowances. (1) The provisions in subpart E of this 
part 617 shall apply to timely applications for relocation allowances 
that are approved on or after July 18, 1984.
    (2) Workers whose applications for relocations allowances were filed 
timely but were approved before July 18, 1984, are covered under the 
provisions of the Trade Act of 1974 in effect prior to July 18, 1984, 
and are not entitled to receive the increase in the lump sum allowance 
level provided in section 2672(b) of the Deficit Reduction Act of 1984 
and Sec. 617.45(a)(3) of this part.
[51 FR 45870, Dec. 22, 1986]



Sec. 617.66  Transition procedures for amendments in sections 13002 through 13009 of Pub. L. 99-272 (the Consolidated Omnibus Budget Reconciliation Act of 
          1985).

    The procedures for administering the Trade Act of 1974 before and 
after the amendments made by the Pub. L. 99-272 are as follows:
    (a) Duration of TRA. The provisions contained in Sec. 617.15 
expanding the eligibility period for payment of basic TRA benefits from 
52 weeks to 104 weeks shall apply only to those claimants whose 
eligibility periods begin on or after April 7, 1986, or who have a 
previously established 52-week TRA eligibility period that ends on or 
after April 7, 1986. Workers with 52-week eligibility periods that end 
before April 7, 1986, will not have their eligibility periods extended 
to 104 weeks.
    (b) TRA payments--(1) Retroactive TRA payments. Retroactive claims 
of eligible workers may be approved for weeks of unemployment beginning 
with the first week after the week which includes December 18, 1985. 
Claims for weeks beginning before April 7, 1986 (or, if later, before 
claimants are notified of their potential entitlement and have filed 
claims for retroactive benefits) are not subject to the application of 
the Extended Benefits (EB) work test, nor to the State timely filing 
requirement. Claimants shall be subject to those requirements for weeks 
of unemployment beginning after the date eligible workers are notified 
of such requirements and have filed claims for such benefits.
    (2) Employer-authorized leave, disability leave and union service. 
The change to Sec. 617.11(a)(3) for crediting weeks of specified leave 
to qualify for TRA will apply only to initial claims for basic TRA filed 
with the State agency by eligible workers on or after April 7, 1986.
    (c) Job search program. The job search program requirement applies 
to workers certified under petitions for trade adjustment assistance 
filed with the Department on or after April 7, 1986.

[[Page 143]]

    (d) Training and other amendments. Other amendments in Pub. L. 99-
272 are effective on April 7, 1986, and apply to applications for TAA 
benefits approved on or after April 7, 1986.
    (e) Application of Gramm-Rudman. TRA payments to workers made under 
part 1 of chapter 2 of title II of the Trade Act of 1974 and this part 
shall be reduced by a percentage equal to the non-defense sequester 
percentage applied in the Sequestration Report (submitted under the 
Balanced Budget and Emergency Deficit Control Act of 1985 and dated 
January 21, 1986) of the Comptroller General of the United States for 
Fiscal Year 1986, for the period from March 1, 1986 to October 1, 1986.
[53 FR 32352, Aug. 24, 1988]



Sec. 617.67  Transition guidelines for the 1988 Amendments.

    The provisions of part 3 of subtitle D of title I of the Omnibus 
Trade and Competitiveness Act of 1988 (the ``OTCA''), Public Law 100-
418, approved on August 23, 1988, made material changes in the TAA 
Program for workers that are reflected in the amended regulations 
published with this new section on transition guidelines for the 1988 
Amendments. States and cooperating State agencies shall be guided by the 
following paragraphs of this section in the transition to the TAA 
Program as modified by the 1988 Amendments and reflected in the 
preceding provisions of this part 617, as well as in the interim 
operating instructions issued by the Department which are superseded by 
these regulations. The operating instructions in GAL 15-90, and the 
Changes thereto, shall continue in effect as guidance on the proper 
application of the 1988 Amendments except as modified in these final 
regulations. (GAL 15-90 is available from the Office of Trade Adjustment 
Assistance, U.S. Department of Labor, 200 Constitution Ave., NW., room 
C-4318, Washington, DC 20210.)
    (a) Oil and gas workers--prospective. Workers in firms or 
appropriate subdivisions of firms engaged in exploration or drilling for 
oil or natural gas are newly covered under the TAA Program by an 
amendment to section 222 of the Trade Act of 1974. This is a permanent 
change in the Act having prospective effect, and became effective on 
August 23, 1988. Oil and gas workers covered by a certification issued 
pursuant to section 223 of the Act and the regulations at 29 CFR part 90 
shall be entitled to basic and additional TRA and other TAA Program 
benefits on precisely the same terms and conditions as apply to other 
workers covered by other certifications and which are specifically set 
forth in this part 617.
    (b) Oil and gas workers--retroactive. Oil and gas workers referred 
to in paragraph (a) of this section, who were separated from adversely 
affected employment after September 30, 1985, are covered retroactively 
under section 1421(a)(1)(B) of the OTCA, if they are covered by a 
certification issued pursuant to section 223 of the Act which is in 
response to a petition filed in the Office of Trade Adjustment 
Assistance on or before November 18, 1988. Administration of TAA Program 
benefits to these workers shall be on precisely the same terms and 
conditions as apply to other workers covered by other certifications, 
except that the limitations of the impact date provision of section 
223(b) and the 60-day preclusion in section 231(a) may not be applied to 
these workers.
    (c) Benefit information to workers. (1) An amendment to section 225 
of the Act requires individualized and published notices to workers 
covered by certifications issued pursuant to section 223 of the Act. 
This amendment became effective as a requirement on September 22, 1988, 
and is applicable to all certifications issued on and after that date. 
Individualized notices and published notices shall contain the 
information specifically set forth in this part 617.
    (2) Section 239(f) of the Act requires cooperating State agencies to 
furnish four discrete items of information and advice to individuals 
about TAA Program benefits, commencing with such advice and information 
to every individual who applies for unemployment insurance under each 
State's unemployment compensation law. See Sec. 617.4(e). This amendment 
became effective on August 23, 1988. Information and advice required by 
section 239(f)

[[Page 144]]

shall be provided in accordance with this part 617.
    (d) Training and eligibility requirements for TRA. Effective on 
November 21, 1988, in general, enrollment and participation in, or 
completion of, a training program approved under subpart C is required 
as a condition of entitlement to basic TRA. Amendments to sections 
231(a)(5), 231(b), and 231(c) of the Act incorporate this new 
requirement, replacing the job search program requirement which remains 
in effect through November 20, 1988. Continuation of the job search 
program requirement through November 20, 1988, and installation of the 
training program requirement on and after November 21, 1988, is required 
of all applicants for basic TRA.
    (e) Eligibility period for basic TRA. (1) Effective on August 23, 
1988, and with respect to all decisions (i.e., all determinations, 
redeterminations, and decisions on appeals) issued on or after that 
date, the eligibility period for basic TRA is changed from the prior 
law. Prior to the OTCA amendments, section 233(a)(2) provided that the 
eligibility period for an individual was a fixed 104-week period that 
immediately followed the week with respect to which the individual first 
exhausted all rights to regular benefits after the individual's first 
qualifying separation. Under section 233(a)(2) the new eligibility 
period is movable, and is the 104-week period that immediately follows 
the week in which the worker's most recent total qualifying separation 
occurs under the same, single certification. Under the effective date 
provisions of the OTCA, section 233(a)(2) applies to all decisions 
(i.e., determinations, redeterminations, and decisions on appeals) 
issued on and after August 23, 1988. Further, the law to be applied in 
making any such decision is the law as in effect on the date such a 
decision is made. These interpretative rules apply in all cases, 
regardless of whether the total qualifying separation occurred before, 
on, or after August 23, 1988, except as noted in paragraph (e)(3) of 
this section.
    (2) The major significance of the change in section 233(a)(2) is 
that, effective for all decisions (i.e., determinations, 
redeterminations, and decisions on appeals) issued on or after August 
23, 1988, it applies to the ``most recent'' total qualifying separation. 
This means that, after the first qualifying separation before August 23, 
1988, or the first total qualifying separation on and after August 23, 
1988, with each subsequent total qualifying separation of an individual 
under the same certification the individual's eligibility period must be 
redetermined as the 104-week period that immediately follows the week in 
which such subsequent separation occurred.
    (3) Section 1430(g) of the OTCA requires that the new eligibility 
period not be applied with respect to any total qualifying separation 
occurring before August 23, 1988, if as a result of applying section 
233(a)(2) the individual would have an eligibility period with an 
earlier expiration date than the expiration date of the eligibility 
period established under the prior law and based on a first qualifying 
separation which occurred under the same certification before August 23, 
1988. Therefore, for decisions (i.e., determinations, redeterminations, 
and decisions on appeals) issued on or after August 23, 1988, for a 
worker who had a first qualifying separation under the same 
certification before August 23, 1988, it must be determined what the 
individual's eligibility period is based upon the prior law, and, if the 
individual also had a subsequent total qualifying separation, what the 
individual's eligibility period is based on the amended law. Only if the 
subsequent total qualifying separation occurred before August 23, 1988, 
and the expiration date of the new eligibility period ends on the same 
date or a later date than the expiration date of the old eligibility 
period may the new eligibility period be applied to the individual, and 
in that event it must be applied; if the new eligibility period would 
end on a date earlier than the ending date of the eligibility period 
based on the worker's first qualifying separation, section 1430(g) 
operates to preclude the application of amended section 233(a)(2).
    (4) Computation of the weekly and maximum amounts of basic TRA do 
not change under the 1988 Amendments in the OTCA. They must continue to 
be based upon the first benefit period

[[Page 145]]

which is related to the worker's first total or partial separation under 
the same certification regardless of whether such first separation 
occurs before, on, or after August 23, 1988. Upon the occurrence of a 
second or subsequent separation under the same certification which is a 
total qualifying separation under this part 617, the individual's 
eligibility period will be 104 weeks after the week of such second or 
subsequent (total qualifying) separation, but no change will be made in 
the weekly or maximum amounts of basic TRA as computed in relation to 
the first separation. Therefore, for any decision (i.e., determination, 
redetermination, or decision on appeal) issued on or after August 23, 
1988, whenever an individual files a new TRA claim it will be necessary 
to determine whether the individual's most recent separation was a total 
qualifying separation, and, if so, whether the individual had a prior 
partial or total separation within the certification period of the same 
certification which was a first qualifying separation. If such most 
recent (total qualifying) separation occurred before August 23, 1988, 
and was not the individual's first qualifying separation, then:
    (i) The eligibility period will be the 104 weeks beginning with the 
week following the week in which the most recent total qualifying 
separation occurred or 104 weeks after the first exhaustion of regular 
UI following the first qualifying separation, whichever is longer, and
    (ii) The individual's weekly amount of basic TRA, as computed under 
Sec. 617.13, and the individual's maximum amount of basic TRA, as 
computed under Sec. 617.14, are established or remain fixed as 
determined with respect to the individual's first benefit period 
following the first separation which is within the certification period 
of the certification covering the individual.
    (f) Eligibility period for additional TRA. One technical and one 
conforming change are made by the OTCA in section 233(a)(3) of the Act, 
but have no effect on the 26-week eligibility period for additional TRA 
as the statute has been interpreted and applied in the past. Therefore, 
the 26-week eligibility period begins with the first week of training if 
the training begins after exhaustion of basic TRA. Further, if the 
training begins before approval is obtained under this part 617, the 26-
week eligibility period begins with the week in which the determination 
of approval is issued, if there is any scheduled training session in 
that week after the date of the determination.
    (g) Eligibility for TRA during breaks in training. (1) Paragraph (f) 
of section 233 of the Act, added by the OTCA, provides for the payment, 
under specified conditions, of both basic and additional TRA during 
scheduled breaks in a training program, provided the conditions for such 
payments are met as expressed in this part 617. By making this provision 
applicable to basic TRA as well as additional TRA, paragraph (f) of 
section 233 of the Act changes the prior law for both. Previously, basic 
TRA was payable during training breaks, but additional TRA was payable 
solely with respect to weeks of training. Under new section 233(f), both 
basic and additional TRA are payable during training breaks, but only if 
the break does not exceed 14 days. Now, as under the prior law, weeks 
when TRA is not payable will still count against the eligibility periods 
for both basic and additional TRA, and in the case of additional TRA it 
will also count against the number of weeks payable.
    (2) Paragraph (f) of section 233 of the Act is effective with regard 
to all decisions (i.e., all determinations, redeterminations, and 
decisions on appeals) made on or after August 23, 1988, regardless of 
when the training was approved under section 236 of the Trade Act, or 
whether the training was approved or is approvable under section 236 as 
amended by the 1988 Amendments, or when the break in training began or 
ended. In making any decision involving paragraph (f) of section 233 of 
the Act, the law to be applied is the law as in effect on the date the 
decision is made.
    (h) Retroactive eligibility for TRA. (1) Effective on August 23, 
1988, section 1425(b) of the OTCA provides for an open-ended waiver of 
the time limit in section 233(a)(2) on the eligibility period for basic 
TRA, and the 210-day time limit in section 233(b) on filing a bona fide 
application for training in

[[Page 146]]

order to qualify for additional TRA. This waiver provision applies 
solely to workers who experienced a total qualifying separation in the 
period which began on August 13, 1981 and ended on April 7, 1986. Other 
conditions must be met that are specified in section 1425(b) and in this 
part 617.
    (2) Altogether, nine conditions must be met for workers to obtain 
TRA payments under this special provision. (See Sec. 617.11(a)(3).) 
Further, this special provision applies solely to weeks which begin 
after August 23, 1988; no retroactive payments may be made under this 
special provision. Finally, only the two specific time limitations are 
waived, and all other requirements of the prior and amended law apply, 
including the first separation rule (relating to computation of the 
weekly and maximum amounts of basic TRA payable), the 26-week 
eligibility period for additional TRA, and the break provision of 
section 233(f).
    (i) Training for adversely affected workers. Extensive amendments to 
section 236 are made in the OTCA which, except for some technical and 
conforming changes that take effect on November 21, 1988, all became 
effective on August 23, 1988. These changes must be effectuated in 
accordance with this part 617.
    (j) Agreements with States. Section 239 also was amended by the 
OTCA, to require new terms and conditions in the section 239 agreements. 
This requires new agreements to be executed between the States and the 
Secretary of Labor, and gives new emphasis to the contractual nature of 
the obligations entered into by the States to administer the TAA Program 
in strict accordance with the Act and the regulations and operating 
instructions issued by the Department.
    (k) Other. Other matters covered by the OTCA amendments, as well as 
the matters discussed in the preceding paragraphs of this section, 
shall, to the extent that the States may be involved in their 
implementation, be effectuated in strict accordance with the Act and the 
regulations and operating instructions issued by the Department, and as 
of the respective effective dates of the various provisions of the OTCA.
[59 FR 941, Jan. 6, 1994]

 Appendix A to Part 617--Standard for Claim Filing, Claimant Reporting, 
                  Job Finding, and Employment Services

         EMPLOYMENT SECURITY MANUAL (Part V, Sections 5000-5004)

                        5000-5099  Claims Filing

 5000  Standard for Claim Filing, Claimant Reporting, Job Finding, and 
                           Employment Services

    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for:
    ``Payment of unemployment compensation solely through public 
employment offices or such other agencies as the Secretary may 
approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax and section 
303(a)(5) of the Social Security Act require that a State law provide 
for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    B. Secretary's interpretation of federal law requirements.
    1. The Secretary interprets section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act to 
require that a State law provide for payment of unemployment 
compensation solely through public employment offices or claims offices 
administered by the State employment security agency if such agency 
provides for such coordination in the operations of its public 
employment offices and claims offices as will insure (a) the payment of 
benefits only to individuals who are unemployed and who are able to work 
and available for work, and (b) that individuals claiming unemployment 
compensation (claimants) are afforded such placement and other 
employment services as are necessary and appropriate to return them to 
suitable work as soon as possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for:
    a. Such contact by claimants with public employment offices or 
claims offices or both, (1) as will reasonably insure the payment of 
unemployment compensation only to individuals who are unemployed and who 
are able to work and available for work, and (2) that claimants are 
afforded such placement

[[Page 147]]

and other employment services as are necessary and appropriate to 
facilitate their return to suitable work as soon as possible; and
    b. Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such States law.

   5001  Claim Filing and Claimant Reporting Requirements Designed to 
                   Satisfy Secretary's Interpretation

    A. Claim filing--total or part-total unemployment
    1. Individuals claiming unemployment compensation for total or part-
total unemployment are required to file a claim weekly or biweekly, in 
person or by mail, at a public employment office or a claims office 
(these terms include offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person.
    a. His new claim with respect to a benefit year, or his continued 
claim for a waiting week or for his first compensable week of 
unemployment in such year; and
    b. Any other claim, when requested to do so by the claims personnel 
at the office at which he files his claim(s) because questions about his 
right to benefits are raised by circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirements; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances:
    a. He is located in an area requiring the expenditure of an 
unreasonable amount of time or money in traveling to the nearest 
facility established by the State agency for filing claims in person;
    b. Conditions make it impracticable for the agency to take claims in 
person;
    c. He has returned to full-time work on or before the scheduled date 
for his filing a claim, unless the agency makes provision for in-person 
filing at a time and place that does not interfere with his employment;
    d. The agency finds that he has good cause for failing to file a 
claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

   5002  Requirement for Job Finding, Placement, and Other Employment 
         Services Designed to Satisfy Secretary's Interpretation

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency:
    1. The claims personnel are required to give each claimant such 
necessary and appropriate assistance as they reasonably can in finding 
suitable work and at their discretion determine when more complete 
placement and employment services are necessary and appropriate for a 
claimant; and if they determine more complete services are necessary and 
appropriate, the claims personnel are to refer him to employment service 
personnel in the public employment office in which he has been filing 
claim(s), or, if he has been filing in a claims office, in the public 
employment office most accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.

[[Page 148]]

    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel required to so 
arrange and coordinate the contacts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) his failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

            5004  Evaluation of Alternative State Provisions

    If the State law provisions do not conform to the ``suggested State 
law requirements'' set forth in sections 5001 and 5002, but the State 
law contains alternative provisions, the Manpower Administrator, in 
collaboration with the State agency, will study the actual or 
anticipated affect of the alternative provisions. If the Manpower 
Administrator concludes that the alternative provisions satisfy the 
requirements of the Federal law as construed by the Secretary (see 
section 5000 B) he will so notify the State agency. If he does not so 
conclude, he will submit the matter to the Secretary. If the Secretary 
concludes that the alternative provisions satisfy such requirements, the 
State agency will be so notified. If the Secretary concludes that there 
is a question as to whether the alternative provisions satisfy such 
requirements, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.3.
[59 FR 943, Jan. 6, 1994]

 Appendix B to Part 617--Standard for Claim Determinations--Separation 
                               Information

    6010  Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. . . .
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as

[[Page 149]]

``cash benefits payable to individuals with respect to their 
unemployment.''
    6011  Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012  Criteria for Review of State Law Conformity with Federal 
Requirements:
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013  Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria:
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices:
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a

[[Page 150]]

change in the State law (or in the application thereof) affecting the 
reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraph 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
there is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wage is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits:
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application

[[Page 151]]

of the law, an explanation of the change shall be included.
    When claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions:
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2) (a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determinations.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination

[[Page 152]]

or in separate informational material referred to in the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ____ to ____ of the ____ (name of 
pamphlet or booklet) heretofore furnished to you.''
    6014  Separation Information Requirements Designed To Meet 
Department of Labor Criteria:
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker:
    1. Information required to be given. Employers are required to give 
their employees information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015  Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of the 
alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in

[[Page 153]]

section 6012, he will so notify the State agency. If the Administrator 
of the Bureau does not so conclude, he will submit the matter to the 
Secretary. If the Secretary concludes that the alternative provisions 
satisfy the criteria in section 6012, the State agency will be so 
notified. If the Secretary concludes that there is a question as to 
whether the alternative provisions satisfy the criteria, the State 
agency will be advised that unless the State law provisions are 
appropriately revised, a notice of hearing will be issued as required by 
the Code of Federal Regulations, title 20, Sec. 601.5.
[51 FR 45848, Dec. 22, 1986. Redesignated at 59 FR 943, Jan. 6, 1994]

  Appendix C to Part 617--Standard for Fraud and Overpayment Detection

    7510  Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation . . .''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    7511  The Secretary's Interpretation of Federal Law Requirements. 
The Secretary of Labor interprets the above sections to require that a 
State law include provision for such methods of administration as are, 
within reason, calculated (1) to detect benefits paid through error by 
the agency or through willful misrepresentation or error by the claimant 
or others, and (2) to deter claimants from obtaining benefits through 
willful misrepresentation.
    7513  Criteria for Review of State Conformity With Federal 
Requirements. In determining State conformity with the above 
requirements of the Internal Revenue Code and the Social Security Act, 
as interpreted by the Secretary of Labor, the following criteria will be 
applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explanation: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agent for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are comonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan 
of investigation based on a sample post-audit will be considered as 
partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated?

[[Page 154]]

    Explanation. To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants?
    Explanation. To meet this criterion, the State agency must issue 
adequate material of claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.
    *7515  Evaluation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative methods of administration. If the Bureau concludes that 
the alternative methods satisfy the criteria in section 7513, it will so 
notify the State agency. If the Bureau does not so conclude, it will 
submit to the Secretary the results of the study for his determination 
of whether the State's alternative methods of administration meet the 
criteria.
[51 FR 45848, Dec. 22, 1986. Redesignated at 59 FR 943, Jan. 6, 1994]



PART 618--621--[RESERVED]






PART 625--DISASTER UNEMPLOYMENT ASSISTANCE--Table of Contents




Sec.
625.1  Purpose; rules of construction.
625.2  Definitions.
625.3  Reemployment assistance.
625.4  Eligibility requirements for Disaster Unemployment Assistance.
625.5  Unemployment caused by a major disaster.
625.6  Weekly amount; jurisdictions; reductions.
625.7  Disaster Unemployment Assistance: Duration.
625.8  Applications for Disaster Unemployment Assistance.
625.9  Determinations of entitlement; notices to individual.
625.10  Appeal and review.
625.11  Provisions of State law applicable.
625.12  The applicable State for an individual.
625.13  Restrictions on entitlement; disqualification.
625.14  Overpayments; disqualification for fraud.
625.15  Inviolate rights to DUA.
625.16  Recordkeeping; disclosure of information.
625.17  Announcement of the beginning of a Disaster Assistance Period.
625.18  Public access to Agreements.
625.19  Information, reports and studies.
625.20  Saving clause.
625.30  Appeal Procedures for Guam, American Samoa, Commonwealth of the 
          Northern Mariana Islands, Federated States of Micronesia, 
          Republic of the Marshall Islands, and the Trust Territory of 
          the Pacific Islands.

Appendix A to Part 625--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 625--Standard for Claim Determinations--Separation 
          Information
Appendix C to Part 625--Standard for Fraud and Overpayment Detection

    Authority:  42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5189a(c); 42 
U.S.C. 5201(a); Executive Order 12673 of March 23, 1989 (54 FR 12571); 
delegation of authority from the Director of the Federal Emergency 
Management Agency to the Secretary of Labor, effective December 1, 1985 
(51 FR 4988); Secretary's Order No. 4-75 (40 FR 18515).

[[Page 155]]


    Source:  42 FR 46712, Sept. 16, 1977, unless otherwise noted.



Sec. 625.1  Purpose; rules of construction.

    (a) Purpose. Section 410 of ``The Robert T. Stafford Disaster Relief 
and Emergency Assistance Act'' amended the program for the payment of 
unemployment assistance to unemployed individuals whose unemployment is 
caused by a major disaster, and to provide reemployment assistance 
services to those individuals. The unemployment assistance provided for 
in section 410 of the Act is hereinafter referred to as Disaster 
Unemployment Assistance, or DUA. The regulations in this part are issued 
to implement sections 410 and 423 of the Act.
    (b) First rule of construction. Sections 410 and 423 of the Act and 
the implementing regulations in this part shall be construed liberally 
so as to carry out the purposes of the Act.
    (c) Second rule of construction. Sections 410 and 423 of the Act and 
the implementing regulations in this part shall be construed so as to 
assure insofar as possible the uniform interpretation and application of 
the Act throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor, on receipt of a 
request from the Department, a copy of any determination or 
redetermination ruling on an individual's entitlement to DUA.
    (2) If the Department believes a determination or redetermination is 
inconsistent with the Secretary's interpretation of the Act, the 
Department may at any time notify the State agency of the department's 
view. Thereafter, the State agency shall appeal if possible, and shall 
not follow such determination or redetermination as a precedent; and in 
any subsequent proceedings which involve such determination or 
redetermination, or wherein such determination or redetermination is 
cited as precedent or otherwise relied upon, the State agency shall 
inform the hearing officer of the Department's view and shall make all 
reasonable efforts to obtain modification, limitation, or overruling of 
the determination or redetermination.
    (3) A State agency may request reconsideration of a notice that a 
determination or redetermination is inconsistent with the Act, and shall 
be given an opportunity to present views and arguments if desired. If a 
determination or redetermination setting a precedent becomes final, 
which the Department believes to be inconsistent with the Act, the 
Secretary will decide whether the Agreement with the State shall be 
terminated.
    (4) Concurrence of the Department in a determination or 
redetermination shall not be presumed from the absence of a notice 
issued pursuant to this paragraph.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 554, Jan. 5, 1990]



Sec. 625.2  Definitions.

    For the purposes of the Act and this part:
    (a) Act means sections 410 and 423 of The Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (formerly section 407 of 
the ``Disaster Relief Act of 1974'', Pub. L. 93-288, 88 Stat. 143, 156, 
approved May 22, 1974), 42 U.S.C. 5177, 5189a, as amended by The 
Disaster Relief and Emergency Assistance Amendments of 1988, Pub. L. 
100-707, 102 Stat. 4689, 4704, 4705, approved November 23, 1988.
    (b) Agreement means the Agreement entered into pursuant to the Act, 
between a State and the Secretary of Labor of the United States, under 
which the State agency of the State agrees to make payments of Disaster 
Unemployment Assistance in accordance with the Act and the regulations 
and procedures thereunder prescribed by the Secretary.
    (c) Announcement date means the first day on which the State agency 
publicly announces the availability of Disaster Unemployment Assistance 
in the State, pursuant to Sec. 625.17.
    (d) Compensation means unemployment compensation as defined in 
section 85(b) of the Internal Revenue Code of 1986, and shall include 
any assistance or allowance payable to an individual with respect to 
such individual's unemployment under any State law or Federal 
unemployment compensation

[[Page 156]]

law unless such governmental unemployment compensation program payments 
are not considered ``compensation'' by ruling of the Internal Revenue 
Service or specific provision of Federal and/or State law because such 
payments are based on employee contributions which are not deductible 
from Federal income tax liability until the total nondeductible 
contributions paid by the employee to such program has been paid or are 
not ``compensation'' as defined under paragraph (d)(5) of this section. 
Governmental unemployment compensation programs include (but are not 
limited to) programs established under: a State law approved by the 
Secretary of Labor pursuant to section 3304 of the Internal Revenue 
Code, chapter 85 of title 5 of the United States Code, the Railroad 
Unemployment Insurance Act (45 U.S.C. 351 et seq.), any Federal 
supplementary compensation law, and trade readjustment allowances 
payable under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 
2271 et seq.). ``Compensation'' also includes ``regular compensation'', 
``additional compensation'', ``extended compensation'', ``Federal 
supplementary compensation'', and ``disability payments'' defined as 
follows:
    (1) Regular compensation means compensation payable to an individual 
under any State law or the unemployment compensation plan of a political 
subdivision of a State and, when so payable, includes compensation 
payable pursuant to 5 U.S.C. chapter 85 (parts 609 and 614 of this 
chapter), but not including extended compensation or additional 
compensation.
    (2) Additional compensation means compensation totally financed by a 
State and payable under a State law by reason of conditions of high 
unemployment or by reason of other special factors, and, when so 
payable, includes compensation payable pursuant to 5 U.S.C. chapter 85.
    (3) Extended compensation means compensation payable to an 
individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970 (title 
II, Pub. L. 91-373; 84 Stat. 695, 708; part 615 of this chapter), as 
amended with respect to the payment of extended compensation, and, when 
so payable, includes additional compensation and compensation payable 
pursuant to 5 U.S.C. chapter 85.
    (4) Federal supplementary compensation means supplemental 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Disability payments means cash disability payments made pursuant 
to a governmental program as a substitute for cash unemployment payments 
to an individual who is ineligible for such payments solely because of 
the disability, except for payments made under workmen's compensation 
acts for personal injuries or sickness.
    (e) Date the major disaster began means the date a major disaster 
first occurred, as specified in the understanding between the Federal 
Emergency Management Agency and the Governor of the State in which the 
major disaster occurred.
    (f) Disaster Assistance Period means the period beginning with the 
first week following the date the major disaster began, and ending with 
[the 26th week subsequent to the date the major disaster was declared.
    (g) Disaster Unemployment Assistance means the assistance payable to 
an individual eligible for the assistance under the Act and this part, 
and which is referred to as DUA.
    (h) Federal Coordinating Officer means the official appointed 
pursuant to section 302 of The Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, to operate in the affected major disaster 
area.
    (i) Governor means the chief executive of a State.
    (j) Initial application means the first application for DUA filed by 
an individual, on the basis of which the individual's eligibility for 
DUA is determined.
    (k) Major disaster means a major disaster as declared by the 
President pursuant to section 401 of The Robert T. Stafford Disaster 
Relief and Emergency Assistance Act.
    (l) Major disaster area means the area identified as eligible for 
Federal assistance by the Federal Emergency Management Agency, pursuant 
to a Presidential declaration of a major disaster.

[[Page 157]]

    (m) Secretary means the Secretary of Labor of the United States.
    (n) Self-employed individual means an individual whose primary 
reliance for income is on the performance of services in the 
individual's own business, or on the individual's own farm.
    (o) Self-employment means services performed as a self-employed 
individual.
    (p) State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the United States Virgin 
Islands, the Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands, and the Trust Territory of the Pacific Islands.
    (q) State agency means----
    (1) In all States except the Territory of Guam, American Samoa, 
Commonwealth of the Northern Mariana Islands, Federated States of 
Micronesia, Republic of the Marshall Islands and the Trust Territory of 
the Pacific Islands, the agency administering the State law; and
    (2) In the Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
agency designated in the Agreement entered into by the State.
    (r)(1) State law means, with respect to----
    (i) The States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands, the unemployment 
compensation law of the State which has been approved under section 
3304(a) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)); and
    (ii) The Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
Hawaii Employment Security Law.
    (2) Applicable State law means, for an individual, the State law of 
the applicable State for an individual as provided in Sec. 625.12.
    (s) Unemployed worker means an individual who was employed in or was 
to commence employment in the major disaster area at the time the major 
disaster began, and whose principal source of income and livelihood is 
dependent upon the individual's employment for wages, and whose 
unemployment is caused by a major disaster as provided in Sec. 625.5(a).
    (t) Unemployed self-employed individual means an individual who was 
self-employed in or was to commence self-employment in the major 
disaster area at the time the major disaster began, and whose principal 
source of income and livelihood is dependent upon the individual's 
performance of service in self-employment, and whose unemployment is 
caused by a major disaster as provided in Sec. 625.5(b).
    (u) Wages means remuneration for services performed for another, 
and, with respect to a self-employed individual, net income from 
services performed in self-employment.
    (v) Week means a week as defined in the applicable State law.
    (w) Week of unemployment means--
    (1) For an unemployed worker, any week during which the individual 
is totally, part-totally, or partially unemployed. A week of total 
unemployment is a week during which the individual performs no work and 
earns no wages, or has less than full-time work and earns wages not 
exceeding the minimum earnings allowance prescribed in the applicable 
State law. A week of part-total unemployment is a week of otherwise 
total unemployment during which the individual has odd jobs or 
subsidiary work and earns wages not exceeding the maximum earnings 
allowance prescribed in the applicable State law. A week of partial 
unemployment is a week during which the individual works less than 
regular, full-time hours for the individual's regular employer, as a 
direct result of the major disaster, and earns wages not exceeding the 
maximum earnings allowance prescribed by the applicable State law.
    (2) For an unemployed self-employed individual, any week during 
which the individual is totally, part-totally, or partially unemployed. 
A week of total unemployment is a week during which

[[Page 158]]

the individual performs no services in self-employment or in an 
employer-employee relationship, or performs services less than full-time 
and earns wages not exceeding the minimum earnings allowance prescribed 
in the applicable State law. A week of part-total unemployment is a week 
of otherwise total unemployment during which the individual has odd jobs 
or subsidiary work and earns wages not exceeding the maximum earnings 
allowance prescribed in the applicable State law. A week of partial 
unemployment is a week during which the individual performs less than 
the customary full-time services in self-employment, as a direct result 
of the major disaster, and earns wages not exceeding the maximum 
earnings allowance prescribed by the applicable State law, or during 
which the only activities or services performed are for the sole purpose 
of enabling the individual to resume self-employment.
    (3) If the week of unemployment for which an individual claims DUA 
is a week with respect to which the individual is reemployed in a 
suitable position or has commenced services in self-employment, that 
week shall be treated as a week of partial unemployment if the week 
qualifies as a week of partial unemployment as defined in this 
paragraph.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 554, Jan. 5, 1990; 56 
FR 22805, May 16, 1991]



Sec. 625.3  Reemployment assistance.

    (a) State assistance. Except as provided in paragraph (b) of this 
section, the applicable State shall provide, without reimbursement from 
any funds provided under the Act, reemployment assistance services under 
any other law administered by the State to individuals applying for DUA 
and all other individuals who are unemployed because of a major 
disaster. Such services shall include, but are not limited to, 
counseling, referrals to suitable work opportunities, and suitable 
training, to assist the individuals in obtaining reemployment in 
suitable positions as soon as possible.
    (b) Federal assistance. In the case of American Samoa, Commonwealth 
of the Northern Mariana Islands, Federated States of Micronesia, 
Republic of the Marshall Islands, and the Trust Territory of the Pacific 
Islands, the Department of Labor, in consultation with the Federal 
Emergency Management Agency, will determine what reemployment services 
are needed by DUA applicants, and if any available Federal programs of 
reemployment assistance services can be implemented in that 
jurisdiction.
[55 FR 554, Jan. 5, 1990; as amended at 56 FR 22806, May 16, 1991]



Sec. 625.4  Eligibility requirements for Disaster Unemployment Assistance.

    An individual shall be eligible to receive a payment of DUA with 
respect to a week of unemployment, in accordance with the provisions of 
the Act and this part if:
    (a) That week begins during a Disaster Assistance Period;
    (b) The applicable State for the individual has entered into an 
Agreement which is in effect with respect to that week;
    (c) The individual is an unemployed worker or an unemployed self-
employed individual;
    (d) The individual's unemployment with respect to that week is 
caused by a major disaster, as provided in Sec. 625.5;
    (e) The individual has filed a timely initial application for DUA 
and, as appropriate, a timely application for a payment of DUA with 
respect to that week;
    (f) That week is a week of unemployment for the individual;
    (g) The individual is able to work and available for work within the 
meaning of the applicable State law: Provided, That an individual shall 
be deemed to meet this requirement if any injury caused by the major 
disaster is the reason for inability to work or engage in self-
employment; or, in the case of an unemployed self-employed individual, 
the individual performs service or activities which are solely for the 
purpose of enabling the individual to resume self-employment;
    (h) The individual has not refused a bona fide offer of employment 
in a suitable position, or refused without good cause to resume or 
commence suitable self-employment, if the employment or self-employment 
could have been undertaken in that week or

[[Page 159]]

in any prior week in the Disaster Assistance Period; and
    (i) The individual is not eligible for compensation (as defined in 
Sec. 625.2(d)) or for waiting period credit for such week under any 
other Federal or State law, except that an individual determined 
ineligible because of the receipt of disqualifying income shall be 
considered eligible for such compensation or waiting period credit. An 
individual shall be considered ineligible for compensation or waiting 
period credit (and thus potentially eligible for DUA) if the individual 
is under a disqualification for a cause that occurred prior to the 
individual's unemployment due to the disaster, or for any other reason 
is ineligible for compensation or waiting period credit as a direct 
result of the major disaster.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990]



Sec. 625.5  Unemployment caused by a major disaster.

    (a) Unemployed worker. The unemployment of an unemployed worker is 
caused by a major disaster if--
    (1) The individual has a ``week of unemployment'' as defined in 
Sec. 625.2(w)(1) following the ``date the major disaster began'' as 
defined in Sec. 625.2(e), and such unemployment is a direct result of 
the major disaster; or
    (2) The individual is unable to reach the place of employment as a 
direct result of the major disaster; or
    (3) The individual was to commence employment and does not have a 
job or is unable to reach the job as a direct result of the major 
disaster; or
    (4) The individual has become the breadwinner or major support for a 
household because the head of the household has died as a direct result 
of the major disaster; or
    (5) The individual cannot work because of an injury caused as a 
direct result of the major disaster.
    (b) Unemployed self-employed individual. The unemployment of an 
unemployed self-employed individual is caused by a major disaster if--
    (1) The individual has a ``week of unemployment'' as defined in 
Sec. 625.2(w)(2) following the ``date the major disaster began'' as 
defined in Sec. 625.2(e), and such unemployment is a direct result of 
the major disaster; or
    (2) The individual is unable to reach the place where services as a 
self-employed individual are performed, as a direct result of the major 
disaster; or
    (3) The individual was to commence regular services as a self-
employed individual, but does not have a place or is unable to reach the 
place where the services as a self-employed individual were to be 
performed, as a direct result of the major disaster; or
    (4) The individual cannot perform services as a self-employed 
individual because of an injury caused as a direct result of the major 
disaster.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990; 56 
FR 22806, May 16, 1991]



Sec. 625.6  Weekly amount; jurisdictions; reductions.

    (a) In all States, except as provided in paragraphs (c) and (d) of 
this section, the amount of DUA payable to an unemployed worker or 
unemployed self-employed individual for a week of total unemployment 
shall be the weekly amount of compensation the individual would have 
been paid as regular compensation, as computed under the provisions of 
the applicable State law for a week of total unemployment. In no event 
shall such amount be in excess of the maximum amount of regular 
compensation authorized under the applicable State law for that week.
    (1) Except as provided in paragraph (a)(2) or (b) of this section, 
in computing an individual's weekly amount of DUA, qualifying employment 
and wage requirements and benefit formula of the applicable State law 
shall be applied; and for purposes of this section, employment, wages, 
and self-employment which are not covered by the applicable State law 
shall be treated in the same manner and with the same effect as covered 
employment and wages, but shall not include employment or self-
employment, or wages earned or paid for employment or self-employment, 
which is contrary to or prohibited by any Federal law, such as, but not 
limited to, section 3304(a)(14)(A) of the Federal Unemployment Tax Act 
(26 U.S.C. 3304(a)(14)(A)).

[[Page 160]]

    (2) For purposes of paragraph (a)(1) of this section, the base 
period to be utilized in computing the DUA weekly amount shall be the 
most recent tax year that has ended for the individual (whether an 
employee or self-employed) prior to the individual's unemployment that 
was a direct result of the major disaster. The self-employment income to 
be treated as wages for purposes of computing the weekly amount under 
this paragraph (a) shall be the net income reported on the tax return of 
the individual as income from all self-employment that was dependent 
upon the performance of services by the individual. If an individual has 
not filed a tax return for the most recent tax year that has ended at 
the time of such individual's initial application for DUA, such 
individual shall have a weekly amount determined in accordance with 
paragraph (e)(3) of this section.
    (3) As of the date of filing an initial application for DUA, family 
members over the age of majority, as defined under the statutes of the 
applicable State, who were customarily or routinely employed or self-
employed as a family unit or in the same self-employment business prior 
to the individuals' unemployment that was a direct result of the major 
disaster, shall have the wages from such employment or net income from 
the self-employment allocated equally among such adult family members 
for purposes of computing a weekly amount under this paragraph (a), 
unless the documentation to substantiate employment or self-employment 
and wages earned or paid for such employment or self-employment 
submitted as required by paragraph (e) of this section supports a 
different allocation. Family members under the age of majority as of the 
date of filing an initial application for DUA shall have a weekly amount 
computed under this paragraph (a) based on the actual wages earned or 
paid for employment or self-employment rather than an equal allocation.
    (b) If the weekly amount computed under paragraph (a) of this 
section is less than 50 percent of the average weekly payment of regular 
compensation in the State, as provided quarterly by the Department, or, 
if the individual has insufficient wages from employment or insufficient 
or no net income from self-employment (which includes individuals 
falling within paragraphs (a)(3) and (b)(3) of Sec. 625.5) in the 
applicable base period to compute a weekly amount under paragraph (a) of 
this section, the individual shall be determined entitled to a weekly 
amount equal to 50 percent of the average weekly payment of regular 
compensation in the State.
    (1) If an individual was customarily or routinely employed or self-
employed less than full-time prior to the individual's unemployment as a 
direct result of the major disaster, such individual's weekly amount 
under this paragraph (b)(1) shall be determined by calculating the 
percent of time the individual was employed or self-employed compared to 
the customary and usual hours per week that would constitute the average 
per week hours for year-round full-time employment or self-employment 
for the occupation, then applying the percentage to the determined 50 
percent of the average weekly amount of regular compensation paid in the 
State. The State agency shall utilize information furnished by the 
applicant at the time of filing an initial application for DUA and any 
labor market or occupational information available within the State 
agency to determine the average per week hours for full-time employment 
or self-employment for the occupation. If the weekly amount computed for 
an individual under this paragraph (b)(1) is less than the weekly amount 
computed under paragraph (a) of this section for the individual, the 
individual shall be entitled to the higher weekly amount.
    (2) The weekly amount so determined under paragraph (b)(1) of this 
section, if not an even dollar amount, shall be rounded in accordance 
with the applicable State law.
    (c) In the Territory of Guam and the Commonwealth of the Northern 
Mariana Islands, the amount of DUA payable to an unemployed worker or 
unemployed self-employed individual for a week of total unemployment 
shall be the average of the payments of regular compensation made under 
all State laws referred to in Sec. 625.2(r)(1)(i) for weeks of total 
unemployment in the

[[Page 161]]

first four of the last five completed calendar quarters immediately 
preceding the quarter in which the major disaster began. The weekly 
amount so determined, if not an even dollar amount, shall be rounded to 
the next higher dollar.
    (d) In American Samoa, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
amount of DUA payable to an unemployed worker or unemployed self-
employed individual for a week of total unemployment shall be the amount 
agreed upon by the Regional Administrator, Employment and Training 
Administration, for Region IX (San Francisco), and the Federal 
Coordinating Officer, which shall approximate 50 percent of the area-
wide average of the weekly wages paid to individuals in the major 
disaster area in the quarter immediately preceding the quarter in which 
the major disaster began. The weekly amount so determined, if not an 
even dollar amount, shall be rounded to the next higher dollar.
    (e) The State agency shall immediately determine, upon the filing of 
an initial application for DUA, a weekly amount under the provisions of 
paragraphs (a) through (d) of this section, as the case may be, based on 
the individual's statement of employment or self-employment preceding 
the individual's unemployment that was a direct result of the major 
disaster, and wages earned or paid for such employment or self-
employment. An immediate determination of a weekly amount shall also be 
made where, in conjunction with the filing of an initial application for 
DUA, the individual submits documentation substantiating employment or 
self-employment and wages earned or paid for such employment or self-
employment, or, in the absence of documentation, where any State agency 
records of employment or self-employment and wages earned or paid for 
such employment or self-employment, justify the determination of a 
weekly amount. An immediate determination shall also be made based on 
the individual's statement or in conjunction with the submittal of 
documentation in those cases where the individual was to commence 
employment or self-employment on or after the date the major disaster 
began but was prevented from doing so as a direct result of the 
disaster.
    (1) In the case of a weekly amount determined in accordance with 
paragraph (e) of this section, based only on the individual's statement 
of earnings, the individual shall furnish documentation to substantiate 
the employment or self-employment or wages earned from or paid for such 
employment or self-employment or documentation to support that the 
individual was to commence employment or self-employment on or after the 
date the major disaster began. In either case, documentation shall be 
submitted within 21 calendar days of the filing of the initial 
application for DUA.
    (2) Any individual who fails to submit documentation to substantiate 
employment or self-employment or the planned commencement of employment 
or self-employment in accordance with paragraph (e)(1) of this section, 
shall be determined ineligible for the payment of DUA for any week of 
unemployment due to the disaster. Any weeks for which DUA was already 
paid on the application prior to the date of the determination of 
ineligibility under this paragraph (e)(2) are overpaid and a 
determination shall be issued in accordance with Sec. 625.14(a). In 
addition, the State agency shall consider whether the individual is 
subject to a disqualification for fraud in accordance with the 
provisions set forth in Sec. 625.14(i).
    (3) For purposes of a computation of a weekly amount under paragraph 
(a) of this section, if an individual submits documentation to 
substantiate employment or self-employment in accordance with paragraph 
(e)(1), but not documentation of wages earned or paid during the base 
period set forth in paragraph (a)(2) of this section, including those 
cases where the individual has not filed a tax return for the most 
recent tax year that has ended, the State agency shall immediately 
redetermine the weekly amount of DUA payable to the individual in 
accordance with paragraph (b) of this section.
    (4) Any individual determined eligible for a weekly amount of DUA 
under the provisions of paragraph (e)(3) of

[[Page 162]]

this section may submit necessary documentation to substantiate wages 
earned or paid during the base period set forth in paragraph (a)(2) of 
this section, including those cases where the individual has not filed a 
tax return for the most recent tax year that has ended, at any time 
prior to the end of the disaster assistance period. A redetermination of 
the weekly amount payable, as previously determined under paragraph (b) 
of this section, shall immediately be made if the wages earned or paid 
for services performed in employment or self-employment reflected in 
such documentation is sufficient to permit a computation under paragraph 
(a) of this section of a weekly amount higher than was determined under 
paragraph (b) of this section. Any higher amount so determined shall be 
applicable to all weeks during the disaster assistance period for which 
the individual was eligible for the payment of DUA.
    (f)(1) The weekly amount of DUA payable to an unemployed worker or 
unemployed self-employed individual for a week of partial or part-total 
unemployment shall be the weekly amount determined under paragraph (a), 
(b), (c) or (d) of this section, as the case may be, reduced (but not 
below zero) by the amount of wages that the individual earned in that 
week as determined by applying to such wages the earnings allowance for 
partial or part-total employment prescribed by the applicable State law.
    (2) The weekly amount of DUA payable to an unemployed self-employed 
individual for a week of unemployment shall be the weekly amount 
determined under paragraph (a), (b), (c) or (d) of this section, as the 
case may be, reduced (but not below zero) by the full amount of any 
income received during the week for the performance of services in self-
employment, regardless of whether or not any services were performed 
during the week, by applying the earnings allowance as set forth in 
paragraph (f)(1) of this section. Notwithstanding the definition of 
``wages'' for a self-employed individual under Sec. 625.2(u), the term 
``any income'' for purposes of this paragraph (f)(2) means gross income.
[60 FR 25568, May 11, 1995]



Sec. 625.7  Disaster Unemployment Assistance: Duration.

    DUA shall be payable to an eligible unemployed worker or eligible 
unemployed self-employed individual for all weeks of unemployment which 
begin during a Disaster Assistance Period.



Sec. 625.8  Applications for Disaster Unemployment Assistance.

    (a) Initial application. An initial application for DUA shall be 
filed by an individual with the State agency of the applicable State 
within 30 days after the announcement date of the major disaster as the 
result of which the individual became unemployed, and on a form 
prescribed by the Secretary which shall be furnished to the individual 
by the State agency. An initial application filed later than 30 days 
after the announcement date of the major disaster shall be accepted as 
timely by the State agency if the applicant had good cause for the late 
filing, but in no event shall an initial application be accepted by the 
State agency if it is filed after the expiration of the Disaster 
Assistance Period. If the 30th day falls on a Saturday, Sunday, or a 
legal holiday in the major disaster area, the 30-day time limit shall be 
extended to the next business day.
    (b) Weekly applications. Applications for DUA for weeks of 
unemployment shall be filed with respect to the individual's applicable 
State at the times and in the manner as claims for regular compensation 
are filed under the applicable State law, and on forms prescribed by the 
Secretary which shall be furnished to the individual by the State 
agency.
    (c) Filing in person. (1) Except as provided in paragraph (c)(2) of 
this section, all applications for DUA, including initial applications, 
shall be filed in person.
    (2) Whenever an individual has good cause for not filing any 
application for DUA in person, the application shall be filed at such 
time, in such place, and in such a manner as directed by the State 
agency and in accordance with this part and procedures prescribed by the 
Secretary.

[[Page 163]]

    (d) IBPP. The ``Interstate Benefit Payment Plan'' shall apply, where 
appropriate, to an individual filing applications for DUA.
    (e) Wage combining. The ``Interstate Arrangement for Combining 
Employment and Wages'' (part 616 of this chapter) shall apply, where 
appropriate, to an individual filing applications for DUA: Provided, 
That the ``Paying State'' shall be the applicable State for the 
individual as prescribed in Sec. 625.12.
    (f) Procedural requirements. (1) The procedures for reporting and 
filing applications for DUA shall be consistent with this part, and with 
the Secretary's ``Standard for Claim Filing, Claimant Reporting, Job 
Finding and Employment Services,'' Employment Security Manual. Part V, 
sections 5000 et seq. (appendix A of this part), insofar as such 
standard is not inconsistent with this part.
    (2) The provisions of the applicable State law which apply hereunder 
to applications for and the payment of DUA shall be applied consistent 
with the requirements of title III of the Social Security Act and the 
Federal Unemployment Tax Act which are pertinent in the case of regular 
compensation, including but not limited to those standards and 
requirements specifically referred to in the provisions of this part.

(Approved by the Office of Management and Budget under control number 
1205-0051)


(Pub. L. No. 96-511)
[42 FR 46712, Sept. 16, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
55 FR 555, Jan. 5, 1990]



Sec. 625.9  Determinations of entitlement; notices to individual.

    (a) Determination of initial application. (1) The State agency shall 
promptly, upon the filing of an initial application for DUA, determine 
whether the individual is eligible, and if the individual is found to be 
eligible, the weekly amount of DUA payable to the individual and the 
period during which DUA is payable.
    (2) An individual's eligibility for DUA shall be determined, where a 
reliable record of employment, self-employment and wages is not 
obtainable, on the basis of an affidavit submitted to the State agency 
by the individual, and on a form prescribed by the Secretary which shall 
be furnished to the individual by the State agency.
    (b) Determinations of weekly applications. The State agency shall 
promptly, upon the filing of an application for a payment of DUA with 
respect to a week of unemployment, determine whether the individual is 
entitled to a payment of DUA with respect to that week, and, if 
entitled, the amount of DUA to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to regular compensation 
under the applicable State law shall apply to determinations pertaining 
to DUA.
    (d) Notices to individual. The State agency shall give notice in 
writing to the individual, by the most expeditious method, of any 
determination or redetermination of an initial application, and of any 
determination of an application for DUA with respect to a week of 
unemployment which denies DUA or reduces the weekly amount initially 
determined to be payable, and of any redetermination of an application 
for DUA with respect to a week of unemployment. Each notice of 
determination or redetermination shall include such information 
regarding the determination or redetermination and notice of right to 
reconsideration or appeal, or both, as is furnished with written notices 
of determination and written notices of redeterminations with respect to 
claims for regular compensation.
    (e) Promptness. Full payment of DUA when due shall be made with the 
greatest promptness that is administratively feasible.
    (f) Secretary's Standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for DUA, 
shall be consistent with this part and with the Secretary's ``Standard 
for Claim Determinations--Separation Information,'' Employment Security 
Manual. Part V,

[[Page 164]]

sections 6010 et seq. (Appendix B of this part).

(Approved by the Office of Management and Budget under control number 
1205-0051)


(Pub. L. No. 96-511)
[42 FR 46712, Sept. 16, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
55 FR 555, Jan. 5, 1990]



Sec. 625.10  Appeal and review.

    (a) States of the United States. (1) Any determination or 
redetermination made pursuant to Sec. 625.9, by the State agency of a 
State (other than the State agency of the Territory of Guam, American 
Samoa, Commonwealth of the Northern Mariana Islands, Federated States of 
Micronesia, Republic of the Marshall Islands, or the Trust Territory of 
the Pacific Islands) may be appealed by the applicant in accordance with 
the applicable State law to the first-stage administrative appellate 
authority in the same manner and to the same extent as a determination 
or redetermination of a right to regular compensation may be appealed 
under the applicable State law, except that the period for appealing 
shall be 60 days from the date the determination or redetermination is 
issued or mailed instead of the appeal period provided for in the 
applicable State law. Any decision on a DUA first-stage appeal must be 
made and issued within 30 days after receipt of the appeal by the State.
    (2) Notice of the decision on appeal, and the reasons therefor, 
shall be given to the individual by delivering the notice to such 
individual personally or by mailing it to the individual's last known 
address, whichever is most expeditious. The decision shall contain 
information as to the individual's right to review of the decision by 
the appropriate Regional Administrator, Employment and Training 
Administration, if requested within 15 days after the decision was 
mailed or delivered in person to the individual. The notice will include 
the manner of requesting such review, and the complete address of the 
Regional Administrator. Notice of the decision on appeal shall be given 
also to the State agency (with the same notice of right to review) and 
to the appropriate Regional Administrator.
    (b) Guam, American Samoa, and the Trust Territory of the Pacific 
Islands. (1) In the case of an appeal by an individual from a 
determination or redetermination by the State agency of the Territory of 
Guam, American Samoa, Commonwealth of the Northern Mariana Islands, 
Federated States of Micronesia, Republic of the Marshall Islands, or the 
Trust Territory of the Pacific Islands, the individual shall be entitled 
to a hearing and decision in accordance with Sec. 625.30 of this part.
    (2) Notice of the referee's decision, and the reasons therefor, 
shall be given to the individual by delivering the notice to the 
individual personally or by mailing it to the individual's last known 
address, whichever is most expeditious. The notice of decision shall 
contain information as to the individual's right to review of the 
decision by the Regional Administrator, Employment and Training 
Administration, for Region IX (San Francisco), and the manner of 
obtaining such review, including the address of the Regional 
Administrator. Notice of the decision on appeal shall be given also to 
the State agency and to the Regional Administrator.
    (c) Review by Regional Administrator. (1) The appropriate Regional 
Administrator, Employment and Training Administration, upon request for 
review by an applicant or the State agency shall, or upon the Regional 
Administrator's own motion may, review a decision on appeal issued 
pursuant to paragraph (a) or (b) of this section.
    (2) Any request for review by an applicant or a State agency shall 
be filed, and any review on the Regional Administrator's own motion 
shall be undertaken, within 15 days after notice of the decision on 
appeal was delivered or mailed to the individual.
    (3)(i) A request for review by an individual may be filed with the 
appropriate State agency, which shall forward the request to the 
appropriate Regional Administrator, Employment and Training 
Administration, or may be filed directly with the appropriate Regional 
Administrator.
    (ii) A request for review by a State agency shall be filed with the 
appropriate Regional Administrator, and a copy shall be served on the 
individual

[[Page 165]]

by delivery to the individual personally or by mail to the individual's 
last known address.
    (iii) When a Regional Administrator undertakes a review of a 
decision on the Regional Administrator's own motion, notice thereof 
shall be served promptly on the individual and the State agency.
    (iv) Whenever review by a Regional Administrator is undertaken 
pursuant to an appeal or on the Regional Administrator's own motion, the 
State agency shall promptly forward to the Regional Administrator the 
entire record of the case.
    (v) Where service on the individual is required by paragraph 
(c)(3)(ii) of this section, adequate proof of service shall be furnished 
for the record before the Regional Administrator, and be a condition of 
the Regional Administrator undertaking review pursuant to this 
paragraph.
    (4) The decision of the Regional Administrator on review shall be 
rendered promptly, and not later than the earlier of--
    (i) 45 days after the appeal is received or is undertaken by the 
Regional Administrator, or
    (ii) 90 days from the date the individual's appeal from the 
determination or redetermination was received by the State agency.
    (5) Notice of the Regional Administrator's decision shall be mailed 
promptly to the last known address of the individual, to the State 
agency of the applicable State, and to the Director, Unemployment 
Insurance Service. The decision of the Regional Administrator shall be 
the final decision under the Act and this part, unless there is further 
review by the Assistant Secretary as provided in paragraph (d) of this 
section.
    (d) Further review by the Assistant Secretary. (1) The Assistant 
Secretary for Employment and Training on his own motion may review any 
decision by a Regional Administrator issued pursuant to paragraph (c) of 
this section.
    (2) Notice of a motion for review by the Assistant Secretary shall 
be given to the applicant, the State agency of the applicable State, the 
appropriate Regional Administrator, and the Director, Unemployment 
Insurance Service.
    (3) When the Regional Administrator and the State agency are 
notified of the Assistant Secretary's motion for review, they shall 
forward all records in the case to the Assistant Secretary.
    (4) Review by the Assistant Secretary shall be solely on the record 
in the case, any other written contentions or evidence requested by the 
Assistant Secretary, and any further evidence or arguments offered by 
the individual, the State agency, the Regional Administrator, or the 
Director, Unemployment Insurance Service, which are mailed to the 
Assistant Secretary within 15 days after mailing the notice of motion 
for review.
    (5) Upon review of a case under this paragraph, the Assistant 
Secretary may affirm, modify, or reverse the decision of the Regional 
Administrator, and may remand the case for further proceedings and 
decision in accordance with the Assistant Secretary's decision.
    (6) The decision of the Assistant Secretary shall be made promptly, 
and notice thereof shall be sent to the applicant, the State agency, the 
Regional Administrator, and the Director, Unemployment Insurance 
Service.
    (7) The decision of the Assistant Secretary shall be final and 
conclusive, and binding on all interested parties, and shall be a 
precedent applicable throughout the States.
    (e) Procedural requirements. (1) All decisions on first-stage 
appeals from determinations or redeterminations by the State agencies 
must be made within 30 days of the appeal; therefore, the Secretary's 
``Standard for Appeals Promptness-Unemployment Compensation'' in part 
650 of this chapter shall not apply to the DUA program.
    (2) The provisions on right of appeal and opportunity for hearing 
and review with respect to applications for DUA shall be consistent with 
this part and with sections 303(a)(1) and 303(a)(3) of the Social 
Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (3) Any petition or other matter required to be filed within a time 
limit under this section shall be deemed to be filed at the time it is 
delivered to an appropriate office, or at the time of the postmark if it 
is mailed via the United

[[Page 166]]

States Postal Service to an appropriate office.
    (4) If any limited time period specified in this section ends on a 
Saturday, Sunday, or a legal holiday in the major disaster area, the 
time limit shall be extended to the next business day.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990; 56 
FR 22805, May 16, 1991]



Sec. 625.11  Provisons of State law applicable.

    The terms and conditions of the State law of the applicable State 
for an individual, which apply to claims for, and the payment of regular 
compensation, shall apply to applications for, and the payment of, DUA 
to each such individual, only as specifically set forth in the 
provisions of this part.



Sec. 625.12  The applicable State for an individual.

    (a) Applicable State. The applicable State for an individual shall 
be that State in which the individual's unemployment is the result of a 
major disaster.
    (b) Limitation. DUA is payable to an individual only by an 
applicable State as determined pursuant to paragraph (a) of this 
section, and--
    (1) Only pursuant to an Agreement entered into pursuant to the Act 
and this part, and with respect to weeks in which the Agreement is in 
effect; and
    (2) Only with respect to weeks of unemployment that begin during a 
Disaster Assistance Period.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec. 625.13  Restrictions on entitlement; disqualification.

    (a) Income reductions. The amount of DUA payable to an individual 
for a week of unemployment, as computed pursuant to Sec. 625.6, shall be 
reduced by the amount of any of the following that an individual has 
received for the week or would receive for the week if the individual 
filed a claim or application therefor and took all procedural steps 
necessary under the appropriate law, contract, or policy to receive such 
payment:
    (1) Any benefits or insurance proceed from any source not defined as 
``compensation'' under Sec. 625.2(d) for loss of wages due to illness or 
disability;
    (2) A supplemental unemployment benefit pursuant to a collective 
bargaining agreement.
    (3) Private income protection insurance;
    (4) Any workers' compensation by virtue of the death of the head of 
the household as the result of the major disaster in the major disaster 
area, prorated by weeks, if the individual has become the head of the 
household and is seeking suitable work because the head of the household 
died as the result of the major disaster in the major disaster area; and
    (5) The prorated amount of a retirement pension or annuity under a 
public or private retirement plan or system, prorated, where necessary, 
by weeks, but only if, and to the extent that, such amount would be 
deducted from regular compensation payable under the applicable State 
law.
    (6) The prorated amount of primary benefits under title II of the 
Social Security Act, but only to the extent that such benefits would be 
deduced from regular compensation if payable to the individual under the 
applicable State law.
    (b) Disqualification. (1) An individual shall not be entitled to DUA 
for any week after the week in which the individual is reemployed in a 
suitable position.
    (2) An individual who refuses without good cause to accept a bona 
fide offer of reemployment in a position suitable to the individual, or 
to investigate or accept a referral to a position which is suitable to 
and available to the individual, shall not be entitled to DUA with 
respect to the week in which such refusal occurs or in any subsequent 
week in the Disaster Assistance Period. For the purposes of this 
paragraph, a position shall not be deemed to be suitable for an 
individual if the circumstances present any unusual risk to the health, 
safety, or morals of the individual, if it is impracticable for the 
individual to accept the position, or if acceptance for the position 
would, as to the individual, be inconsistent with any labor standard in 
section 3304(a)(5) of the Federal Unemployment Tax Act,

[[Page 167]]

26 U.S.C. 3304(a)(5), or the comparable provisions of the applicable 
State law.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec. 625.14  Overpayments; disqualification for fraud.

    (a) Finding and repayment. If the State agency of the applicable 
State finds that an individual has received a payment of DUA to which 
the individual was not entitled under the Act and this part, whether or 
not the payment was due to the individual's fault or misrepresentation, 
the individual shall be liable to repay to the applicable State the 
total sum of the payment to which the individual was not entitled, and 
the State agency shall take all reasonable measures authorized under any 
State law or Federal law to recover for the account of the United States 
the total sum of the payment to which the individual was not entitled.
    (b) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any outstanding overpayment of DUA made to 
the individual by the State, by deductions from any DUA payable to the 
individual under the Act and this part, or from any compensation payable 
to the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) The State agency shall also recover, insofar as possible, the 
amount of any outstanding overpayment of DUA made to the individual by 
another State, by deductions from any DUA payable by the State agency to 
the individual under the Act and this part, or from any compensation 
payable to the individual under any Federal unemployment compensation 
law administered by the State agency, or from any assistance or 
allowance payable to the individual with respect to unemployment under 
any other Federal law administered by the State agency.
    (3) If the State has in effect an agreement to implement the cross-
program offset provisions of section 303(g)(2) of the Social Security 
Act (42 U.S.C. 503(g)(2)), the State shall apply the provisions of such 
agreement to the recovery of outstanding DUA overpayments.
    (c) Debts due the United States. DUA payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be aplied or 
used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person.
    (d) Recovered overpayments. Overpayments recovered in any manner 
shall be credited or returned, as the case may be, to the appropriate 
account of the United States.
    (e) Application of State law. Any provision of State law authorizing 
waiver of recovery of overpayments of compensation shall not be 
applicable to DUA.
    (f) Final decision. Recovery of any overpayment of DUA shall not be 
enforced by the State agency until the determination establishing the 
overpayment has become final, or if appeal is taken from the 
determination, until the decision after opportunity for a fair hearing 
has become final.
    (g) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (f) of Sec. 625.9 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 625.10 shall apply to determinations and 
redeterminations made pursuant to this section.
    (h) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of DUA shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to regular compensation and 
consistent with the Secretary's ``Standard for Fraud and Overpayment 
Detection,'' Employment Security Manual, part V, sections 7510 et seq.  
(Appendix C of this part).
    (i) Disqualification for fraud. Any individual who, with respect to 
a major disaster, makes or causes another to make a false statement or 
misrepresentation of a material fact, knowing it to be false, or 
knowingly fails or causes another to fail to disclose a material fact, 
in order to obtain for the individual or any other person a payment of 
DUA to which the individual or any

[[Page 168]]

other person is not entitled, shall be disqualified as follows:
    (1) If the false statement, misrepresentation, or nondisclosure 
pertains to an initial application for DUA--
    (i) The individual making the false statement, misrepresentation, or 
nondisclosure shall be disqualified from the receipt of any DUA with 
respect to that major disaster; and
    (ii) If the false statement, misrepresentation, or nondisclosure was 
made on behalf of another individual, and was known to such other 
individual to be a false statement, misrepresentation, or nondisclosure, 
such other individual shall be disqualified from the receipt of any DUA 
with respect to that major disaster; and
    (2) If the false statement, misrepresentation, or nondisclosure 
pertains to a week for which application for a payment of DUA is made--
    (i) The individual making the false statement, misrepresentation, or 
nondisclosure shall be disqualified from the receipt of DUA for that 
week and the first two compensable weeks in the Disaster Assistance 
Period that immediately follow that week, with respect to which the 
individual is otherwise entitled to a payment of DUA; and
    (ii) If the false statement, misrepresentation, or nondisclosure was 
made on behalf of another individual, and was known to such other 
individual to be a false statement, misrepresentation, or nondisclosure, 
such other individual shall be disqualified from the receipt of DUA for 
that week and the first two compensable weeks in the Disaster Assistance 
Period that immediately follow that week, with respect to which the 
individual is otherwise entitled to a payment of DUA.
    (j) Criminal penalties. The provisions of this section on recovery 
of overpayments and disqualification for fraudulently claiming or 
receiving any DUA to which an individual was not entitled under the Act 
and this part shall be in addition to and shall not preclude any 
applicable criminal prosecution and penalties under State or Federal 
law.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec. 625.15  Inviolate rights to DUA.

    Except as specifically provided in this part, the right of 
individuals to DUA shall be protected in the same manner and to the same 
extent as the rights of persons to regular unemployment compensation are 
protected under the applicable State law. Such measures shall include 
protection of applicants for DUA from waiver, release, assignment, 
pledge, encumbrance, levy, execution, attachment, and garnishment, of 
their rights to DUA. In the same manner and to the same extent, 
individuals shall be protected from discrimination and obstruction in 
regard to seeking, applying for and receiving any right to DUA.



Sec. 625.16  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Act as the Secretary requires, 
and will make all such records available for inspection, examination, 
and audit by such Federal officials or employees as the Secretary may 
designate or as may be required by law.
    (b) Disclosure of information. Information in records made and 
maintained by a State agency in administering the Act shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
regular compensation and the entitlement of individuals thereto may be 
disclosed under the applicable State law, and consistently with section 
303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1). This 
provision on the confidentiality of information obtained in the 
administration of the Act shall not apply, however, to the United States 
Department of Labor, or in the case of information, reports and studies 
requested pursuant to Sec. 625.19, or where the result would be 
inconsistent with the Freedom of Information Act (5 U.S.C. 552), the 
Privacy Act of 1974 (5 U.S.C. 552a), or regulations of the United States 
Department of Labor promulgated thereunder.

[[Page 169]]



Sec. 625.17  Announcement of the beginning of a Disaster Assistance Period.

    Whenever a major disaster is declared in a State, the State agency 
shall promptly announce throughout the major disaster area by all 
appropriate news media that individuals who are unemployed as the result 
of the major disaster may be entitled to DUA; that they should file 
initial applications for DUA as soon as possible, but not later than the 
30th day after the announcement date; the beginning date of the Disaster 
Assistance Period; and where individuals may obtain further information 
and file applications for DUA.



Sec. 625.18  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec. 625.19  Information, reports and studies.

    (a) Routine responses. State agencies shall furnish to the Secretary 
such information and reports and make such studies as the Secretary 
decides are necessary or appropriate for carrying out the purposes of 
the Act and this part.
    (b) Final Report. In addition to such other reports as may be 
required by the Secretary, within 60 days after all payments of Disaster 
Unemployment Assistance as the result of a major disaster in the State 
have been made, the State agency shall submit a final report to the 
Secretary. A final report shall contain a narrative summary, a 
chronological list of significant events, pertinent statistics about the 
Disaster Unemployment Assistance provided to disaster victims, brief 
statements of major problems encountered, discussion of lessons learned, 
and suggestions for improvement of the program during future major 
disasters.

(Approved by the Office of Management and Budget under control number 
1205-0051)


(Pub. L. No. 96-511)
[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984]



Sec. 625.20  Saving clause.

    The regulations in this part do not apply to applications, 
determinations, hearings, or other administrative or judicial 
proceedings, with respect to any major disaster declared prior to 
November 23, 1988, and such applications, determinations, hearings, or 
other administrative or judicial proceeding shall remain subject to the 
Act and the Regulations in this part issued thereunder which were in 
effect prior to that date.
[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 557, Jan. 5, 1990]



Sec. 625.30  Appeal Procedures for Guam, American Samoa, Commonwealth of the Northern Mariana Islands, Federated States of Micronesia, Republic of the Marshall 
          Islands, and the Trust Territory of the Pacific Islands.

    (a) Designation of referee. The Director of the Unemployment 
Insurance Service shall designate a referee of a State agency to hear 
and decide appeals under this section from determinations and 
redeterminations by the State agencies of the Territory of Guam, 
American Samoa, Commonwealth of the Northern Mariana Islands, Federated 
States of Micronesia, Republic of the Marshall Islands, and the Trust 
Territory of the Pacific Islands.
    (b) Appeals to referee. (1) A DUA applicant may appeal from a 
determination or redetermination issued by the State agency of the 
Territory of Guam, American Samoa, Commonwealth of the Northern Mariana 
Islands, Federated States of Micronesia, Republic of the Marshall 
Islands, or the Trust Territory of the Pacific Islands within 60 days 
after the mailing of notice and a copy of such determination or 
redetermination to such applicant's last known address, or in the 
absence of mailing within 60 days after delivery in person thereof to 
such applicant. The appeal shall be in writing and may be filed with any 
office of the State agency.

[[Page 170]]

    (2) Notice that an appeal has been filed may be given or mailed, in 
the discretion of the referee, to any person who has offered or is 
believed to have evidence with respect to the claim.
    (3) An appeal shall be promptly scheduled and heard, in order that a 
decision on the appeal can be issued within 30 days after receipt of the 
appeal by the State agency. Written notice of hearing, specifying the 
time and place thereof and those questions known to be in dispute, shall 
be given or mailed to the applicant, the State agency, and any person 
who has offered or is believed to have evidence with respect to the 
claim 7 days or more before the hearing, except that a shorter notice 
period may be used with the consent of the applicant.
    (c) Conduct of hearings. Hearings before the referee shall be 
informal, fair, and impartial, and shall be conducted in such manner as 
may be best suited to determine the DUA applicants' right to 
compensation. Hearings shall be open to the public unless sufficient 
cause for a closed hearing is shown. The referee shall open a hearing by 
ascertaining and summarizing the issue or issues involved in the appeal. 
The applicant may examine and cross-examine witnesses, inspect 
documents, and explain or rebut any evidence. An opportunity to present 
argument shall be afforded such applicant, and such argument shall be 
made part of the record. The referee shall give such applicant, if not 
represented by counsel or other representative, every assistance that 
does not interfere with the impartial discharge of the referee's duties. 
The referee may examine such applicant and other witnesses to such 
extent as the referee deems necessary. Any issue involved in the claim 
shall be considered and passed upon even though such issue was not set 
forth as a ground of appeal.
    (d) Evidence. Oral or written evidence of any nature, whether or not 
conforming to the legal rules of evidence, may be accepted. Any official 
record of the State agency, including reports submitted in connection 
with administration of the DUA program, may be included in the record if 
the applicant is given an opportunity to examine and rebut the same. A 
written statement under oath or affirmation may be accepted when it 
appears impossible or unduly burdensome to require the attendance of a 
witness, but a DUA applicant adversely affected by such a statement must 
be given the opportunity to examine such statement, to comment on or 
rebut any or all portions thereof, and whenever possible to cross-
examine a witness whose testimony has been introduced in written form by 
submitting written questions to be answered in writing.
    (e) Record. All oral testimony before the referee shall be taken 
under oath or affirmation and a transcript thereof shall be made and 
kept. Such transcript together with all exhibits, papers, and requests 
filed in the proceeding shall constitute the record for decision.
    (f) Withdrawal of appeal. A DUA applicant who has filed an appeal 
may withdraw such appeal with the approval of the referee.
    (g) Nonappearance of DUA applicant. Failure of a DUA applicant to 
appear at a hearing shall not result in a decision being automatically 
rendered against such applicant. The referee shall render a decision on 
the basis of whatever evidence is properly before him/her unless there 
appears to be a good reason for continuing the hearing. An applicant who 
fails to appear at a hearing with respect to his/her appeal may within 
seven days thereafter petition for a reopening of the hearing. Such 
petition shall be granted if it appears to the referee that such 
applicant has shown good cause for his/her failure to attend.
    (h) Notice of referee's decision and further review--(1) Decision. A 
copy of the referee's decision, which shall include findings and 
conclusions, shall promptly be given or mailed to the applicant, the 
State agency, and to the Regional Administrator, Employment and Training 
Administration, for Region IX (San Francisco). The decision of the 
referee shall be accompanied by an explanation of the right of such 
applicant or State agency to request review by the Regional 
Administrator and the time and manner in which such review may be 
instituted, as provided in paragraph (a)(2) of Sec. 625.10.

[[Page 171]]

    (2) Time limit for decision. A decision on an appeal to a referee 
under this section shall be made and issued by the referee not later 
than 30 days after receipt of the appeal by the State agency.
    (3) Further review. Further review by the Regional Administrator or 
the Assistant Secretary with respect to an appeal under this section 
shall be in accordance with paragraphs (c) and (d) of Sec. 625.10.
    (i) Consolidation of appeals. The referee may consolidate appeals 
and conduct joint hearings thereon where the same or substantially 
similar evidence is relevant and material to the matters in issue. 
Reasonable notice of consolidation and the time and place of hearing 
shall be given or mailed to the applicants or their representatives, the 
State agency, and to persons who have offered or are believed to have 
evidence with respect to the DUA claims.
    (j) Representation. A DUA applicant may be represented by counsel or 
other representative in any proceedings before the referee or the 
Regional Administrator. Any such representative may appear at any 
hearing or take any other action which such applicant may take under 
this part. The referee, for cause, may bar any person from representing 
an applicant, in which event such action shall be set forth in the 
record. No representative shall charge an applicant more than an amount 
fixed by the referee for representing the applicant in any proceeding 
under this section.
    (k) Postponement, continuance, and adjournment of hearings. A 
hearing before the referee shall be postponed, continued, or adjourned 
when such action is necessary to afford a DUA applicant reasonable 
opportunity for a fair hearing. In such case notice of the subsequent 
hearing shall be given to any person who received notice of the prior 
hearing.
    (l) Information from agency records. Information shall be available 
to a DUA applicant, either from the records of the State agency or as 
obtained in any proceeding herein provided for, to the extent necessary 
for proper presentation of his/her case. All requests for information 
shall state the nature of the information desired as clearly as possible 
and shall be in writing unless made at a hearing.
    (m) Filing of decisions. Copies of all decisions of the referee 
shall be kept on file at his/her office or agency for at least 3 years.
[55 FR 557, Jan. 5, 1990, as amended at 56 FR 22805, May 16, 1991]

 Appendix A to Part 625--Standard for Claim Filing, Claimant Reporting, 
                  Job Finding, and Employment Services

         Employment Security Manual (Part V, Sections 5000-5004)

 5000  Standard for Claim Filing, Claimant Reporting, Job Finding, and 
                           Employment Services

    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for: ``Payment of unemployment 
compensation solely through public employment offices or such other 
agencies as the Secretary may approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law provide 
for: ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for: ``Such methods of administration . . . as are found by 
the Secretary to be reasonably calculated to insure full payment of 
unemployment compensation when due.''
    B. Secretary's interpretation of federal law requirements: 1. The 
Secretary interprets section 3304(a)(1) of the Federal Unemployment Tax 
Act and section 303(a)(2) of the Social Security Act to require that a 
State law provide for payment of unemployment compensation solely 
through public employment offices or claims offices administered by the 
State employment security agency if such agency provides for such 
coordination in the operations of its public employment offices and 
claims offices as will insure (a) the payment of benefits only to 
individuals who are unemployed and who are able to work and available 
for work, and (b) that individuals claiming unemployment compensation 
(claimants) are afforded such placement and other employment services as 
are necessary and appropriate to return them to suitable work as soon as 
possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for: a. Such contact by claimants with public 
employment offices or claims offices or both,

[[Page 172]]

(1) as will reasonably insure the payment of unemployment compensation 
only to individuals who are unemployed and who are able to work and 
available for work, and (2) that claimants are afforded such placement 
and other employment services as are necessary and appropriate to 
facilitate their return to suitable work as soon as possible; and b. 
Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such State law.

   5001  Claim Filing and Claimant Reporting Requirements Designed to 
                   Satisfy Secretary's Interpretation

    A. Claim filing--total or part-total unemployment: 1. Individuals 
claiming unemployment compensation for total or part-total unemployment 
are required to file a claim weekly or biweekly, in person or by mail, 
at a public employment office or a claims office (these terms include 
offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person: a. His new claim with respect to a benefit year, or his 
continued claim for a waiting week or for his first compensable week of 
unemployment in such year; and b. Any other claim, when requested to do 
so by the claims personnel at the office at which he files his claim(s) 
because questions about his right to benefits are raised by 
circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirements; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances: a. He is located in an area requiring the 
expenditure of an unreasonable amount of time or money in traveling to 
the nearest facility established by the State agency for filing claims 
in person; b. Conditions make it impracticable for the agency to take 
claims in person; c. He has returned to full-time work on or before the 
scheduled date for his filing a claim, unless the agency makes provision 
for in-person filing at a time and place that does not interfere with 
his employment; d. The agency finds that he has good cause for failing 
to file a claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

   5002  Requirement for Job Finding, Placement, and other Employment 
         Services Designed to Satisfy Secretary's Interpretation

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency: 1. The claims personnel 
are required to give each claimant such necessary and appropriate 
assistance as they reasonably can in finding suitable work and at their 
discretion determine when more complete placement and employment 
services are necessary and appropriate for a claimant; and if they 
determine more complete services are necessary and appropriate, the 
claims personnel are to refer him to employment service personnel in the 
public employment office in which he has been filing claim(s), or, if he 
has been filing in a claims office, in the public employment office most 
accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.

[[Page 173]]

    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel are required to 
so arrange and coordinate the contracts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) his failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

            5004  Evaluation of Alternative State Provisions

    If the State law provisions do not conform to the ``suggested State 
law requirements'' set forth in sections 5001 and 5002, but the State 
law contains alternative provisions, the Manpower Administrator, in 
collaboration with the State agency, will study the actual or 
anticipated affect of the alternative provisions. If the Manpower 
Administrator concludes that the alternative provisions satisfy the 
requirements of the Federal law as construed by the Secretary (see 
section 5000 B) he will so notify the State agency. If he does not so 
conclude, he will submit the matter to the Secretary. If the Secretary 
concludes that the alternative provisions satisfy such requirements, the 
State agency will be so notified. If the Secretary concludes that there 
is a question as to whether the alternative provisions satisfy such 
requirements, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.5.
[55 FR 558, Jan. 5, 1990]

 Appendix B to Part 625--Standard for Claim Determinations--Separation 
                               Information

         Employment Security Manual (Part V, Sections 6010-6015)

  6010-6019  Standard for Claim Determinations--Separation Information

    6010  Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for: ``Such 
methods of administration . . . as are found by the Secretary to be 
reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for: ``Opportunity for a fair hearing before an 
impartial tribunal, for all individuals whose claims for unemployment 
compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for: ``Expenditure of all money withdrawn from an unemployment

[[Page 174]]

fund of such State, in the payment of unemployment compensation . . . 
.''
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011  Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that: A. Individuals who may be 
entitled to unemployment compensation are furnished such information as 
will reasonably afford them an opportunity to know, establish, and 
protect their rights under the unemployment compensation law of such 
State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012  Criteria for Review of State Law Conformity with Federal 
Requirements. In determining the conformity of a State law with the 
above requirements of the Federal Unemployment Tax Act and the Social 
Security Act as interpreted by the Secretary, the following criteria 
will be applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013  Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria.
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his application identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except

[[Page 175]]

that written notice of determination need not be given with respect to:
---------------------------------------------------------------------------


    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it (1) results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2 f (1). However, a written notice of determination 
is required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2 f 
(2) and 2 h. However, a written notice of determination is required if: 
(a) there is a dispute concerning the denial or reduction of benefits 
with respect to such week; or (b) there is a change in the State law (or 
in the application thereof) affecting the denial or reduction; or (c) 
there is a change in the amount of the reduction except as to the 
balance covered by the last reduction in a series of reductions.
    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.
    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessay to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights

[[Page 176]]

to partial benefits for any week with respect to which he is working 
less than his normal customary full-time workweek because of lack of 
work and for which he earns less than his weekly benefit amount or 
weekly benefit amount plus earnings, whichever is provided by the State 
law. If the explanation is contained in the notice of determination, 
reference to the item in the notice in which his weekly benefit amount 
is entered should be made.
    f. Deductions from weekly benefits
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c(1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimaint's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligibile or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute

[[Page 177]]

good cause,'' rather than merely the phrase ``voluntary quit.'' Checking 
a box as to the reason for the disqualification is not a sufficiently 
detailed explanation. However, this statement of the reason for the 
disqualification need not be a restatement of all facts considered in 
arriving at the determination.
    1. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages  ____  to  ____  of the  
________________  (name of pamphlet or booklet) heretofore furnished to 
you.''

6014  Separation Information Requirements Designed To Meet Department of 
                             Labor Criteria

    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information of worker. 1. Information required to be given. 
Employers are required to give their employees information and 
instructions concerning the employees' potential rights to benefits and 
concerning registration for work and filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.

[[Page 178]]

    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.

6015  Evaluation of Alternative State Provisions with Respect to Claim 
Determinations and Separation Information. If the State law provisions 
do not conform to the suggested requirements set forth in sections 6013 
and 6014, but the State law contains alternative provisions, the Bureau 
of Employment Security, in collaboration with the State agency, will 
study the actual or anticipated effects of the alternative provisions. 
If the Administrator of the Bureau concludes that the alternative 
provisions satisfy the criteria in section 6012, he will so notify the 
State agency. If the Administrator of the Bureau does not so conclude, 
he will submit the matter to the Secretary. If the Secretary concludes 
that the alternative provisions satisfy the criteria in section 6012, 
the State agency will be so notified. If the Secretary concludes that 
there is a question as to whether the alternative provisions satisfy the 
criteria, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.5.
[55 FR 559, Jan. 5, 1990]

  Appendix C to Part 625--Standard for Fraud and Overpayment Detection

         Employment Security Manual (Part V, Sections 7510-7515)

         7510-7519  Standard for Fraud and Overpayment Detection

7510  Federal Law Requirements. Section 303(a)(1) of the Social Security 
          Act requires that a State law include provision for:

    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

 7511  The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
  reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the claimant or 
   others, and (2) to deter claimants from obtaining benefits through 
                       willful misrepresentation.

7513  Criteria for Review of State Conformity With Federal Requirements. 
   In determining State conformity with the above requirements of the 
Internal Revenue Code and the Social Security Act, as interpreted by the 
       Secretary of Labor, the following criteria will be applied:

    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explanation: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-

[[Page 179]]

time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agency for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are commonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan
    A. of investigation based on a sample post-audit will be considered 
as partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated?
    Explanation: To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants?
    Explanation: To meet this criterion, the State agency must issue 
adequate material on claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.

7515  Evaluation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative methods of administration. If the Bureau concludes that 
the alternative methods satisfy the criteria in section 7513, it will so 
notify the State agency. If the Bureau does not so conclude, it will 
submit to the Secretary the results of the study for his determination 
of whether the State's alternative methods of administration meet the 
criteria.
[55 FR 562, Jan. 5, 1990]



PART 626--INTRODUCTION TO THE REGULATIONS UNDER THE JOB TRAINING PARTNERSHIP ACT--Table of Contents




Sec.
626.1  Scope and purpose of the Job Training Partnership Act.
626.2  Format of the Job Training Partnership Act regulations.
626.3  Purpose, scope, and applicability of the Job Training Partnership 
          Act regulations.
626.4  Table of contents for the Job Training Partnership Act 
          regulations.
626.5  Definitions.

    Authority:  29 U.S.C. 1579(a).

    Source:  59 FR 45815, Sept. 2, 1994, unless otherwise noted.



Sec. 626.1  Scope and purpose of the Job Training Partnership Act.

    It is the purpose of the Job Training Partnership Act (JTPA or the 
Act) to establish programs to prepare youth and adults facing serious 
barriers to employment for participation in the

[[Page 180]]

labor force by providing job training and other services that will 
result in increased employment and earnings, increased educational and 
occupational skills, and decreased welfare dependency, thereby improving 
the quality of the work force and enhancing the productivity and 
competitiveness of the Nation (section 2).



Sec. 626.2  Format of the Job Training Partnership Act regulations.

    (a) Regulations promulgated by the Department of Labor to implement 
the provisions of the Act are set forth in parts 626 through 638 of 
title 20, chapter V, of the Code of Federal Regulations, with the 
exception of the veterans' employment program's chapter IX regulations 
of the Office of the Assistant Secretary for Veterans' Employment and 
Training, which are set forth at part 1005 of title 20.
    (b) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, will 
be governed by the provisions of 29 CFR part 34 and will be administered 
by the Department of Labor (Department or DOL) Directorate of Civil 
Rights.
    (c) General authority for the JTPA regulations is found at section 
169 of the Act. Specific statutory authorities other than section 169 
are noted throughout the JTPA regulations.



Sec. 626.3  Purpose, scope, and applicability of the Job Training Partnership Act regulations.

    (a) Parts 626 through 638 of this chapter and part 1005 of chapter 
IX (Veterans' employment programs under title IV, part C of the Job 
Training Partnership Act) establish the Federal programmatic and 
administrative requirements for JTPA grants awarded by the Department of 
Labor to eligible grant recipients.
    (b) Parts 626 through 638 of this chapter and part 1005 of chapter 
IX apply to recipients and subrecipients of JTPA funds.



Sec. 626.4  Table of contents for the Job Training Partnership Act regulations.

    The table of contents for the regulations under the Job Training 
Partnership Act, 20 CFR parts 626-638 and 1005,\1\ is as follows:


    \1\ Part 1005 was removed at 59 FR 26601, May 23, 1994.
---------------------------------------------------------------------------

    PART 626--INTRODUCTION TO THE REGULATIONS UNDER THE JOB TRAINING 
                             PARTNERSHIP ACT

Sec.
626.1  Scope and purpose of the Job Training Partnership Act.
626.2  Format of the Job Training Partnership Act regulations.
626.3  Purpose, scope and applicability of the Job Training Partnership 
          Act regulations.
626.4  Table of contents for the Job Training Partnership Act 
          regulations.
626.5  Definitions.

      PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER THE ACT

                      Subpart A--Scope and Purpose

627.100  Scope and Purpose of Part 627.

                     Subpart B--Program Requirements

627.200  Governor/Secretary agreement.
627.205  Public service employment prohibition.
627.210  Nondiscrimination and nonsectarian activities.
627.215  Relocation.
627.220  Coordination with programs under title IV of the Higher 
          Education Act including the Pell grant program.
627.225  Employment generating activities.
627.230  Displacement.
627.235  General program requirements.
627.240  On-the-job training.
627.245  Work experience.
627.250  Interstate agreements.

   Subpart C--Payments, Supportive Services and Benefits and Working 
                               Conditions

627.300  Scope and purpose.
627.305  Payments.
627.310  Supportive Services.
627.315  Benefits and working conditions.

                   Subpart D--Administrative Standards

627.400  Scope and purpose.
627.405  Grant agreement and funding.
627.410  Reallotment and reallocation.
627.415  Insurance.
627.420  Procurement.
627.422  Selection of service providers.
627.423  Funding restrictions for ``high-risk'' recipients and 
          subrecipients.

[[Page 181]]

627.424  Prohibition of subawards to debarred and suspended parties.
627.425  Standards for financial management and participant data 
          systems.
627.430  Grant payments.
627.435  Cost principles and allowable costs.
627.440  Classification of costs.
627.445  Limitations on certain costs.
627.450  Program income.
627.455  Reports required.
627.460  Requirements for records.
627.463  Public access to records.
627.465  Property management standards.
627.470  Performance standards.
627.471  Reorganization plan appeals.
627.475  Oversight and monitoring.
627.477  Governor's determination of substantial violation.
627.480  Audits.
627.481  Audit resolution.
627.485  Closeout.
627.490  Later disallowances and adjustments after closeout.
627.495  Collection of amounts due.

      Subpart E--Grievances Procedures at the State and Local Level

627.500  Scope and purpose.
627.501  State grievance and hearing procedures for noncriminal 
          complaints at the recipient level.
627.502  Grievance and hearing procedures for noncriminal complaints at 
          the SDA and SSG levels.
627.503  Recipient-level review.
627.504  Noncriminal grievance procedure at employer level.

    Subpart F--Federal Handling of Noncriminal Complaints and other 
                               Allegations

627.600  Scope and purpose.
627.601  Complaints and allegations at the Federal level.
627.602  Resolution of investigative findings.
627.603  Special handling of labor standards violations under section 
          143 of the Act.
627.604  Alternative procedure for handling labor standards violations 
          under section 143--Binding arbitration.
627.605  Special Federal review of SDA and SSG-level complaints without 
          decision.
627.606  Grant officer resolution.
627.607  Grant Officer resolution of Governor's failure to promptly take 
          action.

             Subpart G--Sanctions for Violations of the Act

627.700  Scope and purpose.
627.702  Sanctions and corrective actions.
627.703  Failure to comply with procurement provisions.
627.704  Process for waiver of State liability.
627.706  Process for advance approval of a recipient's contemplated 
          corrective actions.
627.708  Offset process.

     Subpart H--Hearings by the Office of Administrative Law Judges

627.800  Scope and purpose.
627.801  Procedures for filing request for hearing.
627.802  Rules of procedure.
627.803  Relief.
627.804  Timing of decisions.
627.805  Alternative dispute resolution.
627.806  Other authority.

                    Subpart I--Transition Provisions

627.900  Scope and purpose.
627.901  Transition period.
627.902  Governor's actions.
627.903  Actions which are at the discretion of the Governor.
627.904  Transition and implementation.
627.905  Guidance on contracts and other agreements.
627.906  Determinations on State and SDA implementation.

  PART 628--PROGRAMS UNDER TITLE II OF THE JOB TRAINING PARTNERSHIP ACT

                      Subpart A--Scope and Purpose

628.100  Scope and purpose of part 628.

                        Subpart B--State Planning

628.200  Scope and purpose.
628.205  Governor's coordination and special services plan.
628.210  State Job Training Coordinating Council.
628.215  State Human Resource Investment Council.

                        Subpart C--State Programs

628.300  Scope and purpose.
628.305  State distribution of funds.
628.310  Administration.
628.315  Education coordination and grants.
628.320  Services for older individuals.
628.325  Incentive grants, capacity building and technical assistance.

                Subpart D--Local Service Delivery System

628.400  Scope and purpose.
628.405  Service delivery areas.
628.410  Private Industry Council.
628.415  Selection of SDA grant recipient and administrative entity.
628.420  Job training plan.
628.425  Review and approval.
628.426  Disapproval or revocation of the plan.
628.430  State SDA submission.

[[Page 182]]

 Subpart E--Program Design Requirements for Programs Under Title II of 
                    the Job Training Partnership Act

628.500  Scope and purpose.
628.505  Eligibility.
628.510  Intake, referrals, and targeting.
628.515  Objective assessment.
628.520  Individual service strategy.
628.525  Limitations.
628.530  Referrals of participants to non-title II programs.
628.535  Limitations on job search assistance.
628.540  Volunteer program.
628.545  Linkages and coordination.
628.550  Transfer of funds.

                      Subpart F--The Adult Program

628.600  Scope and purpose.
628.605  Eligibility.
628.610  Authorized services.

       Subpart G--The Summer Youth Employment and Training Program

628.700  Scope and purpose.
628.701  Program goals and objectives.
628.702  Enriched Educational Component.
638.703  Private Sector Summer Jobs.
628.704  Eligibility.
628.705  SYETP authorized services.
628.710  Period of program operation.

                    Subpart H--Youth Training Program

628.800  Scope and purpose.
628.803  Eligibility.
628.804  Authorized services.

                          PART 629--[RESERVED]

                          PART 630--[RESERVED]

 PART 631--PROGRAMS UNDER TITLE III OF THE JOB TRAINING PARTNERSHIP ACT

                      Subpart A--General Provisions

631.1  Scope and purpose.
631.2  Definitions.
631.3  Participant eligibility.
631.4  Approved training rule.

 Subpart B--Additional Title III Administrative Standards and Procedures

631.11  Allotment and obligation of funds by the Secretary.
631.12  Reallotment of funds by the Secretary.
631.13  Classification of costs at State and substate levels.
631.14  Limitations on certain costs.
631.15  Federal reporting requirements.
631.16  Complaints, investigations, and penalties.
631.17  Federal monitoring and oversight.
631.18  Federal by-pass authority.
631.19  Appeals.

                    Subpart C--Needs-Related Payments

631.20  Needs-related payments.

                     Subpart D--State Administration

631.30  Designation or creation and functions of a State dislocated 
          worker unit or office and rapid response assistance.
631.31  Monitoring and oversight.
631.32  Allocation of funds by the Governor.
631.33  State procedures for identifying funds subject to mandatory 
          Federal reallotment.
631.34  Designation of substate areas.
631.35  Designation of substate grantees.
631.36  Biennial State plan.
631.37  Coordination activities.
631.38  State by-pass authority.

                        Subpart E--State Programs

631.40  State program operational plan.
631.41  Allowable State activities.

                      Subpart F--Substate Programs

631.50  Substate plan.
631.51  Allowable substate program activities.
631.52  Selection of service providers.
631.53  Certificate of continuing eligibility.

   Subpart G--Federal Delivery of Dislocated Worker Services Through 
                     National Reserve Account Funds

631.60  General.
631.61  Application for funding and selection criteria.
631.62  Cost limitations.
631.63  Reporting.
631.64  General Administrative Requirements.
631.65  Special Provisions for CAETA and DDP.

                          Subpart H--[Reserved]

            Subpart I--Disaster Relief Employment Assistance

631.80  Scope and Purpose.
631.81  Availability of funds.
631.82  Substate allocation.
631.83  Coordination.
631.84  Allowable projects.
631.85  Participant eligibility.
631.86  Limitations on disaster relief employment.
631.87  Definitions.

[[Page 183]]

  PART 632--INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS

                         Subpart A--Introduction

632.1  [Reserved]
632.2  Scope and purpose.
632.3  Format for these regulations.
632.4  Definitions.

   Subpart B--Designation Procedures for the Native American Grantees

632.10  Eligibility requirements for designation as a Native American 
          grantee.
632.11  Designation of Native American grantees.
632.12  Alternative arrangements for the provision of services, 
          nondesignation.
632.13  Review of denial of designation as a Native American grantee, or 
          rejection of a comprehensive annual plan.

  Subpart C--Program Planning, Application and Modification Procedures

632.17  Planning process.
632.18  Regional and national planning meetings.
632.19  Grant application content.
632.20  Submission of grant applications.
632.21  Application disapproval.
632.22  Modification of a Comprehensive Annual Plan (CAP) and/or Master 
          Plan.
632.23  Termination and corrective action of a CAP and/or Master Plan.

           Subpart D--Administrative Standards and Procedures

632.31  General.
632.32  Financial management systems.
632.33  Audits.
632.34  Program income.
632.35  Native American grantee contracts and subgrants.
632.36  Procurement standards.
632.37  Allowable costs.
632.38  Classification of costs.
632.39  Administrative cost plan.
632.40  Administrative staff and personnel standards.
632.41  Reporting requirements.
632.42  Grant closeout procedures.
632.43  Reallocation of funds.
632.44  Sanctions for violation of the Act.

                Subpart E--Program Design and Management

632.70  Waiver of regulations under parts 632 and 636.
632.75  General responsibilities of Native American grantees.
632.76  Program management systems.
632.77  Participant eligibility determination.
632.78  Training activities.
632.79  Employment activities.
632.80  Other activities.
632.81  Payments to participants.
632.82  Benefits and working conditions for participants.
632.83  FICA.
632.84  Non-Federal status of participants.
632.85  Participant limitations.
632.86  Nondiscrimination and nonsectarian activities.
632.87  Equitable provision of services to the eligible population and 
          significant segments.
632.88  General responsibilities of the Department.
632.89  Performance standards.

            Subpart F--Prevention of Fraud and Program Abuse

632.115  General.
632.116  Conflict of interest.
632.117  Kickbacks.
632.118  Nepotism.
632.119  Political patronage.
632.120  Political activities.
632.121  Lobbying activities.
632.122  Unionization and antiunionization activities; work stoppages.
632.123  Maintenance of effort.
632.124  Theft or embezzlement from employment and training funds; 
          improper inducement; obstruction of investigations and other 
          criminal provisions.
632.125  Responsibilities of Native American grantees, subgrantees and 
          contractors for preventing fraud and program abuse and for 
          general program management.

                          Subpart G--[Reserved]

Subpart H--Job Training Partnership Act Programs Under Title IV, Section 
                                   401

632.170  Eligibility for funds.
632.171  Allocation of funds.
632.172  Eligibility for participation in Title IV, Section 401.
632.173  Allowable program activities.
632.174  Administrative costs.

        Subpart I--Summer Youth Employment and Training Programs

632.250  General.
632.251  Eligibility for funds.
632.252  Allocation of funds.
632.253  Special operating provision.
632.254  Program startup.
632.255  Program planning.
632.256  Submission of applications.
632.257  Eligibility for participation.
632.258  Allowable activities.
632.259  Vocational exploration program.
632.260  Worksite standards.
632.261  Reporting requirements.
632.262  Termination date for the summer

[[Page 184]]

          program.
632.263  Administrative costs.

           PART 633--MIGRANT AND SEASONAL FARMWORKER PROGRAMS

                   Subpart A--Introductory Provisions

633.102  Scope and purpose of Title IV, Section 402 programs.
633.103  Format for these regulations.
633.104  Definitions.
633.105  Allocation of funds.
633.106  Eligibility for allocable funds.
633.107  Eligibility for participation in Section 402 programs.

          Subpart B--Grant Planning and Application Procedures

633.201  Grant planning and application procedures in general.
633.202  Announcement of State planning estimates and invitation to 
          submit a grant application.
633.203  Review of funding request.
633.204  Responsibility review.
633.205  Notification of selection.

         Subpart C--Program Design and Administrative Procedures

633.301  General responsibilities.
633.302  Training activities and services.
633.303  Allowable costs.
633.304  Section 402 cost allocation.
633.305  General benefits and working conditions for program 
          participants.
633.306  Retirement benefits.
633.307  Packages of benefits.
633.308  Non-Federal status of participants.
633.309  Recordkeeping requirements.
633.310  Bonding.
633.311  Management information systems.
633.312  Grantee contracts and subgrants.
633.313  Administrative staff and personnel standards.
633.314  Reports required.
633.315  Replacement, corrective action, termination.
633.316  Closeout procedures.
633.317  Reallocation of funds.
633.318  Nondiscrimination and nonsectarian activities.
633.319  Lobbying, political activities and unionization.
633.320  Nepotism.
633.321  Performance standards for Section 402 programs.
633.322  Sanctions for violation of the Act.

 PART 634--LABOR MARKET INFORMATION PROGRAMS UNDER TITLE IV, PART E OF 
                    THE JOB TRAINING PARTNERSHIP ACT

              Comprehensive Labor Market Information System

634.1  General.
634.2  Availability of funds.
634.3  Eligible recipients.
634.4  Statistical standards.
634.5  Federal oversight.

                          PART 635--[RESERVED]

           PART 636--COMPLAINTS, INVESTIGATIONS, AND HEARINGS

636.1  Scope and purpose.
636.2  Protection of informants.
636.3  Complaint and hearing procedures at the grantee level.
636.4  Grievance procedures at the employer level.
636.5  Exhaustion of grantee level procedure.
636.6  Complaints and investigations at the Federal level.
636.7  Subpoenas.
636.8  Initial and final determination; request for hearing at the 
          Federal level.
636.9  Opportunity for informal review.
636.10  Hearings before the Office of Administrative Law Judges.
636.11  Final action.

  PART 637--PROGRAMS UNDER TITLE V OF THE JOB TRAINING PARTNERSHIP ACT

                      Subpart A--General Provisions

Sec.
637.100  Scope and purpose.
637.105  Definitions.

                Subpart B--Program Planning and Operation

637.200  Allotments to States.
637.205  Notice of intent to participate.
637.210  Incentive bonus program applications.
637.215  Review and approval of applications for incentive bonus 
          payments.
637.220  Eligibility criteria for individuals to be counted in 
          determining incentive bonuses.
637.225  Determination of incentive bonus.
637.230  Use of incentive bonuses.

  Subpart C--Additional Title V Administrative Standards and Procedures

637.300  Management systems, reporting and recordkeeping.
637.305  Federal monitoring and oversight.

[[Page 185]]

637.310  Audits.

                  Subpart D--Data Collection [Reserved]

    PART 638--JOB CORPS PROGRAM UNDER TITLE IV-B OF THE JOB TRAINING 
                             PARTNERSHIP ACT

                      Subpart A--Purpose and Scope

638.100  General.

                         Subpart B--Definitions

638.200  Definitions.

      Subpart C--Funding, Site Selection, and Facilities Management

638.300  Eligibility for funds and eligible deliverers.
638.301  Funding procedures.
638.302  Center performance measurement.
638.303  Site selection and facilities management.
638.304  Historical preservation.
638.305  Capital improvements.
638.306  Protection and maintenance of contract center facilities owned 
          or leased by Job Corps.
638.307  Facilities surveys.

 Subpart D--Enrollment, Transfers, Terminations, and Placements in the 
                                Job Corps

638.400  Eligibility for participation.
638.401  Outreach and screening of participants.
638.402  Enrollment by readmission.
638.403  Selective service.
638.404  Transfers.
638.405  Extensions of enrollment.
638.406  Federal status of students.
638.407  Terminations.
638.408  Transportation.
638.409  Placement and job development.

                      Subpart E--Center Operations

638.500  Orientation program.
694.501  Student handbook.
638.502  Job Corps basic education program.
638.503  Vocational training.
638.504  Occupational exploration programs.
638.505  Scheduling of training.
638.506  Purchase of vocational supplies and equipment.
638.507  Work experience.
638.508  Sale of services or objects.
638.509  Leisure-time employment.
638.510  Health care and services.
638.511  Drug use and abuse.
638.512  Sexual behavior and harassment.
638.513  Death.
638.514  Residential support services.
638.515  Recreation/avocational program.
638.516  Laundry, mail, and telephone service.
638.517  Counseling.
638.518  Intergroup relations program.
638.519  Incentives system.
638.520  Student government and leadership program.
638.521  Student welfare associations.
638.522  Evaluation of student progress.
638.523  Food service.
638.524  Allowances and allotments.
638.525  Clothing.
638.526  Tort and other claims.
638.527  Federal employees' compensation.
638.528  Social Security.
638.529  Income taxes.
638.530  Emergency use of personnel, equipment, and facilities.
638.531  Limitations on the use of students in emergency projects.
638.532  Annual leave.
638.533  Other student absences.
638.534  Legal services to corpsmembers.
638.535  Voting rights.
638.536  Religious rights.
638.537  Disclosure of information.
694.538  Disciplinary procedures and appeals.
638.539  Complaints and disputes.
638.540  Cooperation with agencies and institutions.
638.541  Job Corps training opportunities.
638.542  Child care services.
638.543  Community relations program.

           Subpart F--Applied Vocational Skills Training (VST)

638.600  Applied vocational skills training (VST) through work projects.
638.601  Applied VST budgeting.

      Subpart G--Experimental, Research, and Demonstration Projects

638.710  Experimental, research, and demonstration projects.

                  Subpart H--Administrative Provisions

638.800  Program management.
638.801  Staff training.
638.802  Student records management.
638.803  Safety.
638.804  Environmental health.
638.805  Security and law enforcement.
638.806  Property management and procurement.
638.807  Imprest and petty cash funds.
638.808  Center financial management and reporting.
638.809  Audit.
638.810  Reporting requirements.
638.811  Review and evaluation.
638.812  State and local taxation of Job Corps deliverers.
638.813  Nondiscrimination, nonsectarian activities.

[[Page 186]]

638.814  Lobbying; political activities; unionization.
638.815  Charging fees.
[59 FR 45815, Sept. 2, 1994, as amended at 60 FR 58229, Nov. 27, 1995]



Sec. 626.5  Definitions.

    In addition to the definitions contained in section 4 of the Act, 
the following definitions of terms used in the Act or parts 626-631 of 
this chapter apply as appropriate to programs under titles I, II, and 
III of the Act:
    Accrued expenditures means charges made to the JTPA program. 
Expenditures are the sum of actual cash disbursements, the amount of 
indirect expense incurred, and the net increase (or decrease) in the 
amounts owed by the recipient for the goods and other property received, 
for services performed by employees, contractors, subgrantees, 
subcontractors, and other payees, and other amounts becoming owed under 
programs for which no current services or performance are required, such 
as annuities, insurance claims, and other benefit payments.
    Act means the Job Training Partnership Act.
    ALJ means an administrative law judge in the Office of 
Administrative Law Judges of the U.S. Department of Labor.
    Awarding agency means: (1) With respect to a grant, the Department 
of Labor; and (2) with respect to a subgrant or contract, the party that 
awarded the subgrant or contract.
    Capacity building means the systematic improvement of job functions, 
skills, knowledge, and expertise of the personnel who staff and 
administer employment and training and other closely related human 
service systems. Capacity building is designed to enhance the 
effectiveness, to strengthen the caliber of customer services provided 
under the Act and other Federal, State, and local employment and 
training programs, and improve coordination among them. Capacity 
building includes curriculum development, appropriate training, 
technical assistance, staff development, and other related activities.
    Chief elected official (CEO) means the official or officials, or 
their representatives, of the jurisdiction or jurisdictions which 
requested designation by the Governor as a service delivery area.
    Commercial organizations means private for-profit entities.
    Commercially available off-the-shelf training package means a 
training package sold or traded to the general public in the course of 
normal business operations, at prices based on established catalog or 
market prices. To be considered as ``sold to the general public,'' the 
package must be regularly sold in sufficient quantities to constitute a 
real commercial market to buyers that must include other than JTPA 
programs. The package must include performance criteria pertaining to 
the delivery of the package which may include participant attainment of 
knowledge, skills or a job.
    Contractor means the organization, entity, or individual that is 
awarded a procurement contract under the recipient's or subrecipient's 
procurement standards and procedures.
    Cost means accrued expenditure.
    Department means the U.S. Department of Labor.
    DOL means the U.S. Department of Labor.
    ETA means the Employment and Training Administration of the U.S. 
Department of Labor.
    Family is defined at section 4(34) of the Act. An ``individual with 
a disability'' shall, for the purposes of income eligibility 
determination, be considered to be an unrelated individual who is a 
family unit of one, consistent with the definition of ``economically 
disadvantaged'' at section 4(8) of the Act. The Governor may provide 
interpretations of the term ``family'' related to how ``dependent 
children'' are defined for programs within a State, consistent with the 
Act, and all applicable rules and regulations, and State or local law. 
Such interpretations by the Governor may address the treatment of 
certain individuals who may need to be viewed discretely in the income 
eligibility determination process, such as runaways, emancipated youth, 
and court adjudicated youth separated from the family.
    The phrase ``living in a single residence'' with other family 
members includes temporary, voluntary residence

[[Page 187]]

elsewhere (e.g., attending school or college, or visiting relatives). It 
does not include involuntary temporary residence elsewhere (e.g., 
incarceration, or placement as a result of a court order).
    Family income means ``income'' as defined by the Department of 
Health and Human Services in connection with the annual poverty 
guidelines. Such income shall not include unemployment compensation, 
child support and public assistance (including Aid to Families with 
Dependent Children, Supplemental Security Income, Emergency Assistance 
money payments, and non-federally funded General Assistance or General 
Relief money payments), as provided for at section 4(8) of the Act. In 
addition, such income shall also exclude foster child care payments, 
educational financial assistance received under title IV of the Higher 
Education Act (20 U.S.C. 1087), as amended by section 479(B) of the 
Higher Education Act Amendments of 1992), needs-based scholarship 
assistance, and income earned while on active military duty and other 
benefit payments specified at 38 U.S.C. 4213, items (1) and (3). The 
Governor may, for the purposes of determining income eligibility for 
services to older individuals under section 204(d)(5) of the Act, 
exclude up to 25 percent of Social Security and Old Age Survivors' 
Insurance benefit payments under title II of the Social Security Act, 
(42 U.S.C., section 401, et seq.) from the definition of family income. 
In addition, when a Federal statute specifically provides that income or 
payments received under such statute shall be excluded in determining 
eligibility for and the level of benefits received under any other 
federal statute, such income or payments shall be excluded in JTPA 
eligibility determinations.
    Funding period means the period of time when JTPA funds are 
available for expenditure. Unless a shorter period of time is specified 
in a title III discretionary award, the JTPA funding period is the 3-
year period specified in JTPA section 161(b); the program year in which 
Federal funds are obligated to the recipient, and the two succeeding 
program years.
    Governor means, in addition to the definition at section 4(9) of the 
Act, the recipient of JTPA funds awarded to the State under titles I 
through III.
    Grant means an award of JTPA financial assistance by the U.S. 
Department of Labor to an eligible JTPA recipient. (Also, see 
Secs. 627.405 and 627.430 of these regulations).
    Grantee means the recipient.
    Individual service strategy (ISS) is defined in Sec. 628.520 of this 
chapter.
    Job search assistance (also including job search skills training and 
job club activities) means the provision of instruction and support to a 
participant to give the participant skills in acquiring full time 
employment. The services provided may include, but are not limited to, 
resume writing, interviewing skills, labor market guidance, telephone 
techniques, information on job openings, and job acquisition strategies, 
as well as the provision of office space and supplies for the job 
search.
    Job Training Partnership Act means Public Law (Pub. L.) 97-300, as 
amended, 29 U.S.C. 1501, et seq.
    JTPA means the Job Training Partnership Act.
    Nontraditional employment, as applied to women, means occupations or 
fields of work where women comprise less than 25 percent of the 
individuals employed in such occupation or field of work as provided 
periodically by the Department in the Federal Register. (Pub. L. 102-
235, Nontraditional Employment for Women Act).
    OALJ means the Office of Administrative Law Judges of the U.S. 
Department of Labor.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a funding period that will require payment by the recipient or 
subrecipient during the same or a future period.
    OIG means the Office of Inspector General of the U.S. Department of 
Labor.
    PIC means a private industry council.
    Participant means an individual who has been determined to be 
eligible to participate in and who is receiving services (except post-
termination services authorized under sections 204(c)(4) and 264(d)(5) 
and followup services authorized under section 253(d)) under a

[[Page 188]]

program authorized by the JTPA. Participation shall be deemed to 
commence on the first day, following determination of eligibility, on 
which the participant began receiving subsidized employment, training, 
or other services provided under the JTPA. (section 4(37)).
    Program year means the 12-month period beginning July 1 of the 
indicated year.
    Recipient means the entity to which a JTPA grant is awarded directly 
from the Department of Labor to carry out the JTPA program. The 
recipient is the entire legal entity that received the award and is 
legally responsible for carrying out the JTPA program, even if only a 
particular component of the entity is designated in the grant award 
document. For JTPA grants under titles I, II and III, except for certain 
discretionary grants awarded under title III, part B, the State is the 
recipient.
    SDA means a service delivery area designated by the Governor 
pursuant to section 101(a)(4) of the Act. As used in these regulations, 
SDA may also refer to the entity that administers the JTPA program 
within the designated area.
    SDA grant recipient means the entity that receives JTPA funds for a 
service delivery area directly from the recipient.
    Secretary means the Secretary of Labor, U.S. Department of Labor, or 
his or her designee.
    Section, as used in this chapter, means a section of the Act unless 
the text specifically indicates otherwise.
    Service provider means a public agency, private nonprofit 
organization, or private-for-profit entity that delivers educational, 
training, employment or supportive services to JTPA participants. Awards 
to service providers may be made by subgrant, contract, subcontract, or 
other legal agreement.
    Stand-in costs means costs paid from non-Federal sources that a 
recipient proposes to substitute for Federal costs that have been 
disallowed as a result of an audit or other review. In order to be 
considered as valid substitutions, the costs (1) shall have been 
reported by the grantee as uncharged program costs under the same title 
and in the same program year in which the disallowed costs were incurred 
(2) shall have been incurred in compliance with laws, regulations, and 
contractual provisions governing JTPA, and (3) shall not result in a 
violation of the applicable cost limitations.
    State is defined at section 4(22) of the Act. For cash payment 
purposes, the definition of ``State'' contained in the Department of the 
Treasury regulations at 31 CFR 205.3 shall apply to JTPA programs.
    State council means the State Job Training Coordinating Council 
(SJTCC) or, in a State with a Human Resource Investment Council (HRIC) 
pursuant to Sec. 628.215 of this chapter, the HRIC.
    Subgrant means an award of JTPA financial assistance in the form of 
money, or property in lieu of money, made under a grant by a recipient 
to an eligible subrecipient. It also means a subgrant award of JTPA 
financial assistance by a subrecipient to a lower tier subrecipient. The 
term includes financial assistance when provided by any legal agreement, 
even if the agreement is called a contract, but does not include 
procurement purchases from vendors nor does it include any form of 
assistance received by program participants.
    Subgrantee means a subrecipient.
    Subrecipient means the legal entity to which a subgrant is awarded 
and which is accountable to the recipient (or higher tier subrecipient) 
for the use of the funds provided. For JTPA purposes, distinguishing 
characteristics of a subrecipient include items such as determining 
eligibility of applicants, enrollment of participants, performance 
measured against meeting the objectives of the program, responsibility 
for programmatic decisionmaking, responsibility for compliance with 
program requirements, and use of the funds awarded to carry out a JTPA 
program or project, as compared to providing goods or services for a 
JTPA program or project (vendor). Depending on local circumstances, the 
PIC, local elected official, or administrative entity may be a 
subrecipient. SDA grant recipients and JTPA title III substate grantees 
are particular types of subrecipients.

[[Page 189]]

    Substate grantee (SSG) means that agency or organization selected to 
administer programs pursuant to section 312(b) of the Act. The substate 
grantee is the entity that receives JTPA title III funds for a substate 
area directly from the Governor.
    Technical assistance is a facet of capacity building which may 
include but is not limited to information sharing, dissemination and 
training on program models and job functions; peer-to-peer networking 
and problem solving; guides; and interactive communication technologies.
    Title, as used in this chapter, means a title of the Act, unless the 
text of the regulation specifically indicates otherwise.
    Vendor means an entity responsible for providing generally required 
goods or services to be used in the JTPA program. These goods or 
services may be for the recipient's or subrecipient's own use or for the 
use of participants in the program. Distinguishing characteristics of a 
vendor include items such as: Providing the goods and services within 
normal business operations; providing similar goods or services to many 
different purchasers, including purchasers outside the JTPA program; and 
operating in a competitive environment. A vendor is not a subrecipient 
and does not exhibit the distinguishing characteristics attributable to 
a subrecipient, as defined above. Any entity directly involved in the 
delivery of program services not available to the general public, with 
the exception of an employer providing on-the-job training, shall be 
considered a subrecipient rather than a vendor.
    Wagner-Peyser Act means 29 U.S.C. 49, et seq.
[59 FR 45815, Sept. 2, 1994, as amended at 61 FR 19983, May 3, 1996]



PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT--Table of Contents




                      Subpart A--Scope and Purpose

627.100  Scope and purpose of this part 627.

                     Subpart B--Program Requirements

627.200  Governor/Secretary agreement.
627.201  Waivers.
627.205  Public service employment prohibition.
627.210  Nondiscrimination and nonsectarian activities.
627.215  Relocation.
627.220  Coordination with programs under title IV of the Higher 
          Education Act including the Pell grant program.
627.225  Employment generating activities.
627.230  Displacement.
627.235  General program requirements.
627.240  On-the-job training.
627.245  Work experience.
627.250  Interstate agreements.

   Subpart C--Payments, Supportive Services, and Benefits and Working 
                               Conditions

627.300  Scope and purpose.
627.305  Payments.
627.310  Supportive services.
627.315  Benefits and working conditions.

                   Subpart D--Administrative Standards

627.400  Scope and purpose.
627.405  Grant agreement and funding.
627.410  Reallotment and reallocation.
627.415  Insurance.
627.420  Procurement.
627.422  Selection of service providers.
627.423  Funding restrictions for ``high-risk'' recipients and 
          subrecipients.
627.424  Prohibition of subawards to debarred and suspended parties.
627.425  Standards for financial management and participant data 
          systems.
627.430  Grant payments.
627.435  Cost principles and allowable costs.
627.440  Classification of costs.
627.445  Limitations on certain costs.
627.450  Program income.
627.455  Reports required.
627.460  Requirements for records.
627.463  Public access to records.
627.465  Property management standards.
627.470  Performance standards.
627.471  Reorganization plan appeals.
627.475  Oversight and monitoring.
627.477  Governor's determination of substantial violation.
627.480  Audits.
627.481  Audit resolution.
627.485  Closeout.
627.490  Later disallowances and adjustments after closeout.
627.495  Collection of amounts due.

      Subpart E--Grievances Procedures at the State and Local Level

627.500  Scope and purpose.
627.501  State grievance and hearing procedures for noncriminal 
          complaints at the recipient level.
627.502  Grievance and hearing procedures for noncriminal complaints at 
          the SDA

[[Page 190]]

          and SSG levels.
627.503  Recipient-level review.
627.504  Noncriminal grievance procedure at employer level.

    Subpart F--Federal Handling of Noncriminal Complaints and Other 
                               Allegations

627.600  Scope and purpose.
627.601  Complaints and allegations at the Federal level.
627.602  Resolution of investigative findings.
627.603  Special handling of labor standards violations under section 
          143 of the Act.
627.604  Alternative procedure for handling labor standards violations 
          under section 143--binding arbitration.
627.605  Special Federal review of SDA- and SSG-level complaints without 
          decision.
627.606  Grant Officer resolution.
627.607  Grant Officer resolution of Governor's failure to promptly take 
          action.

             Subpart G--Sanctions for Violations of the Act

627.700  Purpose and scope.
627.702  Sanctions and corrective actions.
627.703  Failure to comply with procurement provisions.
627.704  Process for waiver of State liability.
627.706  Process for advance approval of a recipient's contemplated 
          corrective actions.
627.708  Offset process.

     Subpart H--Hearings by the Office of Administrative Law Judges

627.800  Scope and purpose.
627.801  Procedures for filing request for hearing.
627.802  Rules of procedure.
627.803  Relief.
627.804  Timing of decisions.
627.805  Alternative dispute resolution.
627.806  Other authority.

                    Subpart I--Transition Provisions

627.900  Scope and purpose.
627.901  Transition period.
627.902  Governor's actions.
627.903  Actions which are at the discretion of the Governor.
627.904  Transition and implementation.
627.905  Guidance on contracts and other agreements.
627.906  Determinations on State and SDA implementation.

    Authority:  29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102 
Stat. 1107; 29 U.S.C. 1791i(e).

    Source:  59 FR 45821, Sept. 2, 1994, unless otherwise noted.

                      Subpart A--Scope and Purpose



Sec. 627.100  Scope and purpose of this part 627.

    (a) This part sets forth requirements for implementation of programs 
under titles I, II, and III of the Job Training Partnership Act.
    (b) Subpart B provides general program requirements that apply to 
all programs under the titles I, II, and III of the Act, except as 
provided elsewhere in the Act or this chapter. These requirements 
include the Governor/Secretary agreement, the nondiscrimination and 
nonsectarian activity provisions, coordination provisions with Higher 
Education Act programs, and the prohibitions on public service 
employment, relocation assistance, displacement, and employment 
generating activities. This subpart also sets forth comprehensive rules 
for on-the-job training for JTPA participants as well as for work 
experience.
    (c) Subpart C sets forth requirements for allowable payments to JTPA 
participants.
    (d) Subpart D establishes the administrative and financial standards 
and requirements that apply to funds received under the Act.
    (e) Subpart E establishes the procedures that apply to the handling 
of noncriminal complaints under the Act at the Governor, the SDA, and 
title III SSG levels.
    (f) Subpart F establishes the procedures that apply to the filing, 
handling, and review of complaints at the Federal level.
    (g) Subpart G sets forth the provisions that apply to the sanctions 
and corrective actions that may be imposed by the Secretary for 
violations of the Act, regulations, or grant terms and conditions.
    (h) Subpart H sets forth procedures that apply to hearing by the 
Office of the Administrative Law Judges.



                     Subpart B--Program Requirements



Sec. 627.200  Governor/Secretary agreement.

    (a)(1) To establish a continuing relationship under the Act, the 
Governor and the Secretary shall enter into a Governor/Secretary 
agreement. The

[[Page 191]]

agreement shall consist of a statement assuring that the State shall 
comply with (i) the Job Training Partnership Act and all applicable 
rules and regulations and (ii) the Wagner-Peyser Act and all applicable 
rules and regulations. The agreement shall specify that guidelines, 
interpretations, and definitions, adopted and issued by the Governor and 
identified pursuant to section 124 of the Act, shall, to the extent that 
they are consistent with the Act and applicable rules and regulations, 
be accepted by the Secretary.
    (2) Either the Governor or the Secretary may seek a modification, 
revision, or termination of the agreement at any time, to be effective 
at the end of a program year.
    (b) Except as provided at part B of title III of the Act and part 
631, subpart G, of this chapter, the State shall be the grant recipient 
of JTPA funds awarded under titles I, II, and III.



Sec. 627.201  Waivers.

    (a)(1) The Governor may request, and the Secretary may grant, a 
waiver of specific provisions of these regulations to the extent that 
such request is consistent with the provisions of the Act.
    (2) In requesting a waiver under paragraph (a)(1) of this section, 
the Governor shall demonstrate how it will either improve the targeting 
of services to the hard to serve, increase the level of basic and 
occupational skills training provided by the JTPA program in the State, 
contribute to the provision of academic enrichment services to youth, 
promote coordination of JTPA programs with other human resource 
programs, or substantially improve the job placement outcomes of the 
JTPA program.
    (3) Waivers granted by the Secretary shall be effective for no more 
than four years from the date the waiver is granted.



Sec. 627.205  Public service employment prohibition.

    No funds available under titles I, II-A, II-C, or III-A of the Act 
may be used for public service employment (sections 141(p) and 
314(d)(2)).



Sec. 627.210  Nondiscrimination and nonsectarian activities.

    (a)(1) Recipients, SDA grant recipients, title III substate 
grantees, and other subrecipients shall comply with the 
nondiscrimination provisions of section 167 of the Act.
    (2) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, are 
governed by the provisions of 29 CFR part 34 and are administered and 
enforced by the DOL Directorate of Civil Rights.
    (3) Funds may be used to meet a recipient's or subrecipient's 
obligation to provide physical and programmatic accessibility and 
reasonable accommodation in regard to the JTPA program as required by 
Section 504 of the Rehabilitation Act of 1973, as amended, and the 
Americans with Disabilities Act of 1990.
    (b) The employment or training of participants in sectarian 
activities is prohibited.



Sec. 627.215  Relocation.

    (a) No funds provided under the Act shall be used, or proposed for 
use, to encourage or to induce the relocation of an establishment, or 
part thereof, that result in the loss of employment for any employee or 
such establishment at the original location.
    (b) For 120 days after the commencement or the expansion of 
commercial operations of a relocating establishment, no funds provided 
under this Act shall be used for customized or skill training, on-the-
job training, or company-specific assessments of job applicants or 
employees, for any relocating establishment or part thereof at a new, or 
expanded location, if the relocation of such establishment or part 
thereof results in a loss of employment for any employee of such 
establishment at the original location.
    (c) For the purposes of this section, relocating establishment means 
a business entity, including a successor-in-interest, which is moving 
any operations from a facility in one labor market area within the 
United States and its territories to a new or expanding facility in 
another labor market area. For the purposes of this section, a labor 
market area is an area within

[[Page 192]]

which individuals can readily change employment without changing their 
place of residence.
    (d) Pre-award review. To verify that an establishment which is new 
or expanding is not, in fact, relocating employment from another area, 
standardized pre-award review procedures developed by the State shall be 
completed and documented jointly by the service delivery area or 
substate grantee and the establishment as a prerequisite to JTPA 
assistance. The review should include names under which the 
establishment does business, including successors-in-interest; the name, 
title, and address of the company official certifying the information; 
the name and address of the facility in the other geographic location 
which is being closed or from which business is being transferred; a 
statement from the employer about job losses at that location; the 
nature of the products or business being transferred; the date the 
facility will commence or expand operations, and whether JTPA assistance 
is sought in connection with past or impending job losses at other 
facilities.
    (e) Violations and sanctions. The Department will promptly review 
and take appropriate action with regard to alleged violations of the 
provisions of paragraphs (a) and (b) of this section. Procedures for the 
investigation and resolution of the violations are provided for under 
subpart F of this part. Sanctions and remedies are provided for under 
subpart G of this part.



Sec. 627.220  Coordination with programs under title IV of the Higher Education Act including the Pell grant program.

    (a) Coordination. Financial assistance programs under title IV of 
the Higher Education Act of 1965, as amended (HEA) (the Pell Grant 
program, the Supplemental Education Opportunity Grant program, the Work-
study program, and Federal loan programs such as Federal Perkins Loans. 
Federal Stafford Loans and Federal Direct Stafford Loans) provide 
student financial aid and are available to JTPA participants enrolling 
in postsecondary level education programs. SDA's and title III SSG's 
shall establish coordination procedures and contractual safeguards to 
ensure that JTPA funds are used in addition to funds otherwise available 
in the area and are coordinated with these funding sources.
    (b) Affordable programs. (1) The SDA shall assist the participant 
early in the objective assessment, as appropriate, to establish 
eligibility for Pell Grants, student loans and other forms of financial 
aid.
    (2) The SDA or SSA shall record in the ISS or participant record the 
participant's training-related financial assistance needs and the mix of 
JTPA and other funds, including Pell Grant funds (sections 141(b), 
107(b), 205(b) and 265(b)).
    (3) The SDA shall ensure, to the extent practicable, that available 
Federal, State, and local resources are coordinated sufficiently to meet 
the training and education-related costs of services, so that the 
participant can afford to complete the agreed-upon program successfully.
    (4) Participants shall not be required to apply for or access 
student loans, or incur personal debt as a condition of JTPA 
participation.
    (c) Information sharing. To prevent duplication of funding and to 
streamline the tracking of the participant's financial needs and use of 
funds when HEA, title IV programs are involved, contracts and agreements 
with educational institutions shall require the educational 
institution's financial aid officer to inform the SDA's/SSG's of the 
amounts and disposition of any HEA, title IV awards and other types of 
financial aid to each JTPA participant awarded after the enrollment of 
the participant, as part of a continuing, regular information sharing 
process (section 141(b)).



Sec. 627.225  Employment generating activities.

    (a)(1) No funds available under the Act shall be used for employment 
generating activities, economic development activities, investment in 
revolving loan funds, capitalization of businesses, investment in 
contract bidding resource centers, or similar activities.
    (2) No funds available under titles I, II, or III of the Act shall 
be used for

[[Page 193]]

foreign travel for employment generating activities, economic 
development activities, or similar activities.
    (b) JTPA funds may be used for normal employer outreach and job 
development activities including, but not limited to: contacts with 
potential employers for the purpose of placement of JTPA participants; 
participation in business associations (such as chambers of commerce); 
JTPA staff participation on economic development boards and commissions, 
and work with economic development agencies, to provide information 
about JTPA and to assist in making informed decisions about community 
job training needs; subscriptions to relevant publications; general 
dissemination of information on JTPA programs and activities; labor 
market surveys; and development of on-the-job training (OJT) 
opportunities, as defined in Sec. 627.240; and other allowable JTPA 
activities in the private sector.



Sec. 627.230  Displacement.

    (a) No currently employed worker shall be displaced by any 
participant (including partial displacement such as a reduction in the 
hours of nonovertime work, wages, or employment benefits).
    (b) No participant shall be employed or job opening filled: (1) When 
any other individual is on layoff from the same or any substantially 
equivalent job, or
    (2) When the employer has terminated any regular employee without 
cause or otherwise reduced its workforce with the intention of filling 
the vacancy so created by hiring a participant whose wages are 
subsidized under the Act.
    (c) Violations and sanctions. The Department will promptly review 
and take appropriate action with regard to alleged violations of the 
provisions of paragraphs (a) and (b) of this section. Procedures for the 
investigation and resolution of violations are provided for under 
subpart F of this part. Sanctions and remedies are provided for under 
subpart G of this part.



Sec. 627.235  General program requirements.

    (a) The requirements set forth in sections 141, 142 and 143 of the 
Act apply to all programs under titles I, II, and III of the Act, except 
as provided elsewhere in the Act.
    (b) Recipients shall ensure that an individual enrolled in a JTPA 
program meets the requirements of section 167(a)(5) of the Act, Section 
3 of the Military Selective Service Act (50 U.S.C. App. 453) and other 
requirements applicable to programs funded under the specific section or 
title of the Act under which the participant is enrolling (section 604).
    (c) Recipients shall ensure that individuals are enrolled within 45 
days of the date of eligibility determination or a new eligibility 
determination (including new application, if necessary) shall be made, 
except that eligible summer program applicants under title II-B may be 
enrolled within 45 days into a summer youth enrollee pool, and no 
subsequent eligibility determination need be made prior to participation 
during the period of that summer program. In addition, the 45-day 
enrollment requirement shall not apply for individuals who have a valid 
certificate of continuing eligibility under the title III program, as 
described in Sec. 631.3 and Sec. 631.53 of this chapter.
    (d) Programs operated under titles I, II, and III of the Act are not 
subject to the provisions of 29 CFR part 97, ``Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments,'' except as otherwise explicitly provided in this chapter.
    (e) If a recipient or SDA imposes a requirement that is in addition 
to the provisions of the Act and these regulations relating to the 
administration and operation of programs funded by the Act, the 
recipient or SDA shall identify the requirement as a State- or SDA-
imposed requirement (section 124).



Sec. 627.240  On-the-job training.

    (a) General--(1) On-the-job training (OJT) means training by an 
employer in the private or public sector given to

[[Page 194]]

a participant who, after objective assessment, and in accordance with 
the ISS, has been referred to and hired by the employer following the 
development of an agreement with the employer to provide occupational 
training in exchange for reimbursement of the employer's extraordinary 
costs. On-the-job training occurs while the participant is engaged in 
productive work which provides knowledge and skills essential to the 
full and adequate performance of the job.
    (2) This does not preclude a participant who has been trained by one 
employer from ultimately being placed in a comparable training-related 
position with another employer.
    (3) On-the-job training may be sequenced with or accompanied by 
other types of training such as classroom training or literacy training.
    (b) Duration of OJT. (1) OJT authorized for a participant shall be 
limited to a period not in excess of that required for the participant 
to acquire the skills needed for the OJT position. Except as described 
in paragraph (b) (3) of this section, the period of reimbursement to the 
employer under an OJT agreement shall not exceed 6 months of training.
    (2) The 6-month duration of OJT may be expressed as a number of 
hours, days, or weeks the participant is expected to work in a 6-month 
period if the participant works full-time.
    (3) In the event that a participant's regular employment is less 
than full-time and less than 500 hours of OJT has occurred by the end of 
6 months, that participant may remain in OJT until 499 hours OJT hours 
have occurred.
    (4)(i) Recipients shall develop policies and procedures for 
determining the average training duration for occupations including to 
reflect an individual participant's need for additional training time, 
or reduction in training time to reflect the individual participant's 
partial acquisition of needed skills. (In no case should an individual 
who is fully skilled in an occupation be placed in OJT in that 
occupation.)
    (ii) In determining the average training time, consideration should 
be given to recognized reference materials, such as the ``Dictionary of 
Occupational Titles'' (DOT) and employer training plans. Such materials 
need not be limited to the DOT, however.
    (5) On-the-job training is encouraged, but not required, in all 
occupations with significant training content, particularly in higher-
skill occupations appropriate to the participant's needs. Training plans 
may be developed that recognize the full duration of the OJT period 
necessary for the full and adequate performance of the job, but the 
period of reimbursement may not exceed the duration in paragraph (a)(1) 
or (a)(2) of this section.
    (6) When the OJT period in a given occupation for a participant for 
whom the ISS identifies OJT as appropriate varies from the average for 
that occupation, the basis for the variation shall be recorded in the 
ISS.
    (c) On-the-job training payments to employers. (1) On-the-job 
training payments to employers are deemed to be in compensation for the 
extraordinary costs associated with training participants and in 
compensation for the costs associated with the lower productivity of 
such participants. Employers shall not be required to document such 
extraordinary costs or lower productivity (section 141(g)(1)).
    (2)(i) On-the-job training payments to employers shall not, during 
the period of such training, average more than 50 percent of the wages 
paid by the employer to OJT participants.
    (ii) On-the-job training payments to employers may be based upon 
scheduled raises or regular pay increases.
    (iii) On-the-job training payments may not be based on overtime, 
shift differential, premium pay and other nonregular wages paid by the 
employer to participants.
    (iv) On-the-job training payments may not be based upon periods of 
time such as illness, holidays, plant downtime or other events in which 
no training occurs.
    (3) Employers which provide classroom or vestibule training to meet 
the specific training needs of JTPA participants to equip them with 
education and knowledge necessary to the OJT occupation may be 
separately reimbursed for training costs, such as instructors and 
training material.

[[Page 195]]

    (d) On-the-job training agreements. (1) Each OJT agreement shall, at 
a minimum, specify the occupation(s) for which training is to be 
provided, the duration of the training, the number of participants to be 
trained in each occupation, wage rates to be paid, the rate of 
reimbursement, the maximum amount of reimbursement, a job description or 
training outline that reflects what the participant will learn, and any 
other separate classroom training that may be provided.
    (2) The agreement shall provide that the employer will maintain and 
make available time and attendance, payroll and other records to support 
amounts reimbursed under OJT contracts.
    (e) Labor standards. OJT participants shall be compensated by the 
employer at the same rates, including periodic increases, as similarly 
situated employees, but in no event less than the higher of the minimum 
wage specified under the Fair Labor Standards Act of 1938, as amended or 
the applicable State or local minimum wage. Participants must receive 
the same benefits and have the same working conditions as similarly 
situated employees.
    (f) Suitability of participants. (1) Only those participants who 
have been assessed and for whom OJT has been determined as an 
appropriate activity in the participant's ISS may be referred to an 
employer for participation in OJT.
    (2) An individual referred to the JTPA program by an employer may be 
enrolled in an OJT program with such employer only upon completion of 
the objective assessment and individual service strategy in which OJT 
with such employer has been determined to be an appropriate activity and 
only if the employer has not already hired such individual.
    (3) OJT with the participant's previous or current employer in the 
same, a similar, or an upgraded job is not permitted.
    (g) Monitoring. (1) OJT agreements shall be monitored periodically 
on-site by the entity issuing the contract to assure that the validity 
and propriety of amounts claimed for reimbursement are substantiated by 
payroll and time and attendance records and that the training is being 
provided as specified in the agreement.
    (2) Brokering contractors shall conduct on-site monitoring of the 
OJT employers and other subcontractors to verify compliance with 
subcontract terms before making payments.
    (3) Nothing in this paragraph (g) shall relieve recipients and SDA's 
from responsibility for monitoring expenditures under the Act.
    (h) Employer eligibility. (1) OJT agreements shall not be entered 
into with employers which, under previous agreements, have exhibited a 
pattern of failing to provide OJT participants with continued long-term 
employment as regular employees with wages, benefits and working 
conditions at the same level and to the same extent as similarly 
situated employees. This prohibition does not apply to OJT agreements 
for youth in the program under title II-B who are returning to school.
    (2) Governors shall issue procedures and criteria to implement the 
requirement in paragraph (h)(1) of this section, which shall specify the 
duration of the period of loss of eligibility. The procedures and 
criteria shall provide that situations in which OJT participants quit 
voluntarily, are terminated for cause, or are released due to 
unforeseeable changes in business conditions will not necessarily result 
in termination of employer eligibility.
    (i) Brokered OJT. Each agreement with an OJT employer that is 
written by a brokering contractor (not written directly by the SDA/SSA 
or recipient) shall specify and clearly differentiate the services to be 
provided by the brokering contractor (including but not limited to 
outreach, recruitment, training, counseling, assessment, placement, 
monitoring, and followup), the employer and other agencies and 
subcontractors, including services provided with or without cost by 
other agencies or subcontractors.
    (j) Youth OJT. OJT conducted under title II-C shall meet the 
requirements of subpart H of part 628 of this chapter (628.804), as well 
as the requirements of this section. Where OJT is provided to youth 
concurrently enrolled under titles II-B and II-C, the source of funding 
for the OJT shall govern which requirements apply.

[[Page 196]]

    (k) Employment and employee leasing agencies.
    (1) Definition. The terms employment agency and employee leasing 
agency mean an employer that provides regular, on-going employment 
(i.e., not probationary, temporary, or intermittent employment) in a 
specific occupation and, for a fee, places employees at the worksite of 
another employer to perform work for such employer.
    (2) Employment and employee leasing agencies that meet the other 
requirements of this section may be eligible for OJT agreements when the 
agreement specifies the source of training and specifies that the 
payments are for the extraordinary training costs of the entity 
providing the training.



Sec. 627.245  Work experience.

    (a) Definition.--Work Experience means a short-term or part-time 
training assignment with a public or private nonprofit organization for 
a participant who needs assistance in becoming accustomed to basic work 
requirements. It is prohibited in the private for-profit sector.
    (b) Suitability. Work experience should be designed to promote the 
development of good work habits and basic work skills.
    (c) Duration of work experience. Participation in work experience 
shall be for a reasonable length of time, based on the needs of the 
participant. The duration of work experience shall be recorded in the 
participant's ISS.
    (d) Combination with other services. Work experience under titles 
II-A and C shall be accompanied either concurrently or sequentially by 
other services designed to increase the basic education and/or 
occupational skills of the participant, as recorded in the ISS.
    (e) Work experience is not an allowable activity under title III of 
the Act. (Sections 204(b) and (c), 253(a), and 264 (c) and (d).)



Sec. 627.250  Interstate agreements.

    The Secretary hereby grants authority to the several States to enter 
into interstate agreements and compacts in accordance with section 127 
of the Act and, as specified in Sec. 627.420(g), Procurement.



   Subpart C--Payments, Supportive Services, and Benefits and Working 
                               Conditions



Sec. 627.300  Scope and purpose.

    This subpart sets forth requirements for allowable payments to JTPA 
participants under titles I and II. These include needs-based payments 
under title II, incentive and bonus payments under title II, work-based 
training payments under title II, and payments for combined activities 
under title II. Requirements for supportive services under titles I, II, 
and III, including financial assistance and needs-related payments, are 
also included in this subpart. This subpart also sets forth rules for 
benefits and working conditions for JTPA participants. These include 
requirements for: Compliance with applicable labor laws; workers' 
compensation coverage or medical and accident insurance where there is 
no State workers' compensation coverage; and working conditions which 
are not detrimental to the participant's health and safety.



Sec. 627.305  Payments.

    (a)(1) General. Allowable types of payments which may be made to 
participants are: Needs-based payments for eligible individuals in 
programs under title II; incentive and bonus payments for participants 
in title II programs; work-based training payments for work experience, 
entry employment experience, internships and other work-based training 
activities; payments for participants in title II-B activities; and 
training payments for combined activities in title II programs. These 
payments shall be made in accordance with paragraphs (b) through (f) of 
this section.
    (2) A participant shall receive no payments for training activities 
in which the participant fails to participate without good cause 
(section 142(a)(1)).
    (3) The SDA shall ensure to the extent possible that similarly 
situated participants receive similar payments.
    (4) Payments to participants, broadly defined for this subsection as 
all funds distributed to participants except OJT wages, shall not be 
considered as income for the purposes of determining

[[Page 197]]

eligibility for and the amount of income transfer and in-kind aid 
furnished under any Federal or federally assisted program based on need, 
other than as provided under the Social Security Act (section 142(b)).
    (5) The SDA is responsible for meeting any applicable Internal 
Revenue Service and Fair Labor Standards Act requirements (section 
142(a)(3)).
    (6) An SDA may set fixed levels for any non-wage payment.
    (b) Needs-based payments. (1) Participants in programs funded under 
title II may receive needs-based payments when such payments are 
necessary to enable the individual to participate in training programs. 
Payments shall be made in accordance with a locally developed policy 
which is included in the job training plan approved by the Governor.
    (2) The individual determination of participants' needs-based 
payments and the amount of such payments shall be based upon the results 
of the continuing objective assessment and determined in accordance with 
a locally developed policy. The provisions and amount of such payments 
shall be recorded in the ISS.
    (c) Incentive and bonus payments. Participants in programs funded 
under title II may receive incentive and bonus payments based on their 
attendance and performance in accordance with a locally developed 
policy. The policy shall be described in the job training plan approved 
by the Governor and shall include a specification of the requirements 
for the receipt of such payments and the level of payments.
    (d) Work-based training payments. Individuals participating in work 
experience, in entry employment experience programs, in limited 
internships for youth in the private sector, or in other work-based 
training activities under title II of the Act may receive work-based 
training payments which may be wages.
    (e) Summer participants may receive training payments for 
participation in activities under title II-B.
    (f) Training payments for combined activities. For title II 
programs, participants in one of the activities described in paragraph 
(d) of this section for which work-based training payments are payable 
for more than 50 percent of the participant's time, including classroom 
training, may also receive training payments for hours of participation 
in classroom training.



Sec. 627.310  Supportive services.

    (a)(1) The SDA or SSG shall develop a policy on supportive services 
in accordance with the definition at section 4(24) of the Act. This 
policy shall be included in the job training plan approved by the 
Governor (section 4(24)). Supportive services may be provided to 
participants through in-kind or cash assistance, or by arrangement with 
another human service agency when necessary to enable an individual who 
is eligible for training under a JTPA assisted program, but who cannot 
afford to pay for such services, to participate in such JTPA-assisted 
program.
    (2) In the event that an SDA or SSG adopts a policy of providing a 
fixed reimbursement for a particular supportive service to all 
participants, it shall, as part of its policy, state the rationale for 
its choice and the fixed amounts it has adopted.
    (b) Limited supportive services may be provided to applicants in 
order to permit them to complete the application process.
    (c) Necessary supportive services shall be recorded in a 
participant's ISS under title II or should be recorded in a 
participant's individual readjustment plan under title III. When 
supportive services are provided in accordance with paragraph (b) of 
this section, information on any supportive service provided may be 
maintained for future inclusion in an ISS.
    (d) The SDA or SSG shall ensure, to the extent possible, that 
similarly situated participants receive similar supportive services.
    (e) For title II participants, necessary supportive services (with 
the exception of financial assistance) may be provided for up to one 
year following termination as post-termination or followup services 
(sections 4(24), 204(b)(2)(J), and 204(c)(4)). For title III 
participants, the provisions at section 314(c)(15) of the Act shall 
apply.
    (f) An SDA or SSG may set fixed levels of benefit for any supportive 
service.

[[Page 198]]

    (g)(1) For purposes of title II, financial assistance is defined as 
a general supportive service payment for the purpose of retaining 
participants in training.
    (2) Financial assistance payments may be considered to be necessary 
for participation in training for title II participants, i.e., a 
separate, individual determination of need is not necessary.
    (h) Needs-related payments. The requirements pertaining to needs-
related payments provided for under section 315(b) under title III of 
the Act, are described in part 631 of this chapter.



Sec. 627.315  Benefits and working conditions.

    (a) In the development and conduct of programs funded under the Act, 
SDA's and SSG's shall ensure that participants are not assigned to work 
for employers which do not comply with applicable labor laws, including 
wage and hour, occupational health and safety, and child labor laws (29 
CFR part 570).
    (b) To the extent that a State workers' compensation law is 
applicable, workers' compensation benefits in accordance with such law 
shall be available with respect to injuries suffered by participants. 
Where a State's workers' compensation law is not applicable, recipients 
and subrecipients shall secure insurance coverage for injuries suffered 
by such participants in all JTPA work-related activities. Income 
maintenance coverage (e.g., contributions for unemployment 
compensation), is not required for participants (section 143(a)(3)).
    (c) Where a participant is engaged in activities not covered under 
the Occupational Safety and Health Act of 1970, as amended, the 
participant shall not be required or permitted to work, be trained, or 
receive services in buildings or surroundings or under working 
conditions which are unsanitary, hazardous, or dangerous to the 
participant's health or safety. A participant employed or trained for 
inherently dangerous occupations, e.g., fire or police jobs, shall be 
assigned to work in accordance with reasonable safety practices (section 
143(a)(2)).



                   Subpart D--Administrative Standards



Sec. 627.400  Scope and purpose.

    This subpart establishes the administrative and financial standards 
and requirements that apply to funds received under the Act.



Sec. 627.405  Grant agreement and funding.

    (a)(1) Pursuant to Sec. 627.200 of this part and the Governor/
Secretary agreement, each program year there will be executed a grant 
agreement signed by the Governor or the Governor's designated 
representative and the Secretary or the Secretary's designated 
representative (Grant Officer).
    (2) The grant agreement described in paragraph (a)(1) of this 
section shall be the basis for Federal obligation of funds for the 
program year for programs authorized by titles I, II, and III, including 
any title III discretionary projects awarded to the State, and such 
other funds as the Secretary may award under the grant.
    (b) Funding. The Secretary shall allot funds to the States in 
accordance with sections 162, 202, 252, 262, and 302 of the Act. The 
Secretary shall obligate such allotments through Notices of Obligation.
    (c) Pursuant to instructions issued by the Secretary, additional 
funds may be awarded to States for the purpose of carrying out the 
administrative activities described in section 202(c)(1)(A) when a State 
receives an amount under such section that is less than $500,000 
(section 453(d)).
    (d) Termination. Each grant shall terminate when the period of 
availability for expenditure (funding period), as specified in section 
161(b) of the Act, has expired and shall be closed in accordance with 
Sec. 627.485, of this part, Closeout.



Sec. 627.410  Reallotment and reallocation.

    (a)(1) The Governor shall reallocate title II-A and II-C funds among 
service delivery areas within the State in accordance with the 
provisions of section 109(a) of the Act. The amount to be reallocated, 
if any, shall be based on SDA

[[Page 199]]

obligations of the funds allocated separately to each SDA for title II-A 
or II-C programs.
    (2) The Governor shall not establish reallocation requirements that 
are inconsistent with the provisions of section 109(a) of the Act.
    (b) The Secretary shall reallot title II-A and II-C funds among the 
States in accordance with the provisions of section 109(b) of the Act. 
The amounts to be reallotted, if any, shall be based on State 
obligations of the funds allotted separately to each State for title II-
A or II-C programs, excluding funds allotted under section 202(c)(1)(D) 
and the State's obligation of such funds.
    (c) Title III funds shall be reallotted by the Secretary in 
accordance with section 303 of the Act.



Sec. 627.415  Insurance.

    (a) General. Each recipient and subrecipient shall follow its normal 
insurance procedures except as otherwise indicated in this section and 
Sec. 627.465, Property Management Standards.
    (b) DOL assumes no liability with respect to bodily injury, illness, 
or any other damages or losses, or with respect to any claims arising 
out of any activity under a JTPA grant or agreement whether concerning 
persons or property in the recipient's or any subrecipient's 
organization or that of any third party.



Sec. 627.420  Procurement.

    (a) General. (1) For purposes of this section, the term procurement 
means the process which leads to any award of JTPA funds.
    (2) The Governor, in accordance with the minimum requirements 
established in this section, shall prescribe and implement procurement 
standards to ensure fiscal accountability and prevent waste, fraud, and 
abuse in programs administered under this Act.
    (3) When procuring property and services, a State shall follow the 
same policies and procedures it uses for procurements from its non-
Federal funds, provided that the State's procurement procedures also 
comply with the minimum requirements of this section.
    (4) Each subrecipient shall use its own procurement procedures which 
reflect applicable State and local laws and regulations, provided that 
the subrecipient's procurement procedures also comply with the 
requirements of this section and the standards established by the 
Governor, pursuant to paragraph (a)(2) of this section.
    (5) States and subrecipients shall not use funds provided under JTPA 
to duplicate facilities or services available in the area (with or 
without reimbursement) from Federal, State, or local sources, unless it 
is demonstrated that the JTPA-funded alternative services or facilities 
would be more effective or more likely to achieve performance goals 
(sections 107(b) and 141(h)).
    (6) Awards are to be made to responsible organizations possessing 
the demonstrated ability to perform successfully under the terms and 
conditions of a proposed subgrant or contract. A determination of 
demonstrated ability shall be done in accordance with the requirements 
contained in Sec. 627.422 (b) and (d).
    (b) Competition. (1) Each State and subrecipient shall conduct 
procurements in a manner which provides full and open competition. Some 
of the situations considered to be restrictive of competition include, 
but are not limited to:
    (i) Placing unreasonable requirements on firms or organizations in 
order for them to qualify to do business;
    (ii) Requiring unnecessary experience and excessive bonding;
    (iii) Noncompetitive pricing practices between firms or 
organizations or between affiliated companies or organizations;
    (iv) Noncompetitive awards to consultants that are on retainer 
contracts;
    (v) Organizational conflicts of interest;
    (vi) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement;
    (vii) Overly restrictive specifications; and
    (viii) Any arbitrary action in the procurement process.
    (2) Each State and subrecipient shall have written procedures for 
procurement transactions. These procedures shall ensure that all 
solicitations:

[[Page 200]]

    (i) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured 
(including quantities). Such description shall not, in competitive 
procurements, contain features which unduly restrict competition; and
    (ii) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (3) Each State and subrecipient shall ensure that all prequalified 
lists of persons, firms, or other organizations which are used in 
acquiring goods and services are current and include sufficient numbers 
of qualified sources to ensure maximum open and free competition.
    (c) Conflict of interest. (1) Each recipient and subrecipient shall 
maintain a written code of standards of conduct governing the 
performance of persons engaged in the award and administration of JTPA 
contracts and subgrants. To the extent permitted by State or local law 
or regulation, such standards of conduct will provide for penalties, 
sanctions, or other disciplinary actions for violations of such 
standards by the awarding agency's officers, employees, or agents, or by 
awardees or their agents.
    (2) Staff conflict of interest. Each recipient and subrecipient 
shall ensure that no individual in a decisionmaking capacity shall 
engage in any activity, including participation in the selection, award, 
or administration of a subgrant or contract supported by JTPA funds if a 
conflict of interest, real or apparent, would be involved.
    (3) PIC conflict of interest. (i) A PIC member shall not cast a 
vote, nor participate in any decisionmaking capacity, on the provision 
of services by such member (or any organization which that member 
directly represents), nor on any matter which would provide any direct 
financial benefit to that member.
    (ii) Neither membership on the PIC nor the receipt of JTPA funds to 
provide training and related services shall be construed, by itself, to 
violate provisions of section 141(f) of the Act or Sec. 627.420.
    (4) A conflict of interest under paragraphs (c) (2) and (3) of this 
section would arise when:
    (i) The individual,
    (ii) Any member of the individual's immediate family,
    (iii) The individual's partner, or
    (iv) An organization which employs, or is about to employ, any of 
the above, has a financial or other interest in the firm or organization 
selected for award.
    (5) The officers, employees, or agents of the agency and PIC members 
making the award will neither solicit nor accept gratuities, favors, or 
anything of monetary value from awardees, potential awardees, or parties 
to subagreements. States and subrecipients may set minimum rules where 
the financial interest is not substantial or the gift is an unsolicited 
item of nominal intrinsic value.
    (d) Methods of procurement. (1) Each State and subrecipient shall 
use one of the following methods of procurement, as appropriate for each 
procurement action:
    (i) Small purchase procedures--simple and informal procurement 
methods for securing services, supplies, or other property that do not 
cost more than $25,000 in the aggregate. Recipients and subrecipients 
shall not break down one purchase into several purchases merely to be 
able to use small purchase procedures. The Governor shall establish 
standards for small purchase procedures to ensure that price or rate 
quotations will be documented from an adequate number of qualified 
sources.
    (ii) Sealed bids (formal advertising)--bids are publicly solicited 
procurements for which a firm-fixed-price award (lump sum or unit price) 
or other fixed-price arrangement is awarded to the responsible bidder 
whose bid, conforming with all the material terms and conditions of the 
invitation for bids, is the lowest in price. The Governor shall 
establish standards for sealed bids which include requirements that 
invitations for bids be publicly advertised, and that bids be solicited 
from an adequate number of organizations.
    (iii) Competitive proposals--normally conducted with more than one 
source submitting an offer and either a fixed-

[[Page 201]]

price or cost-reimbursement type award is made. The Governor shall 
establish standards for competitive proposals which include requirements 
for the establishment of a documented methodology for technical 
evaluations and award to the responsible offeror whose proposals are 
most advantageous to the program with price, technical, and other 
factors considered.
    (iv) Noncompetitive proposals (sole source)--procurement through 
solicitation of a proposal from only one source, the funding of an 
unsolicited proposal, or when, after solicitation of a number of 
sources, competition is determined inadequate. Each State and 
subrecipient shall minimize the use of sole source procurements to the 
extent practicable, but in every case the use of sole source 
procurements shall be justified and documented. On-the-job training 
(OJT) awards (except OJT brokering awards, which shall be selected 
competitively) and the enrollment of individual participants in 
classroom training may be sole sourced. For all other awards, 
procurement by noncompetitive proposals may be used only when the award 
is infeasible under small purchase procedures, sealed bids, or 
competitive proposals and one of the following circumstances applies:
    (A) The item or service is available only from a single source;
    (B) The public exigency or emergency need for the item or service 
does not permit a delay resulting from competitive solicitation;
    (C) For SDAs, SSGs and subrecipients, the awarding agency authorizes 
noncompetitive proposals; for States, the noncompetitive proposal is 
approved through the State's normal sole source approval process;
    (D) After solicitation of a number of sources, competition is 
determined inadequate;
    (2) Pass Throughs--The procurement rules do not apply to pass 
throughs of monies from any unit of State or local government (or SDA or 
SSG administrative entities) to other such units, such as a local 
educational agency or public housing authority. To qualify as a pass 
through, the receiving entity must either further pass through the 
monies to another such entity or procure services in accordance with the 
procurement rules.
    (e) Cost or price analysis. (1) Each recipient, in accordance with 
the minimum requirements established in this section, shall establish 
standards on the performance of cost or price analysis.
    (2) Each recipient and subrecipient shall perform a cost or price 
analysis in connection with every procurement action, including 
modifications (except for modifications where a determination has been 
made that they do not have a monetary impact). The method and degree of 
analysis depends on the facts surrounding the particular procurement and 
pricing situation. At a minimum, the awarding agency shall make 
independent estimates before receiving bids or proposals. A cost 
analysis is necessary when the offeror is required to submit the 
elements of the estimated cost (e.g., as in the case of subrecipient 
relationships), when adequate price competition is lacking, and for sole 
source procurements, including modifications or change orders. A price 
analysis shall be used when price reasonableness can be established on 
the basis of a catalog or market price of a commercial product sold in 
substantial quantities to the general public or based on prices set by 
law or regulation (including situations involving inadequate price 
competition and sole source procurements where a price analysis may be 
used in lieu of a cost analysis). When a cost analysis is necessary and 
there is inadequate price competition, the offeror shall certify that to 
the best of its knowledge and belief, the cost data are accurate, 
complete, and current at the time of agreement on price. Awards or 
modifications negotiated in reliance on such data should provide the 
awarding agency a right to a price adjustment to exclude any significant 
sum by which the price was increased because the awardee had knowingly 
submitted data that were not accurate, complete, or current as 
certified.
    (3) JTPA procurements shall not permit excess program income (for 
nonprofit and governmental entities) or excess profit (for private for-
profit entities). If profit or program income is included in the price, 
the awarding

[[Page 202]]

agency shall negotiate profit or program income as a separate element of 
the price for each procurement in which there is no price competition 
and in all cases where cost analysis is performed. To establish a fair 
and reasonable profit or program income, consideration shall be given 
to:
    (i) The complexity of the work to be performed;
    (ii) The risk borne by the awardee;
    (iii) The offeror's investment;
    (iv) The amount of subcontracting/subgranting;
    (v) The quality of the offeror's record of past performance;
    (vi) Industry profit rates in the surrounding geographical area for 
similar work; and
    (vii) Market conditions in the surrounding geographical area.
    (4) Each recipient and subrecipient may charge to the agreement only 
those costs which are consistent with the allowable cost provisions of 
Sec. 627.435 of this part, including the guidelines issued by the 
Governor, as required at Sec. 627.435(i) of this part.
    (5) The cost plus a percentage of cost method shall not be used.
    (f) Oversight. (1) Each recipient and subrecipient shall conduct and 
document oversight to ensure compliance with the procurement standards, 
in accordance with the requirements of Sec. 627.475 of this part, 
Oversight and monitoring.
    (2) Each recipient and subrecipient shall maintain an administration 
system which ensures that vendors and subrecipients perform in 
accordance with the terms, conditions, and specifications of their 
awards.
    (g) Transactions between units of government. (1) Except as provided 
in paragraph (g)(2) of this section, procurement transactions between 
units of State or local governments, or any other entities organized 
principally as the administrative entity for service delivery areas or 
substate areas, shall be conducted on a cost reimbursable basis. Cost 
plus type awards are not allowable.
    (2) In the case of procurement transactions with schools that are a 
part of these entities, such as State universities and secondary 
schools, when tuition charges or entrance fees are not more than the 
educational institution's catalogue price, necessary to receive specific 
training, charged to the general public to receive the same training, 
and for training of participants, the tuition and/ or entrance fee does 
not have to be broken out by items of cost.
    (h) Award provisions. Each recipient and subrecipient agreement 
shall:
    (1) Clearly specify deliverables and the basis for payment; and
    (2) In the case of awards to subrecipients, contain clauses that 
provide for:
    (i) Compliance with the JTPA regulations;
    (ii) Assurance of nondiscrimination and equal opportunity as found 
in 29 CFR 34.20, Assurance required; duration of obligation; covenants.
    (3) In the case of awards to vendors, contain clauses that provide 
for:
    (i) Access by the recipient, the subrecipient, the Department of 
Labor, the Comptroller General of the United States, or any of their 
duly authorized representatives to any books, documents, papers, and 
records (including computer records) of the contractor or subcontractor 
which are directly pertinent to charges to the program, in order to 
conduct audits and examinations and to make excerpts, transcripts, and 
photocopies; this right also includes timely and reasonable access to 
contractor's and subcontractor's personnel for the purpose of interviews 
and discussions related to such documents;
    (4) In the case of awards to both subrecipients and vendors, contain 
clauses that provide for:
    (i) Administrative, contractual, or legal remedies in instances 
where contractors/subgrantees violate or breach agreement terms, which 
shall provide for such sanctions and penalties as may be appropriate;
    (ii) Notice of 29 CFR 97.34 requirements pertaining to copyrights 
(agreements which involve the use of copyrighted materials or the 
development of copyrightable materials);
    (iii) Notice of requirements pertaining to rights to data. 
Specifically, the awarding agency and the Department of Labor shall have 
unlimited rights to any data first produced or delivered under the 
agreement (agreements

[[Page 203]]

which involve the use/development of computer programs/ applications, or 
the maintenance of databases or other computer data processing program, 
including the inputing of data);
    (iv) Termination for cause and for convenience by the awarding 
agency, including the manner by which the termination will be effected 
and the basis for settlement;
    (v) Notice of awarding agency requirements and regulations 
pertaining to reporting;
    (vi) Audit rights and requirements;
    (vii) Payment conditions and delivery terms;
    (viii) Process and authority for agreement changes; and
    (ix) Provision against assignment;
    (5) The Governor may establish additional clauses, as deemed 
appropriate, for State and subrecipient procurements.
    (i) Disputes. (1) The Governor shall ensure that the recipient and 
each subrecipient have protest procedures to handle and resolve disputes 
relating to their procurements. A protester shall exhaust all 
administrative remedies with the subrecipient before pursuing a protest 
at a higher level.
    (2) Violations of law will be handled in accordance with the 
requirements contained in Sec. 627.500(c).
    (j) Each recipient and subrecipient shall maintain records 
sufficient to detail the significant history of a procurement. These 
records shall include, but are not necessarily limited to, the 
following: rationale for the method of procurement, selection of 
agreement type, awardee selection or rejection, and the basis for the 
agreement price.



Sec. 627.422  Selection of service providers.

    (a) Service providers selected under titles I, II, and III of the 
Act shall be selected in accordance with the provisions of section 107 
of the Act, except that section 107(d) shall not apply to training under 
title III.
    (b) Consistent with the requirements of this section, the Governor 
shall establish standards to be followed by recipients and subrecipients 
in making determinations of demonstrated performance, prior to the award 
of all agreements under titles I, II, and III of the Act. These 
standards shall comply with the requirements of this section, 
Sec. 627.420, of this part, Procurement, and section 164(a)(3) of the 
Act. The standards shall require that determinations of demonstrated 
performance will be in writing, and completed prior to the award of an 
agreement.
    (c) Each recipient and subrecipient, to the extent practicable, 
shall select service providers on a competitive basis, in accordance 
with the standards established in Sec. 627.420(b) of this part, 
Procurement. When a State, SDA, SSG, or administrative entity determines 
that services other than intake and eligibility determination will be 
provided by its own staff, a determination shall be made of the 
demonstrated performance of the entity to provide the services. This 
determination: Shall be in writing; shall take into consideration the 
matters listed in paragraph (d) of this section; and may, if 
appropriate, be documented and described in the Job Training Plan, 
GCSSP, or EDWAA plan.
    (d) Awards are to be made to organizations possessing the 
demonstrated ability to perform successfully under the terms and 
conditions of a proposed subgrant or contract. Where comparable 
proposals have been received from an offeror which has demonstrated 
performance and a high-risk recipient/subrecipient, and a determination 
has been made that both proposals are fundable, the award should be made 
to the offeror which has demonstrated performance, unless other factors 
dictate a contrary result. Determinations of demonstrated performance 
shall be in writing, and take into consideration such matters as whether 
the organization has:
    (1) Adequate financial resources or the ability to obtain them;
    (2) The ability to meet the program design specifications at a 
reasonable cost, as well as the ability to meet performance goals;
    (3) A satisfactory record of past performance (in job training, 
basic skills training, or related activities), including demonstrated 
quality of training; reasonable drop-out rates from past programs; where 
applicable, the ability to provide or arrange for appropriate supportive 
services as specified in the

[[Page 204]]

ISS, including child care; retention in employment; and earning rates of 
participants;
    (4) For title II programs, the ability to provide services that can 
lead to the achievement of competency standards for participants with 
identified deficiencies;
    (5) A satisfactory record of integrity, business ethics, and fiscal 
accountability;
    (6) The necessary organization, experience, accounting and 
operational controls; and
    (7) The technical skills to perform the work.
    (e) In selecting service providers to deliver services in a service 
delivery area/substate area, proper consideration shall be given to 
community-based organizations (section 107(a)). These community-based 
organizations, including women's organizations with knowledge about or 
experience in nontraditional training for women, shall be organizations 
which are recognized in the community in which they are to provide 
services. Where proposals are evenly rated, and one of these proposals 
has been submitted by a CBO, the tie breaker may go to the CBO.
    (f) Appropriate education agencies in the service delivery area/
substate area shall be provided the opportunity to provide educational 
services, unless the administrative entity demonstrates that alternative 
agency(ies) or organization(s) would be more effective or would have 
greater potential to enhance the participants' continued educational and 
career growth (section 107(c)). Where proposals are evenly rated, and 
one of these proposals has been submitted by an educational institution, 
the tie breaker shall go to the educational institution.
    (g) In determining demonstrated performance of institutions/
organizations which provide training, such performance measures as 
retention in training, training completion, job placement, and rates of 
licensure shall be taken into consideration.
    (h) Service providers under agreements to conduct projects under 
section 123(a)(2) shall be selected in accordance with the requirements 
of this section.
    (i) The requirements of section 204(d)(2)(B) shall be followed in 
entering into agreements to provide services for older individuals 
funded under title II, part A.
    (j) Additional requirements for selection of service providers by 
substate grantees are described at section 313(b)(6) of the Act and 
Sec. 631.52 of this chapter.
    (k) Amounts for service providers. Each SDA/SSG shall ensure that, 
for all services provided to participants through contracts, grants, or 
other agreements with a service provider, such contract, grant, or 
agreement shall include appropriate amounts necessary for administration 
and supportive services (section 108(b)(5)).
    (l) When a State, SDA or SSG has a policy of awarding additional 
points to proposals received from such organizations as minority 
business enterprises and women-owned businesses, and this policy is 
generally applicable to its other funds, the State, SDA or SSG may apply 
this policy to the JTPA funds.



Sec. 627.423  Funding restrictions for ``high-risk'' recipients and subrecipients.

    (a) A recipient or subrecipient may be considered ``high-risk'' if 
an awarding agency determines that the recipient or subrecipient is 
otherwise responsible, but:
    (1) Has a history of unsatisfactory performance;
    (2) Is not financially stable;
    (3) Has a management system which does not meet the management 
standards set forth in this part; or
    (4) Has not conformed to terms and conditions of a previously 
awarded grant or subgrant.
    (b) If the awarding agency determines that an award will be made to 
a ``high-risk'' recipient or subrecipient, then special funding 
restrictions that address the ``high-risk'' status may be included in 
the award. Funding restrictions may include, but are not limited to:
    (1) Payment on a reimbursement basis;
    (2) Requiring additional and/or more detailed financial or 
performance reports;

[[Page 205]]

    (3) Additional monitoring;
    (4) Requiring the recipient or subrecipient to obtain specific 
technical or management assistance; and/or
    (5) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such funding 
restrictions, the awarding official will notify the recipient or 
subrecipient as early as possible, in writing, of:
    (1) The nature of the funding restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions; and
    (4) The method of requesting reconsideration of the restrictions 
imposed.



Sec. 627.424  Prohibition of subawards to debarred and suspended parties.

    (a) No recipient or subrecipient shall make any awards or permit any 
awards at any tier to any party which is debarred or suspended or is 
otherwise excluded from or ineligible for participation in Federal 
assistance programs in accordance with the Department of Labor 
regulations at 29 CFR part 98.
    (b) Recipients and subrecipients shall comply with the applicable 
requirements of the Department of Labor regulations at 29 CFR part 98.



Sec. 627.425  Standards for financial management and participant data systems.

    (a)(1) General. The financial management system and the participant 
data system of each recipient and subrecipient shall provide federally 
required records and reports that are uniform in definition, accessible 
to authorized Federal and State staff, and verifiable for monitoring, 
reporting, audit, program management, and evaluation purposes (sections 
165(a)(1) and (2), and 182).
    (2) An awarding agency may review the adequacy of the financial 
management system and participant data system of any recipient/
subrecipient as part of a preaward review or at any time subsequent to 
award.
    (b) Financial systems. Recipients and subrecipients shall ensure 
that their own financial systems as well as those of their subrecipients 
provide fiscal control and accounting procedures that are:
    (1) In accordance with generally accepted accounting principles 
applicable in each State including:
    (i) Information pertaining to subgrant and contract awards, 
obligations, unobligated balances, assets, liabilities, expenditures, 
and income;
    (ii) Effective internal controls to safeguard assets and assure 
their proper use;
    (iii) A comparison of actual expenditures with budgeted amounts for 
each subgrant and contract;
    (iv) Source documentation to support accounting records; and
    (v) Proper charging of costs and cost allocation; and
    (2) Sufficient to:
    (i) Permit preparation of required reports;
    (ii) Permit the tracing of funds to a level of expenditure adequate 
to establish that funds have not been used in violation of the 
applicable restrictions on the use of such funds;
    (iii) As required by section 165(g), permit the tracing of program 
income, potential stand-in costs and other funds that are allowable 
except for funding limitations, as defined in Sec. 627.480(f) of this 
part, Audits; and
    (iv) Demonstrate compliance with the matching requirement of section 
123(b)(2).
    (c) Applicant and participant data systems. Each recipient and 
subrecipient shall ensure that records are maintained:
    (1) Of each applicant for whom an application has been completed and 
a formal determination of eligibility or ineligibility made;
    (2) Of each participant's enrollment in a JTPA-funded program in 
sufficient detail to demonstrate compliance with the relevant 
eligibility criteria attending a particular activity and with the 
restrictions on the provision and duration of services and specific 
activities imposed by the Act; and
    (3) Of such participant information as may be necessary to develop 
and measure the achievement of performance standards established by the 
Secretary.

[[Page 206]]



Sec. 627.430  Grant payments.

    (a) Except as provided in paragraph (h)(2) of this section, JTPA 
grant payments shall be made to the Governor in accordance with the Cash 
Management Improvement Act of 1990 (31 U.S.C. 6501, et seq.), Department 
of Treasury regulations at 31 CFR part 205, and the State Agreement 
entered into with the Department of the Treasury.
    (b) Basic standard. Except as provided in paragraphs (d) and (e) of 
this section, each recipient and subrecipient shall be paid in advance, 
provided it demonstrates the willingness and ability to limit advanced 
funds to the actual immediate disbursement needs in carrying out the 
JTPA program.
    (c) Advance payments. To the maximum extent feasible, each 
subrecipient shall be provided advance payments via electronic funds 
transfer, following the procedures of the awarding agency.
    (d) Reimbursement. (1) Reimbursement is the preferred method when 
the requirements in paragraph (b) of this section are not met.
    (i) Each recipient shall submit requests for reimbursement in 
accordance with the provisions at 31 CFR part 205.
    (ii) Each subrecipient shall submit requests for reimbursement in 
accordance with requirements established by the awarding agency.
    (2) Each subrecipient shall be paid as promptly as possible after 
receipt of a proper request for reimbursement.
    (e) Working capital advance payments. If a subrecipient cannot meet 
the criteria for advance payments described in paragraph (b) of this 
section, and the awarding agency has determined that reimbursement is 
not feasible because the subrecipient lacks sufficient working capital, 
the awarding agency may provide cash on a working capital advance 
payment basis. Under this procedure, the awarding agency shall advance 
cash to the subrecipient to cover its estimated disbursement needs for 
an initial period, generally geared to the subrecipient's disbursing 
cycle. In no event may such an advance exceed 20 percent of the award 
amount. Thereafter, the awarding agency shall reimburse the subrecipient 
for its actual cash disbursements. The working capital advance method of 
payment shall not be used by recipients or subrecipients if the reason 
for using such method is the unwillingness or inability of the recipient 
or subrecipient to provide timely advances to the subrecipient to meet 
the subrecipient's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. Each recipient and subrecipient shall disburse cash received as 
a result of program income, rebates, refunds, contract settlements, 
audit recoveries, and interest earned on such funds before requesting 
additional cash payments.
    (g) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, each 
recipient and subrecipient is encouraged to use minority-owned banks (a 
bank which is at least 50 percent owned by minority group members). 
Additional information may be obtained from the Minority Business 
Development Agency, Department of Commerce, Washington, DC 20230.
    (2) A recipient or subrecipient shall not be required to maintain a 
separate bank account but shall separately account for Federal funds on 
deposit.
    (h) Interest earned on advances. (1) An interest liability shall 
accrue on advance payments between Federal agencies and State 
governments, as provided by the Cash Management Improvement Act (31 
U.S.C. 6501, et seq.) and implementing regulations at 31 CFR part 205.
    (2) Each recipient and subrecipient shall account for interest 
earned on advances of Federal funds as program income, as provided at 
Sec. 627.450 of this part, Program income.



Sec. 627.435  Cost principles and allowable costs.

    (a) General. To be allowable, a cost shall be necessary and 
reasonable for the proper and efficient administration of the program, 
be allocable to the program, and, except as provided herein, not be a 
general expense required to carry out the overall responsibilities of 
the Governor or a governmental subrecipient. Costs charged to the 
program shall be accorded consistent treatment through application of 
generally accepted accounting principles

[[Page 207]]

appropriate to the JTPA program, as determined by the Governor.
    (b) Whether a cost is charged as a direct cost or as an indirect 
cost shall be determined in accordance with the descriptions of direct 
and indirect costs contained in the OMB Circulars identified in DOL's 
regulations at 29 CFR 97.22(b).
    (c) Costs allocable to another Federal grant, JTPA program, or cost 
category may not be shifted to a JTPA grant, subgrant, program, or cost 
category to overcome fund deficiencies, avoid restrictions imposed by 
law or grant agreements, or for other reasons.
    (d) Applicable credits such as rebates, discounts, refunds, and 
overpayment adjustments, as well as interest earned on any of them, 
shall be credited as a reduction of costs if received during the same 
funding period that the cost was initially charged. Credits received 
after the funding period shall be returned to the Department as provided 
for at Sec. 627.490(b).
    (e) The following costs are not allowable charges to the JTPA 
program:
    (1) Costs of fines and penalties resulting from violations of, or 
failure to comply with, Federal, State, or local laws and regulations;
    (2) Back pay, unless it represents additional pay for JTPA services 
performed for which the individual was underpaid;
    (3) Entertainment costs;
    (4) Bad debts expense;
    (5) Insurance policies offering protection against debts established 
by the Federal Government;
    (6) Contributions to a contingency reserve or any similar provision 
for unforeseen events;
    (7) Costs prohibited by 29 CFR part 93 (Lobbying Restrictions) or 
costs of any salaries or expenses related to any activity designed to 
influence legislation or appropriations pending before the Congress of 
the United States; and
    (8) Costs of activities prohibited in Sec. 627.205, Public service 
employment prohibition; Sec. 627.210, Nondiscrimination and nonsectarian 
activities; Sec. 627.215, Relocation; Sec. 627.225, Employment 
generating activities; and Sec. 627.230, Displacement, of this part.
    (f)(1) The cost of legal expenses required in the administration of 
grant programs is allowable. Legal expenses include the expenses 
incurred by the JTPA system in the establishment and maintenance of a 
grievance system, including the costs of hearings and appeals, and 
related expenses such as lawyers' fees. Legal expenses does not include 
costs resulting from, and after, the grievance process such as fines and 
penalties, which are not allowable, and settlement costs, which are 
allowable to the extent that such costs included in the settlement would 
have been allowable if charged to the JTPA program at the time they were 
incurred.
    (2) Legal services furnished by the chief legal officer of a State 
or local government or staff solely for the purpose of discharging 
general responsibilities as a legal officer are unallowable.
    (3) Legal expenses for the prosecution of claims against the Federal 
Government, including appeals to an Administrative Law Judge, are 
unallowable.
    (g) Costs of travel and incidental expenses incurred by volunteers 
are allowable provided such costs are incurred for activities that are 
generally consistent with section 204(c)(6) of the Act.
    (h) Contributions to a reserve for a self-insurance program, to the 
extent that the type and extent of coverage and the rates and premiums 
would have been allowed had insurance been purchased to cover the risks, 
are allowable.
    (i) The Governor shall prescribe and implement guidelines on 
allowable costs for SDA, SSG, and statewide programs that are consistent 
with the cost principles and allowable costs provisions of paragraphs 
(a) through (h) of this section and that include, at a minimum, 
provisions that specify the extent to which the following cost items are 
allowable or unallowable JTPA costs and, if allowable, guidelines on 
conditions or the extent of allowability, documentation requirements, 
and any prior approval requirements applicable to such cost items:
    (1) Compensation for personal services of staff, including wages, 
salaries, supplementary compensation, and fringe benefits;
    (2) Costs incurred by the SJTCC, HRIC, PIC's, and other advisory 
councils or committees;

[[Page 208]]

    (3) Advertising costs;
    (4) Depreciation and/or use allowances;
    (5) Printing and reproduction costs;
    (6) Interest expense;
    (7) Expenditures for transportation and travel;
    (8) Payments to OJT employers, training institutions, and other 
vendors;
    (9) Fees or profits;
    (10) Insurance costs, including insurance coverage for injuries 
suffered by participants who are not covered by existing workers' 
compensation, and personal liability insurance for PIC members;
    (11) Acquisitions of capital assets;
    (12) Building space costs, including rent, repairs, and alterations;
    (13) Pre-agreement costs;
    (14) Fund-raising activities;
    (15) Professional services, including organizational management 
studies conducted by outside individuals or firms; and
    (16) Taxes.



Sec. 627.440  Classification of costs.

    (a) Allowable costs for programs under title II and title III shall 
be charged (allocated) to a particular cost objective/category to the 
extent that benefits are received by such cost objective/category. Joint 
and similar types of costs may be charged initially to a cost pool used 
for the accumulation of such costs pending distribution in due course to 
the ultimate benefitting cost objective/category. The classification of 
costs for programs under title III of the Act are set forth at 
Sec. 631.13 of this chapter, Classification of costs at State and 
substate levels.
    (b) For State-administered programs under Title II, the State is 
required to plan, control, and charge expenditures against the following 
cost objectives/categories:
    (1) Titles II-A and II-C (combined)--capacity building and technical 
assistance (sections 202(c)(1)(B) and 262(c)(1)(B) of the Act to carry 
out activities pursuant to sections 202(c)(3)(A) and 262(c)(3)(A) of the 
Act);
    (2) Titles II-A and II-C (combined)--8 percent coordination 
(sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out 
activities pursuant to section 123(d)(2)(A) of the Act);
    (3) Titles II-A and II-C (combined)--8 percent services/direct 
training (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out 
activities pursuant to section 123(d)(2)(B) of the Act);
    (4) Titles II-A and II-C (combined)--8 percent services/training-
related and supportive services (sections 202(c)(1)(C) and 262(c)(1)(C) 
of the Act to carry out activities pursuant to section 123(d)(2)(B) of 
the Act);
    (5) Titles II-A and II-C (combined)--8 percent services/
administration (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to 
carry out activities pursuant to section 123(d)(2)(B) of the Act);
    (6) Titles II-A and II-C (combined)--8 percent services to 
disadvantaged (section 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry 
out activities pursuant to section 123(d)(2)(C) of the Act);
    (7) Title II-A--older individuals/direct training (section 
202(c)(1)(D) of the Act to carry out activities pursuant to section 
204(d) of the Act);
    (8) Title II-A--older individuals/training-related and supportive 
services (section 202(c)(1)(D) of the Act to carry out activities 
pursuant to section 204(d) of the Act);
    (9) Title II-A--older individuals/administration (section 
202(c)(1)(D) of the Act to carry out activities pursuant to section 
204(d) of the Act); and
    (10) Title II--administration (sections 202(c)(1)(A) and 
262(c)(1)(A) of the Act to carry out activities pursuant to Title II of 
the Act, including Title II-B).
    (c)(1) SDA grant recipients and their subrecipients shall plan, 
control, and charge expenditures, excluding incentive funds received 
pursuant to sections 202(c)(1)(B) and 262(c)(1)(B) of the Act, against 
the following cost objectives/categories:
    (i) Title II-A--direct training services;
    (ii) Title II-C--direct training services;
    (iii) Title II-A--training-related and supportive services;
    (iv) Title II-C--training-related and supportive services;
    (v) Title II-B--training and supportive services;
    (vi) Title II-A--administration;

[[Page 209]]

    (vii) Title II-B--administration; and
    (viii) Title II-C--administration.
    (2) Incentive funds received pursuant to sections 202(c)(1)(B) and 
262(c)(1)(B) of the Act, may be combined and accounted for in total, 
without regard to cost categories or cost limitations.
    (d) States and subrecipients shall use the following definitions in 
assigning costs to the cost categories contained in paragraphs (b) and 
(c) of this section:
    (1) Direct training services--title II-A. Costs for direct training 
services that may be charged to the title II-A program are:
    (i) The personnel and non-personnel costs directly related to 
providing those services to participants specified in section 204(b)(1) 
of the Act and which can be specifically identified with one or more of 
those services. Generally, such costs are limited to:
    (A) Salaries, fringe benefits, equipment, supplies, space, staff 
training, transportation, and other related costs of personnel directly 
engaged in providing training; and
    (B) Salaries, fringe benefits, and related non-personnel costs of 
program component supervisors and/or coordinators as well as clerical 
staff, provided such staff work exclusively on activities or functions 
specified in section 204(b)(1) of the Act or allocations of such costs 
are made based on actual time worked or other equitable cost allocation 
methods;
    (ii) Books, instructional materials, and other teaching aids used by 
or for participants;
    (iii) Equipment and materials used in providing training to 
participants;
    (iv) Classroom space and utility costs;
    (v) Costs of insurance coverage of participants as specified at 
Sec. 627.315(b) of this part, Benefits and Working Conditions;
    (vi) Payments to vendors for goods or services procured for the use 
or benefit of program participants for direct training services, 
including:
    (A) Payments for commercially available training packages purchased 
competitively pursuant to section 141(d)(3) of the Act;
    (B) Tuition charges, entrance fees, and other usual and customary 
fees of an educational institution when such tuition charges, entrance 
fees, or other fees are not more than the educational institution's 
catalogue price, necessary to receive specific training, charged to the 
general public to receive the same training, and are for training of 
participants; and
    (C) Payments to OJT employers, but not brokering contractors. Costs 
incurred under brokering arrangements shall be allocated to all of the 
benefitting cost categories, and
    (vii) Payments to JTPA participants that represent hours spent in a 
direct training activity (e.g., wages, work-based training payments, 
training payments for combined activities), including work experience, 
vocational exploration, limited internships, and entry employment.
    (2) Direct training services--title II-C. Costs for direct training 
services that may be charged to the title II-C program are the costs 
identified in paragraph (d)(1) of this section as well as costs directly 
related to providing those services to participants specified in section 
264(c)(1) of the Act and which can be specifically identified with one 
or more of those services.
    (3) Training-related and supportive services--title II-A. Costs for 
training-related and supportive services that may be charged to the 
title II-A program are:
    (i) The personnel and non-personnel costs directly related to 
providing outreach, intake, and eligibility determination, as well as 
those services to participants specified in section 204(b)(2) of the 
Act, and which can be specifically identified with one or more of those 
services. Generally, such costs are limited to:
    (A) Salaries, fringe benefits, equipment, supplies, space, staff 
training, transportation, and other related costs of personnel directly 
engaged in providing training-related and/or supportive services; and
    (B) Salaries, fringe benefits, and related non-personnel costs of 
program component supervisors and/or coordinators as well as clerical 
staff, provided such staff work exclusively on activities or functions 
specified in section 204(b)(2) of the Act or allocations of such costs 
are made based on actual

[[Page 210]]

time worked or another equitable allocation method.
    (ii) Needs-based payments, cash incentives and bonuses, other 
financial assistance and supportive services to participants and 
applicants, where applicable.
    (4) Training-related and supportive services--title II-C. Costs for 
training-related and supportive services that may be charged to the 
title II-C program are the costs identified in paragraph (d)(3) of this 
section, as well as costs directly related to providing those services 
to participants specified in section 264(c)(2) of the Act and which can 
be specifically identified with one or more of those services.
    (5) Administration. The costs of administration are those portions 
of necessary and allowable costs associated with the overall management 
and administration of the JTPA program and which are not directly 
related to the provision of services to participants or otherwise 
allocable to the program cost objectives/categories in paragraphs 
(b)(1)-(8) or (c)(1) (i)-(v) of this section. These costs can be both 
personnel and non-personnel and both direct and indirect. Costs of 
administration shall include:
    (i) Except as provided in paragraph (e)(1) of this section, costs of 
salaries, wages, and related costs of the recipient's or subrecipient's 
staff or PIC staff engaged in:
    (A) Overall program management, program coordination, and general 
administrative functions, including the salaries and related costs of 
the executive director, JTPA director, project director, personnel 
officer, fiscal officer/bookkeeper, purchasing officer, secretary, 
payroll/insurance/property clerk and other costs associated with 
carrying out administrative functions;
    (B) Preparing program plans, budgets, schedules, and amendments 
thereto;
    (C) Monitoring of programs, projects, subrecipients, and related 
systems and processes;
    (D) Procurement activities, including the award of specific 
subgrants, contracts, and purchase orders;
    (E) Providing State or local officials and the general public with 
information about the program (public relations);
    (F) Developing systems and procedures, including management 
information systems, for assuring compliance with program requirements;
    (G) Preparing reports and other documents related to the program 
requirements;
    (H) Coordinating the resolution of audit findings;
    (I) Evaluating program results against stated objectives; and
    (J) Performing such administrative services as general legal 
services, accounting services, audit services; and managing purchasing, 
property, payroll, and personnel;
    (ii) Costs for goods and services required for administration of the 
program, including such goods and services as rental or purchase of 
equipment, utilities, office supplies, postage, and rental and 
maintenance of office space;
    (iii) The costs of organization-wide management functions; and
    (iv) Travel costs incurred for official business in carrying out 
program management or administrative activities, including travel costs 
incurred by PIC members.
    (e) Other cost classification guidance. (1) Personnel and related 
non-personnel costs of the recipient's or subrecipient's staff, 
including project directors, who perform services or activities that 
benefit two or more of the cost objectives/categories identified in this 
section may be allocated to the benefitting cost objectives/categories 
based on documented distributions of actual time worked or other 
equitable cost allocation methods.
    (2) Indirect or overhead costs normally shall be charged to 
administration, except that specific costs charged to an overhead or 
indirect cost pool that can be identified directly with a JTPA cost 
objective/category other than administration may be charged to the JTPA 
cost objective/category directly benefitted. Documentation of such 
charges shall be maintained.
    (3) Where an award to a subrecipient is for a ``commercially 
available off-the-shelf training package,'' as defined at Sec. 626.5 of 
this chapter, the subrecipient may charge all costs of such

[[Page 211]]

package to the direct training services cost category.
    (4) Profits, fees, and other revenues earned by a subrecipient that 
are in excess of actual costs incurred, to the extent allowable and 
consistent with the guidelines on allowable costs prescribed by the 
Governor in accordance with Sec. 627.435(i). Cost principles and 
allowable costs, may be allocated to all three cost categories based on 
the proportionate share of actual costs incurred attributable to each 
category.



Sec. 627.445  Limitations on certain costs.

    (a) State-administered programs--(1) Services for older individuals. 
Of the funds allocated for any program year for section 202(c)(1)(D) of 
the Act to carry out activities pursuant to section 204(d) of the Act--
    (i) Not less than 50 percent shall be expended for the cost of 
direct training services; and
    (ii) Not more than 20 percent shall be expended for the cost of 
administration.
    (2) State education services. Of the funds allocated for any program 
year for sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out 
activities pursuant to section 123(d)(2)(B) of the Act--
    (i) Not less than 50 percent shall be expended for the cost of 
direct training services; and
    (ii) Not more than 20 percent shall be expended for the cost of 
administration.
    (3) The limitations specified in paragraph (a)(2) of this section 
shall apply to the combined total of funds allocated for sections 
202(c)(1)(C) and 262(c)(1)(C) of the Act.
    (b) SDA allocations. (1) In applying the title II-A and II-C cost 
limitations specified in section 108(b)(4) of the Act, the funds 
allocated to a service delivery area shall be net of any:
    (i) Transfers made in accordance with sections 206, 256, and 266 of 
the Act; and
    (ii) Reallocations made by the Governor in accordance with section 
109(a) of the Act.
    (2) The limitations specified in paragraph (b)(1) of this section 
shall apply separately to the funds allocated for title II-A and title 
II-C programs.
    (3) The title II-B administrative cost limitation of 15 percent 
shall be 15 percent of the funds allocated for any program year to a 
service delivery area, excluding any funds transferred to title II-C in 
accordance with section 256 of the Act (section 253(a)(3)).
    (c)(1) The State shall establish a system to regularly assess 
compliance with the cost limitations including periodic review and 
corrective action, as necessary.
    (2) States and service delivery areas shall have the 3-year period 
of fund availability to comply with the cost limitations in section 108 
of the Act and paragraphs (a) and (b) of this section (section 161(b)).
    (d) Administrative costs incurred by a community-based organization 
or non-profit service provider shall not be included in the limitation 
described in section 108(b)(4)(A) of the Act if:
    (1) Such costs are incurred under an agreement that meets the 
requirements of section 141(d)(3)(C) (i) and (ii) of the Act;
    (2) The total administrative expenditures of the service delivery 
area, including the administrative expenditures of such community-based 
organizations or non-profit service providers, do not exceed 25 percent 
of the funds allocated to the service delivery area for the program year 
of allocation; and
    (3) The total direct training expenditures of the service delivery 
area, including the direct training expenditures of such community-based 
organizations or non-profit service providers, is equal to or exceeds 50 
percent of the funds allocated to the service delivery area for the 
program year less one-half of the percentage by which the total 
administrative expenditures of the service delivery area exceeds 20 
percent. For example, if the total administrative expenditures of the 
service delivery area is 24 percent, then the total direct training 
expenditures of the service delivery area must be at least 48 percent.
    (e) The provisions of this section do not apply to any title III 
programs.
    (f) The provisions of this section do not apply to any designated 
SDA which served as a concentrated employment program grantee for a 
rural area under

[[Page 212]]

the Comprehensive Employment and Training Act (section 108(d)).



Sec. 627.450  Program income.

    (a) Definition of program income. (1) Program income means income 
received by the recipient or subrecipient that is directly generated by 
a grant or subgrant supported activity, or earned only as a result of 
the grant or subgrant. Program income includes:
    (i) Income from fees for services performed and from conferences;
    (ii) Income from the use or rental of real or personal property 
acquired with grant or subgrant funds;
    (iii) Income from the sale of commodities or items fabricated under 
a grant or subgrant;
    (iv) Revenues earned by a governmental or non-profit service 
provider under either a fixed-price or reimbursable award that are in 
excess of the actual costs incurred in providing the services; and
    (v) Interest income earned on advances of JTPA funds.
    (2) Program income does not include:
    (i) Rebates, credits, discounts, refunds, etc., or interest earned 
on any of them, which shall be credited in accordance with 
Sec. 627.435(d), Cost principles and allowable costs;
    (ii) Taxes, special assessments, levies, fines, and other such 
governmental revenues raised by a recipient or subrecipient; or
    (iii) Income from royalties and license fees for copyrighted 
material, patents, patent applications, trademarks, and inventions 
developed by a recipient or subrecipient.
    (3) Property. Proceeds from the sale of property shall be handled in 
accordance with the requirements of Sec. 627.465 of this part, Property 
management standards.
    (b) Cost of generating program income. Costs incidental to the 
generation of program income may be deducted, if not already charged to 
the grant, from gross income to determine program income.
    (c) Use of program income. (1)(i) A recipient or subrecipient may 
retain any program income earned by the recipient or subrecipient only 
if such income is added to the funds committed to the particular JTPA 
grant or subgrant and title under which it was earned and such income is 
used for that title's purposes and under the terms and conditions 
applicable to the use of the grant funds.
    (ii) A State may use interest it earns on JTPA funds, deposited by 
the United States to the State's account, to satisfy the requirement at 
31 U.S.C. 6503(c) that the State pay interest on such deposits.
    (iii) The classification of costs in Secs. 627.440 and 631.13 shall 
apply to the use of program income.
    (iv) The administrative cost limitation in Secs. 627.445 and 631.14 
shall apply to the use of program income, except that program income 
used in accordance with paragraph (c)(1)(ii) of this section shall be 
exempt from the administrative cost limitations.
    (2) Program income generated under title II may also be used to 
satisfy the matching requirement of section 123(b) of the Act.
    (3) Program income shall be used prior to the submission of the 
final report for the funding period of the program year of funds to 
which the earnings are attributable.
    (4) If the subrecipient that earned program income cannot use such 
income for JTPA purposes, the recipient may permit another entity to use 
the program income for JTPA purposes.
    (5) Program income not used in accordance with the requirements of 
this section shall be remitted to the Department of Labor.
    (d) Program and other income after the funding period. Rental income 
and user fees on real and personal property acquired with JTPA funds 
shall continue to be JTPA program income in subsequent funding periods. 
There are no Federal requirements governing the disposition of all other 
income that is earned after the end of the funding period.



Sec. 627.455  Reports required.

    (a) General. The Governor shall report to DOL pursuant to 
instructions issued by DOL. Reports shall be submitted no more 
frequently than quarterly, in accordance with section 165(f) of the Act, 
and within 45 calendar days after the end of the report period. 
Additional reporting requirements for title

[[Page 213]]

III are set forth at Sec. 631.15 of this chapter.
    (b) A recipient may impose different forms or formats, shorter due 
dates, and more frequent reporting requirements on subrecipients, 
however, the recipient is required to meet the reporting requirements 
imposed on it by DOL.
    (c) DOL may provide computer outputs to recipients to expedite or 
contribute to the accuracy of reporting. DOL may accept the required 
information from recipients in electronically reported format or 
computer printouts instead of prescribed forms.
    (d) Financial reports. (1) Financial reports for programs under 
titles I, II, and III shall be submitted to DOL by each State quarterly 
and by program year of appropriation.
    (2) Each recipient shall report program outlays on an accrual basis. 
If the recipient's accounting records are not normally kept on the 
accrual basis, the recipient shall develop such accrual information 
through an analysis of the documentation on hand.
    (3) A final financial report is required 90 days after the 
expiration of a funding period (see Sec. 627.485 of this part, 
Closeout).
    (4) Pursuant to section 104(b)(13) of the Act, the SDA shall 
annually report to the Governor. Among other items, this report shall 
include information on the extent to which the SDA has met the goals for 
the training and training-related placement of women in nontraditional 
employment.



Sec. 627.460  Requirements for records.

    (a) Records, including the records identified in section 165(g) of 
the Act, shall be retained in accordance with section 165(e) of the Act. 
In establishing the time period of record retention requirements for 
records of subrecipients, the State may either:
    (1) Impose the time limitation requirement of section 165(e) of the 
Act; or
    (2) Require that subrecipient records for each funding period be 
retained for 3 years after the subrecipient submits to the awarding 
agency its final expenditure report for that funding period. Records for 
nonexpendable property shall be retained for a period of three years 
after final disposition of the property.
    (b) The Governor shall ensure that the records under this section 
shall be retained beyond the prescribed period if any litigation or 
audit is begun or if a claim is instituted involving the grant or 
agreement covered by the records. In these instances, the Governor shall 
ensure that the records shall be retained until the litigation, audit, 
or claim has been finally resolved.
    (c) In the event of the termination of the relationship with a 
subrecipient, the Governor or SDA or title III SSG shall be responsible 
for the maintenance and retention of the records of any subrecipient 
unable to retain them.
    (d) Record storage. Records shall be retained and stored in a manner 
which will preserve their integrity and admissibility as evidence in any 
audit or other proceeding. The burden of production and authentication 
of the records shall be on the custodian of the records.
    (e) Federal and awarding agencies' access to records--(1) Records of 
recipients and subrecipients. The awarding agency, the Department of 
Labor (including the Department of Labor's Office of Inspector General), 
and the Comptroller General of the United States, or any of their 
authorized representatives, have the right of timely and reasonable 
access to any books, documents, papers, computer records, or other 
records of recipients and subrecipients that are pertinent to the grant, 
in order to conduct audits and examinations, and to make excerpts, 
transcripts, and photocopies of such documents. This right also includes 
timely and reasonable access to recipient and subrecipient personnel for 
the purpose of interview and discussion related to such documents.
    (2) Expiration of right of access. The right of access in this 
section is not limited to the required retention period but shall last 
as long as the records are retained.



Sec. 627.463  Public access to records.

    (a) Public access. Except as provided in paragraph (b) of this 
section, records maintained by recipients or subrecipients pursuant to 
Sec. 627.460 shall be made

[[Page 214]]

available to the public upon request, notwithstanding the provisions of 
State or local law.
    (b) Exceptions. This requirement does not apply to:
    (1) Information, the disclosure of which would constitute a clearly 
unwarranted invasion of personal privacy; or
    (2) Trade secrets, or commercial or financial information, obtained 
from a person and privileged or confidential.
    (c) Fees. For processing of a request for a record under this 
section, a fee may be charged to the extent sufficient to recover the 
cost applicable to processing such request (section 165(a)(4)).



Sec. 627.465  Property management standards.

    (a) States and governmental subrecipients. Real property, equipment, 
supplies, and intangible property acquired or produced after July 1, 
1993, by States and governmental subrecipients with JTPA funds shall be 
governed by the definitions and property requirements in the DOL 
regulations at 29 CFR part 97, except that prior approval by the 
Department of Labor to acquire property is waived.
    (b) Nongovernmental subrecipients. Except as provided in paragraph 
(c) of this section, real and personal property, including intangible 
property, acquired or produced after July 1, 1993, by nongovernmental 
subrecipients with JTPA funds shall be governed by the definitions and 
property management standards of OMB Circular A-110, as codified by 
administrative regulations of the Department of Labor in 29 CFR Part 95, 
except that prior approval by the Department of Labor to acquire 
property is waived.
    (c) Special provisions for property acquired under subgrants to 
commercial organizations--(1) Scope. This paragraph (c) applies to real 
and personal property other than supplies that are acquired or produced 
after July 1, 1993, under a JTPA subgrant to a commercial organization.
    (2) Property acquired by commercial subrecipients. Title to property 
acquired or produced by a subrecipient that is a commercial organization 
shall vest in the awarding agency, provided such agency is a 
governmental entity or nongovernmental organization that is not a 
commercial organization. Property so acquired or produced shall be 
considered to be acquired or produced by the awarding agency and 
paragraph (a) or (b) of this section, as appropriate, shall apply to 
that property. If the awarding agency is also a commercial organization, 
title shall vest in the higher level, non-commercial awarding agency 
that made the subaward to the commercial subrecipient.
    (3) Approval for acquisition. A subrecipient that is a commercial 
organization shall not acquire property subject to this section without 
the prior approval of the awarding agency.
    (d) Notification to the Secretary of real property acquisitions. 
Recipients shall notify the Secretary immediately upon acquisition of 
real property with JTPA funds, including acquisitions by subrecipients. 
Such notification shall include the location of the real property and 
the Federal share percentage.
    (e) Property procured before July 1, 1993. (1) Personal or real 
property procured with JTPA funds or transferred from programs under the 
Comprehensive Employment and Training Act must be used for purposes 
authorized by the Act. Subject to the Secretary's rights to such 
property, the Governor shall maintain accountability for property in 
accordance with State procedures and the records retention requirements 
of Sec. 627.460 of this part.
    (2) The JTPA program must be reimbursed the fair market value of any 
unneeded property retained by the Governor for use in a non-JTPA 
program. The proceeds from the sale of any property or transfer of 
property to a non-JTPA program must be used for purposes authorized 
under the Act.



Sec. 627.470  Performance standards.

    (a) General. The Secretary shall prescribe performance standards for 
adult programs under title II-A, for youth programs under title II-C, 
for dislocated worker programs under title III, and for older worker 
programs under section 204(d) of the Act. Any performance standards 
developed for employment competencies shall be based on such factors as 
entry level skills and other hiring requirements.

[[Page 215]]

    (b) Pursuant to instructions and time lines issued by the Secretary, 
the Governor shall:
    (1) Collect the data necessary to set performance standards pursuant 
to section 106 of the Act; and
    (2) Maintain records and submit reports required by sections 
106(j)(3), 165(a)(3), (c)(1), and (d) and 121(b)(6) of the Act.
    (c) Title II performance standards. (1) The Governor shall establish 
SDA performance standards for title II within the parameters set by the 
Secretary pursuant to sections 106(b) and (d) of the Act and apply the 
standards in accordance with section 202(c)(1)(B) of the Act.
    (2) The Governor shall establish incentive award policies pursuant 
to section 106(b)(7) of the Act, except for programs operated under 
section 204(d) of the Act. Pursuant to section 106(b)(8) of the Act, 
Governors may not consider standards relating gross program expenditures 
to performance measures in making such incentive awards.
    (3) The Governor shall provide technical assistance to SDA's failing 
to meet performance standards established by the Secretary for a given 
program year (section 106(j)(2)).
    (4)(i) If an SDA fails to meet a prescribed number of the 
Secretary's performance standards for 2 consecutive years, the Governor 
shall notify the Secretary and the service delivery area of the 
continued failure and impose a reorganization plan (section 106(j)(4)).
    (ii) The number of standards deemed to constitute failure shall be 
specified by the Secretary biennially and shall be based on an 
appropriate proportion of the total number established by the Secretary 
for that performance cycle. In determining failure, the specified 
proportion shall be applied separately to each year of the two year 
cycle.
    (iii) A reorganization plan shall not be imposed for a failure to 
meet performance standards other than those established by the 
Secretary.
    (iv) A reorganization plan shall be considered to be imposed when, 
at a minimum:
    (A) The problem or deficiency is identified,
    (B) The problem is communicated to the SDA, and
    (C) The SDA is provided an initial statement of the actions or steps 
required and the timeframe within which they are to be initiated. A 
final statement of required steps and actions is to be issued within 30 
days.
    (d)(1) If the Governor does not impose a reorganization plan, 
required by paragraph (c)(4) of this section, within 90 days of 
notifying the Grant Officer of an SDA's continued failure to meet 
performance standards, the Grant Officer shall develop and impose such a 
plan (section 106(j)(5)).
    (2) Before imposing a reorganization plan, the Grant Officer shall 
notify the Governor and SDA in writing of the intent to impose the plan 
and provide both parties the opportunity to submit comments within 30 
days of receipt of the Grant Officer's notice.
    (e) An SDA subject to a reorganization plan under paragraphs (c)(4) 
or (d) of this section may, within 30 days of receiving notice of such 
action, appeal to the Secretary to revise or rescind the reorganization 
plan under the procedures set forth at Sec. 627.471 of this subpart, 
Reorganization plan appeals (section 106(j)(6)(A)).
    (f) Secretarial action to recapture or withhold funds. (1) The Grant 
Officer shall recapture or withhold an amount not to exceed one-fifth of 
the State administration set-aside allocated under sections 202(c)(1)(A) 
and 262(c)(1)(A) of the Act when:
    (i) The Governor has failed to impose a reorganization plan under 
paragraph (c)(4) of this section, for the purposes of providing 
technical assistance under a reorganization plan imposed by the 
Secretary (section 106(j)(5)(B)); or
    (ii) The Secretary determines in an appeal provided for at paragraph 
(e) of this section, and set forth at Sec. 627.471 of this subpart, that 
the Governor has not provided appropriate technical assistance as 
required at section 106(j)(2) (section 106(j)(6)(B)).
    (2)(i) A Governor of a State that is subject to recapture or 
withholding under paragraph (f)(1) of this section may, within 30 days 
of receipt of such notice, appeal such recapture or withholding to the 
Secretary.
    (ii) The Secretary may consider any comments submitted by the 
Governor

[[Page 216]]

and shall make a decision within 45 days after the appeal is received.
    (g) Title III performance standards. (1) The Governor shall 
establish SSG performance standards for programs under title III within 
the parameters set annually by the Secretary pursuant to section 106(c) 
and (d) of the Act.
    (2) Any performance standard for programs under title III shall make 
appropriate allowances for the difference in cost resulting from serving 
workers receiving needs-related payments authorized under Sec. 631.20 of 
this chapter (section 106(c)(2)).
    (3) The Secretary annually shall certify compliance, if the program 
is in compliance, with the title III performance standards established 
pursuant to paragraph (a) of section 322(a)(4) of the Act.
    (4) The Governor shall not establish standards for the operation of 
programs under title III that are inconsistent with the performance 
standards established by the Secretary under provisions of section 
106(c) of the Act (section 311(b)(8)).
    (5) When an SSG fails to meet performance standards for 2 
consecutive years, the Governor may institute procedures pursuant to the 
Governor's by-pass authority in accordance with Sec. 631.38(b) of this 
chapter or require redesignation of the substate grantee in accordance 
with Sec. 631.35 of this chapter, as appropriate.



Sec. 627.471  Reorganization plan appeals.

    (a) A reorganization plan imposed by the Governor, as provided for 
at Secs. 627.470(c)(4) or 627.477(b)(2) of this part, or by the 
Secretary, as provided for at Sec. 627.470(d) of this part, may be 
appealed directly to the Secretary without prior exhaustion of local 
remedies.
    (b)(1) Appeals shall be submitted to the Secretary, U.S. Department 
of Labor, Washington, DC 20210, ATTENTION: ASET. A copy of the appeal 
shall be provided simultaneously to the Governor.
    (2) The Secretary shall not accept an appeal dated later than 30 
days after receipt of written notification from the Governor or the 
Secretary.
    (3) The appealing party shall explain why it believes the decision 
to impose the reorganization plan is contrary to the provisions of 
section 106 of the Act.
    (4) The Secretary shall accept the appeal and make a decision only 
with regard to determining whether or not the decision to impose the 
reorganization plan is inconsistent with section 106 of the Act. The 
Secretary may consider any comments submitted by the Governor or the 
SDA, as appropriate. The Secretary shall make a final decision within 60 
days after this appeal is received (section 106(j)).



Sec. 627.475  Oversight and monitoring.

    (a) The Secretary may monitor all recipients and subrecipients of 
financial assistance pursuant to section 163 of the Act.
    (b) The Governor is responsible for oversight of all SDA and SSG 
activities and State-supported programs. The Governor shall develop and 
make available for review a State monitoring plan. The plan shall 
specify the mechanism which:
    (1) Ensures that established policies to achieve program quality and 
outcomes meet the objectives of the Act and regulations promulgated 
thereunder;
    (2) Enables the Governor to determine if SDA's and SSG's have 
demonstrated substantial compliance with the requirements for oversight;
    (3) Determines whether the Job Training Plan shall be disapproved 
consistent with the criteria contained in section 105(b)(1) of the Act;
    (4) Regularly examines expenditures against the cost categories and 
cost limitations specified in the Act and these regulations;
    (5) Ensures that all areas of SDA and SSG operations are monitored 
onsite regularly, but not less than once annually; and
    (6) Provides for corrective action to be imposed if conditions in 
paragraphs (b)(1)-(4) of this section are not met.
    (c) The Governor shall issue instructions to SDA's and title III 
SSG's on the development of a substate monitoring plan. The instructions 
for development of the monitoring plan, at a minimum, shall address the 
monitoring scope and frequency, and the Secretary's emphasis and 
direction. The

[[Page 217]]

substate monitoring plan shall be part of the job training plan.
    (d) The Governor shall establish general standards for PIC oversight 
responsibilities. The required PIC standards shall be included in the 
Governor's Coordination and Special Services Plan (GCSSP).
    (e)(1) The PIC, pursuant to standards established by the Governor, 
shall establish specific policies for monitoring and oversight of SDA 
performance which shall be described in the job training plan.
    (2) The PIC shall exercise independent oversight over activities 
under the job training plan which shall not be circumscribed by 
agreements with the appropriate chief elected official(s) of the SDA.
    (f) The PIC and chief elected official(s) may conduct such oversight 
as they, individually or jointly, deem necessary or delegate oversight 
responsibilities to an appropriate entity pursuant to their mutual 
agreement.



Sec. 627.477  Governor's determination of substantial violation.

    (a) Except as provided at paragraph (d) of this section, if, as a 
result of financial and compliance audits or otherwise, the Governor 
determines that there is a substantial violation of a specific provision 
of this Act or the regulations under this Act, and corrective action has 
not been taken, the Governor shall
    (1) Issue a notice of intent to revoke approval of all or part of 
the plan affected; or
    (2) Impose a reorganization plan, which may include
    (i) Restructuring the private industry council involved;
    (ii) Prohibiting the use of designated service providers;
    (iii) Selecting an alternative entity to administer the program for 
the service delivery area involved;
    (iv) Merging the service delivery area into 1 or more other existing 
service delivery areas; or
    (v) Other such changes as the Secretary or Governor determines 
necessary to secure compliance (section 164(b)(1)).
    (b)(1) The actions taken by the Governor pursuant to paragraph 
(a)(1) of this section may be appealed to the Secretary as provided at 
Sec. 628.426 of this chapter (section 164(b)(2)(A)).
    (2) The actions taken by the Governor pursuant to paragraph (a)(2) 
of this section may be appealed to the Secretary, as provided at 
Sec. 627.471 of this part (section 164(b)(2)(B)).
    (c) Allegations that the Governor failed to promptly take the 
actions required under paragraph (a) of this section shall be handled 
under Sec. 627.607 of this part (section 164(b)(3)).
    (d) This section does not apply to remedial actions for SDA failures 
to meet performance standards, which are provided for at Sec. 627.470 of 
this part, and do not apply to remedial actions for the failure to 
comply with procurement standards, which are provided for at 
Sec. 627.703 of this part.



Sec. 627.480  Audits.

    (a) Non-Federal Audits--(1) Governments. Each recipient and 
governmental subrecipient is responsible for complying with the Single 
Audit Act of 1984 (31 U.S.C. 7501-7) and 29 CFR part 96, the Department 
of Labor regulations which implement Office of Management and Budget 
(OMB) Circular A-128, ``Audits of State and Local Governments''.
    (2) Non-governmental organizations. Each non-governmental recipient 
or subrecipient shall comply with OMB Circular A-133, ``Audits of 
Institutions of Higher Education and Other Nonprofit Institutions'', as 
implemented by the Department of Labor regulations at 29 CFR part 96. 
The provisions of this paragraph (a)(2) do not apply to any non-
governmental organization that is:
    (i) A commercial organization; or
    (ii) A hospital or an institution of higher education for which 
State or local governments choose to apply OMB Circular A-128.
    (3) Commercial organizations. A commercial organization which is a 
recipient or subrecipient and which receives $25,000 or more a year in 
Federal financial assistance to operate a JTPA program shall have an 
audit that:
    (i) Is usually performed annually, but not less frequently than 
every two years;

[[Page 218]]

    (ii) Is completed within one year after the end of the period 
covered by the audit and submitted to the awarding agency within one 
month after completion;
    (iii) Is either:
    (A) An independent financial and compliance audit of Federal funds 
that includes coverage of the JTPA program within its scope, and is 
conducted and prepared in accordance with generally accepted government 
auditing standards; or
    (B) An organization-wide audit that includes financial and 
compliance coverage of the JTPA program within its scope.
    (b) Federal audits. The notice of audits conducted or arranged by 
the Office of Inspector General or the Comptroller General shall be 
provided in advance, as required by section 165(b) of the Act.
    (c) Audit reports. (1) Audit reports of recipient-level entities and 
other organizations which receive JTPA funds directly from the U.S. 
Department of Labor shall be submitted to the Office of Inspector 
General.
    (2) Audit reports of organizations other than those described in 
paragraph (c)(1) of this section shall be submitted to the entity which 
provided the JTPA funds.
    (d) Each entity that receives JTPA program funds and awards a 
portion of those funds to one or more subrecipients shall:
    (1) Ensure that each subrecipient complies with the applicable audit 
requirements;
    (2) Resolve all audit findings that impact the JTPA program with its 
subrecipient and ensure that corrective action for all such findings is 
instituted within 6 months after receipt of the audit report (where 
appropriate, corrective action shall include debt collection action for 
all disallowed costs); and
    (3) Maintain an audit resolution file documenting the disposition of 
reported questioned costs and corrective actions taken for all findings. 
The ETA Grant Officer may request that an audit resolution report, as 
specified in paragraph (e)(2) of this section, be submitted for such 
audits or may have the audit resolution reviewed through the compliance 
review process.
    (e)(1) Audits of recipient-level entities and other organizations 
which receive JTPA funds directly from DOL and all audits conducted by 
or under contract for the Office of Inspector General shall be issued by 
the OIG to the Employment and Training Administration after acceptance 
by OIG.
    (2) After receipt of the audit report, the ETA Grant Officer shall 
request that the State submit an audit resolution report documenting the 
disposition of the reported questioned costs, i.e., whether allowed or 
disallowed, the basis for allowing questioned costs, the method of 
repayment planned or required, and corrective actions, including debt 
collection efforts, taken or planned.
    (f) If the recipient intends to propose the use of ``stand-in'' 
costs as substitutes for otherwise unallowable costs, the proposal shall 
be included with the audit resolution report. To be considered, the 
proposed ``stand-in'' costs shall have been reported as uncharged JTPA 
program costs, included within the scope of the audit, and accounted for 
in the auditee's financial system, as required by Sec. 627.425 of this 
part, Standards for financial management and participant data systems. 
To be accepted, stand-in costs shall be from the same title, and program 
year as the costs which they are proposed to replace, and shall not 
result in a violation of the applicable cost limitations.
    (g) After receiving the audit resolution report, the ETA Grant 
Officer shall review the report, the recipient's disposition, and any 
liability waiver request submitted in accordance with Sec. 627.704 of 
this part. If the Grant Officer agrees with all aspects of the 
recipient's disposition of the audit, the Grant Officer shall so notify 
the recipient. If the Grant Officer disagrees with the recipient's 
conclusion on specific points in the audit, the Grant Officer shall 
resolve the audit through the initial and final determination process 
described in Sec. 627.606 of this part.



Sec. 627.481  Audit resolution.

    (a) Federal audit resolution. When the OIG issues an audit report to 
the Employment and Training Administration

[[Page 219]]

for resolution, the ETA Grant Officer shall provide a copy of the report 
to the recipient (if it does not already have the report), along with a 
request that the recipient submit its audit resolution report as 
specified in Sec. 627.480(e)(2) of this part, unless the Grant Officer 
chooses to proceed directly against the recipient pursuant to 
Sec. 627.601 of this part.
    (1) For audits of recipient-level entities and other organizations 
which receive JTPA funds directly from DOL, the Grant Officer shall 
request that the audit resolution report be submitted within 60 days 
from the date that the audit report is issued by the OIG.
    (2) For audits of subrecipient organizations, the Grant Officer 
shall provide the recipient with a 180-day period within which to 
resolve the audit with its subrecipient(s), and shall request that the 
audit resolution report be submitted at the end of that 180-day period.
    (b) After receiving the audit resolution report, the ETA Grant 
Officer shall review the report, the recipient's disposition, any 
liability waiver request, and any proposed ``stand-in'' costs. If the 
Grant Officer agrees with all aspects of the recipient's disposition of 
the audit, the Grant Officer shall so notify the recipient, constituting 
final agency action on the audit. If the Grant Officer disagrees with 
the recipient's conclusion on specific points in the audit, or if the 
recipient fails to submit its audit resolution report, the Grant Officer 
shall resolve the audit through the initial and final determination 
process described in Sec. 627.606 of this part. Normally, the Grant 
Officer's notification of agreement (a concurrence letter) or 
disagreement (an initial determination) with the recipient's audit 
resolution report will be provided within 180 days of the Grant 
Officer's receipt of the report.
    (c) Non-Federal audit resolution. (1) To ensure timely and 
appropriate resolution for audits of all subrecipients, including SDA 
grant recipients and title III SSG's, and to ensure recipient-wide 
consistency, the Governor shall prescribe standards for audit resolution 
and debt collection policies and procedures that shall be included in 
each job training plan in accordance with section 104(b)(12) of the Act.
    (2) The Governor shall prescribe an appeals procedure for audit 
resolution disputes which, at a minimum, provides for:
    (i) The period of time, not less than 15 days nor more than 30 days, 
after the issuance of the final determination in which an appeal may be 
filed;
    (ii) The rules of procedure;
    (iii) Timely submission of evidence;
    (iv) The timing of decisions; and
    (v) Further appeal rights, if any.



Sec. 627.485  Closeout.

    (a) General. The Grant Officer shall close out each annual JTPA 
grant agreement within a timely period after the funding period covered 
by the award has expired.
    (b) Revisions to the reported expenditures for a program year of 
funds may be made until 90 days after the time limitation for 
expenditure of JTPA funds, as set forth in section 161(b) of the Act, 
has expired. The Grant Officer may extend this deadline if the recipient 
submits a written request with justification. After that time, the Grant 
Officer shall consider all reports received as final and no additional 
revisions may be made.
    (c) When closing out a JTPA grant, the Grant Officer shall notify 
the recipient, by certified mail, that, since the time limitation for 
expenditure of funds covered by the grant award has expired, it is the 
Department of Labor's intent to close the annual grant as follows:
    (1) Cost adjustment. Based on receipt of reports in paragraph (b) of 
this section, the Grant Officer shall make upward or downward 
adjustments to the allowable costs; and
    (2) Cash adjustment. DOL shall make prompt payment to the recipient 
for allowable reimbursable costs; the recipient shall promptly refund to 
DOL any balance of cash advanced that is in excess of allowable costs 
for the grant award being closed.
    (d) The recipient shall have an additional 60 days after the date of 
the notice described in paragraph (c) of this section in which to 
provide the Grant Officer with information as to the reason(s) why 
closeout should not occur.

[[Page 220]]

    (e) At the end of the 60-day period described in paragraph (d) of 
this section, the Grant Officer shall notify the recipient that closeout 
has occurred, unless information provided by the recipient, pursuant to 
paragraph (d) of this section, indicates otherwise.



Sec. 627.490  Later disallowances and adjustments after closeout.

    The closeout of a grant does not affect:
    (a) The Grant Officer's right to disallow costs and recover funds on 
the basis of a later audit or other review;
    (b) The recipient's obligation to return any funds due as a result 
of later refunds, corrections, subrecipient audit disallowances, or 
other transactions;
    (c) Records retention requirements in Sec. 627.460 of this part, 
Requirements for records, and Sec. 627.463 of this part, Public access 
to records;
    (d) Property management requirements in Sec. 627.465 of this part, 
Property management standards; and
    (e) Audit and audit resolution requirements in Sec. 627.480 of this 
part, Audits and Sec. 627.481 of this part, Audit resolution.



Sec. 627.495  Collection of amounts due.

    (a) Any funds paid to a recipient in excess of the amount to which 
the recipient is finally determined to be entitled under the terms of 
the grant constitute a debt to the Federal Government. If not paid 
within a reasonable period after demand, the Secretary may take any 
actions permitted by law to recover the funds.
    (b) The Secretary shall charge interest on an overdue debt in 
accordance with the Federal Claims Collection Standards (4 CFR ch. II).



      Subpart E--Grievances Procedures at the State and Local Level



Sec. 627.500  Scope and purpose.

    (a) General. This subpart establishes the procedures which apply to 
the handling of noncriminal complaints under the Act at the Governor, 
the SDA, and the SSG levels. Nothing contained in this subpart shall be 
deemed to prejudice the separate exercise of other legal rights in 
pursuit of remedies and sanctions available outside the Act.
    (b) Handling of discrimination complaints. Complaints of 
discrimination pursuant to section 167(a) of the Act shall be handled 
under 29 CFR part 34.
    (c) Complaints and reports of criminal fraud, waste, and abuse. 
Information and complaints involving criminal fraud, waste, abuse or 
other criminal activity shall be reported through the Department's 
Incident Reporting System, directly and immediately to the DOL Office of 
Inspector General, Office of Investigations, 200 Constitution Avenue 
NW., Room S5514, Washington, DC 20210, or to the corresponding Regional 
Inspector General for Investigations, with a copy simultaneously 
provided to the Employment and Training Administration. The Hotline 
number is 1-800-347-3756. Other complaints of a noncriminal nature will 
continue to be handled under the procedures set forth in this part, 
subparts E and F, and through the Department's Incident Reporting 
System.
    (d) Non-JTPA remedies. Whenever any person, organization, or agency 
believes that a recipient, an SDA, an SSG, or other subrecipient has 
engaged in conduct that violates the Act and that such conduct also 
violates a Federal statute other than JTPA, or a State or local law, 
that person, organization, or agency may, with respect to the non-JTPA 
cause of action, institute a civil action or pursue other remedies 
authorized under such other Federal, State, or local law against the 
recipient, the SDA, the SSG, or other subrecipient, without first 
exhausting the remedies in this subpart. Nothing in the Act or this 
chapter shall:
    (1) Allow any person or organization to file a suit which alleges a 
violation of JTPA or regulations promulgated thereunder without first 
exhausting the administrative remedies described in this subpart; or
    (2) Be construed to create a private right of action with respect to 
alleged violations of JTPA or the regulations promulgated thereunder.

[[Page 221]]



Sec. 627.501  State grievance and hearing procedures for noncriminal complaints at the recipient level.

    (a)(1) Each recipient shall maintain a recipient-level grievance 
procedure and shall ensure the establishment of procedures at the SDA 
level and the SSG level for resolving any complaint alleging a violation 
of the Act, regulations promulgated thereunder, grants, or other 
agreements under the Act. The procedures shall include procedures for 
handling complaints and grievances arising in connection with JTPA 
programs operated by each SDA, SSG, and subrecipient under the Act 
(section 144(a)).
    (2) The procedures described in paragraph (a)(1) of this section 
shall also provide for resolution of complaints arising from actions 
taken by the recipient with respect to investigations or monitoring 
reports.
    (b) The recipient's grievance hearing procedure shall require 
written notice to interested parties of the date, time, and place of the 
hearing; an opportunity to present evidence; and a written decision. For 
matters under paragraph (a)(2) of this section, the notice of hearing 
shall indicate the nature of the violation(s) which the hearing covers.



Sec. 627.502  Grievance and hearing procedures for noncriminal complaints at the SDA and SSG levels.

    (a) Each SDA and SSG, pursuant to guidelines established by the 
recipient, shall establish procedures for resolving complaints and 
grievances arising in connection with JTPA programs operated by the SDA, 
the SSG, and other subrecipients under the Act. The procedures also 
shall provide for resolution of complaints arising from actions taken by 
the SDA or the SSG with respect to investigations or monitoring reports 
of their subgrantees, contractors, and other subrecipients (section 
144(a)).
    (b) Each SDA and SSG grievance hearing procedure shall include 
written notice of the date, time, and place of the hearing; an 
opportunity to present evidence; a written decision; and a notice of 
appeal rights.
    (c) The SDA and SSG procedures shall provide for a decision within 
60 days of the filing of the complaint.



Sec. 627.503  Recipient-level review.

    (a) If a complainant does not receive a decision at the SDA or the 
SSG level within 60 days of filing the complaint or receives a decision 
unsatisfactory to the complainant, the complainant shall have the right 
to request a review of the complaint by the recipient. The recipient 
shall issue a decision within 30 days of receipt of the complaint.
    (b) The recipient shall also provide for an independent review, by a 
reviewer who is independent of the JTPA program, of a complaint 
initially filed at the recipient level on which a decision was not 
issued within 60 days of receipt of a complaint or on which the 
complainant has received an adverse decision. A decision shall be made 
within 30 days of receipt by the recipient.
    (c) A request for review under the provisions of paragraphs (a) or 
(b) of this section shall be filed within 10 days of receipt of the 
adverse decision or, if no timely decision is rendered, within 15 days 
from the date on which the complainant should have received a timely 
decision.
    (d) With the exception of complaints alleging violations of the 
labor standards under section 143 of the Act, the recipient's decision 
is final unless the Secretary exercises the authority for Federal-level 
review in accordance with the provisions at Sec. 627.601 of this part, 
Complaints and grievances at the Federal level. Complaints alleging 
violations of section 143 of the Act shall be handled under the 
procedures set forth at Sec. 627.603 of this part, special handling of 
labor standards violations under section 143.



Sec. 627.504  Noncriminal grievance procedure at employer level.

    (a) Recipients, SDA's, SSG's, and other subrecipients shall assure 
that other employers, including private-for-profit employers of 
participants under the Act, have a grievance procedure relating to the 
terms and conditions of employment available to their participants 
(section 144(b)).

[[Page 222]]

    (b)(1) Employers under paragraph (a) of this section may operate 
their own grievance system or may utilize the grievance system 
established by the recipient, the SDA, or the SSG under this subpart, 
except as provided for in paragraph (b)(2) of this section. Employers 
shall inform participants of the grievance procedures they are to follow 
when the participant begins employment.
    (2) If an employer is required to use a certain grievance procedure 
under a covered collective bargaining agreement, then those procedures 
should be followed for the handling of JTPA complaints under this 
section.
    (c) An employer grievance system shall provide for, upon request by 
the complainant, a review of an employer's decision by the SDA, or the 
SSG and the recipient if necessary, in accordance with Secs. 627.501 and 
627.502 of this part.



    Subpart F--Federal Handling of Noncriminal Complaints and Other 
                               Allegations



Sec. 627.600  Scope and purpose.

    (a) This subpart establishes the procedures which apply to the 
filing, handling, and reviewing of complaints at the Federal level. 
Nothing in the Act or this chapter shall be construed to allow any 
person or organization to join or sue the Secretary with respect to the 
Secretary's responsibilities under JTPA except after exhausting the 
remedies in subpart E of this part and this subpart F.
    (b) Complaints of discrimination pursuant to section 167(a) of the 
Act shall be handled under 29 CFR part 34.



Sec. 627.601  Complaints and allegations at the Federal level.

    (a) The types of complaints and allegations that may be received at 
the Federal level for review include:
    (1) Complaints for which the recipient has failed to issue a timely 
decision as required by Sec. 627.503 of this part;
    (2) Alleged violations of the Act and/or the regulations promulgated 
thereunder resulting from Federal, State, and/or SDA and SSG monitoring 
and oversight reviews;
    (3) Alleged violations of the labor standards provisions at section 
143 of the Act;
    (4) Alleged violations of the relocation provisions in section 
141(c) of the Act; and
    (5) Other allegations of violations of the Act or the regulations 
promulgated thereunder.
    (b) Upon receipt of a complaint or allegation alleging any of the 
violations listed in paragraph (a) of this section, the Secretary may:
    (1) Direct the recipient to handle a complaint through local 
grievance procedures established under Sec. 627.502 of this part; or
    (2) Investigate and determine whether the recipient or 
subrecipient(s) are in compliance with the Act and regulations 
promulgated thereunder (section 163(b) and (c)).
    (3) Allegations of violations of sections 141(c) or 143 of the Act 
and Sec. 627.503 of this part shall be handled under paragraph (b)(2) of 
this section.



Sec. 627.602  Resolution of investigative findings.

    (a)(1) As a result of an investigation or monitoring by the 
Department, or of the actions specified in paragraph (b)(2) of 
Sec. 627.601 of this part, the Grant Officer shall notify the recipient 
of the findings of the investigation and shall give the recipient a 
period of time, not to exceed 60 days, depending on the nature of the 
findings, to comment and to take appropriate corrective actions.
    (2) The Grant Officer shall review the complete file of the 
investigation and the recipient's actions. The Grant Officer's review 
shall take into account the sanction provisions of subpart G of this 
part. If the Grant Officer agrees with the recipient's handling of the 
situation, the Grant Officer shall so notify the recipient. This 
notification shall constitute final agency action.
    (3) If the Grant Officer disagrees with the recipient's handling of 
the matter, the Grant Officer shall proceed pursuant to Sec. 627.606 of 
this part, Grant officer resolution.

[[Page 223]]



Sec. 627.603  Special handling of labor standards violations under section 143 of the Act.

    (a) A complaint alleging JTPA section 143 violations may be 
submitted to the Secretary by either party to the complaint when:
    (1) The complainant has exhausted the grievance procedures set forth 
at subpart E of this part, or
    (2) The 60-day time period specified for reaching a decision under a 
procedure set forth at subpart E of this part has elapsed without a 
decision (section 144(a) and (d)(1)).
    (b)(1) The Secretary shall investigate the allegations contained in 
a complaint alleging violations of JTPA section 143, make a 
determination whether a violation has occurred, and issue a decision 
within 120 days of receipt by the Secretary of the complaint (section 
144(c) and (d)).
    (2) If the results of the Secretary's investigation indicate that a 
decision by a recipient under a procedure set forth at subpart E of this 
part requires modification or reversal, or that the 60-day time period 
for decision under section 144(a) has elapsed, the Secretary shall 
modify, reverse, or issue such decision.
    (3) If the Secretary modifies or reverses a decision made under a 
procedure set forth at subpart E of this part, or issues a decision 
where the 60-day time period has elapsed without a decision, the 
Secretary shall offer an opportunity for a hearing, in accordance with 
the procedures under section 166 of the Act and subpart H of this part 
(sections 144(d)(2) and 166(a)).
    (4) If the Secretary upholds a recipient's decision, the 
determination is the final decision of the Secretary (section 
144(d)(3)). This decision is not appealable to the Office of 
Administrative Law Judges.
    (c) Except as provided in paragraph (d) of this section, remedies 
available under this section to a grievant for violations of section 143 
of the Act shall be limited to:
    (1) Suspension or termination of payments under the Act;
    (2) Prohibition of placement of a participant, for an appropriate 
period of time, in a program under the Act with an employer that has 
violated section 143 of the Act, as determined under section 144(d) or 
(e) of the Act; and/or
    (3) Appropriate equitable relief (other than back pay) (section 
144(f)(1)).
    (d) Available remedies for violations of section 143(a)(4), (b)(1), 
(b)(3), and (d) of the Act include the remedies listed in paragraph (c) 
of this section, and may include the following:
    (1) Reinstatement of the grievant to the position held prior to 
displacement;
    (2) Payment of lost wages and benefits; and/or
    (3) Reestablishment of other relevant terms, conditions, and 
privileges of employment.
    (e) Nothing in this section shall be construed to prohibit a 
grievant from pursuing a remedy authorized under another Federal, State, 
or local law for a violation of section 143 of the Act (section 144(g)).



Sec. 627.604  Alternative procedure for handling labor standards violations under section 143 of the Act--binding arbitration.

    (a) A person alleging a violation of section 143 of the Act, as an 
alternative to processing the grievance under a procedure described at 
section 144 of the Act, may submit the grievance to a binding 
arbitration procedure, if a collective bargaining agreement covering the 
parties to the grievance so provides (section 144(e)(1)).
    (b) A person electing to have her/his complaint on JTPA section 143 
labor standard violations processed under binding arbitration 
provisions--
    (1) Shall choose binding arbitration before, and in lieu of, 
initiating a complaint under other grievance procedures established 
pursuant to section 144 of the Act, and
    (2) May not elect binding arbitration for a complaint that 
previously has been or is subject to any other grievance procedure 
established under the Act.
    (c) Binding arbitration decisions under the provisions of section 
144(e) of the Act are not reviewable by the Secretary.
    (d) The remedies available to a grievant under binding arbitration 
are limited to those set forth at section 144(f)(1)(C) and (f)(2) of the 
Act (section 144(e)(2)).

[[Page 224]]

    (e) Nothing in this section shall be construed to prohibit a 
grievant from pursuing a remedy authorized under another Federal, State, 
or local law for a violation of section 143 of the Act (section 144(g)).



Sec. 627.605  Special Federal review of SDA- and SSG-level complaints without decision.

    (a) Should the recipient fail to provide a decision as required in 
Sec. 627.503 of this part, the complainant may then request from the 
Secretary a determination whether reasonable cause exists to believe 
that the Act or regulations promulgated thereunder have been violated.
    (b) The Secretary shall act within 90 days of receipt of a request 
made pursuant to paragraph (a) of this section. Where there is 
reasonable cause to believe the Act or regulations promulgated 
thereunder have been violated, the Secretary shall direct the recipient 
to issue a decision adjudicating the dispute pursuant to recipient and 
local procedures. The Secretary's action does not constitute final 
agency action and is not appealable under the Act (sections 166(a) and 
144(c)). If the recipient does not comply with the Secretary's order 
within 60 days, the Secretary may impose a sanction upon the recipient 
for failing to issue a decision.
    (c) A request pursuant to paragraph (a) of this section shall be 
filed no later than 15 days from the date on which the complainant 
should have received a decision as required in Sec. 627.503 of this 
part. The complaint shall contain the following:
    (1) The full name, telephone number (if any), and address (if any) 
of the person making the complaint;
    (2) The full name and address of the respondent against whom the 
complaint is made;
    (3) A clear and concise statement of the facts, including pertinent 
dates, constituting the alleged violation;
    (4) The provisions of the Act, regulations promulgated thereunder, 
grant, or other agreement under the Act believed to have been violated;
    (5) A statement disclosing whether proceedings involving the subject 
of the request have been commenced or concluded before any Federal, 
State, or local authority, and, if so, the date of such commencement or 
conclusion, the name and address of the authority, and the style of the 
case; and
    (6) A statement of the date the complaint was filed with the 
recipient, the date on which the recipient should have issued decision, 
and an attestation that no decision was issued.
    (d)(1) A request pursuant to paragraph (a) of this section will be 
considered to have been filed when the Secretary receives from the 
complainant a written statement sufficiently precise to evaluate the 
complaint and the grievance procedure used by the recipient, the SDA, or 
the SSG.
    (2) When an imprecise request is received within the 15-day period 
prescribed in paragraph (a) of this section, the Secretary may extend 
the period for submission.



Sec. 627.606  Grant Officer resolution.

    (a) When the Grant Officer is dissatisfied with the State's 
disposition of an audit, as specified in Sec. 627.481 of this part, or 
other resolution of violations (including those arising out of incident 
reports or compliance reviews), with the recipient's response to 
findings resulting from investigations pursuant to Sec. 627.503 of this 
part, or if the recipient fails to comply with the Secretary's decision 
pursuant to Sec. 627.605(b) of this part, the initial and final 
determination process shall be used to resolve the matter.
    (b) Initial determination. The Grant Officer shall make an initial 
determination on the findings for both those matters where there is 
agreement and those where there is disagreement with the recipient's 
resolution, including the allowability of questioned costs or 
activities. Such initial determination shall be based upon the 
requirements of the Act, regulations promulgated thereunder, grants, 
contracts, or other agreements under the Act.
    (c) Informal resolution. The Grant Officer shall not revoke a 
recipient's grant in whole or in part, nor institute corrective actions 
or sanctions, without first providing the recipient with an opportunity 
to present documentation or arguments to resolve informally those 
matters in controversy contained in the initial determination.

[[Page 225]]

The initial determination shall provide for an informal resolution 
period which shall be at least 60 days from issuance of the initial 
determination. If the matters are resolved informally, the Grant Officer 
shall issue a final determination pursuant to paragraph (d) of this 
section which notifies the parties in writing of the nature of the 
resolution and may close the file.
    (d) Grant Officer's final determination. (1) If the matter is not 
fully resolved informally, the Grant Officer shall provide each party 
with a written final determination by certified mail, return receipt 
requested. For audits of recipient-level entities and other recipients 
which receive JTPA funds directly from DOL, ordinarily the final 
determination will be issued not later than 180 days from the date that 
the OIG issues the final approved audit report to the Employment and 
Training Administration. For audits of subrecipients conducted by the 
OIG, ordinarily the final determination will be issued not later than 
360 days from the date the OIG issues the final approved audit report to 
ETA.
    (2) A final determination under this paragraph (d) shall:
    (i) Indicate that efforts to informally resolve matters contained in 
the initial determination have been unsuccessful;
    (ii) List those matters upon which the parties continue to disagree;
    (iii) List any modifications to the factual findings and conclusions 
set forth in the initial determination;
    (iv) Establish a debt, if appropriate;
    (v) Require corrective action when needed;
    (vi) Determine liability, method of restitution of funds and 
sanctions; and
    (vii) Offer an opportunity for a hearing in accordance with subpart 
H of this part.
    (3) Unless a hearing is requested, a final determination under this 
paragraph (d) constitutes final agency action and is not subject to 
further review.
    (e) Nothing in this section shall preclude the Grant Officer from 
issuing an initial determination and/or final determination directly to 
a subrecipient, in accordance with section 164(e)(3) of the Act. In such 
a case, the Grant Officer shall inform the recipient of such action.



Sec. 627.607  Grant Officer resolution of Governor's failure to promptly take action.

    (a) An allegation, whether arising from a complaint, from monitoring 
or other information available to the Department, that a Governor failed 
to promptly take remedial action of a substantial violation of the Act 
or the regulations under this Act, as required by Sec. 627.477 of this 
part, shall be promptly investigated by the Department.
    (b) The Grant Officer shall notify the Governor of the findings of 
the investigation or monitoring and shall give the Governor a period of 
time, not to exceed 30 days, to comment on the nature of the findings 
and to take appropriate corrective actions.
    (c) The Grant Officer shall review the complete file of the 
investigation, monitoring, and the Governor's actions.
    (d) If the Grant Officer determines that, (1) as a result financial 
and compliance audits or otherwise, the Governor determined that there 
was a substantial violation of a specific provision of the Act or the 
regulations under this Act, and corrective action had not been taken 
and, (2) the Grant Officer determines that the Governor has not taken 
the actions required by Sec. 627.477(a), the Grant Officer shall take 
such actions required by Sec. 627.477(a).
    (e) The Grant Officer's determination, unless a hearing is 
requested, constitutes final agency action and is not subject to further 
review. (Section 164(b)(3)).



             Subpart G--Sanctions for Violations of the Act



Sec. 627.700  Purpose and scope.

    This subpart describes the sanctions and appropriate corrective 
actions that may be imposed by the Secretary for violations of the Act, 
regulations promulgated thereunder, or grant terms and conditions 
(sections 106(j)(5), 164 (b), (d), (e), (f), (g), and (h)).

[[Page 226]]



Sec. 627.702  Sanctions and corrective actions.

    (a) Except for actions under sections 106(j), 164 (b) and (f), and 
167 of the Act and the funding restrictions specified at Sec. 627.423 of 
this part, Funding restrictions for ``high-risk'' recipients and 
subrecipients, the Grant Officer shall utilize initial and final 
determination procedures outlined in Sec. 627.606, Grant Officer 
resolution, of this part to impose a sanction or corrective action.
    (b) To impose a sanction or corrective action regarding a violation 
of section 167 of the Act, the Department shall utilize the procedures 
of 29 CFR part 34.
    (c) To impose a sanction or corrective action for failure to meet 
performance standards, where the recipient has not acted as required at 
section 106(j)(4), the Grant Officer shall utilize the procedures set 
forth at Sec. 627.470 (d) and (f).
    (d) To impose a sanction or corrective action for noncompliance with 
the procurement standards provisions set forth at Secs. 627.420 and 
627.703 of this part, where the recipient has not acted, the Grant 
Officer may utilize the procedures set forth at section 164(b) of the 
Act.
    (e) To impose a sanction or corrective action for the Governor's 
failure to promptly take remedial action of a substantial violation as 
required by Sec. 627.477 of this part, the Grant Officer shall utilize 
the procedure set forth in Sec. 627.607 of this part.
    (f) The recipient shall be held responsible for all funds under its 
grant(s). The recipient shall hold subrecipients, including SDA's and 
SSG's, responsible for JTPA funds received through the grant, and may 
ultimately hold the units of local government which constitute the SDA 
or the SSG responsible for such funds.
    (g) Nothing in this section shall preclude the Grant Officer from 
imposing a sanction directly against a subrecipient, as authorized in 
section 164(e)(3) of the Act. In such a case, the Grant Officer shall 
inform the recipient of such action.



Sec. 627.703  Failure to comply with procurement provisions.

    (a) If, as part of the recipient's annual on-site monitoring of its 
SDA's/SSG's, the recipient determines that an SDA/SSG is not in 
compliance with the procurement requirements established in accordance 
with the provisions at section 164(a)(3) of the Act and Sec. 627.420, of 
this part, Procurement, and Sec. 627.422 of this part, Selection of 
service providers, the recipient shall:
    (1) Require corrective action to secure prompt compliance; and
    (2) Impose the sanctions provided for under the provisions at 
section 164(b) if the recipient finds that the SDA/SSG has failed to 
take timely corrective action under paragraph (a)(1) of this section 
(section 164(a) (4) and (5)).
    (b) An action by the recipient to impose a sanction against either 
an SDA or SSG, in accordance with this section, may be appealed to the 
Secretary under the same terms and conditions as the disapproval of the 
respective plan, or plan modification, as set forth at Sec. 628.426(e), 
Review and approval (section 164(b)(2)).
    (c) If, upon a determination under paragraph (a)(2) of this section 
to impose a sanction under section 164(b) of the Act, the recipient 
fails to promptly take the actions required under paragraph (a)(2) of 
this section, the Secretary shall take such actions against the 
recipient or the SDA/SSG as appropriate (section 164(b)(3)).



Sec. 627.704  Process for waiver of State liability.

    (a) A recipient may request a waiver of liability as described in 
section 164(e)(2) of the Act.
    (b)(1) When the debt for which a waiver of liability is desired was 
established in a non-Federal resolution, such requests shall be 
accompanied by a resolution report.
    (2) When the ETA Grant Officer is resolving the finding(s) for which 
a waiver of liability is desired, such request shall be made no later 
than the informal resolution period described in Sec. 627.606(c) of this 
part.
    (c) A waiver of the recipient's liability can only be considered by 
the Grant Officer when the misexpenditure of JTPA funds:

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    (1) Occurred at a subrecipient level;
    (2) Was not a violation of section 164(e)(1) of the Act, or did not 
constitute fraud; or
    (3) If fraud did exist, it was perpetrated against the recipient/
subrecipient; and:
    (i) The recipient/subrecipient discovered, investigated, reported, 
and prosecuted the perpetrator of said fraud; and
    (ii) After aggressive debt collection action, it can be documented 
that there is no likelihood of collection from the perpetrator of the 
fraud.
    (4) The recipient has issued a final determination which disallows 
the misexpenditure, the recipient's appeal process has been exhausted, 
and a debt has been established; and
    (5) The recipient requests such a waiver and provides documentation 
to demonstrate that it has substantially complied with the requirements 
of section 164(e)(2)(A), (B), (C), and (D) of the Act.
    (d) The recipient shall not be released from liability for misspent 
funds under the determination required by section 164(e) of the Act 
unless the Grant Officer determines that further collection action, 
either by the recipient or subrecipient, would be inappropriate or would 
prove futile.



Sec. 627.706  Process for advance approval of a recipient's contemplated corrective actions.

    (a) The recipient may request advance approval from the Grant 
Officer for contemplated corrective actions, including debt collection 
actions, which the recipient plans to initiate or to forego. The 
recipient's request shall include a description and an assessment of all 
actions taken by the subrecipient to collect the misspent funds.
    (b) Based on the recipient's request, the Grant Officer may 
determine that the recipient may forego certain collection actions 
against a subrecipient where:
    (1) The subrecipient was not at fault with respect to the liability 
criteria set forth in section 164(e)(2)(A), (B), (C), and (D) of the 
Act;
    (2) The misexpenditure of funds:
    (i) Was not made by that subrecipient but by an entity that received 
JTPA funds from that subrecipient;
    (ii) Was not a violation of section 164(e)(1) of the Act, or did not 
constitute fraud; or
    (iii) If fraud did exist, it was perpetrated against the 
subrecipient, and:
    (A) The subrecipient discovered, investigated, reported, and 
prosecuted the perpetrator of said fraud; and
    (B) After aggressive debt collection action, it can be documented 
that there is no likelihood of collection from the perpetrator of the 
fraud.
    (3) A final determination which disallows the misexpenditure and 
establishes a debt has been issued at the appropriate level;
    (4) Final action within the recipient's appeal system has been 
completed; and
    (5) Further debt collection action by that subrecipient or the 
recipient would be either inappropriate or futile.



Sec. 627.708  Offset process.

    (a) In accordance with section 164(d) of the Act, the primary 
sanction for misexpenditure of JTPA funds is repayment.
    (b) A recipient may request that a debt, or a portion thereof, be 
offset against amounts allotted to the recipient, and retained at the 
recipient level for administrative costs, under the current or a future 
JTPA entitlement.
    (1) For title II grants, any offset shall be applied against the 
recipient level 5 percent administrative cost set-aside only and may not 
be distributed by the recipient among its subrecipients.
    (2) For title III grants, any such offset must be applied against 
that portion of funds reserved by the recipient for recipient level 
administration only and may not be distributed by the recipient among 
its subrecipients.
    (c) The Grant Officer may approve an offset request, under section 
164(d) of the Act, if the misexpenditures were not in violation of 
section 164(e)(1) of the Act.
    (d) If offset is granted, the debt shall not be fully satisfied 
until the Grant Officer reduces amounts allotted to the State by the 
amount of the misexpenditure.
    (e) The recipient shall not have the authority to reduce allocations 
to an

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SDA or SSG for misexpenditure of JTPA funds under section 164(d) of the 
Act.



     Subpart H--Hearings by the Office of Administrative Law Judges



Sec. 627.800  Scope and purpose.

    (a) The jurisdiction of the Office of the Administrative Law Judges 
(OALJ) extends only to those complainants identified in sections 141(c), 
144(d), 164(f), and 166(a) of the Act.
    (b) Actions arising under section 167 of the Act shall be handled 
under 29 CFR part 34.
    (c) All other disputes arising under the Act shall be adjudicated 
under the appropriate recipient or subrecipient grievance procedures or 
other applicable law.



Sec. 627.801  Procedures for filing request for hearing.

    (a) Within 21 days of receipt of a final determination imposing a 
sanction or corrective action or denying financial assistance, the 
applicant, the recipient, the SDA, the SSG, or other subrecipient, or a 
vendor against which the Grant Officer has imposed a sanction or 
corrective action may appeal the Grant Officer's determination to the 
OALJ. A request for a hearing shall be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, 800 K Street, NW., Suite 400, Washington, DC 20001, 
with one copy to the departmental official who issued the determination.
    (b) The 21-day filing requirement in paragraph (a) of this section 
is jurisdictional. Failure to timely request a hearing acts as a waiver 
of the right to hearing.
    (c) A request for a hearing under this section shall state 
specifically those issues of the final determination upon which review 
is requested. Those provisions of the final determination not specified 
for review, or the entire final determination when no hearing has been 
requested within the 21 days, shall be considered resolved and not 
subject to further review. Only alleged violations of the Act, 
regulations promulgated thereunder, grant or other agreement under the 
Act fairly raised in the determination and the request for hearing are 
subject to review.
    (d) The procedures set forth in this subpart apply in the case of a 
complainant who has not had a dispute adjudicated under the alternative 
dispute resolution process set forth in Sec. 627.805 of this part within 
60 days, except that the request for hearing before the OALJ must be 
filed within 15 days of the conclusion of the 60-day period. In addition 
to including the final determination upon which review is requested, the 
complainant shall include a copy of any Stipulation of Facts and a brief 
summary of proceedings.



Sec. 627.802  Rules of procedure.

    (a) The rules of practice and procedure promulgated by the OALJ, at 
subpart A of 29 CFR part 18, shall govern the conduct of hearings under 
this section, except that a request for hearing under this section shall 
not be considered a complaint to which the filing of an answer by DOL or 
a DOL agency or official is required. Technical rules of evidence shall 
not apply to hearings conducted pursuant to this part; however, rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to cross-examination shall apply.
    (b) Prehearing procedures. In all cases, the ALJ should encourage 
the use of prehearing procedures to simplify and to clarify facts and 
issues.
    (c) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or things at hearings shall be 
obtained from the ALJ and shall be issued pursuant to the authority 
contained in section 163(b) of the Act, incorporating 15 U.S.C. 49.
    (d) Timely submission of evidence. The ALJ shall not permit the 
introduction at the hearing of any documentation if such documentation 
has not been made available for review by the other parties to the 
proceeding either at the time ordered for any prehearing conference, or, 
in the absence of such an order, at least 3 weeks prior to the hearing 
date.
    (e) Burden of production. The Grant Officer shall have the burden of 
production to support her or his decision. To

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this end, the Grant Officer shall prepare and file an administrative 
file in support of the decision which shall be made part of the record. 
Thereafter, the party or parties seeking to overturn the Grant Officer's 
decision shall have the burden of persuasion.



Sec. 627.803  Relief.

    In ordering relief, the ALJ shall have the full authority of the 
Secretary under section 164 of the Act.



Sec. 627.804  Timing of decisions.

    The ALJ should render a written decision not later than 90 days 
after the closing of the record.



Sec. 627.805  Alternative dispute resolution.

    (a) Parties to a complaint under Sec. 627.801 of this part, 
Procedures for filing a request for hearing, may choose to waive their 
rights to an administrative hearing before the OALJ by choosing to 
transfer the settlement of their dispute to an individual acceptable to 
all parties for the purpose of conducting an informal review of the 
stipulated facts and rendering a decision in accordance with applicable 
law. A written decision will be issued within 60 days after the matter 
is submitted for informal review.
    (b) The waiver of the right to request a hearing before the OALJ may 
be revoked if a settlement has not been reached or a decision has not 
been issued within the 60 days provided in paragraph (a) of this 
section.
    (c) The decision rendered under this informal review process shall 
be treated as a final decision of an Administrative Law Judge pursuant 
to section 166(b) of the Act.



Sec. 627.806  Other authority.

    Nothing contained in this subpart shall be deemed to prejudice the 
separate exercise of other legal rights in pursuit of remedies and 
sanctions available outside the Act.



                    Subpart I--Transition Provisions



Sec. 627.900  Scope and purpose.

    (a) Regulations set forth at parts 626, 627, 628, 629, 630, 631, and 
637 of 20 CFR chapter V (1993) were amended, effective December 29, 
1992, and were published as an interim final rule to provide planning 
guidance for States and SDA's on the changes made to the JTPA program as 
a result of the 1992 JTPA amendments (See 57 FR 62004 (December 29, 
1992)). The transition provisions of the regulations were amended on 
June 3, 1992 (see 58 FR 31472, June 3, 1993). Those regulations and the 
statutory amendments were effective for the program year beginning July 
1, 1993 (PY 1993), and succeeding program years. For PY 1992, JTPA 
programs and activities shall continue under the regulations set forth 
at 20 CFR parts 626, 627, 628, 629, 630, 631, and 637 (1992).
    (b) In order to provide for the orderly transition to and 
implementation of the provisions of JTPA, as amended by the 1992 
amendments, this subpart I applies to the use of JTPA title II and title 
III funds allotted by formula to the States. Additional guidance on 
transition matters may be provided in administrative issuances. The 
provisions in this subpart are operational during the transition period 
for implementing the 1992 JTPA amendments.



Sec. 627.901  Transition period.

    The transition period ended June 30, 1993 unless otherwise stated. 
The intent of the transition period is to complete, to the extent 
possible, activity begun on or before June 30, 1993 under current policy 
and regulations and to ensure that all requirements mandated by the 1992 
JTPA amendments have been implemented.



Sec. 627.902  Governor's actions.

    The following are actions required to be taken prior to July 1, 
1993:
    (a) Review current policies, practices, procedures, and delivery 
systems to ensure that they conform to the requirements of the 
amendments;
    (b) Modify the Governor's coordination and special services plan in 
accordance with instructions issued by the Secretary;
    (c) Ensure that SDAs modify job training plans as necessary;
    (d) Execute a new Governor/Secretary agreement and a new grant 
agreement;

[[Page 230]]

    (e) Issue procurement standards that comply with the Act and these 
regulations, as described in Sec. 627.420 of this part, Procurement;
    (f) Issue instructions necessary to implement program year 1993 cost 
categories pursuant to Sec. 627.440 of this part, Classification of 
costs;
    (g) Issue instructions necessary for SDAs to report program 
expenditures by year of appropriation pursuant to Sec. 627.455 of this 
part, Reports required;
    (h) Certify private industry councils pursuant to Sec. 628.410 of 
this chapter, Private Industry Council.



Sec. 627.903  Actions which are at the discretion of the Governor.

    (a) Establish a State Human Resource Investment Council (HRIC);
    (b) Issue instructions to ``grandparent'' participants in JTPA 
programs as of June 30, 1993 for purposes of completing training;
    (c) Issue instructions for use of PY 1992 and prior year 6 percent 
performance standards incentive funds to further develop and implement 
data collection and management information systems to track the program 
experience of participants. PY 1993 and subsequent performance standards 
incentive funds may not to be used for this purpose;
    (d) Of the Title II and Title III unobligated balance of funds 
available as of June 30, 1993, any amount may be reprogrammed into PY 
1993 activity. The Department believes these amounts will be minimal and 
not represent a significant proportion of the funds available. Such 
reprogrammed funds will be subject to requirements contained in JTPA 
regulations effective July 1, 1993.



Sec. 627.904  Transition and implementation.

    (a) Review. The Governor shall conduct a comprehensive review of the 
current policies, procedures, and delivery systems relating to programs 
authorized under the Job Training Partnership Act for the purpose of 
ensuring the effective implementation of the amendments. Such a review 
shall include consideration of the appropriateness of current SDA 
designations, the representation on current State and local councils, 
the adequacy of current administrative systems, the effectiveness of 
current outreach, service delivery, and coordination activities, and 
other relevant matters.
    (b) Governor's Coordination and Special Services Plan (GCSSP). The 
GCSSP requires modification to assure conformance to the requirements of 
the amendments. The plan was to be modified pursuant to instructions 
issued by the Secretary and shall be submitted to the Secretary for 
review by May 15, 1993.
    (c) Job training plans. Service delivery area job training plans 
will require modification to comply with Sec. 628.420 of this chapter, 
Job training plan.
    (d) Governor/Secretary agreement and grant agreement. A new 
Governor/Secretary agreement is required to assure that the State shall 
comply with JTPA, as amended, and the applicable rules and regulations; 
the Wagner-Peyser Act, as amended, and the applicable rules and 
regulations. A new grant agreement is needed to provide the basis for 
Federal obligation of funds for programs authorized by Titles I, II, and 
III, and such other funds as the Secretary may award under the grant.
    (e) Procurement standards. In order to ensure fiscal accountability 
and prevent waste, fraud, and abuse in programs administered under JTPA, 
as amended, the Governor shall prescribe and implement procurement 
standards meeting the requirements of Sec. 627.420 of this part, 
Procurement. All procurements initiated on or after July 1, 1993 shall 
be governed by and follow the requirements in Sec. 627.420 of this part. 
Initiation of procurement means any sole source or small purchase 
awarded on or after July 1, 1993 and any Invitation for Bid or Request 
for Proposal issued on or after July 1, 1993.
    (f) Participants. In order to have the least possible disruption to 
program participants, during PY 1993, Governors and SDAs have the 
flexibility to grandfather participants already enrolled in JTPA 
programs up to and including June 30, 1993 under existing rules and 
regulations. All participants in programs on June 30, 1993, will be 
eligible for transfer to programs operated under the new provisions at 
any time

[[Page 231]]

beginning on July 1, 1993. ``Hard to serve'' barriers to participation, 
assessment and Individual Service Strategy provisions of the amendments 
will not apply to participants enrolled prior to July 1, 1993 or to 1993 
Title II-B participants.
    (g) Cost categories. (1) Cost categories applicable to PY 1992 and 
earlier funds will be subject to prior regulations either until the 
funds have been exhausted or program activity has been completed. In 
order to assist the orderly transition to and implementation of the new 
requirements of the 1992 JTPA amendments, an increase is allowed in the 
administrative cost limitation for PY 1992 funds from 15 percent to 20 
percent, with a corresponding adjustment to cost limitations for 
training and participant support. Specifically, not less than 80 percent 
of the title II-A funds shall be expended for training and participant 
support, and not less than 65 percent shall be expended for training.
    (2) Any prior year's carryover funds made available for use in PY 
1993 will be subject to the reporting requirements and cost categories 
applicable to PY 1993 funds.
    (3) In determining compliance with the JTPA cost limitations for PY 
1992, Governors may either:
    (i) Determine cost limitation compliance separately for funds 
expended in accordance with paragraphs (g)(1) and (g)(2) of this 
section; or
    (ii) Determine compliance for each cost category against the total 
PY 1992 funds, whether expended in accordance with the Act and 
regulations in effect prior to the 1992 amendments to JTPA or in 
accordance with the amended Act and these regulations. Using this 
option, the total combined funds expended for training and direct 
training should be at least 65 percent of PY 1992 SDA allocations.
    (4) In addition to the institutions specified in 
Sec. 627.440(d)(1)(vi)(B), the costs of tuition and entrance fees of a 
postsecondary vocational institution specified at section 481(c) of the 
Higher Education Act (20 U.S.C. 1088(c)) may be charged to direct 
training services through June 30, 1995, when such tuition charges or 
entrance fees are not more than the educational institution's catalog 
price, are necessary to receive specific training, are charged to the 
general public to receive such training, and are for the training of 
participants.
    (h) Financial reporting. Notwithstanding reprogramming, expenditures 
must be recorded separately by year of appropriation.
    (i) Private Industry Council. The private industry councils shall be 
certified pursuant to Sec. 628.410 of this chapter, Private Industry 
Council.
    (j) Grievances, investigations, and hearings. Generally, all 
grievances, investigations and hearings pending on or before June 30, 
1993 should be resolved and settled under prior rules and procedures. 
Grievances, investigations, and hearings occurring on or after July 1, 
1993 will be governed by the procedures described in subparts E, F, and 
H of this part 627.
    (k) Summer program. (1) The Title II-B Summer Youth Employment 
Program for 1993 shall be governed by the Act and regulations in effect 
prior to the Amendments (prior to September 7, 1992).
    (2) Up to 10 percent of the 1993 title II-B funds available may be 
transferred to the title II-C program.
    (l) SDA designation. At the Governor's discretion, SDA's designated 
prior to July 1, 1992 need not be subject to the provisions of 
Sec. 628.405, Service delivery areas.
    (m) Program implementation. The implementation by the States and 
SDA's of certain new program design requirements, particularly objective 
assessment and development of individual service strategies (ISS), may 
require additional time to fully implement beyond July 1, 1993. 
Reasonable efforts to implement the provisions of Secs. 628.515, 
628.520, and 628.530. as soon as possible after July 1, 1993, are 
expected to be made. However, it is not expected that every new 
participant will initially receive objective assessment, ISS, and 
referral to non-title II services for a period of 6 months, or until 
January 1, 1994.
    (n) Out-of-school youth ratio. The 50-percent out-of-school 
participants requirement for title II-C will be phased in during PY 1993 
and will not be the subject of compliance review until PY

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1994, beginning July 1, 1994. During PY 1993, however, SDA's must show 
significant improvement in the proportion of out-of-school youth being 
served and performance in increasing the service ratio will be monitored 
by the States and DOL during this implementation period.
    (o) Administrative issuances. Other implementation issues may be 
handled by administrative issuance. ETA will transmit such guidance 
directly to all Governors via a Training and Employment Guidance Letter 
(TEGL). Such TEGL's will be published as Notices in the Federal Register 
(section 701(i)).



Sec. 627.905  Guidance on contracts and other agreements.

    The Department does not intend for contracts, agreements, inter-
agency agreements, retainers, and similar arrangements to be negotiated 
and/or entered into for the sole purpose of applying previously existing 
rules and regulations. The 1992 JTPA amendments were effective July 1, 
1993. The Department intends that contracts, awards and agreements 
entered into on or before June 30, 1993 are to be used to serve and/or 
train participants enrolled on or before June 30, 1993, unless the 
contracts and agreements are modified to comply with the new amendments 
and regulations.



Sec. 627.906  Determinations on State and SDA implementation.

    (a) The Department expects that the States and SDA's will fully 
implement the provisions of the Act and these regulations regarding 
procurement, cost principles, cost categories, cost limitations, 
participant service requirements and eligibility beginning July 1, 1993.
    (b) The Department expects that the implementation by the States and 
SDA's of the program design features in these regulations, particularly 
objective assessment and development of the ISS, may require additional 
time beyond July 1, 1993 to fully implement.
    (c) In deciding to allow or disallow questioned costs related to the 
implementation of the provisions described in paragraph (b) of this 
section, the Grant Officer will consider the extent to which the State's 
and SDA's have made good faith efforts in properly implementing such 
provisions in the period July 1, 1993 through June 30, 1994.



PART 628--PROGRAMS UNDER TITLE II OF THE JOB TRAINING PARTNERSHIP ACT--Table of Contents




                      Subpart A--Scope and Purpose

Sec.
628.100  Scope and purpose of part 628.

                        Subpart B--State Planning

628.200  Scope and purpose.
628.205  Governor's coordination and special services plan.
628.210  State Job Training Coordinating Council.
628.215  State Human Resource Investment Council.

                        Subpart C--State Programs

628.300  Scope and purpose.
628.305  State distribution of funds.
628.310  Administration.
628.315  Education coordination and grants.
628.320  Services for older individuals.
628.325  Incentive grants, capacity building and technical assistance.

                Subpart D--Local Service Delivery System

628.400  Scope and purpose.
628.405  Service delivery areas.
628.410  Private Industry Council.
628.415  Selection of SDA grant recipient and administrative entity.
628.420  Job training plan.
628.425  Review and approval.
628.426  Disapproval or revocation of the plan.
628.430  State SDA submission.

 Subpart E--Program Design Requirements for Programs Under Title II of 
                    the Job Training Partnership Act

628.500  Scope and purpose.
628.505  Eligibility.
628.510  Intake, referrals, and targeting.
628.515  Objective assessment.
628.520  Individual service strategy.
628.525  Limitations.
628.530  Referrals of participants to non-title II programs.
628.535  Limitations on job search assistance.
628.540  Volunteer program.
628.545  Linkages and coordination.
628.550  Transfer of funds.

                      Subpart F--The Adult Program

628.600  Scope and purpose.
628.605  Eligibility.

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628.610  Authorized services.

       Subpart G--The Summer Youth Employment and Training Program

628.700  Scope and purpose.
628.701  Program goals and objectives.
628.702  Eligibility.
628.705  SYETP authorized services.
628.710  Period of program operation.

                    Subpart H--Youth Training Program

628.800  Scope and purpose.
628.803  Eligibility.
628.804  Authorized services.

    Authority:  29 U.S.C. 1579(a).

    Source:  59 FR 45845, Sept. 2, 1994, unless otherwise noted.



                      Subpart A--Scope and Purpose



Sec. 628.100  Scope and purpose of part 628.

    (a) This part sets forth requirements for implementation of programs 
under title II of the Job Training Partnership Act, and includes the 
councils described in subpart B that have responsibilities under titles 
I, II, and III. In this part, the provisions generally pertaining to 
title II are covered in subparts B, C, D, and E. Matters specific to 
titles IIA, II-B, or II-C are addressed in subparts F, G, or H, 
respectively.
    (b) Title II-A Adult Training programs are to prepare adults for 
participation in the labor force by providing job training and other 
services that will result in increased employment and earnings, 
increased occupational and educational skills, reduced welfare 
dependency, and result in improved long-term employability.
    (c) Title II-B Summer Youth Employment and Training programs are to 
provide eligible youth with exposure to the world of work, to enhance 
the basic education skills of youth, to encourage school completion or 
enrollment in supplemental or alternative school programs and to enhance 
the citizenship skills of youth.
    (d) Title II-C Youth Training programs are to improve the long-term 
employability of youth; to enhance the educational, occupational and 
citizenship skills of youth; to encourage school completion or 
enrollment in alternative school programs; to increase the employment 
and earnings of youth; to reduce welfare dependency; and to assist youth 
in addressing problems that impair their ability to make successful 
transition from school to work, to apprenticeship, to the military or to 
postsecondary education and training.



                        Subpart B--State Planning



Sec. 628.200  Scope and purpose.

    This subpart provides requirements for the submission of the 
Governor's Coordination and Special Services Plan, as well as the 
procedures for plan review. This subpart also contains requirements for 
the composition and responsibilities of the State Job Training 
Coordinating Council and the State Human Resource Investment Council.



Sec. 628.205  Governor's coordination and special services plan.

    (a)(1) Submittal. By a date established by the Secretary, each State 
seeking financial assistance under the Act shall submit to the 
Secretary, biennially, the Governor's coordination and special services 
plan (GCSSP) encompassing two program years (section 121(a)).
    (2) The GCSSP shall address the requirements of section 121(b) of 
the Act, including a description of the Governor's coordination 
criteria; the measures taken by the State to ensure coordination and 
prevent duplication with the Job Opportunities and Basic Skills (JOBS) 
program; the certification of the implementation of the procurement 
system, as required at section 164(a)(6) of the Act; the technical 
assistance and training plan; goals, and the efforts to accomplish such 
goals, for the training and placement of women in nontraditional 
employment and apprenticeship; the projected use of resources, including 
oversight of program performance; program administration; program 
financial management and audit resolution procedures; capacity building; 
priorities and criteria for State incentive grants; and performance 
goals for State supported programs (section 121(b)).
    (b) GCSSP review. The Secretary shall review the GCSSP for overall 
compliance with the provisions of the Act. If the GCSSP is disapproved, 
the Secretary shall notify the Governor, in writing, within 45 days of 
submission of

[[Page 234]]

the reasons for disapproval so that the Governor may modify the plan to 
bring it into compliance with the Act (section 121(d)).
    (c) Information to SDA's. (1) In the year preceding the program 
years for which the plan is developed, the State shall make available to 
the SDA's in the State information on its plans to undertake State 
activities in program areas including education coordination grants, 
services to older workers, and capacity building.
    (2) The information described in paragraph (c)(1) of this section 
shall be provided to SDA's in sufficient time for SDA's to take it into 
consideration in developing local job training plans.



Sec. 628.210  State Job Training Coordinating Council.

    (a) The Governor shall appoint a State Job Training Coordinating 
Council (SJTCC) pursuant to section 122 of the Act. In lieu of a SJTCC, 
the Governor may establish and utilize a State Human Resource Investment 
Council (HRIC) pursuant to section 701 of the Act and in accordance with 
Sec. 628.215 of this part.
    (b) Consistent with section 122(a)(3) of the Act, the SJTCC shall be 
composed as follows: 30 percent, business and industry representatives; 
30 percent, State and local government and local education agency 
representatives; 30 percent, organized labor and community-based 
organization representatives; and 10 percent, representatives from the 
general public. The SJTCC shall have the specific functions and 
responsibilities outlined in sections 122, 317, and 501 of the Act.
    (c) Funding for the SJTCC shall be provided pursuant to sections 
202(c)(1)(A) and 262(c)(1)(A) of the Act.
    (d) The SJTCC shall:
    (1) Analyze the SDAs' reports made pursuant to section 104(b)(13) of 
the Act and make recommendations for technical assistance and corrective 
action, and
    (2) Prepare a summary of such reports and disseminate them to SDA's 
and service providers in the State and to the Secretary (section 
122(a)(5) and (6)).



Sec. 628.215  State Human Resource Investment Council.

    (a) Establishment and responsibilities. The State may, in accordance 
with sections 701, 702, and 703 of the Act, establish a State Human 
Resource Investment Council (HRIC). The HRIC's responsibilities are 
described at section 701(a) of the Act. The HRIC shall carry out the 
following responsibilities:
    (1) Review the provision of services and the use of funds and 
resources under applicable Federal human resource programs and advise 
the Governor on methods of coordinating such provision of services and 
use of funds and resources consistent with the laws and regulations 
governing such programs;
    (2) Advise the Governor on the development and implementation of 
State and local standards and measures relating to applicable Federal 
human resource programs and coordination of such standards and measures; 
and
    (3) Carry out the duties and functions prescribed for existing State 
councils described under the laws relating to the applicable Federal 
human resource programs, including the responsibilities of the State 
Council on Vocational Education (SCOVE) under Section 112 of the Carl D. 
Perkins Vocational and Applied Technology Education Act.
    (4) Perform other functions as specified by the Governor (section 
701).
    (b) Applicable Programs. For the purposes of this section, the 
programs included are those listed at section 701(b)(2) of the Act. A 
program shall be included only if the Governor and the head of the State 
agency responsible for the administration of the program jointly agree 
to include such program. In addition, programs under the Carl Perkins 
Vocational and Applied Technology Act shall require the agreement of the 
State council on vocational education (section 701(b)(1)(B)).
    (c) Composition. (1) The Governor shall establish procedures to 
ensure appropriate representation on the HRIC from among the categories 
of representation specified in section 702 of the Act.
    (2) In addition, when the functions and responsibilities of the 
SCOVE are included on the HRIC, the Governor is

[[Page 235]]

encouraged to consider appointing the State Director for Vocational 
Education as a representative on the HRIC.
    (d) Funding. (1) Funding to carry out the functions of the HRIC 
shall be available pursuant to section 703(a) of the Act.
    (i) The costs associated with the operation of the HRIC should be 
allocated among the various funding sources based on the relationship of 
each funding source or program to total spending of all applicable 
funding sources and programs (section 703(d)).
    (ii) Costs of the HRIC that are in excess of costs paid by funds 
from participating State agencies are, subject to the availability of 
funds from applicable JTPA sources, allowable JTPA costs (section 703(a) 
and (d)).
    (2) A HRIC which meets the requirements of title VII and includes 
each of the programs listed at section 701(b)(2)(A) of the Act shall be 
authorized to use JTPA State Education Coordination and Grants funds 
(section 123(a)(2)(D)(ii)).
    (e) Replacement of other councils. A HRIC meeting the requirements 
of title VII of the Act shall replace the councils of the participating 
programs listed at section 701(b)(2)(A) of the Act.
    (f) Expertise. The Governor shall ensure that in the composition of 
the HRIC and the staff of the HRIC there exists the proper expertise to 
carry out the functions of the HRIC and the council(s) it replaces 
(sections 702(c)(2) and 703(b)).
    (g) Certification. Each State, as part of the certification process 
to the Secretary, shall ensure that the council meets the requirements 
of sections 701, 702, and 703. This certification shall be made in 
writing and submitted to the Secretary, with a copy provided to the 
Secretary of Education, at least 90 days before the beginning of each 
period of 2 program years for which a job training plan is submitted 
under the Act.



                        Subpart C--State Programs



Sec. 628.300  Scope and purpose.

    This subpart provides requirements for the State-operated programs 
including the education coordination and grants, services to older 
workers, and incentive grants to SDA's and grants to SDA's for capacity 
building and technical assistance.



Sec. 628.305  State distribution of funds.

    (a) The funds made available to the Governor under sections 202(c) 
and 262(c) of the Act shall be used to carry out activities and services 
under this subpart.



Sec. 628.310  Administration.

    Funds provided to the Governor under sections 202(c)(1)(A) and 
262(c)(1)(A) of the Act may be used for overall administration, 
management, oversight of program performance; technical assistance to 
SDA's failing to meet performance standards, as described in section 
106(j)(1) of the Act; auditing; and activities under sections 121 and 
122 of the Act.



Sec. 628.315  Education coordination and grants.

    (a) Governor's responsibilities. The Governor shall allocate funds 
available pursuant to sections 202(c)(1)(C) and 262(c)(1)(C) of the Act 
to any State education agency. For the purposes of this section, ``State 
education agency'' shall not include the State agency which administers 
the JTPA program within the State or other agencies which do not have 
education as a primary and operational function, such as correctional 
agencies, although this limitation shall not preclude such an agency 
from being an ultimate subrecipient of funds (section 123(a)(1)).
    (b) Agreements. (1) The State education agency to be allocated funds 
under section 123(a)(1) of the Act shall participate in joint planning 
activities with the Governor in order to develop a plan which shall be 
submitted in the GCSSP (section 123(c)).
    (2) The Governor and the State education agency shall jointly agree 
on the plan required in paragraph (b)(1) of this section, which shall 
include a description of the agreements described in paragraph (b)(3) of 
this section (section 123(c)).
    (3) Projects to undertake the activities set forth in section 
123(a)(2) shall be conducted in accordance with agreements between the 
State education agency(ies) and administrative entities

[[Page 236]]

in service delivery areas in the State. The agreements may include other 
entities such as State agencies, local education agencies and 
alternative service providers (section 123(b)(1)(B)).
    (4)(i) When there is a failure by the State education agency and the 
Governor to develop the joint plan described in paragraph (b)(2) of this 
section, the Governor shall not allocate funds under section 123(a)(1) 
to such education agency nor shall such funds be available for 
expenditure by the Governor (section 123(c)).
    (ii) When no State education agency accepts the allocation of funds 
under section 123(a)(1), or when there is a failure to reach the 
agreement(s) specified in paragraph (b)(3) of this section, the funds 
may only be used by the Governor pursuant to section 123(e) and in 
accordance with the GCSSP (section 123(e)).
    (c) Allowable activities. (1) Funds made available for education 
coordination and grants under section 123 of the Act shall be used to 
pay the Federal share of education coordination and grants projects 
(section 123(a)(2)).
    (2) Projects, as defined at section 123(a)(2)(A), (B), and (C) of 
the Act shall be conducted for eligible individuals and should include 
those which:
    (i) Provide school-to-work services of demonstrated effectiveness, 
including youth apprenticeship programs;
    (ii) Provide literacy and lifelong learning opportunities and 
services of demonstrated effectiveness, including basic education and 
occupational skills training; and
    (iii) Provide statewide coordinated approaches to education and 
training services, including model programs, designed to train, place, 
and retain women in nontraditional employment (section 123(a)).
    (3) Projects for coordination of education and training may also be 
conducted which may include support activities pertaining to the HRIC 
which meets the requirements of title VII.
    (d) Expenditure requirements. (1)(i) At least 80 percent of the 
funds allocated under section 202(c)(1)(C) and section 262(c)(1)(C) of 
the Act shall be expended to pay for the Federal share of projects 
described in paragraph (c)(2) of this section (section 123(d)(2)(B)).
    (ii) The Governor shall assure that not less than 75 percent of the 
funds expended for such projects are expended for projects for eligible 
economically disadvantaged participants who experience barriers to 
employment. For purposes of meeting this requirement, participants 
meeting the conditions of section 263(a)(2)(B) and (C) and (g) of the 
Act may be considered economically disadvantaged (section 123(d)(2)(C)).
    (iii) Priority for funds not expended for the economically 
disadvantaged shall be given to title III participants and persons with 
barriers to employment.
    (iv) The Governor may assure compliance with the requirement to 
serve participants with barriers to employment by targeting projects to 
particular barrier groups (e.g., school dropouts).
    (2) Not more than 20 percent of funds allocated under section 
202(c)(1)(C) of the Act may be expended to:
    (i) Facilitate coordination of education and training services for 
participants in the projects described in section 123(a)(2)(A), (B) and 
(C), or
    (ii)(A) Support activities pertaining to a HRIC that meets the 
requirements of Sec. 628.215 of this part, or
    (B) Support activities pertaining to a State council which carries 
out functions similar to those of a HRIC if such council was established 
prior to July 1, 1992.
    (e) Contribution. (1) Except as provided in paragraph (e)(3) of this 
section, the State shall provide for the contribution of funds, other 
than the funds made available under this Act, of a total amount equal to 
the amounts allotted under Section 123;
    (2) The Governor shall define and assure the provision of adequate 
resources by the State to meet the requirements of paragraph (e)(1) of 
this section. Such amount may include the direct cost of employment and 
training services provided by other Federal programs or agencies if such 
use for matching is in accordance with the applicable Federal law 
governing the use of such funds.
    (3) When there is a failure to reach agreement between the State 
education agency and the administrative

[[Page 237]]

entity in the service delivery area, as set forth in paragraph (b)(3) of 
this section, the requirement for the contribution of funds shall not 
apply.
    (f) Eligible youth, age 14 through 15, may be served in the program 
under this section to the extent set forth in the agreements under 
paragraph (b)(3) of this section.



Sec. 628.320  Services for older individuals.

    (a) Consultation. (1) The Governor shall consult with the 
appropriate PIC's and chief elected official(s) prior to entering into 
agreements to provide services under section 204(d) and to assure that 
services provided to participants under section 204(d) are consistent 
with the programs and activities provided in the SDA to eligible older 
participants.
    (2) The GCSSP shall specify the process for accomplishing the 
consultation required by paragraph (a)(2) of this section.
    (b) Funds available under section 204(d) shall be used by the 
Governor to provide services on an equitable basis throughout the State, 
taking into account the relative share of the population of eligible 
older individuals residing in each SDA and the participation of such 
older individuals in the labor force.
    (c) Delivery of services. (1) Services to participants eligible 
under section 204(d) shall be delivered through agreements with SDA's, 
private industry councils, public agencies, private nonprofit 
organizations (including veterans organizations) and private-for-profit 
organizations.
    (2) Priority for delivery of services under this section shall be 
given to agencies and organizations which have a demonstrated 
effectiveness in providing training and employment services to such 
older individuals.
    (d) Eligibility. (1) Individuals provided services under section 
204(d) of the Act shall be economically disadvantaged, based on criteria 
applicable in the SDA in which they reside, and shall be age 55 or 
older. However, each program year not more than 10 percent of 
participants enrolled under section 204(d) may be individuals who are 
not economically disadvantaged but have serious barriers to employment 
as identified by the Governor and have been determined within the last 
12 months to meet the income eligibility requirements for title V of the 
Older Americans Act of 1965 (section 204(d)(5)(B)(i)).
    (2) The following criteria shall apply to joint programs for older 
workers.
    (i) In order to carry out a joint program with operators of programs 
under title V of the Older Americans Act, there shall be a written 
financial or non-financial agreement, or written joint program 
description when the entity which operates the JTPA and title V program 
are the same.
    (ii) Joint programs under this paragraph (d)(2) may include 
referrals between programs, co-enrollment and provision of services.
    (iii) Under agreements pursuant to this paragraph (d)(2), 
individuals eligible under title V of the Older Americans Act shall be 
deemed to satisfy the requirements of section 203(a)(2) of the Act 
(Older Americans Act, Pub. L. 103-171, section 510).
    (e) Applicable requirements. Except as provided in the Act, the 
provisions of title II-A shall apply to programs conducted under section 
204(d) (section 204(d)(6)).
    (f) The Governor shall make efforts to coordinate the delivery of 
services under section 204(d) with the delivery of services under title 
V of the Older Americans Act of 1965. Such coordination may include 
coenrollment, coordination of a continuum of services between this 
section and title V of the Older Americans Act and other appropriate 
linkages.
    (g) The Governor shall give consideration to assisting programs 
involving training for jobs in growth industries and jobs reflecting the 
use of new technological skills (section 204(d)(3)).



Sec. 628.325  Incentive grants, capacity building, and technical assistance.

    (a) Funds available to the Governor under sections 202(c)(1)(B) and 
262(c)(1)(B) of the Act shall be used to provide incentive grants to 
SDA's and for capacity building and technical assistance.
    (b) Incentive grants. (1) Not less than 67 percent of the funds 
available under sections 202(c)(1)(B) and 262(c)(1)(B) of

[[Page 238]]

the Act shall be used by the Governor to provide incentive grants for 
programs, except programs under section 204(d) of the Act, exceeding 
title II performance standards (section 106(b)(7)).
    (2) Incentive grant funds under this section shall be distributed by 
the Governor among SDA's within the State pursuant to section 106(b)(7) 
of the Act.
    (3) The Governor shall, as part of the annual statement of goals and 
objectives required by section 121(a)(1) of the Act, provide SDA's with 
the specific policies and procedures to implement section 106(b)(7) of 
the Act.
    (4) In a State which is the service delivery area, incentive grant 
funds shall be distributed in a manner determined by the Governor and 
described in the GCSSP. The Governor shall give consideration to 
recognizing the performance of service providers within the State.
    (5) SDA's should use incentive grant funds for capacity building and 
technical assistance activities and/or for the conduct of allowable 
Title II activities for eligible youth, eligible adults, or both, at the 
discretion of the SDA.
    (c) Capacity building and technical assistance. (1) Up to 33 percent 
of the funds available under sections 202(c)(1)(B) and 262(c)(1)(B) of 
the Act may be used by the Governor to provide capacity building and 
technical assistance efforts aimed at improving the competencies of the 
personnel who staff and administer JTPA including SDA's, service 
providers, State staff, private industry councils, other job training 
councils and related human service systems provided for in section 
205(a) of the Act.
    (2) In providing capacity building and technical assistance 
activities, the Governor shall:
    (i) Consult with SDA's concerning capacity building and technical 
assistance activities consistent with the process specified in the 
GCSSP;
    (ii) Ensure that the use of funds will assist front line staff 
providing services to participants by directing resources to SDA and 
service provider staff for capacity building efforts, building a 
statewide capacity building strategy based on an assessment of local 
capacity building needs developed in cooperation with the SDA's, and/or 
delivering training and technical assistance directly to the local 
level;
    (iii) Ensure that expenditures for the purchase of hardware/software 
are only for the development of Statewide communications and training 
mechanisms involving computer-based communication technologies that 
directly facilitate interaction with the National Capacity Building and 
Information Dissemination Network (National Network) described in 
section 453 of the Act and that facilitate the use of computer-based 
training techniques in capacity building and technical assistance 
activities;
    (iv) Ensure that State and local capacity building efforts are 
coordinated and integrated with the National Network, pursuant to 
sections 202(c)(3)(B) and 262(c)(3)(B) of the Act, and that materials 
developed with funds under this section are made available to be shared 
with other States, SDA's and the National Network. States and SDA's 
retain the flexibility to tailor Network products to their own needs 
and/or to produce and train on similar or related products when local 
circumstances so dictate and;
    (v) Provide technical assistance to service delivery areas failing 
to meet performance standards pursuant to section 106(j)(2) of the Act.
    (d) Cost sharing. (1) Cost sharing approaches are encouraged among 
States, SDA's and/or among other Federal, State, and local human service 
programs, including those listed in section 205(a) of the Act, in 
developing electronic communications, training mechanisms and/or 
contributing to the National Network.
    (2) All shared costs shall be allocated among the contributing 
funding sources on the basis of benefits received.



                Subpart D--Local Service Delivery System



Sec. 628.400  Scope and purpose.

    This subpart sets forth requirements for the selection of service 
delivery areas, the establishment and responsibilities of the private 
industry council, and the selection of the SDA grant recipient and 
administrative entity.

[[Page 239]]

This subpart also contains the requirements for the local job training 
plan as well as the procedures for its review and approval by the State.



Sec. 628.405  Service delivery areas.

    (a)(1) The Governor, after receiving recommendations from the SJTCC, 
shall designate SDA's within the State in accordance with the provisions 
of section 101 of the Act.
    (2) SDA's may not be designated by the Governor more frequently than 
once every two years, and such designations shall be made to coincide 
with the two-year plan cycle for the GCSSP and local job training plans 
(i.e., the designation cannot be made for an off-year in this cycle).
    (3) Each request for designation as an SDA shall be submitted in a 
form and by a date established by the Governor. The procedures 
established by the Governor shall provide for the treatment of existing 
SDA's for the purposes of submitting SDA designation requests.
    (b)(1) The Governor shall approve SDA designation requests from 
entities with a population of 200,000 or more that satisfy the criteria 
specified in section 101(a)(4)(A) of the Act.
    (2) When there are competing applications under paragraph (b)(1) of 
this section for the same geographic area, the Governor shall designate 
the entity with the population closest to 200,000, if the remaining 
reduced area also continues to satisfy the criteria specified in section 
101(a)(4)(A) of the Act. The Governor shall offer to designate the 
remaining reduced area as an SDA as well.
    (3) When there are competing applications under paragraph (b)(1) of 
this section for the same geographic area and the designation of the 
entity with the population closest to 200,000 would have the effect of 
reducing the population of the competing entity to below a population of 
200,000, the Governor has the discretion to determine which request to 
honor.
    (d) The Governor may, in accordance with section 101(a)(4)(B) of the 
Act, approve a request to be a SDA from any unit, or contiguous units, 
of general local government, without regard to population, which serves 
a substantial portion of a labor market area. In making such 
designations, the Governor shall evaluate the degree to which a proposed 
service delivery area meets criteria established by the Governor which, 
at a minimum, shall include:
    (1) The capability to effectively deliver job training services;
    (2) The capacity to administer the job training program in 
accordance with the Act, applicable rules and regulations and State 
standards; and
    (3) The portion of a labor market to be served.
    (e) For the purposes of SDA designations under section 101(a)(4)(A) 
and (B) of the Act, the term ``substantial part'' and ``substantial 
portion'' of a labor market area shall be defined by the Governor, but 
shall not be less than 10% of the population of a labor market area.
    (f) All areas within the State shall be covered by designated SDA's. 
After honoring all requests for designation from eligible entities under 
section 101(a)(4)(A) of the Act, and making any qualified discretionary 
designations under section 101(a)(4)(B) of the Act, the Governor shall 
include uncovered areas in the State within other designated SDA's 
willing to accept them or within a State administered SDA.
    (g) Appeals. (1) Only an entity which meets the requirements of 
section 101(a)(4)(A) of the Act for designation as a service delivery 
area, but which has had its request to be an SDA denied, may appeal the 
Governor's denial of service delivery area designation to the Secretary 
of Labor.
    (2) Appeals made pursuant to paragraph (g)(1) of this section shall 
be submitted by certified mail, return receipt requested, to the 
Secretary, U.S. Department of Labor, Washington, DC 20210, Attention: 
ASET. A copy of the appeal shall simultaneously be provided to the 
Governor.
    (3) The Secretary shall not accept an appeal dated later than 30 
days after receipt of written notification of the denial from the 
Governor.
    (4) The appealing party shall explain why it believes the denial is 
contrary to the provisions of section 101 of the Act.

[[Page 240]]

    (5) The Secretary shall accept the appeal and make a decision only 
with regard to whether or not the denial is inconsistent with section 
101 of the Act. The Secretary may consider any comments submitted by the 
Governor. The Secretary shall make a final decision within 30 days after 
receipt of the appeal (section 101(a)(4)(C)).
    (6) The Secretary shall notify the Governor and the appellant in 
writing of the Secretary's decision.



Sec. 628.410  Private Industry Council.

    (a) Certification of the PIC. (1) The chief elected official(s) of 
the SDA shall establish and the Governor shall certify the private 
industry council (PIC) pursuant to section 102 of the Act.
    (2) The Governor shall review the certification of the PIC 
biennially, one year prior to the effective date of the 2-year SDA job 
training plan to the Governor. The Governor's review shall include:
    (i) The PIC composition, which shall be consistent with section 
102(a), (b), (c), and (d) of the Act and shall include the names of 
individuals nominated and their qualifications;
    (ii) The nomination process;
    (iii) The written agreement(s) among the appropriate chief elected 
official(s) and the PIC, including procedures for the development of the 
SDA job training plan and the selection of the grant recipient and 
administrative entity.
    (3) The chief elected official shall select labor representatives 
for the PIC from individuals recommended by recognized State and local 
labor federations. For purposes of this section, a labor federation is 
an alliance of two or more organized labor unions for the purpose of 
mutual support and action. An example of a recognized labor federation 
is the AFL-CIO.
    (b) Responsibilities of the PIC. Pursuant to section 103 of the Act, 
the PIC shall:
    (1) Provide policy and program guidance for all activities under the 
job training plan for the SDA;
    (2) In accordance with agreements negotiated with the appropriate 
chief elected official(s), determine the procedures for development of 
the job training plan and select the grant recipient and administrative 
entity for the SDA;
    (3) Independent oversight. As specified in subpart D of part 627 of 
this chapter, the PIC shall exercise independent oversight over programs 
and activities under the job training plan, which oversight shall not be 
circumscribed by agreements with the appropriate chief elected 
official(s) of the SDA;
    (4) Be a party to the designation of substate grantees under title 
III, as set forth in Sec. 631.35 of this chapter;
    (5) Establish guidelines for the level of skills to be provided in 
occupational skills training programs funded by the administrative 
entity;
    (6) Consult with the Governor on agreements to provide services for 
older individuals under section 204(d) of the Act;
    (7) Establish youth and adult competency levels consistent with 
performance standards established by the Secretary, based on such 
factors as entry level skills and other hiring requirements, in 
consultation with educational agencies and, where appropriate, with 
representatives of business, organized labor and community-based 
organizations pursuant to section 106(b)(5) and 107(d); and
    (8) Identify occupations for which there is a demand in the area 
served.
    (c) Substate plan. The PIC shall be provided the opportunity to 
review and comment on a substate grantee plan under title III of the Act 
prior to the submission of such plan to the Governor (section 313(a)).
    (d) [Reserved]
    (e) The State Employment Service agency shall develop jointly with 
each appropriate PIC and chief elected official(s) for the SDA those 
components of the plans required under the Wagner-Peyser Act which are 
applicable to the SDA. (See part 652 of this chapter).
    (f) Single SDA States. (1) In any case in which the service delivery 
area is a State, the SJTCC or a portion of the SJTCC may be 
reconstituted as a PIC if the PIC meets the requirements of section 
102(a) of the Act.
    (2) When the service delivery area is a State and the functions of 
the SJTCC are embodied in the HRIC, the HRIC or a portion of the HRIC 
may be reconstituted as a PIC if the requirements for

[[Page 241]]

private sector business representation at section 102(a)(1) of the Act 
are met (section 102(h)).



Sec. 628.415  Selection of SDA grant recipient and administrative entity.

    (a) Selection of SDA grant recipient. (1) The SDA grant recipient 
and the entity to administer the SDA's job training plan for title II, 
developed pursuant to section 104 of the Act, shall be selected by 
agreement of the PIC and chief elected official(s) of the SDA. These may 
be the same or different entities.
    (2) The specific functions and responsibilities of the entities 
described in paragraph (a)(1) of this section shall be spelled out in 
the agreement between the PIC and the chief elected official(s), and 
shall specifically address the provisions of section 141(i) of the Act 
(section 103(b)(1)).
    (b) Subrecipient requirements. (1) The Governor may establish 
requirements pertaining to subrecipient, including SDA grant recipient, 
responsibility for JTPA funds.
    (2) The requirements of paragraph (b)(1) of this section shall not 
preclude the selection of any entity identified in section 103(b) of the 
Act as SDA grant recipient.



Sec. 628.420  Job training plan.

    (a) The Governor shall issue instructions and schedules to assure 
that job training plans and plan modifications for SDA's within the 
State conform to all requirements of the Act.
    (b) The Governor's instructions for development of the SDA's job 
training plan shall require that the plan contain the following 
information:
    (1) A complete and detailed discussion of the elements found in 
section 104(b) of the Act, including goals for the training and training 
related placement of women in nontraditional employment and 
apprenticeships;
    (2) A discussion of the SDA's compliance with the Secretary's 
program goals, as outlined in the planning guidance provided to the 
Governor; and
    (3) An oversight plan for the SDA which includes: (i) A description 
of the oversight activities of the PIC and the chief elected 
official(s), and (ii) the SDA administrative entity's monitoring plan 
which includes the Governor's monitoring requirements for service 
providers.
    (c) The Governor may also require that the SDA job training plan 
contain a capacity building and technical assistance strategy that 
includes plans for designating capacity building as a staff function, 
assessing local capacity building needs, and developing and 
participating in computerized communication mechanisms.
    (d) The SDA job training plan shall be jointly approved and jointly 
submitted to the Governor by the PIC and the chief elected official(s) 
(section 103(d)).
    (e) Modifications. (1) Any major modification to the SDA job 
training plan shall be jointly approved and jointly submitted by the PIC 
and chief elected official(s) of the SDA to the Governor for approval.
    (2) For the purposes of this section, the circumstances which 
constitute a ``major'' modification shall be specified by the Governor.



Sec. 628.425  Review and approval.

    (a) Standards and procedures. The Governor shall establish standards 
and procedures for the review and approval or disapproval of the SDA job 
training plan and plan modifications that shall be provided to the SDA's 
at the same time as the instructions and schedules for preparation of 
the plans are provided.
    (b) Plan approval. Except when the Governor makes a finding under 
the provisions of section 105(b)(1) of the Act, the Governor shall 
approve the SDA job training plan or plan modification. The notice of 
approval shall be provided in writing to the chief elected official(s) 
and to the private industry council.



Sec. 628.426  Disapproval or revocation of the plan.

    (a) If the Governor disapproves the SDA job training plan or plan 
modification for any reason, the Governor shall notify the PIC and chief 
elected official(s) for the SDA in writing as provided in section 
105(b)(2) of the Act.
    (b) If the Governor disapproves the SDA job training plan or plan 
modification, the Governor shall provide the PIC and the chief elected 
official(s) for

[[Page 242]]

the SDA 30 days to correct the deficiencies and resubmit the plan or 
plan modification. Within 15 days after the plan or plan modification is 
resubmitted, the Governor shall make a final decision and shall notify 
the PIC and the appropriate chief elected official(s) of the SDA in 
writing of the final disapproval or approval.
    (c) Governor mediation. If the PIC and the appropriate chief elected 
official(s) of an SDA are unable to reach an agreement under the 
provisions of section 103 (b)(1) or (d) of the Act, any such party may 
request the Governor to mediate.
    (d) Failure to reach agreement. If the PIC and the chief elected 
official(s) fail to reach the required agreements in section 103 (b)(1) 
or (d) of the Act, funds may not be made available to an SDA under 
section 104 of the Act and the Governor shall merge the affected area 
into one or more other existing service delivery areas (section 
105(c)(1)).
    (e) Appeals. (1) In accordance with section 105(b)(2) of the Act, 
any final disapproval by the Governor of the SDA job training plan or 
modification may be appealed by the PIC and chief elected official(s) of 
the SDA to the Secretary.
    (2) The Secretary shall not accept an appeal dated later than 30 
days after receipt by the PIC and chief elected official(s) of the final 
disapproval of the SDA job training plan or modification from the 
Governor.
    (3) The Secretary shall accept an appeal under paragraph (e)(1) of 
this section and shall determine only whether the disapproval is clearly 
erroneous under section 105(b)(1) of the Act. The Secretary may consider 
any comments submitted by the Governor. In accordance with section 
105(b)(2) of the Act, the Secretary shall make a final decision within 
45 days after the appeal is received by the Secretary.
    (4) The Secretary shall notify the Governor and the appellant in 
writing of the Secretary's decision.
    (f) Appeals of plan revocations. Pursuant to section 164(b)(1) of 
the Act, a notice of intent to revoke approval of all or part of a plan 
may be appealed to the Secretary. Such appeals shall be treated as a 
disapproval under paragraphs (c) and (e) of this section, except that 
the revocation shall not become effective until the later of:
    (1) The time for appeal under paragraph (e) of this section has 
expired; or
    (2) The date on which the Secretary issues a decision affirming the 
revocation.
    (g) In the event that a plan is disapproved and the Governor's 
decision is upheld upon appeal, the Governor shall merge the affected 
area into other designated SDA's willing to accept it or include it in 
another SDA within the State.



Sec. 628.430  State SDA Submission.

    (a) Pursuant to section 105(d) of the Act, when the SDA is the 
State, the Governor shall submit to the Secretary, not less that 60 days 
before the beginning of the first of the two program years covered by 
the job training plan and in accordance with instructions issued by the 
Secretary, an SDA job training plan covering two program years. When the 
SDA is the State, modifications to the plan shall be submitted to the 
Secretary for approval.
    (b) When a State submits an SDA job training plan or plan 
modification pursuant to paragraph (a) of this section, the Secretary 
shall review the plan or plan modification for overall compliance with 
the provisions of the Act. The State's plan shall be considered approved 
unless, within 45 days of receipt of the submission described in 
paragraph (a) of this section, the Secretary notifies the Governor in 
writing of inconsistencies between the submission and requirements of 
specific provisions of the Act. If the plan or plan modification is 
disapproved, the Governor may appeal the decision by requesting a 
hearing before an administrative law judge pursuant to subpart H of part 
627 of this chapter.



 Subpart E--Program Design Requirements for Programs Under Title II of 
                    the Job Training Partnership Act



Sec. 628.500  Scope and purpose.

    This subpart contains the regulations pertaining to the program 
design requirements common to all programs conducted under titles I 
(i.e., sections

[[Page 243]]

121 and 123) and II of the Act. Regulations specifically pertaining to 
the Adult Program can be found in subpart F of this part. Regulations 
pertaining to the Summer Youth Employment and Training Program can be 
found in subpart G of this part. Regulations pertaining to the Youth 
Training Program can be found in subpart H of this part.



Sec. 628.505  Eligibility.

    (a) Eligibility criteria. (1) Individuals who apply to participate 
in a program under title II shall be evaluated for eligibility based on 
age and economic disadvantage. Specific eligibility criteria for 
programs under title II, parts A, B, and C are described in this part.
    (2) Individuals served under title II shall be residents of the SDA, 
as determined by local government policy, except for the limited 
exceptions described in the job training plan, including joint programs 
operated by SDA's (section 141(e)).
    (b) Eligibility documentation. (1) In order to promote the uniform 
and standard application of eligibility criteria for participation in 
the JTPA program, the Department has issued an Eligibility Documentation 
TAG that provides guidance on acceptable documentation.
    (2) SDA utilization of eligibility guidance. When it is determined 
that the SDA or service provider has followed the guidance contained in 
the Eligibility Documentation TAG, the Grant Officer will not disallow 
questioned costs related to the required documentation concerning an 
individual's eligibility.



Sec. 628.510  Intake, referrals and targeting.

    (a) Collection of personal data. In addition to determining an 
applicant's eligibility, the intake process shall include a preliminary 
review of information relating to whether an applicant is included in 
one or more of the categories listed in section 203(b) of the Act.
    (b) Information on services. Upon application, an eligible 
individual shall be provided information by the SDA or its service 
providers on the full array of services available through the SDA and 
its service providers, including information for women about the 
opportunities for nontraditional training and employment.
    (c) Assessment during intake. Some limited assessment activities may 
be conducted during the intake process in order to determine an eligible 
applicant's suitability for title II program services. This assessment 
should be a method, in difficult cases, to finalize determinations for 
enrollment. The amount of assessment provided during intake is not 
restricted, however, assessment during intake shall be charged in 
accordance with Sec. 627.440(d)(3).
    (d) Referral of eligible applicants. During the intake process, 
determinations may be made prior to enrollment to refer an eligible 
applicant to another human service, training or education program deemed 
more suitable for the individual, including the Job Corps program. In 
these cases, information on the full array of services available in the 
SDA may be provided in written form with recommendations and written 
referrals to other appropriate programs. Copies of or notations of 
referrals will be maintained as documentation and may be recorded in an 
incomplete ISS. Further tracking or follow-up of referrals out of title 
II is not required.
    (e) Referrals from service providers to service delivery areas for 
additional assessment. (1) Each service provider shall ensure that an 
eligible applicant who cannot be served by its particular program shall 
be referred to the SDA for assessment, as necessary, and suitable 
referral to other appropriate programs. Each service provider shall also 
ensure that a participant who cannot be served by its particular program 
shall be referred to the SDA for further assessment, as necessary, and 
suitable referral to other appropriate programs, consistent with 
Sec. 628.515.
    (2) Each SDA shall take the appropriate steps (e.g., contract 
provisions, local administrative issuances, and/or PIC policies) to 
ensure that its service providers adhere to the provisions of this 
section and that they maintain documentation of referrals.
    (3) Each SDA shall develop an appropriate mechanism to ensure 
suitability screening for eligible applicants or to

[[Page 244]]

apply the provisions of Sec. 628.530 for participants referred by 
service providers and describe such mechanism in its SDA job training 
plan.
    (f)(1) ``Most in need.'' SDA's that satisfy the requirements of 
sections 203(b) and 263 (b) and (d) pertaining to hard to serve 
individuals shall be deemed to meet the ``most in need'' criteria at 
section 141(a) of the Act.
    (2) The requirements referred to in paragraph (h)(1) of this section 
shall be calculated on the basis of new participants for whom services 
or training have been provided subsequent to the objective assessment.
    (g) The SDA's method of meeting the requirements of sections 203(b) 
and 263(b) pertaining to hard to serve individuals shall be implemented 
consistent with the equal opportunity provisions of 29 CFR part 34.



Sec. 628.515  Objective assessment.

    (a) General. The requirements of this section shall apply to 
programs conducted under title I (i.e., sections 121 and 123) and title 
II, parts A, B, and C.
    (b) Definition. (1) For purposes of this part, an objective 
assessment means an examination of the capabilities, needs, and 
vocational potential of a participant and is to be used to develop an 
individual service strategy and employment goal. Such assessment is 
customer-centered and a diagnostic evaluation of a participant's 
employment barriers taking into account the participant's family 
situation, work history, education, basic and occupational skills, 
interests, aptitudes (including interests and aptitudes for 
nontraditional occupations), attitude towards work, motivation, behavior 
patterns affecting employment potential, financial resources and needs, 
supportive service needs, and personal employment information as it 
relates to the local labor market.
    (2) For the program under title II-B, the objective assessment shall 
include an examination of the basic skills and supportive service needs 
of each participant and may include the other areas listed in paragraph 
(b)(1) of this section (sections 204(a)(1)(A), 253(c)(1) and 
264(b)(1)(A)).
    (c) Methods of objective assessment. (1) The SDA shall choose the 
most appropriate means to measure skills, abilities, attitudes, and 
interests of the participants. The methods used in conducting the 
objective assessment may include, but are not limited to, structured 
interviews, paper and pencil tests, performance tests (e.g., skills, 
and/or work samples, including those that measure interest and 
capability to train in nontraditional employment), behavioral 
observations, interest and/or attitude inventories, career guidance 
instruments, aptitude tests, and basic skills tests.
    (2) Instruments used for objective assessment may be developed at 
the local level; however, any formalized instruments nationally 
available should be used only for the specific populations for which 
they are normed.
    (d) Updating of assessments. Objective assessment should be treated 
as an ongoing process. As additional relevant information relating to a 
participant becomes available, it should be reviewed and considered for 
inclusion in the individual service strategy.
    (e) Other sources of objective assessment. Other non-JTPA 
assessments (e.g., through the Job Opportunities and Basic Skills (JOBS) 
program under title IV of the Social Security Act, or through schools) 
which have been completed within one year of application for services, 
and which meet the requirements of this section, may be used to comply 
with the requirement to assess each participant.



Sec. 628.520  Individual service strategy.

    (a) General. The requirements of this section shall apply to 
programs conducted under title I (i.e., sections 121 and 123) and title 
II, parts A, B and C.
    (b) Definition. (1) Individual service strategy (ISS) means an 
individual plan for a participant, which shall include an employment 
goal (including, for women, consideration of nontraditional employment), 
appropriate achievement objectives, and the appropriate combination of 
services for the participant based on the objective assessment conducted 
pursuant to Sec. 628.515 of this part, Objective assessment. In 
developing the ISS, the participant shall be counseled regarding

[[Page 245]]

required loan repayments if the participant chooses to incur personal 
indebtedness to participate in an education program. The participant 
shall also be apprised of the requirements for self-sufficiency and the 
occupational demands within the labor market.
    (2) Decisions concerning appropriate services shall be customer-
centered, and ensure that the participant is not excluded from training 
or career options consistent with the provisions of 29 CFR part 34 
concerning nondiscrimination and equal opportunity.
    (3) For the title II-B program, the ISS may include the components 
specified in paragraph (b)(1) of this section (sections 204(a)(1)(B), 
253(c)(2) and 264(b)(1)(B)). For purposes of titles II-B and II-C, the 
employment goal may be interpreted broadly and based on long-term career 
guidance.
    (c) Joint Development of ISS. The ISS shall be developed in 
partnership with the participant and reflect the needs indicated by the 
objective assessment and the expressed interests and desires of the 
participant. It is not a formal contract and signatures are not a 
requirement.
    (d) Review of ISS. The ISS shall be reviewed periodically to 
evaluate the progress of each participant in meeting the objectives of 
the service strategy, including an evaluation of the participant's 
progress in acquiring basic skills, and occupational skills, as 
appropriate, and the adequacy of the supportive services provided.
    (e) Provision of services. If JTPA resources are not sufficient to 
provide the full range of training or supportive services which might be 
identified in the ISS, the SDA shall make every reasonable effort to 
arrange for, through other community resources, basic and occupational 
skills training and supportive services identified as needed in the ISS 
for participants under titles II-A and II-C and, in addition, 
preemployment and work maturity skills training and work experience 
combined with skills training for participants under title II-C 
(sections 204(a)(1)(D) and 264(b)(1)(D).
    (f) SDA review of objective assessment and ISS. (1) The objective 
assessment and development of the ISS may be conducted by service 
providers.
    (2) The SDA administrative entity shall ensure that development of 
the ISS and the services provided, respond to the individual needs of 
the participant and that the combination of services to the participant 
is indicated by the results of the objective assessment.
    (g) ISS record of decisions. The ISS shall be used as the basic 
instrument for the SDA to record the results of decisions made about the 
combination and sequence of services for the participant based on the 
objective assessment. Justification for decisions may be referenced but 
need not be recorded in the ISS. These decisions shall include, but are 
not limited to, the employment goal and/or career cluster; referrals to 
other programs for specified activities; the provision and amount of 
supportive services; and the delivery agents and schedules for training 
and supportive services activities. The decisions for time and duration 
of OJT (Sec. 627.240 of this chapter) shall be briefly recorded in the 
ISS and may not reference other documents.
    (h) The ISS is a customer-centered case management tool and shall 
not be used as a compliance document.



Sec. 628.525  Limitations.

    Neither eligibility for nor participation in a JTPA program creates 
an entitlement to services, and nothing in the Act or this part shall be 
construed to establish a private right of action for a participant to 
obtain services described in the objective assessment or ISS.



Sec. 628.530  Referrals of participants to non-title II programs.

    (a) When it is determined, through the objective assessment and the 
ISS, that a participant would be better served by a program other than 
one under title II (e.g., Job Corps, Vocational Rehabilitation, State or 
local education, substance abuse treatment center, and/or dislocated 
worker programs), the participant shall be referred to the appropriate 
program. Such referral shall be recorded in the ISS.
    (b) In cases where there will be a continuing relationship with a 
participant, a referral to another program(s) for

[[Page 246]]

specific services will be part of the participant's title II program 
strategy and will be recorded in the ISS.
    (c) When there will not be a continuing relationship with a 
participant as the result of a referral to a program other than title 
II, and an assessment but no training component has been provided, the 
referral should be recorded in a partial ISS and the individual shall 
not be counted for purposes of calculating performance against the SDA's 
performance standards. Further tracking or follow-up of referrals out of 
title II is not required.



Sec. 628.535  Limitations on job search assistance.

    (a) General. Job search assistance is designed to give a participant 
skills in acquiring full time employment. (See Sec. 626.5 of this 
chapter, Definitions.)
    (b) Conditions. Job search activities may be conducted only:
    (1) For participants when specified as appropriate in the ISS; and
    (2) When delivered in conjunction with other training or educational 
services designed to increase the participant's ability to acquire 
employment. Additional services which may be provided in conjunction 
with job search include the direct training services listed in JTPA 
section 204(b)(1) of the Act, excluding standalone skill assessment, 
counseling, work experience and case management and the direct training 
services listed in 264(b) of the Act excluding tutoring, standalone 
skill assessment, counseling, work experience and case management. (See 
Sec. 627.245 of this chapter, ``Work Experience,'' especially 
Sec. 627.245(d) regarding combination of other services.)
    (c) Exceptions. (1) Job search assistance activities, including job 
search skills, training, and job clubs may be provided without the 
accompanying services specified in paragraph (b) of this section only 
when:
    (i) The objective assessment and the ISS indicate that the 
additional services are not appropriate; and
    (ii) The activities are not available or accessible through other 
public agencies, including the Employment Service.
    (2) The exceptions in paragraph (c)(1) of this section apply to 
Title II-A and II-B and are not applicable to Title II-C programs (see 
Sec. 628.804 (d) and (e)).
    (d) Determination of job search availability. For purposes of this 
section, a determination of the availability of the job search 
assistance activity will be made by the SDA, in consultation with the 
employment service and documented in the local job training plan.
    (e) Older individuals. For purposes of this section, when an 
individual aged 55 or older indicates in the assessment a preference for 
immediate job placement, job search assistance may be provided on a 
stand-alone basis. The individual's preference shall be recorded in the 
ISS.



Sec. 628.540  Volunteer program.

    Pursuant to sections 204(c)(6) and 264(d)(7) of the Act, the SDA 
shall make opportunities available for individuals who have successfully 
participated in programs under this part to volunteer assistance, in the 
form of mentoring, tutoring, and other activities.



Sec. 628.545  Linkages and coordination.

    (a) General requirements. (1) To the extent practicable, and as 
permitted by law and regulations, the Governor shall, at the State 
level, facilitate coordination among the programs set forth at section 
205(a) and 265(b) of the Act, including, but not limited to, the 
establishment of State-level coordination agreements. The Governor may 
focus coordination through the SJTCC or the HRIC.
    (2) The SDA, in conducting programs under this part, shall establish 
appropriate linkages and coordination procedures with other Federal 
programs and appropriate State and local educational, social service, 
and public housing agencies, including with CBO's, business and labor 
organizations, volunteer groups and others, such as women and older 
worker organizations, and with appropriate education and training 
agencies, such as local JOBS programs, Employment Service offices which 
provide services for JTPA participants, and the local agencies on aging, 
to avoid duplication and to enhance the delivery of services, which 
shall be described in the SDA job

[[Page 247]]

training plan. Where a local agency declines to complete such a linkage 
with an SDA, the SDA shall reflect this information in its job training 
plan (section 104(b)).
    (b) SDA's are encouraged to facilitate effective ``one stop shop 
career centers'' and ``single point of contact'' delivery systems which 
may include:
    (1) The development of individual service strategy plans and of a 
common program application; and
    (2) A unified job development effort and comprehensive programmatic 
design (sections 104(b) (3) and (4), 205 (a) and (b) and 265).
    (c) Requirements for youth. For the youth programs under this part, 
formal agreements shall be established with appropriate local 
educational agencies which participate in JTPA programs which, at a 
minimum, shall specify:
    (1) The procedures for referring and serving in-school youth;
    (2) The methods of assessment of in-school youth; and
    (3) Procedures for notifying the SDA when a youth drops out of the 
school system.
    (d) Schoolwide projects. (1) In conducting a schoolwide project for 
low income individuals under sections 263(g) and 265(d) of the Act, the 
SDA shall establish a cooperative agreement with the appropriate local 
educational agency.
    (2) In addition to the requirements listed in paragraphs (a) and (b) 
of this section, the cooperative agreement shall include:
    (i) A description of the ways in which the JTPA schoolwide project 
will supplement the educational program of the school;
    (ii) Identification of measurable goals to be achieved by the 
schoolwide project and a provision for assessing the extent to which 
such goals are met;
    (iii) A description of the ways in which the program will use 
available JTPA and other education program resources;
    (iv) A description of the number of individuals to be served by the 
schoolwide project; and
    (v) Assurances that JTPA resources shall be used in coordination 
with existing sources of funds to supplement and not supplant them 
(section 107(b)).
    (3) In areas where there is more than one local educational agency, 
cooperative agreements for schoolwide projects are required only with 
those local education agencies that will participate in programs under 
schoolwide projects (section 263(g)).



Sec. 628.550  Transfer of funds.

    If described in the job training plan and approved by the Governor:
    (a) An amount up to 10 percent of the funds allocated to the SDA 
under section 202(b) of the Act for title II-A may be transferred to the 
program under title II-C of the Act;
    (b) An amount up to 20 percent of the funds allocated to the SDA 
under section 252(b) of the Act for title II-B may be transferred to the 
program under title II-C of the Act; and
    (c) An amount up to 10 percent of the funds allocated to the SDA 
under section 262(b) of the Act for title II-C may be transferred to the 
program under title II-A of the Act.



                      Subpart F--The Adult Program



Sec. 628.600  Scope and purpose.

    This subpart contains the regulations for the Adult Program under 
part A of Title II of the Act. The regulations in part 627 of this 
chapter and subpart E of this part apply to the Adult Program to the 
extent that they do not conflict with the provisions of this subpart.



Sec. 628.605  Eligibility.

    (a) Age and economic disadvantage. Except as provided in paragraph 
(b) of this section, an individual shall be eligible to participate 
under this part only if he or she is economically disadvantaged and 22 
years of age or older. There is no maximum age for eligibility.
    (b) Non-economically disadvantaged individuals. Up to 10 percent of 
the individuals served under this subpart in each SDA may be individuals 
who are not economically disadvantaged, if such individuals face serious 
barriers to employment in accordance with section 203(c) of the Act.
    (c) Requirement to assist hard-to-serve individuals. (1) Not less 
than 65 percent

[[Page 248]]

of adults who participate in the program under this subpart, including 
those who are not economically disadvantaged, shall have one or more of 
the additional barriers to employment as described in section 203(b) of 
the Act.
    (2) The 65 percent barrier requirement in paragraph (c)(1) of this 
section shall be calculated on the basis of participants for whom 
services or training have been provided subsequent to an objective 
assessment on July 1, 1993 or later.
    (d) Addition of barrier. An SDA may identify and add one additional 
serious barrier to employment to the categories listed at section 203(b) 
of the Act, in accordance with the specific procedures and requirements 
in section 203(d) of the Act.
    (e) Criteria for older workers under joint programs. (1) The SDA may 
establish written financial or non-financial agreements with sponsors of 
programs under title V of the Older Americans Act to carry out joint 
programs.
    (2) Joint programs under this paragraph (e) may include referrals 
between programs, co-enrollment and provision of services.
    (3) Under agreements entered into pursuant to this paragraph (e), 
individuals eligible under title V of the Older Americans Act shall be 
deemed to satisfy the requirements of section 203(a)(2) of the JTPA 
(Older Americans Act, Pub. L. 102-375, section 510).



Sec. 628.610  Authorized services.

    (a) The services that may be provided under this subpart are those 
described at section 204(b) of the Act.
    (b) Counseling and supportive services. Counseling and supportive 
services provided under this subpart may be provided to a participant 
for a period of up to 1 year after the date on which the participant 
completes the program.



       Subpart G--The Summer Youth Employment and Training Program



Sec. 628.700  Scope and purpose.

    This subpart contains the regulations for the Summer Youth 
Employment and Training Program (SYETP) under part B of title II of the 
Act. The regulations in part 627 of this chapter and subpart E of this 
part apply to the SYETP to the extent that they do not conflict with the 
provisions of this subpart.



Sec. 628.701  Program goals and objectives.

    (a) Each SDA shall establish written goals and objectives that shall 
be used in evaluating the effectiveness of its SYETP activities. Such 
goals and objectives may include enhancement of basic educational skills 
through improvement in school retention or academic performance 
(including mathematics and reading comprehension); encouragement of 
school completion or enrollment in supplementary or alternative school 
programs; improvement of employability skills, including provision of 
vocational exploration opportunities and exposure to the world of work; 
enhancement of youth citizenship skills; and demonstrated coordination 
with other appropriate community organizations.
    (b) Each SDA shall ensure that the activities and services offered 
under the SYETP are consistent with and will contribute to the 
achievement of the goals and objectives developed pursuant to paragraph 
(a) of this section.



Sec. 628.702  Eligibility.

    (a) Age and economic disadvantage. An individual is eligible to 
participate in programs funded under title II-B of the Act, if such 
individual is
    (1) Age 14 through 21; and
    (2)(i) Economically disadvantaged; or
    (ii) Has been determined to meet the eligibility requirements for 
free meals under the National School Lunch Act during the most recent 
school year. Most recent school year means the current school year 
unless the eligibility determination is made during an interim period 
between school terms, in which case the term means the preceding school 
year; or
    (iii) Is participating in a compensatory education program under 
Chapter I of title I of the Elementary and Secondary Education Act of 
1965; or
    (iv) Is participating in a schoolwide project as set forth at 
section 263(g) of the Act.

[[Page 249]]

    (b) Eligibility determination verification. The SDA may accept the 
same documentation utilized by the local educational agency for 
approving free lunch meals or an assurance by school officials 
concerning the students' participation in the free school lunch program 
under the National School Lunch Act.



Sec. 628.705  SYETP authorized services.

    (a) The services that may be provided under this subpart are those 
described at section 253 of the Act.
    (b) Basic and remedial education and preemployment and work maturity 
skills training. The SDA shall ensure the availability of basic or 
remedial education and preemployment and work maturity skills training 
for SYETP participants pursuant to the assessment process described in 
Sec. 628.515 of this part from funds available to the SDA or by other 
education and training programs, including, but not limited to, the Job 
Corps, the JOBS program, youth corps programs or alternative or 
secondary schools.
    (c) Work experience. (1) Work experience shall be conducted 
consistent with the provisions of Sec. 627.245 of this chapter.
    (2) Work experience provided under this subpart, to the extent 
feasible, shall include contextual learning opportunities which 
integrate the development of general competencies with the development 
of academic skills.
    (d) Concurrent enrollment. (1) Youth being served under the SYETP or 
the Youth Training Program authorized under title II-C of the Act (see 
subpart H of this part) are not required to be terminated from 
participation in one program to enroll in the other. The SDA may enroll 
such youth concurrently in programs under this subpart and subpart H of 
this part, pursuant to guidance to be issued by the Secretary, in order 
to promote continuity and coordination of services.
    (2) The requirement that not less than 65 percent of the total 
number of title II-C participants shall have one or more barriers to 
employment pursuant to section 263(c) and (d) of the Act shall apply to 
youth who are concurrently enrolled and will participate in the program 
under title II-C.
    (e) Followup services. (1) The SDA shall make followup services 
available for participants if the ISS indicates that such services are 
appropriate (section 253(d)).
    (2) Title II-B funds may be used for such followup services for one 
year after program participation, which may be concurrent with a period 
of any subsequent participation in the Title II-C program.
    (3) Followup services include the full array of supportive services 
described in section 4(24) of the Act, except for financial assistance, 
and may include such followup services as counseling, mentoring, or 
tutoring.
    (f) Classroom training. Classroom training provided under this 
subpart shall, to the extent feasible, include opportunities to apply 
knowledge and skills relating to academic subjects to the world of work.
    (g) Educational linkages. (1) In conducting the program assisted 
under this subpart, service delivery areas shall establish linkages with 
the appropriate educational agencies responsible for service to 
participants.
    (2) Such linkages shall include arrangements to ensure that there is 
a regular exchange of information relating to the progress, problems and 
needs of participants, including the results of assessments of the skill 
levels of participants.



Sec. 628.710  Period of program operation.

    (a) Except as provided under paragraph (b) of this section, the 
SYETP shall be conducted during the school vacation period occurring 
duri the summer months.
    (b) An SDA operating within the jurisdiction of one or more local 
educational agencies that operate schools on a year-round full-time 
basis may offer SYETP activities to participants in such a jurisdiction 
during the school vacation period(s) treated as the period(s) equivalent 
to a school summer vacation.



                    Subpart H--Youth Training Program



Sec. 628.800  Scope and purpose.

    This subpart contains the regulations for the Year-round Youth 
Program

[[Page 250]]

under part C of title II of the Act. The regulations in part 627 of this 
chapter and subpart E of this part apply to the Year-round Youth program 
to the extent that they do not conflict with the provisions of this 
subpart.



Sec. 628.803  Eligibility.

    (a) Out-of-school youth. An out of school youth is a youth who does 
not meet the definition of in-school youth as set forth in paragraph (b) 
of this section. An out-of-school youth shall be eligible to participate 
in programs under this subpart, if such individual is:
    (1) Age 16 through 21, and
    (2) Economically disadvantaged.
    (b) In-school youth. Definition. In-school youth means a youth who 
has not yet attained a high school diploma and is attending school full 
time. An in-school youth shall be eligible to participate in programs 
under this subpart, if such individual is:
    (1)(i) Age 16 through 21, or
    (ii) If provided in the job training plan, age 14 through 21 
inclusive; and
    (2)(i) Economically disadvantaged; or
    (ii) Participating in a compensatory education program under Chapter 
I of title I of the Elementary and Secondary Education Act of 1965; or
    (iii) Has been determined to meet the eligibility requirements for 
free meals under the National School Lunch Act during the most recent 
school year. Most recent school year means the current school year 
unless the eligibility determination is made during an interim period 
between school terms, in which case the term means the preceding school 
year.
    (c) Eligibility determination verification. The SDA may accept the 
same documentation utilized by the local educational agency for 
approving free lunch meals or an assurance by school officials 
concerning the students' participation in the free school lunch program 
under the National School Lunch Act. The Department shall provide 
guidance on this verification separate from these regulations.
    (d) Requirement to serve hard-to-serve individuals. (1) Not less 
than 65 percent of the in-school youth who participate in the program 
under this subpart, including those who are not economically 
disadvantaged, shall have one or more additional barriers to employment, 
as described in section 263(b) of the Act.
    (2)(i) Not less than 65 percent of the out-of-school youth who 
participate in the program under this subpart, including those who are 
not economically disadvantaged, shall have one or more barriers to 
employment, as described in section 263(d) of the Act, in addition to 
any criterion listed in paragraph (b)(2) of this section.
    (ii) All Job Corps participants shall be considered out-of-school 
and as having a barrier to employment.
    (3) The requirement of paragraphs (d)(1) and (2) of this section 
shall be calculated on the basis of participants for whom services or 
training have been provided subsequent to the objective assessment on 
July 1, 1993 or later.
    (e) Addition of barrier. An SDA may identify and add one additional 
serious barrier to employment to the categories listed at sections 
263(b) and (d) of the Act in accordance with the specific procedures and 
requirements in section 263(h) of the Act.
    (f) Services to non-economically disadvantaged individuals. Up to 10 
percent of the youth served by an SDA under this subpart may be 
individuals who are not economically disadvantaged, but such individuals 
shall face one or more serious barriers to employment in accordance with 
section 263(e) of the Act.
    (g) Eligibility based on schoolwide project participation. (1) In 
addition to the individuals who meet the conditions described in 
Sec. 628.803 of this part, individuals who are not economically 
disadvantaged may participate in programs under this subpart if they are 
enrolled in a schoolwide project pursuant to section 263(g) of the Act.
    (2) For purposes of paragraph (g)(1) of this section, the term 
school means an individual building, facility, campus or a portion of 
the school such as the 11th or 12th grade.
    (3) A schoolwide project may be operated in a public school located 
in an urban census tract or non-metropolitan county with a poverty rate 
of 30 percent or above, and in which 70 percent or more of the students 
have at least one barrier to employment. The school

[[Page 251]]

shall make the determination on whether its students meet the barrier 
requirements.
    (4) The SDA shall determine which will be its schoolwide projects. 
Examples of schoolwide projects include, but are not limited to, school-
to-work programs; college awareness and application assistance programs; 
school restructuring to make the schools career academies or magnet 
schools; mentoring programs; business-education compacts; integration of 
work and learning; year-round extensions of summer STEP programs; 
community service programs, including linkages with youth service corps; 
programs to encourage teen parents to stay in school, including 
establishing child care centers; and work experience slots provided as 
incentives to stay in school.
    (h)(1) Out-of-school ratio. Not less than 50 percent of the total 
title II-C participants in each SDA shall be out-of-school youth 
(section 263(f)(1) of the Act). The Governor shall be responsible for 
determining the period for which the 50 percent requirement will be 
calculated based either on the period covered by the job training plan 
or on a program year basis.
    (2) For purposes of paragraph (h)(1) of this section, a youth who 
has attained a high school diploma or an equivalency, is habitually 
truant, as defined by State law, or is attending an alternative school 
program may be considered out of school. An alternative school program 
includes an alternative high school, an alternative course of study 
approved by the local educational agency, or a high school equivalency 
program. Such programs may be operated either within or outside of the 
local public school system, and can offer either a high school diploma 
or equivalency.
    (3) Schoolwide project ratios. Those in-school participants who are 
served under a schoolwide project shall not be counted in determining 
the ratio of in-school to out-of-school youth in paragraph (h)(1) of 
this section.



Sec. 628.804  Authorized services.

    (a) The SDA and the PIC shall take into consideration exemplary 
program strategies and services, including those selected for 
replication pursuant to section 453(c) of the Act concerning capacity 
building, in the development of services for programs under this 
subpart.
    (b) Except as provided in paragraph (c) of this section, in order to 
participate in programs under this part an individual who is under the 
age of 18 and a school dropout, as defined in section 4(38) of the Act, 
shall enroll in and attend a school, course or program described in 
section 264(d)(2)(B)(ii) and (iii). An alternative course of study shall 
be approved by the LEA and may include educational programs provided by 
community-based organizations.
    (c) An individual who is a school dropout, as defined in section 
4(38) of the Act, and under the age of 18 may participate in programs 
under this part without meeting the requirements of paragraph (b) of 
this section for a limited interim period which may be during the summer 
months, during periods between school terms, or when a course of study 
is not immediately available.
    (d) The provision of preemployment and work maturity skills training 
shall be accompanied either by work experience or by other additional 
services which are designed to increase the basic education or 
occupational skills of the participant (section 264(d)(3)(A)).
    (e) The provision of work experience, job search assistance, job 
search skills training, and job club activities under programs conducted 
under this subpart shall be accompanied by other additional services 
which are designed to increase the basic education or occupational 
skills of the participant (section 264(d)(3)(B)).
    (f) The additional services offered pursuant to paragraphs (d) and 
(e) of this section may be provided concurrently or sequentially with 
services provided under other education and training programs (e.g., Job 
Opportunities and Basic Skills programs under title IV of the Social 
Security Act, Job Corps (see part 638 of this chapter), or schools).
    (g) Schoolwide projects for low-income schools shall meet the 
conditions in sections 263(g)(1) and (2) of the Act.
    (h) Entry employment experience is a training activity which may be 
conducted in public or private agencies. In all cases, this training 
activity shall

[[Page 252]]

increase or develop the long term employability of eligible in-school 
and out-of-school youth. Entry employment experiences may include, but 
are not limited to:
    (1) Work experience as described in Sec. 627.245 of this chapter; 
and
    (2) Cooperative education programs that coordinate educational 
programs with work in the private sector. Subsidized wages are not 
permitted in cooperative education programs.
    (i) Limited internships in the private sector under this subpart 
shall be designed to enhance the long-term employability of youth.
    (1) A limited internship shall be conducted pursuant to an agreement 
with an employer to provide structured on-site private sector exposure 
to work and the requirements for successful job retention.
    (2) A limited internship should be combined with classroom 
instruction relating to a particular position, occupation, industry or 
the basic skills and abilities to successfully compete in the local 
labor market.
    (j)(1) On-the-job (OJT) training activities approved under this 
subpart shall be consistent with the provisions of subpart B of part 627 
of this chapter and shall:
    (i) Be for positions that pay the participant a wage that equals or 
exceeds on the average wage at placement based on the most recent 
available data in the SDA for participants under title II-A;
    (ii) Be for positions that have career advancement potential; and
    (iii) Include a formal, written program of structured job training 
that will provide the participant with an orderly combination of 
instruction in work maturity skills, general employment competencies, 
and occupational specific skills.
    (2) In those cases where the OJT participant is a school dropout, 
the participant shall participate in an education program in accordance 
with paragraph (b) of this section.
    (k) Counseling and supportive services provided under this subpart 
may be provided to a participant for a period of up to 1 year after the 
date on which the participant completes the program. These include the 
full array of supportive services described in section 4(24) of the Act 
except for financial assistance.
    (l) Year-round operations. Programs for youth under this subpart 
shall:
    (1) Provide for a year-round education and training program that is 
coordinated with the appropriate local educational agencies, service 
providers, and other programs; and
    (2) As appropriate, ensure services for youth are available on a 
multiyear basis, consistent with the determined needs and goals of the 
youth served.
    (3) The year-round program delivery requirement of this paragraph 
does not prohibit schools on a 9-month operations schedule from 
providing services for programs under this part.



PARTS 629--630  [RESERVED]






PART 631--PROGRAMS UNDER TITLE III OF THE JOB TRAINING PARTNERSHIP ACT--Table of Contents




                      Subpart A--General Provisions

Sec.
631.1  Scope and purpose.
631.2  Definitions.
631.3  Participant eligibility.
631.4  Approved training rule.

 Subpart B--Additional Title III Administrative Standards and Procedures

631.11  Allotment and obligation of funds by the Secretary.
631.12  Reallotment of funds by the Secretary.
631.13  Classification of costs at State and substate levels.
631.14  Limitations on certain costs.
631.15  Federal reporting requirements.
631.16  Complaints, investigations, and penalties.
631.17  Federal monitoring and oversight.
631.18  Federal by-pass authority.
631.19  Appeals.

                    Subpart C--Needs-Related Payments

631.20  Needs-related payments.

                     Subpart D--State Administration

631.30  Designation or creation and functions of a State dislocated 
          worker unit or office and rapid response assistance.
631.31  Monitoring and oversight.
631.32  Allocation of funds by the Governor.
631.33  State procedures for identifying funds

[[Page 253]]

          subject to mandatory Federal reallotment.
631.34  Designation of substate areas.
631.35  Designation of substate grantees.
631.36  Biennial State plan.
631.37  Coordination activities.
631.38  State by-pass authority.

                        Subpart E--State Programs

631.40  State program operational plan.
631.41  Allowable State activities.

                      Subpart F--Substate Programs

631.50  Substate plan.
631.51  Allowable substate program activities.
361.52  Selection of service providers.
631.53  Certificate of continuing eligibility.

   Subpart G--Federal Delivery of Dislocated Worker Services through 
                      National Reserve Account Fund

631.60  General.
631.61  Application for funding and selection criteria.
631.62  Cost limitations.
631.63  Reporting.
631.64  General administrative requirements.
631.65  Special provisions for CAETA and DDP.

                          Subpart H--[Reserved]

            Subpart I--Disaster Relief Employment Assistance

631.80  Scope and purpose.
631.81  Availability of funds.
631.82  Substate allocation.
631.83  Coordination.
631.84  Allowable projects.
631.85  Participant eligibility.
631.86  Limitations on disaster relief employment.
631.87  Definitions.

    Authority:  29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102 
Stat 1107; Sec. 631.30(d)(7) also issued under 29 U.S.C. 2107(a); 
Sec. 631.37(e) also issued under Sec. 402, Pub. L. 100-689, 102 Stat. 
4178-4179 (29 U.S.C. 1751 note).

    Source:  59 FR 45857, Sept. 2, 1994, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 631.1  Scope and purpose.

    This part implements Title III of the Act. Title III programs seek 
to establish an early readjustment capacity for workers and firms in 
each State; to provide comprehensive coverage to workers regardless of 
the cause of dislocation; to provide early referral from the 
unemployment insurance system to adjustment services as an integral part 
of the adjustment process; to foster labor, management and community 
partnerships with government in addressing worker dislocation; to 
emphasize retraining and reemployment services rather than income 
support; to create an on-going substate capacity to deliver adjustment 
services; to tailor services to meet the needs of individuals; to 
improve accountability by establishing a system of mandated performance 
standards; to improve financial management by monitoring expenditures 
and reallotting available funds; and to provide the flexibility to 
target funds to the most critical dislocation problems.



Sec. 631.2  Definitions.

    In addition to the definitions contained in sections 4, 301, and 
303(e) of the Act and Part 626 of this chapter, the following 
definitions apply to programs under Title III of the Act and this part:
    Substantial layoff (for participant eligibility) means any 
reduction-in-force which is not the result of a plant closing and which 
results in an employment loss at a single site of employment during any 
30 day period for:
    (a)(1) At least 33 percent of the employees (excluding employees 
regularly working less than 20 hours per week); and
    (2) At least 50 employees (excluding employees regularly working 
less than 20 hours per week); or
    (b) At least 500 employees (excluding employees regularly working 
less than 20 hours per week).
    Substantial layoff (for rapid response assistance) means any 
reduction-in-force which is not the result of a plant closing and which 
results in an employment loss at a single site of employment during any 
30 day period for at least 50 employees (excluding employees regularly 
working less than 20 hours per week) (section 314(b)(4)).



Sec. 631.3  Participant eligibility.

    (a) Eligible dislocated workers, as defined in section 301 of the 
Act, may participate in programs under this part. For the purposes of 
determining

[[Page 254]]

eligibility under section 301(a)(1)(A) of the Act, the term ``eligible 
for'' unemployment compensation includes any individual whose wages from 
employment would be considered in determining eligibility for 
unemployment compensation under Federal or State unemployment 
compensation laws.
    (b)(1) Except as provided in paragraph (b)(3) of this section, 
workers who have not received an individual notice of termination but 
who are employed at a facility for which the employer has made a public 
announcement of planned closure shall be considered eligible dislocated 
workers with respect to the provision of basic readjustment services 
specifically identified in section 314(c) of the Act with the exception 
of supportive services and relocation assistance.
    (2) Individuals identified in paragraph (b)(1) of this section shall 
be eligible to receive all services authorized in sections 314 of the 
Act after a date which is 180 days prior to the scheduled closure date 
of the facility, subject to the provisions of Sec. 631.20 of this part 
and other applicable provisions regarding receipt of supportive 
services.
    (3) Paragraphs (b)(1) and (b)(2) of this section shall not apply to 
individuals who are likely to remain employed with the employer or to 
retire instead of seeking new employment.
    (4) For the purposes of paragraph (b)(1) of this section, the 
Governor shall establish criteria for defining public announcement. Such 
criteria shall include provisions that the public announcement shall be 
made by the employer and shall indicate a planned closure date for the 
facility (section 314(h)).
    (c) Eligible dislocated workers include individuals who were self-
employed (including farmers and ranchers) and are unemployed:
    (1) Because of natural disasters, subject to the provisions of 
paragraph (e) of this section; or
    (2) As a result of general economic conditions in the community in 
which they reside.
    (d) For the purposes of paragraph (c) of this section, categories of 
economic conditions resulting in the dislocation of a self-employed 
individual may include, but are not limited to:
    (1) Failure of one or more businesses to which the self-employed 
individual supplied a substantial proportion of products or services;
    (2) Failure of one or more businesses from which the self-employed 
individual obtained a substantial proportion of products or services;
    (3) Substantial layoff(s) from, or permanent closure(s) of, one or 
more plants or facilities that support a significant portion of the 
State or local economy.
    (e) The Governor is authorized to establish procedures to determine 
the eligibility to participate in programs under this part of the 
following categories of individuals:
    (1) Self-employed farmers, ranchers, professionals, independent 
tradespeople and other business persons formerly self-employed but 
presently unemployed.
    (2) Self-employed individuals designated in paragraph (d)(1) of this 
section who are in the process of going out of business, if the Governor 
determines that the farm, ranch, or business operations are likely to 
terminate.
    (3) Family members and farm or ranch hands of individuals identified 
under paragraphs (d)(1) and (2) of this section, to the extent that 
their contribution to the farm, ranch, or business meets minimum 
requirements as established by the Governor.
    (f) The Governor is authorized to establish procedures to identify 
individuals permanently dislocated from their occupations or fields of 
work, including self-employment, because of natural disasters. For the 
purposes of this paragraph (f), categories of natural disasters include, 
but are not limited to, any hurricane, tornado, storm, flood, high 
water, wind-driven water, tidal wave, tsunami, earthquake, volcanic 
eruption, landslide, mudslide, drought, fire, or explosion.
    (g) The State may provide services to displaced homemakers (as 
defined in section 4 of the Act) under this part only if the Governor 
determines that such services may be provided without adversely 
affecting the delivery of such services to eligible dislocated workers 
(section 311(b)(4)).

[[Page 255]]

    (h) An eligible dislocated worker issued a certificate of continuing 
eligibility, as provided in Sec. 631.53 of this part, shall remain 
eligible for assistance under this part for the period specified in the 
certificate, not to exceed 104 weeks. The 45-day enrollment provisions 
described in subpart B of part 627 of this chapter shall be waived for 
eligible individuals who possess a valid certificate under this 
paragraph and it is not required that a new application be taken prior 
to participation.
    (i) An eligible dislocated worker who does not possess a valid 
certificate shall remain eligible if such individual:
    (1) Remains unemployed, or
    (2) Accepts temporary employment for the purpose of income 
maintenance prior to and/or during participation in a training program 
under this part with the intention of ending such temporary employment 
at the completion of the training and entry into permanent unsubsidized 
employment as a result of the training. Such temporary employment must 
be with an employer other than that from which the individual was 
dislocated. This provision applies to eligible individuals both prior to 
and subsequent to enrollment.
    (j) The Governor shall ensure that rapid response and basic 
readjustment services under Title III of JTPA are made available to 
workers who, under the NAFTA Worker Security Act (Pub. L. 103-182), are 
members of a group of workers (including workers in any agricultural 
firm or subdivision of an agricultural firm) for which the Governor has 
made a finding that (1) the sales or production, or both, of such firm 
or subdivision have decreased absolutely, and (2) imports from Mexico or 
Canada of articles like or directly competitive with articles produced 
by such firm or subdivision have increased; or (3) there has been a 
shift in production by such workers' firm or subdivision to Mexico or 
Canada of articles which are produced by the firm or subdivision.



Sec. 631.4  Approved training rule.

    An eligible dislocated worker who is participating in any retraining 
activity, except on-the-job training, under Title III of the Act or this 
part shall be deemed to be in training with the approval of the State 
agency for purposes of section 3304(a)(8) of the Internal Revenue Code 
of 1986. Participation in the approved training shall not disqualify the 
individual from receipt of unemployment benefits to which the individual 
is otherwise entitled (section 314(f)(2)).



 Subpart B--Additional Title III Administrative Standards and Procedures



Sec. 631.11  Allotment and obligation of funds by the Secretary.

    (a) Funds shall be allotted among the various States in accordance 
with section 302(b)(1) of the Act, subject to paragraph (b) of this 
section.
    (b) Funds shall be allotted among the various States in accordance 
with section 302(b)(2)(A) and (B) of the Act as soon as satisfactory 
data are available under section 462(e) of the Act.
    (c) Allotments for the Commonwealth of the Northern Mariana Islands 
and other territories and possessions of the United States shall be made 
by the Secretary in accordance with the provisions of section 302(e) of 
the Act.



Sec. 631.12  Reallotment of funds by the Secretary.

    (a) Based upon reports submitted by States pursuant to Sec. 631.15 
of this part, the Secretary shall make determinations regarding total 
expenditures of funds within the State with reference to the amount 
required to be reallotted pursuant to section 303(b) of the Act. For 
purposes of this paragraph (a)--
    (1) The funds to be reallotted will be an amount equal to the sum 
of:
    (i) Unexpended funds in excess of 20 percent of the prior program 
year's formula allotment to the State, and
    (ii) All unexpended funds from the formula allotment for the program 
year preceding the prior program year.
    (2)(i) The current program year is the year in which the 
determination is made; and
    (ii) The prior program year is the year immediately preceding the 
current program year.
    (3) Unexpended funds shall mean the remainder of the total funds 
made available by formula that were available to the State for the prior 
program

[[Page 256]]

year minus total accrued expenditures at the end of the prior program 
year.
    (4) Reallotted funds will be made available from current year 
allotments made available by formula.
    (b) Based upon the most current and satisfactory data available, the 
Secretary shall identify eligible States, pursuant to the definitions in 
section 303(e) of the Act.
    (c) The Secretary shall recapture funds from States identified in 
paragraph (a) of this section and reallot and reobligate such funds by a 
Notice of Obligation (NOO) adjustment to current year funds to eligible 
States as identified in paragraph (b) of this section, as set forth in 
section 303(a), (b), and (c) of the Act.
    (d) Reallotted funds shall be subject to allocation pursuant to 
Sec. 631.32 of this part, and to the cost limitations at Sec. 631.14 of 
this part.



Sec. 631.13  Classification of costs at State and substate levels.

    (a)(1) Allowable costs under Title III shall be planned, controlled, 
and charged by either the State or the substate grantee against the 
following cost categories: rapid response services, basic readjustment 
services, retraining services, needs-related payments and supportive 
services, and administration. Costs shall be reported to the Secretary 
of Labor in accordance with the reporting requirements established 
pursuant to Sec. 631.15 of this part.
    (2) All costs shall be allocable to a particular cost category to 
the extent that benefits are received by such category; and no costs 
shall be chargeable to a cost category except to the extent that 
benefits are received by such category.
    (b) Rapid response services shall include the cost of rapid response 
activities identified at section 314(b) of the Act.
    (1) Staff salary and benefit costs are chargeable to the rapid 
response services cost category only for that portion of staff time 
actually spent on rapid response activities.
    (2) All other costs are chargeable to the rapid response services 
cost category only to the extent that they are for rapid response 
purposes.
    (c) Basic readjustment services shall include the cost of basic 
readjustment services identified at section 314(c) of the Act, except 
that the cost of supportive services under section 314(c)(15) of the Act 
shall be charged to the needs-related payments and supportive services 
cost category, as provided in paragraph (e) of this section.
    (d) Retraining services shall include the cost of retraining 
services identified at section 314(d) of the Act.
    (e) Needs-related payments and supportive services shall include the 
cost of needs-related payments identified in section 314(e) of the Act, 
and supportive services identified in section 4(24) of the Act and 
provided for in section 314(c)(15) of the Act.
    (f)(1) Administration shall include the costs incurred by recipients 
and subrecipients in the administration of programs under Title III of 
the Act, and shall be that portion of necessary and allowable costs 
which is not directly related to the provision of services and otherwise 
allocable to the cost categories in paragraphs (b) through (e) of this 
section. The description of administrative costs in subpart D of part 
627 of this chapter shall be used by States and substate grantees as 
guidance in charging administration costs to Title III programs.
    (2) Administration does not include the costs of activities under 
section 314(b) of the Act and which are provided for in paragraph (b) of 
this section.
    (3) Administration shall include Title III funds used for 
coordination of worker adjustment programs with the Federal-State 
unemployment compensation system and with Chapter 2 of Title II of the 
Trade Act of 1974 (19 U.S.C. 2271, et seq.) and part 617 of this chapter 
(sections 311(b)(10) and 314(f)).



Sec. 631.14  Limitations on certain costs.

    (a) Retraining services. Of the funds allocated to a substate 
grantee under part A of Title III for any program year, not less than 50 
percent shall be expended for retraining services specified under 
section 314(d) of the Act, unless a waiver of this requirement is 
granted by the Governor. The Governor shall prescribe criteria that will 
allow substate grantees to apply in advance

[[Page 257]]

for a waiver of this requirement, pursuant to section 315(a)(2) of the 
Act. The Governor shall prescribe the time and form for the submission 
of an application for such a waiver, as provided for at section 
315(a)(3) of the Act. The Governor shall not grant a waiver that allows 
less than 30 percent of the funds expended by a substate grantee to be 
expended for retraining activities.
    (b) Needs-related payments and supportive services. Of the funds 
allocated to the Governor, or allocated to any substate grantee, under 
part A of Title III for any program year, not more than 25 percent may 
be expended to provide needs-related payments and other supportive 
services.
    (c) Administrative cost. Of the funds allocated to the Governor, or 
allocated to any substate grantee, under part A of Title III for any 
program year, not more than 15 percent may be expended to cover the 
administrative cost of programs.
    (d) Reallotted funds are subject to the cost limitations in 
paragraphs (a), (b) and (c) of this section.
    (e) Funds allocated (or distributed) to substate areas under the 
provisions of section 302(c)(1)(E) of the Act shall be considered funds 
allocated to a substate grantee for the program year of the funds' 
initial allotment to the State, and included in the cost limitations in 
paragraphs (a), (b) and (c) of this section.
    (f) Funds reserved by the Governor under the provisions of Section 
302(c)(1) of the Act, other than funds distributed to substate grantees 
under the provisions of JTPA section 302(c)(1)(E), shall be considered 
funds allocated to the Governor for the program year of the funds' 
initial allotment to the State and included in the cost limitations 
applicable to the Governor.
    (g) States and substate grantees shall have the full period of time 
that the funds are available to them to comply with the cost limitations 
described in JTPA section 315 and paragraphs (a), (b), and (c) of this 
section.
    (h) Combination of funds. (1) Substate grantees within a State may 
combine funds allocated under part A of Title III for provision of 
services to eligible dislocated workers from two or more substate areas. 
Funds contributed by the substate grantees under this section remain 
subject to the cost limitations which apply to each substate grantee's 
total allocation (section 315(d)).
    (2) To combine funds under this provision, substate grantees must be 
in contiguous substate areas or part of the same labor market area.
    (i) For the purposes of this section:
    (1) Allotment to the State means allotted by the formula described 
in section 302(b) of the Act, as adjusted by reallotments among the 
States, in accordance with section 303 of the Act. For purposes of 
determining availability and of applying cost limitations, funds will 
retain the identity of the program year in which they were initially 
allotted to a State, irrespective of subsequent reallotments.
    (2) Allocated to the substate grantee means allocated by the formula 
prescribed by the Governor under section 302(b) of the Act, and 
allocated (or distributed) under the provisions of section 302(c)(1)(E), 
as adjusted by within State reallocations implemented by the Governor 
through procedures established pursuant to section 303(d) of the Act. 
For purposes of determining availability and of applying cost 
limitations, funds will retain the identity of the program year in which 
they were initially allotted to the State.
    (3) Allocated to the Governor refers to funds reserved by the 
Governor for use in accordance with the provisions of section 302(c)(1) 
of the Act, exclusive of any such funds which are distributed or 
allocated to substate grantees pursuant to section 302(c)(1)(E).
    (j) The cost limitations described in this section do not apply to 
any designated substate grantee which served as a concentrated 
employment program grantee for a rural area under the Comprehensive 
Employment and Training Act (section 108(d)).



Sec. 631.15  Federal reporting requirements.

    Notwithstanding the requirements in subpart D of part 627 of this 
chapter, the Governor shall report to the Secretary pursuant to 
instructions issued by the Secretary for programs and activities funded 
under this part. Such reports shall include a cost breakdown

[[Page 258]]

of all funds made available under this part used by the State Dislocated 
Worker Unit for administrative expenditures. Reports shall be provided 
to the Secretary within 45 calendar days after the end of the report 
period (sections 165(a)(2) and 311(b)(11)).



Sec. 631.16  Complaints, investigations, and penalties.

    The provisions of this section apply in addition to the sanctions 
provisions in subpart G of part 627 of this chapter.
    (a) The Secretary shall investigate a complaint or report received 
from an aggrieved party or a public official which alleges that a State 
is not complying with the provisions of the State plan required under 
section 311(a) of the Act (section 311(e)(1)).
    (b) Where the Secretary determines that a State has failed to comply 
with its State plan, and that other remedies under the Act and part 627 
of this chapter are not available or are not adequate to achieve 
compliance, the Secretary may withhold an amount not to exceed 10 
percent of the allotment to the State for the program year in which the 
determination is made for each such violation (section 311(e)(2)(A)).
    (c) The Secretary will not impose the penalty provided for under 
paragraph (b) of this section until all other remedies under the Act and 
part 627 of this chapter for achieving compliance have been exhausted or 
are determined to be unavailable or inadequate to achieve State 
compliance with the terms of the State plan.
    (d) The Secretary will make no determination under this section 
until the affected State has been afforded adequate written notice and 
an opportunity to request and to receive a hearing before an 
administrative law judge pursuant to the provisions of subpart H of part 
627 of this chapter (section 311(e)(2)(B)).



Sec. 631.17  Federal monitoring and oversight.

    The Secretary shall conduct oversight of State administration of 
programs under this part, including the administration by each State of 
the rapid response assistance services provided in such State. The 
Secretary shall take the appropriate actions to ensure the 
effectiveness, efficiency and timeliness of services conducted by the 
State in accordance with Sec. 631.30(b) of this part (section 
314(b)(3)).



Sec. 631.18  Federal by-pass authority.

    (a) In the event that a State fails to submit a biennial State plan 
that is approved under Sec. 631.36 of this part, the Secretary shall 
make arrangements to use the amount that would be allotted to that State 
for the delivery in that State of the programs, activities, and services 
authorized under Title III of the Act and this part.
    (b) No determination may be made by the Secretary under this section 
until the affected State is afforded written notification of the 
Secretary's intent to exercise by-pass authority and an opportunity to 
request and to receive a hearing before an administrative law judge 
pursuant to the provisions of subpart H of part 627 of this chapter.
    (c) The Secretary will exercise by-pass authority only until such 
time as the affected State has an approved plan under the provisions of 
Sec. 631.36 of this part (section 321(b)).



Sec. 631.19  Appeals.

    Except as provided in this part, disputes arising in programs under 
this part shall be adjudicated under the appropriate State or local 
grievance procedures required by subpart E of part 627 of this chapter 
or other applicable law. Complaints alleging violations of the Act or 
this part may be filed with the Secretary, pursuant to subpart F of part 
627 of this chapter. Paragraphs (a) through (e) of this section refer to 
appeal rights set forth in this part.
    (a) Section 628.405(g) of this chapter (appeals of denial of SDA 
designation) shall apply to denial of substate area designations under 
Sec. 631.34(c)(1) and (3) of this part.
    (b) Section 628.426(e) of this chapter (appeals of final disapproval 
of SDA job training plans or modifications) shall apply to final 
disapproval of substate plans under Sec. 631.50(f) of this part.
    (c) Section 628.426(f) of this chapter (appeals of a Governor's 
notice of intent to revoke approval of all or part of

[[Page 259]]

a plan) shall apply to a Governor's notice of intent to exercise by-pass 
authority under Sec. 631.38 of this part.
    (d) Section 628.430(b) of this chapter (appeals of the Secretary's 
disapproval of a plan when the SDA is the State) shall apply to plan 
disapproval when the substate area is the State, as set forth in 
Sec. 631.50(g) and (h) of this part.
    (e) Decisions pertaining to designations of substate grantees under 
Sec. 631.35 of this part are not appealable to the Secretary.



                    Subpart C--Needs-related payments



Sec. 631.20  Needs-related payments.

    (a) Title III funds available to States and substate grantees may be 
used to provide needs-related payments to participants in accordance 
with the approved State or substate plan, as appropriate.
    (b) In accordance with the approved substate plan, needs-related 
payments shall be provided to an eligible dislocated worker only in 
order to enable such worker to participate in training or education 
programs under this part. To be eligible for needs-related payments:
    (1) An eligible worker who has ceased to qualify for unemployment 
compensation must have been enrolled in a training or education program 
by the end of the thirteenth week of the worker's initial unemployment 
compensation benefit period, or, if later, by the end of the eighth week 
after an employee is informed that a short-term layoff will in fact 
exceed 6 months.
    (2) For purposes of paragraph (b)(1) of this section, the term 
enrolled in a training or education program means that the worker's 
application for training has been approved and the training institution 
has furnished written notice that the worker has been accepted in the 
approved training program beginning within 30 calendar days.
    (3) An eligible worker who does not qualify for unemployment 
compensation must be participating in a training or education program 
(section 314(e)(1)).
    (c) Needs-related payments shall not be provided to any participant 
for the period that such individual is employed, enrolled in, or 
receiving on-the-job training, out-of-area job search, or basic 
readjustment services in programs under the Act, nor to any participant 
receiving trade readjustment allowances, on-the-job training, out-of-
area job search allowances, or relocation allowances under Chapter 2 of 
Title II of the Trade Act of 1974 (19 U.S.C. 2271, et seq.) or part 617 
of this chapter (section 314(e)(1)).
    (d) The level of needs-related payments to an eligible dislocated 
worker in programs under this part shall not exceed the higher of:
    (1) The applicable level of unemployment compensation; or
    (2) The poverty level (as by the published by the Secretary of 
Health and Human Services) (section 314(e)(2)).



                     Subpart D--State Administration



Sec. 631.30  Designation or creation and functions of a State dislocated worker unit or office, and rapid response assistance.

    (a) Designation or creation of State dislocated worker unit or 
office. The State shall designate or create an identifiable State 
dislocated worker unit or office with the capabilities and functions 
identified in paragraph (b) of this section. Such unit or office may be 
an existing organization or new organization formed for this purpose 
(section 311(b)(2)). The State dislocated worker unit or office shall:
    (1) Make appropriate retraining and basic adjustment services 
available to eligible dislocated workers through substate grantees, and 
in statewide, regional or industrywide projects;
    (2) Work with employers and labor organizations in promoting labor-
management cooperation to achieve the goals of this part;
    (3) Operate a monitoring, reporting, and management system to 
provide adequate information for effective program management, review, 
and evaluation;
    (4) Provide technical assistance and advice to substate grantees;
    (5) Exchange information and coordinate programs with the 
appropriate economic development agency, State education and training 
and social services programs;

[[Page 260]]

    (6) Coordinate with the unemployment insurance system, the Federal-
State Employment Service system, the Trade Adjustment Assistance program 
and other programs under this chapter;
    (7) Receive advance notice of plant closings and mass layoffs as 
provided at section 3(a)(2) of the Worker Adjustment and Retraining 
Notification Act (29 U.S.C. 2102(a)(2) and part 639 of this chapter);
    (8) Immediately notify (within 48 hours) the appropriate substate 
grantees following receipt of an employer notice of layoff or plant 
closing or of any other information that indicates a projected layoff or 
plant closing by an employer in the grantee's substate area, in order to 
continue and expand the services initiated by the rapid response team 
(section 311(b)(3)(D));
    (9) Fully consult with labor organizations where substantial numbers 
of their members are to be served; and
    (10) Disseminate throughout the State information on the 
availability of services and activities under Title III of the Act and 
this part.
    (b) Rapid response capability. The dislocated worker unit shall have 
one or more rapid response specialists, and the capability to provide 
rapid response assistance, on-site, for dislocation events such as 
permanent closures and substantial layoffs throughout the State. The 
State shall not transfer the responsibility for the rapid response 
assistance functions of the State dislocated worker unit to another 
entity, but the State may contract with another entity to perform rapid 
response assistance services. Nothing in this paragraph shall remove or 
diminish the dislocated worker unit's accountability for ensuring the 
effective delivery of rapid response assistance services throughout the 
State (section 311(b)(12)).
    (1) State rapid response specialists should be knowledgeable about 
the resources available through programs under this part and all other 
appropriate resources available through public and private sources to 
assist dislocated workers. The expertise required by this part includes 
knowledge of the Federal, State, and local training and employment 
systems; labor-management relations and collective bargaining 
activities; private industry and labor market trends; programs and 
services available to veterans; and other fields necessary to carry out 
the rapid response requirements of the Act.
    (2) The rapid response specialists should have:
    (i) The ability to organize a broad-based response to a dislocation 
event, including the ability to coordinate services provided under this 
part with other State-administered programs available to assist 
dislocated workers, and the ability to involve the substate grantee and 
local service providers in the assistance effort;
    (ii) The authority to provide limited amounts of immediate financial 
assistance for rapid response activities, including, where appropriate, 
financial assistance to labor-management committees formed under 
paragraph (c)(2) of this section;
    (iii) Credibility among employers and in the employer community in 
order to effectively work with employers in difficult situations; and
    (iv) Credibility among employee groups and in the labor community, 
including organized labor, in order to effectively work with employees 
in difficult situations.
    (3) The dissemination of information on the State dislocated worker 
unit's services and activities should include efforts to ensure that 
major employers, organized labor, and groups of employees not 
represented by organized labor, are aware of the availability of rapid 
response assistance. The State dislocated worker unit should make equal 
effort in responding to dislocation events without regard to whether the 
affected workers are represented by a union.
    (4) In a situation involving an impending permanent closure or 
substantial layoff, a State may provide funds, where other public or 
private resources are not expeditiously available, for a preliminary 
assessment of the advisability of conducting a comprehensive study 
exploring the feasibility of having a company or group, including the 
workers, purchase the plant and continue it in operation.
    (5) Rapid response specialists may use funds available under this 
part:

[[Page 261]]

    (i) To establish on-site contact with employer and employee 
representatives within a short period of time (preferably 48 hours or 
less) after becoming aware of a current or projected permanent closure 
or substantial layoff in order to--
    (A) Provide information on and facilitate access to available public 
programs and services; and
    (B) Provide emergency assistance adapted to the particular permanent 
closure or substantial layoff; such emergency assistance may include 
financial assistance for appropriate rapid response activities, such as 
arranging for the provision of early intervention services and other 
appropriate forms of immediate assistance in response to the dislocation 
event;
    (ii) To promote the formation of labor-management committees as 
provided for in paragraph (c) of this section, by providing:
    (A) Immediate assistance in the establishment of the labor-
management committee, including providing immediate financial assistance 
to cover the start-up costs of the committee;
    (B) A list of individuals from which the chairperson of the 
committee may be selected;
    (C) Technical advice as well as information on sources of 
assistance, and liaison with other public and private services and 
programs; and
    (D) Assistance in the selection of worker representatives in the 
event no union is present;
    (iii) To provide ongoing assistance to labor-management committees 
described in paragraph (c) of this section by:
    (A) Maintaining ongoing contact with such committees, either 
directly or through the committee chairperson;
    (B) Attending meetings of such committees on an ex officio basis; 
and
    (C) Ensuring ongoing liaison between the committee and locally 
available resources for addressing the dislocation, including the 
establishment of linkages with the substate grantee or with the service 
provider designated by the substate grantee to act in such capacity;
    (iv) To collect information related to:
    (A) Economic dislocation (including potential closings or layoffs); 
and
    (B) All available resources within the State for serving displaced 
workers, which information shall be made available on a regular basis to 
the Governor and the State Council to assist in providing an adequate 
information base for effective program management, review, and 
evaluation;
    (v) To provide or obtain appropriate financial and technical advice 
and liaison with economic development agencies and other organizations 
to assist in efforts to avert worker dislocations;
    (vi) To disseminate information throughout the State on the 
availability of services and activities carried out by the dislocated 
worker unit or office; and
    (vii) To assist the local community in developing its own 
coordinated response and in obtaining access to State economic 
development assistance.
    (6) Notwithstanding the definition of ``substantial layoff (for 
rapid response assistance)'' at Sec. 631.2 of this part;
    (i) The Governor shall provide rapid response and basic readjustment 
services to members of a group of workers under the NAFTA Worker 
Security Act for which the Governor has made a finding under 
Sec. 631.3(j); and
    (ii) The Governor may, under exceptional circumstances, authorize 
rapid response assistance provided by a State dislocated worker unit 
when the layoff is less than 50 or more individuals, is not at a single 
site of employment, or does not take place during a single 30 day 
period. For purposes of this provision, exceptional circumstances 
include those situations which would have a major impact upon the 
community(ies) in which they occur (section 314(b)).
    (c) Labor-management committees. As provided in sections 301(b)(1) 
and 314(b)(1)(B) of the Act, labor-management committees are a form of 
rapid response assistance which may be voluntarily established to 
respond to actual or prospective worker dislocation.
    (1) Labor management committees ordinarily include (but are not 
limited to) the following:
    (i) Shared and equal participation by workers and management, with 
members often selected in an informal fashion;

[[Page 262]]

    (ii) Shared financial participation between the company and the 
State, using funds provided under Title III of the Act, in paying for 
the operating expenses of the committee; in some instances, labor union 
funds may help to pay committee expenses;
    (iii) A chairperson, to oversee and guide the activities of the 
committee who--
    (A) Shall be jointly selected by the labor and management members of 
the committee;
    (B) Is not employed by or under contract with labor or management at 
the site; and
    (C) Shall provide advice and leadership to the committee and prepare 
a report on its activities;
    (iv) The ability to respond flexibly to the needs of affected 
workers by devising and implementing a strategy for assessing the 
employment and training needs of each dislocated worker and for 
obtaining the services and assistance necessary to meet those needs;
    (v) A formal agreement, terminable at will by the workers or the 
company management, and terminable for cause by the Governor; and
    (vi) Local job identification activities by the chairperson and 
members of the committee on behalf of the affected workers.
    (2) Because they include employee representatives, labor-management 
committees typically provide a channel whereby the needs of eligible 
dislocated workers can be assessed, and programs of assistance developed 
and implemented, in an atmosphere supportive to each affected worker. As 
such, committees must be perceived to be representative and fair in 
order to be most effective.



Sec. 631.31  Monitoring and oversight.

    The Governor is responsible for monitoring and oversight of all 
State and substate grantee activities under this part. In such 
monitoring and oversight of substate grantees, the Governor shall ensure 
that expenditures and activities are in accordance with the substate 
plan or modification thereof, and with the cost limitations described in 
Sec. 631.14 of this part.



Sec. 631.32  Allocation of funds by the Governor.

    Of the funds allotted to the Governor by the Secretary under 
Sec. Sec. 631.11 and 631.12 of this part:
    (a) The Governor shall issue allocations to substate grantees, the 
sum of which shall be no less than 50 percent of the State's allotment 
(section 302(d)).
    (b)(1) The Governor shall prescribe the formula to be used in 
issuing substate allocations required under paragraph (a) of this 
section to substate grantees.
    (2) The formula prescribed pursuant to paragraph (b)(1) of this 
section shall utilize the most appropriate information available to the 
Governor. In prescribing the formula, the Governor shall include (but 
need not be limited to) the following information:
    (i) Insured unemployment data;
    (ii) Unemployment concentrations;
    (iii) Plant closing and mass layoff data;
    (iv) Declining industries data;
    (v) Farmer-rancher economic hardship data; and
    (vi) Long-term unemployment data.
    (3) The Governor may allow for an appropriate weight for each of the 
formula factors set forth in paragraph (b)(2) of this section. A weight 
of zero for any of the factors required in section 302(d) of the Act and 
identified in paragraph (b)(2) of this section shall only be made when a 
review of available data indicates that the factor is not relevant to 
determining the incidence of need for worker dislocation assistance 
within the State. The formula may be amended no more frequently than 
once each program year (section 302(d)).
    (c) The Governor may reserve an amount equal to not more than 40 
percent of the funds allotted to the State under Sec. 631.11 and 
Sec. 631.12 of this part for State activities and for discretionary 
allocations to substate grantees (section 302(c)(1)).
    (d) The Governor may reserve an additional amount equal to not more 
than 10 percent of the funds allotted to the State under Sec. 631.11 of 
this part. The Governor shall allocate such funds, subject to the SJTCC 
or HRIC review and comment, during the first three

[[Page 263]]

quarters of the program year among substate grantees on the basis of 
need. Such funds shall be allocated to substate grantees and shall not 
be used for statewide activities. Such funds shall be included in each 
substate grantee's allocation for purposes of cost limitations, as 
described in Sec. 631.14 of this part (sections 302(c)(2) and 
317(1)(B)).



Sec. 631.33  State procedures for identifying funds subject to mandatory Federal reallotment.

    The Governor shall establish procedures to assure the equitable 
identification of funds required to be reallotted pursuant to section 
303(b) of the Act. Funds so identified may be funds reserved by the 
State pursuant to section 302(c)(1)(A) through (D) of the Act and/or 
allocated to substate grantees pursuant to section 302(c)(1)(E), (c)(2) 
and/or (d) of the Act (section 303(d)). Such procedures may not exempt 
either State or substate funds from reallotment.



Sec. 631.34  Designation of substate areas.

    (a) The Governor, after receiving recommendations from the SJTCC or 
HRIC, shall designate substate areas for the State (section 312(a)).
    (b) In designating substate areas, the Governor shall:
    (1) Ensure that each service delivery area within the State is 
included within a substate area and that no SDA is divided among two or 
more substate areas; and
    (2) Consider the availability of services throughout the State, the 
capability to coordinate the delivery of services with other human 
services and economic development programs, and the geographic 
boundaries of labor market areas within the State.
    (c) Subject to paragraph (b) of this section, the Governor shall 
designate as a substate area:
    (1) Any single SDA that has a population of 200,000 or more;
    (2) Any two or more contiguous SDA's that:
    (i) In the aggregate have a population of 200,000 or more; and
    (ii) Request such designation; and
    (3) Any concentrated employment program grantee for a rural area as 
described in section 101(a)(4)(A)(iii) of the Act.
    (d) In addition to the entities identified in paragraph (c) of this 
section, the Governor may, without regard to the 200,000 population 
requirement, designate SDAs with smaller populations as substate areas.
    (e) The Governor may deny a request for substate area designation 
from a consortium of two or more SDAs that meets the requirements of 
paragraph (c)(2) of this section only upon a determination that the 
request is not consistent with the effective delivery of services to 
eligible dislocated workers in the relevant labor market area, or would 
otherwise not be appropriate to carry out the purposes of title III. The 
Governor will give good faith consideration to all such requests by a 
consortium of SDAs to be a substate area. In denying a consortium's 
request for substate area designation, the Governor shall set forth the 
basis and rationale for the denial (section 312(a)(5)).
    (f) In the case where the service delivery area is the State, the 
entire State shall be designated as a single substate area.
    (g)(1) Entities described in paragraphs (c)(1) and (3) of this 
section may appeal the Governor's denial of substate area designation to 
the Secretary of Labor. The procedures that apply to such appeals shall 
be those set forth at Sec. 628.405(g) for appeals of the Governor's 
denial of SDA designation.
    (2) An entity described in paragraph (c)(2) of this section that has 
been denied substate area designation may utilize the State-level 
grievance procedures required by section 144(a) of the Act and subpart E 
of part 627 of this chapter for the resolution of disputes arising from 
such a denial.
    (h) Designation of substate areas shall not be revised more 
frequently than once every two years. All such designations must be 
completed no later than four months prior to the beginning of any 
program year (section 312(a)(6)).



Sec. 631.35  Designation of substate grantees.

    The Governor may establish procedures for the designation of 
substate grantees.

[[Page 264]]

    (a) Designation of the substate grantee for each substate area shall 
be made on a biennial basis.
    (b) Entities eligible for designation as substate grantees include:
    (1) Private industry councils in the substate area;
    (2) Service delivery area grant recipients or administrative 
entities designated under Title II of the Act;
    (3) Private non-profit organizations;
    (4) Units of general local government in the substate area, or 
agencies thereof;
    (5) Local offices of State agencies; and
    (6) Other public agencies, such as community colleges and area 
vocational schools.
    (c) Substate grantees shall be designated in accordance with an 
agreement among the Governor, the local elected official or officials of 
such area, and the private industry council or councils of such area. 
Whenever a substate area is represented by more than one such official 
or council, the respective officials and councils shall each designate 
representatives, in accordance with procedures established by the 
Governor (after consultation with the SJTCC or HRIC), to negotiate such 
agreement.
    (d) The agreement specified in paragraph (c) of this section shall 
set forth the conditions, considerations, and other factors related to 
the selection of substate grantees in accordance with section 312(b) of 
the Act.
    (e) The Governor shall negotiate in good faith with the parties 
identified in paragraph (c) of this section and shall make a good faith 
effort to reach agreement. In the event agreement cannot be reached on 
the selection of a substate grantee, the Governor shall select the 
substate grantee.
    (f) Decisions under paragraphs (c), (d), and (e) of this section are 
not appealable to the Secretary (section 312(b) and (c)).



Sec. 631.36  Biennial State plan.

    (a) In order to receive an allotment of funds under Secs. 631.11 and 
631.12 of this part, the State shall submit to the Secretary, in 
accordance with instructions issued by the Secretary, on a biennial 
basis, a biennial State plan (section 311). Such plan shall include:
    (1) Assurances that--
    (i) The State will comply with the requirements of Title III of the 
Act and this part;
    (ii) Services will be provided only to eligible displaced workers, 
except as provided in paragraph (a)(2) of this section;
    (iii) Services will not be denied on the basis of State of residence 
to eligible dislocated workers displaced by a permanent closure or 
substantial layoff within the State; and may be provided to other 
eligible dislocated workers regardless of the State of residence of such 
workers;
    (2) Provision that the State will provide services under this part 
to displaced homemakers only if the Governor determines that the 
services may be provided to such workers without adversely affecting the 
delivery of services to eligible dislocated workers;
    (3) A description of the substate allotment and reallotment 
procedures and assurance that they meet the requirements of the Act and 
this part;
    (4) A description of the State procurement system and procedures to 
be used under Title III of the Act and this part which are consistent 
with the provisions in subpart D of part 627 of this chapter; and
    (5) Assurance that the State will not prescribe any performance 
standard which is inconsistent with Sec. 627.470 of this chapter.
    (b) The State biennial plan shall be submitted to the Secretary on 
or before the May 1 immediately preceding the first of the two program 
years for which the funds are to be made available.
    (c) Any plan submitted under paragraph (a) of this section may be 
modified to describe changes in or additions to the programs and 
activities set forth in the plan. No plan modification shall be 
effective unless reviewed pursuant to paragraph (d) of this section and 
approved pursuant to paragraph (e) of this section.
    (d) The Secretary shall review State biennial plans and plan 
modifications, including any comments thereon submitted by the SJTCC or 
HRIC, for overall compliance with the provisions

[[Page 265]]

of the Act, this part, and the instructions issued by the Secretary.
    (e) A State biennial plan or plan modification is submitted on the 
date of its receipt by the Secretary. The Secretary shall approve a plan 
or plan modification within 45 days of submission unless, within 30 days 
of submission, the Secretary notifies the Governor in writing of any 
deficiencies in such plan or plan modification.
    (f) The Secretary shall not finally disapprove the State biennial 
plan or plan modification of any State except after written notice and 
an opportunity to request and to receive a hearing before an 
administrative law judge pursuant to the provisions of subpart H of part 
627 of this chapter.



Sec. 631.37  Coordination activities.

    (a) Services under this part shall be integrated or coordinated with 
services and payments made available under Chapter 2 of Title II of the 
Trade Act of 1974 (19 U.S.C. 2271, et seq.) and part 617 of this chapter 
and programs provided by any State or local agencies designated under 
section 239 of the Trade Act of 1974 (19 U.S.C. 2311) or part 617 of 
this chapter (section 311(b)(10)). Such coordination shall be effected 
under provisions of an interagency agreement when the State agency 
responsible for administering programs under this part is different from 
the State agency administering Trade Act programs.
    (b) States may use funds allotted under Secs. 631.11 and 631.12 of 
this part for coordination of worker readjustment programs, (i.e., 
programs under this part and trade adjustment assistance under part 617 
of this chapter) and the unemployment compensation system consistent 
with the limitation on administrative expenses (see Sec. 631.14(a)(1) of 
this part). Each State shall be responsible for coordinating the 
unemployment compensation system and worker readjustment programs 
(section 314(f)).
    (c) Services under this part shall be coordinated with dislocated 
worker services under Title III of the Carl D. Perkins Vocational 
Education Act (20 U.S.C. 2351, et seq.) (section 311(b)(5)).
    (d) In promoting labor management cooperation, including the 
formation of labor-management committees under this part, the dislocated 
worker unit shall consider cooperation and coordination with labor-
management committees established under other authorities (section 
311(b)(3)(B)).
    (e) In accordance with section 402 of the Veterans' Benefits and 
Programs Improvement Act of 1988 (29 U.S.C. 1751 note) services under 
this part shall be coordinated with programs administered by the 
Department of Veterans Affairs and with other veterans' programs such as 
the Veterans' Job Training Act (29 U.S.C. 1721 note), title IV-C of the 
Job Training Partnership Act (29 U.S.C. 1721, et seq.), part 635 of this 
chapter, and the Transition Assistance Program.



Sec. 631.38  State by-pass authority.

    (a)(1) In the event that a substate grantee fails to submit a plan, 
or submits a plan which is not approved by the Governor (see 
Sec. 631.50(f) of this part), the Governor may direct the expenditure of 
funds allocated to the substate area.
    (2) The Governor's authority under this paragraph (a) to direct the 
expenditure of funds remains in effect only until such time as a plan is 
submitted and approved, or a new substate grantee is designated (section 
313(c)).
    (3) The Governor shall not direct the expenditure of funds under 
this paragraph (a) until after the affected substate grantee has been 
afforded advance written notice of the Governor's intent to exercise 
such authority and an opportunity to appeal to the Secretary pursuant to 
the provisions of Sec. 628.426(e) of this chapter.
    (b)(1) If a substate grantee fails to expend funds allocated to it 
in accordance with its plan, the Governor, subject to appropriate notice 
and opportunity for comment in the manner required by section 105(b)(1), 
(2), and (3) of the Act, may direct the expenditure of funds only in 
accordance with the substate plan.
    (2) The Governor's authority under this paragraph (b) to direct the 
expenditure of funds shall remain in effect only until:
    (i) The substate grantee corrects the failure;
    (ii) The substate grantee submits an acceptable modification; or

[[Page 266]]

    (iii) A new substate grantee is designated (section 313(a) and (d)).
    (3) The Governor shall not direct the expenditure of funds under 
this paragraph (b) until after the affected substate grantee has been 
afforded advance written notice of the Governor's intent to exercise 
such authority and an opportunity to appeal to the Secretary pursuant to 
the provisions of Sec. 628.426(e) of this chapter.
    (c) When the substate area is the State, the Secretary shall have 
the same authority as the Governor under paragraphs (a) and (b) of this 
section.



                        Subpart E--State Programs



Sec. 631.40  State program operational plan.

    (a) The Governor shall submit to the Secretary biennially, in 
accordance with instructions issued by the Secretary, a State program 
operational plan describing the specific activities, programs and 
projects to be undertaken with the funds reserved by the Governor under 
Sec. 631.32(c) of this part.
    (b) The State program operational plan shall include a description 
of the mechanisms established between the Federal-State Unemployment 
Compensation System, the Trade Adjustment Assistance Program, the State 
Employment service and programs authorized under title III of the Act 
and this part to coordinate the identification and referral of 
dislocated workers and the exchange of information.



Sec. 631.41  Allowable State activities.

    (a) States may use funds reserved under Sec. 631.32(c) of this part, 
subject to the provisions of the State biennial and program operational 
plans, for:
    (1) Rapid response assistance;
    (2) Basic readjustment services when undertaken in Statewide, 
regional or industrywide projects, or, initially, as part of rapid 
response assistance;
    (3) Retraining services, including (but not limited to) those in 
section 314(d) of the Act when undertaken in Statewide, industrywide and 
regional programs;
    (4) Coordination with the unemployment compensation system, in 
accordance with Sec. 631.37(b) of this part;
    (5) Discretionary allocation for basic readjustment and retraining 
services to provide additional assistance to substate areas that 
experience substantial increases in the number of dislocated workers, to 
be expended in accordance with the substate plan or a modification 
thereof;
    (6) Incentives to provide training of greater duration for those who 
require it; and
    (7) Needs-related payments in accordance with section 315(b) of the 
Act.
    (b) Activities shall be coordinated with other programs serving 
dislocated workers, including training under Chapter 2 of Title II of 
the Trade Act of 1974 (19 U.S.C. 2271, et seq.) and part 617 of this 
chapter.
    (c) Where appropriate, State-level activities should be coordinated 
with activities and services provided by substate grantees.
    (d) Retraining services provided to individuals with funds available 
to a State should be limited to those individuals who can most benefit 
from and are in need of such services.
    (e) Other than basic and remedial education, literacy and English 
for non-English speakers training, retraining services provided with 
funds available to a State shall be limited to those for occupations in 
demand in the area or another area to which the participant is willing 
to relocate, or in sectors of the economy with a high potential for 
sustained demand or growth.
    (f) Services provided to displaced homemakers should be part of 
ongoing programs and activities under Title III and this part and not 
separate and discrete programs.
    (g) Basic readjustment services described in Sec. 631.3(b)(1), 
provided to individuals who have not received a specific notice of 
termination or layoff and who work at a facility at which the employer 
has made a public announcement that such facility will close shall, to 
the extent practicable be funded by the State with funds reserved under 
Sec. 631.32(c) (section 314(h)).
    (h) The provisions of section 107(a), (b) and (e) of the Act (but 
not subsections (c) and (d) of section 107) and Sec. 627.422 of this 
chapter apply to State

[[Page 267]]

selection of service providers for funded activities authorized in 
Sec. 631.32(c) of this part.



                      Subpart F--Substate Programs



Sec. 631.50  Substate plan.

    (a) In order to receive an allocation of funds under Sec. 631.32 of 
this part, the substate grantee shall submit to the Governor a substate 
plan, in accordance with instructions issued by the Governor. Such plan 
shall meet the requirements of this section and shall be approved by the 
Governor prior to funds being allocated to a substate grantee.
    (b) The Governor shall issue instructions and schedules that assure 
that substate plans and plan modifications conform to all requirements 
of the Act and this part and contain the statement required by section 
313(b) of the Act.
    (c) Substate plans shall provide for compliance with the cost 
limitation provisions of Sec. 631.14 of this part.
    (d) The SJTCC or HRIC shall review and submit to the Governor 
written comments on substate plans.
    (e) Prior to the submission of the substate plan to the Governor, 
the substate grantee shall submit the plan to the parties to the 
agreement described in Sec. 631.35(c) of this part for review and 
comment (section 313(a)).
    (f) The Governor's review and approval (or disapproval) of a 
substate plan or plan modification, and appeals to the Secretary from 
disapprovals thereof, shall be conducted according to the provisions of 
section 105 of the Act and Sec. 628.426 of this chapter (section 
313(c)).
    (g) If a substate grantee fails to meet the requirements for plan 
submission and approval found in this section, the Governor may exercise 
the by-pass authority set forth at Sec. 631.38 of this part.
    (h) When the substate area is the State, the substate plan (and plan 
modification(s)) shall be submitted by the Governor to the Secretary. 
The dates for submission and consideration and the Secretary's review 
and approval (or disapproval) of the plan or plan modification, and 
appeals to administrative law judges from disapproval thereof, shall be 
conducted according to the provisions of Sec. 628.430 of this chapter.



Sec. 631.51  Allowable substate program activities.

    (a) The substate grantee may use JTPA section 302(c)(1), (c)(2), and 
(d) funds allocated by the Governor under Sec. 631.32 of this part for 
basic readjustment services, retraining services, supportive services 
and needs-related payments.
    (b) The provisions of Secs. 627.420 and 627.435 of this chapter 
(Procurement, Cost principles and allowable costs) apply to funds 
allocated to substate grantees under this part unless otherwise 
specifically provided for.
    (c) Other than basic and remedial education, literacy and English 
for non-English speakers training, retraining services provided with 
funds available to a substate area shall be limited to those for 
occupations in demand in the area or another area to which the 
participant is willing to relocate, or in sectors of the economy with a 
high potential for sustained demand or growth.
    (d) Retraining services provided to individuals with funds available 
to a substate area should be limited to those individuals who can most 
benefit from and are in need of such services (sections 312(e) and 
141(a)).



Sec. 631.52  Selection of service providers.

    (a) The substate grantee shall provide authorized JTPA Title III 
services within the substate area, pursuant to an agreement with the 
Governor and in accordance with the approved State plan and substate 
plan, including the selection of service providers.
    (b) The substate grantee may provide authorized JTPA Title III 
services directly or through contract, grant, or agreement with service 
providers (section 312(d)).
    (c) Services provided to displaced homemakers should be part of 
ongoing programs and activities under Title III of the Act and this part 
and not separate and discrete programs.
    (d) The provisions of section 107(a), (b), (c) and (e) of the Act 
and Sec. 627.422 of this chapter apply to substate grantee selection of 
service providers as specified in this section.

[[Page 268]]



Sec. 631.53  Certificates of continuing eligibility.

    (a) A substate grantee may issue to any eligible dislocated worker 
who has applied for the program authorized in this part a certificate of 
continuing eligibility. Such a certificate of continuing eligibility:
    (1) May be effective for periods not to exceed 104 weeks;
    (2) Shall not include any reference to any specific amount of funds;
    (3) Shall state that it is subject to the availability of funds at 
the time any such training services are to be provided; and
    (4) Shall be non-transferable.
    (b) Acceptance of a certificate of continuing eligibility shall not 
be deemed to be enrollment in training.
    (c) Certificates of continuing eligibility may be used, subject to 
the conditions included on the face of the certificate, in two distinct 
ways:
    (1) To defer the beginning of retraining: any individual to whom a 
certificate of continuing eligibility has been issued under paragraph 
(a) of this section shall remain eligible for retraining and education 
services authorized under this part for the period specified in the 
certificate, notwithstanding the definition of ``eligible dislocated 
worker'' in section 301(a) of the Act or the participant eligibility 
provisions in Sec. 631.3 of this part, and may use the certificate in 
order to receive retraining services, subject to the limitations 
contained in the certificate; or
    (2) To permit eligible dislocated workers to seek out and arrange 
their own retraining with service providers approved by the substate 
grantee; retraining provided pursuant to the certificate shall be in 
accord with requirements and procedures established by the substate 
grantee and shall be conducted under a grant, contract, or other 
arrangement between the substate grantee and the service provider.
    (d) Substate grantees shall ensure that records are maintained 
showing to whom such certificates of continuing eligibility have been 
issued, the dates of issuance, and the number redeemed by substate 
grantees.



   Subpart G--Federal Delivery of Dislocated Worker Services Through 
                     National Reserve Account Funds



Sec. 631.60  General.

    This subpart provides for the use of funds reserved to the Secretary 
for use under part B of title III of the Act. These funds may be used 
for the allowable activities, described in section 323 of the Act; 
demonstration programs, described in section 324 of the Act; the Defense 
Conversion Adjustment Program (DCAP), described in section 325 of the 
Act; the Defense Diversification Program (DDP), described in section 
325A of the Act; Clean Air Employment Transition Assistance (CAETA), 
described in section 326 of the Act; and similar uses and programs which 
may be added to part B of title III of the Act.



Sec. 631.61  Application for funding and selection criteria.

    To qualify for consideration for funds reserved by the Secretary for 
activities under section 323 of the Act, applications shall be submitted 
to the Secretary pursuant to instructions issued by the Secretary 
specifying application procedures, selection criteria, and approval 
process. Separate instructions will be issued for each category of grant 
awards, as determined by the Secretary.



Sec. 631.62  Cost limitations.

    The expenditure of funds provided to grantees under this subpart 
shall be consistent with the cost limitations specified in the grant. 
Applicants for grants under this subpart may propose, in their grant 
applications, reasonable costs to be incorporated into the grant. The 
Grant Officer may accept or modify such proposals at his/her discretion. 
Where proposals do not adequately justify to the Grant Officer's 
satisfaction the costs to be incorporated into the grant, the cost 
limitations that shall be applied shall be those specified in section 
315 of the Act and described in paragraphs (a), (b) and (c) of 
Sec. 631.14 of this part.

[[Page 269]]



Sec. 631.63  Reporting.

    (a) Grantees under part B of title III of the Act shall submit 
reports as prescribed by the Secretary.
    (b) Significant developments. Grantees shall notify the Secretary of 
developments that have a significant impact on the grant or subgrant 
supported activities, including problems, delays, or adverse conditions 
which may materially impair the ability to meet the objectives of the 
project. This notification shall include a statement of the action 
taken, or contemplated, and any assistance needed to resolve the 
situation.



Sec. 631.64  General administrative requirements.

    (a) Activities under this subpart may be carried out and funding 
provided directly to grantees other than States.
    (b) All grantees and subgrantees under this subpart that are States 
or substate grantees are subject to the provisions in part 627 of this 
chapter.
    (c) For grantees other than States and substate grantees, the 
following provisions shall apply to grants under this subpart.
    (1) Grievance procedures. (i) Each grantee shall establish and 
maintain a grievance procedure for grievances or complaints about its 
programs and activities from participants, subgrantees, subcontractors, 
and other interested persons. Hearings on any grievance shall be 
conducted within 30 days of filing of a grievance and decisions shall be 
made not later than 60 days after the filing of a grievance. Except for 
complaints alleging fraud or criminal activity, complaints shall be made 
within one year of the alleged occurrence.
    (ii) Grantees shall be subject to the provisions of section 144 of 
the Act, and 29 CFR part 95 or 97, as appropriate.
    (iii) If the grantee is already subject to the grievance procedure 
process and requirements established by the Governor (i.e., through 
another JTPA grant, subgrant, or contract), its adherence to that 
procedure shall meet the requirements of this paragraph (c)(1).
    (2) Uniform Administrative Standards. Grantees shall be subject to 
the standards and requirements described in 29 CFR part 95 or 97, as 
appropriate, as well as any additional standards prescribed in grant 
documents or Secretarial guidelines. If the grantee/ subgrantee is 
already subject to additional standards established by the Governor 
(i.e., through another JTPA grant, subgrant, or contract), its adherence 
to those standards shall meet the requirements of this paragraph (c)(2).



Sec. 631.65  Special provisions for CAETA and DDP.

    (a) Allowances for Job Search Outside the Commuting Area under 
CAETA. Allowances for job search outside the commuting area shall be an 
allowable activity under CAETA, only where it has been determined that 
the dislocated worker cannot reasonably be expected to secure suitable 
employment within the commuting area in which the worker resides. 
Procedures for determining whether a dislocated worker cannot reasonably 
be expected to secure suitable employment within the commuting area in 
which the dislocated worker resides shall be described in the grant 
application and shall be subject to approval by the Grant Officer. The 
cost of job search outside the commuting area shall be an allowable 
cost, but shall not provide for more than 90 percent of the cost of 
necessary job search expenses, and may not exceed a total of $800, 
unless the need for a greater amount is justified in the grant 
application and approved by the Grant Officer.
    (b) Relocation Allowances under CAETA. Relocation allowances under 
CAETA shall be allowable only where the eligible dislocated worker 
cannot reasonably be expected to secure suitable employment in the 
commuting area in which the worker resides and has obtained suitable 
employment affording a reasonable expectation of long-term duration in 
the area in which the worker wishes to relocate, or has obtained a bona 
fide offer of such employment, provided that the worker is totally 
separated from employment at the time relocation commences. The cost of 
relocation for an eligible dislocated worker shall not exceed an amount 
which is equal to the sum of the reasonable and necessary expenses 
incurred in transporting the dislocated

[[Page 270]]

worker and the dislocated worker's family, if any, and household 
effects, and a lump sum relocation allowance, equivalent to three times 
such worker's average weekly wage. The maximum relocation allowance, 
however, shall not exceed $800, unless a greater amount is justified in 
the grant application and approved by the Grant Officer. Necessary 
expenses shall be travel expenses for the dislocated worker and the 
dislocated worker's family and for the transfer of household effects. 
Reasonable costs for such travel and transfer expenses shall be by the 
least expensive, most reasonable form of transportation.
    (c) Needs-related payments under CAETA and DDP. Funds from grants 
for CAETA and DDP shall be available for needs-related payments to 
enable participants to participate in and complete training or education 
programs under those grants, subject to the following:
    (1) Needs-related payments shall be provided to the participant only 
if the participant:
    (i) Does not qualify or has ceased to qualify for unemployment 
compensation;
    (ii) Has been enrolled in training programs by the end of the 13th 
week of an individual's initial unemployment benefit period following 
the layoff or termination, or, if later, the end of the 8th week after 
an individual is informed that a short-term layoff will exceed six 
months;
    (iii) Is making satisfactory progress in training or education 
programs under this section, except that an individual shall not be 
disqualified pursuant to this clause for a failure to participate that 
is not the fault of the individual; and
    (iv) Currently receives, or is a member of a family which currently 
receives, a total family income (exclusive of unemployment compensation, 
child support payments, and welfare payments) which, in relation to 
family size, is not in excess of the lower living standard income level.
    (2) Needs-related payments shall be equal to the higher of:
    (i) The applicable level of unemployment compensation; or
    (ii) The poverty level determined in accordance with the criteria 
established by the Director of the Office of Management and Budget.
    (3) Total family income shall be reviewed periodically, based upon 
information obtained from participants with respect to such income and 
changes therein, to determine continued eligibility, or to begin 
payments to individuals previously found ineligible for needs-related 
payments under this section.



                          Subpart H--[Reserved]



            Subpart I--Disaster Relief Employment Assistance



Sec. 631.80  Scope and purpose.

    This subpart establishes a Disaster Relief Employment Assistance 
program under title IV, part J of JTPA which shall be administered in 
conjunction with the title III National Reserve Grants Programs.



Sec. 631.81  Availability of funds.

    Funds appropriated to carry out this subpart may be made available 
by grant to the Governor of any State within which is located an area 
that has suffered an emergency or a major disaster as defined in 
paragraphs (1) and (2), respectively, of section 102 of the Disaster 
Relief Act of 1974 (42 U.S.C. 5122(1) and (2)) (referred to in this 
subpart as the ``disaster area''). The Secretary shall prescribe 
procedures for applying for funds.



Sec. 631.82  Substate allocation.

    (a) Not less than 80 percent of the grant funds available to any 
Governor under Sec. 631.81 of this part shall be allocated by the 
Governor to units of general local government located, in whole or in 
part, within such disaster areas. The remainder of such funds may be 
reserved by the Governor for use, in concert with State agencies, in 
cleanup, rescue, repair, renovation, and rebuilding activities 
associated with such major disaster.
    (b) The JTPA title III program substate grantee for the disaster 
area shall

[[Page 271]]

be the designated local entity for administration of the grant funds 
under this subpart.



Sec. 631.83  Coordination.

    Funds made available under this subpart to Governors and units of 
general local government shall be expended in consultation with--
    (a) Agencies administering programs for disaster relief provided 
under the Disaster Relief Act of 1974; and
    (b) The JTPA title II administrative entity and the private industry 
council in each service delivery area within which disaster employment 
programs will be conducted under this subpart.



Sec. 631.84  Allowable projects.

    Funds made available under this subpart to any unit of general local 
government in a disaster area--
    (a) Shall be used exclusively to provide employment on projects that 
provide food, clothing, shelter and other humanitarian assistance for 
disaster victims; and on projects involving demolition, cleanup, repair, 
renovation, and reconstruction of damaged and destroyed structures, 
facilities, and lands located within the disaster area; and
    (b) May be expended through public and private non-profit agencies 
and organizations engaged in such projects.



Sec. 631.85  Participant eligibility.

    An individual shall be eligible for disaster employment under this 
subpart if such individual is--
    (a)(1) Eligible to participate or enroll, or is a participant or 
enrolled, under Title III of the Act, other than an individual who is 
actively engaged in a training program; or
    (2) Eligible to participate in programs or activities assisted under 
Native American and Migrant Programs; and
    (3) Unemployed as a consequence of the disaster.
    (b) [Reserved].



Sec. 631.86  Limitations on disaster relief employment.

    No individual shall be employed under this subpart for more than 6 
months for work related to recovery from a single natural disaster 
(described in Sec. 631.3(f) of this part).



Sec. 631.87  Definitions.

    As used in this subpart, the term unit of general local government 
includes:
    (a) In the case of a community conducting a project in an Indian 
reservation or Alaska Native village, the grantee designated under the 
JTPA section 401 Indian and Native American Program (see part 632 of 
this chapter), or a consortium of such grantees and the State; and
    (b) In the case of a community conducting a project in a migrant or 
seasonal farmworker community, the grantee designated under the JTPA 
section 402 Migrant and Seasonal Farmworker Program (see part 633 of 
this chapter), or a consortium of such grantees and the State.



PART 632--INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS--Table of Contents




                         Subpart A--Introduction

Sec.
632.1  [Reserved]
632.2  Scope and purpose.
632.3  Format for these regulations.
632.4  Definitions.

   Subpart B--Designation Procedures for the Native American Grantees

632.10  Eligibility requirements for designation as a Native American 
          grantee.
632.11  Designation of Native American grantees.
632.12  Alternative arrangements for the provision of services, 
          nondesignation.
632.13  Review of denial of designation as a Native American grantee, or 
          rejection of a Comprehensive Annual Plan.

  Subpart C--Program Planning, Application and Modification Procedures

632.17  Planning process.
632.18  Regional and national planning meetings.
632.19  Grant application content.
632.20  Submission of grant application.
632.21  Application disapproval.
632.22  Modification of a Comprehensive Annual Plan (CAP) and/or Master 
          Plan.
632.23  Termination and corrective action of a CAP and/or Master Plan.

           Subpart D--Administrative Standards and Procedures

632.31  General.

[[Page 272]]

632.32  Financial management systems.
632.33  Audits.
632.34  Program income.
632.35  Native American grantee contracts and subgrants.
632.36  Procurement standards.
632.37  Allowable costs.
632.38  Classification of costs.
632.39  Administrative cost plan.
632.40  Administrative staff and personnel standards.
632.41  Reporting requirements.
632.42  Grant closeout procedures.
632.43  Reallocation of funds.
632.44  Sanctions for violation of the Act.

                Subpart E--Program Design and Management

632.70  Waiver of regulations under parts 632 and 636.
632.75  General responsibilities of Native American grantees.
632.76  Program management systems.
632.77  Participant eligibility determination.
632.78  Training activities.
632.79  Employment activities.
632.80  Other activities.
632.81  Payments to participants.
632.82  Benefits and working conditions for participants.
632.83  FICA.
632.84  Non-Federal status of participants.
632.85  Participant limitations.
632.86  Nondiscrimination and nonsectarian activities.
632.87  Equitable provision of services to the eligible population and 
          significant segments.
632.88  General responsibilities of the Department.
632.89  Performance standards.

            Subpart F--Prevention of Fraud and Program Abuse

632.115  General.
632.116  Conflict of interest.
632.117  Kickbacks.
632.118  Nepotism.
632.119  Political patronage.
632.120  Political activities.
632.121  Lobbying activities.
632.122  Unionization and antiunionization activities; work stoppages.
632.123  Maintenance of effort.
632.124  Theft or embezzlement from employment and training funds; 
          improper inducement; obstruction of investigations and other 
          criminal provisions.
632.125  Responsibilities of Native American grantees, subgrantees and 
          contractors for preventing fraud and program abuse and for 
          general program management.

                          Subpart G--[Reserved]

Subpart H--Job Training Partnership Act Programs Under Title IV, Section 
                                   401

632.170  Eligibility for funds.
632.171  Allocation of funds.
632.172  Eligibility for participation in title IV, section 401.
632.173  Allowable program activities.
632.174  Administrative costs.

        Subpart I--Summer Youth Employment and Training Programs

632.250  General.
632.251  Eligibility for funds.
632.252  Allocation of funds.
632.253  Special operating provisions.
632.254  Program startup.
632.255  Program planning.
632.256  Submission of applications.
632.257  Eligibility for participation.
632.258  Allowable activities.
632.259  Vocational exploration program.
632.260  Worksite standards.
632.261  Reporting requirements.
632.262  Termination date for the summer program.
632.263  Administrative costs.

    Authority:  29 U.S.C. 1579(a).

    Source:  48 FR 48754, Oct. 20, 1983, unless otherwise noted.



                         Subpart A--Introduction



Sec. 632.1  [Reserved]



Sec. 632.2  Scope and purpose.

    It is the purpose of Native American programs to provide job 
training and employment activities consistent with the intent of title 
IV, part A, section 401. Such programs shall be administered in such a 
manner as to maximize the Federal commitment to support growth and 
development as determined by representatives of the communities and 
groups served by this section including furtherance of the policy of 
Indian Self-Determination.



Sec. 632.3  Format for these regulations.

    Regulations promulgated by the Department of Labor to implement the 
provisions of title IV, section 401 and Indian programs under title II-B 
of the Act are set forth in 20 CFR part 632. This part in conjunction 
with part 636 contains all the regulations under the Act applicable to 
Indian and Native American programs.

[[Page 273]]



Sec. 632.4  Definitions.

    Act-- means the Job Training Partnership Act (29 U.S.C. section 1501 
et seq.).
    Capital Improvement-- means any modification, addition, restoration 
or other improvement:
    (a) Which increases the usefulness, productivity, or serviceable 
life of an existing building, structure, or major item of equipment;
    (b) Which is classified for accounting purposes as a ``fixed 
asset;'' and
    (c) The cost of which increases the recorded value of the existing 
building, structure, or major item of equipment and is subject to 
depreciation.
    Community Based Organization-- means a private nonprofit 
organization which is representative of the Indian and Native American 
community or significant segments of the community and which provides 
employment and training services or activities.
    Comprehensive Annual Plan (CAP)-- means the annual update to the 
Master Plan. The CAP will identify the work plan and budget for the 
annual 401 and title II, part B funding allocations.
    Construction-- means the erection, installation, assembly or 
painting of a new structure or a major addition, expansion or extension 
of an existing structure and the related site preparation, excavation, 
filling and landscaping or other land improvements.
    Contract-- means a procurement instrument, other than a grant, by 
which the Department, a Native American grantee or a subgrantee acquires 
and pays for property, services, supplies, materials or equipment.
    Contractor-- means any person, corporation, partnership, public 
agency, or other entity which enters into a contract with the DOL, a 
Native American grantee or subgrantee under the Act.
    Department-- means the United States Department of Labor (DOL) 
including its agencies and organizational units.
    Dependent-- means any person for whom, both currently and during the 
previous 12 months, the participant has assumed 50 percent of the 
person's support.
    DINAP--means the Division of Indian and Native American Programs of 
the Department of Labor.
    DOL--means the U.S. Department of Labor.
    Economically Disadvantaged--means an individual who (a) receives, or 
is a member of a family which receives, cash welfare payments under a 
Federal, State, or local welfare program; (b) has, or is a member of a 
family which has, received a total family income for the six-month 
period prior to application for the program involved (exclusive of 
unemployment compensation, child support payments, and welfare payments) 
which, in relation to family size, was not in excess of the higher of 
(1) the poverty level determined in accordance with criteria established 
by the Department of Health and Human Services, or (2) 70 percent of the 
lower living standard income level; (c) is receiving food stamps 
pursuant to the Food Stamp Act of 1977; (d) is a foster child on behalf 
of whom State or local government payments are made; or (e) is a 
handicapped individual whose own income meets the requirements of 
paragraph (a) or (b) of this definition, but who is a member of a family 
whose income does not meet such requirements.
    Entered Employment--means the act of securing unsubsidized 
employment for or by a participant.
    Entry Level--means the lowest position in any promotional line, as 
defined locally by collective bargaining agreements, past practice, or 
applicable personnel rules.
    Family--(a) means one or more persons living in a single residence 
who are related to each other by blood, marriage, or adoption. A step-
child or a step-parent is considered to be related by marriage.
    (b) (1) For purposes of paragraph (a) of this definition, one or 
more persons not living in the single residence but who are claimed as a 
dependent on another person's Federal Income Tax return for the previous 
year is presumed, unless otherwise demonstrated, to be part of the other 
person's family.
    (2) A handicapped individual may be considered a family of one when 
applying for programs under the Act.

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    (3) An individual 18 years of age or older, except as provided in 
(b) (1) or (2) of this definition, who receives less than 50 percent of 
support from the family, and who is not the principal earner nor the 
spouse of the principal earner shall not be considered a member of the 
family. Such an individual shall be considered a family of one.
    Family Income--means all income actually received from all sources 
by all members of the family for the six-month period prior to 
application. Family size is the maximum number of family members during 
the six-month period prior to application. When computing family income, 
income of a spouse and other family members is counted for the portion 
of the six-month period prior to application that the person was 
actually a part of the family unit.
    (a) For the purposes of determining participant eligibility (and not 
for grantee allocations), family income includes:
    (1) Gross wages, including CSE, Work Experience and OJT paid from 
JTPA funds, and salaries (before deductions);
    (2) Net self-employment income (gross receipts minus operating 
expenses); and
    (3) Other money income received from sources such as interest, net 
rents, OASI (Old Age and Survivors Insurance) social security benefits, 
pensions, alimony, and periodic income from insurance policy annuities, 
and other sources of income.
    (b) Family income does not include:
    (1) Non-cash income such as food stamps, or compensation received in 
the form of food or housing;
    (2) Imputed value of owner-occupied property, i.e., rental value;
    (3) Public assistance payments;
    (4) Cash payments received pursuant to a State plan approved under 
titles I, IV, X or XVI of the Social Security Act, or disability 
insurance payments received under title II of the Social Security Act;
    (5) Federal, State or local unemployment benefits;
    (6) Capital gains and losses;
    (7) One time unearned income, such as, but not limited to:
    (i) Payments received for a limited fixed term under income 
maintenance programs and supplemental (private) unemployment benefits 
plans;
    (ii) One-time or fixed-term scholarship and fellowship grants;
    (iii) Accident, health, and casualty insurance proceeds;
    (iv) Disability and death payments, including fixed term (but not 
lifetime) life insurance annuities and death benefits;
    (v) One-time awards and gifts;
    (vi) Inheritance, including fixed term annuities;
    (vii) Fixed term workers' compensation awards;
    (viii) Terminal leave pay;
    (ix) Soil bank payments; and
    (x) Agriculture crop stabilization payments;
    (8) Pay or allowances which were previously received by any veteran 
while serving on active duty in the Armed Forces;
    (9) Educational assistance and compensation payments to veterans and 
other eligible persons under chapters 11, 13, 31, 34, 35, and 36, of 
title 38, United States Code;
    (10) Payments received under the Trade Act of 1974;
    (11) Black Lung payments received under the Benefits Reform Act of 
1977, Pub. L. 95-239, 30 U.S.C. 901;
    (12) Child support payments; and
    (13) Any income directly or indirectly derived from, or arising out 
of, any property held by the United States in trust for any Indian 
tribe, band or group or any individual; per capita payments; and 
services, compensation or funds provided by the United States in 
accordance with, or generated by, the exercise of any right guaranteed 
or protected by treaty; and any property distributed or income derived 
there-from, or any amounts paid to or for any individual member, or 
distributed to or for the legatees or next of kin of any member, derived 
from or arising out of the settlement of an Indian claim.
    Financial Assistance-- means any grant, loan, or any other 
arrangement by which the Department or Native American grantee provides 
or otherwise makes available assistance in the form of:
    (a) Funds;

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    (b) Services of Federal or Native American grantee personnel; or
    (c) Real and personal property or any interest in or use of such 
property, including:
    (1) Transfers or leases of such property for less than fair market 
value or for reduced consideration and
    (2) Proceeds from a subsequent transfer or lease of such property if 
the Federal or Native American grantee share of its fair market value is 
not returned to the Federal Government or Native American grantee.
    Governing Body-- means a body consisting of duly elected or 
designated representatives, a body appointed by duly elected officials, 
or a body selected in accordance with traditional tribal means which has 
the authority to provide services to, and to enter into contracts, 
agreements and grants under this part on behalf of the organization or 
individuals who elected or designated them, elected the appointing 
official, or recognize the body selected in accordance with traditional 
tribal means.
    Governor-- means the chief executive of any State.
    Handicapped Individual-- means any individual who has a physical or 
mental disability which for such individual constitutes or results in a 
substantial handicap to employment.
    Hawaiian Native-- means any individual, any of whose ancestors were 
natives, prior to 1778, of the area which now comprises the State of 
Hawaii (Sec. 3(12)).
    JTPA--means the Job Training Partnership Act.
    Local Educational Agency (LEA)-- means such an agency as defined in 
section 195(10) of the Vocational Educational Act of 1963. It shall 
further mean the governing bodies of any Bureau of Indian Affairs, 
tribal or reservation run agencies or school districts, or any nonprofit 
agency or tribally chartered entity providing educational services to 
Indian and Native American persons as determined by the Native American 
grantee.
    Low Income Housing-- means: (a) For weatherization or winterization 
projects, those dwellings occupied by persons whose family income does 
not exceed 125 percent of the poverty level and which are:
    (1) Owned by the occupant;
    (2) Publicly owned;
    (3) Owned by a private nonprofit organization;
    (4) Cooperatively owned; or
    (5) For projects funded and approved by the Federal Energy 
Administration, privately owned rental housing.
    (b) For rehabilitation as part of community revitalization or 
stabilization, housing built or improved with the assistance of Federal, 
State or tribal programs, and those dwellings occupied by persons whose 
family income does not exceed 80 percent of the median income for the 
area, in accordance with section 8(f)(1) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f) and which are:
    (1) Owned by the occupant;
    (2) Publicly owned;
    (3) Owned by a private nonprofit organization; or
    (4) Cooperatively owned.
    Lower Living Standard Income Level-- means that income level 
(adjusted for regional, metropolitan, urban, and rural differences and 
family size) determined annually by the Secretary based on the most 
recent ``lower living family budget'' issued by the Secretary.
    Master Plan-- means the basic long term agreement between the 
Department and the Native American grantee. The master plan contains all 
basic eligibility determination and administrative information.
    Native American Community Benefit-- means the outcome of allowable 
activities undertaken for the advancement of economic and social 
development in the Indian, Alaskan Native, and Hawaiian Native 
communities consistent with their goals and life styles as determined by 
representatives of the community.
    Offender-- means any adult or juvenile who is or has been subject to 
any stage of the criminal justice process for whom services under this 
part may be beneficial or who requires assistance in overcoming 
artificial barriers to employment resulting from a record of arrest or 
conviction.
    Older Worker-- means a person who is 55 years of age or older.
    Participant-- means an individual who has:

[[Page 276]]

    (a) Been determined eligible for participation; and
    (b) Started receiving employment, training or services (except post-
termination services) funded under the Act, within 45 days of such 
determination.
    Poverty Level-- means the annual income level at or below which 
families are considered to live in poverty, as annually determined by 
the Department of Health and Human Services.
    Program Income-- means net income earned from grant or agreement 
supported activities. Such earnings include but are not limited to: 
income from service fees, sale of commodities, usage or rental fees, and 
royalities on patents or copyrights.
    Program year-- means that 12-month period of time during which job 
training activities and services and provided to participants.
    Public Assistance-- means Federal, State, tribal, or local 
government cash payments for which eligibility is determined by a need 
or income test.
    Secretary-- means the Secretary of Labor.
    Similarly Employed-- means that status of a person who is working 
for the same employer as the JTPA participant, is doing the same type of 
work, and is similarly classified with respect to employment status 
(e.g., full-time, permanent, or temporary).
    State-- means the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern 
Marianas Islands, American Samoa, and the Trust Territory of the Pacific 
Islands.
    State Employment Security Agency (SESA)-- means the State agency 
which exercises control over the Unemployment Insurance Service and the 
Employment Service.
    Subgrantee-- means any person, corporation, partnership, public 
agency, or other entity, excluding private for profits concerns, which 
enters into a grant with the Native American Grantee.
    Underemployed Persons--means:
    (a) Persons who are working part-time but seeking full-time work; or
    (b) Persons who are working full-time but whose current annualized 
wage rate (for a family of one), or whose family's current annualized 
income, is not in excess of:
    (1) The poverty level, or
    (2) 70 percent of the lower living standard income level.
    Unemployed Persons--means individuals who are without jobs and who 
want and are available for work. The determination of whether 
individuals are without jobs shall be made in accordance with the 
criteria used by the Bureau of Labor Statistics of the Department of 
Labor in defining individuals as unemployed.



     Subpart B--Designation Procedures for Native American Grantees



Sec. 632.10  Eligibility requirements for designation as a Native American grantee.

    (a) All funds specifically identified in the Act as reserved for the 
benefit of Indian and Native American participants shall be disbursed by 
the Department only to Native American grantees designated pursuant to 
this subpart. Except for FY 1984, designation will be for a period of 
two years.
    (b) To be designated as a Native American grantee, an applicant must 
have:
    (1) A governing body;
    (2) For new grantees, an Indian or Native American population within 
its designated service area of at least 1,000 persons;
    (3) The capability to administer an Indian and Native American 
employment and training program. For purposes of this paragraph, 
``capability to administer'' means that the applicant can demonstrate 
that it possesses, or can acquire the managerial, technical, or 
administrative staff with the ability to properly administer government 
funds, develop employment and training opportunities, evaluate program 
performance and comply with the provisions of the Act and the 
regulations. In judging the applicant's request for designation, 
consideration shall be given to factors such as:
    (i) Previous experience in operating an effective employment and 
training program serving Indians or Native Americans;

[[Page 277]]

    (ii) The number and kind of activities of similar magnitude and 
complexity that the applicant has successfully completed;
    (iii) Information from other Federal agencies regarding program 
performance or financial and management capability.
    (c) The Department will not designate an organization in cases where 
it is established that:
    (1) The agency's efforts to recover debts (for which three demand 
letters have been sent) established by final agency action have been 
unsuccessful, or
    (2) Fraud or criminal activity has been proven to exist within the 
organization, or
    (3) The amount under the funding formulas will not total at least 
$120,000 in all JTPA funds for the first year of the two-year 
designation period. In the event that this amount cannot be determined 
at the time of the Department's decision on the request for designation, 
the amount shall be estimated in part by reference to the funding levels 
for Native American programs for the prior fiscal or program year. An 
applicant for designation shall be designated notwithstanding the 
limitation in this paragraph of this subsection if it demonstrates that:
    (i) It has or expects to receive a combined total of $120,000 in 
funds or services for the first year of the 2-year designation period 
from JTPA and other human resource development programs, including but 
not limited to those providing for employment, education, vocational 
education, health, social or similar services; or
    (ii) It is recognized and directly funded by Federal agencies, such 
as the Indian-serving agencies within the Departments of the Interior, 
Health and Human Services or Education as the primary service delivery 
organization for the provision of human resource development services to 
Indians or Native Americans within the organization's customary service 
area. This provision shall be interpreted consistent with the Federal 
policy established in Pub. L. 96-638, the Indian Self-Determination Act; 
or
    (iii) It has demonstrated successful operation of an employment and 
training program at a level below $120,000 within the previous two 
years. For this purpose, success is the ability to adequately meet 
planned goals and stay within the grant's cost limits.
    (4) For a consortium to be designated, it must submit the consortium 
agreement which meets the requirements of this subpart.
    (d) Types of eligible Native American grantees:
    (1) Indian tribe, band or group. The Department shall designate as a 
Native American grantee an Indian tribe, band or group which meets the 
requirements in paragraphs (b) and (c) of this section.
    (2) Alaskan Native entity. The Department shall designate as a 
Native American grantee an Alaskan Native entity as defined in the 
Alaskan Native Claims Settlement Act which meets the requirements in 
paragraphs (b) and (c) of this section.
    (3) Hawaiian Native grantee. The Department may designate as a 
Native American grantee any private nonprofit organization or public 
agency representative of the Native Hawaiian community which meets the 
requirements in paragraphs (b) and (c) of this section and which the 
Department determines will best meet the needs of Native Hawaiians.
    (4) Public or private agencies. The Department may designate as a 
section 401 grantee a private nonprofit organization or public agency 
which meets the requirements in paragraphs (b) and (c) of this section 
to serve areas where there are significant numbers of Indians or Native 
Americans, but where there are no Indian tribes, bands or groups, 
Alaskan Native entities or Hawaiian sponsors or consortia of such 
sponsors eligible for designation.
    (5) Consortium grantees. The Department may designate as a Native 
American grantee a consortium of any of the types of grantees described 
in paragraphs (c), (1), (2), (3), and (4) of this section which may or 
may not be independently eligible. All such consortia shall meet the 
following requirements, in addition to the requirements in paragraphs 
(b) and (c) of this section:
    (i) All the members shall be in geographic proximity to one another. 
A

[[Page 278]]

consortium may operate in more than one State.
    (ii) An administrative unit shall be designated for operating the 
program, which may be a member of the consortium or an agency formed by 
the members. The administrative unit shall be delegated all powers 
necessary to administer the program effectively, including the power to 
enter into contracts and subgrants and other necessary agreements, to 
receive and expend funds, to employ personnel, to organize and train 
staff, to develop procedures for program planning, to monitor financial 
and program performance, and to modify the grant agreement through 
agreement with the Secretary. The right of reallocating funds within the 
consortium area shall be reserved to the consortium's members.
    (iii) The consortium shall be the Native American grantee. The 
consortium agreement shall be signed by an official or officials of each 
member of the consortium authorized to enter into a binding consortium 
and shall specify that each member shall be liable jointly or separately 
for claims established against the grantee. Additional standardized 
requirements for consortium agreements will be communicated to grantees 
under separate order.
    (e) In the situation where the Department does not designate Indian 
tribes, bands or groups or Alaska Native groups to serve such groups, 
the Department shall, to the maximum extent feasible, enter into 
arrangements for the provision of services to such groups with other 
types of section 401 grantees which meet with the approval of the Indian 
tribes, bands, groups or Alaska Native groups to be served (section 
401(d)). In such cases, the Department shall consult with the governing 
body of such Indian tribes, bands, groups or Alaska Native groups prior 
to the designation of a Native American grantee.
    (f) In designating Native American grantees to serve groups other 
than those in paragraph (e) of this section, such as nonreservation 
Indians and Native Hawaiians, the Department shall, whenever feasible, 
designate grantees which are directly controlled by Indian or Native 
American people. Where it is not feasible to designate such types of 
grantees, DINAP shall consult with Indian or Native American-controlled 
organizations in the area with respect to the designation of a Native 
American grantee. Where a private nonprofit organization is designated, 
DINAP shall require any such grantees not directly controlled by Indian 
or Native American people to establish a Native American Employment and 
Training Planning Council and to implement an Indian preference policy 
with respect to hiring of staff and contracting for services with regard 
to all funds provided pursuant to this part (sec. 7(b) of the Indian 
Self-Determination and Education Assistance Act).



Sec. 632.11  Designation of Native American grantees.

    (a) When designations are required and the potential grantee is not 
under a Master Plan agreement, an applicant for designation as a Native 
American grantee shall submit a notice of intent to apply for funds. 
Such notices of intent shall be postmarked by January 1 and be submitted 
to the Division of Indian and Native American Programs (DINAP), 
Employment and Training Administration, U.S. Department of Labor, 601 D 
Street NW., Washington, DC. 20213. Notices of intent may also be 
delivered to that office in person not later than the close of business 
on January 2 or the first business day of the designation year. Such 
notices of intent to apply shall be submitted on Standard Form 424 as a 
preapplication for Federal assistance. For applicants not under an 
active Master Plan agreement or the Master Plan agreement is due to 
expire during the year of designation, the following information shall 
be included in the notice of intent:
    (1) Evidence that the applicant meets the requirements for a Native 
American grantee contained in Sec. 632.10.
    (2) A description of the geographic area or areas which the 
applicant proposes to serve, together with the Indian and Native 
American population in such areas, to the extent known. The description 
must include a list of States (if more than one), in alphabetical order, 
and under each State, a list of counties in alphabetical order, followed 
by a list of tribes, bands or

[[Page 279]]

groups (if any) in alphabetical order. If the applicant was a Native 
American grantee for the period prior to the one which is being applied 
for, the applicant must also list any counties and tribes, bands or 
groups which are being added to, or deleted from, the previous fiscal 
year's service area;
    (3) A description of the applicant's organization, including the 
legal status of the applicant, the process of selection of the governing 
body, the duties and responsibilities of the governing body, and in the 
case of private nonprofit organizations, a copy of the articles of 
incorporation;
    (4) Evidence of the applicant's capability to operate an Indian or 
Native American employment and training program, including a statement 
of the applicant's past successes in operating programs for Indians or 
other Native Americans and a statement of the applicant's experience in 
managing the types of programs and activities allowable under the Act;
    (5) A description of the planning process including employer 
involvement which the applicant proposes to undertake in developing a 
plan for the use of funds;
    (6) Information related to a grantee's administrative 
responsibility. The DOL will conduct an independent review to determine 
whether each applicant is currently delinquent in repaying any DOL 
claims or has any outstanding administrative problems. Applicants are, 
therefore, encouraged to submit any documents related to these factors 
including documents and correspondence previously submitted to DOL. 
Submittal of such materials will enable DOL to move rapidly to complete 
the Notice of Intent and grantee designation review process.
    (7) If the applicant is applying as a consortium, evidence that the 
consortium meets the requirements for a consortium in this part and a 
consortium agreement as specified in Sec. 632.10(d)(5)(iii).
    (b) If more than one organization submits a Notice of Intent for a 
geographic area, the Department will notify the organizations involved 
and conduct a special review for the area in question. The notice to the 
organizations will indicate any additional information needed and the 
review process to be followed.
    (c) If the applicant for designation is a current grantee, under a 
master plan agreement, and there is no change in the service area 
requested, only the Standard Form 424 and a statement(s) indicating that 
to the best of the applicant's knowledge, it meets the requirements of 
Sec. 632.10(c)(4) will be necessary and shall be submitted within the 
timeframe established in Sec. 632.11(a).
    (d) Responsibility Review. Prior to finally designating, 
conditionally designating or nondesignating the Department will conduct 
a review of the available records to determine whether or not the 
organization has failed any responsibility test. This review is intended 
to establish overall responsibility to administer Federal funds. With 
the exception of Sec. 632.11 (c)(1) and (c)(3), the failure to meet any 
one of the following responsibility test factors would not establish 
that the organization is irresponsible unless the failure is substantial 
or persistent. The responsibility tests are as follows:
    (1) The agency's efforts to recover debts (for which three demand 
letters have been sent) established by final agency action have been 
unsuccessful, or failure to comply with an approved repayment plan.
    (2) Serious administrative deficiencies have been identified in 
final findings and determination--such as failure to maintain a 
financial management system as required by Federal regulations.
    (3) Established fraud or criminal activity exists within the 
organization.
    (4) Wilfull obstruction of the audit process.
    (5) Substantial failure to provide services to applicants as agreed 
to in a current or recent grant or to meet performance standards 
requirements as provided for and developed pursuant to Sec. 632.89.
    (6) Failure to correct deficiencies brought to the grantee's 
attention in writing as a result of monitoring activities, reviews, 
assessments, etc.
    (7) Failure to return a grant closeout package on outstanding 
advances within 90 days of expiration date or receipt of closeout 
package, whichever is later, unless an extension has been requested

[[Page 280]]

and granted; final billings reflecting serious cost category or total 
budget cost overrun.
    (8) Failure to submit required reports.
    (9) Failure to properly report and dispose of government property as 
instructed by DOL.
    (10) Failure to have maintained cost controls resulting in excess 
cash on hand.
    (11) Failure to procure or arrange for audit coverage for any two 
year period when required by DOL.
    (12) Failure to audit subrecipient within the required period when 
applicable.
    (13) Final disallowed costs in excess of five percent of the grant 
or contract award.
    (14) Failure to establish a mechanism to resolve subrecipient's 
audit within established time frames.
    (e) On March 1 of each designation year, the Department shall 
designate or conditionally designate Native American grantees for the 
coming two program years. Each applicant shall be notified in writing of 
the determination. Those applicants that are not designated in whole or 
in part as Native American grantees may appeal under the complaint 
procedures available for this part. Conditional designations will 
include the nature of the conditions and the actions required to be 
finally designated.

(Approved by the Office of Management and Budget and assigned OMB 
control number 1205-0213)



Sec. 632.12  Alternative arrangements for the provision of services, nondesignation.

    (a) If no application for Native American grantee designation for an 
area is filed, or if the Department has denied such application for that 
area, the Department may designate and fund an entity to serve that 
area, pending the final resolution of any Petitions for Reconsideration 
or other actions taken pursuant to Sec. 632.13. An organization not 
designated in whole or in part may also appeal to an ALJ under the 
provisions of part 636. This further appeal will not in any way 
interfere with the Department's designation and funding of another 
organization to serve the area in question. The available remedy under 
such an appeal will be the right to be designated in the future rather 
than a retroactive or immediately effective designation status. 
Therefore, in the event the ALJ rules that the organization should have 
been designated and the organization continues to meet the requirements 
at Secs. 632.10 and 632.11, the Department will designate the successful 
appellant organization and fund within 90 days of the ALJ decision 
unless the end of the 90 day period is within six months of the end of 
the two year designation period. Any organization designated or funded 
for the area in question would be affected by this remedial action and 
undesignated. All parties must agree to this arrangement prior to 
funding. The alternate organization which loses its designation as a 
result of the application of this remedy may not appeal the 
undesignation.
    (b) If the grant officer finally disapproves a CAP pursuant to 
Sec. 632.21 he/she may withdraw the Native American grantee's 
designation and immediately designate another entity to serve the area, 
pending the final resolution of any Petitions for Reconsideration or 
other actions taken pursuant to part 636.
    (c) If a Native American grantee's CAP is terminated or suspended in 
whole or in part, the Department (after an opportunity for a hearing 
except in emergency situations as described in section 164(f) of the 
Act) may designate another entity to serve the area.
    (d) If it is not feasible for the Department to designate another 
entity to serve the area under the conditions described in paragraphs 
(a), (b), and (c) of this section, the funds involved may be distributed 
at the Secretary's discretion to Native American grantees serving other 
areas.



Sec. 632.13  Review of denial of designation as a Native American grantee, or rejection of a Comprehensive Annual Plan.

    (a) An applicant for designation as a Native American grantee which 
is refused such designation in whole or in part may file a Petition for 
Reconsideration with the Grant Officer within 14 days of receipt of a 
letter from the Department indicating its failure to be

[[Page 281]]

designated as a Native American grantee.
    (1) A Petition for Reconsideration shall be in writing, shall be 
signed by a responsible official of the applicant entity, and shall 
enumerate the factors which the applicant entity asserts should be 
reviewed by the Grant Officer in reconsidering the denial of its 
application.
    (2) Upon receipt of the Petition for Reconsideration, the Grant 
Officer shall, within 30 days, make one of the following determinations:
    (i) That based on the available information from the original 
request for designation and information supplied in the Petition for 
Reconsideration, the applicant entity should be designated as a Native 
American grantee;
    (ii) That the original determination made was correct; or
    (iii) That an informal conference between representatives of the 
applicant entity and the Grant Officer shall be held at a specified time 
and place to discuss the Petition for Reconsideration.
    (3) If an informal conference is held, the applicant entity shall 
have the opportunity to present any pertinent information which may 
further substantiate its petition. The Grant Officer shall notify the 
applicant entity of its final decision within 14 days after the informal 
conference is held.
    (4) All final determinations of the Grant Officer, which deny a 
Petition for Reconsideration, shall be in writing, shall state the 
reasons for the denial, shall be sent to the applicant by certified 
mail, return receipt requested, and shall notify the applicant entity 
that, within 21 days of its receipt of the notice, it may request a 
hearing pursuant to part 636.
    (b) A designated Native American grantee whose CAP has been rejected 
may file a Petition for Reconsideration pursuant to paragraph (a) of 
this section. Such petitions shall be handled under the procedures 
described in paragraph (a) of this section.



  Subpart C--Program Planning, Application and Modification Procedures



Sec. 632.17  Planning process.

    (a) Each Native American grantee shall establish a planning process 
for the development of its Master Plan and Comprehensive Annual Plan. 
This planning process shall involve consideration of the need for job 
training and employment services, appropriate means of providing needed 
services and methods of monitoring and assessing the services provided. 
Recognizing the importance of employer involvement in designing and 
implementing programs, each Native American grantee shall involve 
employers in program planning.
    (b) (1) Each Native American grantee's planning process shall 
involve consultation with major employers or organizations representing 
employers inside the grantee's designated service or surrounding labor 
market area. Such consultation shall include consideration of the 
opportunities for placement of program participants and the design of 
training activities and related services.
    (2) A description of the procedures used for this consultation shall 
be included in the grantee's Master Plan. The results of the 
consultation shall be described in the grantee's Comprehensive Annual 
Plan.
    (3) Native American grantees are encouraged to establish or to use 
existing formal advisory councils, such as Private Industry Councils, as 
vehicles for such consultation. Grantees are also encouraged to use all 
appropriate mechanisms, including Tribal Employment Rights Offices 
(TEROs), to insure maximum opportunity for the placement of participants 
in unsubsidized employment.
    (4) A Native American grantee will not be held responsible for the 
refusal of any employer or organization representing employers to engage 
in the consultation process described in this section.

[[Page 282]]

    (c) In addition to the requirement in paragraph (b) of this section, 
the planning process shall provide the opportunity for the involvement 
of the client community, service providers (such as appropriate 
community-based organizations) and educational agencies, tribal agencies 
or other Indian and Native American organizations whose programs are 
relevant to the provision of job training services within the grantee's 
service area.



Sec. 632.18  Regional and national planning meetings.

    Grant funds may be used for holding regional and national planning 
meetings, subject to restrictions of allowable costs.



Sec. 632.19  Grant application content.

    The basic document will be a four year Master Plan which will be 
supplemented each fiscal year by submission and approval of a 
Comprehensive Annual Plan (CAP). The Master Plan and CAP system will be 
implemented for 1985 or the first designation period following the FY 
1984 designations. Each designated grantee will be informed of and 
provided the necessary documents and requirements in sufficient time to 
complete grant actions without interrupting services to participants.



Sec. 632.20  Submission of grant application.

    (a) Beginning with 1985 or the first designation period after 1984, 
a Master Plan must be submitted by a date and pursuant to instructions 
issued by the Department. The approved Master Plan will remain in effect 
for four years unless terminated. During the fourth year of the Master 
Plan a new Master Plan must be submitted by a date and pursuant to 
instructions issued by the Department.
    (b) Each year a completed CAP is to be submitted for approval by 
registered mail to the Chief, DINAP by a date and pursuant to 
instructions announced by the Department. The CAP will be approved by 
DINAP if it is consistent with the basic provisions or the Master Plan 
and applicable regulations and formal directives.



Sec. 632.21  Application disapproval.

    (a) A CAP shall be disapproved by the Grant Officer if it fails to 
meet the requirements of the Act or the regulations.
    (b) No CAP shall be finally disapproved until the designated Native 
American grantee is provided with a description by the Chief, DINAP in 
writing of the CAP's defects and has been provided with at least 30 days 
to remedy such defect(s), but has failed to do so.
    (c) When a CAP is finally disapproved a notice of disapproval shall 
be transmitted by certified mail, return receipt requested, to the 
applicant, accompanied by a statement of the grounds of the disapproval 
and a statement that the applicant may file a Petition for 
Reconsideration with respect to the disapproval.



Sec. 632.22  Modification of a Comprehensive Annual Plan (CAP) and/or Master Plan.

    (a) The requirements for modifying a Master Plan and/or CAP will be 
included in administrative instructions issued by the Grant Officer upon 
final implementation of the Master Plan/CAP system.
    (b) Prior to implementing the Master Plan/CAP system, a formal 
modification will be required when:
    (1) There is a change of at least 25 percent or $25,000 (whichever 
is greater) in any cost category; or
    (2) There is a change of at least 25 percent or 25 individuals 
(whichever is greater) in the number of individuals to be served in any 
category of program activity.
    (c) The documentation to be submitted to the DINAP Federal 
Representative requesting such a modification shall consist of a letter 
explaining the need for the change and four copies of the proposed 
modification.
    (d) The Grant Officer should notify the Native American grantee of 
tentative approval or disapproval within 10 calendar days of receipt of 
the proposed modifications. The Grant Officer should notify the Native 
American grantee in writing of final approval or disapproval within 30 
calendar days of the receipt of the proposed modification.

[[Page 283]]

    (e) A Native American grantee may make any change in its Program 
Planning Summary and Budget Information Summary without prior approval, 
except as provided in this section.
    (f) Native American grantees shall notify DINAP by submitting a 
modification whenever there is a change in a name, address, or other 
similar information.
    (g) The Department will unilaterally modify a grant when a simple 
funding or performance period increase is required and it is consistent 
with the approved plan.

(Approved by the Office of Management and Budget and assigned OMB 
control number 1205-0213)



Sec. 632.23  Termination and corrective action of a CAP and/or Master Plan.

    (a) Emergency Termination. The Department may terminate or suspend a 
CAP designation or Master Plan under emergency termination procedures in 
accordance with section 164(f) of the Act. The provisions in part 636 
shall not apply in instances of emergency termination.
    (1) Instances under which emergency termination can occur include 
but are not limited to: Audit reports identifying numerous adverse 
findings in the area of financial control and management; information 
gathered through onsite monitoring which substantiates serious 
management, fiscal and/or performance problems, information from the 
Inspector General or gained through incident reports of poor 
performance, serious administrative problems and/or inability to protect 
and account for Federal funds.
    (2) Within 30 days of written termination notification to a grantee, 
the Department will secure applicable documents onsite, seize bank 
accounts relating to the program, arrange for the payment of legitimate 
bills and debts and arrange, to the degree feasible, for the continued 
provision of services to program enrollees.
    (b) Termination for Cause. Termination for cause can occur whenever 
there is a substantial or persistent violation of the governing rules 
and regulations or failure to comply with the grant terms and 
conditions. The following factors will be considered for termination:
    (1) Poor performance and inability to meet Federal standards related 
to such debt collection requirements as:
    (i) Failure to respond to demand letters from DOL for repayment of 
debts within the stated timeframe;
    (ii) Failure to comply with an approved repayment agreement revealed 
through monitoring or subsequent audit;
    (iii) Failure to take necessary corrective action to improve 
underperformance and to plan for more effective subsequent operations.
    (2) Nonperformance related to such requirements as:
    (i) Failure to submit required quarterly financial reports for two 
successive periods within 45 days after they are due;
    (ii) Failure to submit required quarterly performance reports for 
two successive periods within 45 days after they are due;
    (iii) Failure to develop a plan of action to correct deficiencies 
identified in an audit report or by an onsite monitoring review.
    (3) Nonperformance related to such requirements as:
    (i) Failure to comply with formal corrective action after due 
notice;
    (ii) Failure to comply with the requirements of the Act related to a 
grievance procedure and other requirements;
    (iii) Failure to submit a required modification within 10 days to 
adjust the grant award due to reduction in available funds, reductions 
due to debt collection action, etc.
    (c) In addition, the Department, by written notice, may terminate a 
grant in whole or in part in the event of a reduction in the funds 
available or a change in provisions for JTPA title IV, section 401 
programs by reason of congressional action.



           Subpart D--Administrative Standards and Procedures



Sec. 632.31  General.

    (a) This subpart describes requirements relating to the 
administration of grants by Native American grantees. Administrative 
requirements found in

[[Page 284]]

this subpart apply to all programs under the Act unless stated to the 
contrary for any specific program.
    (b) As referenced in this subpart, the requirements set forth in 41 
CFR parts 29-70, ``Administrative requirements governing all grants and 
agreements by which Department of Labor agencies award funds to State 
and local governments, Indian and Native American entities, public and 
private institutions of higher education and hospitals, and other quasi-
public and private nonprofit organizations,'' shall apply to grants 
under JTPA. Whenever the provisions of 41 CFR part 29-70 conflict with 
the provisions of part 632, the provisions of part 632 shall prevail.
    (1) The requirements in 41 CFR 29-70.1 set forth the policies which 
apply to all basic grants and agreements.
    (2) The requirements in 41 CFR 29-70.2 implement OMB Circular Nos. 
A-102 and A-110, and apply to all JTPA grants and agreements unless 
otherwise indicated in these regulations.



Sec. 632.32  Financial management systems.

    (a) Each Native American grantee, subgrantee and contractor shall 
maintain a financial management system which will provide accurate, 
current and complete disclosure of the financial transactions under each 
grant, subgrant or contract activity, and will enable each Native 
American grantee, subgrantee or contractor to evaluate the effectiveness 
of program activities and meet the reporting requirements of this 
subpart.
    (b) Each Native American grantee, subgrantee and contractor shall 
maintain its financial accounts so that the reports required by the 
Department may be prepared therefrom.
    (c) To be acceptable for audit under this subpart, a Financial 
Status Report shall be:
    (1) Current as of the cut-off date of the audit;
    (2) Taken directly from or linked by worksheet to the Native 
American grantee's books of original entry; and
    (3) Traceable to source documentation of the unit transaction.



Sec. 632.33  Audits.

    (a) General. The audit provisions of 41 CFR part 29-70 shall apply 
to Native American grantees. Until unified or single audit procedures 
are promulgated and implemented for nonprofit entities, the Office of 
the Inspector General shall be responsible for arranging and conducting 
audits of Native American grantees that are not Indian tribal 
governments.
    (b) Audit reports. Upon receipt of a final audit report the 
Inspector General will promptly transmit the audit report to the grantee 
for a comment period not to exceed 30 days.
    (c) Initial Determination. After the conclusion of the comment 
period for audits provided the grantee, the Grant Officer shall make an 
initial determination of the allowability of questioned costs or 
activities. Such determination should be based on the Act, regulations 
grants or other agreements under the Act.
    (d) Informal resolution. Except as provided in section 164(f) of the 
Act, the Grant Officer shall not revoke a grant, in whole or in part, 
nor institute corrective action or sanctions against a grantee without 
first providing the grantee with an opportunity to informally resolve 
those matters contained in the Grant Officer's initial determination. If 
the matters are informally resolved the Grant Officer shall notify the 
parties in writing of the nature of the resolution, which shall 
constitute the final determination, and may close the file.
    (e) Final determination. The Grant Officer shall, not later than 180 
days from the time the Inspector General issues the final approved audit 
report, issue a final determination that:
    (1) Indicates that efforts to informally resolve matters contained 
in the initial determination pursuant to paragraph (a) of the section 
have been unsuccessful.
    (2) Lists those matters upon which the parties continue to disagree.
    (3) Lists any modifications to the factual findings and conclusions 
set forth in the initial determination.
    (4) Lists any sanctions, and required corrective actions, including 
any other alteration or modification of the plan,

[[Page 285]]

grant, agreement or program intended by the Grant Officer.
    (5) Sets forth any appeal rights.



Sec. 632.34  Program income.

    (a) General. The provisions of 41 CFR 29-70.205, program income and 
interest earned, shall apply to Native American grantee programs.
    (b) Income generated under any program may be retained by the 
recipient to continue to carry out the program, notwithstanding the 
expiration of DOL financial assistance for that program.
    (c) Special provisions. Income earned as a result of activities of 
JTPA participants by an income generating enterprise, which is owned by 
an Indian tribe, band or group or an Alaskan native entity, and the 
profits of which are used exclusively for governmental, charitable, 
educational, civic, social or other similar purposes, may be retained by 
such enterprise and used in the same manner as other income of such 
enterprise.



Sec. 632.35  Native American grantee contracts and subgrants.

    (a) Contracts may be entered into between the Native American 
grantee and any party, public or private, for purposes set forth in the 
JTPA.
    (b) Subgrants may be entered into between the Native American 
grantee and units of State and local general government, Indian tribal 
government, public agencies or nonprofit organizations.
    (c) The Native American grantee is responsible for the development, 
approval and operation of all contracts and subgrants and shall require 
that its contractors and subgrantees adhere to the requirements of the 
Act, the regulations under the Act, and other applicable law. It shall 
also require contractors and subgrantees to maintain effective control 
and accountability over all funds, property and other assets covered by 
the contract or subgrant.
    (d) Each Native American grantee shall take action against its 
contractors and subgrantees to prevent or eliminate violations of the 
regulations, and to prevent misuse of JTPA funds.
    (e) Subgrantees are entitled to funding for administrative costs. 
The amount of such funding will be determined during the development of 
subgrants subject to the overall administrative costs of the grant.
    (f) If a contract or subgrant is cancelled in whole or in part, the 
Native American grantee shall develop procedures for ensuring continuity 
of service to affected participants to the extent feasible.
    (g) The Native American grantee may enter into contracts or 
subgrants which extend past the expiration date of the CAP but such 
extension shall not exceed 6 months. In such cases, the grantee shall 
continue to be responsible for the administration of such contracts and 
subgrants.
    (h) To the extent feasible, Native American Indian grantees shall 
give preference in the award of contracts and subgrants to Indian 
organizations and to Indian-owned economic enterprises as defined in 
section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452). Any 
contract or subgrant made by a Native American grantee shall require 
that, to the greatest extent feasible, preference and opportunities for 
training and employment in connection with such contract or subgrant 
shall be given to qualified Indians regardless of age, religion or sex 
and that the contractor or subgrantee shall comply with any Indian 
preference requirements established by the Native American grantee. All 
grantees, subgrantees and contractors shall include the requirements of 
this paragraph in all subcontracts and subgrants made by them (sec. 7(b) 
of the Indian Self-Determination and Education Assistance Act, Public 
Law 93-638 (25 U.S.C. 450 et seq)).
    (i) The Native American grantee shall ensure that contractors and 
subgrantees maintain and make available for review by the grantee and 
the Department of Labor all records pertaining to the operations of 
programs under such contracts and subgrants consistent with the 
maintenance and retention of record requirements in 41 CFR parts 29-70.



Sec. 632.36  Procurement standards.

    (a) Native American grantees shall comply with the procurement 
systems and procedures found in 41 CFR 29-70.216, Procurement standards.

[[Page 286]]

    (b) Subject to the Indian preference provisions of Sec. 632.35(h), 
small and minority-owned businesses, including small businesses owned by 
women, within the service area of the Native American grantee, shall be 
provided maximum reasonable opportunity to compete for contracts for 
supplies and services. One means to provide for this is the use of set-
asides.
    (c) No funds shall be paid by the Native American grantee to any 
organization for the conduct of programs under the Act unless:
    (1) It has submitted an acceptable proposal;
    (2) Selection is performed on a merit basis;
    (3) It has not been seriously deficient in its conduct of, or 
participation in, any Department of Labor program in the past, or is not 
a successor organization to one that was seriously deficient in the 
past, unless the organization statisfactorily demonstrates that the 
deficiency has been or will be corrected and performance substantially 
improved; and
    (4) It has the administrative capability to perform effectively.



Sec. 632.37  Allowable costs.

    (a) General. To be allowable, a cost must be necessary and 
reasonable for proper and efficient administration of the grantee's 
program, be allocable thereto under these principles, and, except as 
provided herein, not be a general expense required to carry out the 
overall responsibilities of the grantee. Costs charged to the program 
shall be consistent with those normally allowed in like circumstances 
and, with applicable State and local law, rules or regulations as 
determined by the Native American grantee.
    (b) Unless otherwise indicated below, direct and indirect costs 
shall be charged in accordance with 41 CFR 29-70 and 41 CFR 1-15.7.
    (c) Costs associated with repairs, maintenance, and capital 
improvements of existing facilities used primarily for programs under 
the Act are allowable. Additionally, the costs of home repair, 
weatherization and rehabilitation are allowable when the work is 
performed on low income housing as defined in Sec. 632.4.
    (d) Section 401 funds may be used to pay the cost of incorporating a 
PIC, other planning body or consortium administrative entity for the 
purpose of carrying out programs under the Act. These costs are 
chargeable to administration.
    (e) Costs which are billed as a single unit charge do not have to be 
allocated or prorated among the several cost categories but may be 
charged entirely to training when the agreement:
    (1) Is for classroom training;
    (2) Is fixed unit price; and
    (3) Stipulates that full payment for the full unit price will be 
made only upon completion of training by a participant and placement of 
the participant into unsubsidized employment in the occupation trained 
for and at not less than the wage specified in the agreement.



Sec. 632.38  Classification of costs.

    Allowable costs shall be charged against the following four cost 
categories: Administration; training, employment and other (including 
supportive services).
    (a) Costs are allocable to a particular cost category to the extent 
that benefits are received by such category.
    (b) The Native American grantee is required to plan, control and 
charge expenditures against the aforementioned cost categories.
    (c) The Native American grantee is responsible for ensuring that, at 
a minimum, subgrant or subcontract recipients plan, control, and charge 
expenditures against the aforementioned cost categories.
    (d) Administrative costs consist of all direct and indirect costs 
associated with the management of the grantee's program. These costs 
include but are not limited to: the salaries and fringe benefits of 
personnel engaged in executive, fiscal, data collection, personnel, 
legal, audit, procurement, data processing, communications, maintenance, 
and similar functions; and related materials, supplies, equipment, 
office space costs, and staff training. Also included are salaries and 
fringe benefits of direct program administrative positions such as 
supervisors, program analysts, labor market analysts, and project 
directors. Additionally, all

[[Page 287]]

costs of clerical personnel, materials, supplies, equipment, space, 
utilities, and travel which are identifiable with these program 
administration positions are charged to administration.
    (e) Training costs consist of goods and services which directly 
affect program participants in a training activity. Training costs 
include, but are not limited to, the following: the costs associated 
with on-the-job training, salaries, fringe benefits, equipment and 
supplies of personnel engaged in providing training; books and other 
teaching aids; equipment and materials used in providing training to 
participants; classroom space and utility costs; employability 
assessment; job related counseling for participants; job search 
assistance and labor market orientation; participant allowances, and 
tuition and entrance fees which represent instructional costs which have 
a direct and immediate impact on participants. In addition, 250 hours of 
youth try-out employment is considered an allowable training cost. Youth 
try-out employment is that which meets the requirements of Sec. 632.78.
    (f) The compensation of individuals who both instruct participants 
and supervise other instructors must be prorated among the training and 
administration cost categories on the basis of time records or other 
equitable means. Similarly, tuition fees, and the costs of supplies used 
in the course of both participant instruction and other activities 
should be prorated among the benefitting uses.
    (g) Employment costs consist of those costs associated with 
community service employment and work experience as described in 
Sec. 632.79.
    (h) Other costs include supportive services, services which are 
necessary to enable an individual to participate in training and 
assistance under this part, and those described in Sec. 632.80.
    (i) Costs which are not readily assignable to the training or 
employment cost category should be charged to either the administration 
or other category as appropriate.
    (j) Unemployment compensation costs are allowable for administrative 
staff hired in accordance with the administrative provisions of this 
part, and for CSE participants. Unemployment compensation costs are 
allowed for work experience only where required by State law.
    (k) Travel costs. (1) The cost of participant travel and staff 
travel necessary for the administration of programs under the Act are 
allowable costs, chargeable to the proper cost category, and must follow 
standard Federal travel requirements.
    (2) Travel costs of Native American grantee officials, including 
staff, board members, and advisory council members are allowable if the 
travel and costs specifically relate to programs under the Act. These 
costs will be charged to administration. Travel costs for officials of 
tribes or organizations belonging to a consortium require advance 
written approval from the Chief, DINAP, unless they are also officials 
of the Native American grantee organization.
    (3) Travel costs for participants using their personal vehicles in 
the performance of their jobs are allowable if the employing agency 
normally reimburses its other employees in this way. These costs shall 
be charged to supportive services.
    (4) Travel costs to enable participants to obtain employment or to 
participate in programs under the Act are allowable as supportive 
services.
    (l) Allocation of fixed unit charge. (1) When contractors or 
subgrantees bill the Native American grantee with a single unit charge 
containing costs which are chargeable to more than one cost category, 
the Native American grantee shall charge these costs to the cost 
categories in Sec. 632.38. For unit charges such as tuition fees for 
which the necessary detail cannot be provided, a reasonable estimate of 
the breakdown of the single unit charge among cost categories in 
Sec. 632.38 will be sufficient, including for audit purposes. When such 
unit charges are normally billed as a single charge and the cumulative 
amount of such charges to a service provider does not exceed $25,000 
within the grant year, proration will not be required. These costs may 
be charged to the category receiving the most benefit.
    (2) The provisions of this section shall not apply to vendors 
selling or

[[Page 288]]

leasing equipment and attendant service at a commercially established 
rate to Native American grantees or subgrantees.
    (3) In the case of multiuse equipment there must be a proration of 
costs or, if there is a predominant usage relating to one cost category, 
a charge shall be made to that category.
    (4) Any single cost, such as staff salaries or fringe benefits, 
which is properly chargeable to more than one cost category shall be 
prorated among the affected categories.



Sec. 632.39  Administrative cost plan.

    (a) All administrative funds for all programs operated under 
separate sections of the Act by a Native American grantee may be 
accounted for separately and be allocated by title and program activity 
or may be pooled into one fund. Planned expenditures from the fund shall 
be described in a separate section of the CAP.
    (b) The administrative cost plan may be modified during the program 
year.



Sec. 632.40  Administrative staff and personnel standards.

    (a) Staffing. Members of the population to be served shall be 
provided maximum employment opportunities at all levels of the JTPA 
grantee administration. Native American grantees shall establish systems 
to enhance the recruitment and hiring of qualified Indian and Native 
Americans and to provide opportunities for their further occupational 
training and career advancement.
    (b) Compensation. Compensation for administrative staff shall be at 
levels consistent with generally accepted business practices in the 
area. Such administrative wages, salaries, and fringe benefits are 
allowable administrative costs under JTPA.
    (c) Basic personnel standards. All grantee employees, including 
participants, engaged in the administration of programs under the Act 
shall be subject to the policies and methods of personnel administration 
as formally established by the Native American grantee.
    (d) Bonding. Native American grantees shall comply with the bonding 
requirements at 41 CFR 29-70.202b.



Sec. 632.41  Reporting requirements.

    Within 45 days of the end of each quarter, a Native American grantee 
shall submit to the Chief, DINAP by registered mail, financial and 
program reports. Accuracy of all reports must be verified by the chief 
executive officer or financial officer. When estimates are used the 
verification statement will so state. The exact reports to be submitted 
and reporting instructions as approved by the Office of Management and 
Budget will be announced to Native American grantees under separate 
order.



Sec. 632.42  Grant closeout procedures.

    Grant closeout will conform to the requirements at 41 CFR part 29-
70. As necessary, the Secretary shall issue supplementary closeout 
requirements.



Sec. 632.43  Reallocation of funds.

    When the DINAP determines that reallocation is appropriate, it shall 
give the Native American grantee 30-day notice of proposed action to 
remove funds from the grant. Such notice shall include specific reasons 
for the action being taken, and shall give the Native American grantee 
the opportunity to submit comments on the proposed reallocation of 
funds. These comments shall be submitted to DINAP within 30 days from 
the date of the notice. DINAP shall notify affected Native American 
grantees on any decision to reallocate funds. The Grant Officer shall 
finally reallocate by modifying the CAP.



Sec. 632.44  Sanctions for violation of the Act.

    (a) Pursuant to sections 164 (d), (e), (f), (g), and (h) of the Act, 
the Secretary may impose appropriate sanctions and corrective actions 
for violations of the Act, Regulations, or grant terms and conditions. 
Additionally, sanctions may include the following:
    (1) Offsetting debts, arising from misexpenditure of grant funds, 
against amounts to which the grantee is or may be entitled under the 
Act, except as provided in section 164(e)(1) of the Act. The debt shall 
be fully satisfied when the Secretary reduces amounts allotted to the 
grantee by the amount of the misexpenditure; and

[[Page 289]]

    (2) Determining the amount of Federal cash maintained by the grantee 
or its subgrantee or contract or in excess of reasonable grant needs, 
establishing a debt for the amount of such excessive cash, and charging 
interest on that debt.
    (b) Except for actions under section 164(f) and 167 of the Act, to 
establish a debt or violation subject to sanction and/or corrective 
action, the Secretary shall utilize initial and final determination 
procedures outlined in part 636.
    (c) To impose a sanction or corrective action regarding a violation 
of section 167 of the Act, the Secretary shall utilize the procedures of 
29 CFR part 31.
    (d) (1) The Secretary shall hold the grantee responsible for all 
funds under the grant. The grantee shall hold its subgrantees and 
contractors responsible for JTPA funds received through the grant.
    (2) The Secretary shall determine the liability of the grantee for 
misexpenditures of grant funds in accordance with section 164(e) of the 
Act, including the requirement that the grantee shall have taken prompt 
and appropriate corrective actions for misexpenditures by a subgrantee 
or contractor.
    (3) Prompt, appropriate, and aggressive debt collection action to 
recover any funds misspent by subgrantees or contractors ordinarily 
shall be considered a part of the corrective action required by section 
164(e)(2)(D) of the Act.
    (4) In making the determination required by section 164(e)(2) of the 
Act, the Secretary may determine, based on a request from the grantee, 
that the grantee may forego certain collection actions against a 
subgrantee or contractor where that subgrantee or contractor was not at 
fault with respect to the liability criteria set forth in section 
164(e)(2)(A) through section 164(e)(2)(D) of the Act. The Secretary 
shall consider such requests in assessing whether the grantee's 
corrective action was appropriate in light of section 164(e)(2)(D) of 
the Act.
    (5) The grantee shall not be released from liability for misspent 
funds under the determination required by section 164(e) of the Act 
until the Secretary determines that further collection action, either by 
the grantee or subgrantee or contractor, would be inappropriate or would 
prove futile.
    (e) Nothing in this section shall preclude the Secretary from 
imposing a sanction directly against a subgrantee or contractor as 
authorized in section 164(e)(3) of the Act. In such a case, the 
Secretary shall inform the grantee of the Secretary's action.



                Subpart E--Program Design and Management



Sec. 632.70  Waiver of regulations under Parts 632 and 636.

    (a) A Native American section 401 grantee may request, and the 
Assistant Secretary of Labor for Employment and Training may grant, a 
waiver of specific provisions of 20 CFR Parts 632 and 636, or of any 
applicable administrative issuance, to the extent that such request is 
consistent with the provision of the Act.
    (b)(1) In requesting a waiver under this section, the Native 
American section 401 grantee shall demonstrate how it will enhance the 
provision of services or outcomes to participants, which may include, 
but are not limited to, the following purposes: improving the targeting 
of services to the hard-to-serve; increasing the level of basic and 
occupational skills training provided by the JTPA program; contributing 
to the provisions of academic enrichment services to youth; promoting 
coordination of JTPA programs with other human resources programs; or 
substantially improving the job placement outcomes of the JTPA program.
    (2) The request shall describe the regulatory requirements to be 
waived and demonstrate how such requirements impede the enhancement of 
the services and outcomes described in paragraph (b)(1) of this section.
    (3) The waiver request shall indicate how the grantee will modify 
its planning documents as a result of the waiver.
    (c) A waiver shall not be granted for:
    (1) Any statutory requirement;
    (2) The formula for allocation of funds;

[[Page 290]]

    (3) Eligibility requirements for services as provided in this part;
    (4) Requirements for public health or safety, labor standards, civil 
rights, occupational safety or health, or environmental protection; or
    (5) Prohibitions or restrictions relating to construction of 
buildings or facilities.
    (d) Waivers granted shall be effective for no more than four years 
from the date the waiver is granted.
[60 FR 58229, Nov. 27, 1995]



Sec. 632.75  General responsibilities of Native American grantees.

    This subpart sets out program operation requirements for Native 
American grantees including program management, linkages, coordination 
and consultation, allowable activities, participant benefits and 
duration of participation provisions. It also sets forth the 
responsibilities of Native American grantees with respect to 
nondiscrimination and equitable provision of services.



Sec. 632.76  Program management systems.

    (a) All Native American grantees shall establish management 
information systems to control and assess all programs. Native American 
grantees must institute and maintain effective systems for the overall 
management of all programs including:
    (1) Eligibility verification systems as described in Sec. 632.77;
    (2) Complaint and hearing procedures as described in part 636; and
    (3) Mechanisms for taking immediate corrective action where problems 
have been identified and for restitution of JTPA funds for improper 
expenditures.
    (b) All Native American grantees shall establish and maintain 
financial management and participant tracking systems in accordance with 
Sec. 632.32 and Sec. 632.77. The principal objectives of such systems 
shall be to provide the Native American grantee with systems necessary 
to effectively manage its program and to provide information necessary 
to design program activities and delivery mechanisms and complete 
Federal required reports.
    (c) Each Native American grantee shall establish and use procedures 
for the continuous, systematic assessment of program performance in 
relation to the performance standards and goals contained in its CAP.
    (d) Native American grantees shall establish and use procedures 
whereby the information collected and assessments conducted shall be 
considered in subsequent program planning and in the selection of 
service deliverers.



Sec. 632.77  Participant eligibility determination.

    (a) Each Native American grantee, and any subgrantees or contractors 
assigned responsibility for the determination of participant 
eligibility, shall be responsible for developing and maintaining a 
system which reasonably ensures an accurate determination and subsequent 
verification of eligibility based on the information presented at the 
time of application.
    (b) The ultimate responsibility for the selection of participants 
and the maintenance of participant records rests with the Native 
American grantee. However, the Native American grantee may assign the 
administration of this responsibility to subgrantees of contractors. The 
selected agency must provide adequate documentation of each 
participant's eligibility and retain in the participant's folder the 
information on which this determination is based.
    (c) The eligibility determination shall be based upon a signed, 
completed, application form which records all information necessary to 
determine eligibility, which attests that the information on the 
application is true to the best of the applicant's knowledge and 
acknowledging that such information is subject to verification and that 
falsification of the application shall be grounds for the participant's 
termination and may subject the applicant to prosecution under law. In 
the case of an applicant who is a minor (except minors who are 
emancipated or heads of households), the signature of the parent, 
responsibile adult or guardian is also required.
    (d) Native American grantees shall maintain documentation to ensure 
the credibility of the eligibility determination, which shall at a 
minimum:

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    (1) Include a completed application for participation;
    (2) Include records of all actions taken to correct deficiencies in 
the eligibility determination procedures; and
    (3) Show compliance with section 504 of the Act.
    (e) A participant determined to be ineligible shall immediately be 
terminated.
    (f) A Native American grantee may enter into an agreement with a 
State employment security agency (SESA) or other independent agency or 
organization as may be approved by the Department, for the verification 
of applicant eligibility within 45 days of enrollment. The Native 
American grantee shall monitor such verification procedures to ensure 
that erroneous verifications are not made deliberately or with 
insufficient care.
    (g) Participants may be transferred from one JTPA program to 
another, from one Native American grantee to another, from a Native 
American grantee to a SDA grant recipient, from a SDA grant recipient to 
a Native American grantee, or concurrently enrolled in programs 
sponsored by Native American grantees or SDA grant recipients, provided, 
except for age requirements, they were eligible for the subsequent or 
concurrent program when they were first enrolled.
    (h) Eligibility determinations for each program shall be made at the 
time of application. Applicants determined eligible may be enrolled as 
participants within 45 days of the date of the application without an 
update of the information on the application provided they did not 
obtain full-time permanent unsubsidized employment in the interim. This 
provision does not appy to the title II-B program.
    (i) Aliens described in section 167(a)(5) of the Act and who 
otherwise meet the eligibility requirements for programs under this 
part, may participate in a program if this is permitted by Indian law or 
the Native American grantee.



Sec. 632.78  Training activities.

    Native American grantees shall design and operate programs funded 
under the Act which support growth and development as determined by 
representatives of the Indian and Native American communities and groups 
served (sec. 401(a)). Training shall be only for occupations for which 
there is a demand in the area served or in another area to which the 
participant is willing to relocate, and consideration in the selection 
of training programs may be given to training in occupations determined 
to be in sectors of the economy which have a potential for sustained 
demand or growth. The CAP will provide evidence based on local labor 
market information that occupational demand exists for planned training. 
The basic types of training activities available to Native American 
grantees, subgrantees and contractors include, but are not limited, to 
the following:
    (a) Classroom training. This program activity is any training of the 
type normally conducted in an institutional setting, including 
vocational education, and designed to provide individuals with the 
technical skills and information required to perform a specific job or 
group of jobs. It may be coupled with other employment and training 
activities and may also include training designed to enhance the 
employability of individuals by upgrading basic skills, through the 
provision of courses such as remedial education, GED, training in the 
primary language of persons with limited English-speaking proficiency, 
or English-as-a-second-language training.
    (b) On-the-job training. (1) On-the-job training (OJT) is training 
in the private or public sector given to a participant, who has been 
hired first by the employer, and which occurs while the participant is 
engaged in productive work which provides knowledge or skills essential 
to the full and adequate performance of the job. This does not preclude 
a participant who has been hired by and received OJT from one employer 
from being ultimately placed with another employer. Innovative 
approaches to financing, particularly involving the sharing of training 
costs by the private sector are to be encouraged.
    (2) OJT may be coupled with other JTPA employment and training 
activities. As needed, OJT participants may receive any of the 
employment and

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training services or supportive services through the system, through 
community resources, or through employer resources.
    (3) Reimbursement. Payments to employers for OJT which shall not, 
during the period of such training, average more than 50 percent of the 
wages excluding fringe benefits paid by the employer to such 
participants, and payments in such amount shall be deemed to be in 
compensation for the extraordinary costs associated with the training 
costs and lower productivity of such participants. No direct wage 
payments will be made to OJT participants by the Native American 
Grantee.
    (4) OJT agreements. Employers will be held responsible with respect 
to JTPA costs only in accordance with the provisions of their OJT 
agreements. At a minimum, the OJT agreement shall contain the elements 
listed below. Native American grantees may place additional provisions 
in the OJT agreement only after a careful assessment is made of the 
additional burdens imposed on participating employers. Agreements may be 
entered into only with employers which have not been seriously deficient 
in their conduct of or participation in any DOL program. Each OJT 
agreement shall contain:
    (i) A brief training outline, including the length of training and 
the nature of the training;
    (ii) The method and maximum amount of reimbursement for OJT training 
costs;
    (iii) The number of participants to be trained;
    (iv) Job descriptions and specification of participant wage rates;
    (v) Reporting requirements;
    (vi) An assurance that payroll records, time and attendance records, 
job duties and documentation of classroom training, employment and 
training services, or supportive services, costs for which the employer 
is being reimbursed will be subject to review;
    (vii) A termination clause for nonperformance; and
    (viii) An assurance that the employer will comply with the Act and 
regulations.
    (c) Tryout employment. Tryout employment in private-for-profit 
worksites may be conducted in accordance with section 205(d)(3)(B) of 
the Act (sec. 141(K)).
    (d) Training assistance. Such assistance includes:
    (1) Orientation to the world of work;
    (2) Counseling. This includes employment and training related 
counseling and testing;
    (3) Job development;
    (4) Job search assistance. This includes transition services, such 
as job seeking skills instruction, individualized job search plan, labor 
market information, and other special activities for transition to 
unsubsidized employment;
    (5) Job referral and placement; and
    (6) Vocational Exploration Program (VEP). A Native American grantee 
may conduct a VEP program to expose participants to jobs available in 
the private sector through observation of such jobs, instruction, and, 
if appropriate, limited practical experience.
    (e) Combined activities. (1) A participant may be simultaneously or 
sequentially enrolled in two or more activities.
    (2) (i) Reimbursement may be up to 100 percent to employers, 
including private-for-profit employers, for expenditures for the costs 
of classroom training, employment and training assistance or supportive 
services for participants in combined activities including the costs of 
participants' wages paid by the employer for time spent in these 
activities during working hours.
    (ii) Reimbursement may be made on a cost reimbursement or fixed cost 
basis and shall be supported by business receipts, payroll, or other 
records normally kept by the employer.
    (iii) Nothing in this paragraph (b)(1) shall allow reimbursement to 
private-for-profit employers for the costs of OJT to exceed the amounts 
allowable in Sec. 632.78.



Sec. 632.79  Employment activities.

    (a) Community service employment (CSE). Community Service Employment 
is the type of work normally provided by government and includes, but is 
not limited to, work (including part-time work) in such fields as 
environmental quality, child care, health care,

[[Page 293]]

education, crime prevention and control, prisoner rehabilitation, 
transportation, recreation, maintenance of parks, streets and other 
public facilities, solid waste removal, pollution control, housing and 
neighborhood improvement, rural development, conservation, 
beautification, veterans outreach, development of alternative energy 
technologies, and other fields of human betterment and community 
improvement. It includes work performed by tribally sponsored or owned 
income generating enterprises owned by Indian tribes, bands, or groups, 
or Native Alaskan entities, provided the profits from such enterprises 
are used exclusively for functions normally performed by the governing 
body of such entities.
    (b) Work experience. (1) Work experience is a short-term or part-
time work assignment with an employing agency or an organization 
authorized to employ CSE participants. It is otherwise prohibited in the 
private-for-profit sector.
    (2) Participation in work experience shall be for a reasonable 
length of time, based on the needs of the participant, and subject to 
the restrictions set forth in Sec. 632.85.



Sec. 632.80  Other activities.

    (a) General. Native American grantees may conduct employment and 
training activities not described in this subpart. The CAP shall 
describe the basic design of activities undertaken as ``other 
activities'' and their objectives. These activities may include, but are 
not limited to:
    (1) Removal of artificial barriers to employment;
    (2) Job restructuring;
    (3) Revision or establishment of merit systems;
    (4) Development and implementation of affirmative action plans, 
including Indian preference plans and Tribal Employment Rights Office 
(TERO) programs.
    (5) Post termination services in Sec. 632.80 for up to 30 days 
following termination; and
    (6) Employment generating services.
    (b) Supportive services. Supportive services are those which are 
necessary to enable an individual eligible under this part, but who 
cannot afford to pay for such services, participate in the program. Such 
supportive services may include but are not limited to transportation, 
health care, special services and materials for the handicapped, child 
care, meals, temporary shelter, financial counseling, and other 
reasonable expenses required for participation in the training program 
and may be provided in-kind or through cash assistance.



Sec. 632.81  Payments to participants.

    (a) General. Each participant paid wages for employment activities, 
allowances for classroom training or reimbursed for OJT or tryout 
employment will be provided such benefits pursuant to section 142 of the 
Act.
    (b) Maximum wage rates for CSE. (1) The wages (including those 
received from overtime work and leave taken during the period of 
employment) paid to any CSE participant from funds under the Act shall 
be limited to a full-time rate of $10,000 per year (or the hourly, 
weekly, or monthly rate which, if full-time and annualized, would equal 
a rate of $10,000 per year). Approved rates above $10,000 are fixed at 
the CETA approved rate as of September 30, 1982, unless adjusted by the 
Secretary.
    (2) Fringe benefits payable from funds under the Act to any CSE 
participant may not exceed those regularly afforded to similarly 
employed non-JTPA workers.
    (3) Davis-Bacon wages. All laborers and mechanics employed by 
contractors or subcontractors in any construction, alteration, or 
repair, including painting and decorating, of projects, buildings, and 
works which are federally assisted under this Act, shall be paid wages 
at rates not less than those prevailing on similar construction in the 
locality as determined by the Secretary in accordnace with the Act of 
March 3, 1931, popularly known as the Davis-Bacon Act, and the 
implementing regulations in 29 CFR parts 1, 3, 5, and 7.
    (c) Payment of allowances. (1) A basic hourly allowance for 
regularly enrolled classroom training or services participants shall not 
exceed the higher of the

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State or Federal minimum hourly wage.
    (2) Native American grantees are encouraged to submit allowance 
payment designs which are less than in paragraph (c) (1) of this 
section. Through innovative reimbursement systems the number of 
participants should be maximized. The allowance payment system will be 
described in the Master Plan and as an option may include dependent 
allowances.
    (3) Repayments. Native American grantees shall require participants 
to repay the amount of any overpayment of allowances under this part, 
except if the overpayment was made in the absence of fault on the part 
of the participant. Where the Native American grantee requires 
repayment, any overpayment not repaid may be set off against any future 
allowance or other payments under the Act to which the participant may 
become entitled.
    (d) Combined activities. A primary activity is one in which a 
participant is enrolled for more than 50 percent of scheduled time. 
Participants enrolled in a primary activity for which wages are payable 
and simultaneously in an activity for which allowances are payable may, 
at the Native American grantee's option, be paid wages for all hours of 
participation. A participant enrolled in a primary activity for which 
allowances are payable may, at the Native American grantee's option, be 
paid allowances for all hours of participation, except when OJT is the 
non-primary component. However, in the latter case, before placing an 
individual in such an activity, the Native American grantee shall 
request a determination from the Internal Revenue Service as to whether 
income from the non-primary component is taxable.



Sec. 632.82  Benefits and working conditions for participants.

    The provisions of sections 142 and 143 of the Act shall apply to 
benefits and working conditions.



Sec. 632.83  FICA.

    Expenditures may be made from JTPA funds for taxes under the Federal 
Insurance Contribution Act (FICA), 26 U.S.C. 3101, et seq.



Sec. 632.84  Non-Federal status of participants.

    Participants shall not be deemed Federal employees and shall not be 
subject to the provisions of law relating to Federal employment.



Sec. 632.85  Participant limitations.

    (a) Except as provided in paragraph (c) of this section and for 
participants in programs that have other statutory limits, participation 
in work experience shall be limited to a maximum of 1,000 hours during 
any one year beginning with the day of enrollment in either CETA or 
JTPA.
    (b) No participant may receive wages for CSE for more than 78 weeks 
during a 2-year period from the participant's initial enrollment in 
either JTPA or in a program supported by the Comprehensive Employment 
and Training Act.
    (c) The limitation on work experience participation in JTPA set 
forth in paragraph (a) of this section:
    (1) Shall not apply to time spent by in-school youth or title II-B 
participants enrolled in a work experience program under the Act, nor 
shall such time be included in determining if an individual has reached 
such limitations; and
    (2) May be waived by the Chief, DINAP and the waiver justification 
described in the Master Plan or CAP.



Sec. 632.86  Nondiscrimination and nonsectarian activities.

    Pursuant to section 167(a) of the Act:
    (a) Subject to the restriction that services under section 401 of 
JTPA are legally available only to Indian and Native American persons, 
nondiscrimination and equal opportunity requirements and procedures, 
including complaint processing compliance reviews, will be governed by 
the provisions of 29 CFR parts 31 and 32 and will be administered by the 
Office of Civil Rights.
    (b) The employment or training of participants in sectarian 
activities is prohibited.

[[Page 295]]



Sec. 632.87  Equitable provision of services to the eligible population and significant segments.

    Native American grantees shall ensure and provide evidence in the 
Master Plan that a system is in place to afford all members of the 
eligible population within the service area for which the grantee was 
designated are afforded an equitable opportunity for employment and 
training activities and services.



Sec. 632.88  General responsibilities of the Department.

    The Department of Labor shall be responsible for:
    (a) Providing prompt notification to all Native American grantees of 
allocations of funds, proposed and final rules and program directives 
and procedures.
    (b) The development, after consultation with Native American 
grantees, of regulations, performance standards and program policies 
governing Native American programs. Such regulations and program 
policies shall take into account the special circumstances under which 
Native American programs operate (sec. 401 (h)(1)).
    (c) Providing Native American grantees with technical assistance, as 
the Secretary deems necessary, related to the administration and 
operation of JTPA programs (sec. 401(i)).
    (d) Taking appropriate action to establish administrative procedures 
and machinery within the Department, including the retention of 
personnel having particular competence in the field of Indian and Native 
American employment and training programs, for the selection, 
administration, monitoring and evaluation of such programs (sec. 
401(e)).



Sec. 632.89  Performance standards.

    The Department of Labor shall establish performance standards for 
all Native American grantees (section 401(h)(1)). Performance results, 
as judged against these standards, will not be used for grantee 
designation purposes for the Program Years 1985-1986. Performance 
results will be a factor in grantee designations for Program Years 1987-
1988, and beyond.



            Subpart F--Prevention of Fraud and Program Abuse



Sec. 632.115  General.

    (a) To ensure the integrity of the JTPA programs special efforts by 
grantees are necessary to prevent fraud and other program abuses. While 
any violation of the Act or regulations may constitute fraud or program 
abuse, this subpart F identifies and addresses those specific program 
problems of most concern to the Department.
    (b) This subpart sets forth specific responsibilities of Native 
American grantees, subgrantees and contractors and of the Secretary to 
prevent fraud and program abuse in JTPA programs.



Sec. 632.116  Conflict of interest.

    (a) No member of any advisory, planning, private industry council or 
governing body under the Act shall cast a vote on any matter which has a 
direct bearing on services to be provided by that member or any 
organization which such member directly represents or on any matter 
which would financially benefit such member or any organization such 
member represents.
    (b) Each Native American grantee, subgrantee or contractor shall 
avoid personal and organizational conflict of interest in awarding 
financial assistance and in the conduct of procurement activities 
involving funds under the Act in accordance with the code of conduct 
requirements set forth in 41 CFR 29-70.216-4.
    (c) Neither the Secretary nor any Native American grantee, 
subgrantee or contractor shall pay funds under the Act to any 
nongovernmental individual, institution or organization to conduct an 
evaluation of any program under the Act if such individual, institution 
or organization is associated with that program as a consultant or 
technical advisor.



Sec. 632.117  Kickbacks.

    No officer, employee or agent of any Native American grantee, 
subgrantee of contractor shall solicit or accept gratuities, favors or 
anything of monetary value from any actual or potential subgrantee, 
contractor or supplier.

[[Page 296]]



Sec. 632.118  Nepotism.

    (a) No Native American grantee, subgrantee, contractor or employing 
agency shall permit the hiring of any person in a staff position or as a 
participant if that person or a member of that person's immediate family 
is employed in an administrative capacity by the Native American 
grantee, subgrantee or contractor. The Native American grantee may waive 
this requirement if adequate justification is documented. The following 
are examples where the nepotism provision may be waived:
    (1) If there are no other persons eligible and available for 
participation or employment by the Native American grantee;
    (2) Where the Native American grantee's total service population is 
2,000 or less, or where the geographical situation of an Indian or 
Native American community is rural and isolated from other communities 
within the designated service area; or
    (3) Where the potential participant has a history of unemployment or 
dependence on public assistance.
    (b) A Native American grantee may develop its own nepotism policy in 
lieu of the policy in paragraph (a) of this section. The Chief, DINAP, 
shall review any such policy before its implementation and shall approve 
or disapprove it. Any such policy shall be described in the Master Plan 
and have adequate safeguards to prevent persons employed in an 
administrative capacity for the Native American grantee, its subgrantees 
or contractors from using such position to secure JTPA services or other 
benefits for a member of his or her immediate family. A satisfactory 
policy shall include the following minimum criteria:
    (1) All formal personnel procedures shall be followed;
    (2) There shall be full written disclosure to the governing body 
describing all advantages, conflicts and/or disadvantages which may 
result from the specific personnel action; and
    (3) No member of the immediate family of the applicant shall 
participate in the applicant's selection.
    (c) For purposes of this section, the term ``immediate family'' 
means wife, husband, son, daughter, mother, father, brother, and sister. 
The term ``staff position'' includes all JTPA staff positions funded 
under the Act such as instructors, counselors, and other staff involved 
in administrative, training or service activities. The term ``employed 
in an administrative capacity'' includes those persons who have overall 
administrative responsibility for a program including: All elected and 
appointed officials who have any responsibility for the obtaining of or 
approval of any grant funded under this part as well as other officials 
who have any influence or control over the administration of the 
program, such as the project director, deputy director and unit chiefs; 
and persons who have selection, hiring, placement or supervisory 
responsibilities for participants in a Native American employment and 
training program. The term excludes officials of entities belonging to a 
consortium who are not at the same time officials of the consortium. 
Persons serving on a Native American grantee's advisory councils or PIC 
shall not be considered to be in an administrative capacity.



Sec. 632.119  Political patronage.

    (a) No Native American grantee, subgrantee or contractor may select, 
reject, or promote a participant based on that individual's political 
affiliation or beliefs. The selection or advance of employees as a 
reward for political services or as a form of political patronage, 
whether or not the political service or patronage is partisan in nature, 
is prohibited.
    (b) There shall be no selection of subgrantees or contractors based 
on political affiliation.



Sec. 632.120  Political activities.

    (a) No program under the Act may involve political activities.
    (b) No participant may engage in partisan or nonpartisan political 
activities during hours for which the participant is paid with JTPA 
funds.
    (c) No participant may, at any time, engage in partisan or 
nonpartisan political activities in which such participant represents 
himself or herself as a spokesperson for the JTPA program.

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Sec. 632.121  Lobbying activities.

    No funds provided under the Act may be used in any way:
    (a) To attempt to influence in any manner a member of Congress to 
favor or oppose any legislative or appropriation by Congress; or
    (b) To attempt to influence in any manner State or local legislators 
to favor or oppose any legislation or appropriation by such legislators.



Sec. 632.122  Unionization and antiunionization activities; work stoppages.

    (a) No funds under the Act shall be used in any way to either 
promote or oppose unionization (sec. 143(c)(1)).
    (b) No participant in work experience or community service 
employment may be placed into, or remain working in, any position which 
is affected by labor disputes involving a work stoppage. If such a work 
stoppage occurs during the grant period, participants in affected 
positions must:
    (1) Be relocated to positions not affected by the dispute; or
    (2) Be suspended through administrative leave or other means; or
    (3) Where participants belong to the labor union involved in the 
work stoppage, they shall be treated in the same manner as other members 
of the union except that they may not remain in the affected positions. 
The grantee shall make every effort to relocate participants who wish to 
remain working into suitable positions unaffected by the work stoppage.
    (c) No person shall be referred to or placed in an on-the-job 
training position affected by a labor dispute involving a work stoppage 
and no payments may be made to employers for the training and employment 
of participants in on-the-job training during the periods of work 
stoppage.



Sec. 632.123  Maintenance of effort.

    (a) Funds provided under this Act shall only be used for activities 
which are in addition to those which would otherwise be available in the 
area in the absence of such funds.
    (b) Funds provided under this Act shall not be used to duplicate 
facilities or services available in the area (with or without 
reimbursement) from Federal, State, or local sources, unless the plan 
establishes that alternative services or facilities would be more 
effective or more likely to achieve performance goals.



Sec. 632.124  Theft or embezzlement from employment and training funds; improper inducement; obstruction of investigations and other criminal provisions.

    The criminal provision of 18 U.S.C. 665 states:
    (a) Whoever, being an officer, director, agent or employee of, or 
connected in any capacity with, any agency receiving financial 
assistance under the JTPA knowingly hires an ineligible individual or 
individuals; embezzles, willfully misapplies, steals, or obtains by 
fraud any of the money, funds, assets, or property which are the subject 
of a grant or contract of assistance pursuant to such Act shall be fined 
not more than $10,000 or imprisoned for not more than 2 years, or both; 
but if the amount so embezzled, misapplied, stolen, or obtained by fraud 
does not exceed $100, such person shall be fined not more than $1,000 or 
imprisoned not more than 1 year, or both.
    (b) Any person whoever willfully obstructs or impedes, or endeavors 
to obstruct or impede, an investigation or inquiry under the JTPA or the 
regulations thereunder, shall be punished by a fine of not more than 
$5,000 or by imprisonment for not more than 1 year, or by both such fine 
and imprisonment.
    (c) In addition to the criminal provisions set forth in paragraphs 
(a) and (b) of this section, individuals may be held criminally liable 
under other Federal laws. For example, 18 U.S.C. sections 600 and 601 
hold them liable if they:
    (1) Directly or indirectly promise any employment position, 
compensation, contract, appointment, or other benefit, provided for or 
made possible in whole or in part by funds under the Act, or any special 
consideration in obtaining any such benefit, to any person as 
consideration, favor, or regard for any political activity or for the 
support of, or opposition to, any candidate or any political party in 
connection with any general or special election to any political office, 
or in connection with any primary election or political convention or 
caucus held to select

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candidates for any political office (18 U.S.C. 600); or
    (2) Directly or indirectly knowingly cause or attempt to cause any 
person to make a contribution of a thing of value (including services) 
for the benefit of any candidate or any political party, by means of the 
denial or deprivation, or the threat of the denial or deprivation, of 
any employment or benefits funded under the Act (18 U.S.C. 601).



Sec. 632.125  Responsibilities of Native American grantees, subgrantees and contractors for preventing fraud and program abuse and for general program 
          management.

    (a) Each Native American grantee shall establish and use internal 
program management procedures sufficient to prevent fraud and program 
abuse, including subgrantee and contractor fraud and abuse. The 
procedures to be used shall be identified in the Native American 
grantee's Master Plan.
    (b) Each Native American grantee, subgrantee and contractor shall 
ensure that sufficient, auditable, and otherwise adequate records are 
maintained which support the expenditure of all funds under the Act. 
Such records shall be sufficient to allow the Secretary to audit and 
monitor the Native American grantees', subgrantees', and contractors' 
programs and shall include the maintenance of a management information 
system in accordance with the requirements of Sec. 632.32.
    (c) Any person having knowledge of fraud, criminal activity or other 
abuse shall report such information directly and immediately to the 
Secretary. Similarly, all complaints involving such matters should also 
be reported to the Secretary directly and immediately.



                          Subpart G--[Reserved]



Subpart H--Job Training Partnership Act Programs Under Title IV, Section 
                                   401



Sec. 632.170  Eligibility for funds.

    The Department shall provide funds under section 401 of the Act only 
to Native American grantees designated in accordance with Sec. 632.10.



Sec. 632.171  Allocation of funds.

    (a) One hundred percent, except as provided in Sec. 632.171(c), of 
the amount available for section 401 will be distributed by formula as 
follows:
    (1) Twenty-five percent of the available funds shall be allocated on 
the basis of the relative number of unemployed Indians and other Native 
Americans within the Native American grantee's geographic service area 
compared to the total number of unemployed Indians and other Native 
Americans in the United States.
    (2) Seventy-five percent of the available funds shall be allocated 
on the basis of the relative number of members of Indian and other 
Native Americans households, whose income is at or below the poverty 
level, within the Native American grantee's geographic service area 
compared to the total number of members of Indians and Native American 
households in poverty in the United States.
    (b) Commencing with Program Year 1985 and after consultation with 
Indian groups, the Department may reserve up to one percent of section 
401 funds. These funds may be used for technical assistance to improve 
the program's overall performance.
    (c) In situations when the Department determines that the formula 
allocation will result in severe disruption from one year to the next, a 
hold harmless or other factor to minimize such disruptions may be used.



Sec. 632.172  Eligibility for participation in title IV, section 401.

    (a) An Indian, Native Alaskan, or Native Hawaiian, as determined by 
the Native American Grantee, who is economically disadvantaged, or 
unemployed or underemployed is eligible to participate in a program 
under this subpart. For income eligibility purposes, the NAG may use 
either 6-months annualized or 12-months actual income.
    (b) Indians and other persons of Native American descent who meet 
the requirements of subsection (a) of this section and who are 
identified by the

[[Page 299]]

Federal or State government as ``landless'' or ``terminated'' or `'non-
federally recognized'' are included among those eligible to participate. 
These terms shall be broadly construed for the specific purpose of 
including, among others, terminated, State-recognized, or other groups 
or individuals previously determined to be eligible for Indian services 
under the Comprehensive Employment and Training Act.
    (c) A Native American grantee may enroll Indian and Native American 
participants in upgrading and retraining programs who are not 
unemployed, underemployed or economically disadvantaged where such 
participants meet the following eligibility requirements:
    (1) For upgrading, a person must be operating at less than full 
skill potential, and working for at least the prior 6 months with the 
same employer in either an entry level, unskilled or semiskilled 
position or a paid position with little or no advancement opportunity in 
a normal promotional line. Priority consideration shall be given to the 
workers who have been in entry level positions for the longest time.
    (2) For retraining a person must have received a bona fide notice of 
impending layoff and have been determined by the grantee as having 
little opportunity to be reemployed in the same or equivalent occupation 
or skill level within the labor market area.



Sec. 632.173  Allowable program activities.

    (a) Native American grantees may undertake programs and activities 
consistent with the purposes of the Act including, but not limited to, 
programs and activities described in Secs. 632.78 through 632.81.
    (b) Native American grantees are encouraged to develop innovative 
means of addressing the needs of unemployed, underemployed and 
economically disadvantaged members of their communities and of 
contributing to the permanent economic self-sufficiency of such 
communities.
    (c) Training and placement in the private sector will be emphasized. 
CSE and work experience are permitted when consistent over the long term 
with increasing earnings in unsubsidized employment. Expenditures for 
CSE are limited to 10 percent or the unemployment rate, based on data 
collected by an appropriate Federal or State agency including BIA, of a 
NAG's total section 401 allocation. For nonreservation grantees, the 
official BLS unemployment rate or State job service rate for the area 
will be used.
    (d) Wages and allowances are to be kept to a minimum to maximize 
funds to be used for training.
    (e) Innovative approaches to the private sector are encouraged.
    (f) Other activities described in Sec. 632.80 should use no more 
than 25 percent of the funds. This limitation may be increased to 
accommodate the extraordinary costs associated with special training 
projects where it is clear the benefits support the additional cost. An 
increase to this limitation shall be approved in instances such as, but 
not limited to, rural participants needing relocation for training, when 
the costs of housing, transportation, etc., for training participants 
cannot be met within a 25 percent limitation, and for TERO activities.



Sec. 632.174  Administrative costs.

    Administrative costs for this subpart are limited to and shall not 
exceed 20 percent of the funds available.



        Subpart I--Summer Youth Employment and Training Programs



Sec. 632.250  General.

    This subpart contains the policies, rules, and regulations of the 
Department in implementing and administering a Summer Youth Employment 
and Training Program for Indians and other Native Americans authorized 
by title II, part B of the Act.



Sec. 632.251  Eligibility for funds.

    Only Native American grantees described in section 401(c)(1) of the 
Act are eligible for summer youth program funds.



Sec. 632.252  Allocation of funds.

    (a) For this program the Secretary shall reserve the same percentage 
of JTPA 3(b) funds as were available in the CETA, IV-C Fiscal Year 1983 
program.

[[Page 300]]

    (b) Allocations shall be made to eligible Native American grantees 
on the basis of a formula using the best available data as determined by 
the Department in consultation with Native American groups and shall be 
published by the Secretary.



Sec. 632.253  Special operating provisions.

    Native American grantees shall:
    (a) Provide services to youths most in need;
    (b) Develop outreach and recruitment techniques aimed at all 
segments of the economically disadvantage youth population, especially 
school dropouts, youth not likely to return to school without assistance 
from the summer program, and youth who remain in school but are likely 
to be confronted with significant employment barriers relating to work 
attitude, aptitude, social adjustment, and other such factors;
    (c) Provide labor market orientation to participants. This 
orientation may include, as appropriate: vocational exposure, 
counseling, testing, resume preparation, job interview preparation, 
providing labor market information, providing information about other 
training programs available in the area, including apprenticeship 
programs, and similar activities. It may be provided on a group or 
individual basis. In providing labor market orientation, skill training 
and remedial education, each grantee shall make maximum efforts to 
develop cooperative relationships with other community resources so that 
these activities are provided in the summer program at no cost, or at 
minimum cost, to the summer program;
    (d) Assure that adequate supervision from skilled supervisors is 
provided to participants at each worksite;
    (e) Make appropriate efforts to encourage educational agencies and 
post-secondary institutions to award academic credit for the 
competencies participants gain from their participation in the summer 
program;
    (f) Ensure that appropriate efforts are made to closely monitor the 
performance of the summer program and measure program results against 
established goals;
    (g) Ensure that enrollee applications are widely available and that 
jobs are awarded among individuals most severely disadvantaged in an 
equitable fashion. Enrollment applications shall require the signature 
of the applicant or (in the case of minors) the parent or guardian 
attesting to the accuracy of the information, including income data, 
provided on the application; and
    (h) Provide participants with an orientation to the program which 
shall include, but not be limited to: purposes of the program and the 
conditions and standards (including such items as hours of work, pay 
provisions and complaint procedures) for such activities in the program.



Sec. 632.254  Program startup.

    During the planning and design phase of the program and prior to the 
close of the school year, only those activities outlined in 
Sec. 632.255(b) are permissible. These activities shall be charged as 
administrative costs. Individuals may not begin participation in the 
program before the close of school.



Sec. 632.255  Program planning.

    (a)(1) In developing the summer program, the Native American grantee 
shall coordinate the summer plan with its title IV program.
    (2) Native American grantees shall use the planning process 
described in Sec. 632.17.
    (b) The following planning and design activities shall be allowable 
beginning October 1 of each year;
    (1) Hiring of staff (planners, worksite developers, intake 
specialists, etc.), provided, prior to the close of school all staff 
salaries and benefits shall be charged as administrative expenses, 
except that 45 days prior to the beginning of the summer program and 45 
days after the summer program, all staff costs and other program 
development costs may be charged pursuant to Sec. 632.38;
    (2) Development of the summer plan;
    (3) Worksite development;
    (4) Recruitment, intake and selection of participants;
    (5) Arrangements for supportive services;
    (6) Dissemination of program information;

[[Page 301]]

    (7) Development of coordination between schools and other services;
    (8) Staff training; and
    (9) Other activities that may be characterized as planning and 
design but not program operation.
    (c) Expenses incurred in such planning and design activities may, 
pursuant to Sec. 632.38, be paid from administrative funds received 
under other titles of the Act.



Sec. 632.256  Submission of applications.

    To the extent possible, Native American grantees will be notified of 
their summer youth allocation at the same time section 401 allocations 
are announced. The summer plan will be a separate part of the CAP and 
follow the same format as the CAP.



Sec. 632.257  Eligibility for participation.

    (a) An individual shall be eligible for participation if, at time of 
application, he or she is an Indian or Native American youth who is:
    (1) At the time of application, economically disadvantaged;
    (2) At the time of enrollment, age 14 through 21 inclusive; and
    (3) For income eligibility purposes, the NAG may use either six 
months annualized or 12 months actual income.
    (b) The nepotism provisions of this part shall not apply to this 
program,



Sec. 632.258  Allowable activities.

    Allowable activities are those listed in Sec. 632.78-80 except that 
community service employment is not permitted.



Sec. 632.259  Vocational exploration program.

    A Native American grantee may conduct a vocational exploration 
program for the purpose of exposing youth to the operation and types of 
jobs and instruction including, where appropriate, limited and short 
term practical experience.



Sec. 632.260  Worksite standards.

    (a)(1) Each Native American grantee shall develop a written 
agreement with worksite employers which complies with sections 142 and 
143 of the Act and which assures:
    (i) Adequate supervision of each participant;
    (ii) Adequate accountability for participant time and attendance; 
and
    (iii) Adherence to the rules and regulations governig the summer 
program.
    (2) Such written agreements may be memoranda of understanding, 
simple work statements or other documents which indicate an estimate of 
the number of participants at the worksite and any operational 
conditions governing the program at the worksite.
    (b) Each Native American grantee shall establish procedures for the 
monitoring and evaluation of each worksite to insure compliance with the 
worksite agreements and the terms and conditions of subgrants and 
contracts.
    (c) No participant shall be required to work, or be compensated for 
work with JTPA funds, for more than 40 hours of work per week.



Sec. 632.261  Reporting requirements.

    (a) Each Native American grantee shall submit an end of summer 
report which will include both financial and characteristics 
information. The report format will be issued to grantees under separate 
instructions.
    (b) The report in this section is to be submitted to Chief, DINAP by 
registered mail no later than 45 days after the end of the summer 
program.



Sec. 632.262  Termination date for the summer program.

    Participants may not be enrolled in the summer program beyond 
September 30, or beyond the date they resume school full-time, whichever 
occurs earlier. Allowable activities after September 30 include report 
and record preparation and submittal, completion of evaluations and 
assessments of worksite employers and the overall program or other 
elements of the summer program.



Sec. 632.263  Administrative costs.

    Administrative costs for this subpart are limited to and shall not 
exceed 20 percent of the funds available.

[[Page 302]]



PART 633--MIGRANT AND SEASONAL FARMWORKER PROGRAMS--Table of Contents




                   Subpart A--Introductory Provisions

Sec.
633.102  Scope and purpose of title IV, section 402 programs.
633.103  Format for these regulations.
633.104  Definitions.
633.105  Allocation of funds.
633.106  Eligibility for allocable funds.
633.107  Eligibility for participation in section 402 programs.

          Subpart B--Grant Planning and Application Procedures

633.201  Grant planning and application procedures in general.
633.202  Announcement of State planning estimates and invitation to 
          submit a grant application.
633.203  Review of funding request.
633.204  Responsibility review.
633.205  Notification of selection.

         Subpart C--Program Design and Administrative Procedures

633.301  General responsibilities.
633.302  Training activities and services.
633.303  Allowable costs.
633.304  Section 402 cost allocation.
633.305  General benefits and working conditions for program 
          participants.
633.306  Retirement benefits.
633.307  Packages of benefits.
633.308  Non-federal status of participants.
633.309  Recordkeeping requirements.
633.310  Bonding.
633.311  Management information systems.
633.312  Grantees contracts and subgrants.
633.313  Administrative staff and personnel standards.
633.314  Reports required.
633.315  Replacement, corrective action, termination.
633.316  Closeout procedures.
633.317  Reallocation of funds.
633.318  Nondiscrimination and nonsectarian activities.
633.319  Lobbying, political activities and unionization.
633.320  Nepotism.
633.321  Performance standards for section 402 programs.
633.322  Sanctions for violation of the Act.

    Authority:  Job Training Partnership Act, sec.169 (29 U.S.C. 1501 et 
seq., Pub. L. 97-300, 96 Stat. 1322), unless otherwise noted.

    Source:  48 FR 48771, Oct. 20, 1983, unless otherwise noted.



                   Subpart A--Introductory Provisions



Sec. 633.102  Scope and purpose of title IV, section 402 programs.

    (a) It is the purpose of title IV, section 402, of the Act to 
provide job training, employment opportunities, and other services for 
those individuals who suffer chronic seasonal unemployment and 
underemployment in the agriculture industry. These conditions have been 
substantially aggravated by continual advancements in technology and 
mechanization resulting in displacement and contribute significantly to 
the Nation's rural employment problem. These factors substantially 
affect the entire national economy.
    (b) Because of farmworker employment and training problems, such 
programs shall be centrally administered at the national level. Programs 
and activities supported under this section shall in accordance with 
section 402(c)(3) of the Act:
    (1) Enable farmworkers and their dependents to obtain or retain 
employment;
    (2) Allow participation in other program activities leading to their 
eventual placement in unsubsidized agricultural or nonagricultural 
employment;
    (3) Allow activities leading to stabilization in agricultural 
employment; and
    (4) Include related assistance and supportive services.



Sec. 633.103  Format for these regulations.

    (a) Regulations promulgated by the Department to implement the 
provisions of title IV section 402 of the Act are set forth in 20 CFR 
part 633 and part 636. These parts contain all the regulations under the 
Act applicable to migrant and other seasonally employed farmworker 
programs.
    (b) Should the regulations at this part conflict with regulations at 
other parts of this title of the Code of Federal Regulations, the 
regulations at this part shall prevail with respect to programs and 
activities governed by this part.



Sec. 633.104  Definitions.

    The following definitions are applicable to section 402 programs.

[[Page 303]]

    Accrued expenditures shall mean total costs incurred during the 
reporting period for: (a) Goods and other tangible property received; 
(b) services performed by employees, contractors, subgrantees and other 
payees; and (c) other amounts becoming owed under programs for which no 
current services or performance is required such as annuities, insurance 
claims, and other benefit payments.
    Act shall mean the Job Training Partnership Act (29 U.S.C. 1501 et 
seq.).
    Allocation shall mean the amount of funds calculated in accordance 
with Sec. 633.105(b)(1) for section 402 programs in each State and 
distributed in accordance with the requirements of this part.
    Chief, DFREP shall mean the Chief of the Division of Farmworker and 
Rural Employment Programs in the Employment and Training Administration, 
Department of Labor.
    Construction shall mean the erection, installation, assembly, or 
painting of a new structure or a major addition, expansion, or extension 
of an existing structure, and the related site preparation, excavation, 
filling and landscaping or other land improvements.
    Department shall mean the United States Department of Labor (DOL), 
including its agencies and organizational units.
    DOL shall mean the United States Department of Labor.
    Employment shall mean the situation wherein a person(s) provides 
work or services for an employer for wages or salary. This includes 
self-employment. The satisfaction of workfare requirements does not 
constitute employment.
    Entered employment shall mean the act of securing unsubsidized 
employment for or by a participant. Seasonal agricultural placements 
will not be considered as unsubsidized employment secured for or by a 
participant for purposes of this definition unless it can be 
substantiated that the placement represents an upgraded position within 
agriculture and will not result in the continued underemployment of the 
individual.
    Entered employment, direct shall mean unsubsidized employment 
secured for or by a participant after receiving direct placement 
services not associated with training or subsidized employment.
    Entered employment, indirect shall mean unsubsidized employment 
secured for or by a participant after participation in training or 
subsidized employment.
    Family (a) shall mean one or more persons related by blood, 
marriage, or adoption. A step-child or a step-parent is considered to be 
related by marriage.
    (b) (1) For purposes of paragraph (a) of this definition, a person 
claimed as a dependent on another person's Federal Income Tax return for 
the previous year is presumed to be part of the other person's family.
    (2) A handicapped individual may be considered a family of one when 
applying for programs under the Act.
    (3) An individual 18 years of age or older, except as provided in 
(a) or (b) above, who receives less than 50 percent of support from the 
family, and who is not the principal earner nor the spouse of the 
principal earner, is not considered a member of the family. Such an 
individual is considered a family of one.
    Family income shall mean all income received from all sources for 
the eligibility determination period by persons who are family members 
at the time of eligibility determination.
    (a) For the purpose of determining eligibility (and not for 
allocations), family income includes:
    (1) Gross wages and salaries (before deductions);
    (2) Net self-employment income (gross receipts minus operating 
expenses); and
    (3) Other money income received from sources such as net rents, Old 
Age and Survivors Insurance, Social Security benefits, pensions, 
alimony, periodic income from insurance policy annuities, and other 
sources of income.
    (b) Earned family income does not include:
    (1) Non-cash income such as food stamps, or compensation received in 
the form of food or housing;
    (2) Rental value of owner-occupied property;
    (3) Public assistance payments;
    (4) Cash payments received pursuant to a State plan approved under 
titles I,

[[Page 304]]

IV, X or XVI of the Social Security Act, or disability insurance 
payments received under title II of the Social Security Act;
    (5) Federal, State or local unemployment benefits;
    (6) Payments made to participants in employment and training 
programs;
    (7) Capital gains and losses;
    (8) One-time unearned income, such as, but not limited to:
    (i) Payments received for a limited fixed term under income 
maintenance programs and supplemental (private) unemployment benefits 
plans;
    (ii) One-time or fixed-term scholarship and fellowship grants;
    (iii) Accident, health, and casualty insurance proceeds;
    (iv) Disability and death payments, including fixed term (but not 
lifetime) life insurance annuities and death benefits;
    (v) One-time awards and gifts;
    (vi) Inheritance, including fixed term annuities;
    (vii) Fixed-term workers' compensation awards;
    (viii) Terminal leave pay;
    (ix) Soil bank payments; and
    (x) Agriculture crop stabilization payments.
    (9) Pay or allowances received by any veteran while he/she was 
serving on active duty in the Armed Forces;
    (10) Educational assistance and compensation payments to veterans 
and other eligible persons under chapters 11, 13, 31, 34, 35, and 36 of 
title 38, United States Code;
    (11) Payments received under the Trade Act of 1974 as amended;
    (12) Black Lung payments received under the Benefits Reform Act of 
1977, Pub. L. 95-239, 30 USC 901; and
    (13) Child support payments.
    Farmwork shall mean, for eligibility purposes, work performed for 
wages in agricultural production or agricultural services as defined in 
the most recent edition of the Standard Industrial Classification (SIC) 
Code definitions included in industries 01--Agricultural Production--
Crops; 02--Agricultural Production--Livestock excluding 027--Animal 
Specialties; 07--Agricultural Services excluding 074--Veterinary 
Services, 0752--Animal Speciality Services, and 078--Landscape and 
Horticultural Services.
    Grantee shall mean any person, organization or other entity which 
receives JTPA funds directly from the Department.
    JTPA shall mean the Job Training Partnership Act.
    Migrant farmworker shall mean a seasonal farmworker who performs or 
has performed farmwork during the eligibility determination period (any 
consecutive 12-month period within the 24-month period preceding 
application for enrollment) which requires travel such that the worker 
is unable to return to his/her domicile (permanent place of residence) 
within the same day.
    Participant shall mean an individual who is:
    (a) Eligible for participation; and
    (b) Enrolled within 45 days of eligibility determination; and
    (c) Enrolled and receiving employment, training or services (except 
post-termination services) funded under the Act.
    Planning estimates shall mean the preliminary allocations announced 
for the purpose of providing target funding levels for each State.
    Program income shall mean net income earned from grant or agreement 
supported activities. Such earnings include, but are not limited to: 
income from service fees, sale of commodities, usage or rental fees, and 
royalties on patents or copyrights.
    Poverty level shall mean the annual income level at, or below which 
families are considered to live in poverty, as annually determined by 
HHS.
    Seasonal farmworker shall mean a person who during the eligibility 
determination period (any consecutive 12-month period within the 24-
month period preceding application for enrollment) was employed at least 
25 days in farmwork or earned at least $400 in farmwork; and who has 
been primarily employed in farmwork on a seasonal basis, without a 
constant year round salary.
    Section 402 programs shall mean the Migrant and Seasonal Farmworker 
Program, under section 402 of title IV of the Job Training Partnership 
Act.

[[Page 305]]

    The term subsidized employment shall mean employment created in the 
private or public sector and in private nonprofit agencies financed by 
the recipient's program funds or by other DOL funded programs, e.g., 
work experience and tryout employment.
    Supplemental funds shall mean any funds allocated in excess of that 
amount announced as a ``planning estimate.''
    Target area shall mean a geographic area to be served by a section 
402 grantee. Such an area may be a county, multicounty area, a State, or 
a multistate area.
    Target population shall mean farmworkers and their dependents who 
meet the requirements of Sec. 633.107.
    Underemployed persons shall mean:
    (a) Persons who are working part-time but seeking full-time work; or
    (b) Persons who are working full-time but whose current annualized 
wage rate (for a family of one), or whose family's current annualized 
income, is not in excess of:
    (1) The poverty level, or
    (2) 70 percent of the lower living standard income level.
    Unemployed individuals shall mean individuals who are without jobs 
and who want and are available for work. The determination of whether 
individuals are without jobs shall be made in accordance with the 
criteria used by the Bureau of Labor Statistics of the Department in 
defining individuals as unemployed.



Sec. 633.105  Allocation of funds.

    (a) National Account. (1) Up to 6 percent of the statutory reserves 
for section 402 activities may be set aside for the National Account to 
be used for technical assistance and for special projects funded at the 
discretion of the Department.
    (2) Funds from the National Account may be obligated by the 
Department by means of either contracts or grants to private nonprofit 
agencies, to private profitmaking organizations, to States and local 
units of government, or public agencies.
    (b) State allocations (allocable funds). (1) No less than 94 percent 
of the funds received for section 402 activities shall be allocated for 
farmworker programs in individual States in an equitable manner using 
the best data available as to the farmworker population as determined by 
the Department. The formula used to determine State allocations will be 
published in the Federal Register for review and comment, along with the 
rationale for such formula and proposed allocations, no later than 30 
days prior to the publication of the final allocations of available 
funds in the Federal Register.
    (2) Allocation Exceptions. (i) The Department reserves the right not 
to allocate any funds for use in a State whose allocation is less than 
$120,000.
    (ii) Those funds not allocated will be available for technical 
assistance and special projects funded at the discretion of the 
Department.
    (iii) Current grantees which are unsuccessful applicants for new 
grant funds shall be given notice that funds will expire and that a 
reasonable period will be given to phase out their operations. Such 
notice will not bind the Department to obligate additional funds. The 
notification of nonselection shall be the notice of termination of funds 
and departmental closeout requirements are to be followed.
    (3) Allocation Adjustment. In situations where the Department 
determines that the formula allocation will result in severe disruption 
of funding levels from one year to the next, a hold harmless or other 
factor to minimize such disruption may be used.
    (4) Funding cycle. Projects will be funded in accordance with a 
schedule to be specified by the Department in the Federal Register:
    (i) Announcement of State planning estimates and an invitation to 
submit applications for State(s) or area(s) open for competition as 
provided in the Solicitation for Grant Application (SGA).
    (ii) Deadline for submission of Preapplication for Federal 
Assistance Forms.
    (iii) Deadline for submission of applications.



Sec. 633.106  Eligibility for allocable funds.

    The following organizations and units of government shall be 
eligible to receive funds under section 402.

[[Page 306]]

    (a) A public agency;
    (b) A private nonprofit organization authorized by its charter or 
articles of incorporation to provide employment and training or such 
other services as are permitted by this subpart.



Sec. 633.107  Eligibility for participation in section 402 programs.

    (a) Eligibility for participation in section 402 programs is limited 
to those individuals who have, during any consective 12-month period 
within the 24-month period preceding their application for enrollment:
    (1) Been a seasonal farmworker or migrant farmworker as defined in 
Sec. 633.104; and,
    (2) Received at least 50 percent of their total earned income or 
been employed at least 50 percent of their total work time in farmwork; 
and,
    (3) Been identified as a member of a family which receives public 
assistance or whose annual family income does not exceed the higher of 
either the proverty level or 70 percent of the lower living standard 
income level.
    (4) Dependents of the above individuals are also eligible.
    (b) The 24-month period preceding application for enrollment shall 
be extended for persons who have been in the armed forces, incarcerated, 
hospitalized, or physically or mentally disabled. The extended period of 
time shall be not more than 24 months plus the amount of time the person 
was in the armed forces, incarcerated, detained at any Federal or State 
facility, hospitalized, or physically or mentally disabled. Such 
conditions shall be positively demonstrated by the applicant. This can 
be done by producing documentary evidence satisfactory to the grantee.
    (c) To be eligible for participation, individuals shall meet the 
requirements of sections 167(a)(5) and 504 of the Act.
    (d) A participant in another program or title under JTPA who met the 
eligibility criteria for section 402 at the time of enrollment into such 
other program or title may be transferred into, or enrolled 
concurrently, in the section 402 program. A section 402 participant who 
met the eligibility criteria for another program or title under JTPA at 
the time of enrollment into the section 402 program may also be 
transferred into or enrolled concurrently in such other program or 
title.
    (e) The grantee shall establish the necessary procedures for 
identifying and selecting participants and for eligibility determination 
and verification.
    (f) The provisions of section 181(k) of the Act are applicable to 
section 402 programs.



          Subpart B--Grant Planning and Application Procedures



Sec. 633.201  Grant planning and application procedures in general.

    Precondition for grant application: The Department will not consider 
an application for funding from any applicant in cases where it is 
established that:
    (a) The agency's efforts to recover debts (for which three demand 
letters have been sent) established by final agency action have been 
unsuccessful; or
    (b) Fraud or criminal activity has been proven to exist within the 
organization.



Sec. 633.202  Announcement of State planning estimates and invitation to submit a grant application.

    (a) Announcements. The Department, through a notice in the Federal 
Register, will announce State Planning estimates of section 402 funds 
and will publish an SGA for all areas open to competition. The SGA will 
contain all information needed by an applicant to apply for funding; 
i.e., general program description, rating criteria, and dates for 
submission of applications.
    (b) Intention to apply. Any eligible applicant intending to apply 
for funds shall submit a Preapplication for Federal Assistance to DOL by 
a specified date as announced in the Federal Register.
    (c) Applications for statewide programs are encouraged; however, the 
Department reserves the right to award grant funds to less than 
statewide areas.
    (d) Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' and the implementing regulations at 30 CFR part 46 generally 
apply

[[Page 307]]

to this program. Pursuant to these requirements, in States which have 
established a consultation process expressly covering this program, 
applications shall be provided to the State for comment. Since States 
may also participate as competitors for this program, applications shall 
be submitted to the State upon the deadline for submission to the 
Department, instead of the usual 30-day period for review.



Sec. 633.203  Review of funding request.

    The SGA will identify all review standards including:
    (a) An understanding of the problems of migrant and seasonal 
farmworkers;
    (b) A familiarity with the area to be served;
    (c) A previously demonstrated capability to administer effectively a 
diversified employability development program for migrant and seasonal 
farmworkers.
    (d) General administrative and financial management capability.
    (e) Prior performance with respect to financial management, audit 
and program outcomes.



Sec. 633.204  Responsibility review.

    (a) Prior to final selection as a potential grantee the Department 
will conduct a review of the available records to determine whether or 
not the organization has failed any responsibility test. This review is 
intended to establish overall responsibility to administer Federal 
funds. With the exceptions of paragraphs (a)(1) and (a)(3) of this 
section, the failure to meet any one of the tests would not establish 
that the organization is irresponsible unless the failure is substantial 
or persistent. The responsibility tests are as follows:
    (1) The agency's efforts to recover debts (for which three demand 
letters have been sent) established by final agency action have been 
unsuccessful, or failure to comply with an approved repayment plan.
    (2) Serious administrative deficiencies identified in final findings 
and determinations--such as failure to maintain a financial management 
system as required by Federal regulations.
    (3) Established fraud or criminal activity within the organization.
    (4) Wilfull obstruction of the audit process.
    (5) Substantial failure to provide services to applicants as agreed 
to in a current or recent grant or to meet performance standard 
requirements as provided at Sec. 633.321 of this subpart.
    (6) Failure to correct deficiencies brought to the grantees' 
attention in writing as a result of monitoring activities, reviews, 
assessments, etc.
    (7) Failure to return a grant closeout package or outstanding 
advances within 90 days of expiration date or receipt of closeout 
package, whichever is later, unless an extension has been requested and 
granted; final billings reflecting serious cost category or total budget 
cost overrun.
    (8) Failure to submit required reports.
    (9) Failure to properly report and dispose of government property as 
instructed by DOL.
    (10) Failure to have maintained cost controls resulting in excess 
cash on hand.
    (11) Failure to procure or arrange for audit coverage for any two 
year period when required by DOL.
    (12) Failure to audit a subrecipient within the required period when 
applicable.
    (13) Final disallowed costs in excess of five percent of the grant 
or contract award.
    (14) Failure to establish a mechanism to resolve subrecipient's 
audit within established time frames.
    (b) This responsibility review is independent of the competitive 
process. Applicants failing to meet the requirements of this section 
will not be selected as potential grantees irrespective of their 
standing in the competition.



Sec. 633.205  Notification of selection.

    (a) Respondents to the SGA which are selected as potential grantees 
shall be so notified by the Department. The notification shall invite 
each potential grantee to negotiate the final terms and conditions of 
the grant, shall establish a reasonable time and place for the 
negotiation, and shall indicate the State or area to be covered by the 
grant. Funds may be awarded for two program years.

[[Page 308]]

    (b) In the event that no grant applications are received for a 
specific State or area or that those received are deemed to be 
unacceptable, or where a grant agreement is not successfully negotiated, 
the Department may give the Governor first right to submit an acceptable 
application pursuant to Sec. 633.201. Should the Governor not accept the 
offer within fifteen days, the Department may then (1) designate another 
organization or organizations, (2) reopen the area for competitive 
bidding, or (3) use the funds for national-account activities.
    (c) An applicant whose grant application is not selected by the 
Department to receive section 402 funds shall be notified in writing.
    (d) Applicants who submit grant applications which have been 
rejected may not resubmit a new grant application for the State(s) or 
area(s) in which they are interested in providing services until the 
area(s) is announced by the Department as reopened for competition.
    (e) Any applicant whose grant application is denied in whole or in 
part by the Department may request an administrative review as provided 
in part 636, with respect to whether there is a basis in the record to 
support the Department's decision. This appeal will not in any way 
interfere with the Department's designation and funding of another 
organization to service the area in question during the appeal period. 
The available remedy under such an appeal will be the right to be 
designated in the future rather than a retroactive or immediately 
effective selection status. Therefore, in the event the ALJ rules that 
the organization should have been selected and the organization 
continues to meet the requirements of this part, the Department will 
select and fund the organization within 90 days of the ALJ's decision 
unless the end of the 90-day period is within 6 months of the end of the 
funding period. Any organization selected and/or funded prior to the 
ALJ's decision will be affected in a manner prescribed by the 
Department. All parties will agree to the provisions of this paragraph 
as a condition for funding.



         Subpart C--Program Design and Administrative Procedures



Sec. 633.301  General responsibilities.

    (a) This subpart sets forth the program operation requirements for 
grantees under section 402, including program and fiscal management, 
coordination and consultation, allowable activities, participant 
benefits, and duration of participation. Unless otherwise indicated, 
grantees shall follow procedures as prescribed in DOL administrative 
regulations a 41 CFR part 29-70 and OMB Circular A-122.
    (b) Basic program design responsibilities of grantees. A grantee 
shall be responsible for:
    (1) Designing training which, to the maximum extent feasible, is 
consistent with every participant's fullest capabilites and will lead to 
employment opportunities enabling every participant to become 
economically self-sufficient.
    (2) Designing program activities which will, to the maximum extent 
feasible, contribute to the occupational development and upward mobility 
of every participant;
    (3) Providing training only to participants who are legally able to 
accept gainful employment in the occupation for which training is being 
provided; and
    (4) Making maximum efforts to achieve the goals and the performance 
standards set forth in the grant.



Sec. 633.302  Training activities and services.

    (a) A grantee may provide assistance to eligible individuals to 
obtain or retain employment, to participate in other program activities 
leading to their eventual placement in unsubsidized agricultural or 
nonagricultural employment, and to participate in activities leading to 
stabilization in agricultural employment through training and supportive 
services which may include, but are not limited to:
    (1) Job search assistance, including job clubs;
    (2) Job development;
    (3) Training, such as classroom, on-the-job, work experience, and 
tryout employment, in jobs skills for which demand exceeds supply;

[[Page 309]]

    (4) Training related and non-training related supportive services, 
including commuting assistance and financial and personal counseling;
    (5) Relocation assistance; and
    (6) Programs conducted in cooperation with employers or labor 
organizations to provide early intervention in the event of the 
disruption of employment opportunities.
    (b) Public service employment is not an allowable activity under 
section 402 programs.
    (c) Tryout employment shall conform to section 205(d)(3)(B) and 
section 141(k) of the Act.
    (d) A participant's enrollment in work experience shall not exceed 
1,000 hours in a one-year period.



Sec. 633.303  Allowable costs.

    (a) General. To be allowable, a cost must be necessary and 
reasonable for proper and efficient administration of the program, be 
allocable thereto under these principles, and, except as specifically 
provided herein, not be a general expense required to carry out the 
overall responsibilities of the recipient.
    (b) Unless otherwise indicated below, direct and indirect costs 
shall be charged in accordance with 41 CFR part 29-70 and OMB Circular 
A-122.
    (c) Funds may be used for construction activities only to:
    (1) Provide compensation to participants employed by public or 
private nonprofit agencies;
    (2) Reimburse OJT costs to private-for-profit employers;
    (3) Purchase equipment, materials, and supplies for use in the 
training of such participants; and
    (4) Cover costs of a training program in a construction occupation, 
including costs such as instructors' salaries, training tools, books, 
and needs-based payments and compensation to participants.
    (d) Costs associated with capital improvements (as defined in OMB 
Circular A-122, attachment B, sections 13 and 22) of existing facilities 
used primarily for programs under the Act are allowable with prior 
approval of the Department.
    (e) Unemployment compensation costs are allowable for administrative 
and program staff hired in accordance with the administrative provisions 
of the regulations, and for participants required by State law to be 
covered for unemployment compensation purposes.
    (f) Costs which are billed as a single unit charge do not have to be 
allocated or prorated among the several cost categories but may be 
charged entirely to training when the agreement:
    (1) Is for classroom training;
    (2) Is fixed unit price; and
    (3) Stipulates that full payment for the full unit price will be 
made only upon completion of training by a participant and placement of 
the participant into unsubsidized employment in the occupation trained 
for and at not less than the wage specified in the agreement.
    (g) Travel costs. (1) The cost of participant and staff travel 
necessary for the operation or administration of programs under the Act 
is allowable as provided herein.
    (2) Travel costs of section 402 administrative staff or members of 
governing boards of grantee organizations are allowable without the 
prior approval of the Department if the travel specifically relates to 
programs under section 402. All other travel to be charged to JTPA 
section 402 grants shall require the prior approval of the Department. 
These costs shall be charged to administration.
    (3) Travel costs of other grantee officials of multifunded programs 
changed with overall grantee responsibilities are allowable only if 
costs specifically relate to programs under section 402.
    (4) Travel costs to enable participants to obtain or retain 
employment, access other services or to participate in programs under 
this Act are allowable as direct costs but shall be limited to the 
grantee's jurisdiction or within daily commuting distance, unless part 
of an approved component of the grantee's program. These costs shall be 
charged to training-related supportive services.
    (5) Travel costs for participants in administrative or programmatic 
positions using their personal or other forms of transportation in the 
performance of their jobs are allowable and shall be charged 
appropriately.

[[Page 310]]

    (6) Travel policies of all grantees, subgrantees and contractors 
shall be generally consistent with those set forth in the Department's 
Travel and Transportation Manual.
    (h) Association membership. Grantees are permitted to use grant 
funds to join those associations which provide technical and 
administrative services in support of section 402 program efforts. The 
activities of such associations must be designed to contribute to the 
enhancement of professional and technical program knowledge. No 
financial assistance in the form of membership dues or other membership-
related costs can involve political or lobbying activities.
    (1) The cost shall be for a section 402 grantee's membership rather 
than an individual person's membership.
    (2) The cost of a membership shall be reasonably related to the 
value of the services or benefits received and shall not exceed $850 
annually.
    (3) Association-related costs shall be incorporated in the grantee's 
section 402 grant budget, charged to the administrative category, and as 
such, shall be subject to the overall administrative cost ceiling.
    (i) Allowances and reimbursements for board and advisory council 
members--(1) General. A reasonable allowance to members who attend 
meetings of any board, council, or committee for section 402 program 
purposes, and reimbursement of actual expenses connected with those 
meetings, are allowable costs, and may be paid for attendance at no more 
than six meeting days per grantee per quarter.
    (2) Allowances and loss of wages. Any individual or family member 
who is a member of a private nonprofit grantee or subgrantee 
policymaking body or of a public agency grantee or subgrantee farmworker 
advisory council is eligible to be paid and allowance provided:
    (i) such individual's family income does not exceed either 70 
percent of the lower living standard income level or the poverty level 
as established by HHS.
    (ii) Allowances may not be paid for attendance in excess of ten 
dollars per meeting, unless approved in advance by the Department.
    (3) Reimbursement for expenses. (i) All board members shall be 
eligible for receiving reimbursement for actual expenses of travel, 
meals, and lodging incurred in attending board meetings, or a per diem 
in lieu of actual expenses.
    (ii) Any individual or family member where family income does not 
exceed 70 percent of the lower living standard income level and who is a 
member of a private nonprofit grantee or subgrantee policymaking body or 
of a public agency grantee or subgrantee farmworker advisory council 
shall also be eligible for reimbursement of actual wages lost, if 
supported by a statement from the employer.
    (iii) The grantee shall define which expenses may be reimbursed, 
whether incurred as the result of actual meeting attendances or in 
performance of other official duties and responsibilities in connection 
with the program, and shall establish procedures for the reimbursement 
of such expenses.



Sec. 633.304  Section 402 cost allocation.

    (a) General. Allowable costs for section 402 programs shall be 
charged against the following four cost categories: Administration; 
training; training-related supportive services; and nontraining-related 
supportive services.
    (1) Costs are allocable to a particular cost category to the extent 
that benefits are received by such category.
    (2) All grantees are required to plan, control, and report 
expenditures against the aforementioned cost categories.
    (3) All grantees are responsible for ensuring that subgrantees and 
contractors plan, control, and report expenditures against the 
aforementioned cost categories.
    (b) Limitation on certain costs. (1) Costs for administration of the 
grant shall not exceed 20 percent of the total amount of the grant.
    (2) Costs for nontraining-related supportive services shall not 
exceed 15 percent of the total amount of the grant.
    (3) Costs for training shall be no less than 50 percent of the total 
amount of the grant.
    (c) Classification of costs by category. All grant costs shall be 
charged to the

[[Page 311]]

four cost categories listed above. Within each category costs shall be 
assigned and accounted for as follows:
    (1) Administration. Administration costs consist of all direct and 
indirect costs associated with the management of the program. 
Administrative costs shall be limited to those necessary to effectively 
operate the program. These costs include but are not limited to: the 
salaries and fringe benefits of personnel engaged in executive, fiscal, 
data collection, personnel, legal, audit, procurement, data processing, 
communications, maintenance, and similar functions; and related 
materials, supplies, equipment, office-space costs, and staff training.
    (i) Also included are salaries and fringe benefits of direct program 
administrative positions such as supervisors, program analysts, labor 
market analysts, and project directors. Additionally, all costs of 
clerical personnel, materials, supplies, equipment, space, utilities, 
and travel that are identifiable with these program-administration 
positions are charged to administration.
    (ii) Allowances and reimbursement costs for governing boards and 
advisory councils shall be prorated wherever applicable as 
administrative costs among all the grants, from whatever source, 
administered by the grantee.
    (2) Training. (i) Instruction and related costs consist of goods and 
services which affect those program participants who are in either a 
work environment, or classroom setting (including classroom training in 
conjunction with Vocational Exploration or Job Readiness or tryout 
employment) and shall be charged to training, i.e., salaries, fringe 
benefits, space, utility, travel and equipment. Training costs include, 
but are not limited to, the following: The costs associated with on-the-
job training services; employer outreach necessary to obtain job 
listings or job-training opportunities, salaries; fringe benefits; 
equipment and supplies of personnel engaged in providing training, 
including remedial education; job-related counseling for participants; 
employability assessment and job development; tuition fees, books and 
other teaching aids; equipment and materials used in providing training 
to participants, classroom space and utility costs; job search 
assistance, labor market orientation, and job referral costs. In 
addition:
    (ii) Wages and fringe benefits for participants in work experience, 
tryout employment, classroom training, shall be charged to training. 
Cost-of-living increases are considered wages.
    (iii) Allowances shall be charged to training.
    (iv) Any single cost which is properly chargeable to training and to 
one or more other categories shall be prorated among training and other 
appropriate cost categories.
    (3) Training-related supportive services. Costs of services which 
are necessary to enable an eligible individual to participate in 
training or subsidized employment under section 402 and to obtain 
subsequent unsubsidized employment shall be charged to training-related 
supportive services. Such supportive services may include but are not 
limited to transportation, health care, special services and materials 
for the handicapped, child care, meals, temporary shelter, financial 
counseling, and other reasonable expenses required for participation in 
the program and may be provided in-kind or through cash assistance. 
Training-related supportive services costs and related costs shall be 
charged to this cost category.
    (4) Nontraining-related supportive services. ``Services only'' are 
the costs of the goods and services provided to participants who are not 
engaged in work experience, tryout employment or training activities, 
including but not limited to such goods and services as: transportation, 
health care, temporary shelter, meals and other nutritional assistance, 
legal or paralegal assistance and emergency assistance.
    (d) Cost categories assignable to program activities. (1) Classroom 
training. Cost categories are: Training and training-related supportive 
services.
    (2) On-the-job training. Cost categories are: Training and training-
related supportive services.
    (3) Work Experience: Cost categories are: Training and training-
related supportive services.

[[Page 312]]

    (4) Tryout employment: Cost categories are: Training and training-
related supportive services.
    (5) Training assistance: Cost categories are: Training and training-
related supportive services.
    (6) Services only (no referral to employment): Cost category is: 
Nontraining-related supportive services.



Sec. 633.305  General benefits and working conditions for program participants.

    (a) Payments for on-the-job training (OJT) shall be made in 
accordance with sections 141(g) and 142(a)(2) of the Act.
    (b) Participants employed in work experience activities shall be 
paid wages in accordance with section 142(a)(3) of the Act.
    (c) Payments to individuals participating in programs under section 
402 shall conform to the provisions of section 142(b) of the Act.
    (d) Section 402 grantees shall not assist any activity under the Act 
unless the activity conforms to provisions of sections 142 and 143 of 
the Act.
    (e) A basic hourly allowance for regularly enrolled classroom 
training participants shall not exceed the higher of the State or 
Federal minimum hourly wage.



Sec. 633.306  Retirement benefits.

    No funds available under this Act may be used for contributions on 
behalf of any participant to retirement systems or plans (sec. 
143(a)(5)).



Sec. 633.307  Packages of benefits.

    (a) Where non-JTPA, similarly employed employees are covered under a 
benefits package which includes retirement, JTPA participants shall 
receive the non-retirement benefits (e.g., health, death, and 
disability-benefit coverage), at the same level and to the same extent 
as other employees. JTPA funds may be used to pay for those benefits.
    (b) JTPA funds may be used to purchase a package of benefits 
including retirement, provided the retirement portion of the package can 
be factored out of the package and adjusted accordingly.



Sec. 633.308  Non-Federal status of participants.

    Except where specifically provided to the contrary, participants in 
a program under the Act shall not be deemed Federal employees and shall 
not be subject to the provisions of law relating to Federal employment, 
including those related to hours of work, rates of compensation, leave, 
unemployment compensation, and Federal employment benefits.



Sec. 633.309  Recordkeeping requirements.

    (a) Each grantee shall ensure maintenance of systems whose financial 
management and participant data components provide federally-required 
records and reports that are accurate, uniform in definition, accessible 
to authorized Federal staff, and verifiable for monitoring, reporting, 
and evaluation purposes.
    (b) The grantee shall ensure that systems:
    (1) Maintain data elements used in required Federal reports in 
accordance with established program definitions contained in the Act and 
these regulations;
    (2) Follow consistent rules for aggregation of detailed data to 
summary levels;
    (3) Are able to track data from detailed records to summary reports;
    (4) Maintain procedures to ensure that information is current, 
complete, consistent, and accurate;
    (5) Meet generally accepted accounting principles as prescribed in 
41 CFR part 29-70;
    (6) Provide for adequate control of Federal funds and other assets;
    (7) Trace the funds to a level of expenditures adequate to 
demonstrate that funds have been spent lawfully;
    (8) Maintain internal controls to avoid conflict-of-interest 
situations and prevent irregular transactions or activities;
    (9) Support accounting records with source documentation such as 
cancelled checks, paid bills, contracts, grants, and agreements; and
    (10) Establish procedures that will minimize the time elapsing 
between the receipt of advanced funds and their disbursement.

[[Page 313]]



Sec. 633.310  Bonding.

    The grantee and all subgrantees shall ensure that every officer, 
director, agent, or employee authorized to act on their behalf in 
receiving or depositing funds into program accounts or in issuing 
financial documents, checks, or other instruments of payment for program 
costs shall be bonded to provide protection against loss. Those costs 
are chargeable to administration.



Sec. 633.311  Management information systems.

    All grantees shall establish and maintain a program and financial 
management system which meets Departmental standards and the 
requirements of Sec. 633.314.



Sec. 633.312  Grantees contracts and subgrants.

    (a) Grantee responsibility. (1) The grantee is responsible for 
development, approval and operation of all contracts and subgrants and 
shall require that its contractors and subgrantees adhere to the 
requirements of the Act, regulations promulgated under the Act, and 
other applicable laws as required by DOL.
    (2) The grantee shall require contractors and subgrantees to 
maintain effective control and accountability over all funds, property 
and other assets covered by the contract or subgrant.
    (3) Each grantee, subgrantee and contractor shall establish and use 
internal program management procedures sufficient to prevent fraud and 
abuse.
    (4) The grantee shall ensure that contractors and subgrantees 
maintain and make available for review by the grantee and the Department 
of Labor all records pertaining to the operations of programs under such 
contracts and subgrants, consistent with the maintenance and retention 
of record requirements.
    (5) Subgrantees are entitled to funding for administrative costs. 
The amount of such funding will be determined during the development of 
subgrants.
    (b) In the event an agreement or subgrant is cancelled, in whole or 
in part, the grantee may be required to develop procedures for ensuring 
continuity of service to participants.
    (c) Grantees are authorized to enter into classroom training or on-
the-job training contracts or subgrants which extend past the expiration 
date of the grant, but such extension shall not exceed six months. In 
such cases, the grantee shall continue to be responsible for the 
administration of such contracts and subgrants, unless, should the grant 
be terminated, such contract or subgrant is transferred to a successor 
grantee.



Sec. 633.313  Administrative staff and personnel standards.

    The following provisions shall be applicable only to private 
nonprofit grantees and to private nonprofit subgrantees receiving 
section 402 funds:
    (a) Personnel policies of grantees and subgrantees shall be stated 
in written form and available to the Department upon request.
    (b) Each grantee and subgrantee shall insure that its staff 
recruiting procedures afford adequate opportunity for the hiring and 
promotion of persons in the target population.
    (c) Grantees and subgrantees shall include the following provisions 
in their published personnel policies relating to outside employment of 
their employees in section 402 programs.
    (1) Such employment shall not interfere with the efficient 
performance of the employee's duties in the DOL-assisted programs;
    (2) Such employment shall not involve conflict of interest or 
conflict with the employee's duties in the DOL-assisted program;
    (3) Such employment shall not involve the performance of duties 
which the employee should perform as part of employment in the DOL-
assisted program; and
    (4) Such employment shall not occur during the employee's regular or 
assigned working hours in the DOL-assisted program, unless the employee 
during the entire day on which such employment occurs is on annual 
leave, compensatory leave, or leave without pay.
    (d) Salaries and wages. (1) Administrative and staff employees in 
section 402 programs shall be paid at a rate no lower than the 
applicable Federal, State, or local minimum wage rate,

[[Page 314]]

whichever is highest. The salary for each position shall be justified 
and documented by the grantee to the satisfaction of the Department.
    (2) Notwithstanding paragraph(d)(1) of this section, where a grantee 
or subgrantee has an established system, it may compensate its section 
402 program employees at existing rates in effect for comparable 
positions under such merit system. However, in order to use this 
methodology, the section 402 program employees must be filling types of 
positions in existence before the grantee or subgrantee received 
financial assistance under the section 402 program, and the salary scale 
must not have been changed as a result of such financial assistance.
    (e) Prorating salaries. Where an individual performs functions under 
several grants, his or her time shall be prorated among the different 
grants and the portion of the salary charged to the section 402 grant 
shall not exceed the percentage of time spent performing section 402 
functions.
    (f) Employee benefits. Employee benefits shall be at the same level 
and to the same extent as those positions in public or private nonprofit 
agencies in the area where the program is carried out.
    (g) Position responsibilities. (1) Each grantee and subgrantee shall 
maintain a written detailed job description identifying job functions 
and responsibilities for each administrative and staff position under 
its section 402 program.
    (2) Each position shall have specific hiring qualifications. 
Positions requiring higher salaries or wages shall include higher level 
of responsibilities commensurate with the salary.
    (h) Personnel procedures. (1) Each grantee and subgrantee shall 
maintain a personnel manual containing detailed procedures for hiring 
new employees, promoting present employees and granting salary 
increases.
    (2) Each grantee and subgrantee shall maintain documentation as to 
any personnel action (including hiring, promotion, and salary increases) 
involving its section 402 program employees.



Sec. 633.314  Reports required.

    Grantees shall report pursuant to instructions issued by the 
Department. Reports shall be submitted quarterly within 45 days after 
the end of the report period (sec. 165(a)(2)). Accuracy of all reports 
must be verified by the chief executive officer or financial officer. 
When estimates are used, the verification statement will so state.



Sec. 633.315  Replacement, corrective action, termination.

    (a) The Department may replace any grantee who during the grant 
period has been terminated by first offering the Governor the 
opportunity to submit an acceptable application. When such an offer is 
made and should the Governor decline, within 15 days, or should the 
Governor or his agent have been the terminated grantee, the Department 
may replace the grantee by (1) designating another organization or 
organizations, or (2) opening the area for competitive bidding.
    (b) The Department may also require appropriate corrective action as 
a condition of continued funding of a grantee whose performance has been 
found deficient, but not sufficient to warrant termination for cause or 
emergency treatment. Such appropriate corrective actions may include but 
are not limited to termination of subrecipient agreements, development 
of and compliance with corrective action plans, etc.
    (c) In cases where deficiencies are identified and efforts at 
corrective action have failed, the Department may apply sanctions, e.g., 
suspension of Letter of Credit, incremental funding, etc.
    (d) Termination for cause can occur whenever there is a violation of 
the governing rules and regulations, failure to comply with the grant 
terms and conditions and in such cases as:
    (1) Inability to meet Federal standards related to such debt 
collection requirements as:
    (i) Failure to respond to demand letters from DOL for repayment of 
debts within the stated timeframe;
    (ii) Failure to comply with approved repayment agreement;
    (2) Nonperformance related to such requirements as:

[[Page 315]]

    (i) Failure to submit required quarterly financial reports for two 
successive periods within 30 days after they are due;
    (ii) Failure to submit required quarterly performance report for two 
successive periods within 30 days after they are due;
    (iii) Failure to develop a plan of action to correct deficiencies 
identified in a final audit finding and determination or by an onsite 
monitoring review;
    (3) Nonperformance related to such requirements as:
    (i) Failure to comply with formal corrective action after due 
notice;
    (ii) Failure to comply with the requirements of the Act related to a 
grievance procedure and other requirements;
    (e) In addition, the Department, by written notice, may terminate a 
grant in whole or in part in the event of reduction in the funds 
available for JTPA title IV, section 402 programs by reason of 
congressional action, whether by authorization, appropriation, deferral, 
rescission or otherwise, or by reason of other legislative action, such 
as changes in service deliverers, program content or services to be 
provided, which makes it impracticable to continue the agreement under 
its original terms. In the event of a congressional reduction in funds, 
the reduction shall be apportioned on an equitable basis among section 
402 grantees. In the case of termination pursuant to this provision, the 
Department shall be liable for payment, in accordance with the payment 
provisions of this agreement, for services rendered and noncancellable 
obligations properly incurred prior to the effective date of 
termination.
    (f) Notwithstanding the provisions of part 636 the Department may 
terminate a grantee under emergency termination procedures in accordance 
with section 164(f) of the Act.
    (i) Instances under which emergency termination can occur include 
but are not limited to: Final audit findings and determinations 
identifying numerous adverse findings in the area of financial 
management; information gathered through onsite monitoring which 
substantiates serious management, fiscal and/or performance problems; 
documented information from the Inspector General or gained through 
incident reports of poor performance, serious administrative problems 
and/or inability to protect and account for Federal funds.
    (ii) Within 30 days of written termination notification to a 
grantee, the Department will secure applicable documents onsite, seize 
bank accounts relating to the program, arrange for the payment of 
legitimate bills and debts and arrange, to the degree feasible, for the 
continued provision of services to program enrollees.



Sec. 633.316  Closeout procedures.

    Grant closeout will conform to the requirements at 41 CFR part 29-
70. As necessary, the Department shall issue supplementary closeout 
requirements.



Sec. 633.317  Reallocation of funds.

    (a) In a limited number of circumstances, the Department may reduce 
a portion of a grant when it can be reasonably projected that the funds 
will not be used during the grant performance period or that they will 
not be used for DOL authorized carryover purposes. Such reduction of 
funds will only be undertaken after 30-days advance notice to the 
grantee.
    (b) Funds recaptured as a result of these grant reductions will be 
available for technical assistance or special projects funded at the 
discretion of the Department .



Sec. 633.318  Nondiscrimination and nonsectarian activities.

    Pursuant to section 167(a) of the Act:
    (a) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, will 
be governed by the provisions of 29 CFR parts 31 and 32 and will be 
administered by the Office of Civil Rights.
    (b) The employment or training of participants in sectarian 
activities is prohibited.



Sec. 633.319  Lobbying, political activities and unionization.

    No funds provided under the Act may be used in any way:
    (a) To attempt to influence in any manner a member of Congress to 
favor

[[Page 316]]

or oppose any legislation or appropriation by Congress.
    (b) To attempt to influence in any manner State or local legislators 
to favor or oppose any legislation or appropriation by such legislators.
    (c) Which involves political activities (sec. 141(a)).
    (d) Which will assist, promote, or deter union organizing (sec. 
143(c)(1)).



Sec. 633.320  Nepotism.

    (a) No grantee, subgrantee, or employing agency may hire a person in 
an administrative capacity, staff position, or on-the-job training 
position funded under the Act if a member of that person's immediate 
family is engaged in an administrative capacity for that grantee, 
subgrantee, or employing agency.
    (b) No subgrantee or employing agency may hire a person in an 
administrative capacity, staff position or on-the-job training position 
funded under the Act, if a member of that person's immediate family is 
engaged in an administrative capacity for the grantee from which that 
subgrantee or employing agency obtains its funds. To the extent that an 
applicable State or local legal requirement regarding nepotism is more 
restrictive than this provision, such State or local requirement shall 
be followed.
    (c) For purposes of this section the term ``immediate family'' means 
wife, husband, son, daughter, mother, father, brother, brother-in-law, 
sister, sister-in-law, son-in-law, daughter-in-law, mother-in-law, 
father-in-law, aunt, uncle, niece, nephew, stepparent, and stepchild.



Sec. 633.321  Performance standards for section 402 programs.

    (a) The Secretary shall issue performance standards for section 402 
programs.
    (b) To issue performance standards, the Secretary shall:
    (1) Select the measures against which the standards will be set.
    (2) Prescribe the pre- and post-program measurement periods.
    (3) Determine standards for each of the measures, from which 
specific grantee standards can be determined in accordance with the 
parameters established by the Secretary.
    (c) No grantee shall be penalized for not meeting performance 
standards for the program years 1984-1986.



Sec. 633.322  Sanctions for violation of the Act.

    (a) Pursuant to sections 164 (d), (e), (f), (g), and (h) of the Act, 
the Secretary may impose appropriate sanctions and corrective actions 
for violations of the Act, regulations, or grant terms and conditions. 
Additionally, sanctions may include the following:
    (1) Offsetting debts, arising from misexpenditure of grant funds, 
against amounts to which the grantee is or may be entitled under the 
Act, except as provided in section (e)(1) of the Act. The debt shall be 
fully satisfied when the Secretary reduces amounts allotted to the 
grantee by the amount of the misexpenditure; and
    (2) Determining the amount of Federal cash maintained by the grantee 
or its subgrantee or contractor in excess of reasonable grant needs, 
establishing a debt for the amount of such excessive cash, and charging 
interest on that debt.
    (b) Except for actions under section 164(f) and 167 of the Act, to 
establish a debt or violation subject to sanction and/or corrective 
action, the Secretary shall utilize initial and final determination 
procedures outlined in 20 CFR part 636.
    (c) To impose a sanction or corrective action regarding a violation 
of section 167 of the Act, the Secretary shall utilize the procedures of 
29 CFR part 31.
    (d) (1) The Secretary shall hold the grantee responsible for all 
funds under the grant. The grantee shall hold its subgrantees and 
contractors responsible for JTPA funds received through the grant.
    (2) The Secretary shall determine the liability of the grantee for 
misexpenditures of grant funds in accordance with section 164(e) of the 
Act, including the requirement that the grantee shall have taken prompt 
and appropriate corrective actions for misexpenditures by a subgrantee 
or contractor.

[[Page 317]]

    (3) Prompt, appropriate, and aggressive debt collection action to 
recover any funds misspent by subgrantees or contractors ordinarily 
shall be considered a part of the corrective action required by section 
164(e)(2)(D) of the Act.
    (4) In making the determination required by section 164(e)(2) of the 
Act, the Secretary may determine, based on a request from the grantee, 
that the grantee may forego certain collection actions against a 
subgrantee or contractor where that subgrantee or contractor was not at 
fault with respect to the liability criteria set forth in section 
164(e)(2)(A) through section 164(e)(2)(D) of the Act. The Secretary 
shall consider such requests in assessing whether the grantee's 
corrective action was appropriate in light of section 164(e)(2)(D) of 
the Act.
    (5) The grantee shall not be released from liability for misspent 
funds under the determination required by section 164(e) of the Act 
until the Secretary determines that further collection action, either by 
the grantee or subgrantee or contractor, would be inappropriate or would 
prove futile.
    (e) Nothing in this section shall preclude the Secretary from 
imposing a sanction directly against a subgrantee or contractor as 
authorized in section 164(e)(3) of the Act. In such a case, the 
Secretary shall inform the grantee of the Secretary's action.



PART 634--LABOR MARKET INFORMATION PROGRAMS UNDER TITLE IV, PART E OF THE JOB TRAINING PARTNERSHIP ACT--Table of Contents




              Comprehensive Labor Market Information System

Sec.
634.1  General.
634.2  Availability of funds.
634.3  Eligible recipients.
634.4  Statistical standards.
634.5  Federal oversight.

    Authority:  Job Training Partnership Act, sec. 169, (29 U.S.C. 1510 
et seq., Pub. L. 97-300, 96 Stat. 1322), unless otherwise noted.

    Source:  48 FR 48779, Oct. 20, 1983, unless otherwise noted.

              Comprehensive Labor Market Information System



Sec. 634.1  General.

    Pursuant to title IV, part E of the Job Training Partnership Act, 
the Secretary, in cooperation with the States, shall maintain a 
comprehensive system of Labor Market Information (LMI). This subpart 
contains regulations governing the comprehensive LMI system.



Sec. 634.2  Availability of funds.

    (a) The Secretary shall make available, from the amounts 
appropriated pursuant to section 461(a) of the Act and sections 3(a) and 
14 of the Wagner-Peyser Act, funds to support LMI activities and 
Federal-State cooperative statistical programs.
    (b) LMI programs may be funded through reimbursable agreements 
between the Secretary and the States.



Sec. 634.3  Eligible recipients.

    (a) For funds appropriated pursuant to JTPA title IV, part E, 
eligible recipients shall be the 50 States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern 
Mariana Islands, American Samoa, and the Trust Territory of the Pacific 
Islands.
    (b) For funds appropriated pursuant to the Wagner-Peyser Act, as 
amended, eligible recipients shall be the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico, Guam, and the Virgin Islands.



Sec. 634.4  Statistical standards.

    Recipients shall agree to provide required data following the 
statistical standards prescribed by the Bureau of Labor Statistics for 
cooperative statistical programs.



Sec. 634.5  Federal oversight.

    The Secretary shall take such action as necessary to ensure 
satisfactory recipient performance.



PART 636--COMPLAINTS, INVESTIGATIONS AND HEARINGS--Table of Contents




Sec.
636.1  Scope and purpose.
636.2  Protection of informants.
636.3  Complaint and hearing procedures at

[[Page 318]]

          the grantee level.
636.4  Grievance procedures at the employer level.
636.5  Exhaustion of grantee level procedure.
636.6  Complaints and investigations at the Federal level.
636.7  Subpoenas.
636.8  Initial and final determination; request for hearing at the 
          Federal level.
636.9  Opportunity for informal review.
636.10  Hearings before the Office of Administrative Law Judges.
636.11  Final action.

    Authority:  29 U.S.C. 1579(a).

    Source:  48 FR 48780, Oct. 20, 1983, unless otherwise noted.



Sec. 636.1  Scope and purpose.

    (a) General. This part establishes the procedures to receive, 
investigate and resolve complaints, and conduct hearings to adjudicate 
disputes under title IV (except part B) of the Act. It governs grievance 
procedures at the recipient or subrecipient level, the receipt and 
investigation of complaints at the Federal level, the procedures for 
resolving investigative findings, the rules of practice for adjudicative 
hearings, and the rendering of decisions pursuant to the Act. Judicial 
review of final action of the Department after opportunity for an 
administrative hearing has been exclusively established in the United 
States Courts of Appeals for the Circuits in which the affected parties 
reside or transact business.
    (b) Initiation of investigations. JTPA investigations may be 
initiated upon the request of any person or organization or by the 
Department on its own initiative.
    (c) Non-JTPA remedies. Whenever any person, organization or agency 
believes that a recipient or subrecipient has engaged in conduct that 
violates the Act and that such conduct also violates a Federal statute 
other than JTPA, or a State or local law, that person, organization or 
agency may, with respect to the non-JTPA cause of action, institute a 
civil action or pursue other remedies authorized under other Federal, 
State, or local law against the recipient or subrecipient without first 
exhausting the remedies in this subpart. For example, if a subrecipient 
believes that a grantee has breached the subgrant agreement between the 
grantee and itself, the subrecipient may institute a civil action for 
breach of contract in a State court if so authorized by State law. 
Nothing in the Act or this paragraph, shall:
    (1) Allow any person or organization to join or sue the Secretary 
with respect to his or her responsibilities under JTPA except after 
exhausting the remedies in this subpart.
    (2) Allow any person or organization to file a suit which alleges a 
violation of JTPA or these regulations without first exhausting the 
administrative remedies described in this subpart, or
    (3) Be construed to create a private right of action with respect to 
alleged violations of JTPA or the regulations.
    (d) Complaints of discrimination pursuant to section 167(a) of the 
Act will be handled under 29 CFR parts 31 and 32.
[48 FR 48780, Oct. 20, 1983, as amended at 55 FR 13007, Apr. 6, 1990]



Sec. 636.2  Protection of informants.

    (a) Informants. Where possible the identity of any person who has 
furnished information relating to, or assisted in an investigation of a 
possible violation of the Act will be held in confidence. Where 
disclosure of the person's identity is essential to assure a fair 
determination of the issues, or where necessary to effectively 
accomplish responsibilities under the Act, the Department may disclose 
such identity upon such conditions as will promote the continued receipt 
of confidential information by the Department and effectuate the 
protections and policies stated in paragraph (b) of this section. Any 
such disclosure shall be consistent with the Freedom of Information Act, 
the Privacy Act and other applicable law.
    (b) Retaliation prohibited. No person or agency may discharge, or in 
any other manner discriminate or retaliate against any person, or deny 
to any person a benefit to which that person is entitled under the 
provisions of the Act or the regulations because such person has filed 
any complaint, instituted or caused to be instituted any proceeding 
under or related to the Act, has testified or is about to testify in any 
such

[[Page 319]]

proceeding or investigation, or has provided information or assisted in 
an investigation.



Sec. 636.3  Complaint and hearing procedures at the grantee level.

    (a) Policy. (1) Each grantee shall establish and maintain a 
procedure for resolving any complaint alleging a violation of the Act, 
regulations, grant or other agreements under the Act, including any 
complaint arising in connection with the JTPA programs operated by the 
grantee or its subrecipients. Such complaint procedures must meet the 
requirements of this section. The complaint procedure shall provide for 
final resolution of complaints within 60 days after filing the 
complaint. Where existing complaints or grievance procedures include the 
elements set forth in this section, grantees may adopt such mechanism 
as, or as part of, their JTPA procedure.
    (2) Participants shall be provided, upon enrollment into employment 
or training, with a written description of the complaint procedures 
including notification of their right to file a complaint and 
instructions on how to do so. Grantees should designate an individual to 
monitor the operation of the complaint procedures, to ensure that 
complaints and related correspondence are logged and filed, to ensure 
that assistance is available for properly filling complaints, and to 
ensure the availability, coordination, and promptness of all elements of 
the procedures. Upon filing a complaint, and at each stage thereafter, 
each complaint shall be notified in writing of the next step in the 
procedure.
    (3) Complaints may be brought by any individual or organization 
including, but not limited to, program participants, subrecipients, 
contractors, staff of the grantee or subrecipient, applicants for 
participation or financial assistance, labor unions, and community-based 
organizations.
    (4) With the exception of complaints alleging fraud or criminal 
activity, the filing of a complaint pursuant to this section must be 
made within one year of the alleged occurrence.
    (5) The grantee may delegate the authority to operate and maintain 
the complaint and hearing procedure to its subrecipients except for 
complaints between the grantee and its subrecipients (e.g., audit 
disallowances), complaints involving more than one of its subrecipients, 
or complaints directly involving the operations or responsibilities of 
the grantee. Where the procedure is delegated, the grantee may provide 
for an appeal to itself from the decision of the subrecipient or the 
grantee may provide that the subrecipient's decision is the final 
decision of the grantee. Where the procedure is delegated, the grantee 
shall ensure that the procedures specified in this section are followed 
and a decision issued promptly within 60 days after a complaint is 
filed.
    (6) When a participant is an employee of a grantee or subrecipient 
and alleges that an occurrence constitutes a violation of the Act, 
regulations, grant, or other agreements under the Act, as well as a 
violation of the terms and conditions of employment under a State or 
local law or a collective bargaining agreement, the participant may 
pursue the complaint and hearing procedures under the State or local law 
or the collective bargaining agreement, pursuant to Sec. 636.4. A 
participant who selects the procedures provided in this section is not 
precluded from filing a complaint under Sec. 636.4, unless otherwise 
prohibited by State or local law, or applicable collective bargaining 
agreement.
    (b) Complaint procedures. The complaint resolution procedure shall 
include:
    (1) Opportunity to file a complaint. All complaints shall be in 
writing.
    (2) Opportunity for informal resolution of the complaint.
    (3) Written notification of an opportunity for a hearing when an 
informal resolution has not been accomplished. The notice shall state 
the procedures for requesting a hearing and shall describe the elements 
in the hearing procedures including those set forth in paragraph (c) of 
this section.
    (4) Opportunity to amend the complaint prior to a hearing.
    (5) Opportunity for a hearing pursuant to paragraph (c) of this 
section within 30 days of filing the complaint.

[[Page 320]]

    (6) A final written decision to the complainant which shall be made 
within 60 days of the filing of the complaint and provided to the 
parties by certified or registered mail, return receipt requested. The 
decision shall include:
    (i) A statement of facts and reason(s) for the decision.
    (ii) A statement that the procedures delineated in this section have 
been completed.
    (iii) A statement of any remedies to be applied.
    (iv) Notice of the right to file a complaint with the Grant Officer 
pursuant to Sec. 636.6 where any party disagrees with the decision.
    (c) Hearing procedure. A hearing shall be provided within 30 days 
after filing a complaint. The hearing procedure shall include:
    (1) Written notice of the date, time and place of the hearing, the 
manner in which it will be conducted, and the issues to be decided. 
Other interested parties may apply for notice. Such other interested 
party is a person or organization potentially affected by the outcome. 
The notice to other interested parties shall include the same 
information furnished to the complainant and shall further state whether 
such interested parties may participate in the hearing and if 
applicable, the method by which they may request such participation.
    (2) Opportunity to withdraw the request for hearing in writing 
before the hearing.
    (3) Opportunity to request rescheduling of the hearing for good 
cause.
    (4) Opportunity to be represented by an attorney or other 
representative of the complainant's choice.
    (5) Opportunity to call witnesses and introduce documentary 
evidence. Recipients or subrecipients shall cooperate in making 
available any persons under their control or employ to testify, if such 
persons are requested to testify by the complainant.
    (6) Opportunity to have records or documents relevant to the issues 
produced by their custodian when such records or documents are kept by 
or for the grantee or its subrecipient in the ordinary course of 
business.
    (7) Opportunity to question any witnesses or parties.
    (8) The right to an impartial hearing officer.
    (9) A verbatim record of the proceeding.
    (10) A written decision from the hearing officer to the 
complainant(s) and any other interested parties within 60 days of the 
filing of the complaint. This period may be extended with the written 
consent of all of the parties for good cause. The written decision shall 
include a statement of facts, a statement of reasons for the decision 
and a statement of any remedies to be applied. Where the hearing 
officer's decision is the grantee's final decision it shall be provided 
to the parties by certified or registered mail, return receipt 
requested.
    (11) Where a complaint procedure provides for a grantee's review of 
the hearing officer's decision, the grantee shall complete its review 
and provide a final written decision to the complainant(s), and any 
other parties, by certified or registered mail, return receipt 
requested, as provided in paragraph (c)(10) of this section within 60 
days after the complaint is filed.
    (12) Where local law, personnel rules or other applicable 
requirements specify procedures in addition to those specified above, 
similarly employed JTPA participants shall be notified of their right to 
use the same procedures.



Sec. 636.4  Grievance procedures at the employer level.

    (a) Policy. (1) Whenever the grantee or subrecipient is an employer, 
it shall continue to operate or shall establish and maintain for its 
participants a grievance procedure relating to the terms and conditions 
of JTPA employment. The employer who does not have a grievance procedure 
may use the complaint procedure established under Sec. 636.3. Employers 
shall inform participants of the procedures they are to follow.
    (2) A participant who elects the grievance procedure in this 
section, may also pursue a complaint under Sec. 636.3 where there is an 
alleged violation of the Act, regulations, grant or other agreement 
under the Act.

[[Page 321]]

    (b) Equal benefits. Where local law, personnel rules, or other 
applicable requirements specify procedures (including procedures for any 
adverse action or for termination of employment), similarly employed 
JTPA participants shall be notified of their right to use the same 
procedures, as well as JTPA procedures.



Sec. 636.5  Exhaustion of grantee level procedure.

    (a) Exhaustion required. No complainant may file a complaint with 
the Department until the grantee level procedures specified in 
Sec. 636.3 have been exhausted.
    (b) Exhaustion exceptions. Complainants who have not exhausted the 
procedures at the grantee level may file the complaint at the Federal 
level, and the Department may accept such complaint if it determines 
that:
    (1) The grantee or subrecipient has not acted within the time frames 
specified in Sec. 636.3; or
    (2) The grantee's or subrecipient's procedures are not in compliance 
with Sec. 636.3; or
    (3) An emergency situation exists.



Sec. 636.6  Complaints and investigations at the Federal level.

    (a) General; final determination of reliable and probative evidence. 
Where local administrative remedies have been exhausted, section 144(c) 
of the Act requires that a final determination of the complaint shall be 
made within 120 days after the Department receives the complaint. The 
Department's resolution of non-criminal matters pursuant to section 
144(c) of the Act consists of the final determination under 
Sec. 636.8(e) of whether there is reliable and probative evidence to 
support the allegation or belief that a grantee or subrecipient is 
failing to comply with the requirements of the Act, regulations, grant 
or other agreement under the Act.
    (b) Complaints. (1) Every complaint shall be filed in writing before 
the commencement of any investigation or corrective action shall be 
required. Complaints alleging discrimination under section 167, will be 
filed with the Regional Director, Office of Civil Rights (OCR). All 
other JTPA complaints will be filed with the appropriate Grant Officer. 
However, a complaint timely filed with either the Grant Officer or the 
Regional OCR Director shall be deemed properly filed and shall be 
referred (as necessary) to the appropriate office. The complaint shall 
be filed only after the grantee level procedures in Sec. 636.3 have been 
exhausted and no later than 30 days from the date of receipt of the 
written decision or notice required by Sec. 636.3. The complaint should 
contain the following:
    (i) The full name, telephone number (if any), and address of the 
person making the complaint.
    (ii) The full name and address of the respondent (the grantee or 
subrecipient or person against whom the complaint is made).
    (iii) A clear and concise statement of the facts, including 
pertinent dates, constituting the alleged violation.
    (iv) Where known, the provisions of the Act, regulations, grant or 
other agreements under the Act believed to have been violated.
    (v) A statement disclosing whether proceedings involving the subject 
of the complaint have been commenced or concluded before any Federal, 
State or local authority, and, if so, the date of such commencement or 
conclusion, the name and address of the authority and the style of the 
case.
    (vi) A copy of the final decision of the recipient or subrecipient 
issued pursuant to Sec. 636.3.
    (2) A complaint will be considered to have been received upon 
receipt by the appropriate Grant Officer. To be acceptable, the 
complaint must be a written statement sufficiently precise to both 
identify those against whom the allegations are made and to fairly 
afford the respondent an opportunity to prepare a defense. A complaint 
may be amended to cure defects or omissions, or to clarify and amplify 
allegations made therein, and such amendments relate back to the 
original filing date for purposes of timely filing.
    (3) A complaint once filed may be withdrawn only with the consent of 
the Grant Officer. If the complainant fails to cooperate or is 
unavailable, the complaint may be dismissed upon reasonable notice to 
the last known address of the complainant.

[[Page 322]]

    (c) Investigation of complaints. Whenever the Grant Officer receives 
a complaint filed in accordance with paragraphs (a) and (b) of this 
section, the complaint shall be investigated if it alleges that any 
person, grantee or subrecipient has failed to comply with the 
requirements of the Act, regulations, grant or other agreements under 
the Act. The Grant Officer shall promptly issue a notice to the grantee 
or subrecipient which shall include a copy or summary of the complaint 
and which shall direct the grantee or subrecipient to forward a copy of 
the complete administrative file, including a copy of the certified 
verbatim transcript of the hearing, within 15 days of receipt of such 
notice to the Grant Officer. Such investigation shall be completed and a 
conclusion made pursuant to Sec. 636.8(e) within 120 days of the filing 
of the complaint, except that the time may be extended with the written 
consent of all the parties.
    (d) Onsite review and other bases for investigation. If after an 
onsite review, monitoring visit, review of reports, data or other 
information, the Grant Officer has reason to believe that a grantee or 
subrecipient is failing to comply with the requirements of the Act, 
regulations, grant or other agreements under the Act, the Grant Officer 
or other designated authority shall inquire into the matter.
    (e) Utilizing other services. With the consent and cooperation of 
State agencies charged with the administration or enforcement of State 
laws, the Secretary may elect for the purpose of carrying out this part, 
to utilize the services of State, local and Tribal agencies and their 
employees, and notwithstanding any other provision of law, may 
reimburse, in whole or in part, such State and local agencies and their 
employees for services rendered for such purposes.
    (f) Criminal investigation. Notwithstanding any other provision of 
this part, investigation by the Department of any matter concerning a 
potential Federal criminal violation shall be conducted as the Inspector 
General shall direct pursuant to the powers granted by the Inspector 
General Act of 1978, Pub. L. 95-452, 92 Stat. 1101.



Sec. 636.7  Subpoenas.

    (a) Subpoenas in non-Inspector General investigations. (1) The 
Department, through the appropriate Assistant Secretary, may issue a 
subpoena directing the person named therein to appear before a 
designated representative at a designated time and place to verify or to 
produce documentary evidence, or both, relating to any matter arising 
under the Act being investigated. The Assistant Secretary, Solicitor or 
the Associate Solicitor for Employment and Training Legal Services, for 
good cause shown, may extend the time prescribed for compliance with 
such subpoenas.
    (2) Any motion to limit or quash any investigational subpoena shall 
be filed with the Chief Administrative Law Judge within 10 days after 
service of the subpoena, or, if the return date is less than 10 days 
after service of the subpoena, within such other time as may be allowed 
by the assigned Administrative Law Judge.
    (3) The timely filing of a motion to limit or quash an 
investigational subpoena shall stay the requirement of a return on the 
portion challenged. If the Administrative Law Judge rules subsequent to 
the return date, and the ruling denies the motion in whole or in part, 
the Administrative Law Judge shall specify a new return date.
    (4) All motions to limit or quash subpoenas, and the responses 
thereto, shall be part of the public record of the Office of the 
Administrative Law Judges except as otherwise ordered or provided under 
these regulations.
    (b) Noncompliance. (1) In cases of failure to comply with compulsory 
processes, appropriate action may be initiated including actions for 
enforcement, forfeiture, penalties or criminal actions.
    (2) The Solicitor of Labor, with the consent of the Attorney 
General, may:
    (i) Institute in the appropriate district court on behalf of the 
Department an enforcement proceeding in connection with the failure or 
refusal of a person, partnership, corporation, recipient or other entity 
to comply with or to obey a subpoena if the return date or any extension 
thereof has passed; or
    (ii) Request on behalf of the Department the institution of civil 
actions, as

[[Page 323]]

appropriate, if the return date or any extension thereof has passed 
including seeking civil contempt in cases where a court order enforcing 
compulsory process has been violated.



Sec. 636.8  Initial and final determination; request for hearing at the Federal level.

    (a) Initial determination. Upon the conclusion of a review of the 
entire administrative record of an investigation conducted pursuant to 
Sec. 636.6 or after the conclusion of the comment period for audits, the 
Grant Officer shall make an initial determination of the matter in 
controversy including the allowability of questioned costs or 
activities. Such determination shall be based upon the requirements of 
the Act, regulations, grants or other agreements, under the Act. The 
determination may conclude either:
    (1) That based upon the entire record there is no violation of the 
Act, regulations, grants or other agreements under the Act; or
    (2) That there is evidence to support the allegation, or finding of 
questioned costs or activities.
    (b) Contents of initial determination. (1) In the event that the 
Grant Officer makes a finding that there is evidence to support the 
allegation of a violation the initial determination shall:
    (i) Be in writing;
    (ii) State the basis of the determination, including factual 
findings and conclusions;
    (iii) Specify the costs or activities disallowed;
    (iv) Specify the corrective actions required and/or that sanctions 
may be imposed; and
    (v) Give notice of an opportunity for informal resolution of the 
matters as necessary to the appropriate parties, which should include 
all interested parties specified by the Grant Officer.
    (2) In the event that the Grant Officer makes a finding of no 
violation the initial determination shall:
    (i) Be in writing;
    (ii) State the bases of the determination (factual findings and 
conclusions); and
    (iii) Give notice of the opportunity to present additional 
information within 30 days of receipt of the initial determination.
    (3) The initial determination shall be mailed by certified mail 
return receipt requested to the parties and interested parties.
    (c) Allowability of certain questioned costs. In any case in which 
the Grant Officer determines that the recipient meets the requirements 
of section 164(e)(2)(A)-(D) of the Act, the Grant Officer may waive the 
imposition of sanctions (sec. 164(e)(3)). It is the responsibility of 
the grantee to request such waiver by the Grant Officer and to submit 
the evidence to be used to make the finding.
    (d) Informal resolution. Except as provided by section 164(f) of the 
Act, the Grant Officer shall not revoke a grant, in whole or in part, 
nor institute corrective action or sanctions against a grantee without 
first providing the grantee with an opportunity to informally resolve 
those matters contained in the Grant Officer's initial determination. If 
all matters are informally resolved, the Grant Officer shall notify the 
parties in writing of the nature of the resolution, which shall 
constitute final agency action, not subject to appeal, and shall close 
the file.
    (e) Final determination. (1) If all the parties and the Grant 
Officer cannot informally resolve any matter pursuant to paragraph (d) 
of this section, the Grant Officer shall provide each party with a final 
written determination by certified mail, return receipt requested. In 
the case of audits, the final determination shall be issued not later 
than 180 days after the receipt by the Grant Officer of the final 
approved audit report.
    (2) The final determination shall:
    (i) Indicate that efforts to informally resolve matters contained in 
the initial determination pursuant to paragraph (a) of this section have 
been unsuccessful;
    (ii) List those matters upon which the parties continue to disagree;
    (iii) List any modifications to the factual findings and conclusions 
set in the initial determination;
    (iv) List any sanctions, and required corrective actions, including 
any other alteration or modification of the plan,

[[Page 324]]

grant, agreement or program ordered by the Grant Officer; and
    (v) Inform the parties of their opportunity to request a hearing 
pursuant to these regulations.
    (3) If it is determined in the final notice that the complaint does 
not allege and/or the evidence does not indicate that there is reason to 
believe there may have been a violation of the Act, regulations, grants 
or other agreements under the Act, the Grant Officer shall dismiss the 
complaint without an offer of a hearing. Such dismissal shall constitute 
final agency action.



Sec. 636.9  Opportunity for informal review.

    (a) Parties to a complaint under Sec. 636.10 may choose to waive 
their rights to an administrative hearing before the Office of 
Administrative Law Judges (OALJ) by choosing to transfer the settlement 
of their dispute to an individual acceptable to all parties for the 
purpose of conducting an informal review of the stipulated facts and 
rendering a decision in accordance with applicable law. A written 
decision will be issued within 60 days after the matter is submitted for 
informal review.
    (b) The waiver of the right to request a hearing before the OALJ 
will automatically be revoked if a settlement has not been reached 
within the 60 days provided in paragraph (a) of this section.
    (c) The decision rendered under this informal review process shall 
be treated as a final decision of an Administrative Law Judge pursuant 
to section 166(b) of the Act.



Sec. 636.10  Hearings before the Office of Administrative Law Judges.

    (a) Jurisdiction. (1) Within 21 days of receipt of the Grant 
Officer's final determination, except for determinations under 
Sec. 636.8(e)(3) dismissing the complaint without an opportunity to 
request a hearing, or on the expiration of 120 days of the filing of a 
complaint with the Grant Officer upon which no extensions have been 
mutually agreed, any affected grantee, subrecipient of complainant may 
transmit by certified mail, return receipt requested, a request for 
hearing to the Chief Administrative Law Judge, United States Department 
of Labor, 800 K Street, NW., suite 400, Washington, DC 20001-8002 with a 
copy to the Grant Officer.
    (2) The request for hearing shall be accompanied by a copy of the 
Grant Officer's final determination, if issued, and shall specifically 
state those issues of the determination upon which review is requested. 
Those provisions of the determination not specified for review, or the 
entire determination when no hearing has been requested, shall be 
considered resolved and not subject to further review.
    (3) Except as otherwise provided by these regulations, only alleged 
violations of the Act, regulations, grants or other agreements under the 
Act fairly raised in grantee level proceedings under Sec. 636.3, alleged 
violations of recipient level procedures fairly raised before the Grant 
Officer, or complaints identified in sections 164(f) and 166(a) of the 
Act are subject to review.
    (4) The same procedure set forth in paragraphs (a) (1) through (3) 
of this section applies in the case of a complainant who has not had a 
dispute adjudicated by the informal review process of Sec. 636.9 within 
the 60 days, except that the request for hearing before the OALJ must be 
filed within 15 days of the conclusion of the 60-day period. In addition 
to including the determination upon which review is requested, the 
complainant must include a copy of any Stipulation of Facts and a brief 
summary of proceedings.
    (5) Discretionary hearing. An opportunity for a hearing may also be 
extended when the appropriate Assistant Secretary determines that 
fairness and the effective operation of JTPA programs would be 
furthered.
    (b) Service and filing. Copies of all papers required to be served 
on a party or filed with the OALJ shall be filed simultaneously with the 
OALJ and served upon the parties of record or their representatives, and 
shall contain proof of such service.
    (c) Rules of Procedure. The rules of practice and procedure 
promulgated by the OALJ shall govern the conduct of hearings under this 
section.
    (d) Prehearing procedures. In all cases, the OALJ should encourage 
the use of prehearing procedures to simplify and clarify facts and 
issues.

[[Page 325]]

    (e) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or things at hearings shall be 
obtained from the OALJ and shall be issued pursuant to the authority 
contained in section 163(b) of the Act, incorporating 15 U.S.C. section 
49.
    (f) Timely submission of evidence. The OALJ shall not permit the 
introduction at the hearing of documentation relating to the 
allowability of costs if such documentation has not been made available 
for review either at the time ordered for any prehearing conference, or, 
in the absence of such an order, at least three weeks prior to the 
hearing date.
    (g) Burden of production. The Department shall have the burden of 
production to support the Grant Officer's decision. To this end, the 
Grant Officer shall prepare and file an administrative file in support 
of the decision. Thereafter, the party or parties seeking to overturn 
the Grant Officer's decision shall have the burden of persuasion.
    (h) Review. (1) In all cases proceeding under Sec. 636.6, the 
Administrative Law Judge shall review the Administrative File and the 
request for hearing and shall determine whether there has been a full 
and fair hearing at the grantee level and whether there are no material 
factual issues unresolved. If the Administrative Law Judge determines 
that these two conditions are met, the case shall be decided upon the 
record and upon such briefs as the parties may submit. The 
Administrative Law Judge shall determine from the record whether there 
exists reliable and probative evidence to uphold the decision of the 
Grant Officer and shall, as appropriate, either affirm or remand the 
decision.
    (2) If the Administrative Law Judge determines that either of the 
two conditions is not met, he or she shall hold a hearing. In such 
cases, the Office of Administrative Law Judges shall have the full 
authority of the Secretary under section 164 of the Act, except with 
respect to the provisions of subsection (e) of that section.
    (3) Nothing in this subsection shall be construed to limit the right 
of the parties to seek a dismissal of the request for hearing or to seek 
summary judgment.
    (i) Termination of grant. When the decision terminates the grant in 
whole or in part after hearing pursuant to this subpart, the decision 
shall specify the extent of termination and the date upon which such 
termination becomes effective. Upon receipt of this notice, the grantee 
shall:
    (1) Discontinue further commitments of grant funds to the extent 
that they relate to the terminated portion of the grant.
    (2) Promptly cancel all subgrants, agreements and contracts 
utilizing funds under this grant to the extent that they relate to the 
terminated portion of the grant.
    (3) Settle, with the approval of the Secretary, all outstanding 
claims arising from such termination.
    (4) Submit, within a reasonable period of time, after the receipt of 
the notice of termination, a termination settlement proposal which shall 
include a final statement of all unreimbursed costs related to the 
terminated portion of the grant.
    (j) Alternative provision of services. If the final decision 
specifies suspension or termination of the grant, the Grant Officer 
shall determine how services shall be maintained in the grantee's area. 
As part of the determination, the Grant Officer shall determine whether 
any funds shall be reallocated to another recipient to serve the area 
formerly served by the terminated or suspended grant. The Grant Officer 
may also consider the desirability of providing direct Federal services 
to the area through appropriate means.
    (k) Timing of decisions. The Office of Administrative Law Judges 
should render a written decision not later than 90 days after the 
closing of the record.
[48 FR 48780, Oct. 20, 1983, as amended at 56 FR 54708, Oct. 22, 1991]



Sec. 636.11  Final action.

    The final decision of the Secretary pursuant to section 166(b) of 
the Act in cases heard by the Administrative Law Judges or decided by an 
informal reviewer, or the Grant Officer's final determination where 
there has been no such hearing, constitutes final agency

[[Page 326]]

action within the meaning of the Act and the Administrative Procedure 
Act, 5 U.S.C. 704.



PART 637--PROGRAMS UNDER TITLE V OF THE JOB TRAINING PARTNERSHIP ACT--Table of Contents




                      Subpart A--General Provisions

637.100  Scope and purpose.
637.105  Definitions.

                Subpart B--Program Planning and Operation

637.200  Allotments to States.
637.205  Notice of intent to participate.
637.210  Incentive bonus program applications.
637.215  Review and approval of applications for incentive bonus 
          payments.
637.220  Eligibility criteria for individuals to be counted in 
          determining incentive bonuses.
637.225  Determination of incentive bonus.
637.230  Use of incentive bonuses.

  Subpart C--Additional Title V Administrative Standards and Procedures

637.300  Management systems, reporting and recordkeeping.
637.305  Federal monitoring and oversight.
637.310  Audits.

                  Subpart D--Data Collection [Reserved]

    Authority:  29 U.S.C 1579(a); 29 U.S.C. 1791i(e).

    Source:  59 FR 45868, Sept. 2, 1994, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 637.100  Scope and purpose.

    (a) This part implements Title V of the Act which creates a program 
to provide incentive bonuses to States for providing certain employable 
dependent individuals with job training to reduce welfare dependency, to 
promote self-sufficiency, to increase child support payments, and to 
increase employment and earnings (section 501).
    (b) This part applies to programs operated with funds under Title V 
of the Job Training Partnership Act.



Sec. 637.105  Definitions.

    In addition to the definitions contained in sections 4, 301, 303(e), 
and in Sec. 626.4 of this chapter, the following definitions apply to 
the administration of Title V of the Act and this part:
    Absent parent means an individual who is continuously absent from 
the household and who is a non-custodial parent of a dependent child 
receiving aid to families with dependent children (AFDC) under part A of 
title IV of the Social Security Act (42 U.S.C. 601, et seq.).
    Disability assistance means benefits offered pursuant to Title XVI 
of the Social Security Act, relating to the supplemental security income 
program.
    Federal contribution means the amount of the Federal component of 
cash payments to individuals within the participating State under 
welfare and/or disability assistance programs, including Part A of Title 
IV of the Social Security Act.



                Subpart B--Program Planning and Operation



Sec. 637.200  Allotments to States.

    (a) For each program year for which funds are appropriated to carry 
out programs under this part, the Secretary shall pay to each 
participating State the amount the State is eligible to receive in 
accordance with this part. No payments shall be made for any years for 
which funds are not appropriated and/or not available (section 502(a)).
    (b) If the appropriation is not sufficient to pay to each State the 
amount it is eligible to receive in accordance with this part, the State 
shall receive a percentage of the total available funds equal to the 
percentage of its bonus compared to the national total of bonuses 
(section 502(b)).
    (c) If an additional amount is made available after the application 
of paragraph (b) of this section, such additional amount shall be 
allocated among the States by increasing payment in the same manner as 
was used to reduce payment, except that no State shall be paid an amount 
which exceeds the amount to which it is eligible (section 502(c)).

[[Page 327]]



Sec. 637.205  Notice of intent to participate.

    (a) Any State seeking to participate in the incentive bonus program 
shall notify the Secretary of its intent to do so no later than 30 days 
before the beginning of its first program year of participation (i.e., 
June 1) (section 505(a)).
    (b) Pursuant to instructions issued by the Secretary, the 
notification referenced in paragraph (a) of this section shall be in the 
form of a letter from the Governor to the Secretary advising the 
Secretary of the State's intention to apply for, receive and expend 
bonuses under this program in a manner consistent with this part 
(section 505(b)).
    (c) After the State's submission of a notice of intent to 
participate, incentive bonuses may be claimed by a State for any 
individual who:
    (1)(i) Was an absent parent of any child receiving AFDC at the time 
such individual was determined to be eligible for participation in 
programs under the Act;
    (ii) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and
    (iii) Pays child support for a child specified in paragraph (c)(1) 
of this sec-tion following termination from activities funded under the 
Act; or
    (2)(i) Is blind or disabled;
    (ii) Was receiving disability assistance at the time such individual 
was determined to be eligible for participation in programs under the 
Act;
    (iii) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and
    (iv) Earns from employment a wage or an income (section 506).
    (d) A Governor may withdraw the State's participation in the 
incentive bonus program in any program year by submitting a written 
notice of withdrawal.



Sec. 637.210  Incentive bonus program applications.

    (a) Any State seeking to receive an incentive bonus under this title 
shall submit an Incentive Bonus Program application pursuant to 
instructions issued by the Secretary that will contain the criteria for 
approval of such application. Each application shall contain, at a 
minimum, the following information:
    (1) A list of eligible individuals who met the requirements of 
Sec. 637.220 of this part during the program year;
    (2) The amount of the incentive bonus attributable to each eligible 
individual who is claimed by the State; and
    (3) A statement certifying the availability of documentation to 
verify the eligibility of participants and the amount of the incentive 
bonus claimed by the State (section 505(b)).
    (b) The application for any program year shall be submitted by the 
State to the Secretary no later than August 31 following the end of the 
program year for which the bonus is being claimed. A copy of such 
application shall also be submitted at the same time to the appropriate 
DOL Employment and Training Administration Regional Office.



Sec. 637.215  Review and approval of applications for incentive bonus payments.

    (a) The Secretary shall review all applications for overall 
compliance with JTPA, the requirements of this part, and the 
instructions issued by the Secretary.
    (b) The Secretary shall inform a State within 30 days after receipt 
of the application whether or not its application has been approved.
    (c) If the application is not approved, the Department shall issue 
an initial notice of denial of payment indicating the reasons for such 
denial. The Governor will then have 30 days to respond to the reasons 
for the denial before a final decision is made.
    (d) If the Department determines that the additional information 
provided does not adequately respond to the questions raised in the 
initial review process, a final denial of payment shall be issued. The 
Governor may then appeal the decision in accordance with the procedures 
at subpart H of part 627 of this chapter (sections 504(c) and 505(c)).

[[Page 328]]



Sec. 637.220  Eligibility criteria for individuals to be counted in determining incentive bonuses.

    An individual shall be eligible to be counted as part of the State's 
request for an incentive bonus payment under this part if the 
individual:
    (a)(1) Was an absent parent of any child receiving AFDC at the time 
such individual was determined to be eligible for participation in 
programs under the Act;
    (2) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and
    (3) Pays child support for a child specified in paragraph (a)(1) of 
this section following termination from activities funded under the Act; 
or
    (b)(1) Is blind or disabled;
    (2) Was receiving disability assistance at the time such individual 
was determined to be eligible for participation in programs under the 
Act;
    (3) Has participated in education, training, or other activities 
(including the Job Corps) funded under the Act; and
    (4) Earns a wage or an income from employment (section 506).



Sec. 637.225  Determination of incentive bonus.

    The amount of the incentive bonus to be paid to each State shall be 
the total of the incentive bonuses claimed for each eligible individual 
within the State. The amount of the incentive bonus to be paid each 
State shall be determined by the sum of:
    (a) An amount equal to the total of the amounts of child support 
paid by each individual who is eligible under Sec. 637.220(a) of this 
part, for up to 2 years after such individual's termination from JTPA; 
and
    (b) An amount equal to the total reduction in the Federal 
contribution to the amounts received under title XVI of the Social 
Security Act (42 U.S.C. 1381, et seq.) by each individual who is 
eligible under Sec. 637.220(b) of this part, for up to 2 years after 
such individual's termination from JTPA (section 503).



Sec. 637.230  Use of incentive bonuses.

    (a) During any program year, the Governor may use an amount not to 
exceed 5 percent of the State's total bonus payment for the 
administrative costs incurred under this program, including data and 
information collection and compilation, recordkeeping, or the 
preparation of applications for incentive bonuses (section 
504(a)(1)(A)).
    (b) The remainder, not less than 95 percent of the incentive bonuses 
received, shall be distributed to SDAs and Job Corps Centers within the 
State in a manner consistent with an agreement between the Governor and 
these SDA's and centers. This agreement shall reflect an equitable 
method of distribution which is based on the degree to which the effort 
of the SDA and/or Center contributed to the State's qualification for 
incentive bonus funds under title V (section 504(a)(1)(B)).
    (c) Not more than 10 percent of the incentive bonus received in any 
program year by each SDA and/or Job Corps Center may be used for the 
administrative costs of establishing and maintaining systems necessary 
for operation of programs under title V, including the costs of 
providing incentive payments described in paragraph (d) of this section, 
technical assistance, data and information collection and compilation, 
management information systems, post-program followup activities, and 
research and evaluation activities (section 504(a)(2)).
    (d) Each SDA and/or Job Corps Center may make incentive payments to 
service providers, including participating State and local agencies, and 
community-based organizations, that demonstrate effectiveness in 
delivering employment and training services to eligible individuals 
under this title (section 504(b)).
    (e) All remaining funds received by each SDA shall be used for 
activities described in sections 204 and 264 of JTPA and shall be 
subject to the regulations governing the operation of programs under 
titles II-A and II-C of JTPA. All remaining funds received by each Job 
Corps Center shall be used for activities authorized under part B of 
title IV (section 504(a)(2).

[[Page 329]]



  Subpart C--Additional Title V Administrative Standards and Procedures



Sec. 637.300  Management systems, reporting and recordkeeping.

    (a) The Governor shall ensure that the State's financial management 
system and recordkeeping system comply with subpart D of part 627 of 
this chapter.
    (b) Notwithstanding the provisions of Sec. 629.455 of this chapter, 
the Governor shall report to the Secretary pursuant to instructions 
issued by the Secretary regarding activities funded under this part. 
Reports shall be required semi-annually and annually. Reports shall be 
provided to the Secretary within 45 calendar days after the end of the 
report period.
    (c) The Governor shall assure that appropriate and adequate records 
are maintained for the required time period to support all incentive 
bonus payment applications. Such records shall include documentation to 
support individuals' eligibility under this part.



Sec. 637.305  Federal monitoring and oversight.

    The Secretary shall conduct oversight of the programs and activities 
conducted in accordance with this part.



Sec. 637.310  Audits.

    The Governor shall ensure that the State complies with the audit 
provisions at Sec. 629.480 of this chapter.



                  Subpart D--Data Collection [Reserved]



PART 638--JOB CORPS PROGRAM UNDER TITLE IV-B OF THE JOB TRAINING PARTNERSHIP ACT--Table of Contents




                      Subpart A--Purpose and Scope

Sec.
638.100  General.

                         Subpart B--Definitions

638.200  Definitions.

      Subpart C--Funding, Site Selection, and Facilities Management

638.300  Eligibility for funds and eligible deliverers.
638.301  Funding procedures.
638.302  Performance measurement.
638.303  Site selection and facilities management.
638.304  Historical preservation.
638.305  Capital improvements.
638.306  Protection and maintenance of contract center facilities owned 
          or leased by Job Corps.
638.307  Facility surveys.

 Subpart D--Enrollment, Transfers, Terminations, and Placements in the 
                                Job Corps

638.400  Eligibility for participation.
638.401  Outreach and screening of participants.
638.402  Enrollment by readmission.
638.403  Selective Service.
638.404  Transfers.
638.405  Extensions of enrollment.
638.406  Federal status of students.
638.407  Terminations.
638.408  Transportation.
638.409  Placement and job development.

                      Subpart E--Center Operations

638.500  Orientation program.
638.501  Student handbook.
638.502  Job Corps basic education program.
638.503  Vocational training.
638.504  Occupational exploration program.
638.505  Scheduling of training.
638.506  Purchase of vocational supplies and equipment.
638.507  Work experience.
638.508  Sale of services or objects.
638.509  Leisure-time employment.
638.510  Health care and services.
638.511  Drug use and abuse.
638.512  Sexual behavior and harassment.
638.513  Death.
638.514  Residential support services.
638.515  Recreation/avocational program.
638.516  Laundry, mail, and telephone service.
638.517  Counseling.
638.518  Intergroup relations program.
638.519  Incentives system.
638.520  Student government and leadership programs.
638.521  Student welfare association.
638.522  Evaluation of student progress.
638.523  Food service.
638.524  Allowances and allotments.
638.525  Clothing.
638.526  Tort and other claims.
638.527  Federal employees' compensation.
638.528  Social Security.
638.529  Income taxes.
638.530  Emergency use of personnel, equipment and facilities.
638.531  Limitation on the use of students in emergency projects.

[[Page 330]]

638.532  Annual leave.
638.533  Other student absences.
638.534  Legal services to students.
638.535  Voting rights.
638.536  Religious rights.
638.537  Disclosure of information.
638.538  Disciplinary procedures and appeals.
638.539  Complaints and disputes.
638.540  Cooperation with agencies and institutions.
638.541  Job Corps training opportunities.
638.542  Child care services.
638.543  Community relations program.

           Subpart F--Applied Vocational Skills Training (VST)

638.600  Applied vocational skills training (VST) through work projects.
638.601  Applied VST budgeting.

      Subpart G--Experimental, Research, and Demonstration Projects

638.700  Experimental, research, and demonstration projects.

                  Subpart H--Administrative Provisions

638.800  Program management.
638.801  Staff training.
638.802  Student records management.
638.803  Safety.
638.804  Environmental health.
638.805  Security and law enforcement.
638.806  Property management and procurement.
638.807  Imprest and petty cash funds.
638.808  Center financial management and reporting.
638.809  Audit.
638.810  Reporting requirements.
638.811  Review and evaluation.
638.812  State and local taxation of Job Corps deliverers.
638.813  Nondiscrimination; nonsectarian activities.
638.814  Lobbying; political activities; unionization.
638.815  Charging fees.

    Authority:  29 U.S.C. 1579(a).

    Source:  55 FR 12996, Apr. 6, 1990, unless otherwise noted.



                      Subpart A--Purpose and Scope



Sec. 638.100  General.

    (a) Purpose and Scope. The purpose of this part is to delineate the 
policies, rules, and regulations that govern the operation of the Job 
Corps program, authorized under title IV-B of the Job Training 
Partnership Act (Act). Job Corps is one of the broad range of programs 
for youth authorized by the Act. Job Corps centers are located in both 
rural and urban areas and provide training, education, residential and a 
variety of other support services necessary to prepare students to 
become more responsible, productive, and employable. (Section 421)
    (b) Job Corps Policy and Requirements Handbook. The policies and 
procedures required in this part which are to be established by the Job 
Corps Director shall be contained in a policy and requirements handbook 
which shall be incorporated by reference in each contract or agreement 
to operate a Job Corps center, program, or entity.
    (c) Definitions. Definitions for terms used in this part are found 
in section 4 of the Act and in subpart B of this part. Statutory 
authority for the regulations in this part is found in section 169(a) of 
the Act (29 U.S.C. 1579(a)). Applicable statutory provisions, including 
sections of the Act other than section 169(a), are noted parenthetically 
in this part.



                         Subpart B--Definitions



Sec. 638.200  Definitions.

    In addition to the definitions contained in section 4 of the Act, 
the following definitions apply to programs under title IV-B of the Act 
and under this part:
    Absent Without Official Leave (AWOL) means the absence of a student 
without official leave. For purposes of tort claims, federal employees' 
compensation, pay status and leave accrual, a residential student is 
considered AWOL if AWOL for 24 continuous hours. A non-resident student 
is considered AWOL if AWOL for one full day of center training.
    Act means the Job Training Partnership Act.
    Allotment means:
    (1) A portion of the readjustment allowance prescribed by this part, 
which portion is paid monthly during the period of service of a student 
directly to a spouse of the student, to the child(ren) of the student, 
or to any other relative of the student who draws substantial support 
from the student; and

[[Page 331]]

    (2) A supplement to the portion allotted by the student, made by the 
payment of an equal amount by DOL. (Section 429(d))
    Allowance means a benefit provided by DOL to students by cash, 
check, credit, voucher, direct provision, or otherwise for such personal 
travel, leave, quarters, subsistence, transportation, equipment, 
clothing, recreational services, and other expenses as the Job Corps 
Director may deem necessary or appropriate to the students' needs. 
(Section 429)
    Capital improvement means any modification, addition, restoration or 
other improvement:
    (1) Which increases the usefulness, productivity, or serviceable 
life of an existing site, facility, building, structure, or major item 
of equipment;
    (2) Which is classified for accounting purposes as a ``fixed 
asset''; and
    (3) The cost of which increases the recorded value of the existing 
building, site, facility, structure, or major item of equipment and is 
subject to depreciation.
    Center means an organizational entity, including all of its 
subparts, providing Job Corps training and designated as a Job Corps 
center by the Job Corps Director.
    Center Director means a center's chief official or the Center 
Director's designee.
    Center operator means an agency or contractor that runs a center 
under an agreement or contract with DOL.
    Center review board means the group at a center consisting of 
representatives from staff and students that reviews charges brought 
against students for infractions of center rules for which the penalty 
of termination might be imposed.
    Civilian Conservation Center (CCC) means a center operated on public 
land under an agreement between DOL and another federal agency, which 
shall provide, in addition to other training and assistance, programs of 
work experience to conserve, develop, or manage public natural resources 
or public recreational areas or to develop community projects in the 
public interest.
    Contract center means a center administered under a contract between 
Job Corps and a corporation, partnership, public agency, or similar 
legal entity.
    Contracting officer means a DOL official authorized to enter into 
contracts or agreements on behalf of DOL.
    Deliverer means any individual or organization that receives federal 
funds directly from DOL to establish, operate, or provide service to any 
Job Corps program or activity.
    Department of Labor (DOL) means the United States Department of 
Labor, including its agencies and organizational units.
    Disruptive home life means a home life characterized by such 
conditions as:
    (1) The youth is living in an orphanage or other protective 
institution;
    (2) The youth is suffering from serious parental or familial neglect 
or abuse; or
    (3) The youth's father, mother, or legal guardian is a chronic 
invalid, alcoholic, narcotics addict, or has any other serious health 
condition.
    Economically disadvantaged means an individual who:
    (1) Receives, or is a member of a family which receives, cash 
welfare payments under a Federal, State, or local welfare program;
    (2) Has, or is a member of a family which has received a total 
income for the 6-month (annualized) period prior to application to the 
program which, in relation to family size or for an individual, was not 
in excess of the higher of:
    (i) The poverty level determined in accordance with criteria 
established by the Department of Health and Human Services; or
    (ii) 70 percent of the lower living standard income level;
    (3) Is receiving (or has been determined within the 6-month period 
prior to the application for the program involved to be eligible to 
receive) food stamps pursuant to the Food Stamp Act of 1977, as 
administered by the U.S. Department of Agriculture;
    (4) Is a foster child on behalf of whom State or local government 
payments are made; or
    (5) Is an individual with handicaps whose own income meets the 
requirements of paragraphs (1) or (2) of this definition, but who may be 
a member

[[Page 332]]

of a family whose income does not meet such requirements.
    Employment and Training Administration (ETA) means the agency within 
DOL which includes the Job Corps.
    Enrollee means a student.
    Enrollment means:
    (1) For resident students, the period of time from the date the 
student leaves home to begin government-authorized travel to the 
assigned center to the date of the scheduled arrival at the official 
travel destination authorized by the Center Director upon termination 
from Job Corps; and
    (2) For nonresident students, the period of time from the time the 
student arrives at any center activity or program until he or she 
physically leaves such activity or program.
    Environmental health program means the center program of health, 
safety, and prevention of environmental hazards for staff and students.
    Facility survey means a review of center facilities conducted by 
professional architects and/or engineers to establish the condition of a 
facility and determine repairs, alterations, or replacement, if any, 
necessary to meet health and safety, building code or programmatic 
requirements.
    Family means persons living in a single residence who are related by 
blood, marriage, or decrees of court and are included in one or more the 
following categories:
    (1) A husband, wife and dependent children,
    (2) A parent or guardian and dependent children, and
    (3) A husband and wife. A step-child or step-parent is considered to 
be related by marriage.
    Finance center means the agency or contractor which handles the 
payment of student allowances, allotments, and transportation charges.
    Imprest fund means a cash fund of a fixed amount established by an 
advance of funds, without charge to an appropriation, from an agency 
finance or disbursing officer to a duly appointed cashier, for 
disbursement as needed from time to time in making payment in cash for 
relatively small purchases. Imprest funds occur only at CCCs. (For 
contract centers, see definition of ``petty cash fund''.)
    Income means all income actually received from all sources by an 
individual or, in the case of a family, by all members of the family for 
the 6-month (annualized) period prior to application. Family size is the 
maximum number of family members during the 6-month period prior to 
application. When computing family income, income of a spouse and other 
family members is counted for the portion of the 6-month (annualized) 
period prior to application that the person was actually a member of the 
family.
    (1) For the purpose of determining an individual's eligibility for 
participation in the Job Corps program, family income includes:
    (i) Gross wages, including wages from community service employment 
(CSE), work experience, and on-the-job training (OJT) paid from Job 
Training Partnership Act funds, and salaries (before deductions);
    (ii) Net self-employment income (gross receipts minus operating 
expenses); and
    (iii) Other money income received from sources such as interest, net 
rents, OASI (Old Age and Survivors Insurance) social security benefits, 
pensions, alimony, and periodic income from insurance policy annuities, 
and other sources of income.
    (2) Family income does not include:
    (i) Non-cash income such as food stamps or compensation received in 
the form of food or housing;
    (ii) Imputed value of owner-occupied property, i.e., rental value;
    (iii) Public assistance payments;
    (iv) Cash payments received pursuant to a State plan approved under 
title I, IV, X, or XVI of the Social Security Act, or disability 
insurance payments received under title II of the Social Security Act;
    (v) Federal, State, or local unemployment benefits;
    (vi) Capital gains and losses;
    (vii) One-time unearned income, such as, but not limited to:
    (A) Payments received for a limited fixed term under income 
maintenance programs and supplemental (private) unemployment benefits 
plans;
    (B) One-time or fixed-term scholarship or fellowship grants;

[[Page 333]]

    (C) Accident, health, and casualty insurance proceeds;
    (D) Disability and death payments including fixed-term (but not 
lifetime) life insurance annuities and death benefits;
    (E) One-time award and gifts;
    (F) Inheritance, including fixed-term annuities;
    (G) Fixed-term workers compensation awards;
    (H) Soil bank payments; and
    (I) Agricultural crop stabilization payments;
    (viii) Pay or allowance which were previously received by any 
veteran while serving on active duty in the Armed Forces;
    (ix) Educational assistance and compensation payments to veterans 
and other eligible persons under chapters 11, 13, 31, 34, 35, and 36, of 
title 38, U.S. Code;
    (x) Payments made under the Trade Act of 1974;
    (xi) Payments received under the Black Lung Benefits Act (30 U.S.C. 
901 et seq.);
    (xii) Any income directly or indirectly derived from, or arising out 
of, any property held by the United States in trust for any Indian 
tribe, band, or group or any individual; per capita payments; and 
services, compensation or funds provided by the United States in 
accordance with, or generated by, the exercise of any right guaranteed 
or protected by treaty; and any property distributed or income derived 
therefrom, or any amounts paid to or for the legatees or next of kin of 
any member, derived from or arising out of the settlement of an Indian 
claim; and
    (xiii) Child support payments.
    Individual means a person who lives alone, or who lives with 
unrelated individuals, or who lives in a single residence where no 
family member claims that person as a dependent. An individual with 
disabilities has an option of applying and being considered as a member 
of a family or as an individual.
    Individual with disabilities means any person within the definition 
at 29 CFR part 33 or 34 or 41 CFR part 60-741 as applicable. Although 
the definition employs the plural form ``disabilities,'' and individual 
with a single impairment is covered within the definition. See 
Secs. 638.539(g) and 638.811(a).
    Interagency Agreement means that formal agreement between DOL and 
another Federal agency administering and operating centers. This 
agreement establishes procedures for the funding, administration, 
operation, and review of those centers as well as the resolution of any 
disputes.
    Job Corps means the agency of the Department of Labor established by 
section 422 of the Job Training Partnership Act (JTPA) (29 U.S.C. 1692) 
to perform those functions of the Secretary of Labor set forth in title 
IV-B of JTPA (29 U.S.C. 1691 et seq.).
    Job Corps Director means the chief official of the Job Corps or the 
Job Corps Director's designee.
    Leisure-time employment means part-time paid employment of students.
    Lower living standard income level means the income level (adjusted 
for regional, metropolitan, urban, and rural differences and family 
size) determined annually by the Secretary based on the most recent 
``lower living family budget'' issued by the Secretary.
    Maximum benefits means the apportioning of various segments of Job 
Corps training so that individual needs of each student are met and the 
student achieves as much benefit from the Job Corps as his or her 
abilities allow.
    National office means the national office of Job Corps.
    National training contractor means a labor union, union-affiliated 
organization, business organization, or a combination thereof, having 
contracts with the national office (or in the case of CCCs, a Federal 
agency at the national level) to provide vocational training, placement, 
or other services under a single contract including multi-area 
operations.
    Occupational exploration program means the center program whereby a 
student is made aware of the vocational training opportunities made 
available by the center in order for the student to make an informed 
vocational selection.
    Operational support services means activities or services required 
for the operation of Job Corps, such as outreach

[[Page 334]]

and screening services, contracted vocational training and off-center 
educational training, placement services, certain health services, and 
miscellaneous logistical services.
    Petty cash fund means a cash fund of a fixed amount from a contract 
center finance or disbursing officer to a contract center's duly 
appointed cashier, for disbursement as needed from time to time in 
making payment in cash for relatively small purchases. Petty cash funds 
occur at contract centers. (For CCCs, see definition of ``imprest 
fund''.)
    Placement means student employment, entry into the Armed Forces, or 
enrollment in other training or education programs, within six months 
following termination from Job Corps (or such other period as may be 
announced by the Job Corps Director by notice in the Federal Register).
    Placement agency means an organization acting pursuant to a contract 
with Job Corps that provides placement services to students.
    Poverty level means the annual income level at or below which 
families are considered to live in poverty, as annually determined by 
the Department of Health and Human Services.
    Readjustment allowance means the money accumulated by and reserved 
for each student on a monthly basis during tenure in Job Corps that is 
paid in a lump sum after termination.
    Readmission means re-enrollment of a student who has previously been 
enrolled in Job Corps for less than 24 months and applies for 
reenrollment to the basic program and can be expected to complete a 
program within the remaining portion of the youth's 24-month enrollment 
period.
    Regional appeal board means the board designated by the Regional 
Director in a regional office that considers student appeals of 
disciplinary discharges.
    Regional Director means the chief official of a regional office or 
the Regional Director's designee.
    Regional office means a regional office of Job Corps.
    Regional Solicitor means the chief official of a regional office of 
the DOL Office of the Solicitor or the Regional Solicitor's designee.
    Screening agency means an organization acting pursuant to a contract 
with the Job Corps that performs outreach, screens, and enrolls youth 
into Job Corps.
    Secretary means the Secretary of Labor (the chief official of DOL) 
or the Secretary's designee.
    Site survey means a survey of a potential location for a center that 
includes a preliminary engineering evaluation of the condition and 
capacity of existing buildings, pavements, utility systems, installed 
equipment, and all other real property components as well as a 
preliminary cost estimate for acquisition of facilities, necessary 
rehabilitation, modification, and new construction required that would, 
among other considerations, take into account structural accessibility 
for persons with handicaps.
    State means one of the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the 
Commonwealth of the Northern Mariana Islands, American Samoa, the 
Federated States of Micronesia, the Republic of the Marshall Islands, 
and the Republic of Palau/Trust Territory.
    Student means an individual who is enrolled in Job Corps.
    Student handbook means the document developed by the center operator 
and given to each student during orientation that outlines center 
services, rules, and regulations and student rights and 
responsibilities. See Sec. 638.501 of this part.
    Termination means the act of officially ending a student's 
enrollment in Job Corps for any reason.
    Transfer means the reassignment of a student from one center to 
another.
    Unauthorized goods means firearms and ammunition; explosives and 
incendiaries; knives with blades longer than 2'' (two inches); homemade 
weapons; all other weapons and instruments used primarily to inflict 
personal injury; stolen property; drugs, including alcohol, marijuana, 
depressants, stimulants, hallucinogens, tranquilizers, and drug 
paraphernalia except for drugs and/or paraphernalia that are prescribed 
for medical reasons; and any other goods prohibited by the center 
operator in the student handbook.

[[Page 335]]

    Utilization study means an architectural/engineering report which is 
developed subsequent to a site survey or assessment after the regional 
and national offices have agreed, on the basis of the site survey, that 
the site is potentially favorable for a center. After the utilization 
study is approved by the Job Corps Director it becomes the basis for 
scope of work, budget, design, rehabilitation, and construction of 
facilities for the center.
    Vocational skills training (VST) means activities that provide 
vocational instruction to students through actual construction or 
improvement of permanent facilities or other approved projects.
    Work experience program means a program for assignment of a student 
to an actual job situation, either on-center or off-center, for the 
purpose of enhancing a student's employability. Work experience 
requiring the student to work over 25 hours per week is subject to the 
provisions of the Fair Labor Standards Act and State and local minimum 
wage laws for hours worked in excess of 25 hours per week.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69099, Dec. 29, 1993]



      Subpart C--Funding, Site Selection, and Facilities Management



Sec. 638.300  Eligibility for funds and eligible deliverers.

    (a) Funds shall be made available by the Secretary to eligible 
deliverers for the operation of centers and for the provision of Job 
Corps operational support services.
    (b) Eligible deliverers for the operation of centers and for the 
operational support services necessary to center operation shall be 
units of Federal, State, and local government, State and local public 
agencies, private-for-profit and nonprofit organizations, Indian tribes 
and organizations, and labor unions, union-affiliated, and union/
management organizations.



Sec. 638.301  Funding procedures.

    (a) Contracting officers shall request proposals for the operation 
of all contract centers and for provision of operational support 
services, pursuant to the Federal Acquisition Regulation (48 CFR chapter 
1) and the DOL Acquisition Regulation (48 CFR chapter 29) for work to be 
done under contract. The requests for proposal for each contract center 
and for each operational support service contract shall describe 
specifications and standards unique to the operation of the center and 
for the provision of operational support services.
    (b) Job Corps contract center operators shall be selected and funded 
on the basis of proposals received, according to criteria established by 
the Job Corps Director. Such criteria shall be listed in the request for 
proposals.
    (c) The contracting officer shall negotiate with eligible deliverers 
for operational support services on the basis of the criteria developed 
for each specific service to be rendered. Such criteria shall be listed 
in the request for proposals.
    (d) The Secretary may enter into interagency agreements with 
eligible deliverers that are Federal agencies for the funding, 
establishment, and operation of CCCs. Such interagency agreements shall 
ensure compliance by such Federal agencies with the regulations under 
this part.
    (e) Job Corps payments to Federal agencies that operate CCCs shall 
be made by a transfer of obligational authority from DOL to the 
respective operating agency on a quarterly basis.
    (f) The Secretary is authorized to expend funds made available for 
Job Corps for the purpose of printing, binding, and disseminating data 
and other information related to Job Corps to public agencies, private 
organizations, and the general public. (Section 438(3)(A))
    (g) Notwithstanding the limitations of titles II, III, and IV of the 
Act, funds made available under those titles and transferred to the Job 
Corps program pursuant to Sec. 638.541 of this part may be used for the 
Job Corps program in accordance with the provisions of this part. 
(Sections 427(b) and 439)
    (h) (1) In accordance with this section and procedures established 
by the Job Corps Director, the contracting officers shall enter into 
contracts with public or private (including nonprofit) entities for the 
provision of outreach and

[[Page 336]]

screening services, which shall be performed in accordance with 
Sec. 638.402 of this part and procedures established by the Job Corps 
Director. (Sections 424 and 425)
    (2) In accordance with this section and procedures established by 
the Job Corps Director, the contracting officers shall enter into 
contracts with public or private (including nonprofit) entities for the 
provision of placement services, which shall be performed in accordance 
with Sec. 638.409 of this part and procedures established by the Job 
Corps Director.
    (i) All agreements and contracts pursuant to this section shall be 
made pursuant to the Federal Property and Administrative Services Act of 
1949, as amended; the Federal Grant and Cooperative Agreement Act of 
1977; and the Federal Acquisition Regulation (48 CFR chapter 1) and the 
DOL Acquisition Regulation (48 CFR chapter 29).
    (j) All Job Corps contractors shall be provided with an equitable 
and negotiated management fee of not less than 1 percent of the contract 
amount.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69100, Dec. 29, 1993]



Sec. 638.302  Performance measurement.

    The Job Corps Director shall establish a national performance 
measurement system for centers and other program components which shall 
include annual performance standards.
[58 FR 69100, Dec. 29, 1993]



Sec. 638.303  Site selection and facilities management.

    (a) The Job Corps Director shall approve the location and size of 
all centers.
    (b) Contract centers shall be established, relocated or expanded in 
accordance with procedures established by the Job Corps Director.
    (c) For federally-operated centers, either the Job Corps Director or 
a Federal agency may propose a site on public lands and if discussions 
between them establish the advisability of such, the Job Corps Director 
may require that the agency submit a site survey and utilization study. 
If the Job Corps Director decides to establish a center, facilities 
engineering and real estate management will be conducted by the Job 
Corps Director or by the Federal agency pursuant to an interagency 
agreement and this part.



Sec. 638.304  Historical preservation.

    The Job Corps Director shall review the ``National Register of 
Historic Places,'' issued by the National Park Service, to identify 
sites, buildings, structures, and objects of archeological, 
architectural, or historic significance which could be destroyed or 
adversely affected by any proposed project or site selection. Procedures 
for review are included in the ``National Register of Historic Places'' 
at 36 CFR part 800.



Sec. 638.305  Capital improvements.

    Capital improvement projects and new construction on Job Corps 
Centers shall be requested and performed in accordance with procedures 
established by the Job Corps Director.



Sec. 638.306  Protection and maintenance of contract center facilities owned or leased by Job Corps.

    The Job Corps Director shall establish procedures for the protection 
and maintenance of contract center facilities owned or leased by Job 
Corps which shall be consistent with Federal Property Management 
Regulations at 41 CFR chapter 101.



Sec. 638.307  Facility surveys.

    The Job Corps Director shall issue procedures to conduct periodic 
facility surveys of centers.



 Subpart D--Enrollment, Transfers, Terminations, and Placements in the 
                                Job Corps



Sec. 638.400  Eligibility for participation.

    To participate in the Job Corps, a young man or woman must be an 
eligible youth who:
    (a) Is at least 16 and not yet 25 years of age at the time of 
enrollment, with the following exceptions:
    (1) In the case of an otherwise eligible individual with 
disabilities, there is no upper age limit;

[[Page 337]]

    (2) Not more than 20 percent of the individuals enrolled by Job 
Corps may be ages 22 through 24; and
    (3) Youths 14 to 15 years of age may be eligible for enrollment upon 
a specific determination by the Job Corps Director to enroll them;
    (b) Is a United States citizen, United States national, a lawfully 
admitted permanent resident alien, a lawfully admitted refugee or 
parolee, or other alien who has been permitted to accept permanent 
employment in the United States by the Attorney General or the 
Immigration and Naturalization Service;
    (c) Requires additional education, training, or intensive counseling 
and related assistance in order to secure and hold meaningful 
employment, participate successfully in regular school work, qualify for 
other suitable training programs, satisfy Armed Forces entry 
requirements, or qualify for a job where prior skill or training is a 
prerequisite;
    (d) Is economically disadvantaged;
    (e) Has sufficient ability to benefit from the program;
    (f) Demonstrates an interest in obtaining the maximum benefit from 
the program, as evidenced by a voluntary desire to enroll and the 
youth's signature on the application form;
    (g) Has a signed consent for enrollment from a responsible parent or 
guardian if the applicant is unemancipated and under the age of majority 
(unless the parent or guardian cannot be located), pursuant to 
applicable laws on age of majority and emancipation of minors;
    (h) Has established suitable arrangements for the care of any 
dependent children for the proposed period of enrollment;
    (i) Is not on probation, parole, or under a suspended sentence, or 
under the supervision of any agency as a result of court action or 
institutionalization, unless the court or other appropriate agency 
certifies in writing that release from the supervision of the agency is 
satisfactory to the agency and does not violate applicable laws and 
regulations;
    (j) To qualify for residential training, is currently living in an 
environment so characterized by cultural deprivations, a disruptive 
homelife, or other disorienting conditions as to substantially impair 
prospects for successful participation in a nonresidential program 
providing appropriate training, education, or assistance;
    (k) Is physically and emotionally able to participate in normal Job 
Corps duties without costly or extensive medical treatment;
    (1) Is free of any behavioral problem that would potentially prevent 
other enrollees from receiving the benefit of the program, or impede 
satisfactory relationships between the center to which the enrollee is 
assigned and surrounding communities; and
    (m) Has a background, characteristics, and physical and mental 
capabilities which provide reasonable expectations of employment after 
training.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69100, Dec. 29, 1993]



Sec. 638.401  Outreach and screening of participants.

    In accordance with procedures issued by the Job Corps Director:
    (a) The Regional Director, as contracting officer, shall contract 
with screening agencies, which shall perform Job Corps outreach and 
screening functions.
    (b) Screening agencies shall develop outreach and referral sources, 
actively seek out potential applicants, conduct personal interviews with 
all applicants, and determine who are interested and likely Job Corps 
participants. See also Sec. 638.541 of this part.
    (c) Screening agencies shall complete all Job Corps application 
forms.
    (1) Except as provided in paragraph (c)(2) of this section, 
screening agencies shall determine whether applicants meet the 
eligibility criteria in Sec. 638.400 of this part for participation in 
the Job Corps.
    (2) The Job Corps Director may provide that determinations with 
respect to one or more of the eligibility criteria set forth in 
Sec. 638.400 of this part shall be made by the Regional Director on the 
basis of information and recommendations supplied by the screening 
agency.
    (3) An applicant for participation in the Job Corps who has been 
determined

[[Page 338]]

ineligible may appeal that determination pursuant to Sec. 638.539 of 
this part. (Sections 423, 424, 425, and 144(a))
    (d) In enrolling individuals who are to be nonresidential 
participants, priority shall be given to those eligible individuals who 
are single parents with dependent children.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69100, Dec. 29, 1993]



Sec. 638.402  Enrollment by readmission.

    Procedures for screening and selection of applicants for readmission 
shall be issued by the Job Corps Director.



Sec. 638.403  Selective Service.

    The Job Corps Director shall develop procedures to ensure that as a 
condition of enrollment and continued enrollment:
    (a) Each male applicant 18 years of age or older has evidence that 
he has complied with section 3 of the Military Selective Service Act (50 
U.S.C. App. 453), by presenting and submitting to registration if 
required pursuant to such section; and
    (b) When a male student turns 18 years of age after enrollment, he 
submits to the center operator evidence that he has complied with 
section 3 of the Military Selective Service Act (50 U.S.C. App. 453), by 
presenting and submitting to registration if required pursuant to such 
section. (Section 504)



Sec. 638.404  Transfers.

    Transfer of a student from one center of assignment to another 
center shall be made only in accordance with procedures issued by the 
Job Corps Director.



Sec. 638.405   Extensions of enrollment.

    The center operator shall see that the total length of enrollment of 
a student does not exceed two years (section 426(a)) except that an 
extension of enrollment may be authorized in accordance with procedures 
issued by the Job Corps Director. Students enrolled in advanced career 
training programs may be enrolled up to one additional year. (Section 
428(d)(1))



Sec. 638.406  Federal status of students.

    Students shall not be deemed Federal employees and shall not be 
subject to the provisions of law relating to Federal employment, 
including those relating to hours of work, rates of employment, leave, 
unemployment compensation, and Federal employee benefits, except as 
provided by 5 U.S.C. 8143(a) (Federal employees' compensation) and by 
Secs. 638.526 and 638.527 of this part. (Section 436(a))



Sec. 638.407  Terminations.

    The Job Corps Director shall issue procedures for the termination of 
students.



Sec. 638.408  Transportation.

    The transportation of students to and from centers shall occur in 
accordance with procedures issued by the Job Corps Director.



Sec. 638.409  Placement and job development.

    The overall objective of all Job Corps activities shall be to 
enhance each student's employability and to effect the successful 
placement of each student. Placement efforts shall concentrate on jobs 
related to a student's vocational training, on military service when 
this is the student's choice, or on acceptance and placement in other 
educational and/or training programs. The placement of students shall be 
performed in accordance with procedures issued by the Job Corps 
Director.
    (a) The Regional Director, as contracting officer, shall contract 
with placement agencies, which shall perform placement functions.
    (b) Placement agencies shall complete all Job Corps placement forms.



                      Subpart E--Center Operations



Sec. 638.500  Orientation program.

    The center operator shall design and implement a reception and 
orientation program in accordance with procedures issued by the Job 
Corps Director.



Sec. 638.501  Student handbook.

    Each center operator shall develop a student handbook which provides 
essential information to students for distribution to all students in 
accordance with procedures issued by the Job Corps Director.

[[Page 339]]



Sec. 638.502  Job Corps basic education program.

    The Job Corps Director shall prescribe or provide for basic 
education curricula to be used at centers. Students are considered to be 
in-school youths. The Job Corps Director, in coordination with regional 
offices, shall review and approve the basic education program at each 
center. Center operators shall provide the following educational 
programs at a minimum:
    (a) Reading and language skills;
    (b) Mathematics;
    (c) A program to prepare eligible students for the American Council 
on Education Tests of General Educational Development (GED);
    (d) World of work;
    (e) Health education;
    (f) Driver education; and
    (g) English as a second language (ESL) programs for selected center 
operators (regional offices shall arrange for the assignment of selected 
applicants needing ESL programs to the centers where such programs are 
available).



Sec. 638.503  Vocational training.

    (a) Each center shall provide enrollees with competency-based or 
individualized training in an area which will best contribute to the 
student's opportunities for permanent long-term employment. Specific 
vocational training programs offered at individual centers will be 
subject to the approval of the Job Corps Director in accordance with 
policies issued by the Job Corps Director.
    (b) The Job Corps Director may determine that it is appropriate to 
contract for vocational training programs at specific centers with 
national business, union, or union-affiliated organizations in order to 
facilitate entry of students into the workforce. All agreements with 
these national training contractors will be contracted at the national 
level in accordance with policies issued by the Job Corps Director; the 
Federal Acquisition Regulation (48 CFR chapter 1); the DOL Acquisition 
Regulation (48 CFR chapter 29); and, if CCCs, interagency agreements.



Sec. 638.504  Occupational exploration program.

    An occupational exploration program shall be provided by all centers 
in accordance with procedures issued by the Job Corps Director.



Sec. 638.505  Scheduling of training.

    The amount of time for each student's education and vocational 
training shall be apportioned to the individual needs of each student 
pursuant to procedures developed by the Job Corps Director.



Sec. 638.506  Purchase of vocational supplies and equipment.

    The Job Corps Director shall develop procedures for the low-cost 
sale to students of vocational tools, clothing, and other equipment that 
are prerequisites to employment.



Sec. 638.507  Work experience.

    (a) The center operator shall emphasize and implement programs of 
work experience for students through center program activities or 
through arrangement with employers. Work experience shall be under 
actual working conditions and should enhance the employability, 
responsibility, and confidence of the students.
    (b) The following limitations shall be observed in establishing work 
experience programs:
    (1) Students shall only be assigned to work meeting the safety 
standards of Sec. 638.803 of this part.
    (2) Any work experience arranged for employment not covered by a 
Federal, State, or local minimum wage law shall have prior regional 
office approval.
    (3) When work experience with pay is arranged, the student, for 
applicable wage provisions of the Davis-Bacon Act, the Fair Labor 
Standards Act, the Service Contract Act, and other applicable minimum 
wage laws, shall be considered a joint employee of the Job Corps and the 
work experience employer.
    (i) The wages paid by Job Corps (including the reasonable cost to 
Job Corps of room, board, and other facilities, as well as clothing and 
living allowances) shall be no less than the federal minimum wage rate 
set forth in

[[Page 340]]

section (6)(a)(1) of the Fair Labor Standards Act (FLSA) for up to 25 
hours a week. The work experience employer shall pay the student, in 
cash, any wages above the FLSA minimum whenever such additional amounts 
are required by the Davis-Bacon Act, the Service Contract Act, the State 
or local minimum wage law, or other applicable minimum wage law. For any 
time in excess of 25 hours per week, the work experience employer shall 
pay the student, in cash, no less than the entire wage at the wage rate 
required by applicable law.
    (ii) In addition to the cash wages required to be paid by work 
experience employers by paragraph (b)(3)(i) of this section, work 
experience employers, after the first six weeks of work by a student, 
shall also pay additional cash wages to the student at an hourly rate of 
25 percent of the wage set forth in section 6(a)(1) of the Fair Labor 
Standards Act.



Sec. 638.508  Sale of services or objects.

    The services rendered or objects produced at the center may be sold 
at cost to students or center employees, but shall not be sold in the 
community unless such services or products do not displace workers in 
the local community or result in the sale of products which compete with 
local merchants.



Sec. 638.509  Leisure-time employment.

    A center operator may authorize gainful leisure time employment of 
students as long as such employment does not interfere with required 
scheduled activities.



Sec. 638.510  Health care and services.

    The center operator shall provide a health program, including basic 
medical, dental, and mental health services, for all students from 
admission until termination from the Job Corps. The program shall be 
developed in accordance with procedures issued by the Job Corps 
Director.



Sec. 638.511  Drug use and abuse.

    The Job Corps Director shall develop procedures to ensure that each 
center operator offers students counseling and education programs 
related to drug and alcohol use and abuse.



Sec. 638.512  Sexual behavior and harassment.

    The Job Corps Director shall develop procedures to ensure that 
center operators establish rules concerning sexual behavior and 
harassment. See also Secs. 638.539(g) and 638.813(a) of this part.



Sec. 638.513  Death.

    In each case of student death, the center operator shall follow 
procedures established by the Job Corps Director, including notification 
of next of kin and for disposition of remains. See also Sec. 638.524(d) 
of this part.



Sec. 638.514  Residential support services.

    The center operator shall provide for residential support services 
structured as an integral part of the overall training program. This 
service shall include a secure, attractive physical and social 
environment, seven days a week, 24 hours a day, designed to enhance 
learning and personal development. All students, including nonresidents 
while they are on-center, shall be provided with the full program of 
applicable services in accordance with procedures issued by the Job 
Corps Director.



Sec. 638.515  Recreation/avocational program.

    The center operator shall develop a recreation/avocational program 
in accordance with procedures issued by the Job Corps Director.



Sec. 638.516  Laundry, mail, and telephone service.

    (a) The center operator shall provide adequate laundry services and 
supplies at no cost to students. Students shall be encouraged to 
launder, iron, and repair their personal clothing.
    (b) The center operator shall establish a system for prompt delivery 
of mail received by students in a manner that protects the 
confidentiality of such mail, and shall arrange for a sufficient number 
of conveniently located pay telephones for student use.



Sec. 638.517  Counseling.

    The center operator shall establish and conduct an ongoing 
structured counseling program in accordance with procedures issued by 
the Job Corps Director.

[[Page 341]]



Sec. 638.518  Intergroup relations program.

    The center operator shall conduct a structured intergroup relations 
program designed to reduce prejudice, prevent discriminatory behavior by 
staff and students, and increase understanding among racial/ethnic 
groups and between men and women. The program shall be developed in 
accordance with procedures issued by the Job Corps Director.



Sec. 638.519  Incentives system.

    The center operator shall establish and maintain its own incentives 
system for students in accordance with procedures established by the Job 
Corps Director.



Sec. 638.520  Student government and leadership programs.

    The center operator shall establish an elected student government 
and student leadership program in accordance with procedures established 
by the Job Corps Director.



Sec. 638.521  Student welfare association.

    The center operator shall develop a plan for the organization and 
operation of a student welfare association, to be run by an elected 
student government for the benefit of all students and with the help of 
a center staff advisor. This plan shall be developed in accordance with 
procedures issued by the Job Corps Director.
    (a) Student welfare association revenues may be derived from such 
sources as snack bars, vending machines, disciplinary fines, etc.
    (b) Student welfare association activities shall be funded from 
student welfare association revenues.



Sec. 638.522  Evaluation of student progress.

    The center operator shall implement a system to evaluate the 
progress of each student in receiving the maximum benefit from the 
program. The system shall be developed in accordance with procedures 
issued by the Job Corps Director.



Sec. 638.523  Food service.

    (a) The center operator shall ensure that meals for students are 
nutritionally well-balanced, of good quality, and sufficient in 
quantity, in accordance with procedures issued by the Job Corps 
Director. Food shall be prepared and served in a sanitary manner.
    (b) Non-students shall be charged for food provided for them unless 
prior regional office approval has been obtained. Such charges shall be 
sufficient to cover the cost of the food and its preparation.



Sec. 638.524  Allowances and allotments.

    (a) The Secretary shall periodically establish rates of allowances 
and allotments to be paid students pursuant to section 429 (a), (c), and 
(d) of the Act, and the Job Corps Director shall publish these rates as 
a notice in the Federal Register.
    (b) The Job Corps Director shall ensure that each student receives a 
readjustment allowance for each paid day of satisfactory participation 
in Job Corps after termination from the program if he/she terminates 
after 210 days in pay status or after 180 days if he/she is a maximum 
benefits or vocational completer. In the event that a student receives a 
medical termination, he/she shall be eligible for the accrued 
readjustment allowance, regardless of length of stay or other 
considerations. See also paragraph (d) of this section. (Section 
429(c)).
    (c) The Job Corps Director shall establish procedures to allow 
students to authorize deductions from their readjustment allowance, 
which shall be matched by an equal amount from Job Corps funds and sent 
biweekly as an allotment by the SPAMIS Data Center to the student's 
spouse, child(ren) or other dependent, if such spouse, child(ren) or 
other dependent resides in any State in the United States.
    (d) In the event of a student's death, any amount due, including the 
amount of any unpaid readjustment allowance, shall be paid in accordance 
with provisions of 5 U.S.C. 5582 (designation of beneficiary; order of 
precedence). (Section 429(c))
[55 FR 12996, Apr. 6, 1990, as amended at 60 FR 18993, Apr. 14, 1995]



Sec. 638.525  Clothing.

    The Job Corps Director shall establish procedures to provide 
clothing for

[[Page 342]]

all students by means of a clothing purchase allowance and by center 
issue.



Sec. 638.526  Tort and other claims.

    (a) Students shall be considered federal employees for purposes of 
the Tort Claims Act (28 U.S.C. 2671 et seq.). (Section 436(a)(3)). In 
the event a student is alleged to be involved in the damage, loss, or 
destruction of the property of others, or of causing personal injury to 
or the death of other individual(s), claims may be filed with the Center 
Director by the owner(s) of the property, the injured person(s), or by a 
duly authorized agent or legal representative of the claimant. The 
Center Director shall collect all of the facts, including accident and 
medical reports and the names and addresses of witnesses, and submit the 
claim for a decision to the DOL Regional Solicitor's Office. All tort 
claims for $25,000 or more shall be sent to the Associate Solicitor for 
Employee Benefits, U.S. Department of Labor, 200 Constitution Avenue, 
NW., Washington, DC 20210.
    (b) Whenever there is loss or damage to persons or property, which 
is believed to have resulted from operation of a Job Corps center and to 
be a proper charge against the Federal Government, a claim for such 
damage may be submitted by the owner(s) of the property, the injured 
person(s), or by a duly authorized agent or legal representative of the 
claimant to the Regional Solicitor, who shall determine if the claim is 
cognizable under the Tort Claims Act. Claims shall be filed no later 
than two years from the date of such loss or damage. If it is determined 
not to be cognizable, the Regional Solicitor shall consider the facts 
and may settle the claim pursuant to section 436(b) of the Act in an 
amount not to exceed $1,500.
    (c) The Job Corps may pay claims to students for lost, damaged, or 
stolen property, up to a maximum set by the Job Corps Director when such 
loss is not due to the negligence of the student. Students shall file 
claims no later than two years from the date of such loss. Students 
shall be compensated for losses when they are the result of a natural 
disaster or when the student's property is in the protective custody of 
the Job Corps, which shall be the case when the student is AWOL. The Job 
Corps Director shall provide for claims to be filed with regional 
offices for a determination on the claim. The regional office shall 
promptly notify the student and the center of its determination.



Sec. 638.527  Federal employees' compensation.

    (a) Students shall be considered federal employees for purposes of 
Federal employees' compensation (FEC). (Section 436(a)(2))
    (b) Resident students shall be considered to be in the ``performance 
of duty'' as Federal employees from the date they leave their homes and 
begin authorized travel to their center of assignment until the date of 
their scheduled arrival at the official travel destination upon the 
termination from Job Corps. During this period the youths shall be known 
as students, and this period shall constitute their period of 
enrollment. During this period, resident students shall be considered as 
in performance of duty at all times, during any and all of their 
activities, 24 hours a day, seven days a week, except as described in 
paragraph (d) of this section.
    (c) Non-resident students shall be considered to be ``in performance 
of duty'' as Federal employees from the time they arrive at any 
scheduled center activity or program until they physically leave such 
activity or program.
    (d) No student shall be considered as being in performance of duty 
status if he/she is absent without official leave (AWOL) or after 
arrival home on administrative leave without allowances.
    (e) In computing compensation benefits for disability or death, the 
monthly pay of a student shall be deemed that received under the 
entrance salary for a grade GS-2 Federal employee, and 5 U.S.C. 8113 (a) 
and (b) shall apply to students.
    (f) Compensation for disability shall not begin to accrue until the 
day following the date on which the injured student completes his or her 
Job Corps termination.

[[Page 343]]

    (g) Whenever a student is injured, develops an occupationally 
related illness, or dies while in the performance of duty, the Job Corps 
Director shall ensure that procedures set forth in the DOL Employment 
Standards Administration regulations at 20 CFR chapter I are followed. 
The Job Corps Director shall ensure that a thorough investigation of the 
circumstances and a medical evaluation are completed and that required 
forms are filed with the DOL Office of Workers' Compensation Programs.



Sec. 638.5 28  Social Security.

    The Act provides that students are covered by title II of the Social 
Security Act (42 U.S.C. 401 et seq.) and shall pay applicable employment 
taxes (e.g., the Federal Insurance Contributions Act (FICA) tax) on 
their living and readjustment allowances. (Section 436(a)(1))



Sec. 638.529  Income taxes.

    The Act provides that students are Federal employees for the 
purposes of the Internal Revenue Code of 1986 (title 26, U.S. Code). The 
Job Corps Director may obtain from tax authorities information regarding 
taxation of student income and provide this to center operators and to 
the finance center.



Sec. 638.530  Emergency use of personnel, equipment and facilities.

    The Job Corps Director may provide emergency assistance when there 
is a threat of natural disaster. Students may be asked to volunteer 
their services to help in such cases. The center operator shall arrange 
that any expenses consequent to such assistance shall be borne, to the 
extent possible, by the benefiting organization.



Sec. 638.531  Limitation on the use of students in emergency projects.

    The Job Corps Director shall develop procedures, when necessary, to 
safeguard the rights and safety of students who volunteer to be used in 
emergency situations.



Sec. 638.532  Annual leave.

    The Job Corps Director shall issue procedures to administer the 
accrual and use of student leave. Such procedures shall provide that:
    (a) Except for the initial pay period, students shall accrue annual 
leave at the rate of one calendar day for each pay period provided that 
the student was not AWOL or on administrative leave without pay during 
that pay period. For the initial pay period, a student shall accrue one 
day of annual leave regardless of the date of enrollment provided that 
the student was not AWOL or on administrative leave without pay from the 
date of enrollment. Accrual time shall begin on the day the student 
departs for a center and end on the date of his or her scheduled arrival 
home or at a place of employment.
    (b) Annual leave shall continue to accrue during periods of home, 
emergency, and administrative leave with pay and shall be suspended only 
when the student is AWOL or on administrative leave without allowances.
    (c) Students shall not be paid at termination for unused accrued 
leave.
    (d) Students may use accrued annual leave at any time subject to 
approval by the Center Director. Annual leave with transportation at 
government expense shall be allowed only after the student has spent 180 
days in pay status in Job Corps, and only once per year of enrollment.
    (e) Students shall not be charged annual leave for travel time to 
and from home and center by the most direct route. Saturdays, Sundays, 
and holidays that are officially recognized at the center shall not be 
charged as annual leave.



Sec. 638.533  Other student absences.

    The Job Corps Director shall develop procedures for authorized 
student absences and to account for all absences whether authorized or 
unauthorized.



Sec. 638.534  Legal services to students.

    (a) The Job Corps Director shall develop procedures to afford 
students effective and competent legal representation in criminal and 
certain civil cases. This shall include assisting students in obtaining 
free or low cost legal assistance or obtaining local attorneys or public 
defenders to represent students, and paying for such legal services 
(provided that attorney fees in criminal

[[Page 344]]

cases shall not be paid by Job Corps except in accordance with paragraph 
(b) of this section), in accordance with guidelines issued by the Job 
Corps Director.
    (b) Job Corps shall not pay the expenses of legal counsel or 
representation in any criminal case or proceeding for a student, unless 
the Center Director has certified to the Regional Director, and the 
Regional Director has approved, that a public defender is not available. 
With such approval of the Regional Director, Job Corps may compensate 
attorneys obtained pursuant to paragraph (a) of this section in criminal 
cases for reasonable expenses. Compensation shall be at the rates no 
higher than those set forth in the Criminal Justice Act of 1964, as 
amended (18 U.S.C. 3006A(d)).



Sec. 638.535  Voting rights.

    The Job Corps Director shall develop procedures to enable eligible 
students and staff to vote either locally or by absentee ballot. See 
also Sec. 638.8l4 (a) through (c) of this part.



Sec. 638.536  Religious rights.

    The right to worship or not worship as he/she chooses shall not be 
denied to any student. Religious services may not be held on-center 
unless the center is so isolated as to make transportation to and from 
community religious facilities impractical. If religious services are 
held on-center, no federal funds shall be paid to those who conduct such 
services. Services shall not be confined to one religious denomination. 
The center operator shall instruct students that students are not 
obligated by Job Corps to attend such services. See also 
Secs. 638.539(g) and 638.813 of this part.



Sec. 638.537  Disclosure of information.

    (a) Requests for information. The Job Corps Director shall develop 
administrative procedures to respond to requests for information or 
records pertaining to students and such other disclosures as may be 
necessary.
    (b) Freedom of Information Act--(1) Disclosure. Disclosure of Job 
Corps information shall be in accordance with the Freedom of Information 
Act and shall be handled according to DOL regulations at 29 CFR part 70.
    (2) Contractors. Job Corps contractors are not ``agencies'' for 
Freedom of Information Act purposes. Therefore, their records are not 
subject to disclosure under the Freedom of Information Act or 29 CFR 
part 70.
    (c) Privacy Act of 1974. When DOL maintains a system of records 
covered by the Privacy Act of 1974, or provides by contract for a 
contractor, such as a screening agency or a contract center operator, to 
operate by or on behalf of the Job Corps such a system of records to 
accomplish a Job Corps function, the requirements of the DOL regulations 
at 29 CFR part 70a apply to such system or records.



Sec. 638.538  Disciplinary procedures and appeals.

    (a) The center operator shall establish reasonable rules and 
regulations for student behavior, in accordance with procedures 
developed by the Job Corps Director. Such rules shall be established to 
ensure high standards of behavior and conduct.
    (b) The center operator shall develop reasonable sanctions for 
breaking established rules, in accordance with procedures developed by 
the Job Corps Director.
    (c) The center operator shall ensure that all students have the 
opportunity for due process in disciplinary proceedings, in accordance 
with procedures developed by the Job Corps Director. Such center 
procedures, at a minimum, shall include center review boards where the 
penalty of termination might be imposed, and procedures for appealing, 
to a regional appeal board designated by the Regional Director, center 
decisions to terminate a student. See Sec. 638.407 of this part. The 
decision of the regional appeal board shall be final agency action.
[55 FR 12996, Apr. 6, 1990; 55 FR 23634, June 11, 1990]



Sec. 638.539  Complaints and disputes.

    (a) Center and other deliverer grievance procedures. Each center 
operator or other Job Corps deliverer shall establish and maintain a 
grievance procedure for complaints about its programs and activities 
from students and other

[[Page 345]]

interested parties. A hearing on each complaint shall be conducted, 
using the established grievance procedure, within 30 days of filing of 
the complaint and a decision on the complaint shall be made by the 
Center Director or with the knowledge of the Center Director not later 
than 60 days after the filing of the complaint. Except for a complaint 
alleging fraud or criminal activity, complaints shall be made within one 
year of the alleged occurrence. (Section 144(a))
    (b) Federal review of student grievances. Where a student or a 
person denied enrollment has exhausted the center or other deliverer 
grievance procedure established pursuant to paragraph (a) of this 
section, the student may appeal the decision to the regional appeal 
board. The regional appeal board shall review the appeal and determine 
within 120 days after receiving the appeal whether to reverse, affirm, 
or remand the decision. The decision of the regional appeal board shall 
be final agency action. (Section 144(c))
    (c) Federal review of non-student grievances. (1) Where the 
grievance or complaint is made by an interested party other than a 
student, should the deliverer fail to provide a decision as required in 
paragraph (a) of this section, the complainant may then request from the 
Regional Director a determination whether reasonable cause exists to 
believe that the Act or this part has been violated. The request shall 
be filed no later than 10 days from the date on which the complainant 
should have received a decision pursuant to paragraph (a) of this 
section, and shall describe with specificity the facts and the 
proceedings (if any) below.
    (2) The Regional Director shall act within 90 days of receipt of the 
request and where there is reasonable cause to believe the Act or this 
part has been violated shall direct the deliverer to issue a decision 
adjudicating the dispute pursuant to the deliverer's grievance 
procedures. The Regional Director's action is not final agency action on 
the merits of the dispute and therefore is not appealable under the Act. 
See sections 144(c) and 166(a) of the Act. If the deliverer does not 
comply with the Regional Director's order within 60 days, the Regional 
Director may impose a sanction on the deliverer for failing to issue a 
decision.
    (d) Failures to comply with the Act. Where DOL has reason to believe 
that the center operator or other deliverer is failing to comply with 
the requirements of the Act, the Regional Director shall investigate the 
allegation or belief and determine within 120 days after receiving the 
complaint whether such allegation or complaint is true. As the result of 
such a determination, the Regional Director may:
    (1) Direct the deliverer to handle a complaint through the grievance 
procedures established under paragraph (a) of this section; or
    (2) Investigate and determine whether the deliverer is in compliance 
with the Act and this part. If the Regional Director determines that the 
deliverer is not in compliance with the Act or this part, the 
appropriate sanctions set forth in section 164 of the Act shall be 
applied, subject to paragraph (e) or (f) of this section, as 
appropriate. (Section 163 (b) and (c))
    (e) Contract disputes. A dispute between DOL and a Job Corps 
contractor shall be handled only pursuant to the Contract Disputes Act 
and 41 CFR part 29-60.
    (f) Inter-agency disputes. A dispute between DOL and a federal 
agency operating a center shall be handled only pursuant to the 
interagency agreement with that agency for the operation of the center.
    (g) Nondiscrimination. Nondiscrimination requirements, procedures, 
complaint processing, and compliance reviews are governed by, as 
applicable, provisions of the following Department of Labor regulations:
    (1) 29 CFR part 34 and subparts B and C and Appendix A of 29 CFR 
part 32 for programs receiving financial assistance under JTPA.
    (2) 29 CFR part 33 for programs conducted by the Department of 
Labor; and
    (3) 41 CFR chapter 60 for entities that have a federal ``government 
contract'' as that term is defined in the applicable regulations.
    See also Sec. 638.813(a) of this part, regarding discrimination.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69100, Dec. 29, 1993]

[[Page 346]]



Sec. 638.540  Cooperation with agencies and institutions.

    The Job Corps Director shall develop guidelines for the national 
office's, the regional offices', and for deliverers' maintenance of 
cooperative relationships with other agencies and institutions, 
including law enforcement, educational institutions, communities, and 
other employment and training agencies.



Sec. 638.541  Job Corps training opportunities.

    The Job Corps Director shall develop policies and requirements which 
will ensure linkages, where feasible, with other Federal, State and 
local programs to enhance the provision of services to disadvantaged 
youth. These shall include, where appropriate: Referrals of enrollees; 
participant assessment; services accompanying pre-employment and work 
maturity skills training, work experience, job search skills training, 
basic skills training, and occupational skills training authorized under 
the Job Training Partnership Act for youth programs; and services 
supporting participants in the Job Opportunities and Basic Skills 
Training Program (JOBS) (section 427(b)). Such services may be provided 
sequentially or concurrently. Nothing in this part shall be construed to 
prohibit an individual who has been a participant in Job Corps from 
concurrently or subsequently participating in programs under title II of 
JTPA, or to prohibit an individual who has been a participant in 
programs under title II of JTPA from concurrently or subsequently 
participating in Job Corps.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69100, Dec. 29, 1993]



Sec. 638.542  Child care services.

    (a) Job Corps centers shall, where practicable, arrange for the 
provision of child care for students with dependent children.
    (b) Center operators may propose and, with the approval of the Job 
Corps Director, establish child care facilities.
[55 FR 12996, Apr. 6, 1990, as amended at 58 FR 69100, Dec. 29, 1993]



Sec. 638.543  Community relations program.

    Each center operator shall establish a community relations program, 
which shall include establishment of a community relations council which 
includes student representation. (Section 431)



           Subpart F--Applied Vocational Skills Training (VST)



Sec. 638.600  Applied vocational skills training (VST) through work projects.

    (a)(1) The Job Corps Director shall establish procedures for 
administering applied vocational skills training (VST) projects; such 
procedures shall include funding and reporting requirements, criteria to 
be used for granting approvals, and reviewing requirements.
    (2) Each applied VST project shall be submitted to the Regional 
Director for approval. The annual applied VST plan described in 
paragraph (c) of this section shall be submitted to the Regional 
Director for approval.
    (b) Applied VST may be provided in an actual working setting for 
training students in the construction and related trades. This shall 
involve authorized construction or other projects that result in 
finished facilities or products. This shall include conservation 
projects on Federal, State, and public lands, and projects performed for 
other organizations in accordance with policies established by the Job 
Corps Director. Centers may also perform applied VST public service 
projects for nearby communities and capital improvements for other Job 
Corps centers.
    (c) Applied VST shall be the major vehicle for the training of 
students in the construction and related trades. In each year, each 
center operator shall develop an annual applied VST plan for the coming 
year. In order to ensure that maximum training opportunities are 
available to students, the center vocational instructor (and/or the 
national training contractor, when applicable) shall participate in the 
planning and shall approve each project which involves his/her 
particular trade. Applied VST projects shall be planned in such a manner 
as to give priority to

[[Page 347]]

on-center rehabilitation and construction needs. The Job Corps Director 
shall establish annual funding levels to support applied VST programs 
and shall establish specific policies on limitation, documentation, and 
reporting requirements relating to applied VST programs.



Sec. 638.601  Applied VST budgeting.

    The Job Corps Director shall establish procedures to ensure that 
center operators maintain applied VST project funds as a separate center 
budget line item and maintain strict accountability for the use or 
nonuse of such funds. The approval of the Job Corps national office is 
necessary to transfer applied VST project funds to any other center 
budget category or program activity. In the case of civilian 
conservation centers, the use of VST project funds shall be governed by 
the interagency agreements.



      Subpart G--Experimental, Research, and Demonstration Projects



Sec. 638.700  Experimental, research, and demonstration projects.

    (a) The Job Corps Director, at his or her discretion, may undertake 
experimental, research, or demonstration projects for the purpose of 
promoting greater efficiency and effectiveness in the Job Corps program 
in accordance with section 433 of the Act.
    (b) The Job Corps Director may arrange for projects under this 
section to be undertaken jointly with other Federal or federally 
assisted programs.
    (c) The Secretary may waive any provision of this part that the 
Secretary finds would prevent the implementation of experimental, 
research, or demonstration project elements essential to a determination 
of their feasibility and usefulness.



                  Subpart H--Administrative Provisions



Sec. 638.800  Program management.

    (a) The Job Corps Director shall establish and use internal program 
management procedures sufficient to prevent fraud or program abuse. The 
Job Corps Director shall ensure that sufficient auditable and otherwise 
adequate records are maintained to support the expenditure of all funds 
under the Act.
    (b) The Job Corps Director shall provide guidelines for center 
staffing levels and qualifications. The guidelines shall adhere to 
standard levels of professional education and experience which are 
accepted generally within the fields of education and counseling.



Sec. 638.801  Staff training.

    The Job Corps Director shall establish guidelines for necessary 
training for national office, regional office, and deliverer staff.



Sec. 638.802  Student records management.

    The Job Corps Director shall develop guidelines for a system of 
maintaining records for each student during enrollment and for the 
disposition of such records after termination.



Sec. 638.803  Safety.

    (a) The Job Corps Director shall establish procedures to ensure that 
students are not required or permitted to work, to be trained, to 
reside, or to receive services in buildings or surroundings or under 
conditions that are unsanitary, hazardous, or lack proper ventilation. 
Whenever students are employed or trained for jobs, they shall be 
assigned to such jobs or training in accordance with appropriate health 
and safety practices.
    (b) The Job Corps Director shall develop a procedure to provide 
appropriate protective clothing for students in work or training.
    (c) The Job Corps Director shall develop procedures to ensure 
compliance with applicable DOL Occupational Safety and Health 
Administration regulations.



Sec. 638.804  Environmental health.

    The Job Corps Director shall provide guidelines for proper 
environmental health conditions.



Sec. 638.805  Security and law enforcement.

    (a) The Job Corps Director shall provide guidelines to protect the 
security

[[Page 348]]

of students, staff, and property on-center on a 24-hours-a-day, 7-days-
a-week basis.
    (b)(1) All property which would otherwise be under exclusive federal 
legislative jurisdiction shall be considered under concurrent 
jurisdiction with the appropriate State and locality with respect to 
criminal law enforcement as long as a center is operated on such 
property. This extends to portions of the property (e.g., housing and 
recreational facilities) in addition to the portions of the property 
used as the center or training facility.
    (2) The Job Corps Director shall ensure that centers on property 
under concurrent federal-State jurisdiction establish agreements with 
federal, State and local law enforcement agencies to enforce criminal 
laws on such property. (Section 435(d))
    (c) The Job Corps Director shall develop procedures to ensure that 
any searches of a student's personal area or belongings for unauthorized 
goods follow applicable right-to-privacy laws.



Sec. 638.806  Property management and procurement.

    The Job Corps Director shall develop procedures to establish and 
maintain a system for acquisition, protection, preservation, 
maintenance, and disposition of Job Corps real and personal property, 
and services so as to maximize its usefulness and to minimize operating, 
repair, and replacement costs.



Sec. 638.807  Imprest and petty cash funds.

    Federally operated centers shall establish auditable imprest funds. 
Contract centers shall establish auditable petty cash funds. The Job 
Corps Director shall develop procedures to ensure the security of and 
accountability for imprest and petty cash funds.



Sec. 638.808  Center financial management and reporting.

    The Job Corps Director shall establish procedures to ensure that 
each center operator and each subcontractor maintain a financial 
management system that will provide accurate, complete, and current 
disclosures of the financial results of Job Corps operations, and will 
provide sufficient data for effective evaluation of program activities. 
Fiscal accounts shall be maintained in a manner that ensures timely and 
accurate reporting as required by the Job Corps Director.



Sec. 638.809  Audit.

    (a) The Secretary of Labor, the DOL Office of Inspector General, the 
Comptroller General of the United States, and any of their duly 
authorized representatives, shall have access to any books, documents, 
papers, and records of the Job Corps deliverers and their subcontractors 
that are pertinent to the Job Corps program for the purpose of making 
surveys, audits, examinations, excerpts, and transcripts.
    (b) The Secretary shall, with reasonable frequency, survey, audit, 
or examine, or arrange for the survey, audit, or examination of Job 
Corps deliverers, or their subcontractors using Federal auditors or 
independent public accountants. Such surveys, audits, or examinations 
normally shall be conducted annually but not less than once every two 
years.



Sec. 638.810  Reporting requirements.

    The Job Corps Director shall establish procedures to ensure timely 
and complete reporting of such program information as is necessary to 
maintain accountability for the Job Corps program and funding.



Sec. 638.811  Review and evaluation.

    The Job Corps Director shall establish adequate program management 
to provide continuous examination of the performance of the components 
of the program.



Sec. 638.812  State and local taxation of Job Corps deliverers.

    The Act provides that transactions conducted by a private for-profit 
deliverer or a nonprofit deliverer in connection with the deliverer's 
operation of a center or other Job Corps program or activity shall not 
be considered as generating gross receipts. Such deliverer shall not be 
liable, directly or indirectly, to any State or subdivision thereof (nor 
to any person acting on behalf thereof) for any gross receipts taxes, 
business privilege taxes measured by gross receipts, or any similar

[[Page 349]]

taxes imposed on, or measured by, gross receipts in connection with any 
payments made to or by such deliverer for operating a center or other 
Job Corps program, or activity. Such deliverer shall not be liable to 
any State or subdivision thereof to collect or pay any sales, excise, 
use, or similar tax imposed upon the sale to or use by such deliverer of 
any property, service, or other item in connection with the operation of 
a center or other Job Corps program or activity. (Section 437(c))



Sec. 638.813  Nondiscrimination; nonsectarian activities.

    (a) Nondiscrimination. Center operators and other deliverers, and 
subcontractors and/or subrecipients of center operators and other 
deliverers shall comply with the nondiscrimination provisions of section 
167 of the Act and its implementing regulations, and with, as 
applicable, 29 CFR parts 31 and 32, part 33, and 41 CFR chapter 60. For 
the purposes of section 167 of the Act, students shall be considered as 
the ultimate beneficiaries of Federal financial assistance. (Section 
167)
    (b) Nonsectarian activities. Students shall not be employed or 
trained on the construction, operation, or maintenance of so much of any 
facility as is used or to be used for sectarian instruction or as a 
place for religious worship. (Section 167(a)(3))



Sec. 638.814  Lobbying; political activities; unionization.

    No funds provided under the Act may be used in any way:
    (a) To attempt to influence in any manner a member of Congress to 
favor or oppose any legislation or appropriation by Congress;
    (b) To attempt to influence in any manner a member of a State or 
local legislature to favor or oppose any legislation or appropriation by 
such legislature;
    (c) For any activity which involves political activities; or
    (d) For any activity which will assist, promote, or deter union 
organizing. (Sections 141(1) and 143(c)(1))



Sec. 638.815  Charging fees.

    No person or organization shall charge an individual a fee for the 
placement or referral of such individual in or to a training program 
under the Act. (Section 141(j))



PART 639--WORKER ADJUSTMENT AND RETRAINING NOTIFICATION--Table of Contents




Sec.
639.1  Purpose and scope.
639.2  What does WARN require?
639.3  Definitions.
639.4  Who must give notice?
639.5  When must notice be given?
639.6  Who must receive notice?
639.7  What must the notice contain?
639.8  How is the notice served?
639.9  When may notice be given less than 60 days in advance?
639.10  When may notice be extended?

    Authority:  29 U.S.C. 2107(a).

    Source:  54 FR 16064, Apr. 20, 1989, unless otherwise noted.



Sec. 639.1  Purpose and scope.

    (a) Purpose of WARN. The Worker Adjustment and Retraining 
Notification Act (WARN or the Act) provides protection to workers, their 
families and communities by requiring employers to provide notification 
60 calendar days in advance of plant closings and mass layoffs. Advance 
notice provides workers and their families some transition time to 
adjust to the prospective loss of employment, to seek and obtain 
alternative jobs and, if necessary, to enter skill training or 
retraining that will allow these workers to successfully compete in the 
job market. WARN also provides for notice to State dislocated worker 
units so that dislocated worker assistance can be promptly provided.
    (b) Scope of these regulations. These regulations establish basic 
definitions and rules for giving notice, implementing the provisions of 
WARN. The Department's objective is to establish clear principles and 
broad guidelines which can be applied in specific circumstances. 
However, the Department recognizes that Federal rulemaking cannot 
address the multitude of industry and company-specific situations in 
which advance notice will be given.
    (c) Notice encouraged where not required. Section 7 of the Act 
states:

It is the sense of Congress that an employer who is not required to 
comply with the notice requirements of section 3 should, to the

[[Page 350]]

extent possible, provide notice to its employees about a proposal to 
close a plant or permanently reduce its workforce.

    (d) WARN enforcement. Enforcement of WARN will be through the 
courts, as provided in section 5 of the statute. Employees, their 
representatives and units of local government may initiate civil actions 
against employers believed to be in violation of Sec. 3 of the Act. The 
Department of Labor has no legal standing in any enforcement action and, 
therefore, will not be in a position to issue advisory opinions of 
specific cases. The Department will provide assistance in understanding 
these regulations and may revise them from time to time as may be 
necessary.
    (e) Notice in ambiguous situations. It is civically desirable and it 
would appear to be good business practice for an employer to provide 
advance notice to its workers or unions, local government and the State 
when terminating a significant number of employees. In practical terms, 
there are some questions and ambiguities of interpretation inherent in 
the application of WARN to business practices in the market economy that 
cannot be addressed in these regulations. It is therefore prudent for 
employers to weigh the desirability of advance notice against the 
possibility of expensive and time-consuming litigation to resolve 
disputes where notice has not been given. The Department encourages 
employers to give notice in all circumstances.
    (f) Coordination with job placement and retraining programs. The 
Department, through these regulations and through the Trade Adjustment 
Assistance Program (TAA) and Economic Dislocation and Worker Adjustment 
Assistance Act (EDWAA) regulations, encourages maximum coordination of 
the actions and activities of these programs to assure that the negative 
impact of dislocation on workers is lessened to the extent possible. By 
providing for notice to the State dislocated worker unit, WARN notice 
begins the process of assisting workers who will be dislocated.
    (g) WARN not to supersede other laws and contracts. The provisions 
of WARN do not supersede any laws or collective bargaining agreements 
that provide for additional notice or additional rights and remedies. If 
such law or agreement provides for a longer notice period, WARN notice 
shall run concurrently with that additional notice period. Collective 
bargaining agreements may be used to clarify or amplify the terms and 
conditions of WARN, but may not reduce WARN rights.



Sec. 639.2  What does WARN require?

    WARN requires employers who are planning a plant closing or a mass 
layoff to give affected employees at least 60 days' notice of such an 
employment action. While the 60-day period is the minimum for advance 
notice, this provision is not intended to discourage employers from 
voluntarily providing longer periods of advance notice. Not all plant 
closings and layoffs are subject to the Act, and certain employment 
thresholds must be reached before the Act applies. WARN sets out 
specific exemptions, and provides for a reduction in the notification 
period in particular circumstances. Damages and civil penalties can be 
assessed against employers who violate the Act.



Sec. 639.3  Definitions.

    (a) Employer. (1) The term ``employer'' means any business 
enterprise that employs--
    (i) 100 or more employees, excluding part-time employees; or
    (ii) 100 or more employees, including part-time employees, who in 
the aggregate work at least 4,000 hours per week, exclusive of hours of 
overtime.

Workers on temporary layoff or on leave who have a reasonable 
expectation of recall are counted as employees. An employee has a 
``reasonable expectation of recall'' when he/she understands, through 
notification or through industry practice, that his/her employment with 
the employer has been temporarily interrupted and that he/she will be 
recalled to the same or to a similar job. The term ``employer'' includes 
non-profit organizations of the requisite size. Regular Federal, State, 
local and federally recognized Indian tribal governments are not 
covered. However, the term ``employer'' includes public and quasi-public 
entities which engage in business (i.e., take part in a commercial or 
industrial enterprise, supply a service or good on a

[[Page 351]]

mercantile basis, or provide independent management of public assets, 
raising revenue and making desired investments), and which are 
separately organized from the regular government, which have their own 
governing bodies and which have independent authority to manage their 
personnel and assets.
    (2) Under existing legal rules, independent contractors and 
subsidiaries which are wholly or partially owned by a parent company are 
treated as separate employers or as a part of the parent or contracting 
company depending upon the degree of their independence from the parent. 
Some of the factors to be considered in making this determination are 
(i) common ownership, (ii) common directors and/or officers, (iii) de 
facto exercise of control, (iv) unity of personnel policies emanating 
from a common source, and (v) the dependency of operations.
    (3) Workers, other than part-time workers, who are exempt from 
notice under section 4 of WARN are nonetheless counted as employees for 
purposes of determining coverage as an employer.
    (4) An employer may have one or more sites of employment under 
common ownership or control. An example would be a major auto maker 
which has dozens of automobile plants throughout the country. Each plant 
would be considered a site of employment, but there is only one 
``employer'', the auto maker.
    (b) Plant closing. The term ``plant closing'' means the permanent or 
temporary shutdown of a ``single site of employment'', or one or more 
``facilities or operating units'' within a single site of employment, if 
the shutdown results in an ``employment loss'' during any 30-day period 
at the single site of employment for 50 or more employees, excluding any 
part-time employees. An employment action that results in the effective 
cessation of production or the work performed by a unit, even if a few 
employees remain, is a shutdown. A ``temporary shutdown'' triggers the 
notice requirement only if there are a sufficient number of 
terminations, layoffs exceeding 6 months, or reductions in hours of work 
as specified under the definition of ``employment loss.''
    (c) Mass layoff. (1) The term ``mass layoff'' means a reduction in 
force which first, is not the result of a plant closing, and second, 
results in an employment loss at the single site of employment during 
any 30-day period for:
    (i) At least 33 percent of the active employees, excluding part-time 
employees, and
    (ii) At least 50 employees, excluding part-time employees.

Where 500 or more employees (excluding part-time employees) are 
affected, the 33% requirement does not apply, and notice is required if 
the other criteria are met. Plant closings involve employment loss which 
results from the shutdown of one or more distinct units within a single 
site or the entire site. A mass layoff involves employment loss, 
regardless of whether one or more units are shut down at the site.
    (2) Workers, other than part-time workers, who are exempt from 
notice under section 4 of WARN are nonetheless counted as employees for 
purposes of determining coverage as a plant closing or mass layoff. For 
example, if an employer closes a temporary project on which 10 permanent 
and 40 temporary workers are employed, a covered plant closing has 
occurred although only 10 workers are entitled to notice.
    (d) Representative. The term ``representative'' means an exclusive 
representative of employees within the meaning of section 9(a) or 8(f) 
of the National Labor Relations Act or section 2 of the Railway Labor 
Act.
    (e) Affected employees. The term ``affected employees'' means 
employees who may reasonably be expected to experience an employment 
loss as a consequence of a proposed plant closing or mass layoff by 
their employer. This includes individually identifiable employees who 
will likely lose their jobs because of bumping rights or other factors, 
to the extent that such individual workers reasonably can be identified 
at the time notice is required to be given. The term ``affected 
employees'' includes managerial and supervisory employees, but does not 
include business

[[Page 352]]

partners. Consultant or contract employees who have a separate 
employment relationship with another employer and are paid by that other 
employer, or who are self-employed, are not ``affected employees'' of 
the business to which they are assigned. In addition, for purposes of 
determining whether coverage thresholds are met, either incumbent 
workers in jobs being eliminated or, if known 60 days in advance, the 
actual employees who suffer an employment loss may be counted.
    (f) Employment loss. (1) The term ``employment loss'' means (i) an 
employment termination, other than a discharge for cause, voluntary 
departure, or retirement, (ii) a layoff exceeding 6 months, or (iii) a 
reduction in hours of work of individual employees of more than 50% 
during each month of any 6-month period.
    (2) Where a termination or a layoff (see paragraphs (f)(1)(i) and 
(ii) of this section) is involved, an employment loss does not occur 
when an employee is reassigned or transferred to employer-sponsored 
programs, such as retraining or job search activities, as long as the 
reassignment does not constitute a constructive discharge or other 
involuntary termination.
    (3) An employee is not considered to have experienced an employment 
loss if the closing or layoff is the result of the relocation or 
consolidation of part or all of the employer's business and, prior to 
the closing or layoff--
    (i) The employer offers to transfer the employee to a different site 
of employment within a reasonable commuting distance with no more than a 
6-month break in employment, or
    (ii) The employer offers to transfer the employee to any other site 
of employment regardless of distance with no more than a 6-month break 
in employment, and the employee accepts within 30 days of the offer or 
of the closing or layoff, whichever is later.
    (4) A ``relocation or consolidation'' of part or all of an 
employer's business, for purposes of paragraph Sec. 639.3(h)(4), means 
that some definable business, whether customer orders, product lines, or 
operations, is transferred to a different site of employment and that 
transfer results in a plant closing or mass layoff.
    (g) Unit of local government. The term ``unit of local government'' 
means any general purpose political subdivision of a State, which has 
the power to levy taxes and spend funds and which also has general 
corporate and police powers. When a covered employment site is located 
in more than one unit of local government, the employer must give notice 
to the unit to which it determines it directly paid the highest taxes 
for the year preceding the year for which the determination is made. All 
local taxes directly paid to the local government should be aggregated 
for this purpose.
    (h) Part-time employee. The term ``part-time'' employee means an 
employee who is employed for an average of fewer than 20 hours per week 
or who has been employed for fewer than 6 of the 12 months preceding the 
date on which notice is required, including workers who work full-time. 
This term may include workers who would traditionally be understood as 
``seasonal'' employees. The period to be used for calculating whether a 
worker has worked ``an average of fewer than 20 hours per week'' is the 
shorter of the actual time the worker has been employed or the most 
recent 90 days.
    (i) Single site of employment. (1) A single site of employment can 
refer to either a single location or a group of contiguous locations. 
Groups of structures which form a campus or industrial park, or separate 
facilities across the street from one another, may be considered a 
single site of employment.
    (2) There may be several single sites of employment within a single 
building, such as an office building, if separate employers conduct 
activities within such a building. For example, an office building 
housing 50 different businesses will contain 50 single sites of 
employment. The offices of each employer will be its single site of 
employment.
    (3) Separate buildings or areas which are not directly connected or 
in immediate proximity may be considered a single site of employment if 
they are in reasonable geographic proximity, used for the same purpose, 
and share the same staff and equipment. An example is an employer who 
manages a number

[[Page 353]]

of warehouses in an area but who regularly shifts or rotates the same 
employees from one building to another.
    (4) Non-contiguous sites in the same geographic area which do not 
share the same staff or operational purpose should not be considered a 
single site. For example, assembly plants which are located on opposite 
sides of a town and which are managed by a single employer are separate 
sites if they employ different workers.
    (5) Contiguous buildings owned by the same employer which have 
separate management, produce different products, and have separate 
workforces are considered separate single sites of employment.
    (6) For workers whose primary duties require travel from point to 
point, who are outstationed, or whose primary duties involve work 
outside any of the employer's regular employment sites (e.g., railroad 
workers, bus drivers, salespersons), the single site of employment to 
which they are assigned as their home base, from which their work is 
assigned, or to which they report will be the single site in which they 
are covered for WARN purposes.
    (7) Foreign sites of employment are not covered under WARN. U.S. 
workers at such sites are counted to determine whether an employer is 
covered as an employer under Sec. 639.3(a).
    (8) The term ``single site of employment'' may also apply to truly 
unusual organizational situations where the above criteria do not 
reasonably apply. The application of this definition with the intent to 
evade the purpose of the Act to provide notice is not acceptable.
    (j) Facility or operating unit. The term ``facility'' refers to a 
building or buildings. The term ``operating unit'' refers to an 
organizationally or operationally distinct product, operation, or 
specific work function within or across facilities at the single site.
    (k) State dislocated worker unit. The term ``State dislocated worker 
unit'' means a unit designated or created in each State by the Governor 
under title III of the Job Training Partnership Act, as amended by 
EDWAA.
    (l) State. For the purpose of WARN, the term ``State'' includes the 
50 States, the District of Columbia, the Commonwealth of Puerto Rico, 
and the U.S. Virgin Islands.



Sec. 639.4  Who must give notice?

    Section 3(a) of WARN states that ``an employer shall not order a 
plant closing or mass layoff until the end of a 60-day period after the 
employer serves written notice of such an order * * *.'' Therefore, an 
employer who is anticipating carrying out a plant closing or mass layoff 
is required to give notice to affected employees or their 
representative(s), the State dislocated worker unit and the chief 
elected official of a unit of local government. (See definitions in 
Sec. 639.3 of this part.)
    (a) It is the responsibility of the employer to decide the most 
appropriate person within the employer's organization to prepare and 
deliver the notice to affected employees or their representative(s), the 
State dislocated worker unit and the chief elected official of a unit of 
local government. In most instances, this may be the local site plant 
manager, the local personnel director or a labor relations officer.
    (b) An employer who has previously announced and carried out a 
short-term layoff (6 months or less) which is being extended beyond 6 
months due to business circumstances (including unforeseeable changes in 
price or cost) not reasonably foreseeable at the time of the initial 
layoff is required to give notice when it becomes reasonably foreseeable 
that the extension is required. A layoff extending beyond 6 months from 
the date the layoff commenced for any other reason shall be treated as 
an employment loss from the date of its commencement.
    (c) In the case of the sale of part or all of a business, section 
2(b)(1) of WARN defines who the ``employer'' is. The seller is 
responsible for providing notice of any plant closing or mass layoff 
which takes place up to and including the effective date (time) of the 
sale, and the buyer is responsible for providing notice of any plant 
closing or mass layoff that takes place thereafter. Affected employees 
are always entitled to notice; at all times the employer is responsible 
for providing notice.
    (1) If the seller is made aware of any definite plans on the part of 
the buyer to carry out a plant closing or mass

[[Page 354]]

layoff within 60 days of purchase, the seller may give notice to 
affected employees as an agent of the buyer, if so empowered. If the 
seller does not give notice, the buyer is, nevertheless, responsible to 
give notice. If the seller gives notice as the buyer's agent, the 
responsibility for notice still remains with the buyer.
    (2) It may be prudent for the buyer and seller to determine the 
impacts of the sale on workers, and to arrange between them for advance 
notice to be given to affected employees or their representative(s), if 
a mass layoff or plant closing is planned.



Sec. 639.5  When must notice be given?

    (a) General rule. (1) With certain exceptions discussed in 
paragraphs (b), (c) and (d) of this section and in Sec. 639.9 of this 
part, notice must be given at least 60 calendar days prior to any 
planned plant closing or mass layoff, as defined in these regulations. 
When all employees are not terminated on the same date, the date of the 
first individual termination within the statutory 30-day or 90-day 
period triggers the 60-day notice requirement. A worker's last day of 
employment is considered the date of that worker's layoff. The first and 
each subsequent group of terminees are entitled to a full 60 days' 
notice. In order for an employer to decide whether issuing notice is 
required, the employer should--
    (i) Look ahead 30 days and behind 30 days to determine whether 
employment actions both taken and planned will, in the aggregate for any 
30-day period, reach the minimum numbers for a plant closing or a mass 
layoff and thus trigger the notice requirement; and
    (ii) Look ahead 90 days and behind 90 days to determine whether 
employment actions both taken and planned each of which separately is 
not of sufficient size to trigger WARN coverage will, in the aggregate 
for any 90-day period, reach the minimum numbers for a plant closing or 
a mass layoff and thus trigger the notice requirement. An employer is 
not, however, required under section 3(d) to give notice if the employer 
demonstrates that the separate employment losses are the result of 
separate and distinct actions and causes, and are not an attempt to 
evade the requirements of WARN.
    (2) The point in time at which the number of employees is to be 
measured for the purpose of determining coverage is the date the first 
notice is required to be given. If this ``snapshot'' of the number of 
employees employed on that date is clearly unrepresentative of the 
ordinary or average employment level, then a more representative number 
can be used to determine coverage. Examples of unrepresentative 
employment levels include cases when the level is near the peak or 
trough of an employment cycle or when large upward or downward shifts in 
the number of employees occur around the time notice is to be given. A 
more representative number may be an average number of employees over a 
recent period of time or the number of employees on an alternative date 
which is more representative of normal employment levels. Alternative 
methods cannot be used to evade the purpose of WARN, and should only be 
used in unusual circumstances.
    (b) Transfers. (1) Notice is not required in certain cases involving 
transfers, as described under the definition of ``employment loss'' at 
Sec. 639.3(f) of this part.
    (2) An offer of reassignment to a different site of employment 
should not be deemed to be a ``transfer'' if the new job constitutes a 
constructive discharge.
    (3) The meaning of the term ``reasonable commuting distance'' will 
vary with local and industry conditions. In determining what is a 
``reasonable commuting distance'', consideration should be given to the 
following factors: geographic accessibility of the place of work, the 
quality of the roads, customarily available transportation, and the 
usual travel time.
    (4) In cases where the transfer is beyond reasonable commuting 
distance, the employer may become liable for failure to give notice if 
an offer to transfer is not accepted within 30 days of the offer or of 
the closing or layoff (whichever is later). Depending upon when the 
offer of transfer was made by the employer, the normal 60-day notice 
period may have expired and the plant

[[Page 355]]

closing or mass layoff may have occurred. An employer is, therefore, 
well advised to provide 60-day advance notice as part of the transfer 
offer.
    (c) Temporary employment. (1) No notice is required if the closing 
is of a temporary facility, or if the closing or layoff is the result of 
the completion of a particular project or undertaking, and the affected 
employees were hired with the understanding that their employment was 
limited to the duration of the facility or the project or undertaking.
    (2) Employees must clearly understand at the time of hire that their 
employment is temporary. When such understandings exist will be 
determined by reference to employment contracts, collective bargaining 
agreements, or employment practices of an industry or a locality, but 
the burden of proof will lie with the employer to show that the 
temporary nature of the project or facility was clearly communicated 
should questions arise regarding the temporary employment 
understandings.
    (3) Employers in agriculture and construction frequently hire 
workers for harvesting, processing, or for work on a particular building 
or project. Such work may be seasonal but recurring. Such work falls 
under this exemption if the workers understood at the time they were 
hired that their work was temporary. In uncertain situations, it may be 
prudent for employers to clarify temporary work understandings in 
writing when workers are hired. The same employers may also have 
permanent employees who work on a variety of jobs and tasks continuously 
through most of the calendar year. Such employees are not included under 
this exemption. Giving written notice that a project is temporary will 
not convert permanent employment into temporary work, making jobs exempt 
from WARN.
    (4) Certain jobs may be related to a specific contract or order. 
Whether such jobs are temporary depends on whether the contract or order 
is part of a long-term relationship. For example, an aircraft 
manufacturer hires workers to produce a standard airplane for the U.S. 
fleet under a contract with the U.S. Air Force with the expectation that 
its contract will continue to be renewed during the foreseeable future. 
The employees of this manufacturer would not be considered temporary.
    (d) Strikes or lockouts. The statute provides an exemption for 
strikes and lockouts which are not intended to evade the requirements of 
the Act. A lockout occurs when, for tactical or defensive reasons during 
the course of collective bargaining or during a labor dispute, an 
employer lawfully refuses to utilize some or all of its employees for 
the performance of available work. A lockout not related to collective 
bargaining which is intended as a subterfuge to evade the Act does not 
qualify for this exemption. A plant closing or mass layoff at a site of 
employment where a strike or lockout is taking place, which occurs for 
reasons unrelated to a strike or lockout, is not covered by this 
exemption. An employer need not give notice when permanently replacing a 
person who is deemed to be an economic striker under the National Labor 
Relations Act. Non-striking employees at the same single site of 
employment who experience a covered employment loss as a result of a 
strike are entitled to notice; however, situations in which a strike or 
lockout affects non-striking employees at the same plant may constitute 
an unforeseeable business circumstance, as discussed in Sec. 639.9, and 
reduced notice may apply. Similarly, the ``faltering company'' 
exception, also discussed in Sec. 639.9 may apply in strike situations. 
Where a union which is on strike represents more than one bargaining 
unit at the single site, non-strikers includes the non-striking 
bargaining unit(s). Notice also is due to those workers who are not a 
part of the bargaining unit(s) which is involved in the labor 
negotiations that led to the lockout. Employees at other plants which 
have not been struck, but at which covered plant closings or mass 
layoffs occur as a direct or indirect result of a strike or lockout are 
not covered by the strike/lockout exemption. The unforeseeable business 
circumstances exception to 60 days' notice also may apply to these 
closings or layoffs at other plants.

[[Page 356]]



Sec. 639.6  Who must receive notice?

    Section 3(a) of WARN provides for notice to each representative of 
the affected employees as of the time notice is required to be given or, 
if there is no such representative at that time, to each affected 
employee. Notice also must be served on the State dislocated worker unit 
and the chief elected official of the unit of local government within 
which a closing or layoff is to occur. Section 2(b)(1) of the Act states 
that ``any person who is an employee of the seller (other than a 
parttime employee) as of the effective date [time] of the sale shall be 
considered an employee of the purchaser immediately after the effective 
date [time] of the sale.'' This provision preserves the notice rights of 
the employees of a business that has been sold, but creates no other 
employment rights. Although a technical termination of the seller's 
employees may be deemed to have occurred when a sale becomes effective, 
WARN notice is only required where the employees, in fact, experience a 
covered employment loss.
    (a) Representative(s) of affected employees. Written notice is to be 
served upon the chief elected officer of the exclusive representative(s) 
or bargaining agent(s) of affected employees at the time of the notice. 
If this person is not the same as the officer of the local union(s) 
representing affected employees, it is recommended that a copy also be 
given to the local union official(s).
    (b) Affected employees. Notice is required to be given to employees 
who may reasonably be expected to experience an employment loss. This 
includes employees who will likely lose their jobs because of bumping 
rights or other factors, to the extent that such workers can be 
identified at the time notice is required to be given. If, at the time 
notice is required to be given, the employer cannot identify the 
employee who may reasonably be expected to experience an employment loss 
due to the elimination of a particular position, the employer must 
provide notice to the incumbent in that position. While part-time 
employees are not counted in determining whether plant closing or mass 
layoff thresholds are reached, such workers are due notice.
    (c) State dislocated worker unit. Notice is to be served upon the 
State dislocated worker unit. Since the States are restructuring to 
implement training under EDWAA, service of notice upon the State 
Governor constitutes service upon the State dislocated worker unit until 
such time as the Governor makes public State procedures for serving 
notice to this unit.
    (d) Chief elected official of the unit of local government. The 
identity of the chief elected official will vary according to the local 
government structure. In the case of elected boards, the notice is to be 
served upon the board's chairperson.



Sec. 639.7  What must the notice contain?

    (a) Notice must be specific. (1) All notice must be specific.
    (2) Where voluntary notice has been given more than 60 days in 
advance, but does not contain all of the required elements set out in 
this section, the employer must ensure that all of the information 
required by this section is provided in writing to the parties listed in 
Sec. 639.6 at least 60 days in advance of a covered employment action.
    (3) Notice may be given conditional upon the occurrence or 
nonoccurrence of an event, such as the renewal of a major contract, only 
when the event is definite and the consequences of its occurrence or 
nonoccurrence will necessarily, in the normal course of business, lead 
to a covered plant closing or mass layoff less than 60 days after the 
event. For example, if the non-renewal of a major contract will lead to 
the closing of the plant that produces the articles supplied under the 
contract 30 days after the contract expires, the employer may give 
notice at least 60 days in advance of the projected closing date which 
states that if the contract is not renewed, the plant closing will occur 
on the projected date. The notice must contain each of the elements set 
out in this section.
    (4) The information provided in the notice shall be based on the 
best information available to the employer at the time the notice is 
served. It is not the intent of the regulations, that errors in the 
information provided in a

[[Page 357]]

notice that occur because events subsequently change or that are minor, 
inadvertent errors are to be the basis for finding a violation of WARN.
    (b) As used in this section, the term ``date'' refers to a specific 
date or to a 14-day period during which a separation or separations are 
expected to occur. If separations are planned according to a schedule, 
the schedule should indicate the specific dates on which or the 
beginning date of each 14-day period during which any separations are 
expected to occur. Where a 14-day period is used, notice must be given 
at least 60 days in advance of the first day of the period.
    (c) Notice to each representative of affected employees is to 
contain:
    (1) The name and address of the employment site where the plant 
closing or mass layoff will occur, and the name and telephone number of 
a company official to contact for further information;
    (2) A statement as to whether the planned action is expected to be 
permanent or temporary and, if the entire plant is to be closed, a 
statement to that effect;
    (3) The expected date of the first separation and the anticipated 
schedule for making separations;
    (4) The job titles of positions to be affected and the names of the 
workers currently holding affected jobs.

The notice may include additional information useful to the employees 
such as information on available dislocated worker assistance, and, if 
the planned action is expected to be temporary, the estimated duration, 
if known.
    (d) Notice to each affected employee who does not have a 
representative is to be written in language understandable to the 
employees and is to contain:
    (1) A statement as to whether the planned action is expected to be 
permanent or temporary and, if the entire plant is to be closed, a 
statement to that effect;
    (2) The expected date when the plant closing or mass layoff will 
commence and the expected date when the individual employee will be 
separated;
    (3) An indication whether or not bumping rights exist;
    (4) The name and telephone number of a company official to contact 
for further information.

The notice may include additional information useful to the employees 
such as information on available dislocated worker assistance, and, if 
the planned action is expected to be temporary, the estimated duration, 
if known.
    (e) The notices separately provided to the State dislocated worker 
unit and to the chief elected official of the unit of local government 
are to contain:
    (1) The name and address of the employment site where the plant 
closing or mass layoff will occur, and the name and telephone number of 
a company official to contact for further information;
    (2) A statement as to whether the planned action is expected to be 
permanent or temporary and, if the entire plant is to be closed, a 
statement to that effect;
    (3) The expected date of the first separation, and the anticipated 
schedule for making separations;
    (4) The job titles of positions to be affected, and the number of 
affected employees in each job classification;
    (5) An indication as to whether or not bumping rights exist;
    (6) The name of each union representing affected employees, and the 
name and address of the chief elected officer of each union.

The notice may include additional information useful to the employees 
such as a statement of whether the planned action is expected to be 
temporary and, if so, its expected duration.
    (f) As an alternative to the notices outlined in paragraph (e) 
above, an employer may give notice to the State dislocated worker unit 
and to the unit of local government by providing them with a written 
notice stating the name of address of the employment site where the 
plant closing or mass layoff will occur; the name and telephone number 
of a company official to contact for further information; the expected 
date of the first separation; and the number of affected employees. The 
employer is required to maintain the other information listed in 
Sec. 639.7(e) on site and readily accessible to the State disclocated 
worker unit and to the unit of general local government. Should

[[Page 358]]

this information not be available when requested, it will be deemed a 
failure to give required notice.



Sec. 639.8  How is the notice served?

    Any reasonable method of delivery to the parties listed under 
Sec. 639.6 of this part which is designed to ensure receipt of notice of 
least 60 days before separation is acceptable (e.g., first class mail, 
personal delivery with optional signed receipt). In the case of 
notification directly to affected employees, insertion of notice into 
pay envelopes is another viable option. A ticketed notice, i.e., 
preprinted notice regularly included in each employee's pay check or pay 
envelope, does not meet the requirements of WARN.



Sec. 639.9  When may notice be given less than 60 days in advance?

    Section 3(b) of WARN sets forth three conditions under which the 
notification period may be reduced to less than 60 days. The employer 
bears the burden of proof that conditions for the exceptions have been 
met. If one of the exceptions is applicable, the employer must give as 
much notice as is practicable to the union, non-represented employees, 
the State dislocated worker unit, and the unit of local government and 
this may, in some circumstances, be notice after the fact. The employer 
must, at the time notice actually is given, provide a brief statement of 
the reason for reducing the notice period, in addition to the other 
elements set out in Sec. 639.7.
    (a) The exception under section 3(b)(1) of WARN, termed ``faltering 
company'', applies to plant closings but not to mass layoffs and should 
be narrowly construed. To qualify for reduced notice under this 
exception:
    (1) An employer must have been actively seeking capital or business 
at the time that 60-day notice would have been required. That is, the 
employer must have been seeking financing or refinancing through the 
arrangement of loans, the issuance of stocks, bonds, or other methods of 
internally generated financing; or the employer must have been seeking 
additional money, credit, or business through any other commercially 
reasonable method. The employer must be able to identify specific 
actions taken to obtain capital or business.
    (2) There must have been a realistic opportunity to obtain the 
financing or business sought.
    (3) The financing or business sought must have been sufficient, if 
obtained, to have enabled the employer to avoid or postpone the 
shutdown. The employer must be able to objectively demonstrate that the 
amount of capital or the volume of new business sought would have 
enabled the employer to keep the facility, operating unit, or site open 
for a reasonable period of time.
    (4) The employer reasonably and in good faith must have believed 
that giving the required notice would have precluded the employer from 
obtaining the needed capital or business. The employer must be able to 
objectively demonstrate that it reasonably thought that a potential 
customer or source of financing would have been unwilling to provide the 
new business or capital if notice were given, that is, if the employees, 
customers, or the public were aware that the facility, operating unit, 
or site might have to close. This condition may be satisfied if the 
employer can show that the financing or business source would not choose 
to do business with a troubled company or with a company whose workforce 
would be looking for other jobs. The actions of an employer relying on 
the ``faltering company'' exception will be viewed in a company-wide 
context. Thus, a company with access to capital markets or with cash 
reserves may not avail itself of this exception by looking solely at the 
financial condition of the facility, operating unit, or site to be 
closed.
    (b) The ``unforeseeable business circumstances'' exception under 
section 3(b)(2)(A) of WARN applies to plant closings and mass layoffs 
caused by business circumstances that were not reasonably foreseeable at 
the time that 60-day notice would have been required.
    (1) An important indicator of a business circumstance that is not 
reasonably foreseeable is that the circumstance is caused by some 
sudden, dramatic, and unexpected action or condition outside the 
employer's control. A principal client's sudden and unexpected 
termination of a major

[[Page 359]]

contract with the employer, a strike at a major supplier of the 
employer, and an unanticipated and dramatic major economic downturn 
might each be considered a business circumstance that is not reasonably 
foreseeable. A government ordered closing of an employment site that 
occurs without prior notice also may be an unforeseeable business 
circumstance.
    (2) The test for determining when business circumstances are not 
reasonably foreseeable focuses on an employer's business judgment. The 
employer must exercise such commercially reasonable business judgment as 
would a similarly situated employer in predicting the demands of its 
particular market. The employer is not required, however, to accurately 
predict general economic conditions that also may affect demand for its 
products or services.
    (c) The ``natural disaster'' exception in section 3(b)(2)(B) of WARN 
applies to plant closings and mass layoffs due to any form of a natural 
disaster.
    (1) Floods, earthquakes, droughts, storms, tidal waves or tsunamis 
and similar effects of nature are natural disasters under this 
provision.
    (2) To qualify for this exception, an employer must be able to 
demonstrate that its plant closing or mass layoff is a direct result of 
a natural disaster.
    (3) While a disaster may preclude full or any advance notice, such 
notice as is practicable, containing as much of the information required 
in Sec. 639.7 as is available in the circumstances of the disaster still 
must be given, whether in advance or after the fact of an employment 
loss caused by a natural disaster.
    (4) Where a plant closing or mass layoff occurs as an indirect 
result of a natural disaster, the exception does not apply but the 
``unforeseeable business circumstance'' exception described in paragraph 
(b) of this section may be applicable.



Sec. 639.10  When may notice be extended?

    Additional notice is required when the date or schedule of dates of 
a planned plant closing or mass layoff is extended beyond the date or 
the ending date of any 14-day period announced in the original notice as 
follows:
    (a) If the postponement is for less than 60 days, the additional 
notice should be given as soon as possible to the parties identified in 
Sec. 639.6 and should include reference to the earlier notice, the date 
(or 14-day period) to which the planned action is postponed, and the 
reasons for the postponement. The notice should be given in a manner 
which will provide the information to all affected employees.
    (b) If the postponement is for 60 days or more, the additional 
notice should be treated as new notice subject to the provisions of 
Secs. 639.5, 639.6 and 639.7 of this part. Rolling notice, in the sense 
of routine periodic notice, given whether or not a plant closing or mass 
layoff is impending, and with the intent to evade the purpose of the Act 
rather than give specific notice as required by WARN, is not acceptable.



PART 640--STANDARD FOR BENEFIT PAYMENT PROMPTNESS--UNEMPLOYMENT COMPENSATION--Table of Contents




Sec.
640.1  Purpose and scope.
640.2  Federal law requirements.
640.3  Interpretation of Federal law requirements.
640.4  Standard for conformity.
640.5  Criteria for compliance.
640.6  Review of State compliance.
640.7  Benefit payment performance plans.
640.8  Enforcement of the standard.
640.9  Information, reports and studies.

    Authority:  Sec. 1102, Social Security Act (42 U.S.C. 1302); 
Secretary's order No. 4-75, dated April 16, 1975 (40 FR 18515) (5 U.S.C. 
553). Interpret and apply secs. 303(a)(1) and 303(b)(2) of the Social 
Security Act (42 U.S.C. 503(a)(1), 503(b)(2)).

    Source:  43 FR 33225, July 28, 1978, unless otherwise noted.



Sec. 640.1  Purpose and scope.

    (a) Purpose. (1) Section 303(a)(1) of the Social Security Act 
requires, for the purposes of title III of that act, that a State 
unemployment compensation law include provision for methods of 
administration of the law that are reasonably calculated to insure the 
full payment of unemployment compensation when determined under the 
State law to be due to claimants. The standard in this part is issued to 
implement section 303(a)(1) in regard to promptness in the payment of 
unemployment benefits to eligible claimants.

[[Page 360]]

    (2) Although the standard applies to the promptness of all benefit 
payments and the criteria apply directly to the promptness of first 
benefit payments, it is recognized that adequate performance is 
contingent upon the prompt determination of eligibility by the State as 
a condition for the payment or denial of benefits. Accordingly, implicit 
in prompt performance with respect to benefit payments is the 
corresponding need for promptness by the State in making determinations 
of eligibility. However, applicable Federal laws provide no authority 
for the Secretary of Labor to determine the eligibility of individuals 
under a State law.
    (b) Scope. (1) The standard in this part applies to all State laws 
approved by the Secretary of Labor under the Federal Unemployment Tax 
Act (section 3304 of the Internal Revenue Code of 1954, 26 U.S.C. 3304), 
and to the administration of the State laws.
    (2) The standard specified in Sec. 640.4 applies to all claims for 
unemployment compensation. The criteria for State compliance in 
Sec. 640.5 apply to first payments of unemployment compensation under 
the State law to eligible claimants following the filing of initial 
claims and first compensable claims.



Sec. 640.2  Federal law requirements.

    (a) Conformity. Section 303(a)(1) of the Social Security Act, 42 
U.S.C. 503(a)(1), requires that a State law include provision for:

    Such methods of administration * * * as are found by the Secretary 
of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.

    (b) Compliance. Section 303(b)(2) of the Social Security Act, 42 
U.S.C. 503(b)(2), provides in part that:

    Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that in the administration of the 
law there is:
    (1) * * *
    (2) a failure to comply substantially with any provision specified 
in subsection (a) of this section;

the Secretary of Labor shall notify such State agency that further 
payments will not be made to the State until the Secretary of Labor is 
satisfied that there is no longer any such * * * failure to comply.

    Until he is so satisfied, he shall make no further certification to 
the Secretary of the Treasury with respect to such State * * *.



Sec. 640.3  Interpretation of Federal law requirements.

    (a) Section 303(a)(1). The Secretary interprets section 303(a)(1) of 
the Social Security Act to require that a State law include provision 
for such methods of administration as will reasonable insure the full 
payment of unemployment benefits to eligible claimants with the greatest 
promptness that is administratively feasible.
    (b) Section 303(b)(2). (1) The Secretary interprets section 
303(b)(2) of the Social Security Act to require that, in the 
administration of a State law, there shall be substantial compliance 
with the provision required by section 303(a)(1).
    (2) The greatest promptness that is administratively feasible will 
depend upon the circumstances in each State that impacts upon its 
performance in paying benefits. Factors reasonably beyond a State's 
control may cause its performance to drop below the level of adequacy 
expressed in the table below as criteria for substantial compliance 
applicable to all States. Where it is demonstrated that failure to meet 
the criteria of adequacy is attributable to factors reasonably beyond 
the State's control and, in light of those factors, the State has 
performed at the highest level administratively feasible, it will be 
considered that the State is in substantial compliance with the Standard 
for conformity. Whether or not the State is in substantial compliance, 
the remedial provisions of Secs. 640.7 and 640.8 will be applicable when 
the pertinent criteria are not met.



Sec. 640.4  Standard for conformity.

    A State law will satisfy the requirement of section 303(a)(1), if it 
contains a provision requiring, or which is construed to require, such 
methods of administration as will reasonably insure the full payment of 
unemployment benefits to eligible claimants with the greatest promptness 
that is administratively feasible.

[[Page 361]]



Sec. 640.5  Criteria for compliance.

    The criteria in the schedule below shall apply in determining 
whether, in the administration of a State law, there has been 
substantial compliance with the provision required by section 303(a)(1) 
in the issuance of benefit payments to eligible claimants for the first 
compensable weeks of unemployment in their benefit years:

------------------------------------------------------------------------
                                           Percentage of first payments 
                                           issued--days following end of
                                              first compensable week    
                                         -------------------------------
                                          14 days,   21 days,           
                                           waiting  nonwaiting  35 days,
                                            week       week        all  
                                           States   States \1\   States 
------------------------------------------------------------------------
                            Intrastate Claims                           
                                                                        
------------------------------------------------------------------------
Performance to be achieved for the 12-                                  
 mo. period ending:                                                     
  Mar. 31, 1978.........................        80         80   ........
  Mar. 31, 1979.........................    \2\ 83     \2\ 83     \2\ 90
  Mar. 31, 1980, and thereafter.........        87         87         93
                                                                        
------------------------------------------------------------------------
                            Interstate Claims                           
                                                                        
------------------------------------------------------------------------
Performance to be achieved for the 12-                                  
 mo. period ending:                                                     
  Mar. 31, 1978.........................        60         60   ........
  Mar. 31, 1979.........................    \2\ 65     \2\ 65     \2\ 75
  Mar. 31, 1980, and thereafter.........        70         70         78
------------------------------------------------------------------------
\1\ A nonwaiting week State is any State whose law does not require that
  a non-compensable period of unemployment be served before the payment 
  of benefits commences.                                                
\2\ Beginning with the month following the effective date of this       
  revised regulation.                                                   


A State will be deemed to comply substantially, as set out in 
Secs. 640.2(b) and 640.3(b), if its average performance, for the period 
of review, meets or exceeds the applicable criteria set forth above.



Sec. 640.6  Review of State compliance.

    (a) Annual reviews. The administration of each State law shall be 
reviewed annually for compliance, as set out in Secs. 640.2(b) and 
640.3(b). Annual reviews shall be for the 12-month period ending on 
March 31 of each year. An annual review with respect to any State shall 
be based upon the monthly reports of performance submitted to the 
Department by the State agency, any special reports of performance 
submitted to the Department by the State agency, any benefit payment 
performance plan applicable to the period being reviewed, any study or 
anylysis of performance relevant to the period being reviewed, and any 
other audit, study, or analysis as directed by the Department of Labor.
    (b) Periodic review. The administration of any State law may be 
reviewed at any other time, when there is reason to believe that there 
may be failure of compliance as set out in Secs. 640.2(b) and 640.3(b). 
Such a review shall be based upon the same elements as may be required 
for an annual review.



Sec. 640.7  Benefit payment performance plans.

    (a) Annual plan. An annual benefit payment performance plan shall be 
submitted by a State agency to the Department of Labor when average 
performance over a 12-month period ending on March 31 of any year does 
not meet the criteria specified in Sec. 640.5. An annual plan shall be 
submitted by July 31 following the applicable March 31, and shall be a 
plan for the fiscal year that begins on the succeeding October 1. An 
annual plan shall be subject to continuing appraisal during the period 
it is in effect, and shall be subject to modification from time to time 
as may be directed by the Department of Labor after consultation with 
the State agency.
    (b) Periodic plan. A periodic benefit payment performance plan shall 
be submitted by a State agency when directed by the Department of Labor. 
A periodic plan may be in addition to, or a modification of an annual 
plan and may be required even though an annual plan covering the same 
period is not required. A periodic plan shall be subject to continuing 
appraisal during the period it is in effect, and shall be subject to 
modification from time to time as may be directed by the Department of 
Labor.
    (c) Content of plan. An annual plan or periodic plan shall set forth 
such corrective actions, performance and evaluation plans, and other 
matters as the Department of Labor directs, after consultation with the 
State agency.

(Approved by the Office of Management and Budget under control number 
1205-0132)



[[Page 362]]


(Pub. L. No. 96-511)
[43 FR 33225, July 28, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 640.8  Enforcement of the standard.

    (a) Action by the Department of Labor. When a State agency fails, 
for an extended period, to meet the standard set forth in Sec. 640.4 or 
the criteria specified in Sec. 640.5, or fails to show satisfactory 
improvement after having submitted a benefit payment performance plan of 
action, the Department of Labor shall pursue any of the following 
remedial steps that it deems necessary before considering application of 
the provisions of Sec. 640.2:
    (1) Initiate informal discussion with State agency officials 
pursuant to Sec. 601.5(b) of this chapter.
    (2) Conduct an evaluation of the State's benefit payment processes 
and analyze the reasons for the State's failure to meet the standard.
    (3) Recommend specific actions for the State to take to improve its 
benefit payment performance.
    (4) Request the State to submit a plan for complying with the 
standard by a prescribed date.
    (5) Initiate special reporting requirements for a specified period 
of time.
    (6) Consult with the Governor of the State regarding the 
consequences of the State's noncompliance with the standard.
    (7) Propose to the Governor of the State and on an agreed upon basis 
arrange for the use of expert Federal staff to furnish technical 
assistance to the State agency with respect to its payment operations.
    (b) Action by the Assistant Secretary. If, after all remedial steps 
have been exhausted, a State fails to take appropriate action, or 
otherwise fails to meet the standard specified in Sec. 640.4, the 
Assistant Secretary for Employment and Training shall, after taking all 
factors into consideration, recommend to the Secretary of Labor that 
appropriate notice be sent to the State agency and that an opportunity 
for a hearing be extended in accordance with section 303(b) of the 
Social Security Act.



Sec. 640.9  Information, reports and studies.

    A State shall furnish to the Secretary of Labor such information and 
reports and make such studies as the Secretary decides are necessary or 
appropriate to carry out this part.



PART 641--SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM--Table of Contents




                   Subpart A--Introductory Provisions

641.101  Scope and purpose.
641.102  Definitions.

          Subpart B--Grant Planning and Application Procedures

641.201  Allocation and allotment of title V funds.
641.202  Eligibility for title V funds.
641.203  Soliciting applications for title V funds.
641.204  Grant application requirements.
641.205  Responsibility review.
641.206  Grant application review.
641.207  Negotiation.
641.208  Rejection of grant application or project components.
641.209  Award of funds.

                       Subpart C--Grant Operations

641.301  General.
641.302  Grantee responsibilities.
641.303  Cooperative relationships.
641.304  Recruitment and selection of enrollees.
641.305  Enrollment eligibility.
641.306  Enrollment priorities.
641.307  [Reserved]
641.308  Orientation.
641.309  Assessment and reassessment of enrollees.
641.310  Community service assignments.
641.311  Enrollee wages and fringe benefits.
641.312  Enrollee supportive services.
641.313  Training.
641.314  Placement into unsubsidized employment.
641.315  Maximum duration of enrollment.
641.316  Individual development plan-related terminations.
641.317  Status of enrollees.
641.318  Over-enrollment.
641.319  [Reserved]
641.320  Political patronage.
641.321  Political activities.
641.322  Unionization.
641.323  Nepotism.
641.324  Enrollee and applicant complaint resolution.
641.325  Maintenance of effort.
641.326  Experimental private sector training

[[Page 363]]

          projects.

  Subpart D--Administrative Standards and Procedures for Grantees and 
                      Limitations on Federal Funds

641.401  General.
641.402  Administrative requirements.
641.403  Allowable costs.
641.404  Classification of costs.
641.405  Limitations on federal funds.
641.406  Administrative cost waiver.
641.407  Non-federal share of project costs.
641.408  Budget changes.
641.409  Grantee fiscal and performance reporting requirements.
641.410  Subgrant agreements.
641.411  Program income accountability.
641.412  Equipment.
641.413  Audits.
641.414  Grant closeout procedures.
641.415  Department of Labor appeals procedures for grantees.

                    Subpart E--Interagency Agreements

641.501  Administration.

                  Subpart F--Assessment and Evaluation

641.601  General.
641.602  Limitation.

    Authority:  42 U.S.C. 3056(b)(2).

    Source:  60 FR 26581, May 17, 1995, unless otherwise noted.



                   Subpart A--Introductory Provisions



Sec. 641.101  Scope and purpose.

    Part 641 contains the regulations of the Department of Labor for the 
Senior Community Service Employment Program (SCSEP) under title V of the 
OAA. The dual purposes of a SCSEP project are to provide useful part-
time community service assignments for persons with low incomes who are 
55 years old or older while promoting transition to unsubsidized 
employment. This part, and other pertinent regulations expressly 
incorporated by reference, set forth all regulations applicable to the 
SCSEP.



Sec. 641.102  Definitions.

    The following definitions apply to this part:
    OAA means the Older Americans Act of 1965, as amended (42 U.S.C. 
3001 et seq.).
    Area agency on aging means an area agency on aging designated under 
section 305(a)(2)(A) of the OAA or a State agency performing the 
functions of an area agency on aging under section 305(b)(5) of the OAA.
    Authorized position means an enrollment opportunity during a program 
year. The number of authorized positions is derived by dividing the 
total amount of funds appropriated during a program year by the national 
average unit cost per enrollee for that program year as determined by 
the Department. The national average unit cost includes all 
administration costs, other enrollee costs, and enrollee wage and fringe 
benefit costs. An allotment of the total dollars for the grantee is 
divided by the national unit cost to determine the total number of 
authorized positions for each grant agreement.
    Community service means social, health, welfare, and educational 
services (particularly literacy tutoring); legal assistance, and other 
counseling services, including tax counseling and assistance and 
financial counseling; library, recreational, day care and other similar 
services; conservation, maintenance, or restoration of natural 
resources; community betterment or beautification; pollution control and 
environmental quality efforts; weatherization activities; and includes 
inter-generational projects; but is not limited to the above. It 
excludes building and highway construction (except that which normally 
is performed by the project sponsor) and work which primarily benefits 
private, profitmaking organizations. [Section 507(2) of the OAA.]
    Department and DOL mean the United States Department of Labor, 
including its agencies and organizational units.
    Disability means a physical or mental impairment of an individual 
that substantially limits one or more major life activities; a record of 
such impairment; or being regarded as having such an impairment. [29 CFR 
parts 32 and 34.]
    Dual eligibility means individuals eligible under title V who are 
enrolled in a joint program established under a written financial or 
non-financial agreement to jointly operate programs with JTPA are deemed 
to satisfy the requirements of all JTPA programs funded under Title II-A 
of the JTPA.

[[Page 364]]

    Eligible individual means a person who is 55 years of age, or older, 
and who has a low income as defined in this section. [Section 507(1) of 
the OAA.]
    Eligible organization means an organization which is legally capable 
of receiving and using Federal funds under the OAA and entering into a 
grant or other agreement with the Department to carry out the provisions 
of title V of the OAA. [Section 502(b)(1) of the OAA.]
    Employment and training program(s) means publicly funded efforts 
designed to offer employment, training and/or placement services which 
enhance an individual's employability. The term is used in this part to 
include, but is not limited to, the JTPA or similar legislation and 
State or local programs of a similar nature.
    Enrollee means an individual who is eligible, receives services, and 
is paid wages for engaging in community service assignments under a 
project.
    Grantee means an eligible organization which has entered into a 
grant agreement with the Department under this part.
    Greatest economic need means the need resulting from an income level 
at or below the poverty line based on guidelines provided by the 
Department.
    Greatest social need, as defined at section 102(a)(30) of the OAA, 
means the need caused by noneconomic factors which include:
    (1) Physical and mental disabilities;
    (2) Language barriers; and
    (3) Cultural, social, or geographical isolation, including isolation 
caused by racial or ethnic status.
    Host agency means a public agency or a private non-profit 
organization, other than a political party or any facility used or to be 
used as a place for sectarian religious instruction or worship, exempt 
from taxation under the provisions of section 501(c)(3) of the Internal 
Revenue Code of 1986, which provides a work site and supervision for an 
enrollee.
    Individual development plan means a plan for an enrollee which shall 
include an employment goal, achievement objectives, and appropriate 
sequence of services for the enrollee based on an assessment conducted 
by the grantee or subgrantee and jointly agreed upon by the enrollee.
    JTPA means the Job Training Partnership Act (29 U.S.C. 1501 et 
seq.).
    Low income means an income of the family which, during the preceding 
six months on an annualized basis or the actual income during the 
preceding 12 months, whichever is more beneficial to the applicant, is 
not more than 125 percent of the poverty levels established and 
periodically updated by the U.S. Department of Health and Human 
Services. In addition, an individual who receives, or is a member of a 
family which receives, regular cash welfare payments shall be deemed to 
have a low income for purposes of this part.
    Poor employment prospects means the unlikelihood of an otherwise 
eligible individual obtaining employment without the assistance of this 
or other employment and training programs. Persons with poor employment 
prospects include, but are not limited to, those without a substantial 
employment history, basic skills, English-language proficiency, or 
displaced homemakers, school dropouts, disabled veterans, homeless or 
residing in socially and economically isolated rural or urban areas 
where employment opportunities are limited.
    Program year means the one-year period covered by a grant agreement 
beginning July 1 and ending on June 30.
    Project means an undertaking by a grantee or subgrantee, pursuant to 
a grant agreement between the Department and the grantee, which provides 
for community service opportunities for eligible individuals and the 
delivery of associated services.
    Reallocation means a redistribution of funds by a grantee.
    Reallotment means the redistribution of allotted title V funds by 
the Department from one State to another State(s) or from one grantee to 
another grantee.
    Residence means an individual's declared dwelling place or address. 
No requirement pertaining to length of residency prior to enrollment 
shall be imposed.
    SCSEP means the Senior Community Service Employment Program as 
authorized under title V of the OAA.

[[Page 365]]

    State agency on aging means the sole agency designated by the State, 
in accordance with regulations of the Assistant Secretary on Aging, 
pursuant to section 305(a)(1) of the 0AA.
    Subgrantee means the legal entity to which a subgrant is awarded by 
a grantee and which is accountable to the grantee (or higher tier 
subgrantee) for the use of the funds provided.
    Title V of the OAA means 42 U.S.C. 3056 et seq.



          Subpart B--Grant Planning and Application Procedures



Sec. 641.201  Allotment and allocation of title V funds.

    (a) Allotment. The Secretary shall allot funds for projects in each 
State in accordance with the distribution requirements contained in 
section 506(a) of the OAA.
    (b) Within-State apportionment. The amount allotted for projects 
within a State shall be apportioned among areas within the State in an 
equitable manner, taking into consideration:
    (1) The proportion which eligible individuals in each such area 
bears to the total number of such persons, respectively, in that State;
    (2) The relative distribution of such individuals residing in rural 
and urban areas within the State; and
    (3) The relative distribution of such individuals who are 
individuals with the greatest economic need, such individuals who are 
minority individuals, and such individuals with greatest social need.
    (c) Annual report of funds allocated by state. The State agency for 
each State receiving funds or a sponsor designated by the Department 
shall report at the beginning of each fiscal year on such State's status 
relative to section 506(c) of the OAA. Each State's report shall include 
names and geographic locations of all projects receiving title V funds 
for projects in the State. All grantees and subgrantees operating in a 
State shall provide information necessary to compile the report. 
[Section 506(d) of the OAA.]



Sec. 641.202  Eligibility for title V funds.

    Agencies and organizations eligible to receive title V funds shall 
be those specified in sections 502(b) and 506(a) of the OAA.



Sec. 641.203  Soliciting applications for title V funds.

    The Department may solicit or request organizations to submit 
applications for funds.



Sec. 641.204  Grant application requirements.

    (a) Schedules. The Department shall establish, by administrative 
directive, schedules for submittal of grant preapplications and 
applications; the contents of grant applications, including goals and 
objectives; amounts of grants; and grant budget and narrative formats.
    (b) Intergovernmental reviews. Grant applicants shall comply with 
the requirements of the Department's regulation, at 29 CFR part 17, 
which implements the intergovernmental review of Department programs and 
activities. A Preapplication for Federal Assistance form (SF-424) filed 
as a result of the intergovernment review system shall contain an 
attachment which, at a minimum, lists the proposed number of authorized 
community service positions in each county, or other appropriate 
jurisdiction within the affected State. Whenever a national organization 
or other program grantee or subgrantee proposes to conduct projects 
within a planning and service area in a State, such organization or 
program grantee is responsible for sharing their applications with area 
agencies on aging and other SCSEP sponsors in the area prior to the 
award of the funds in accord with guidelines issued by the Department.
    (c) Subgrants. A grant applicant planning to award funds by subgrant 
shall:
    (1) Outline the nature and extent of the planned use of such funds; 
and
    (2) Assure that in the event that a subgrant agreement is canceled 
in whole or in part, the grantee will provide continuity of services to 
enrollees.



Sec. 641.205  Responsibility review.

    (a) In order to enter into and continue a grant relationship with 
DOL, an organization (applicant) shall be responsible. To determine 
responsibility, DOL conducts a preaward review of all

[[Page 366]]

grant applicants. As part of this review, DOL applies 13 basic 
responsibility tests to each applicant, included in paragraphs (b) and 
(c) of this section.
    (b) If a grant applicant fails either of the following two 
responsibility tests, it shall not be designated as a grantee:
    (1) The Department's efforts to recover debts from the applicant 
(for which three demand letters have been sent) established by final 
Department action have been unsuccessful, or the applicant has failed to 
comply with an approved repayment plan.
    (2) Fraud or criminal activity has been determined to exist within 
the organization.
    (c) Eleven additional basic responsibility tests are applied to each 
grant applicant. Failure to meet any one of these tests does not 
establish that the applicant is not responsible, unless the failure is 
substantial or persistent. These tests are as follows:
    (1) Serious administrative deficiencies have been identified, such 
as failure to maintain a financial management system as required by 
Federal regulations.
    (2) Willful obstruction of the monitoring process.
    (3) Failure to meet performance requirements.
    (4) Failure to correct deficiencies brought to the grantee's 
attention in writing as a result of monitoring activities, reviews, 
assessments, etc.
    (5) Failure to submit correct grant closeout documents within 90 
days after expiration of the grant, unless an extension has been 
requested and granted.
    (6) Failure to return outstanding cash advances within 90 days of 
the expiration date of the grant, unless an extension has been requested 
and granted, or the funds have been authorized to be retained for use on 
other grants.
    (7) Failure to submit correct required reports by established due 
dates.
    (8) Failure to properly report and dispose of government property as 
instructed by DOL.
    (9) Failure to maintain cost controls resulting in excess cash on 
hand.
    (10) Failure to timely comply with the audit requirements of 29 CFR 
part 96.
    (11) Final disallowed costs in excess of five percent of the grant 
award.



Sec. 641.206  Grant application review.

    (a) The Department shall review each timely grant application 
submitted by an eligible organization.
    (b) In reviewing and considering an application, the Department 
shall determine the following:
    (1) The availability of funds for the proposed grant;
    (2) Whether the application is in accordance with the Department's 
instructions;
    (3) Whether the application complies with the requirements of the 
OAA and this part;
    (4) Whether the application offers the best prospect of serving 
appropriate geographic areas; and
    (5) Whether the application demonstrates the effective use of funds.



Sec. 641.207  Negotiation.

    (a) The Department may negotiate with an eligible organization to 
arrive at a grant agreement if the application generally meets 
requirements set forth in this part.
    (b) The subjects of negotiation may include, but are not limited to, 
the following:
    (1) Project components, including community service assignments and 
geographic locations of authorized positions;
    (2) Subproject(s), if any;
    (3) Funding level, including all budget line items; and
    (4) Performance goals.



Sec. 641.208  Rejection of grant application or project components.

    (a) The Department may question any proposed project component if it 
believes that the component will not serve the purposes of the OAA; if 
negotiation does not produce a mutually acceptable conclusion, it may 
reject this grant application.
    (b) If the Department rejects an application, as set forth in 
paragraph (a) of this section, the Department may solicit applications 
from other eligible organizations in order to arrive at a grant 
agreement.
    (c) When an application is not approved, the Department shall notify

[[Page 367]]

the applicant within a reasonable time in writing and state the 
reason(s) for rejection.
    (d) Rejection of a proposal or application is a final Departmental 
action which is not subject to further administrative review. Rejection 
will not affect future consideration of the applicant for other projects 
as long as the organization meets the eligibility criteria.



Sec. 641.209  Award of funds.

    When the applicant is a unit of State government or a public or 
private non-profit organization, the award of funds to a grantee shall 
be accomplished through the execution of a grant agreement prepared by 
the Department. When the applicant is a unit of the Federal Government, 
other than the Department, the award of funds shall be accomplished 
through an interagency agreement.



                       Subpart C--Grant Operations



Sec. 641.301  General.

    (a) This subpart establishes basic grant operation standards and 
procedures to be followed by all organizations receiving title V funds 
for the purpose of operating SCSEP grant agreements and projects.
    (b) The dual purposes of an SCSEP project are to provide useful 
part-time community service assignments for persons with low incomes who 
are 55 years old or older while promoting transition to unsubsidized 
employment. Grantees and subgrantees shall develop appropriate work 
assignments for eligible individuals which will result in the provision 
of community services as defined in sections 502(b) and 507(2) of the 
OAA, and Sec. 641.102 and will promote unsubsidized employment 
opportunities.



Sec. 641.302  Grantee responsibilities.

    The grantee shall remit to eligible individuals wages, for community 
service assignments, and provide skill enhancement opportunities, 
periodic physical examinations, personal and employment-related 
counseling, assistance in transition to unsubsidized employment where 
feasible, and other benefits as approved by the Department.
    (a) grantees are responsible for:
    (1) Following and enforcing the requirements set forth in the OAA 
and this part;
    (2) Implementing and carrying out projects in accordance with the 
provisions of the grant agreement; and
    (3) Assuring that, to the extent feasible, such projects will serve 
the needs of minority, limited English-speaking, and Indian eligible 
individuals, and eligible individuals who have the greatest economic 
need, at least in proportion to their numbers in the State, and take 
into consideration their rates of poverty and unemployment based on the 
best available information.
    (b) The grantee periodically shall monitor the performance of grant-
supported activities to assure that project goals are being achieved and 
that the requirements of the OAA and this part are being met.
    (c) The grantee or subgrantee shall obtain and record the personal 
information necessary for a proper determination of eligibility for each 
individual and maintain documentation supporting the eligibility of 
enrollees.
    (d) Each grantee or subgrantee shall make efforts to provide 
equitable services among substantial segments of the population eligible 
for participation in SCSEP. Such efforts shall include, but not be 
limited to: outreach efforts to broaden the composition of the pool of 
those considered for participation, to include members of both sexes, 
various race/ethnic groups and individuals with disabilities.



Sec. 641.303  Cooperative relationships.

    (a) Each grantee or subgrantee shall, to the maximum extent 
feasible, cooperate with other agencies, including agencies conducting 
programs under the JTPA, to provide services to elderly persons, to 
persons with low incomes, and with agencies providing employment and 
training services.
    (b) The cooperation described in paragraph (a) of this section shall 
include, but not be limited to:
    (1) Selection of community service assignment occupational 
categories, work assignments, and host agencies to provide a variety of 
community service

[[Page 368]]

opportunities for enrollees and to produce a variety of federally funded 
services which respond to the community's total needs and initiatives.
    (2) Establishment of cooperative relations with the State agency on 
aging designated under section 305(a)(1) of the OAA and with area 
agencies on aging designated under section 305(a)(2) of the OAA for the 
purpose of obtaining services as authorized under titles III, IV, and VI 
of the OAA to increase the likelihood of receipt of unsubsidized 
employment opportunities and supportive services that are available. 
Existing services provided under the authority of section 321(a) of the 
OAA shall be used first by grantee or subgrantee.
    (3) Establishment of cooperative relations with other employment and 
training organizations including the State and local JTPA and the Carl 
D. Perkins Act programs to insure that project enrollees can benefit 
from such cooperative activities as dual eligibility, shared 
assessments, training and referral.
    (4) Establishment of cooperative relations with State employment 
security agencies to insure that enrollees are made aware of services 
available from these agencies.
    (c) Whenever a national organization or other program sponsor 
conducts a project within a planning and service area in a State, such 
an organization or program sponsor shall conduct such a project in 
consultation with the area agency on aging of the planning and service 
area and shall submit to the State agency and the area agency on aging a 
description of such project to be conducted in the State including the 
location of the project, 30 days prior to undertaking the project, for 
review and comment to assure efficient and effective coordination of 
programs under this part.



Sec. 641.304  Recruitment and selection of enrollees.

    Grantees and subgrantees shall use methods of recruitment and 
selection (including notifying the State employment security agency when 
vacancies occur) which will assure that the maximum number of eligible 
individuals will have an opportunity to participate in the program. 
Recruitment efforts shall be designed, to the extent feasible, to assure 
equitable distribution of services to groups described in 
Sec. 641.302(e). [Section 502(b)(1)(H) of the OAA.]



Sec. 641.305  Enrollment eligibility.

    (a) General. Eligibility criteria set forth in this section apply to 
all SCSEP applicants and enrollees, including the following individuals:
    (1) Each individual seeking initial enrollment;
    (2) Each individual seeking reenrollment after termination from the 
SCSEP because of loss of unsubsidized employment through no fault of 
their own, including illness; and
    (3) Each enrollee seeking recertification for continued enrollment.
    (b) Eligibility criteria. To be eligible for initial enrollment, 
each individual shall meet the following criteria for age, income, and 
place of residence:
    (1) Age. Each individual shall be no less than 55 years of age. No 
person whose age is 55 years or more shall be determined ineligible 
because of age, and no upper age limit shall be imposed for initial or 
continued enrollment. [Section 502 of the OAA.]
    (2) Income. The income of the family of which the individual is a 
member shall not exceed the low-income standards defined in Sec. 641.102 
and issued by the Department. In addition, a disabled person may be 
treated as a ``family of one'' for income eligibility purposes.
    (3) Residence. Each individual, upon initial enrollment, shall 
reside in the State in which the project is authorized.
    (c) No additional eligibility requirement. Grantees and subgrantees 
shall not impose any additional condition or requirement for enrollment 
eligibility unless required by Federal law.
    (d) Dual Eligibility. Individuals eligible under title V of the OAA 
who are enrolled in a joint program established under a written 
financial or non-financial agreement to jointly operate programs with 
JTPA shall be deemed to satisfy the requirements of JTPA Title II-A.
    (e) Special responsibilities of the grantees and subgrantee(s) 
relating to eligibility.

[[Page 369]]

    (1) Each grantee or subgrantee shall recertify the income of each 
enrollee under its grant or subgrant, respectively, once each project 
year, according to the schedule set forth in the grant agreement and 
shall maintain documentation to support the recertification. Enrollees 
found to be ineligible for continued enrollment because of income shall 
be given, by the grantee or subgrantee, a written notice of termination 
and shall be terminated 30 days after the notice. No enrollee shall 
participate in a community service position for more than 12 months 
without having his or her income recertified.
    (2) If, at any time, the grantee or a subgrantee determines that an 
enrollee was incorrectly declared eligible as a direct result of false 
information given by that individual, the individual shall be given a 
written notice explaining the reason or reasons for the determination 
and shall be terminated immediately.
    (3) If, at any time, the grantee or subgrantee determines that an 
enrollee was incorrectly declared eligible through no fault of the 
enrollee, the grantee or subgrantee shall give the enrollee immediate 
written notice explaining the reason or reasons for termination, and the 
enrollee shall be terminated 30 days after the notice.
    (4) When a grantee or subgrantee makes an unfavorable determination 
on continued eligibility, it shall explain in writing to the enrollee 
the reason(s) for the determination and shall provide notice of the 
right of appeal in accordance with the required procedures set forth in 
Sec. 641.324.
    (5) When a grantee or subgrantee terminates an enrollee for cause, 
it shall inform the enrollee, in writing, of the reason(s) for 
termination and of the right of appeal in accordance with the required 
procedures set forth in Sec. 641.324.
    (6) When a grantee or subgrantee makes an unfavorable determination 
of enrollment eligibility pursuant to paragraph (e) (1) or (3) of this 
section, it should assure that the individual is given a reason for non-
enrollment and, when feasible, should refer the individual to other 
potential sources of assistance.



Sec. 641.306  Enrollment priorities.

    (a) As set forth in sections 502(b)(1)(M) and 507(1) of the OAA, 
enrollment priorities for filling all positions shall be as follows:
    (1) Eligible individuals with the greatest economic need;
    (2) Eligible individuals who are 60 years old or older; and
    (3) Eligible individuals who seek re-enrollment following 
termination of an unsubsidized job through no fault of their own or due 
to illness, provided that re-enrollment is sought within one year of 
termination.
    (b) Within all enrollment priorities, those persons with poor 
employment prospects shall be given preference.
    (c) Enrollment priorities established in this section shall apply to 
all vacant community service positions, but shall not be interpreted to 
require the termination of any eligible enrollee. The priorities do not 
apply to the experimental private sector projects authorized by section 
502(e) of the OAA.



Sec. 641.307  [Reserved]



Sec. 641.308  Orientation.

    (a) Enrollee. The grantee or subgrantee shall provide orientation to 
eligible individuals who are enrolled as soon as practicable after a 
determination of eligibility. The orientation shall provide, as 
appropriate, information related to: project objectives; community 
service assignments; training; supportive services; responsibilities, 
rights, and duties of the enrollee; permitted and prohibited political 
activities; plans for transition to unsubsidized employment and a 
discussion of safe working conditions at the host agencies.
    (b) Host agency. The grantee or a subgrantee shall provide to those 
individuals who will supervise enrollees at the host agencies, an 
orientation similar to the one described in paragraph (a) of this 
section. This is to assure that enrollees will receive adequate 
supervision and opportunities for transitioning to the host agency staff 
or other unsubsidized employment.
    (c) Supervision. The grantee or subgrantee shall ensure that host 
agencies provide adequate supervision, adequate orientation and 
instruction regarding,

[[Page 370]]

among other things, job duties and safe working procedures.



Sec. 641.309  Assessment and reassessment of enrollees.

    (a) General. The grantee or subgrantee shall assess each enrollee 
under the grant or subgrant, respectively, to determine the most 
suitable community service assignment and to identify appropriate 
employment, training, and community service objectives for each 
individual. The assessment shall be made in partnership with the new 
enrollee and should consider the individual's preference of occupational 
category, work history, skills, interests, talents, physical 
capabilities, need for supportive services, aptitudes, potential for 
performing proposed community service assignment duties, and potential 
for transition to unsubsidized employment.
    (b) Assessment of physical capabilities. The assessment of each 
enrollee shall take into consideration his or her physical capabilities. 
Assessments of physical ability shall be consistent with section 504 of 
the Rehabilitation Act of 1973, as amended (section 504), and the 
Americans with Disabilities Act of 1990 (ADA).
    (c) Assignment. The grantee or subgrantee shall seek a community 
service assignment which will permit the most effective use of each 
enrollee's skills, interests, and aptitudes.
    (d) Individual development plans. The grantee and subgrantee shall 
use the assessment or reassessment as a basis for developing or amending 
an individual development plan (IDP). The IDP shall be developed in 
partnership with the enrollee to reflect the needs of the enrollee as 
indicated by the assessment, as well as the expressed interests and 
desires of the enrollee.
    (e) Review of IDP plan. The grantee and subgrantee shall review the 
IDP at least once in a 12 month period for the following purposes: to 
evaluate the progress of each enrollee in meeting the objectives of the 
IDP; to determine each enrollee's potential for transition to 
unsubsidized employment; to determine the appropriateness of each 
enrollee's current community service assignment; and to review progress 
made toward meeting their training and employment objectives.
    (f) Alternative assignment. The sponsor may develop an alternative 
assignment for an enrollee, when feasible, should there be one of the 
following determinations:
    (1) That a different community service assignment will provide 
greater opportunity for the use of an enrollee's skills and aptitudes;
    (2) That an alternative assignment will provide work experience 
which will enhance the potential for unsubsidized employment; or
    (3) That an alternative assignment will otherwise serve the best 
interests of the enrollee.
    (g) Minimum requirements. The assessments and reassessments required 
by this section shall meet minimum requirements issued by the Department 
on assessment, and subsequent determinations are to be recorded in the 
enrollee's IDP, to become a part of each enrollee's permanent record.
    (h) Recent assessments. Assessments of an enrollee, prepared by 
another employment or training program (such as a program under the JTPA 
or the Carl D. Perkins Vocational and Applied Technology Act) may be 
substituted for one prepared by the grantee or subgrantee if the 
training program prepared the assessment within the last year prior to 
applying for SCSEP. [section 502(b)(1)(M) of the OAA.]



Sec. 641.310  Community service assignments.

    (a) Assignment to community service. After the completion of an 
enrollee's orientation and initial training, if any, the grantee or 
subgrantee shall refer the enrollee, as soon as possible, to a useful 
part-time community service assignment, if appropriate, according to the 
IDP.
    (1) Each enrollee shall be placed in a community service assignment 
which contributes to the general welfare of the community and provides 
services related to publicly-owned and operated facilities and projects, 
or projects sponsored by organizations other than political parties, 
exempt from taxation under the provisions of section 501(c)(3) of the 
Internal Revenue Code of 1986. Project sponsors may provide enrollees

[[Page 371]]

with opportunities to assist in the administration of the SCSEP.
    (2) The enrollee shall not be assigned to work involving the 
construction, operation, or maintenance of any facility used or to be 
used as a place for sectarian religious instruction or worship, or to 
work which primarily benefits private, profit-making organizations. 
[Sections 502(b)(1)(A), (C), and (D) and 507(2) of the OAA.]
    (b) Hours of community service assignments. (1) Each enrollee's 
community service assignment shall not exceed 1,300 hours during a 12-
month period specified in the grantee's agreement. The 1,300 hours 
includes paid hours of orientation, training, sick leave, and vacation 
and hours of enrollment provided by all grantees and subgrantees. No 
enrollee shall be paid for more than 1,300 hours in any 12-month period. 
[Section 508(a)(2) of the OAA.]
    (2) The grantee or subgrantee shall not require an enrollee to 
participate more than 20 hours during one week; however, hours may be 
extended with the consent of the enrollee.
    (3) The grantee or subgrantee shall not offer an enrollee an average 
of fewer than 20 hours of paid participation per week. Shorter periods 
may be authorized by the grant agreement, in writing by the Department, 
or by written agreement between an enrollee and a grantee or subgrantee. 
[Section 508(a)(2) of the OAA.]
    (4) The grantee or subgrantee shall, to the extent possible, ensure 
that the enrollee works during normal business hours, if the enrollee so 
desires.
    (c) Location. The enrollee shall be employed at work sites in or 
near the community where the enrollee resides. [Section 502(b)(1)(B) of 
the OAA.]
    (d) Working conditions for enrollees. Enrollees shall not be 
permitted to work in a building or surroundings or under conditions 
which are unsanitary, hazardous, or dangerous to the enrollees' health 
or safety. The grantee or subgrantee shall make periodic visits to the 
enrollees' work site(s) to assure that the working conditions and 
treatment of the enrollee are consistent with the OAA and this part. 
[Section 502(b)(1)(J) of the OAA.]



Sec. 641.311  Enrollee wages and fringe benefits.

    (a) Wages. Upon engaging in part-time community service assignments, 
including orientation and training in preparation for community service 
assignments, each enrollee shall receive wages at a rate no less than 
the highest applicable rate:
    (1) The minimum wage which would be applicable to the enrollee under 
the Fair Labor Standards Act of 1938;
    (2) The State or local minimum wage for the most nearly comparable 
covered employment; or
    (3) The prevailing rates of pay for persons employed in similar 
public occupations by the same employer.
    (b) Fringe benefits. (1) The grantee or subgrantee shall ensure that 
enrollees receive all fringe benefits required by law.
    (2) Within a project or subproject, fringe benefits shall be 
provided uniformly to all enrollees, unless the Department agrees to 
waive this provision due to a determination that such a waiver is in the 
best interests of applicants, enrollees, and the project administration.
    (3) Physical examination. (i) Each enrollee shall be offered the 
opportunity to take a physical examination annually. A physical is a 
fringe benefit, and is not an eligibility criterion. The examining 
physician shall provide, to the enrollee only, a written report of the 
results of the examination. The enrollee may, at his or her option, 
provide the grantee or subgrantee a copy of the report. The results of 
the physical examination shall not be taken into consideration in 
determining placement into a community service assignment.
    (ii) An enrollee may refuse the physical examination offered. In 
such a case, the grantee or subgrantee should document this refusal, 
through a signed waiver or other means, within 60 work days after 
commencement of the community service assignment. Thereafter, grantees 
or subgrantees shall document an enrollee's refusal of the annual 
physical examination.
    (c) Retirement. Expenditures of grant funds for contributions into a 
retirement system or plan are prohibited, unless the grantee has 
documentation on hand showing that:

[[Page 372]]

    (1) The costs are allowable under the appropriate cost principles 
indicated at Sec. 641.403(b); and
    (2) Such contributions bear a reasonable relationship to the cost of 
providing such benefits to enrollees because:
    (i) the benefits vest at the time contributions are made on behalf 
of the enrollees; or
    (ii) the charges to SCSEP funds are for contributions on behalf of 
enrollees to a ``defined benefit'' type of plan which do not exceed the 
amounts reasonably necessary to provide the specified benefit to 
enrollees, as determined under a separate actuarial determination.
    (d) Workers' compensation. Where an enrollee is not covered by the 
State workers' compensation law, the grantee or subgrantee shall provide 
the enrollee with workers' compensation benefits equal to that provided 
by law for covered employment. [Section 504(b) of the OAA.]
    (e) Unemployment compensation. The grantee is authorized to pay the 
cost of unemployment insurance for covered enrollees, where required by 
law. [Section 502(b)(1)(O) of the OAA.]



Sec. 641.312  Enrollee supportive services.

    (a) The grantee or subgrantee shall provide supportive services 
designed to assist the enrollee in participating successfully in 
community service assignments and, where appropriate, to prepare and 
assist the enrollee in obtaining unsubsidized employment. To the extent 
feasible, the grantee or subgrantee shall utilize supportive services 
available from other titles of the OAA, particularly those administered 
by area agencies on aging and other funding sources.
    (b) Supportive services may include, but need not be limited to, all 
or some of the following:
    (1) Counseling or instruction designed to assist the enrollee to 
participate successfully in community service assignments or to obtain 
unsubsidized employment.
    (2) Counseling designed to assist the enrollee personally in areas 
such as health, nutrition, social security benefits, Medicare benefits, 
and retirement laws.
    (3) Incidentals, including, but not limited to: work shoes, badges, 
uniforms, safety glasses, eyeglasses, and hand tools, may be provided if 
necessary for successful participation in community service assignments 
and if not available from other sources.
    (4) Periodic meetings on topics of general interest, including 
matters related to health, job seeking skills, safety, and consumer 
affairs.
    (5) Enrollee transportation. (i) Enrollee transportation may be paid 
if transportation from other sources at no cost to the project is 
unavailable and such unavailability is documented. When authorized in 
the grant agreement, transportation may be provided for enrollees from 
home to work, to training or to supportive services. [Section 
502(b)(1)(L) of the OAA.]
    (ii) Grant funds may not be expended to support the transportation 
costs of host agencies or programs funded by other than title V of the 
OAA, except where provided by Federal law.



Sec. 641.313  Training.

    (a) The grantee or subgrantee shall provide or arrange for training 
specific to an enrollee's community service assignment. Training may be 
provided through lectures, seminars, classroom instruction, individual 
instruction or other arrangements including, but not limited to, 
arrangements with employment and training programs. The grantee or the 
subgrantee is encouraged to obtain such services through locally 
available resources, including employment and training programs, as 
defined in Sec. 641.103, and through host agencies, at no cost or 
reduced cost to the project. [Section 502(b)(1)(I) of the OAA.]
    (b) Training shall consist of up to 500 hours per grant year and 
shall be consistent with the enrollee's IDP. Such training may cover all 
aspects of training; e.g., skill, job search, etc. Enrollees shall not 
be enrolled solely for the purpose of receiving job search and job 
referral services. Waivers for additional hours of training will be 
considered on an exception basis.
    (c) In addition to training in preparation for community service 
assignments, as described in this section, a grantee or subgrantee is 
encouraged to

[[Page 373]]

arrange for, or directly provide, skills-training opportunities beyond 
the SCSEP community service training activities which will permit the 
enrollee to acquire or improve skills, including literacy training, 
applicable in community service assignment or for unsubsidized 
employment.
    (d) A grantee or subgrantee, to the extent feasible, shall arrange 
skill-training for the enrollee which is realistic and consistent with 
his or her IDP. A grantee or subgrantee shall place major emphasis on 
the training available through on-the-job experience at SCSEP work 
sites, thereby retaining the community service focus of the SCSEP.
    (e) An enrollee engaging in skills-related training, as described in 
paragraphs (c) and (d) of this section, may be reimbursed for the 
documented travel costs and room and board necessary to engage in such 
training. [Section 502(b)(1)(I) of the OAA.]
    (f) Whenever possible a grantee or subgrantee shall seek to obtain 
all training for enrollees reduced or no cost to title V from such 
sources as the JTPA and the Carl D. Perkins Vocational and Applied 
Technology Education Act. Where training is not available from other 
sources, title V funds may be used for training.
    (g) Nothing in this section shall be interpreted to prevent or limit 
an enrollee from engaging in self-development training available from 
sources other than title V of the OAA during hours other than hours of 
community service assignment.
    (h) Joint programming, including co-enrollment when appropriate, 
between title V programs and programs authorized by the Job Training 
Partnership Act, the Community Services Block Grant Act, or the Carl D. 
Perkins Act is strongly encouraged.



Sec. 641.314  Placement into unsubsidized employment.

    (a) In order to ensure that the maximum number of eligible 
individuals have an opportunity to participate in community service 
assignments, the grantee or subgrantee shall employ reasonable means to 
place each enrollee into unsubsidized employment.
    (b) To encourage the placement of the enrollee into an unsubsidized 
job, the Department has established a goal of placing into unsubsidized 
employment the number of enrollees which equals at least 20 percent of 
the project's annual authorized positions. Whenever this goal is not 
achieved, the grantee shall develop and submit a plan of action for 
addressing this shortfall.
    (c) The grantee or subgrantee may contact private and public 
employers directly or through the State employment security agencies to 
develop or identify suitable unsubsidized employment opportunities; and 
should encourage host agencies to employ enrollees in their regular work 
forces.
    (d) The grantee or subgrantee shall follow-up on each enrollee who 
is placed into unsubsidized employment and shall document such follow-up 
at least once within 3 months of unsubsidized placement.



Sec. 641.315  Maximum duration of enrollment.

    A maximum duration of enrollment may be established by the grantee 
in the grant agreement, when authorized by the Department. Time limits 
on enrollment shall be reasonable and IDPs shall provide for transition 
to unsubsidized employment or other assistance before the maximum 
enrollment duration has expired.



Sec. 641.316  Individual development plan-related terminations.

    When an enrollee refuses to accept a reasonable number of referrals 
or job offers to unsubsidized employment consistent with his or her IDP 
and there are no extenuating circumstances, the enrollee may be 
terminated from the SCSEP. Such a termination shall be consistent with 
administrative guidelines issued by the Department and the termination 
shall be subject to the applicable appeal rights and procedures 
described in Sec. 641.324.



Sec. 641.317  Status of enrollees.

    Enrollees who are employed in any project funded under the OAA are 
not deemed to be Federal employees as a result of such employment. 
[Section 504(a) of the OAA.]

[[Page 374]]



Sec. 641.318  Over-enrollment.

    Should attrition or funding adjustments prevent a portion of project 
funds from being fully utilized, the grantee may use those funds during 
the period of the agreement to over-enroll additional eligible 
individuals. The number over-enrolled may not exceed 20 percent of the 
total number of authorized positions established under the grant 
agreement without the written approval of the Department. Payments to or 
on behalf of enrollees in such positions shall not exceed the amount of 
the unused funds available. Each individual enrolled in such a position 
shall be informed in writing that the assignment is temporary in nature 
and may be terminated. The grantee shall first seek to maintain full 
enrollment in authorized positions and shall seek to schedule all 
enrollments and terminations to avoid excessive terminations at the end 
of the grant period.



Sec. 6541.319  [Reserved]



Sec. 641.320  Political patronage.

    (a) No grantee may select, reject, promote, or terminate an 
individual based on that individual's political affiliations or beliefs. 
The selection or advancement of enrollees as a reward for political 
services, or as a form of political patronage, is prohibited.
    (b) There shall be no selection of subgrantees or host agencies 
based on political affiliation.



Sec. 641.321  Political activities.

    (a) General. No project under title V of the OAA or this part may 
involve political activities.
    (1) No enrollee or staff person may be permitted to engage in 
partisan or nonpartisan political activities during hours for which they 
are paid with SCSEP funds.
    (2) No enrollee or staff person, at any time, may be permitted to 
engage in partisan political activities in which such enrollee or staff 
person represents himself or herself as a spokesperson of the SCSEP 
program.
    (3) No enrollee may be employed or out-stationed in the office of a 
Member of Congress, a State or local legislator, or on any staff of a 
legislative committee.
    (4) No enrollee may be employed or out-stationed in the immediate 
office of any elected chief executive officer(s) of a State or unit of 
general government, except that:
    (i) Units of local government may serve as host-agencies for 
enrollees in such positions, provided that such assignments are 
nonpolitical; and
    (ii) Where assignments are technically in such offices, such 
assignments actually are program activities not in any way involved in 
political functions.
    (5) No enrollee may be assigned to perform political activities in 
the offices of other elected officials. However, placement of enrollees 
in such nonpolitical assignments within the offices of such elected 
officials is permissible, provided that grantees develop safeguards to 
ensure that enrollees placed in these assignments are not involved in 
political activities. These safeguards shall be described in the grant 
agreement and shall be subject to review and monitoring by the grantee 
and the Department.
    (b) Hatch Act. (1) State and local employees governed by 5 U.S.C. 
chapter 15 shall comply with the Hatch Act provisions as interpreted and 
applied by the Office of the Special Counsel.
    (2) Each project subject to 5 U.S.C. chapter 15 shall display a 
notice and shall make available to each person associated with such 
project a written explanation, clarifying the law with respect to 
allowable and unallowable political activities under 5 U.S.C. chapter 15 
which are applicable to the project and each category of individuals 
associated with such project. This notice, which shall have the approval 
of the Department, shall contain the telephone number and address of the 
DOL Inspector General. [Section 502(b)(1)(P) of the OAA.] Enforcement of 
the Hatch Act shall be as provided at 5 U.S.C. chapter 15.



Sec. 641.322  Unionization.

    No funds provided under title V of the OAA or this part may be used 
in any way to assist, promote, or deter union organizing.

[[Page 375]]



Sec. 641.323  Nepotism.

    (a) No grantee or subgrantee may hire, and no host agency may be a 
work site for a person who works in an administrative capacity, staff 
position, or community service position funded under title V of the OAA 
or this part if a member of that person's immediate family is engaged in 
a decision-making capacity (whether compensated or not) for that 
project, subproject, grantee, subgrantee or host agency. This provision 
may be waived by the Department at work sites on Native American 
reservations and rural areas provided that adequate justification can be 
documented, such as that no other persons are eligible for 
participation.
    (b) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
that requirement shall be followed.
    (c) For purposes of this section:
    (1) Immediate family means wife, husband, son, daughter, mother, 
father, brother, sister, son-in-law, daughter-in-law, mother-in-law, 
father-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, 
nephew, stepparent, stepchild, grandparent, and grandchild.
    (2) Engaged in an administrative capacity includes those persons 
who, in the administration of projects, or host agencies, have 
responsibility for, or authority over those with responsibility for, the 
selection of enrollees from among eligible applicants.



Sec. 641.324  Enrollee and applicant complaint resolution.

    (a) Each grantee shall establish and describe in the grant agreement 
procedures for resolving complaints, other than those described by 
paragraph (c) of this section, arising between the grantee and an 
enrollee.
    (b) Allegations of violations of federal law, other than those 
described in paragraph (c) of this section, which cannot be resolved 
within 60 days as a result of the grantee's procedures, may be filed 
with the Chief, Division of Older Worker Programs, Employment and 
Training Administration, U.S. Department of Labor, Washington, DC 20210.
    (c) Grantees that do not receive any funds under the JTPA shall 
process complaints of discrimination in accordance with 29 CFR parts 31 
and 32. Grantees that receive any funds under JTPA shall process 
complaints of discrimination in accordance with 29 CFR part 34.
    (d) Except for complaints described in paragraphs (b) and (c) of 
this section, the Department shall limit its review to determining 
whether the grantee's appeal procedures were followed.



Sec. 641.325  Maintenance of effort.

    (a) Employment of an enrollee funded under title V of the OAA or 
this part shall be only in addition to budgeted employment which would 
otherwise be funded by the grantee, subgrantee and the host agency(ies) 
without assistance under the OAA. [Section 502(b)(1)(F) of the OAA.]
    (b) Each project funded under title V of the OAA or this part:
    (1) Should result in an increase in employment opportunities in 
addition to those which would otherwise be available;
    (2) Shall not result in the displacement of currently employed 
workers, including partial displacement such as a reduction in hours of 
non-overtime work, wages, or employment benefits;
    (3) Shall not impair existing contracts for service or result in the 
substitution of Federal funds for other funds in connection with work 
that would otherwise be performed;
    (4) Shall not substitute project jobs for existing federally-
assisted jobs; and
    (5) Shall not employ or continue to employ any enrollee to perform 
work which is the same or substantially the same as that performed by 
any other person who is on layoff. [Section 502(b)(1)(G) of the OAA.]



Sec. 641.326  Experimental private sector training projects.

    (a) The Department may authorize a grantee to develop an 
experimental job training project(s) designed to provide second career 
training and the placement of eligible individuals in employment 
opportunities with private business concerns. [Section 502(e) of the 
OAA.]
    (b) Experimental project agreements for training may be with States, 
public

[[Page 376]]

agencies, non-profit private organizations, and private business 
concerns.
    (c) The geographic location of these projects shall be determined by 
the Department to insure an equitable distribution of such projects.
    (d) To the extent feasible, experimental projects shall emphasize 
second-career training, and innovative work modes, including those with 
reduced physical exertion, and placement into growth industries and jobs 
reflecting new technologies.
    (e) The Department shall establish by administrative guidelines the 
application schedule, content, format, allocation levels and reporting 
requirements for experimental projects.
    (f) Current title V eligibility standards shall be used for 
experimental projects unless the Department permits, in writing, the use 
of another approved income index.
    (g) Projects funded under section 502(e) of the OAA shall seek to be 
coordinated with projects carried out under title II-A of the JTPA to 
the extent feasible.
    (h) National grantees shall distribute funds for experimental 
projects in accordance with the State allocation in their title V grant.
    (i) A grantee may exclude a project, permitted under section 502(e) 
of the OAA, from meeting the non-federal share requirement set forth in 
Sec. 641.407; however, this exclusion does not relieve the grantee from 
the matching requirement, under Sec. 641.407, which applies to the 
entire grant.



  Subpart D--Administrative Standards and Procedures for Grantees and 
                      Limitations on Federal Funds



Sec. 641.401  General.

    This subpart establishes limitations on title V funds to be used for 
community service activities and describes, or incorporates by 
reference, requirements for the administration of grants by the SCSEP 
grantee.



Sec. 641.402  Administrative requirements.

    (a) Except as otherwise provided in this part, title V funds shall 
be administered in accordance with, and subject to, the Department's 
regulations at 29 CFR parts 31, 32, 34, 93, 96, and 98. In addition, 
projects and activities administered by State, local or Indian tribal 
governments are also subject to the Department's administrative 
requirements regulations at 29 CFR part 97; projects and activities 
administered by institutions of higher education, hospitals, or other 
non-profit organizations are subject to the Department's administrative 
requirements regulations at 29 CFR part 95. Grantees of title V funds 
shall be subject to any revisions of any implementing regulations cited 
in this paragraph (a) on the effective date of such revisions.
    (b) The administration of interagency agreements set forth in 
subpart E of this part is not subject to paragraph (a) of this section.



Sec. 641.403  Allowable costs.

    (a) General. The allowability of costs shall be determined in 
accordance with the cost principles indicated in paragraph (b) of this 
section, except as otherwise provided in this part.
    (b) Applicable Cost Principles. (1) The cost principles set forth in 
paragraphs (b)(1) through (4) of this section apply to the organization 
incurring the costs:
    (i) OMB Circular A-87--State, local or Indian tribal government;
    (ii) OMB Circular A-122--Private, non-profit organization other 
than:
    (A) Institutions of higher education;
    (B) Hospitals; or
    (C) Other organizations named in OMB Circular A-122 (see sections 
4.a. (Definitions) and 5 (Exclusions) of OMB Circular A-122);
    (iii) OMB Circular A-21--Educational institution; or
    (iv) 48 CFR part 31, subpart 31.2--Commercial organization (for-
profit organization, other than a hospital or other organizations named 
in OMB Circular A-122).
    (2) The OMB Circulars are available by writing to the Office of 
Management and Budget, Office of Administration, Publications Unit, Room 
G-236, New Executive Office Building, Washington, DC 20503, or by 
calling 202-395-7332.
    (c) Lobbying costs. In addition to the prohibition contained in 29 
CFR part 93 and in accordance with limitations on

[[Page 377]]

the use of appropriated funds in Department of Labor Appropriation Acts, 
title V funds shall not be used to pay any salaries or expenses related 
to any activity designed to influence legislation or appropriations 
pending before the Congress of the United States.
    (d) Building repairs and acquisition costs. No federal grant funds 
provided to a grantee or subgrantee under title V of the OAA or this 
part may be expended directly or indirectly for the purchase, erection, 
or repair of any building except for the labor involved in:
    (1) Minor remodeling of a public building necessary to make it 
suitable for use by project administrators;
    (2) Minor repair and rehabilitation of publicly used facilities for 
the general benefit of the community; and
    (3) Minor repair and rehabilitation by enrollees of housing occupied 
by persons with low incomes who are declared eligible for such services 
by authorized local agencies.
    (4) Accessibility and Reasonable Accommodation. Funds may be used to 
meet a grantee or subgrantee's obligations to provide physical and 
programmatic accessibility and reasonable accommodation as required by 
section 504 of the Rehabilitation Act of 1973, as amended, and the 
Americans with Disabilities Act of 1990.
    (e) Allowable fringe benefit costs. The cost of the following fringe 
benefits are allowable: initial and annual physical assessments, annual 
leave, sick leave, holidays, health insurance, social security, worker's 
compensation and any other fringe benefits approved in the grant 
agreement and permitted by the appropriate Federal cost principles found 
in OMB Circulars A-87 and A-122, except as limited for retirement costs 
by Sec. 641.311(c).



Sec. 641.404  Classification of costs.

    All costs must be charged to one of the following three cost 
categories:
    (a) Administration. The cost category of Administration shall 
include, but need not be limited to, the direct and indirect costs of 
providing:
    (1) Administration, management, and direction of a program or 
project;
    (2) Reports on evaluation, management, community benefits, and other 
aspects of project activity;
    (3) Assistance of an advisory council, if any;
    (4) Accounting and management information systems;
    (5) Training and technical assistance for grantee or subgrantee 
staff;
    (6) Bonding; and
    (7) Audits.
    (b) Enrollee wages and fringe benefits. The cost category of 
Enrollee Wages and Fringe Benefits shall include wages paid to enrollees 
for hours of community service assignments, as described in 
Sec. 641.311, including hours of training related to a community service 
assignment, and the costs of fringe benefits provided in accordance with 
Sec. 641.311.
    (c) Other enrollee costs. The cost category of Other enrollee costs 
shall include all costs of functions, services, and benefits not 
categorized as administration or enrollee wages and fringe benefits. 
Other enrollee costs shall include, but shall not be limited to, the 
direct and indirect costs of providing:
    (1) Recruitment and selection of eligible enrollees as provided in 
Secs. 641.304 and 641.305;
    (2) Orientation of enrollees and host agencies as provided in 
Sec. 641.308;
    (3) Assessment of enrollees for participation in community service 
assignments and evaluation of enrollees for continued participation or 
transition to unsubsidized employment as provided in Sec. 641.309;
    (4) Development of appropriate community service assignments as 
provided in Sec. 641.310;
    (5) Supportive services for enrollees, including transportation, as 
provided in Sec. 641.312;
    (6) Training for enrollees, including tuition; and
    (7) Development of unsubsidized employment opportunities for 
enrollees as provided in Sec. 641.314.
    (d) Cost reductions. Grantees may lower administration costs or 
other enrollee costs by assigning enrollees to activities which normally 
would be charged to either of these cost categories. In such instances, 
the costs of enrollees' wages and fringe benefits shall be charged to 
the cost category of

[[Page 378]]

enrollee wages and fringe benefits. [Section 502(b)(1)(A) of the OAA.]



Sec. 641.405  Limitations on federal funds.

    (a) The limitations on federal funds set forth in this section shall 
apply to SCSEP funds allotted to grantees for community service 
activities. Cost categories, limitations, and periods during which 
different limitations shall apply are set forth in paragraph (b) of this 
section.
    (b) The cost categories and the limitations which apply to them 
shall be:
    (1) Administration. The amount of federal funds expended for the 
cost of administration during the program year shall be no more than 
13.5 percent of the grant. The Department may increase the amount 
available for the cost of administration to no more than 15 percent of 
the project in accordance with section 502(c)(3) of the OAA.
    (2) Enrollee wages and fringe benefits. The amount of federal funds 
budgeted for enrollee wages and fringe benefits shall be no less than 75 
percent of the grant.



Sec. 641.406  Administrative cost waiver.

    (a) Based upon information submitted by a public or private 
nonprofit agency or organization with which the Department has or 
proposes to have an agreement, as set forth under section 502(b) of the 
OAA, the Department may waive Sec. 641.405(b)(1) and increase the amount 
available for paying the costs of administration to an amount not to 
exceed 15 percent of the proposed federal costs of the grant. Each 
waiver shall be in writing. The Department shall administer this section 
in accordance with section 502(c)(3) (A) and (B) of the OAA.
    (b) The waiver may be provided to grantees that demonstrate and 
document reasonable and necessary:
    (1) Major administrative cost increases;
    (2) Operational requirements imposed by the Department;
    (3) Increased costs associated with unsubsidized placement;
    (4) Increased costs of providing specialized services to minority 
groups; and
    (5) The minimum amount necessary to administer the grant relative to 
the available funds.



Sec. 641.407  Non-federal share of project costs.

    The non-federal share of costs may be in cash or in-kind, or a 
combination of the two, and shall be calculated in accordance with 29 
CFR 97.24 or 29 CFR 95.23, as appropriate. The Department shall pay not 
more than 90 percent of the cost of any project which is the subject of 
an agreement entered into under the OAA, except that the Department is 
authorized to pay all of the costs of any such project which is:
    (a) An emergency or disaster project;
    (b) A project located in an economically depressed area as 
determined by the Secretary of Labor in consultation with the Secretary 
of Commerce and the Director of the Office of Community Services of the 
Department of Health and Human Services;
    (c) A project which is exempted by law; or
    (d) A project serving an Indian reservation that can demonstrate it 
cannot provide adequate non-federal resources. [Sections 502(c) and 
502(e) of the OAA.]



Sec. 641.408  Budget changes.

    As an exception to 29 CFR 97.30(c)(1), Budget changes, 29 CFR 95.25, 
Revision of budget and program plans, the movement of Enrollee wages and 
fringe benefits to any other budget category shall not be permitted 
without prior written approval of the awarding agency. The Department 
shall not approve any budget change which would result in non-compliance 
with Sec. 641.405(b)(2).



Sec. 641.409  Grantee fiscal and performance reporting requirements.

    (a) In accordance with 29 CFR 97.40 or 29 CFR 95.51, as appropriate, 
each grantee shall submit a Senior Community Service Employment Program 
Quarterly Progress Report (QPR). This report shall be prepared to 
coincide with the ending dates for Federal fiscal year quarters and 
shall be submitted to the Department no later than 30 days after the end 
of the quarterly reporting period unless a waiver is provided. If the 
grant period ends on a date other

[[Page 379]]

than the last day of a federal fiscal year quarter, the last quarterly 
report covering the entire grant period shall be submitted no later than 
30 days after the ending date unless a waiver is provided. The 
Department shall provide instructions for the preparation of this 
report.
    (b) In accordance with 29 CFR 97.41 or 29 CFR 95.52, as appropriate, 
the following financial reporting requirements apply to title V grants:
    (1) An SF-269, Financial Status Report (FSR), shall be submitted to 
the Department within 30 days after the ending of each quarter of the 
program year unless a waiver is provided. A final FSR shall be submitted 
within 90 days after the end of the grant unless a waiver is provided.
    (2) All FSR's shall be prepared on an accrual basis.
    (c) In accordance with Departmental instructions, an equitable 
distribution report of SCSEP positions by all grantees in each State 
shall be submitted annually by the State agency receiving title V funds 
or another project sponsor designated by the Department. (Approved under 
the Office of Management and Budget Control No. 1205-0040)



Sec. 641.410  Subgrant agreements.

    (a) The grantee is responsible for the performance of all activities 
implemented under subgrant agreements and for compliance by the 
subgrantee with the OAA and this part.
    (b) No subgrant or other subagreement may provide for any 
expenditure of funds beyond the ending date of the grant agreement.
    (c) For purposes of this part, procurement, as described in 29 CFR 
part 97 and 29 CFR 95.40 through 95.48, does not include the award or 
administration of subgrant agreements.



Sec. 641.411  Program income accountability.

    Any of the methods described at 29 CFR 97.25 or 29 CFR 95.24, as 
appropriate, may be used to account for program income.



Sec. 641.412  Equipment.

    Equipment purchased by a State grantee with title V funds prior to 
July 1, 1989, shall be subject to 29 CFR 97.32.



Sec. 641.413  Audits.

    Each grantee is responsible for complying with the Single Audit Act 
of 1984 (31 U.S.C. 7501 et seq.) and 29 CFR part 96, the Department of 
Labor regulation which implements Office of Management and Budget 
Circular A-128, ``Audits of State and Local Governments''; or OMB 
Circular 133, ``Audits of Institutions of Higher Education and Other 
Nonprofit Institutions'', as appropriate.



Sec. 641.414  Grant closeout procedures.

    Grantees shall follow the grant closeout procedures at 29 CFR 97.50 
or 29 CFR 95.71, as appropriate. As necessary, the Department shall 
issue supplementary closeout instructions for all title V grantees.



Sec. 641.415  Department of Labor appeals procedures for grantees.

    (a) This section sets forth the procedures by which the grantee may 
appeal a SCSEP final determination by the Department relating to costs, 
payments, notices of suspension, and notices of termination other than 
those resulting from an audit. Appeals of suspensions and terminations 
for discrimination shall be processed under 29 CFR part 31, 32, or 34, 
as appropriate.
    (b) Appeals from a final disallowance of cost as a result of an 
audit shall be made pursuant to 29 CFR part 96, subpart 96.6.
    (c) Upon a grantee's receipt of the Department's final determination 
relating to costs (except final disallowance of cost as a result of an 
audit), payments, suspension or termination, the grantee may appeal the 
final determination to the Department's Office of Administrative Law 
Judges, as follows:
    (1) Within 21 days of receipt of the Department's final 
determination, the grantee may transmit by certified mail, return 
receipt requested, a request for a hearing to the Chief Administrative 
Law Judge, United States Department of Labor, 800 K Street, NW., room 
400 N, Washington, DC 20001 with a copy to the Department official who 
signed the final determination. The Chief Administrative Law Judge shall 
designate an administrative law judge to hear the appeal.

[[Page 380]]

    (2) The request for hearing shall be accompanied by a copy of the 
final determination, if issued, and shall state specifically those 
issues of the determination upon which review is requested. Those 
provisions of the determination not specified for review, or the entire 
determination when no hearing has been requested, shall be considered 
resolved and not subject to further review.
    (3) The Rules of Practice and Procedures for Administrative Hearings 
Before the Office of Administrative Law Judges, set forth at 29 CFR part 
18, shall govern the conduct of hearings under this section, except 
that:
    (i) The appeal shall not be considered a complaint; and
    (ii) Technical rules of evidence, such as the Federal Rules of 
Evidence and subpart B of 29 CFR part 18, shall not apply to any hearing 
conducted pursuant to this section. However, rules designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where reasonably 
necessary by the administrative law judge conducting the hearing. The 
certified copy of the administrative file transmitted to the 
administrative law judge by the official issuing the final determination 
shall be part of the evidentiary record of the case and need not be 
moved into evidence.
    (4) The administrative law judge should render a written decision no 
later than 90 days after the closing of the record.
    (5) The decision of the administrative law judge shall constitute 
final action by the Secretary of Labor unless, within 21 days after 
receipt of the decision of the administrative law judge, a party 
dissatisfied with the decision, or any part thereof, has filed 
exceptions with the Secretary of Labor specifically identifying the 
procedures, fact, law, or policy to which exception is taken. Any 
exception not specifically urged shall be deemed to have been waived. 
Thereafter, the decision of the administrative law judge shall become 
the decision of the Secretary unless the Secretary of Labor, within 30 
days of such filing, has notified the parties that the case has been 
accepted for review.
    (6) Any case accepted for review by the Secretary of Labor shall be 
decided within 180 days of such acceptance. If not so decided, the 
decision of the administrative law judge shall become the final decision 
of the Secretary of Labor.



                    Subpart E--Interagency Agreements



Sec. 641.501  Administration.

    (a) Federal establishments other than the Department of Labor which 
receive and use funds under title V of the OAA or this part shall submit 
to DOL project fiscal and progress reports as described in Sec. 641.409.
    (b) Non-DOL federal establishments which receive and use funds under 
title V shall maintain the standard records on individual enrollees and 
enrollee activities, in accordance with this part.
    (c) The Department may provide title V funds to another federal 
agency by a non-expenditure transfer authorization or by payments on an 
advance or reimbursement basis.
    (d) In aspects of project administration other than those described 
in paragraphs (a) and (b) of this section, federal establishments which 
receive and use funds under title V of the OAA may use their normal 
administrative procedures.



                  Subpart F--Assessment and Evaluation



Sec. 641.601  General.

    The Department shall assess each grantee and subgrantee to determine 
whether it is carrying out the purposes and provisions of title V of the 
OAA and this part in accordance with the OAA, this part and the grant or 
other agreements. The Department also shall evaluate the overall program 
conducted under title V of the OAA or this part to aid in the 
administration of the SCSEP. The Department and individuals designated 
by the Department may make site visits and conduct such other monitoring 
activities as determined by SCSEP needs.

[[Page 381]]



Sec. 641.602  Limitation.

    In arranging for the assessment of a grantee, or the evaluation of a 
subgrantee, or the evaluation of the overall program under title V of 
the OAA or this part, the Department shall not use any individual, 
institution, or organization associated with any project under title V 
of the OAA.



PART 645--PROVISIONS GOVERNING WELFARE-TO-WORK GRANTS--Table of Contents






                      Subpart A--Scope and Purpose

Sec.
645.100  What does this subpart cover?
645.110  What are the purposes of the Welfare-to-Work program?
645.120  What definitions apply to this part?

       Subpart B--General Program and Administrative Requirements

645.200  What does this subpart cover?
645.210  What is meant by the terms ``entity'' and ``project'' in the 
          statutory phrase ``an entity that operates a project'' with 
          Welfare-to-Work funds?
645.211  How must Welfare-to-Work funds be spent by the operating 
          entity?
645.212  Who may be served as a hard-to-employ individual under the 70 
          percent provision?
645.213  Who may be served as an individual with long-term welfare 
          dependence characteristics under the 30 percent provision?
645.214  How will Welfare-to-Work participant eligibility be determined?
645.220  What activities are allowable under this part?
645.225  How do Welfare-to-Work activities relate to activities provided 
          through TANF and other related programs?
645.230  What general fiscal and administrative rules apply to the use 
          of Federal funds?
645.233  What are the time limitations on the expenditure of Welfare-to-
          Work grant funds?
645.235  What types of activities are subject to the administrative cost 
          limit on Welfare-to-Work grants?
645.240  What are the reporting requirements for Welfare-to-Work 
          programs?
645.245  Who is responsible for oversight and monitoring of Welfare-to-
          Work grants?
645.250  What procedures apply to the resolution of findings arising 
          from audits, investigations, monitoring, and oversight 
          reviews?
645.255  What nondiscrimination protections apply to participants in 
          Welfare-to-Work programs?
645.260  What health and safety provisions apply to participants in 
          Welfare-to-Work programs?
645.265  What safeguards are there to ensure that participants in 
          Welfare-to-Work employment activities do not displace other 
          employees?
645.270  What procedures are there to ensure that currently employed 
          workers may file grievances regarding displacement and that 
          Welfare-to-Work participants in employment activities may file 
          grievances regarding displacement, health and safety standards 
          and gender discrimination?

    Subpart C--Additional Formula Grant Administrative Standards and 
                               Procedures

645.300  What constitutes an allowable match?
645.310  What assurance must a State provide that it will make the 
          required matching expenditures?
645.315  What actions are to be taken if a State fails to make the 
          required matching expenditures?
645.320  When will formula funds be reallotted, and what reallotment 
          procedures will the Secretary use?

             Subpart D--State Formula Grants Administration

645.400  Under what conditions may the Governor request a waiver to 
          designate an alternate local administering agency?
645.410  What elements will the State use in distributing funds within 
          the State?
645.415  What planning information must a State submit in order to 
          receive a formula grant?
645.420  What factors will be used in measuring State performance?
645.425  What are the roles and responsibilities of the State(s) and 
          PIC(s)?

              Subpart E--Welfare-to-Work Competitive Grants

645.500  Who are eligible applicants for competitive grants?
645.510  What is the required consultation with the Governor?
645.515  What are the program and administrative requirements that apply 
          to both the formula grants and competitive grants?
645.520  What are the application procedures and timeframes for 
          competitive grant funds?
645.525  What special consideration will be given to rural areas and 
          cities with large concentrations of poverty?

[[Page 382]]

                Subpart F--Administrative Appeal Process

645.800  What administrative remedies are available under this part?

    Authority: 42 U.S.C. 606(a)(5)(C)(viii).

    Source: 62 FR 61603, Nov. 18, 1997, unless otherwise noted.



                      Subpart A--Scope and Purpose



Sec. 645.100  What does this subpart cover?

    (a) Subpart A establishes regulatory provisions that apply to the 
Welfare-to-Work (WtW) programs conducted at the State and at the Service 
Delivery Area (SDA) levels.
    (b) Subpart B provides general program requirements applicable to 
all WtW formula funds. The provisions of this subpart govern how WtW 
funds must be spent, who is eligible to participate in the program, 
allowable activities and their relationship to TANF, Governor's projects 
for long-term recipients, administrative and fiscal provisions, and 
program oversight requirements. This subpart also addresses worker 
protections and the establishment of a State grievance system.
    (c) Subpart C sets forth additional administrative standards and 
procedures for WtW Formula Grants, such as matching requirements and 
reallotment procedures.
    (d) Subpart D sets forth the conditions under which the Governor may 
request a waiver to designate an alternate administering agency, sets 
forth the formula elements that must be included in the within-State 
distribution formula, the submission of a State annual plan, the factors 
for measuring State performance, and the roles and responsibilities of 
the States and the Private Industry Councils (PICs).
    (e) Subpart E outlines general conditions and requirements for the 
WtW Competitive Grants.
    (f) Regulatory provisions applicable to the Indian and Native 
American Welfare-to-Work Program (INA WtW) are found at 20 CFR part 646.



Sec. 645.110  What are the purposes of the Welfare-to-Work Program?

    The purposes of the WtW program are:
    (a) To facilitate the placement of hard-to-employ welfare recipients 
into transitional employment opportunities which will lead to lasting 
unsubsidized employment and self-sufficiency;
    (b) To provide a variety of activities, grounded in TANF's ``work 
first'' philosophy, to prepare individuals for, and to place them in, 
lasting unsubsidized employment;
    (c) To provide for a variety of post-employment and job retention 
services which will assist the hard-to-employ welfare recipient to 
secure lasting unsubsidized employment;
    (d) To provide targeted WtW funds to high poverty areas with large 
numbers of hard-to-employ welfare recipients.



Sec. 645.120  What definitions apply to this part?

    The following definitions apply under this part:
    Act means Title IV, Part A of the Social Security Act, 42 U.S.C. 
601-619.
    Adult means an individual who is not a minor child.
    Chief Elected Official(s) (CEOs) means:
    (1) The chief elected official of the sole unit of general local 
government in the service delivery area,
    (2) The individual or individuals selected by the chief elected 
officials of all units of general local government in such area as their 
authorized representative, or
    (3) In the case of a service delivery area designated under section 
101(a)(4)(A)(iii) of JTPA, the representative of the chief elected 
official for such area (as defined in section 4(4)(C) of JTPA).
    Competitive Grants means those WtW funds awarded by the Department 
under a competitive application process to local governments, PICs, and 
private entities (such as community development corporations, community-
based and faith-based organizations, disability community organizations, 
and community action agencies) who apply in conjunction with a PIC or 
local government.
    Department or DOL means the U.S. Department of Labor.
    Employment activities means the activities enumerated at 
Sec. 645.220(b).

[[Page 383]]

    ETA means the Employment and Training Administration of the U.S. 
Department of Labor.
    Fiscal year (FY) means any 12-month period ending on September 30 of 
a calendar year.
    Formula grants means the WtW funds allotted to each Welfare-to-Work 
State, based on a formula prescribed by the Act, which equally considers 
States' shares of the national number of poor individuals and of adult 
recipients of assistance under TANF. The State is required to distribute 
not less than 85 percent of the allotted formula grant funds to service 
delivery areas in the State; and the State may retain not more than 15 
percent for projects to help long-term recipients of assistance enter 
unsubsidized employment. Unless otherwise specified, the term ``formula 
grant'' refers to the 85 percent and 15 percent funds.
    Governor means the Chief Executive Officer of a State.
    Job Training Partnership Act or JTPA means Public Law (Pub. L.) 97-
300, as amended, 29 U.S.C. 1501, et seq.
    Minor child means an individual who has not attained 18 years of 
age; or has not attained 19 years of age and is a full-time student in a 
secondary school (or in the equivalent level of vocational or technical 
training).
    MOE means maintenance of effort. Under TANF, States are required to 
maintain a certain level of spending on welfare based on ``historic'' FY 
1994 expenditure levels (Section 409 (a)(7) of the Act).
    PIC means a Private Industry Council established under Section 102 
of the Job Training Partnership Act, which performs the functions 
authorized at Section 103 of the JTPA.
    PRWORA means the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, Public Law (Pub. L.) 104-193, which 
established the TANF program.
    SDA means a service delivery area designated by the Governor 
pursuant to section 101(a)(4) of the Job Training Partnership Act.
    Secretary means the Secretary of Labor.
    Separate State program means a program operated outside of TANF in 
which the expenditures of State funds may count for TANF MOE purposes.
    State means the 50 States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the US Virgin Islands, Guam, 
and American Samoa, unless otherwise specified.
    State TANF Program means those funds expended under the State Family 
Assistance Grant (SFAG), the basic block grant allocated to the States 
under Section 403(a)(1) of the Act.
    TANF means Temporary Assistance for Needy Families Program 
established under PRWORA.
    TANF MOE means the expenditure of State funds that must be made in 
order to meet the Temporary Assistance for Needy Families Maintenance of 
Effort requirement.
    WtW means Welfare-to-Work.
    WtW State means those States that the Secretary of Labor determines 
have met the five conditions established at Section 403(a)(5)(A)(ii) of 
the Act. Only States that are determined to be WtW States can receive 
WtW grant funds.
    WtW statute means those provisions of the Balanced Budget Act of 
1997 containing certain amendments to PRWORA and establishing the new 
Welfare-to-Work program, amending Title IV of the Social Security Act, 
(codified at 42 U.S.C. 601-619).



       Subpart B--General Program and Administrative Requirements



Sec. 645.200  What does this subpart cover?

    This subpart provides general program and administrative 
requirements for WtW formula funds, including Governors' funds for long-
term recipients of assistance, and for competitive grant funding 
(section 403(a)(5) of the Act).



Sec. 645.210  What is meant by the terms ``entity'' and ``project'' in the statutory phrase ``an entity that operates a project'' with Welfare-to-Work funds?

    The terms entity and project, in the statutory phrase ``an entity 
that operates a project'', means:
    (a) For WtW substate formula funds:

[[Page 384]]

    (1) Entity; means the PIC (or the alternate agency designated by the 
Governor and approved by the Secretary pursuant to Sec. 645.400 of this 
part) which administers the WtW substate formula funds in a service 
delivery area(s). This entity is referred to in Secs. 645.211 through 
645.225 of this part as the ``operating entity.''
    (2) Project means all activities, administrative and programmatic, 
supported by the total amount of the WtW substate formula funds allotted 
to the entity described in paragraph (a)(1) of this section.
    (b) For WtW Governors' funds for long-term recipients of assistance:
    (1) Entity means the agency, group, or organization to which the 
Governor has distributed any of the funds for long-term recipients of 
assistance, as described in Sec. 645.410 (b) and (c) of this part. This 
entity is referred to in Secs. 645.211 through 645.225 of this part as 
the ``operating entity.''
    (2) Project means all activities, administrative and programmatic, 
supported by the total amount of one discrete award of WtW Governors' 
funds for long-term recipients of assistance awarded to the entity 
described in paragraph (b)(1) of this section.
    (c) For competitive WtW funds:
    (1) Entity means an eligible applicant, as described in Sec. 645.500 
of this part, which is awarded a competitive WtW grant. This entity is 
referred to in Secs. 645.211 through 645.225 of this part as the 
``operating entity.''
    (2) Project means all of the activities, administrative and 
programmatic, supported by the total amount of one discrete WtW 
competitive grant awarded to the entity described in paragraph (c)(1) of 
this section (section 403(a)(5)(C) of the Act).



Sec. 645.211  How must Welfare-to-Work funds be spent by the operating entity?

    (a) At least 70 percent of the WtW funds allotted to or awarded to 
an operating entity, as described in Sec. 645.210 of this part, must be 
spent to benefit hard-to-employ individuals, as described in 
Sec. 645.212 of this part.
    (b) Not more than 30 percent of the WtW funds allotted to or awarded 
to an operating entity, as described in Sec. 645.210 of this part, may 
be spent to assist individuals with long-term welfare dependence 
characteristics, as described in Sec. 645.213 of this part. If less than 
30 percent of the funds is spent to assist individuals with long-term 
welfare dependence characteristics, the remaining funds shall be spent 
to benefit hard-to-employ individuals pursuant to paragraph (a) of this 
section (section 403(a)(5)(C)of the Act).



Sec. 645.212  Who may be served as a hard-to-employ individual under the 70 percent provision?

    (a) An individual is eligible to be served under the 70 percent 
provision if (s)he meets all three of the criteria listed in paragraphs 
(a)(1), (2), and (3) of this section:
    (1) The individual is receiving TANF assistance; and
    (2) Barriers to employment--at least two of the three following 
barriers to employment must apply to the individual:
    (i) Has not completed secondary school or obtained a certificate of 
general equivalency, and has low skills in reading or mathematics. At 
least 90 percent of individuals determined to have low skills in reading 
or mathematics must be proficient at the 8.9 grade level or below.
    (ii) Requires substance abuse treatment for employment.
    (iii) Has a poor work history. At least 90 percent of individuals 
determined to have a poor work history must have worked no more than 3 
consecutive months in the past 12 calendar months; and
    (3) Length of receipt of TANF assistance--the individual must be a 
long-term recipient, meeting one of the following two criteria:
    (i) Has received assistance under a State TANF program, and/or its 
predecessor program, for at least 30 months. The months do not have to 
be consecutive; or
    (ii) Will become ineligible for assistance within 12 months due to 
either Federal or State-imposed durational time limits on receipt of 
TANF assistance. This includes individuals who have been exempted from 
the durational limits due to hardship pursuant to section 408(a)(7)(C) 
of the Act,

[[Page 385]]

but would face termination within 12 months without the exemption.
    (b) A noncustodial parent of a minor is eligible to participate 
under the 70 percent provision if the custodial parent meets the 
eligibility requirements of paragraph (a) of this section.
    (c) An individual who has barriers to employment, as specified in 
paragraph (a)(2) of this section, and who would be otherwise eligible to 
receive TANF assistance but is no longer receiving TANF assistance 
because (s)he has reached either the Federal five-year lifetime limit on 
receipt of assistance, or a State-imposed lifetime limit, is eligible to 
participate under the 70 percent provision (section 403(a)(5)(C) of the 
Act).



Sec. 645.213  Who may be served as an individual with long-term welfare dependence characteristics under the 30 percent provision?

    (a) An individual is eligible to be served under the 30 percent 
provision if (s)he meets both criteria listed in paragraphs (a)(1) and 
(2) of this section:
    (1) The individual is receiving TANF assistance; and
    (2) The individual has characteristics associated with, or 
predictive of, long-term welfare dependence, such as having dropped out 
of school, teenage pregnancy, or having a poor work history. States, in 
consultation with the operating entity, may designate additional 
characteristics associated with, or predictive of, long-term welfare 
dependence.
    (b) A noncustodial parent of a minor child is eligible to 
participate under the 30 percent provision if the noncustodial parent 
has the characteristics specified in paragraph (a)(2) of this section, 
and the custodial parent is receiving TANF assistance.
    (c) An individual who has characteristics associated with, or 
predictive of, long-term welfare dependence, as specified in paragraph 
(a)(2) of this section, and who would be otherwise eligible to receive 
TANF assistance but is no longer receiving TANF assistance because (s)he 
has reached either the Federal five-year lifetime limit on receipt of 
assistance, or a State-imposed lifetime limit, is eligible to 
participate under the 30 percent provision (section 403(a)(5)(C) of the 
Act).



Sec. 645.214  How will Welfare-to-Work participant eligibility be determined?

    (a) The operating entity, as described in Secs. 645.210(a)(1), 
(b)(1), and (c)(1) of this part, is accountable for ensuring that WtW 
funds are spent only on individuals eligible for WtW projects.
    (b) The operating entity must ensure that there are mechanisms in 
place to determine WtW eligibility for individuals who are receiving 
TANF assistance. These mechanisms:
    (1) Must include arrangements with the TANF agency to ensure that a 
WtW eligibility determination is based on information, current at the 
time of the WtW eligibility determination, about whether an individual 
is receiving TANF assistance, pursuant to Secs. 645.212(a)(1) and 
645.213(a)(1) of this part, the length of receipt of TANF assistance, 
pursuant to Sec. 645.212(a)(3)(i) of this part, and when an individual 
may become ineligible for assistance pursuant to Sec. 645.212(a)(3)(ii) 
of this part (section 403(a)(5)(A)(ii)(dd) of the Act).
    (2) May include a determination of WtW eligibility for barriers to 
employment, pursuant to Sec. 645.212(a)(2) of this part, and for 
characteristics of long-term welfare dependence, pursuant to 
Sec. 645.213(a)(2) of this part, based on information collected by the 
operating entity or the TANF agency up to six months prior to the WtW 
eligibility determination.
    (c) The operating entity must ensure that there are mechanisms in 
place to determine WtW eligibility for individuals who are not receiving 
TANF assistance (i.e., noncustodial parents, pursuant to 
Secs. 645.212(b) and 645.213(b) of this part, and individuals who have 
reached the time limit on receipt of TANF, pursuant to Secs. 645.212(c) 
and 645.213(c) of this part). Mechanisms may include, but are not 
limited to:
    (1) Using staff from the operating entity to determine eligibility;
    (2) Entering into agreements with local agencies such as the TANF 
agency and other appropriate agencies

[[Page 386]]

which foster coordination and facilitate the exchange of eligibility 
information among parties at the local level; and/or
    (3) Performing joint eligibility determination with other 
appropriate agencies, including the TANF agency.
    (d) Eligibility for WtW need not be redetermined for an individual 
after the individual begins to receive WtW services (section 
403(a)(5)(C) of the Act).



Sec. 645.220  What activities are allowable under this part?

    Entities operating WtW projects may use WtW funds for the following:
    (a) Job readiness activities financed through job vouchers or 
through contracts with public or private providers.
    (b) Employment activities which consist of any of the following:
    (1) Community service programs;
    (2) Work experience programs;
    (3) Job creation through public or private sector employment wage 
subsidies; and
    (4) On-the-job training.
    (c) Job placement services financed through job vouchers or through 
contracts with public or private providers, subject to the payment 
requirements at Sec. 645.230(a)(3).
    (d) Post-employment services financed through job vouchers or 
through contracts with public or private providers, which are provided 
after an individual is placed in one of the employment activities listed 
in paragraph (b) of this section, or in any other subsidized or 
unsubsidized job. Post-employment services include, but are not limited 
to, such services as:
    (1) Basic educational skills training;
    (2) Occupational skills training;
    (3) English as a second language training; and
    (4) Mentoring.
    (e) Job retention services and support services which are provided 
after an individual is placed in a job readiness activity, as specified 
in paragraph (a) of this section, in one of the employment activities, 
as specified in paragraph (b) of this section, or in any other 
subsidized or unsubsidized job. These services can be provided with WtW 
funds only if they are not otherwise available to the participant. Job 
retention and support services include, but are not limited to, such 
services as:
    (1) Transportation assistance;
    (2) Substance abuse treatment (except that WtW funds may not be used 
to provide medical treatment);
    (3) Child care assistance;
    (4) Emergency or short term housing assistance; and
    (5) Other supportive services.
    (f) Individual development accounts which are established in 
accordance with section 404 (h) of the Act.
    (g) Intake, assessment, eligibility determination, development of an 
individualized service strategy, and case management may be incorporated 
in the design of any of the allowable activities listed in paragraphs 
(a) through (f) of this section (section 403(a)(5)(C) of the Act).



Sec. 645.225  How do Welfare-to-Work activities relate to activities provided through TANF and other related programs?

    (a) Activities provided through WtW must be coordinated effectively 
at the State and local levels with activities being provided through 
TANF (section 403(a)(5)(A)(vii)(II) of the Act).
    (b) The operating entity must ensure that there is an assessment of 
skills, prior work experience, employability, and other relevant 
information in place for each WtW participant. Where appropriate, the 
assessment performed by the TANF agency or JTPA should be used for this 
purpose.
    (c) The operating entity must ensure that there is an individualized 
strategy for transition to unsubsidized employment in place for each 
participant which takes into account participant assessments, including 
the TANF assessment and any JTPA assessment. Where appropriate, the TANF 
individual responsibility plan (IRP) or JTPA individual service strategy 
should be used for this purpose.
    (d) Coordination of resources should include not only those 
available through WtW and TANF grant funds, and the Child Care and 
Development Block Grant, but also those available through other related 
activities and programs such as the JTPA programs, the State employment 
service, One-Stop systems, private sector employers, labor 
organizations, business and

[[Page 387]]

trade associations, education agencies, housing agencies, community 
development corporations, transportation agencies, community-based and 
faith-based organizations, disability community organizations, community 
action agencies, and colleges and universities which provide some of the 
assistance needed by the targeted population (section 402(a)(5)(A) of 
the Act).



Sec. 645.230  What general fiscal and administrative rules apply to the use of Federal funds?

    (a) Uniform fiscal and administrative requirements. (1) State, 
local, and Indian tribal government organizations are required to follow 
the common rule Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments which is codified 
in the DOL regulations at 29 CFR part 97.
    (2) Institutions of higher education, hospitals, and other non-
profit organizations are required to follow OMB Circular A-110 which is 
codified in the DOL regulations at 29 CFR part 95.
    (3) In addition to the requirements at 29 CFR 95.48 and 29 CFR 
97.36(i), contracts or vouchers for job placement services supported by 
funds provided for this program must include a provision to require that 
at least one-half (\1/2\) of the payment occur after an eligible 
individual placed into the workforce has been in the workforce for six 
(6) months. This provision applies only to placement in unsubsidized 
jobs (section 403(a)(5)(C)(i) of the Act).
    (4) In addition to the requirements at 29 CFR 95.42 and 29 CFR 
97.36(b)(3) which address codes of conduct and conflict of interest 
issues related to employees, it is also required that:
    (i) A PIC member shall neither cast a vote on, nor participate in, 
any decision making capacity on the provision of services by such member 
(or any organization which that member directly represents), nor on any 
matter which would provide any direct financial benefit to that member 
or a member of his immediate family.
    (ii) Neither membership on the PIC nor the receipt of WtW funds to 
provide training and related services shall be construed, by itself, to 
violate these conflict of interest provisions.
    (5) The addition method shall be required for the use of all program 
income earned under WtW grants. The cost of generating program income 
shall be subtracted from the amount earned to establish the amount of 
program income available for use under the grants.
    (b) Audit requirements. All governmental and non-profit 
organizations are required to follow the audit requirements of OMB 
Circular A-133.\1\ This requirement is imposed at 29 CFR 97.26 for 
governmental organizations and at 29 CFR 95.26 for institutions of 
higher education, hospitals, and other non-profit organizations.
---------------------------------------------------------------------------


    \1\ OMB Circulars are available from: Executive Office of the 
President Publications Service, 725 17th Street NW, Suite G-2200, 
Washington, DC 20503; 202-395-7332.
---------------------------------------------------------------------------

    (c) Allowable costs/cost principles. The DOL regulations at 29 CFR 
95.27 and 29 CFR 97.22 identify the Federal principles for determining 
allowable costs which each kind of recipient and subrecipient must 
follow. For those selected items of cost requiring prior approval, the 
authority to grant or deny approval is delegated to the Governor.
    (1) State, local, and Indian tribal government organizations must 
determine allowability of costs in accordance with the provisions of OMB 
Circular A-87, ``Cost Principles for State and Local Governments.''
    (2) Non-profit organizations must determine allowability of costs in 
accordance with OMB Circular A-122, ``Cost Principles for Non-Profit 
Organizations.''
    (3) Institutions of higher education must determine allowability of 
costs in accordance with OMB Circular A-21, ``Cost Principles for 
Education Institutions.''
    (4) Hospitals must determine allowability of costs in accordance 
with the provisions of appendix E of 45 CFR part 74, ``Principles for 
Determining Costs Applicable to Research and Development Under Grants 
and Contracts with Hospitals.''
    (5) Commercial organizations and those non-profit organizations 
listed in Attachment C to OMB Circular A-122 must determine allowability 
of costs in accordance with the provisions of the

[[Page 388]]

Federal Acquisition Regulation (FAR), at 48 CFR part 31.
    (d) Government-wide debarment and suspension, and government-wide 
drug-free workplace requirements. All WtW grant recipients and 
subrecipients are required to comply with the government-wide 
requirements for debarment and suspension, and the government-wide 
requirements for a drug-free workplace which are codified in the DOL 
regulations at 29 CFR part 98.
    (e) Restrictions on lobbying. All WtW grant recipients and 
subrecipients are required to comply with the restrictions on lobbying 
which are codified in the DOL regulations at 29 CFR part 93.
    (f) Nondiscrimination. All WtW grant recipients and subrecipients 
are required to comply with the nondiscrimination provisions which are 
codified in the DOL regulations at 29 CFR parts 31 and 32. In addition, 
recipients of WtW grants who are also recipients under JTPA are required 
to comply with 20 CFR part 34. For purposes of this paragraph, the term 
``recipient'' has the same meaning as the term is defined in 29 CFR 
parts 31, 32, and 34. Participant rights related to nondiscrimination 
may be found at Sec. 645.255 of this part.
    (g) Nepotism. (1) No individual may be placed in a WtW employment 
activity if a member of that person's immediate family is engaged in an 
administrative capacity for the employing agency.
    (2) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
such State or local requirement shall be followed.



Sec. 645.233  What are the time limitations on the expenditure of Welfare-to-Work grant funds?

    (a) Formula grant funds. The maximum time limit for the expenditure 
of a given fiscal year allotment is three years from the effective date 
of the Federal grant award to the State. The maximum time limit will be 
allowed and will be specified in the Department's formula grant document 
for each fiscal year of funds provided to the State. Any remaining funds 
that have not been expended at the end of the expenditure period must be 
returned to the Department in accordance with the applicable closeout 
procedures for formula grants.
    (b) Competitive grant funds. The maximum time limit for the 
expenditure of these funds is three years from the effective date of 
award, but will, in all cases, be determined by the grant period and the 
terms and conditions specified in the Federal grant award agreement 
(including any applicable grant modification documents). Any remaining 
funds that have not been expended at the end of the approved grant 
period must be returned to the Department in accordance with the 
applicable closeout procedures for competitive grants (section 
503(a)(5)(C)(vii) of the Act).



Sec. 645.235  What types of activities are subject to the administrative cost limit on Welfare-to-Work grants?

    (a) Administrative cost limitation (section 404(b)(1)). (1) Formula 
grants to States. Expenditures for administrative purposes under WtW 
formula grants to States are limited to fifteen percent (15%) of the 
grant award.
    (2) Competitive grants. The limitation on expenditures for 
administrative purposes under WtW competitive grants will be specified 
in the grant agreement but in no case shall the limitation be more than 
fifteen percent (15%) of the grant award.
    (b) The costs of administration are that allocable portion of 
necessary and allowable costs associated with the overall management and 
administration of the WtW program and which are not directly related to 
the provision of services to participants. These costs can be both 
personnel and non-personnel and both direct and indirect. Costs of 
administration shall include:
    (1) Except as provided in paragraph (c)(1) of this section, costs of 
salaries, wages, and related costs of the recipient's, subrecipient's or 
PIC's staff engaged in:
    (i) Overall program management, program coordination, and general 
administrative functions, including the salaries and related costs of 
the executive director, WtW director, project director, personnel 
officer, fiscal officer/bookkeeper, purchasing officer, secretary, 
payroll/insurance/property clerk and other costs associated with 
carrying out administrative functions;

[[Page 389]]

    (ii) Preparing program plans, budgets, schedules, and amendments 
thereto;
    (iii) Monitoring of programs, projects, subrecipients, and related 
systems and processes;
    (iv) Procurement activities, including the award of specific 
subgrants, contracts, and purchase orders;
    (v) Providing State or local officials and the general public with 
information about the program (public relations);
    (vi) Developing systems and procedures, including management 
information systems (except as provided in paragraph (c)(3) of this 
section), for assuring compliance with program requirements;
    (vii) Preparing reports and other documents related to the program 
requirements;
    (viii) Coordinating the resolution of audit findings;
    (ix) Evaluating program results against stated objectives; and
    (x) Performing administrative services, including such services as 
general legal services, accounting services, audit services; and 
managing purchasing, property, payroll, and personnel;
    (2) Except as provided at paragraph (c)(3) of this section, costs 
for goods and services required for administration of the program, 
including such goods and services as rental or purchase of equipment, 
utilities, office supplies, postage, and rental and maintenance of 
office space;
    (3) The costs of organization-wide management functions; and
    (4) Travel costs incurred for official business in carrying out 
program management or administrative activities.
    (5) These Interim Final WtW regulations adopt the description of the 
term ``Administrative Costs'' found in the JTPA regulations at 29 CFR 
627.440 to minimize the burden on PICs. The Secretary reserves the right 
to change the definition to be consistent with the TANF definition when 
final TANF regulations are issued.
    (c) Other cost classification guidance. (1) Personnel and related 
non-personnel costs of the recipient's or subrecipient's staff, 
including project directors, who perform both administrative and 
programmatic services or activities may be allocated to the benefitting 
cost objectives/categories based on documented distributions of actual 
time worked or other equitable cost allocation methods.
    (2) Indirect or overhead costs normally shall be charged to 
administration, except that specific costs charged to an overhead or 
indirect cost pool that can be identified directly with a cost 
objective/category other than administration may be charged to the cost 
objective/category directly benefitted. Documentation of such charges 
shall be maintained.
    (3) The costs of information technology--computer hardware and 
software--needed for tracking or monitoring under a WtW grant shall not 
be charged to the administration of the grant (section 404(b)(2) of the 
Act).
    Only the costs of information technology that is ``year 2000 
compliant'' shall be allowable under WtW grants. To meet this 
requirement, information technology must be able to accurately process 
date/time data (including, but not limited to, calculating, comparing 
and sequencing) from, into and between the twentieth and twenty-first 
centuries, and the years 1999 and 2000. The information technology must 
also be able to make leap year calculations. Furthermore, ``year 2000 
compliant'' information technology when used in combination with other 
information technology shall accurately process date/time data if the 
other information technology properly exchanges date/time data with it.



Sec. 645.240  What are the reporting requirements for Welfare-to-Work programs?

    (a) General. All States and other direct grant recipients shall 
report pursuant to instructions issued by DOL (financial data) and by 
DHHS (participant data only). Reports shall be submitted no more 
frequently than quarterly within a time period specified in the 
reporting instructions. In addition, DOL will establish supplemental 
reporting requirements for competitive grant recipients through the 
grant agreements pursuant to Sec. 645.515 of this part.

[[Page 390]]

    (b) Subrecipient reporting. A State or other direct grant recipient 
may impose different forms or formats, shorter due dates, and more 
frequent reporting requirements on subrecipients. However, the recipient 
is required to meet the reporting requirements imposed by DOL and DHHS.
    (c) Financial reports. Financial reports shall be submitted to DOL 
by each grant recipient. Reported expenditures and program income must 
be on the accrual basis of accounting and cumulative by fiscal year of 
appropriation. If the recipient's accounting records are not normally 
kept on the accrual basis of accounting, the recipient shall develop 
accrual information through an analysis of the documentation on hand.
    (d) Due date. Financial reports will be due no later than 45 days 
after the end of each quarter. A final financial report is required 90 
days after the expiration of a funding period or the termination of 
grant support.
    (e) Optional SPIR Reporting. DOL may also provide instructions for 
an optional modified SPIR for internal program management (section 
411(a) of the Act).



Sec. 645.245  Who is responsible for oversight and monitoring of Welfare-to-Work grants?

    (a) The Secretary may monitor all recipients and subrecipients of 
all grants awarded and funds expended under WtW. Federal oversight will 
be conducted primarily at the State level for formula grants and at the 
recipient level for competitive grants.
    (b) The Governor shall monitor PICs (or other approved 
administrative entities) funded under the State's formula allocated 
grants on a periodic basis for compliance with applicable laws and 
regulations. The Governor shall develop and make available for review a 
State monitoring plan.



Sec. 645.250  What procedures apply to the resolution of findings arising from audits, investigations, monitoring and oversight reviews?

    (a) Resolution of subrecipient level findings. (1) The Governor is 
responsible for the resolution of findings that arise from the State's 
monitoring reviews, investigations and audits (including OMB Circular A-
133 audits) of subrecipients.
    (2) A State shall utilize the audit resolution, debt collection and 
appeal procedures that it uses for other Federal grant programs.
    (3) If a State does not have such procedures, it shall prescribe 
standards and procedures to be used for this grant program.
    (b) Resolution of State level findings. (1) The Secretary is 
responsible for the resolution of findings that arise from federal 
audits, monitoring reviews, investigations, incident reports, and 
recipient level OMB Circular A-133 audits.
    (2) The Secretary will use the DOL audit resolution process, 
consistent with the Single Audit Act of 1996 and OMB Circular A-133.
    (3) A final determination issued by a grant officer pursuant to this 
process may be appealed to the DOL Office of Administrative Law Judges 
under the procedures at Sec. 645.800.
    (c) Resolution of nondiscrimination findings. Findings arising from 
investigations or reviews conducted under nondiscrimination laws shall 
be resolved in accordance with those laws and the applicable 
implementing regulations.



Sec. 645.255  What nondiscrimination protections apply to participants in Welfare-to-Work programs?

    (a) All participants in WtW programs under this part shall have such 
rights as are available under all applicable Federal, State and local 
laws prohibiting discrimination including:
    (1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.);
    (2) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794);
    (3) The Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 
seq.); and
    (4) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.).
    (b) Complaints alleging discrimination in violation of any 
applicable Federal, State or local law, including those listed in 
paragraph (a) of this section, shall be processed in accordance with 
those laws and the implementing regulations.

[[Page 391]]

    (c) Questions about or complaints alleging a violation of the 
nondiscrimination laws in paragraph (a) of this section may be directed 
or mailed to the Director, Civil Rights Center, U.S. Department of 
Labor, Room N4123, 200 Constitution Avenue, NW, Washington, DC 20210 for 
processing.
    (d) Participants in job readiness and employment activities operated 
with WtW funds, as defined in Sec. 645.220 of this part, shall not be 
discriminated against because of gender. Participants alleging gender 
discrimination may file a complaint using the State's grievance system 
procedures as described in Sec. 645.270 of this part (section 
403(a)(5)(J)(iii) of the Act).



Sec. 645.260  What health and safety provisions apply to participants in Welfare-to-Work programs?

    (a) Participants in an employment activity operated with WtW funds, 
as defined in Sec. 645.220 of this part, are subject to the same health 
and safety standards established under State and Federal law which are 
applicable to similarly employed employees, of the same employer, who 
are not participants in programs under WtW.
    (b) Participants alleging a violation of these health and safety 
standards may file a complaint pursuant to the procedures contained in 
Sec. 645.270 of this part (section 403(a)(5)(J)(ii) of the Act).



Sec. 645.265  What safeguards are there to ensure that participants in Welfare-to-Work employment activities do not displace other employees?

    (a) An adult participating in an employment activity operated with 
WtW funds, as described in Sec. 645.220 of this part, may fill an 
established position vacancy subject to the limitations in paragraph (c) 
of this section.
    (b) An employment activity operated with WtW funds, as described in 
Sec. 645.220 of this part, shall not violate existing contracts for 
services or collective bargaining agreements. Where such an employment 
activity would violate a collective bargaining agreement, the 
appropriate labor organization and employer shall provide written 
concurrence before the employment activity is undertaken.
    (c) An adult participating in an employment activity operated with 
WtW funds, as described in Sec. 645.220 of this part, shall not be 
employed or assigned:
    (1) When any other individual is on layoff from the same or any 
substantially equivalent job within the same organizational unit;
    (2) If the employer has terminated the employment of any regular, 
unsubsidized employee or otherwise caused an involuntary reduction in 
its workforce with the intention of filling the vacancy so created with 
the WtW participant; and,
    (3) If the employer has caused an involuntary reduction to less than 
full time in hours of any employee in the same or substantially 
equivalent job within the same organizational unit.
    (d) Regular employees and program participants alleging displacement 
may file a complaint pursuant to Sec. 645.270 of this part (section 
403(a)(5)(J)(i) of the Act).



Sec. 645.270  What procedures are there to ensure that currently employed workers may file grievances regarding displacement and that Welfare-to-Work 

          participants in employment activities may file grievances 
          regarding displacement, health and safety standards and gender 
          discrimination?

    (a) The State shall establish and maintain a grievance procedure for 
resolving complaints from:
    (1) Regular employees that the placement of a participant in an 
employment activity operated with WtW funds, as described in 
Sec. 645.220 of this part, violates any of the prohibitions described in 
Sec. 645.265 of this part; and
    (2) Program participants in an employment activity operated with WtW 
funds, as described in Sec. 645.220 of this part, that any employment 
activity violates any of the prohibitions described in Secs. 645.255(d), 
645.260, or 645.265 of this part.
    (b) Such grievance procedure should include an opportunity for 
informal resolution.
    (c) If no informal resolution can be reached within the specified 
time as established by the State as part of its grievance procedure, 
such procedure shall provide an opportunity for the dissatisfied party 
to receive a hearing upon request.

[[Page 392]]

    (d) The State shall specify the time period and format for the 
hearing portion of the grievance procedure, as well as the time period 
by which the complainant will be provided the written decision by the 
State.
    (e) A decision by the State under paragraph (d) of this section may 
be appealed by any dissatisfied party within 30 days of the receipt of 
the State's written decision, according to the time period and format 
for the appeals portion of the grievance procedure as specified by the 
State.
    (f) The State shall designate the State agency which will be 
responsible for hearing appeals. This agency shall be independent of the 
State or local agency which is administering, or supervising the 
administration of the State TANF and WtW programs.
    (g) No later than 120 days of receipt of an individual's original 
grievance, the State agency, as designated in paragraph (f) of this 
section, shall provide a written final determination of the individual's 
appeal.
    (h) The grievance procedure shall include remedies for violations of 
Secs. 645.255(d), 645.260, and 645.265 of this part which may continue 
during the grievance process and which may include:
    (1) Suspension or termination of payments from funds provided under 
this part;
    (2) Prohibition of placement of a WtW participant with an employer 
that has violated Secs. 645.255(d), 645.260, and 645.265 of this part;
    (3) Where applicable, reinstatement of an employee, payment of lost 
wages and benefits, and reestablishment of other relevant terms, 
conditions, and privileges of employment; and
    (4) Where appropriate, other equitable relief (section 
403(a)(5)(J)(iv) of the Act).



    Subpart C--Additional Formula Grant Administrative Standards and 
                               Procedures



Sec. 645.300  What constitutes an allowable match?

    (a) A State is entitled to receive two (2) dollars of Federal funds 
for every one (1) dollar of State match expenditures, up to the amount 
available for allotment to the State based on the State's percentage for 
WtW formula grant for the fiscal year. The State is not required to 
provide a level of match necessary to support the total amount available 
to it based on the State's percentage for WtW formula grant. However, if 
the proposed match is less than the amount required to support the full 
level of federal funds, the grant amount will be reduced accordingly 
(section 403(a)(5)(A)(i)(I) of the Act).
    (b) States shall follow the match or cost-sharing requirements of 
the ``Common Rule'' Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments (codified for DOL 
at 29 CFR 97.24). Paragraphs (b)(1) (i) and (ii), (b)(3), (b)(4) and 
(c)(1) of this section are in addition to the common rule requirements. 
Also, paragraphs included in the common rule which relate to the use of 
donated buildings and other real property as match have been excluded 
from this provision.
    (1) Only costs that would be allowable if paid for with WtW grant 
funds will be accepted as match.
    (i) Because the use of Federal funds is prohibited for construction 
or purchase of facilities or buildings except where there is explicit 
statutory authority permitting it, costs incurred for the construction 
or purchase of facilities or buildings shall not be acceptable as match 
for a WtW grant.
    (ii) Because the costs of construction or purchase of facilities or 
buildings are unallowable as match, the donation of a building or 
property as a third party in-kind contribution is also unallowable as a 
match for a WtW grant.
    (2) A match or cost-sharing requirement may be satisfied by either 
or both of the following:
    (i) Allowable costs incurred by the grantee, subgrantee or a cost 
type contractor under the assistance agreement. This includes allowable 
cost borne by non-Federal grants or by others and cash donations from 
non-Federal third parties.
    (ii) The value of third party in-kind contributions applicable to 
the FY period to which the cost-sharing or matching requirement apply.

[[Page 393]]

    (3) No more than one-half (\1/2\) of the total match expenditures 
may be in the form of third party in-kind contributions.
    (4) Match expenditures must be recorded in the books of account of 
the entity that incurred the cost or received the contribution. These 
amounts may be rolled up and reported as aggregate State level match.
    (c) Qualifications and exceptions. (1) The matching requirements may 
not be met by the use of an employer's share of participant wage 
payments (e.g., employer share of OJT wages).
    (2) Costs borne by other Federal grant agreements. A cost-sharing or 
matching requirement may not be met by costs borne by another Federal 
grant. This prohibition does not apply to income earned by a grantee or 
subgrantee from a contract awarded under another Federal grant.
    (3) General revenue sharing. For the purpose of this section, 
general revenue sharing funds distributed under 31 U.S.C. 6702 are not 
considered Federal grant funds.
    (4) Cost or contributions counted towards other Federal cost-sharing 
requirements. Neither costs nor the values of third party in-kind 
contributions may count towards satisfying a cost-sharing or matching 
requirement of a grant agreement if they have been or will be counted 
towards satisfying a cost-sharing or matching requirement of another 
Federal grant agreement, a Federal procurement contract, or any other 
award of Federal funds.
    (5) Costs financed by program income. Costs financed by program 
income, as defined in 29 CFR 97.25, shall not count towards satisfying a 
cost-sharing or matching requirement unless they are expressly permitted 
in the terms of the assistance agreement. (This use of general program 
income is described in Sec. 97.25(g)).
    (6) Services or property financed by income earned by contractors. 
Contractors under a grant may earn income from the activities carried 
out under the contract in addition to the amounts earned from the party 
awarding the contract. No costs of services or property supported by 
this income may count toward satisfying a cost-sharing or matching 
requirement unless other provisions of the grant agreement expressly 
permit this kind of income to be used to meet the requirement.
    (7) Records. Costs and third party in-kind contributions counting 
towards satisfying a cost-sharing or matching requirement must be 
verifiable from the records of grantees and subgrantee or cost-type 
contractors. These records must show how the value placed on third party 
in-kind contributions was derived. To the extent feasible, volunteer 
services will be supported by the same methods that the organization 
uses to support the allocability of regular personnel costs.
    (8) Special standards for third party in-kind contributions. (i) 
Third party in-kind contributions count towards satisfying a cost-
sharing or matching requirement only where, if the party receiving the 
contributions were to pay for them, the payments would be allowable 
costs.
    (ii) Some third party in-kind contributions are goods and services 
that, if the grantee, subgrantee, or contractor receiving the 
contribution had to pay for them, the payments would have been an 
indirect costs. Cost sharing or matching credit for such contributions 
shall be given only if the grantee, subgrantee, or contractor has 
established, along with its regular indirect cost rate, a special rate 
for allocating to individual projects or programs the value of the 
contributions.
    (iii) A third party in-kind contribution to a fixed-price contract 
may count towards satisfying a cost-sharing or matching requirement only 
if it results in:
    (A) An increase in the services or property provided under the 
contract (without additional cost to the grantee or subgrantee) or
    (B) A cost savings to the grantee or subgrantee.
    (iv) The values placed on third party in-kind contributions for 
cost-sharing or matching purposes will conform to the rules in the 
succeeding sections of this part. If a third party in-kind contribution 
is a type not treated in those sections, the value placed upon it shall 
be fair and reasonable.

[[Page 394]]

    (d) Valuation of donated services. (1) Volunteer services. Unpaid 
services provided to a grantee or subgrantee by individuals will be 
valued at rates consistent with those ordinarily paid for similar work 
in the grantee's or subgrantee's organization. If the grantee or 
subgrantee does not have employees performing similar work, the rates 
will be consistent with those ordinarily paid by other employers for 
similar work in the same labor market. In either case, a reasonable 
amount for fringe benefits may be included in the valuation.
    (2) Employees of other organizations. When an employer other than a 
grantee, subgrantee, or cost-type contractor furnishes free of charge 
the services of an employee in the employee's normal line of work, the 
services will be valued at the employee's regular rate of pay exclusive 
of the employee's fringe benefits and overhead costs. If the services 
are in a different line of work, paragraph (d)(1) of this section 
applies.
    (e) Valuation of third party donated supplies and loaned equipment 
or space. (1) If a third party donates supplies, the contribution will 
be valued at the market value of the supplies at the time of donation.
    (2) If a third party donates the use of equipment or space in a 
building but retains title, the contribution will be valued at the fair 
rental rate of the equipment or space.



Sec. 645.310  What assurance must a State provide that it will make the required matching expenditures?

    In its State plan, a State must provide a written estimate of 
planned matching expenditures and describe the process by which the 
funds will be tracked and reported to ensure that the State meets its 
projected match (section 403(a)(5)(A)(i)(I) of the Act).



Sec. 645.315  What actions are to be taken if a State fails to make the required matching expenditures?

    (a) The Department will implement an annual reconciliation and grant 
adjustment for WtW grants.
    (1) The reconciliation will be based on reported match expenditures 
through the end of the FY report, which is due 45 days after the end of 
the fiscal year.
    (2) If the end of FY report has not been received by December 1 of 
that year, then the reconciliation will be based on the most current 
report received.
    (b) If match expenditures do not satisfy the requirement of the FY 
grant, the subsequent FY grant amount will be reduced by the appropriate 
corresponding amount (i.e., the grant will reduced by two (2) dollars 
for each one (1) dollar shortfall in State matching funds).



Sec. 645.320  When will formula funds be reallotted, and what reallotment procedures will the Secretary use?

    (a) No reallotment of funds among States will occur during FY 98;
    (b) For subsequent fiscal years, a reconciliation will be made 
during the first quarter of the fiscal year under Sec. 645.315 of this 
part to determine whether or not a State has satisfied its required 
level of matching funds for the prior year.
    (c) If a State has failed to expend the required level of matching 
funds, the required reduction in the State grant will be made during the 
second quarter of the fiscal year.
    (d) Also, any funds which become available as a result of 
underexpenditures of required match, or failure to obligate 100 percent 
of the funds by either States or substate entities by the end of the 
fiscal year of the grant, will be reallotted among qualifying States 
(i.e., those which have committed a sufficient match to qualify for 
additional funds). The reallotment will occur during the second quarter 
of the following fiscal year (section 403(a)(5)(A)(i)(I) of the Act).



             Subpart D--State Formula Grants Administration



Sec. 645.400  Under what conditions may the Governor request a waiver to designate an alternate local administering agency?

    (a)(1) The Governor may include in the State's WtW Plan a waiver 
request to select an agency other than the PIC to administer the program 
for one or more SDAs in a State; or

[[Page 395]]

    (2) When the Governor determines the PIC, or alternative agency, has 
not coordinated its expenditures with the expenditure of funds provided 
to the State under TANF, pursuant to section 403(a)(5)(A)(vii)(II) of 
the Act, the Governor shall request a waiver.
    (b) The Governor shall bear the burden of proving that the 
designated alternative agency, rather than the PIC or other 
administering agency, would improve the effectiveness or efficiency of 
the administration of WtW funds in the SDA. The Governor's waiver 
request shall include information to meet that burden. The Governor 
shall provide a copy of the waiver request and any supporting 
information submitted to the Secretary to the PIC and CEO of the SDA for 
which an alternative administering agency is requested.
    (c) The PIC and CEO shall have fifteen (15) days in which to submit 
his or her written response to the Department. The PIC and CEO shall 
provide a copy of such response to the Governor.
    (d) The Secretary will assess the waiver information submitted by 
the Governor, including input from the PIC and CEO in reaching the 
decision whether to permit the use of an alternate administrative 
agency.
    (e) The Secretary shall approve a waiver request if she determines 
that the Governor has established that the designated alternative 
administering agency, rather than the PIC or other administering agency, 
will improve the effectiveness or efficiency of the administration of 
WtW funds provided for the benefit of the SDA.
    (f) Where an alternate administering agency is approved by the 
Secretary, such administrative entity shall coordinate with the CEO for 
the applicable SDA(s) regarding the expenditure of WtW grant funds in 
the SDA(s).
    (g) The decision of the Secretary to approve or deny a waiver 
request will be issued promptly and shall constitute final agency 
action.



Sec. 645.410  What elements will the State use in distributing funds within the State?

    (a) Of the WtW funds allotted to the State, not less than 85 percent 
of the State allotment must be distributed to the SDAs in the State.
    (1) The State shall prescribe a formula for determining the amount 
of funds to be distributed to each SDA in the State using no factors 
other than the three factors described in paragraphs (a)(2) and (3) of 
this section;
    (2) The formula prescribed by the Governor must include as one of 
the formula factors for distributing funds the provision at section 
403(a)(5)(A)(vi)(I)(aa) of the Act. The Governor is to distribute funds 
to an SDA based on the number by which the population of the area with 
an income that is less than the poverty line exceeds 7.5 percent of the 
total population of the area, compared to all such numbers in all such 
areas in the State. The Governor must assign a weight of not less than 
50 percent to this factor;
    (3) The Governor shall distribute the remaining funds, if any, to 
the SDAs utilizing only one or both of the following factors:
    (i) The SDA's share of the number of adults receiving assistance 
under TANF or the predecessor program in the SDA for 30 months or more 
(whether consecutive or not), relative to the number of such adults 
residing in the State;
    (ii) The SDA's share of the number of unemployed individuals 
residing in the SDA, relative to the number of such individuals residing 
in the State.
    (4) If the amount to be distributed to a service delivery area by 
the Governor's formula is less than $100,000, the funds shall be 
available to be used by the Governor to fund projects described at 
paragraph (b) of this section.
    (5) States shall use the guidance provided at section 403(a)(5)(D) 
of the Act in determining the number of individuals with an income that 
is less than the poverty line.
    (6) PICs (or alternate administering agency) shall determine, 
pursuant to section 403(a)(5)(A)(vii)(I) of the Act, on which 
individual(s) and on which allowable activities to expend its WtW fund 
allocation.
    (7) The State shall distribute the SDAs' allocations in a timely 
manner, but not later than 30 days from receipt of the State's fund 
allotment.

[[Page 396]]

    (b) Of the funds allocated to the State, up to 15 percent of the 
funds may be retained at the State level to fund projects that appear 
likely to help long-term recipients of assistance enter unsubsidized 
employment. Any additional funds available as a result of the process 
described at paragraph (a)(4)of this section, shall also be available to 
be used to fund projects to help long-term recipients of assistance 
enter unsubsidized jobs.
    (c) The Governors may distribute the funds retained pursuant to 
paragraph (b) of this section to a variety of workforce organizations, 
in addition to PICs, and other entities such as One-Stop systems, 
private sector employers, labor organizations, business and trade 
associations, education agencies, housing agencies, community 
development corporations, transportation agencies, community-based and 
faith-based organizations, disability community organizations, community 
action agencies, and colleges and universities which provide some of the 
assistance needed by the targeted population.



Sec. 645.415  What planning information must a State submit in order to receive a formula grant?

    (a) Each State seeking financial assistance under the formula grant 
portion of the WtW legislation must submit an annual plan meeting the 
requirements prescribed by the Secretary. This plan shall be in the form 
of an addendum to the TANF State plan and shall be submitted to the 
Secretaries of Labor and Health and Human Services.
    (b) The Secretary shall review the State plan for compliance with 
the statutory and regulatory provisions of the WtW program. The 
Secretary's decision whether to accept a State plan as in compliance 
with the Act shall constitute final agency action.
    (c) If the Governor has requested a waiver to permit the selection 
of an alternative administering agency in the State plan, the provisions 
of Sec. 645.400 of this part shall apply (section 403(a)(5)(A)(ii) of 
the Act).



Sec. 645.420  What factors will be used in measuring State performance?

    (a) State performance will be measured by a formula issued by the 
Secretary after consultation with DHHS, the National Governors 
Association (NGA) and the American Public Welfare Association (APWA).
    (b) The formula shall be the basis for measuring the success of 
States in placing individuals in private sector employment or any kind 
of employment, the duration of such placements, any increase in earnings 
of such individuals and other additional factors that the Secretary of 
Labor deems to be appropriate. The formula will provide for adjustments 
due to general economic conditions on a State-by-State basis.
    (c) The formula shall serve as the basis for the award of FY 2000 
bonus grants based on successful performance (section 403(a)(5)(E) of 
the Act).



Sec. 645.425  What are the roles and responsibilities of the State(s) and PIC(s)?

    (a) State roles and responsibilities. A State:
    (1) Designates State WtW administering agency;
    (2) Provides overall administration of WtW funds, consistent with 
the WtW statute, WtW regulations and the State's WtW Plan;
    (3) Develops the State WtW Plan in consultation and coordination 
with appropriate entities in substate areas, such as One-Stop systems, 
private sector employers, labor organizations, business and trade 
associations, education agencies, housing agencies, community 
development corporations, transportation agencies, community-based and 
faith-based organizations, disability community organizations, community 
action agencies, and colleges and universities which provide some of the 
assistance needed by the targeted population (section 
403(a)(5)(A)(ii)(I)(cc) of the Act);
    (4) Distributes funds to SDAs, consistent with the provisions 
described at Sec. 645.410(a) (section 403(a)(5)(A)(ii)(I)(bb));

[[Page 397]]

    (5) Conducts oversight and monitoring of WtW activities and fund 
expenditures at the State and local levels for compliance with 
applicable laws and regulations, consistent with the provisions at 
Sec. 645.245 and provides technical assistance as appropriate;
    (6) Ensures coordination of PIC fund expenditures with the State 
TANF expenditures and other programs (section 403(a)(5)(A)(ii)(I)(dd));
    (7) Determines whether to request waivers to select an alternate 
administering agency consistent with the provisions described at 
Sec. 645.400 of this part (sections 403(a)(5)(A)(ii)(I)(ee) and 
403(a)(5)(A)(vii)(III));
    (8) Manages and distributes State level WtW funds (15 percent), 
consistent with the provisions at Secs. 645.410(b) and (c) (section 
403(a)(5)(A)(vi)(III));
    (9) Ensures that the 15 percent administration limitation and the 
match requirement are met;
    (10) Ensures that worker protections provisions are observed and 
establishes an appropriate grievance process, consistent with 
Secs. 645.255 through 645.270 of this part (section 403(a)(5)(J));
    (11) Provides comments on Competitive Grant Application(s) from 
eligible entities within the State, consistent with Sec. 645.510 of this 
part (section 403(a)(5)(B)(ii));
    (12) Cooperates with the Department of Health and Human Services on 
the evaluation of WtW programs (section 403(a)(5)(A)(ii)(III));
    (13) Provides technical assistance to PICs or alternate 
administering agencies; and
    (14) Establishes internal reporting requirements to ensure Federal 
reports are accurate, complete and are submitted on a timely basis, 
consistent with Sec. 645.240 of this part.
    (b) Private Industry Council (or alternate administering agency) 
roles and responsibilities. A PIC:
    (1) Has sole authority, in coordination with CEOs, to expend formula 
funds (section 403(a)(5)(A)(vii)(I) of the Act);
    (2) Has authority to determine the individuals to be served in the 
SDA (section 403(a)(5)(A)(vii)(I));
    (3) Has authority to determine the services to be provided in the 
SDA (section 403(a)(5)(A)(vii)(I));
    (4) Ensures funds are expended on eligible recipients and on 
allowable activities, consistent with Sec. 645.410(a)(5) of this part;
    (5) Coordinates WtW fund expenditures with State TANF expenditures 
and other programs (section 403(a)(5)(A)(ii)(dd));
    (6) Ensures that there is an assessment and an individual service 
strategy in place for each WtW participant, consistent with 
Secs. 645.225(a) and (b) of this part;
    (7) Conducts oversight and monitoring of subrecipients, consistent 
with the provisions at Sec. 645.245 of this part;
    (8) Ensures worker protection provisions and grievance process are 
observed, consistent with State guidelines (section 403(a)(5)(J)); and
    (9) Consults with and provides comments on private entity 
Competitive Grant Application(s), consistent with the provisions at 
Sec. 645.500(b)(1)(i) of this part.



              Subpart E--Welfare-To-Work Competitive Grants



Sec. 645.500  Who are eligible applicants for competitive grants?

    (a) Eligible applicants for competitive grants are:
    (1) PICs;
    (2) Political subdivisions of a State; and
    (3) Private entities including nonprofit organizations such as 
community development corporations, community-based and faith-based 
organizations, disability community organizations, community action 
agencies, and public and private colleges and universities, and other 
qualified private organizations.
    (b) Entities other than a PIC or a political subdivision of the 
State must submit an application for competitive grant funds in 
conjunction with the applicable PIC or political subdivision.
    (1) The term ``in conjunction with'' shall mean that the application 
submitted by such an entity must include a signed certification by both 
the applicant and either the applicable PIC or political subdivision 
that:
    (i) The applicant has consulted with the applicable PIC/political 
subdivision

[[Page 398]]

during the development of the application; and
    (ii) The activities proposed in the application are consistent with, 
and will be coordinated with, WtW efforts of the PIC/political 
subdivision.
    (2) If the applicant is unable to include such a certification in 
its application, the applicant will be required to certify, and provide 
information indicating that efforts were undertaken to consult with the 
PIC/political subdivision and that the PIC/political subdivision was 
provided a sufficient opportunity to cooperate in the development of the 
project plan and to review and comment on the application prior to its 
submission to the Secretary. ``Sufficient opportunity for PIC/political 
subdivision review and comment'' shall mean at least 30 calendar days.
    (3) The certification described in paragraph (b)(1) of this section, 
or the evidence of efforts to consult described in paragraph (b)(2), 
must be with each PIC or political subdivision included in the 
geographic area in which the project proposed in the application is to 
operate (section 403(a)(5)(B)(ii) of the Act).



Sec. 645.510  What is the required consultation with the Governor?

    (a) All applicants for competitive grants, including PICs and 
political subdivisions, must consult with the Governor by submitting 
their application to the Governor or the designated State administrative 
entity for the WtW program for review and comment prior to submission of 
the application to the Secretary. The application submitted to the 
Secretary must include:
    (1) Comments on the application from the State; or
    (2) Information indicating that the State was provided a sufficient 
opportunity for review and comment prior to submission to the Secretary. 
``Sufficient opportunity for State review and comment'' shall mean at 
least 15 calendar days.
    (b) For private entity applicants, the submission of the application 
for State review and comment must follow the 30 day period provided for 
PIC/political subdivision review. Evidence of PIC/political subdivision 
review should be included in the submission to the State (section 
403(a)(5)(B)(ii) of the Act).



Sec. 645.515  What are the program and administrative requirements that apply to both the formula grants and competitive grants?

    (a) All of the general program requirements and administrative 
standards set by 29 CFR part 645 subpart B apply (section 403(a)(5)(C) 
and section 404(b) of the Act).
    (b) In addition, competitive grants will be subject to:
    (1) Supplemental reporting requirements; and
    (2) Additional monitoring and oversight requirements based on the 
negotiated scope-of-work of individual grant awards (section 
403(a)(5)(B)(iii) and (v)).



Sec. 645.520  What are the application procedures and timeframes for competitive grant funds?

    (a) The Secretary shall establish appropriate application 
procedures, selection criteria and an approval process to ensure that 
grant awards accomplish the purpose of the competitive grant funds and 
that available funds are used in an effective manner.
    (b) The Secretary shall publish such procedures in the Federal 
Register and establish submission timeframes in a manner that allows 
eligible applicants sufficient time to develop and submit quality 
project plans (section 403(a)(5)(B)(i) and (iii) of the Act).



Sec. 645.525  What special consideration will be given to rural areas and cities with large concentrations of poverty?

    (a) Competitive grant awards will be targeted to geographic areas of 
significant need. In developing application procedures, special 
consideration will be given to rural areas and cities with large 
concentrations of residents living in poverty.
    (b) Grant application guidelines will clarify specific requirements 
for documenting need in the local area (section 403(a)(5)(B)(iv) of the 
Act).

[[Page 399]]



                Subpart F--Administrative Appeal Process



Sec. 645.800  What administrative remedies are available under this part?

    (a) Within 21 days of receipt of a final determination that has 
directly imposed a sanction or corrective action pursuant to 
Sec. 645.250(b) of this part, a recipient, subrecipient, or a vendor 
directly against which the Grant Officer has imposed a sanction or 
corrective action, may request a hearing before the Department of Labor 
Office of Administrative Law Judges, pursuant to the provisions of 29 
CFR part 96 subpart 96.6.
    (b) In accordance with 29 CFR 96.603(b)(2), the rules of practice 
and procedure published at 29 CFR part 18 shall govern the conduct of 
hearings under this section, except that a request for hearing under 
this section shall not be considered a complaint to which the filing of 
an answer by DOL or a DOL agency is required. Technical rules of 
evidence shall not apply to a hearing conducted pursuant to this part; 
however, rules or principles designed to assure production of the most 
credible evidence available and to subject testimony to cross-
examination shall apply.
    (c) The decision of the Administrative Law Judge (ALJ) shall 
constitute final agency action unless, within 20 days of the decision, a 
party dissatisfied with the decision of the ALJ has filed a petition for 
review with the Administrative Review Board (ARB) (established pursuant 
to the provisions of Secretary's Order No. 2-96, published at 61 FR 
19977 (May 3, 1996)), specifically identifying the procedure, fact, law 
or policy to which exception is taken. Any exception not specifically 
urged shall be deemed to have been waived. A copy of the petition for 
review must be sent to the opposing party at that time. Thereafter, the 
decision of the ALJ shall constitute final agency action unless the ARB, 
within 30 days of the filing of the petition for review, has notified 
the parties that the case has been accepted for review. Any case 
accepted by the ARB shall be decided within 120 days of such acceptance. 
If not so decided, the decision of the ALJ shall constitute final agency 
action.



PART 646--PROVISIONS GOVERNING THE INDIAN AND NATIVE AMERICAN WELFARE-TO-WORK GRANT PROGRAM--Table of Contents






 Subpart A--Introduction to Indian and Native American Welfare to Work 
                                Programs

Sec.
646.100  What is the purpose of the Indian and Native American Welfare-
          to-Work (INA WtW) Program?
646.105  What are the purposes of these regulations?
646.110  What are the administrative requirements for the INA WtW 
          Program?
646.115  What are the definitions which apply uniquely to the INA WtW 
          program?

            Subpart B--Eligibility to Receive INA WtW Grants

646.200  What entities are eligible to receive INA WtW grants?
646.205  What entities are eligible to receive INA WtW grants in Alaska?
646.210  Can a consortium composed of tribes which do not operate TANF 
          or NEW programs still receive an INA WtW grant?
646.215  How does a tribe document that it is currently providing 
          ``substantial services'' to public assistance recipients?
646.220  What criteria apply to TANF/NEW tribes regarding the provision 
          of ``substantial services''?
646.225  If a tribe is awarded an INA WtW grant, is the tribe required 
          to participate in an evaluation of the program?

                Subpart C--Application for INA WtW Grants

646.300  How does my tribe apply for an INA WtW grant?
646.305  Can a consortium of Federally-recognized tribes apply for an 
          INA WtW grant on behalf of consortium members approved to 
          operate a TANF or NEW program?
646.310  Some of our consortium members operate their own TANF/NEW 
          programs, and some do not. Can we still apply for an INA WtW 
          grant as a consortium?
646.315  If our consortium members not operating TANF or NEW programs 
          meet the ``substantial services'' criteria, do we then have to 
          submit two separate INA WtW plans?
646.320  If we choose to operate a single INA WtW program for our 
          ``mixed consortium'' for FY 1998, must we submit a single plan 
          to the Department for FY 1999?

[[Page 400]]

646.325  What unique documentation is required of a tribal consortium?
646.330  If our tribe did not receive an INA WtW grant for FY 1998, can 
          we still receive funding for FY 1999?

  Subpart D--Participant Eligibility, Limits, and Allowable Activities

646.400  What TANF recipients are eligible for services under INA WtW 
          grants?
646.405  What activities are allowable under the Welfare-to-Work 
          program?
646.410  Are there any special rules governing the use of job vouchers?
646.415  What kind of ``job readiness'' services are allowable under the 
          INA WtW Program?
646.420  What assistance can be provided under the ``supportive 
          services'' category?
646.425  Are any education or training activities allowable under the 
          INA WtW grant?
646.430  Are there any time limits on client participation under the INA 
          WtW program?

             Subpart E--Tribal Service Areas and Populations

646.500  We're a TANF/NEW tribe. What is my tribe's service area and/or 
          population under an INA WtW grant?
646.505  My tribe (or consortium) must qualify for an INA WtW grant 
          under the ``substantial services'' criteria. How will our 
          service area be determined?
646.510  Are there any special service area provisions made for Indians 
          residing in Oklahoma?

              Subpart F--Funding and Spending Requirements

646.600  How will the INA WtW grant funding allotments be determined?
646.605  What spending limitations are imposed on the INA WtW program?
646.610  What definition of ``administration'' is applicable to the INA 
          WtW program?
646.615  How long does the tribe have to spend INA WtW funds?
646.620  Are there any other restrictions on the use of INA WtW funds?

           Subpart G--Recordkeeping and Reporting Requirements

646.700  What are the recordkeeping requirements for the INA WtW 
          program?
646.705  What are the reporting requirements for the INA WtW program?
646.710  Are tribes operating a TANF program required to report INA WtW 
          activities under TANF as well?

              Subpart H--Waivers and Performance Standards

646.800  Are statutory waivers allowable under the INA WtW program?
646.805  What are the performance measures tribes have to meet under the 
          INA WtW program?

          Subpart I--Miscellaneous Provisions and Requirements

646.900  May a tribe combine its INA WtW grant with other employment and 
          training programs under Pub. L. 102-477, the Indian 
          Employment, Training and Related Services Demonstration Act of 
          1992?
646.905  What are the other Federal laws which must be followed by INA 
          WtW grantees?
646.910  What are a tribe's appeal rights under the INA WtW program?
646.915  What administrative requirements must be met when the INA WtW 
          program ends?

    Authority:  42 U.S.C. 612(a)(3)(B)(iii), unless otherwise noted.

    Source: 63 FR 15988, Apr. 1, 1998, unless otherwise noted.



 Subpart A--Introduction to Indian and Native American Welfare to Work 
                                Programs



Sec. 646.100  What is the purpose of the Indian and Native American Welfare-to-Work (INA WtW) Program?

    The INA WtW Program, authorized by title V, section 5001(c) of the 
Balanced Budget Act of 1997, is a program to complement the Indian 
provisions of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (PRWORA--commonly called the ``Welfare Reform 
Act'') [Pub. L. 104-193, 42 U.S.C. 601 et seq.] by providing additional 
funds to eligible federally-recognized Indian tribes to facilitate the 
transition of public assistance recipients from welfare dependency to 
self-sufficiency by helping recipients to obtain lasting unsubsidized 
employment. The INA WtW Program is authorized by title V, section 
5001(c) of the Balanced Budget Act of 1997 (Pub. L. 105-33), which 
amended title IV-A of the Social Security Act by adding section 
412(a)(3) [42 U.S.C. 612(a)(3)].

[[Page 401]]



Sec. 646.105  What are the purposes of these regulations?

    These regulations are designed to provide INA WtW program operators 
with the basic rules and guidelines needed to operate a Welfare-to-Work 
program which helps Native American public assistance recipients secure 
unsubsidized employment. Where applicable, these regulations also 
establish definitions and parameters not defined in the amended Social 
Security Act. These regulations cross-reference title V of the Balanced 
Budget Act of 1997, title IV of the amended Social Security Act (42 
U.S.C. 601 et seq.), and appropriate sections of the ``Welfare Reform 
Act''.



Sec. 646.110  What are the administrative requirements for the INA WtW Program?

    Tribes and tribal consortia who are participating in the INA WtW 
Program shall follow the common rule, Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments, which is codified in DOL regulations at 29 CFR part 97. 
Alaska Native regional nonprofit corporations shall follow OMB Circular 
A-110, as codified by the Department at 29 CFR part 95. General 
principles of cost allowability may be found in OMB Circulars A-87 (for 
tribes) and A-122 (for nonprofits). The audit requirements of OMB 
Circular A-133 [issued in the Federal Register on June 30, 1997] shall 
apply to both tribes and nonprofits.



Sec. 646.115  What are the definitions which apply uniquely to the INA WtW program?

    The definition of ``substantial services'' is only applicable to 
Indian and Native American Welfare-to-Work programs (see Sec. 646.215 of 
this part).



            Subpart B--Eligibility to Receive INA WtW Grants



Sec. 646.200  What entities are eligible to receive INA WtW grants?

    The three categories of Federally-recognized Indian tribes or Alaska 
Native regional nonprofit corporations eligible to receive INA WtW 
funds, as described at section 412(a)(3)(B) of the amended Social 
Security Act, are those which: Operate a tribal TANF program; operate a 
NEW program; or operate an employment program funded through other 
sources under which substantial services are provided to recipients of 
assistance under a program funded under Part A of title IV of the Social 
Security Act. The term ``substantial services'' is defined at 
Sec. 646.215 of this part.



Sec. 646.205  What entities are eligible to receive INA WtW grants in Alaska?

    The twelve Alaska Native regional nonprofit corporations, along with 
the Metlakatla Indian Community of the Annette Islands Reserve, are the 
only entities in Alaska eligible to apply for INA WtW grants. These 
nonprofit corporations are listed in section 419(4)(B) of the amended 
Social Security Act [42 U.S.C. 619(4)(B)].



Sec. 646.210  Can a consortium composed of tribes which do not operate TANF or NEW programs still receive an INA WtW grant?

    Yes, although the consortium must collectively meet the 
``substantial services'' criteria outlined at Sec. 646.215 below. Refer 
to subpart C of this part for more information on consortium 
requirements.



Sec. 646.215  How does a tribe document that it is currently providing ``substantial services'' to public assistance recipients?

    Tribes which currently operate employment programs funded through 
other sources, such as those under the Job Training Partnership Act 
(JTPA) or Employment Assistance (EA) under the Bureau of Indian Affairs 
(BIA), must provide verifiable documentation that: At least twenty 
percent (20%) of those served in such an employment program were public 
assistance recipients during the most recent program or fiscal year; and 
employment services have been provided to a minimum of fifty (50) public 
assistance recipients over the last two program or fiscal years.

[[Page 402]]



Sec. 646.220  What criteria apply to TANF/NEW tribes regarding the provision of ``substantial services''?

    None. Tribes which operate TANF or NEW programs do not need to meet 
the criteria for providing ``substantial services'' to public assistance 
recipients.



Sec. 646.225  If a tribe is awarded an INA WtW grant, is the tribe required to participate in an evaluation of the program?

    Yes. The Act specifies that each INA WtW grantee ``must agree to 
negotiate in good faith with the Secretary of Health and Human Services 
with respect to the substance and funding of any evaluation * * * and to 
cooperate with the conduct of any such evaluation.'' [42 U.S.C. 
612(a)(3)(B)(iv)]



                Subpart C--Application for INA WtW Grants



Sec. 646.300  How does my tribe apply for an INA WtW grant?

    Each eligible tribe must submit an INA WtW plan to the Department of 
Labor in accordance with the planning instructions issued by the 
Department of Labor. For those tribes with an approved tribal family 
assistance plan (TANF plan), the application for an INA WtW grant must 
take the form of an addendum to that TANF plan. Tribes already 
participating in the demonstration project under Public Law 102-477 [25 
U.S.C. 3401 et seq.], The Indian Employment, Training and Related 
Services Demonstration Act of 1992, should reference Sec. 646.900 of 
this part. Planning information is also available on the INA WtW web 
site at www.wdsc.org/dinap.



Sec. 646.305  Can a consortium of Federally-recognized tribes apply for an INA WtW grant on behalf of consortium member tribes approved to operate a TANF or NEW 
          program?

    Yes. Consortium member tribes which operate approved TANF or NEW 
programs are by law eligible to apply for an INA WtW grant. Their 
consortium may apply for the INA WtW grant on their behalf, under the 
following circumstances: if an established consortium exists for one 
purpose, such as operating a JTPA grant, this established consortium may 
apply for an INA WtW grant on behalf of those member tribes authorized 
to receive NEW funding.



Sec. 646.310  Some of our consortium members operate their own TANF/NEW programs, and some do not. Can we still apply for an INA WtW grant as a consortium?

    Yes. For those consortium member tribes which DO NOT operate TANF or 
NEW programs, they must collectively meet the ``substantial services'' 
criteria.



Sec. 646.315  If our consortium members not operating TANF or NEW programs meet the ``substantial services'' criteria, do we then have to submit two separate 
          INA WtW plans?

    Yes. Because of the different funding formulas involved for FY 1998, 
such a ``mixed consortium'' (composed of tribes which operate TANF/NEW 
programs and those which do not) shall submit two plans for providing 
WtW services across the consortium, one plan for the TANF/NEW tribes and 
the other for those tribes eligible under the ``substantial services'' 
criteria. However, once both plans have been funded, the consortium may 
administer one program across the consortium.



Sec. 646.320  If we choose to operate a single INA WtW program for our ``mixed consortium'' for FY 1998, must we submit a single plan to the Department for FY 
          1999?

    Yes. All FY 1998 INA WtW grantees must submit AFDC/TANF counts to 
the Department so that a single funding formula may be utilized for FY 
1999.



Sec. 646.325  What unique documentation is required of a tribal consortium?

    Consortium tribes must submit a legally-binding consortium agreement 
signed by all the tribes in the consortium with the grant application.



Sec. 646.330  If our tribe did not receive an INA WtW grant for FY 1998, can we still receive funding for FY 1999?

    Yes, provided the tribe or consortium is eligible under the criteria 
cited at Sec. 646.200 of this part. Tribes or consortia

[[Page 403]]

having to meet the ``substantial services'' criteria may use verifiable 
data from any employment program operated by the tribe, as was the case 
for FY 1998. Refer to section 646.215 for these criteria. Tribes or 
consortia are encouraged to submit State-negotiated AFDC/TANF counts for 
their area prior to applying for FY 1999 INA WtW funds.



  Subpart D--Participant Eligibility, Limits, and Allowable Activities



Sec. 646.400  What TANF recipients are eligible for services under INA WtW grants?

    Individual TANF clients must meet the conditions outlined at section 
403(a)(5)(C), clauses (ii), or (iii), or (iv) of the amended Social 
Security Act. For INA WtW purposes, an individual determined to have low 
skills in reading or mathematics must be proficient at the 8.9 grade 
level or below. An individual determined to have a poor work history 
must have worked no more than three (3) consecutive months in the past 
twelve (12) calendar months.



Sec. 646.405  What activities are allowable under the Welfare-to-Work program?

    All allowable activities are described at section 403(a)(5)(C)(i) of 
the Social Security Act. INA WtW funds shall be used to ``move 
individuals into and keep individuals in lasting unsubsidized employment 
by means of any of the following:''
    (a) The conduct and administration of community service or work 
experience programs;
    (b) Job creation through public or private sector employment wage 
subsidies;
    (c) On-the-job training;
    (d) Contracts with public or private providers of readiness, 
placement, and post-employment services;
    (e) Job vouchers for placement, readiness, and post-employment 
services; and
    (f) Job retention or support services if such services are not 
otherwise available.



Sec. 646.410  Are there any special rules governing the use of job vouchers?

    In addition to the requirements at 29 CFR 97.36(i) and 29 CFR 95.48, 
contracts or vouchers for job placement services supported by INA WtW 
funds must include a provision to require that at least one-half (\1/2\) 
of the payment occur after an eligible individual placed into the 
workforce has been in the workforce for six (6) months. This provision 
applies only to placement in unsubsidized jobs.



Sec. 646.415  What kind of ``job readiness'' services are allowable under the INA WtW Program?

    Job readiness services include activities necessary to prepare an 
individual for employment. Such activities include, but are not limited 
to: Intake; eligibility determination; testing; assessment; orientation 
to the world of work; job search skills; job search assistance; job 
clubs; and employment counseling.



Sec. 646.420  What assistance can be provided under the ``supportive services'' category?

    The provision of supportive services must be directly related to 
retaining employment, and not otherwise available to the client. 
Supportive services include, but are not limited to: Day care; 
transportation; work or protective clothing or equipment; tools; medical 
devices such as eyeglasses or braces; food; shelter; special services or 
equipment for the disabled; and financial counseling. Supportive 
services may be provided in-kind or through cash assistance. In cases 
where severe substance abuse or chemical dependency is a significant 
barrier to employment, substance abuse treatment may be undertaken as a 
``supportive services'' activity, to the extent that such services do 
not constitute medical services.



Sec. 646.425  Are any education or training activities allowable under the INA WtW grant?

    Although the Act does not authorize the use of grant funds for 
independent or stand-alone training activities, the

[[Page 404]]

Department recognizes that basic education and skills development as 
part of an employment experience will be needed by some recipients in 
order to achieve the ultimate objective of INA WtW assistance, which is 
self-sufficiency. Therefore, basic education and vocational skills 
training where needed, based on an assessment of the recipient's needs, 
may be provided as a post-employment service where the recipient is 
employed in either a subsidized or unsubsidized job.



Sec. 646.430  Are there any time limits on client participation under the INA WtW program?

    There are no specific participant time limitations for the INA WtW 
program. However, grantees should keep in mind the purpose of WtW, which 
is to provide transitional assistance to hard-to-employ welfare 
recipients to help them secure lasting, unsubsidized employment.



             Subpart E--Tribal Service Areas and Populations



Sec. 646.500  We're a TANF/NEW tribe. What is my tribe's service area and/or population under an INA WtW grant?

    NEW tribes will have the same service area and service population as 
they have under the NEW program. TANF tribes may elect to serve only 
their own tribal members in their service area, in accordance with their 
TANF funding.



Sec. 646.505  My tribe (or consortium) must qualify for an INA WtW grant under the ``substantial services'' criteria. How will our service area be determined?

    Tribes qualifying for the INA WtW program under the ``substantial 
services'' criteria (i.e., not operating their own TANF or NEW programs) 
may use the service area(s) established for the tribe under the JTPA or 
BIA Employment Assistance programs. INA WtW grantees funded under the 
``substantial services'' criteria shall ensure that all AFDC/TANF 
recipients within the service area for which the grantee was designated 
are afforded an equitable opportunity for INA WtW services, because 
their funding is predicated on 1990 Census data for all Native Americans 
residing in their service area, regardless of tribal affiliation. While 
there is no individual entitlement to INA WtW services, all eligible 
AFDC/TANF recipients shall be afforded equal consideration in the 
decision to provide INA WtW services. Service areas differing from those 
outlined above may be negotiated with the Department of Labor.



Sec. 646.510  Are there any special service area provisions made for Indians residing in Oklahoma?

    Yes. With the exception of the Osage reservation in Oklahoma, 
service areas will be determined by reference to the ``tribal 
jurisdiction statistical areas'' (TJSAs). TJSAs are defined by the 
Bureau of the Census as being areas, delineated by Federally-recognized 
tribes in Oklahoma without a reservation, for which the Census Bureau 
tabulates data. TJSAs represent areas generally containing the American 
Indian population over which one or more tribal governments have 
jurisdiction. Service areas for Oklahoma Indian residents differing from 
those outlined under the TJSAs may also be negotiated with the 
Department of Labor.



              Subpart F--Funding and Spending Requirements



Sec. 646.600  How will the INA WtW grant funding allotments be determined?

    Funds will be allotted to INA WtW grantees on a formula basis. To 
determine the FY 1998 allotments, poverty data from the 1990 Decennial 
Census will be used to determine the ``split'' between TANF/NEW tribes 
and all other tribes. The percentage of the annual appropriation 
reserved for TANF and NEW tribes will then be allocated using 1995 AFDC 
counts previously published by DHHS. For FY 1999, a single funding 
formula will be employed utilizing AFDC/TANF counts.



Sec. 646.605  What spending limitations are imposed on the INA WtW program?

    No less than seventy percent (70%) of INA WtW funds must be spent 
directly on assistance for the benefit of TANF

[[Page 405]]

recipients who meet the eligibility requirements of section 
403(a)(5)(C)(ii) of the Social Security Act. Up to thirty percent (30%) 
of INA WtW funds can be spent to provide assistance to individuals who 
meet the eligibility requirements of section 403(a)(5)(C)(iii) of the 
Social Security Act. No more than twenty percent (20%) of INA WtW grant 
funds may be spent for administration. Refer to Sec. 646.400 for the 
definitions of ``low skills in reading or mathematics'' and ``poor work 
history''.



Sec. 646.610  What definition of ``administration'' is applicable to the INA WtW program?

    Administrative costs consist of all direct and indirect costs 
associated with the management of the grantee's program. These costs 
include but are not limited to: the salaries and fringe benefits of 
personnel engaged in executive, fiscal, data collection, personnel, 
legal, audit, procurement, data processing, communications, maintenance, 
and similar functions; and related materials, supplies, equipment, 
office space costs, and staff training. Also included are salaries and 
fringe benefits of direct program administrative positions such as 
supervisors, program analysts, labor market analysts, and project 
directors. Additionally, all costs of clerical personnel, materials, 
supplies, equipment, space, utilities, and travel which are identifiable 
with these program administration positions are charged to 
administration.



Sec. 646.615  How long does the tribe have to spend INA WtW funds?

    INA WtW grantees must expend all allotted funds within three years 
after the effective date of each fiscal year grant agreement signed by 
the Grant Officer, pursuant to section 403(a)(5)(C)(vii) of the Social 
Security Act. Unexpended funds must be returned to the Department in 
accordance with the closeout provisions at 29 CFR parts 97 or 95, as 
applicable.



Sec. 646.620  Are there any other restrictions on the use of INA WtW funds?

    Yes. INA WtW funds may not be used for any other fund matching 
requirements under this Act or other Federal law, pursuant to section 
403(a)(5)(C)(vi) of the Social Security Act.



           Subpart G--Recordkeeping and Reporting Requirements



Sec. 646.700  What are the recordkeeping requirements for the INA WtW program?

    Tribes must meet the recordkeeping and retention requirements of the 
Department's regulations at 29 CFR 97.42. Alaska Native regional 
nonprofit corporations must follow the requirements of 29 CFR 95.53. 
Tribes receiving INA WtW grants may follow the recordkeeping 
requirements of section 411 of the Social Security Act, as applicable.



Sec. 646.705  What are the reporting requirements for the INA WtW program?

    Grantees are required to submit both quarterly and annual reports 
covering program activity and financial expenditures. Two forms have 
been approved by OMB for INA WtW reporting. A modified version of the 
Standard Form (SF) 269A (ETA 9069-1) shall be used to report financial 
expenditures. A Participation and Characteristics Report (PCR) (ETA 
9069) shall be used to report program activity and participant 
characteristics.



Sec. 646.710  Are tribes operating a TANF program required to report INA WtW activities under TANF as well?

    Yes. Pursuant to the requirements of section 411 of the Social 
Security Act, INA WtW grantees who are TANF tribes shall report INA WtW 
activities under the TANF program, in addition to submitting the INA WtW 
reports cited above. However, tribes operating a NEW program and an INA 
WtW program, but not their own TANF program, are exempt from the 
reporting

[[Page 406]]

requirements described in section 411 of the Social Security Act.



              Subpart H--Waivers and Performance Standards



Sec. 646.800  Are statutory waivers allowable under the INA WtW program?

    Yes. The Secretary of Labor may waive or modify any provision of 
section 403(a)(5)(C) [except for clause (vii) thereof, related to the 
deadline for expenditure of funds] of the Social Security Act, which are 
otherwise applicable to INA WtW grantees. Accordingly, the Secretary may 
waive the statutory requirements relating to client eligibility for 
services, allowable activities, and spending limits. Any waiver(s) 
requested must demonstrate how the waiver, if granted, will increase the 
efficiency or effectiveness of the program. Waivers may be requested at 
any time, and shall be effective as of the date indicated in the 
approval letter. Grantees must specify and support each provision to be 
waived.



Sec. 646.805  What are the performance measures tribes have to meet under the INA WtW program?

    The Secretary has determined that the most important measures of the 
tribe's performance are the number of participants entering unsubsidized 
employment, the duration of that employment, and the increase in their 
earnings. Grant applicants will be required to submit planned outcome 
figures with their INA WtW plans. These planned outcomes will be 
compared against reported outcomes in the tribe's annual report. In 
addition, INA WtW grantees must negotiate in good faith with the 
Secretary of DHHS with respect to the substance and funding of any 
evaluation under section 413(j) of the Social Security Act, and must 
cooperate with the conduct of any such evaluation.



          Subpart I--Miscellaneous Provisions and Requirements



Sec. 646.900  May a tribe combine its INA WtW grant with other employment and training programs under Pub. L. 102-477, the Indian Employment, Training and 
          Related Services Demonstration Act of 1992?

    Yes. All grants awarded under the INA WtW program are formula-
funded, so any INA WtW grant funds awarded to a tribe can therefore be 
included in a consolidated plan authorized by Public Law 102-477. For 
those tribes already participating in the ``477'' demonstration effort, 
application for an INA WtW grant will take the form of a ``477 plan'' 
modification submitted to the lead agency responsible for the ``477'' 
program.



Sec. 646.905  What are the other Federal laws which must be followed by INA WtW grantees?

    All otherwise applicable Federal statutes, including those dealing 
with equal employment opportunity, workplace safety, employment 
standards, treatment of individuals with disabilities, age 
discrimination, and civil rights, must be followed by all INA WtW fund 
recipients.



Sec. 646.910  What are a tribe's appeal rights under the INA WtW program?

    The administrative procedures in proceedings initiated by grantees 
funded under section 401 of the Job Training Partnership Act, as 
codified at 20 CFR part 636, shall apply to appeals of agency action by 
INA WtW grantees. These appeal procedures include the following 
provisions:
    (a) Within twenty-one (21) days of the receipt of a denial of a 
request for a statutory waiver under Sec. 646.800 of this part, or 
within twenty-one (21) days of receipt of a final determination imposing 
a sanction or corrective action issued pursuant to 20 CFR 636.8, an INA 
WtW grantee whose request for a statutory waiver has been denied, or who 
seeks review of a Grant Officer's Final

[[Page 407]]

Determination, may request a hearing before the Department's Office of 
Administrative Law Judges pursuant to 20 CFR 636.10.
    (b) The decision of an Administrative Law Judge (ALJ) shall be final 
unless, within twenty (20) days of the decision, a party dissatisfied 
with that ALJ decision has filed a petition for review with the 
Administrative Review Board (ARB), established pursuant to the 
provisions of Secretary's Order No. 2-96, published at 61 FR 19977 (May 
3, 1996). This petition shall specifically identify the procedure, fact, 
law, and/or policy to which exception is taken. Those provisions of the 
determination not specified for review, or the entire determination when 
no hearing has been requested, shall be considered resolved and not 
subject to further review. A copy of the petition for review must be 
sent to the opposing party at that time. Thereafter, the decision of the 
ALJ shall constitute final agency action unless the ARB, within thirty 
(30) days of the filing of the petition for review, notifies the parties 
that the case has been accepted for review. Any case accepted by the ARB 
shall be decided within 120 days of such acceptance. If no decision is 
reached in that time, then the decision of the ALJ shall constitute 
final Departmental action.



Sec. 646.915  What administrative requirements must be met when the INA WtW program ends?

    In accordance with the Department's regulations at 29 CFR 97.50 for 
tribes and 29 CFR 95.71 for nonprofits, all expiring grants will be 
closed out. This means that all funds drawn down under the INA WtW grant 
must be accounted for as allowable expenditures or returned to the 
Department. The Department will issue appropriate closeout forms and 
instructions to all INA WtW grantees after the program ends.



PART 650--STANDARD FOR APPEALS PROMPTNESS--UNEMPLOYMENT COMPENSATION--Table of Contents




Sec.
650.1  Nature and purpose of the standard.
650.2  Federal law requirements.
650.3  Secretary's interpretation of Federal law requirements.
650.4  Review of State law and criteria for review of State compliance.
650.5  Annual appeals performance plan.

    Authority:  Sec. 1102 of the Social Security Act, 42 U.S.C. 1302; 
Secretary's Order No. 4-75, dated April 16, 1975. Interpret and apply 
secs. 303(a)(1), 303(a)(3), and 303(b)(2) of the Social Security Act (42 
U.S.C. 503(a)(1), 503(a)(3), 503(b)(2)).

    Source:  37 FR 16173, Aug. 11, 1972, unless otherwise noted.



Sec. 650.1  Nature and purpose of the standard.

    (a) This standard is responsive to the overriding concern of the 
U.S. Supreme Court in California Department of Human Resources v. Java, 
402 U.S. 121 (1971), and that of other courts with delay in payment of 
unemployment compensation to eligible individuals, including delays 
caused specifically by the adjudication process. The standard seeks to 
assure that all administrative appeals affecting benefit rights are 
heard and decided with the greatest promptness that is administratively 
feasible.
    (b) Sections 303(a) (1) and (3) of the Social Security Act require, 
as a condition for the receipt of granted funds, that State laws include 
provisions for methods of administration reasonably calculated to insure 
full payment of unemployment compensation when due, and opportunity for 
a fair hearing for all individuals whose claims for unemployment 
compensation are denied. The Secretary has construed these provisions to 
require, as a condition for receipt of granted funds, that State laws 
include provisions for hearing and deciding appeals for all unemployment 
insurance claimants who are parties to an administrative benefit appeal 
with the greatest promptness that is administratively feasible. What is 
the greatest promptness that is administratively feasible in an 
individual case depends on the facts and circumstances of that case. For 
example, the greatest promptness that is administratively feasible will 
be longer in cases that involve interstate appeals, complex issues of 
fact or law, reasonable requests by parties for continuances or 
rescheduling of hearings or other unforeseen and uncontrollable factors 
than it will be for other cases.

[[Page 408]]

    (c) In addition, the Secretary has construed section 303(b)(2) of 
the Social Security Act as requiring States to comply substantially with 
the required provisions of State law. The Secretary considers as 
substantial compliance the issuance of minimum percentages of first 
level benefit appeal decisions within the periods of time specified in 
Sec. 650.4.
    (d) Although the interpretation of Federal law requirements in 
Sec. 650.3 below applies to both first and second level administrative 
benefit appeals, the criteria for review of State compliance in 
Sec. 650.3(b) apply only to first level benefit appeals.



Sec. 650.2  Federal law requirements.

    (a) Section 303(a)(1) of the Social Security Act requires that a 
State law include provision for:

    Such methods of administration * * * as are found by the Secretary 
of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.

    (b) Section 303(a)(3) of the Social Security Act requires that a 
State law include provision for:

    Opportunity for a fair hearing, before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.

    (c) Section 303(b)(2) of the Social Security Act provides that:
    Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that in the administration of the 
law there is--
    (1) * * *
    (2) A failure to comply substantially with any provision specified 
in subsection (a) [303(a)]; the Secretary of Labor shall notify such 
State agency that further payments will not be made to the State until 
he is satisfied that there is no longer any such denial or failure to 
comply. Until the Secretary of Labor is so satisfied, he shall make no 
further certification to the Secretary of the Treasury with respect to 
such State * * *



Sec. 650.3  Secretary's interpretation of Federal law requirements.

    (a) The Secretary interprets sections 303(a)(1) and 303(a)(3) above 
to require that a State law include provision for--
    (1) Hearing and decision for claimants who are parties to an appeal 
from a benefit determination to an administrative tribunal with the 
greatest promptness that is administratively feasible, and
    (2) Such methods of administration of the appeals process as will 
reasonably assure hearing and decision with the greatest promptness that 
is administratively feasible.
    (b) The Secretary interprets section 303(b)(2) above to require a 
State to comply substantially with provisions specified in paragraph (a) 
of this section.



Sec. 650.4  Review of State law and criteria for review of State compliance.

    (a) A State law will satisfy the requirements of Sec. 650.3(a) if 
after calendar year 1973 it contains a provision requiring, or is 
construed to require, hearing and decision for claimants who are parties 
to an administrative appeal affecting benefit rights with the greatest 
promptness that is administratively feasible.
    (b) A State will be deemed to comply substantially with the State 
law requirements set forth in Sec. 650.3(a) with respect to first level 
appeals, if for the calendar year 1975 and ensuing years, the State has 
issued at least 60 percent of all first level benefit appeal decisions 
within 30 days of the date of appeal, and at least 80 percent of all 
first level benefit appeal decisions within 45 days. These computations 
will be derived from the State's regular reports required pursuant to 
the Employment Security Manual, part III, sections 4400-4450.\1\
---------------------------------------------------------------------------


    \1\ The Employment Security Manual is available at each regional 
office of the Department of Labor and at the headquarters' office of 
each State employment security agency.
---------------------------------------------------------------------------

    (c) To afford the States a reasonable opportunity to make the 
changes necessary to meet these criteria, the Secretary will not 
evaluate substantial compliance until calendar year 1974 and for that 
year he will apply less stringent criteria than for future years. A 
State law will be deemed to comply substantially with the State law 
promptness requirement for calendar year 1974 if the State has issued at 
least 50 percent of all first level benefit appeal decisions within 30 
days of

[[Page 409]]

the date of appeal; at least 75 percent of its first level benefit 
appeal decisions within 45 days; and at least 90 percent of its first 
level benefit appeal decisions within 75 days. These computations also 
will be derived from the aforementioned reports required pursuant to the 
Employment Security Manual.
[37 FR 16173, Aug. 11, 1972, as amended at 41 FR 6757, Feb. 13, 1976]



Sec. 650.5  Annual appeals performance plan.

    No later than December 15, 1974, and the 15th of December of each 
ensuing year, each State shall submit an appeals performance plan 
showing how it will operate during the following calendar year so as to 
achieve or maintain the issuance of at least 60 percent of all first 
level benefit appeals decisions within 30 days of the date of appeal, 
and 80 percent within 45 days.

(Approved by the Office of Management and Budget under control number 
1205-0132)


(Pub. L. No. 96-511)
[41 FR 6757, Feb. 13, 1976, as amended at 49 FR 18295, Apr. 30, 1984]



PART 651--GENERAL PROVISIONS GOVERNING THE FEDERAL-STATE EMPLOYMENT SERVICE SYSTEM--Table of Contents






Sec. 651.10  Definitions of terms used in parts 651-658.

    Administrator, United States Employment Service (Administrator) 
means the chief official of the United States Employment Service (USES) 
or the Administrator's designee.
    Affirmative action means positive, result-oriented action imposed on 
or assumed by an employer pursuant to legislation, court order, consent 
decree, directive of a fair employment practice authority, government 
contract, grant or loan, or voluntary affirmative action plan adopted 
pursuant to the Affirmative Action Guidelines of the Equal Employment 
Opportunity Commission to provide equal employment opportunities for 
members of a specified group which for reasons of past custom, 
historical practice, or other nonoccupationally valid purposes has been 
discouraged from entering certain occupational fields.
    Agricultural worker means a worker, whose primary work experience 
has been in farmwork in industries with a Standard Industrial 
Classification (SIC) of 01-07, except 027, 074, 0752, and 078, whether 
alien or citizen, who is legally allowed to work in the United States.
    Applicant means a person who files an application for services with 
a local office of a State agency, with outstationed staff or with an 
outreach worker.
    Application card means the basic local office record for an 
applicant.
    A Bona Fide Occupational Qualification (BFOQ) means that an 
employment decision or request based on age, sex, national origin or 
religion is based on a finding that such characteristic is necessary to 
the individual's ability to perform the job in question. Since a BFOQ is 
an exception to the general prohibition against discrimination on the 
basis of age, sex, national origin or religion, it must be interpreted 
narrowly in accordance with the Equal Employment Opportunity Commission 
regulations set forth at 29 CFR parts 1604, 1605 and 1627.
    Clearance means activities in the placement process involving joint 
action of local offices in different labor market areas and/or States in 
the location, selection and the job referral of an applicant.
    Complaint means a representation made or referred to a State or 
local JS office of a violation of the JS regulations and/or other 
federal, State or local employment related law.
    Complainant means the individual, employer, organization, 
association, or other entity filing a complaint.
    Day-haul means the assembly of workers at a pick-up point waiting to 
be employed, transportation of them to farm employment, and the return 
of the workers to the pick-up point on the same day. For the purposes of 
this definition ``day-haul'' shall exclude transportation and return of 
workers employed under regularly scheduled job orders such as corn 
detasseling jobs for youth.

[[Page 410]]

    Decertification means the rescission by the Secretary of the year 
end certification made under Section 7 of the Wagner-Peyser Act to the 
Secretary of the Treasury that the State agency may receive funds 
authorized by the Wagner-Peyser Act.
    Dictionary of Occupational Titles (DOT) means the Dictionary of 
Occupational Titles, the reference work published by the USES which 
contains brief, non-technical definitions of U.S. job titles, 
distinguishing number codes, and worker trait data.
    DOL means the Department of Labor.
    D.O.T. means the Dictionary of Occupational Titles, the reference 
work published by the USES which contains brief, non-technical 
definitions of U.S. job titles, distinguishing number codes, and worker 
trait data.
    Employment and Training Administration (ETA) means the component of 
the Department of Labor containing the United States Employment Service 
(USES).
    Employer means a person, firm, corporation or other association or 
organization (1) which currently has a location within the United States 
to which U.S. workers may be referred for employment, and which proposes 
to employ a worker at a place within the United States and (2) which has 
an employer relationship with respect to employees under this subpart as 
indicated by the fact that it hires, pays, fires, supervises and 
otherwise controls the work of such employee. An association of 
employers shall be considered an employer if it has all of the indicia 
of an employer set forth in this definition. Such an association, 
however, shall be considered as a joint employer with the employer 
member if either shares in exercising one or more of the definitional 
indicia.
    Establishment means a public or private economic employing unit 
generally at a single physical location which produces and/or sells 
goods or services, for example, a mine, factory, store, farm orchard or 
ranch. It is usually engaged in one, or predominantly one, type of 
commerical or governmental activity. Each branch or subsidiary unit of a 
large employer in a geographical area or community should be considered 
an individual establishment, except that all such units in the same 
physical location shall be considered a single establishment. A 
component of an establishment which may not be located in the same 
physical structure (such as the warehouse of a department store) should 
also be considered as part of the parent establishment. For the purpose 
of the ``seasonal farmworker'' definition, farm labor contractors and 
crew leaders are not considered establishments; it is the organizations 
to which they supply the workers that are the establishments.
    Farmwork means work performed for wages in agricultural production 
or agricultural services in establishments included in industries 01--
Agricultural Production-Crops; 02--Agricultural Production-Livestock 
excluding 027--Animal Specialties; 07--Agricultural Services excluding 
074--Veterinary Services, 0752--Animal Speciality Services, and 078--
Landscape and Horticultural Services, as defined in the most recent 
edition of the Standard Industrial Classification (SIC) Code 
definitions.
    Farmworker, see Agricultural worker.
    Full application means an application for an applicant who has 
participated in an application interview and which includes the 
applicant's personal characteristics, work history and an occupational 
classification and DOT code.
    Hearing Officer means a Department of Labor Administrative Law 
Judge, designated to preside at DOL administrative hearings.
    Identification card (applicant identification card) means a card 
given to the applicant on which are recorded identifying information and 
the dates of the applicant's visits to the local employment office.
    Intrastate job order means a job order describing one or more hard-
to-fill job openings, which a local office uses to request recruitment 
assistance from other local offices within the State.
    JS regulations means the Federal regulations at 20 CFR parts 601-
604, 620, 621, and 651-658, and at 29 CFR parts 8, 26, and 75.
    Job bank means a computer assisted system which provides listings of 
current job openings in the area, on a regular basis, for distribution 
to JS and

[[Page 411]]

WIN offices and to cooperating agencies.
    Job development means the process of securing a job interview with a 
public or private employer for a specific applicant for whom the local 
office has no suitable opening on file.
    Job information means information derived from data compiled in the 
normal course of employment service activities from reports, job orders, 
applications and the like.
    Job opening means a single job opportunity for which the local 
office has on file a request to select and refer on applicant or 
applicants.
    Job Information Service (JIS) means a unit or an area within a JS 
local office where applicants primarily, on a self-service basis or with 
minimum professional help, can obtain specific and general information 
on where and how to get a job.
    Job referral means (1) the act of bringing to the attention of an 
employer an applicant or group of applicants who are available for 
specific job openings and (2) the record of such referral. ``Job 
referral'' means the same as ``referral to a job.''
    Job Service (JS) means the nationwide system of public employment 
offices, funded through the United States Employment Service (USES) as 
grantee State agencies, and the various offices of the State agencies.
    Labor market area means a geographic area consisting of a central 
city (or cities) and the surrounding territory within a reasonable 
commuting distance.
    Labor Market Information (LMI) means that body of knowledge 
pertaining to the socio-economic forces influencing the employment 
process in specific labor market areas. These forces, which affect labor 
demand-supply relationships and define the content of the LMI program, 
include population and growth charcteristics, trends in industrial and 
occupational structure, technological developments, shifts in consumer 
demands, unionization, trade disputes, retirement practices, wage 
levels, conditions of employment, training opportunities, job vacancies, 
and job search information.
    Local office manager means the JS official in charge of all JS 
activities in a local office of a State agency.
    LMI means labor market information.
    Migrant farmworker is a seasonal farmworker who had to travel to do 
the farmwork so that he/she was unable to return to his/her permanent 
residence within the same day. Full-time students traveling in organized 
groups rather than with their families are excluded.
    Migrant food processing worker means a person who during the 
preceding 12 months has worked at least an aggregate of 25 or more days 
or parts of days in which some work was performed in food processing (as 
classified in the 1972 Standard Industrial Classification (SIC) 
definitions 201, 2033, 2035, and 2037 for food processing 
establishments), earned at least half of his/her earned income from 
processing work and was not employed in food processing year round by 
the same employer, provided that the food processing required travel 
such that the worker was unable to return to his/her permanent residence 
in the same day. Migrant food processing workers who are full-time 
students but who travel in organized groups rather than with their 
families are excluded.
    MSFW means a migrant farmworker, a migrant food processing worker, 
or a seasonal farmworker.
    Partial application means the application of an applicant who has 
not participated in an application interview and which does not include 
an occupational classification of DOT code. Partial applications 
prepared for Migrants and Seasonal Farmworkers must include a signed 
waiver for full services at that time in accordance with 20 CFR 653.103.
    Placement means the hiring by a public or private employer of an 
individual referred by the employment office for a job or an interview, 
provided that the employment office completed all of the following 
steps:
    (a) Prepared a job order form prior to referral, except in the case 
of a job development contact on behalf of a specific applicant;

[[Page 412]]

    (b) Made prior arrangements with the employer for the referral of an 
individual or individuals;
    (c) Referred an individual who had not been specifically designated 
by the employer, except for referrals on agricultural job orders for a 
specific crew leader or worker;
    (d) Verified from a reliable source, preferably the employer, that 
the individual had entered on a job; and
    (e) Appropriately recorded the placement.
    Program Budget Plan (PBP) means the annual planning document for the 
SESA required by Sec. 8 of the Wagner-Peyser Act containing the SESA's 
detailed planning, programming and budget for carrying out employment 
security activities. For the purpose of JS regulations, this definition 
shall be restricted to the employment service portion of the PBP.
    Public housing means housing operated by or on behalf of any public 
agency.
    RA; see Regional Administrator.
    Regional Administrator, Employment and Training Administration (RA) 
means the chief DOL Employment and Training Administration (ETA) 
official in each DOL regional office.
    Respondent means the employer or State agency (including a State 
agency official) who is alleged to have committed the violation 
described in a complaint.
    Rural area means an area which is not included in the urban area of 
a Standard Metropolitan Statistical Area and which has a population of 
less than 10,000.
    Seasonal farmworker means a person who during the preceding 12 
months worked at least an aggregate of 25 or more days or parts of days 
in which some work was performed in farmwork, earned at least half of 
his/her earned income from farmwork, and was not employed in farmwork 
year round by the same employer. For the purposes of this definition 
only, a farm labor contractor is not considered an employer. Non-migrant 
individuals who are full-time students are excluded.
    Secretary means the Secretary of the U.S. Department of Labor or the 
Secretary's designee.
    SESA; see State Employment Service Agency.
    Significant MSFW States shall be those States designated annually by 
ETA and shall include the twenty (20) States with the highest number of 
MSFW applicants.
    Significant MSFW local offices shall be those designated annually by 
ETA and include those local offices where MSFWs account for 10% or more 
of annual applicants and those local offices which the Administrator 
determines should be included due to special circumstances such as an 
estimated large number of MSFWs in the local office service area. In no 
event shall the number of significant MSFW local offices be less than 
100 offices on a nationwide basis.
    Significant bilingual MSFW local offices shall be those designated 
annually by ETA and include those significant MSFW offices where 10% or 
more of MSFW applicants are estimated to require service provisions in 
Spanish unless the Administrator determines other local offices also 
should be included due to special circumstances.
    Solicitor means the chief legal officer of the U.S. Department of 
Labor or the Solicitor's designee.
    Standard Metropolitan Statistical Area (SMSA) means a metropolitan 
area designated by the Bureau of Census which contains (1) at least one 
city of 50,000 inhabitants or more, or (2) twin cities with a combined 
population of at least 50,000.
    State shall include the fifty States, the District of Columbia, 
Guam, Puerto Rico, and the Virgin Islands.
    State Administrator means the chief official of the State Employment 
Security Agency (SESA).
    State agency means the State job service agency designated under 
section 4 of the Wagner-Peyser Act to cooperate with the USES in the 
operation of the job service system.
    State Employment Security Agency (SESA) means the State agency 
which, under the State Administrator, contains both the State Employment 
service agency (State agency) and the State unemployment compensation 
agency.
    State hearing official means a State official designated to preside 
at State

[[Page 413]]

administrative hearings convened to resolve JS-related complaints 
pursuant to subpart E of part 658 of this chapter.
    Supportive services means services other than employment or training 
that are needed to enable individuals to obtain or retain employment, or 
to participate in employment and training programs.
    Tests means a standardized method of measuring an individual's 
possession of, interest in, or ability to acquire, job skills and 
knowledge. Use of tests by employment service staff must be in 
accordance with the provisions of:
    (1) 41 CFR part 60-3, Uniform Guidelines on Employee Selection 
Procedures;
    (2) 29 CFR part 1627, Records To Be Made or Kept Relating to Age; 
Notices To Be Posted; Administrative Exemptions; and
    (3) The Department of Labor's regulations on Nondiscrimination on 
the Basis of Handicap in Programs and Activities Receiving or Benefiting 
from Federal Financial Assistance, which have been published as 29 CFR 
part 32 at 45 FR 66706 (Oct. 7, 1980).
    Training means a planned, systematic sequence of instruction or 
other learning experience on an individual or group basis under 
competent supervision, which is designed to impart skills, knowledge, or 
abilities to prepare individuals for employment.
    Transaction means a single ES activity performed on behalf of an 
individual seeking assistance and/or the result of such an activity, 
e.g., applicant registration referral to a job, referral to a supportive 
service, counseling interview, testing, job development, job placement, 
enrollment in training, and inactivation of an applicant registration.
    United States Employment Service (USES) means the component of the 
Employment and Training Administration of DOL which was established 
under the Wagner-Peyser Act of 1933 to promote and develop a national 
system of public job service offices.
    Vocational Plan means a plan developed jointly by a counselor or 
counselor trainee and the applicant which describes: (1) The applicant's 
short-range and long-range occupational goals and (2) the actions to be 
taken to place the plan into effect.
    Work Incentive Program (WIN) means the employment and training 
program under part C of title IV of the Social Security Act, 
administered by a State agency (such as the State employment service) or 
another public or nonprofit private agency.

(Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et seq.; 5 U.S.C. 
301; and 38 U.S.C. chapters 41 and 42)
[45 FR 39457, June 10, 1980. Redesignated and amended at 7767 and 7768, 
Jan. 23, 1981]



PART 652--ESTABLISHMENT AND FUNCTIONING OF STATE EMPLOYMENT SERVICES--Table of Contents




          Subpart A--Employment Service Planning and Operations

Sec.
652.1  Introduction and definitions.
652.2  Scope and purpose of the employment service system.
652.3  Basic labor exchange system.
652.4  Allotment of funds and grant agreement.
652.5  Services authorized.
652.6  State planning process and plan.
652.7  Review and approval of plans.
652.8  Administrative provisions.
652.9  Labor disputes.

                    Subpart B--Services for Veterans

652.100  Services for veterans.

    Authority:  29 U.S.C. 49k; 38 U.S.C. chapters 41 and 42.



          Subpart A--Employment Service Planning and Operations

    Source:  48 FR 50665, Nov. 2, 1983, unless otherwise noted.



Sec. 652.1  Introduction and definitions.

    (a) These regulations implement the provisions of the Wagner-Peyser 
Act, as amended by the Job Training Partnership Act (JTPA), known 
hereafter as the Act. Congress intended that the States exercise broad 
authority in implementing the provisions of the Act.
    (b) Except as otherwise provided the definitions contained in 
section 2 of the Act apply to these regulations.
    Act means the Wagner-Peyser Act (29 U.S.C. 49 et seq.).

[[Page 414]]

    Department means the United States Department of Labor (DOL), 
including its agencies and organizational units.
    Director means the chief official of the United States Employment 
Service.
    Governor means the chief executive of any State.
    JTPA means the Job Training Partnership Act of 1982 (29 U.S.C. 1501 
et seq.).
    State means any of the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, and Guam.
    State agency means the State governmental unit designated pursuant 
to section 4 of the Act to cooperate with the United States Employment 
Service in the operation of the public employment service system.
    State Job Training Coordinating Council (SJTCC) means the entity 
within a State appointed by the Governor under section 122 of the Job 
Training Partnership Act which reviews and certifies the employment 
service plan.



Sec. 652.2  Scope and purpose of the employment service system.

    The basic purpose of the employment service system is to improve the 
functioning of the nation's labor markets by bringing together 
individuals who are seeking employment and employers who are seeking 
workers.



Sec. 652.3  Basic labor exchange system.

    At a minimum, each State shall administer a labor exchange system 
which has the capacity:
    (a) To assist jobseekers in finding employment;
    (b) To assist employers in filling jobs;
    (c) To facilitate the match between jobseekers and employers;
    (d) To participate in a system for clearing labor between the 
States, including the use of standardized classification systems issued 
by the Secretary pursuant to JTPA section 462(c)(3); and
    (e) To meet the work test requirements of the State unemployment 
compensation system.



Sec. 652.4  Allotment of funds and grant agreement.

    (a) Allotments. The Secretary shall provide planning estimates in 
accordance with section 6(b)(5) of the Act. Within 30 days of receipt of 
planning estimates from the Secretary, the State shall make public the 
substate resource distributions, and describe the process and schedule 
under which these resources will be issued, planned and committed. This 
notification shall include a description of the procedures by which the 
public may review and comment on the substate distributions, including a 
process by which the State will resolve any complaints.
    (b) Grant Agreement. To establish a continuing relationship under 
the Act, the Governor and the Secretary shall sign a Governor/Secretary 
Agreement, including a statement assuring that the State shall comply 
with the Act and all applicable rules and regulations. Consistent with 
this Agreement and section 6 of the Act, State allotments will be 
obligated through a Notification of Obligation.

(Approved by the Office of Management and Budget under control number 
1205-0209)



Sec. 652.5  Services authorized.

    The sums allotted to each State pursuant to section 6 of the Act 
shall be expended consistent with an approved plan pursuant to 
Sec. 652.7 of these regulations. At a minimum, each State shall provide 
the basic labor exchange elements defined at Sec. 652.3 of these 
regulations.



Sec. 652.6  State planning process and plan.

    (a) The State agency designated pursuant to section 4 of the Act 
shall prepare and submit to the Secretary, through the Governor, an 
annual plan for providing services and activities within the State as 
authorized under section 7(a) of the Act. The Secretary shall establish 
a date for receipt of plans by the Secretary. The plans:
    (1) Shall be developed in accordance with the processes established 
by the State under Sec. 652.4(a) of these regulations;
    (2) Shall be consistent with section 8 of the Act;

[[Page 415]]

    (3) Shall include assurances that the State agency and its 
subrecipients will comply with the Act and applicable law, rules and 
regulations; and
    (4) Shall, in addition to the requirements of section 8(d) of the 
Act, contain a description of each of the following:
    (i) The overall goals and objectives of the State agency and their 
relationship to the Governor's annual statement of goals and objectives 
pursuant to section 121(a) of the JTPA;
    (ii) The overall services to be provided by the State agency in 
implementation of section 7(a) of the Act, as planned pursuant to 
paragraph (a)(1) of this section; and
    (iii) The State agency plans for meeting the requirements of a basic 
labor exchange system, including a description of how:
    (A) Jobseekers will be assisted in finding employment;
    (B) Employers will be assisted in filling jobs;
    (C) The match between jobseekers and employers will be facilitated;
    (D) The State will participate in a system for clearing labor 
between the States, including the use of standardized classification 
systems issued by the Secretary pursuant to section 462(c)(3) of JTPA; 
and
    (E) The work test requirements of the State unemployment 
compensation system will be met.
    (b) Plans submitted to the Secretary pursuant to section 8(b)(5) of 
the Act shall include:
    (1) The State agency submission pursuant to paragraph (a) of this 
section, including the State agency's proposals for the component(s) in 
dispute;
    (2) The alternative(s) proposed jointly by the appropriate Private 
Industry Councils (PIC(s)) and Chief Elected Officials (CEO(s));
    (3) The SJTCC's proposed resolution; and
    (4) Any comments or alternative(s) the Governor may submit relating 
to the disputed component(s).
    (c) The Governor shall describe the use of resources set-aside 
pursuant to section 7(b) of the Act. Such description may be provided:
    (1) As a separate component of the State plan developed pursuant to 
paragraph (a) of this section; or
    (2) As a separate submission to the Secretary, timed to coincide 
with the submission of the State plan to the Secretary.

(Approved by the Office of Management and Budget under control number 
1205-0209)



Sec. 652.7  Review and approval of plans.

    (a) Within 30 days of receipt of the plans submitted pursuant to 
Sec. 652.6 of these regulations, the Secretary shall provide written 
notification of his determination to the Governor, the State agency and 
the SJTCC. Any notice of disapproval shall include an explanation of the 
reasons for such determination. The Secretary shall approve such plans 
unless:
    (1) They fail to conform to a specific provision of the Act or 
applicable law or regulations; or
    (2) The description pursuant to Sec. 652.6(a)(4)(iii) of these 
regulations indicates that the services to be provided are not 
reasonably appropriate and adequate to achieve the requirements of a 
basic labor exchange system as described in Sec. 652.3 of these 
regulations.
    (b) Where alternative plans, or components, are submitted pursuant 
to sections 8(b)(5) or 8(c) of the Act, the Secretary shall, within 30 
days of receipt of such plans, assure their conformity with Sec. 652.6 
of these regulations and choose one of the alternatives and thereby 
resolve the dispute.
    (c) If the Secretary disapproves the State agency plan, pursuant to 
paragraph (a) of this section, the State agency shall have a thirty (30) 
day period to bring the plan into conformance. If, at the end of the 
thirty (30) day period, the Secretary continues to disapprove the plan, 
the State agency may appeal the determination as set forth in 20 CFR 
658.707-711.
    (d) The Secretary's determination pursuant to paragraph (b) of this 
section is final agency action.
    (e) Modifications of plans already approved by the Secretary shall 
be developed, submitted and reviewed pursuant to Secs. 652.6 and 652.7 
of these regulations.

(Approved by the Office of Management and Budget under control number 
1205-0209)


[[Page 416]]





Sec. 652.8  Administrative provisions.

    (a) Administrative Requirements. The Employment Security Manual 
shall not be applicable to funds appropriated under the Wagner-Peyser 
Act. Except as provided for in paragraph (f) of this section, 
administrative requirements and cost principles applicable to grants 
under this part 652 are as specified in 41 CFR part 29-70 and 41 CFR 
part 1-15.7.
    (b) Management systems, reporting and recordkeeping. (1) The State 
shall ensure that financial systems provide fiscal control and 
accounting procedures sufficient to permit preparation of required 
reports, and the tracing of funds to a level of expenditure adequate to 
establish that funds have not been expended in violation of the 
restrictions on the use of such funds (section 10(a)).
    (2) The financial management system and the program information 
system shall provide federally required records and reports that are 
uniform in definition, accessible to authorized Federal and State staff, 
and verifiable for monitoring, reporting, audit and evaluation purposes 
(section 10(c)).
    (c) Reports Required. (1) Each State shall make reports pursuant to 
instructions issued by the Secretary and in such format as the Secretary 
shall prescribe.
    (2) The Secretary is authorized to monitor and investigate pursuant 
to section 10 of the Act.
    (d) Special Administrative and Cost Provisions. (1) Neither the 
Department nor the State is a guarantor of the accuracy or truthfulness 
of information obtained from employers or applicants in the process of 
operating a labor exchange activity.
    (2) Prior approval authority, as described in various sections of 41 
CFR part 29-70 and 41 CFR 1-15.7, is delegated to the State except that 
the Secretary reserves the right to require transfer of title on 
nonexpendable Automated Data Processing Equipment (ADPE), in accordance 
with provisions contained in 41 CFR 29-70.215. The Secretary reserves 
the right to exercise prior approval authority in other areas, after 
providing advance notice to the State.
    (3) Application for financial assistance and modification 
requirements shall be as specified under this part.
    (4) Cost of promotional and informational activities consistent with 
the provisions of the Act, describing services offered by employment 
security agencies, job openings, labor market information, and similar 
items are allowable.
    (5) Each State shall retain basic documents for the minimum period 
specified below:
    (i) Work Application: One year.
    (ii) Job Order: One Year.
    (6) Costs of employer contributions and expenses incurred for State 
agency fringe benefit plans that do not meet the requirements in 41 CFR 
1-15.711-13 and 711-10 are allowable, provided that:
    (i) For retirement plans, on behalf of individuals employed before 
the effective date of this part, the plan is authorized by State law and 
previously approved by the Secretary; the plan is insured by a private 
insurance carrier which is licensed to operate this type of plan; and 
any dividends or similar credits due to participation in the plan are 
credited against the next premium falling due under the contract;
    (ii) For retirement plans on behalf of individuals employed after 
the effective date of this part, and for fringe benefit plans other than 
retirement, the Secretary grants a time extension to cover an interim 
period if State legislative action is required for such employees to be 
covered by plans which meet the requirements of 41 CFR 1-15.711-13 and 
711-10. During this interim period, State agency employees may be 
enrolled in plans open to State agency employees only. No such extension 
may continue beyond the 60th day following the completion of the next 
full session of the State legislature which begins after the effective 
date of this part;
    (iii) For fringe benefit plans other than retirement, the Secretary 
grants a time extension which may continue until such time as they are 
comparable in cost to those fringe benefit plans available to other 
similarly employed employees of the State on the condition that there 
are no benefit improvements. The Secretary may grant this time extension 
if the State agency can demonstrate that the extension is necessary to 
prevent loss of benefits to current States agency employees,

[[Page 417]]

retireees and/or their fringe benefit plan beneficiaries, or that it is 
necessary to avoid unreasonable expenditures on behalf of the employee 
or employer to maintain such fringe benefits for current employees and 
retirees. At such time as the cost of these fringe benefit plans becomes 
equitable with those available to other similarly employed State 
employees, the time extension will cease and the requirements of 41 CFR 
1-15.711-13 and 1-15.711-10 will apply;
    (iv) Requests for time extensions under this section will include an 
opinion of the State Attorney General, that either legislative action is 
required to accomplish compliance with 41 CFR 1-15.711-13 and 1-15.711-
10 or, for (d)(6)(iii) of this section that such compliance would result 
in either loss of current benefits to State agency employees and 
retirees or unreasonable expenditures to maintain these benefits. Such 
requests will be filed with the Secretary no later than 30 days after 
the effective date of this part; and
    (v) Time extensions granted relative to (d)(6)(iii) of this section 
require a signed statement by the State agency Administrator, that no 
improvements have been made to fringe benefits under the extension and 
that the plan(s) is (are) not consistent with those available to other 
similarly employed State employees, for each year of the extension. 
Documentation supporting the affidavit shall be maintained for audit 
purposes.
    (7) Payments from the State's Wagner-Peyser allotment made into a 
State's account in the Unemployment Trust Fund for the purpose of 
reducing charges against Reed Act funds (section 903(c) of the Social 
Security Act, as amended (42 U.S.C. 1103(c)) are allowable costs, 
provided that:
    (i) The charges against Reed Act funds were for amounts 
appropriated, obligated, and expended for the acquisition of automatic 
data processing installations or for the acquisition or major renovation 
of State owned office building; and
    (ii) With respect to each acquisition of improvement of property 
pursuant to paragraph (d)(7)(i) of this section, the payments are 
accounted for in the State's records as credits against equivalent 
amounts of Reed Act Funds used for administrative expenditures.
    (e) Disclosure of Information. (1) The State shall assure the proper 
disclosure of information pursuant to section 3(b) of the Act.
    (2) The information specified in section 3(b) and other sections of 
the Act, shall also be provided to officers or any employee of the 
Federal Government of a State government lawfully charged with 
administration of unemployment compensation laws, employment service 
activities under the Act or other related legislation, but only for 
purposes reasonably necessary for the proper administration of such 
laws.
    (f) Audits, (1) At least once every 2 years, the State shall prepare 
or have prepared an independent financial and compliance audit covering 
each full program year not covered in the previous audit, except that 
funds expended pursuant to section 7(b) of the Act shall be audited 
annually.
    (2) The Comptroller General and the Inspector General of the 
Department shall have the authority to conduct audits, evaluations or 
investigations necessary to meet their responsibilities under sections 
9(b)(1) and 9(b)(2), respectively, of the Act.
    (3) The audit, conducted pursuant to paragraph (f)(1) or (f)(2) of 
this section, shall be submitted to the Secretary who shall make an 
initial determination. Such determinations shall be based on the 
requirements of the Act, regulations, and State plan.
    (i) The initial determination shall identify the audit findings, 
state the Secretary's proposed determination of the allowability of 
questioned costs and activities, and provide for informal resolution of 
those matters in controversy contained in the initial determination.
    (ii) The Secretary shall not impose sanctions and corrective actions 
without first providing the State with an opportunity to present 
documentation or arguments to resolve informally those matters in 
controversy contained in the Secretary's initial determination. The 
informal resolution period shall be at least 60 days from issuance of 
the initial determination and no more that 170 days from the receipt by 
the Secretary of the final approved

[[Page 418]]

audit report. If the matters are resolved informally, the Secretary 
shall issue a final determination pursuant to paragraph (f)(3)(iii) of 
this section which notifies the parties in writing of the nature of the 
resolution and may close the file.
    (iii) If the matter is not resolved informally, the Secretary shall 
provide each party with a final written determination by certified mail, 
return receipt requested. In the case of audits, the final determination 
shall be issued not later than 180 days after the receipt by the 
Secretary of the final approved audit report. The final determination 
shall:
    (A) Indicate that efforts to resolve informally matters contained in 
the initial determination have been unsuccessful;
    (B) List those matters upon which the parties continue to disagree;
    (C) List any modifications to the factual findings and conclusions 
set forth in the initial determination;
    (D) Establish a debt if appropriate;
    (E) Determine liability, method of restitution of funds and 
sanctions;
    (F) Offer an opportunity for a hearing in accordance with 20 CFR 
658.707 through 658.711 in the case of a final determination imposing a 
sanction or corrective action; and
    (G) Constitute final agency action unless a hearing is requested.
    (g) Sanctions for Violation of the Act. (1) The Secretary may impose 
appropriate sanctions and corrective actions for violation of the Act, 
regulations, or State plan, including the following:
    (i) Requiring repayment, for debts owed the Government under the 
grant, from non-Federal funds;
    (ii) Offsetting debts arising from the misexpenditure of grant 
funds, against amounts to which the State is or may be entitled under 
the Act, provided that debts arising from gross negligence or willful 
misuse of funds shall not be offset against future grants. When the 
Secretary reduces amounts allotted to the State by the amount of the 
misexpenditure, the debt shall be fully satisfied;
    (iii) Determining the amount of Federal cash maintained by the State 
or a subrecipient in excess of reasonable grant needs, establishing a 
debt for the amount of such excessive cash, and charging interest on 
that debt;
    (iv) Imposing other appropriate sanctions or corrective actions, 
except where specifically prohibited by the Act or regulations.
    (2) To impose a sanction or corrective action, the Secretary shall 
utilize the initial and final determination procedures outlined in 
(f)(3) of this section.
    (h) Other violations. Violations or alleged violations of the Act, 
regulations, or grant terms and conditions except those pertaining to 
audits or discrimination shall be determined and handled in accordance 
with 20 CFR part 658, subpart H.
    (i) Fraud and abuse. Any persons having knowledge of fraud, criminal 
activity or other abuse shall report such information directly and 
immediately to the Secretary. Similarly, all complaints involving such 
matters should also be reported to the Secretary directly and 
immediately.
    (j) Nondiscrimination and Affirmative Action Requirements. States 
shall:
    (1) Assure that no individual be excluded from participation in, 
denied the benefits of, subjected to discrimination under, or denied 
employment in the administration of or in connection with any services 
or activities authorized under the Act because of age, race, sex, color, 
religion, national origin, handicap, political affiliation or belief. 
All complaints alleging discrimination shall be filed and processed 
according to the procedures in 29 CFR part 31;
    (2) Assure that discriminatory job orders will not be accepted, 
except where the stated requirement is a bona fide occupational 
qualification (BFOQ). See, generally, 42 U.S.C. 2000(e)-2(e), 29 CFR 
parts 1604, 1606, 1625.
    (3) Assure that employers' valid affirmative action requests will be 
accepted and a significant number of qualified applicants from the 
target group(s) will be included to enable the employer to meet its 
affirmative action obligations.
    (4) Assure that employment testing programs will comply with 41 CFR 
part 60-3 and 29 CFR parts 1627 and 32.
    (5) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing

[[Page 419]]

and compliance reviews, will be governed by the provisions of 29 CFR 
parts 31 and 32.



Sec. 652.9  Labor disputes.

    (a) State agencies shall make no job referral on job orders which 
will aid directly or indirectly in the filling of a job opening which is 
vacant because the former occupant is on strike, or is being locked out 
in the course of a labor dispute, or the filling of which is otherwise 
an issue in a labor dispute involving a work stoppage.
    (b) Written notification shall be provided to all applicants 
referred to jobs not at issue in the labor dispute that a labor dispute 
exists in the employing establishment and that the job to which the 
applicant is being referred is not at issue in the dispute.
    (c) When a job order is received from an employer reportedly 
involved in a labor dispute involving a work stoppage, State agencies 
shall:
    (1) Verify the existence of the labor dispute and determine its 
significance with respect to each vacancy involved in the job order; and
    (2) Notify all potentially affected staff concerning the labor 
dispute.
    (d) State agencies shall resume full referral services when they 
have been notified of, and verified with the employer and workers' 
representative(s), that the labor dispute has been terminated.
    (e) State agencies shall notify the regional office in writing of 
the existence of labor disputes which:
    (1) Result in a work stoppage at an establishment involving a 
significant number of workers; or
    (2) Involve multi-establishment employers with other establishments 
outside the reporting State.



                    Subpart B--Services for Veterans



Sec. 652.100  Services for veterans.

    Services for veterans are administered by the Office of the 
Assistant Secretary for Veterans' Employment and Training (OASVET). 
OASVET's general regulations are located in chapter IX of this title.
[54 FR 39354, Sept. 26, 1989]



PART 653--SERVICES OF THE EMPLOYMENT SERVICE SYSTEM--Table of Contents




  Subpart A--Basic Services of the Employment Service System [Reserved]

    Subpart B--Services for Migrant and Seasonal Farmworkers (MSFWs)

Sec.
653.100  Purpose and scope of subpart.
653.101  Provision of services to migrant and seasonal farmworkers 
          (MSFWs).
653.102  Job information.
653.103  MSFW job applications.
653.104  Services to MSFW family members, farm labor contractors, and 
          crew members.
653.105  Job applications at day-haul facilities.
653.106  JS day-haul responsibilites.
653.107  Outreach.
653.108  State agency self-monitoring.
653.109  Data collection.
653.110  Disclosure of data.
653.111  State agency staffing requirements.
653.112  State agency program budget plans.
653.113  Processing apparent violations.

               Subpart C--Services for Veterans [Reserved]

            Subpart D--Services to the Handicapped [Reserved]

                 Subpart E--Support Services [Reserved]

            Subpart F--Agricultural Clearance Order Activity

653.500  Purpose and scope of subpart.
653.501  Requirements for accepting and processing clearance orders.
653.502  Changes in crop and recruitment situations.
653.503  Field checks.

    Authority:  38 U.S.C. chapters 41 and 42; Wagner-Peyser Act, as 
amended, 29 U.S.C. 49 et seq.; sec. 104 of the Emergency Jobs and 
Unemployment Assistance Act of 1974 Pub. L. 93-567, 88 Stat. 1845, 
unless otherwise noted.



  Subpart A--Basic Services of the Employment Service System [Reserved]



    Subpart B--Services for Migrant and Seasonal Farmworkers (MSFWs)

    Source:  45 FR 39459, June 10, 1980, unless otherwise noted.

[[Page 420]]



Sec. 653.100  Purpose and scope of subpart.

    This subpart sets forth the principal regulations of the United 
States Employment Service (USES) for counseling, testing, and job and 
training referral services for migrant and seasonal farmworkers (MSFWs) 
on a basis which is qualitatively equivalent and quantitatively 
proportionate to services provided to non-MSFWs. It also contains 
requirements that State agencies establish a system to monitor their own 
compliance with USES regulations governing services to MSFWs, including 
the regulations under this subpart. Special services to ensure that 
MSFWs receive the full range of employment related services are 
established under this subpart.



Sec. 653.101  Provision of services to migrant and seasonal farmworkers (MSFWs).

    (a) Each State agency and each local office shall offer to migrant 
and seasonal farmworkers (MSFWs) the full range of employment services, 
benefits and protections, including the full range of counseling, 
testing, and job and training referral services as are provided to non-
MSFWs. In providing such services, the State agency shall consider and 
be sensitive to the preferences, needs, and skills of individual MSFWs 
and the availability of job and training opportunities.
    (b) Each State agency shall assure that, in a local area, the same 
local offices, including itinerant and satellite offices, but exclusive 
of day-haul operations, offer services to both non-MSFWs and MSFWs. 
Separate farm labor service local offices, which offer only farmwork to 
agricultural workers while another local office serving the same 
geographical area offers other JS services to other applicants, are 
prohibited so that all applicants receive employment services on the 
same basis.



Sec. 653.102  Job information.

    All State agencies shall make job order information conspicuous and 
available to MSFWs in all local offices. This information shall include 
Job Bank information in local offices where it is available. Such 
information shall be made available either by computer terminal, 
microfiche, hard copy, or other equally effective means. Each 
significant MSFW local office shall provide adequate staff assistance to 
each MSFW to use the job order information effectively. In those offices 
designated as significant MSFW bilingual offices, such assistance shall 
be provided to MSFWs in Spanish and English, wherever requested or 
necessary, during any period of substantial MSFW activity.



Sec. 653.103  MSFW job applications.

    (a) Every local office shall determine whether or not applicants are 
MSFWs as defined at Sec. 651.10 of this chapter.
    (b) Except as provided in Sec. 653.105, when an MSFW applies for JS 
services at a local office or is contacted by an Outreach worker, the 
services available through the JS shall be explained to the MSFW. In 
local offices which have been designated as significant MSFW bilingual 
offices by ETA, this explanation shall be made in Spanish, if necessary 
or requested during any period of substantial MSFW activity. Other local 
offices shall provide bilingual explanations wherever feasible.
    (c) The local office staff member shall provide the MSFW a list of 
those services. The list shall be written in English and Spanish and 
shall specify those services which are available after completion of a 
full application and those services which are available after completion 
of a partial application. The JS staff member shall explain to each MSFW 
the advantages of completing a full application.

Applications shall be reviewed periodically by the local office manager 
or a member of his/her staff to ensure their accuracy and quality. 
Applications and the application-taking process shall also be reviewed 
during State and Federal onsite reviews by the State and Regional MSFW 
Monitor Advocates and/or review staff, who shall check overall accuracy 
and quality, and offer technical advice on corrections or improvements.
    (d) If the MSFW wishes to complete a full application, the staff 
shall provide all assistance necessary to complete the application and 
shall ensure that

[[Page 421]]

the form includes complete information. It shall include, to the extent 
possible, the significant history of the MSFW's prior employment, 
training and educational background and a statement of any desired 
employment and any training needs in order to permit a thorough 
assessment of the applicant's skills, abilities and preferences. All 
applicable items shall be completed according to the ETA instructions 
for preparation of the application card (ES-511). Additional Dictionary 
of Occupational Titles codes or keywords shall be assigned, where 
appropriate, based on the MSFW's work history, training, and skills, 
knowledges, and abilities. Secondary cards shall be completed and 
separately filed when keywords are not used. In extremely small local 
offices where the limited applicant load and file size does not require 
completion of secondary cards, additional D.O.T. codes shall be noted on 
the primary application card.
    (e) If an MSFW wishes any JS service, and does not wish or is unable 
to file a full application, the interviewer shall try to obtain as much 
information as possible for a partial application. The interviewer shall 
enter the information on the partial application. The interviewer shall 
offer to refer the applicant to any available jobs for which the MSFW 
may be qualified, and any JS services permitted by the limited 
information available. He/she shall advise the MSFW that he/she may file 
a full application at any time.
    (f) Partial applications shall be completed according to ETA 
instructions.
    (g) Partial applications for MSFWs shall be filed in accordance with 
local office procedures for filing other partial applications.
    (h) To minimize the need for additional applications in other 
offices, States shall issue JS cards to MSFWs at the initial visit under 
the following conditions:
    (1) When automated data retrieval systems are available in the 
State. In this instance, JS staff shall advise the MSFW that the JS card 
may be presented at any other JS office in the State and that services 
will be provided without completion of an additional application unless 
the services requested require additional information for adequate 
service delivery.
    (2) When an MSFW is referred on an interstate or intrastate order. 
In this instance, when it is known to the order-holding local office 
(through the presentation of an JS card or otherwise) that the MSFW has 
completed a full application or partial application in the applicant 
holding office or elsewhere, an additional application shall not be 
taken by the order-holding office unless the MSFW requests JS services 
in addition to referral on the clearance order.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 46 FR 7772, Jan. 23, 1981; 47 
FR 145, Jan. 5, 1982]



Sec. 653.104  Services to MSFW family members, farm labor contractors, and crew members.

    (a) In addition to other requirements in this subpart, the following 
special requirements are established for services to MSFW family 
members, farm labor contractors and crew members. Except as provided at 
Secs. 653.103(e) and 653.105, no local office shall refer an MSFW family 
or crew unless each working member of the family or crew being referred, 
has filed either a full or partial application pursuant to 
Sec. 653.103(b) at a local office or has been issued a JS card in 
instances set forth in Sec. 653.103(h). Local offices may, upon request, 
provide general information, e.g., the types of crops in other areas, to 
farm labor contractors and family heads prior to the registration of all 
working members.
    (b) No local office shall accept an application from an individual 
for employment as a farm labor contractor or fill an agricultural job 
order submitted by a farm labor contractor (``FLC'') or farm labor 
contractor employee (``FLCE'') unless the FLC or FLCE shows or obtains a 
valid FLC certificate, or FLCE identification card where required by 
Federal law, and a valid State certification where required by State 
law. If a FLC or FLCE is temporarily without his or her valid FLC 
certificate or FLCE identification

[[Page 422]]

card the local office shall try to verify the existence of the valid 
certificate or identification card by telephoning the State central 
office and/or the Department of Labor's Employment Standards 
Administration regional office. The local office, however, shall not 
serve the FLC or FLCE until the existence of the valid certificate or 
identification card is verified.
    (c) Local offices may refer workers to registered farm labor 
contractors who are employers provided that a valid job order has been 
placed with the local office which clearly specifies all the terms and 
conditions of employment with the farm labor contractor shown as 
employer of record. Before a local office may refer workers to a farm 
labor contractor offering employment in another area of the State or in 
another State, one of two requirements must be met: Either a valid 
interstate clearance order from another State agency is on file in the 
office, or an intrastate order has been received from an office in 
another area of the State which is not within commuting distance of the 
office where the farm labor contractor is recruiting workers. Unless one 
of these conditions exists, the local office may only refer workers to a 
registered farm labor contractor who is an employer placing a local job 
order. Whenever the job order includes the provision of transportation, 
a FLC certificate authorizing transportation must be shown before 
workers are referred on the order.



Sec. 653.105  Job applications at day-haul facilities.

    If the State agency is operating a day-haul facility under the 
exceptional circumstances provisions described in Sec. 653.106(a), a 
list of JS services shall be distributed and a full application shall be 
completed whenever an MSFW requests the opportunity to file a full 
application unless this is impractical at that time. In such cases, a 
full application shall be taken at the earliest practical time. In all 
other cases, a list of JS services shall be distributed.



Sec. 653.106  JS day-haul responsibilities.

    (a) State agencies shall not establish, operate, or supervise any 
agricultural day-haul facilities unless exceptional circumstances 
warrant such action and prior approval of the Regional Administrator is 
obtained.
    (b) No JS applicants shall be referred to non-JS operated day-haul 
facilities, unless the applicant is referred on a specific job order and 
is provided with a checklist summarizing wages, working conditions, and 
other material specifications on the job order. Such checklists, where 
necessary, shall be in English and Spanish. State agencies shall use a 
standard checklist format provided by ETA unless a variance has been 
approved by the Regional Administrator. However, general labor market 
information on the availability of jobs, the level of activity of 
agricultural and nonagricultural employment, and crop conditions shall 
be provided, upon request, to applicants where specific referrals to 
employment cannot be made.
    (c) JS outreach workers shall visit all JS and non-JS operated day-
haul facilities with substantial activity during their operation for 
purposes of providing MSFWs with information and assistance pursuant to 
Sec. 653.107(j). Monitoring of such activity shall be conducted pursuant 
to Sec. 653.108(p).

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.107  Outreach.

    (a) Each State agency shall operate an outreach program in order to 
locate and to contact MSFWs who are not being reached by the normal 
intake activities conducted by the local offices. Upon receipt of 
planning instructions and resource guidance from ETA, each State agency 
shall develop an annual outreach plan, setting forth numerical goals, 
policies and objectives. This plan shall be subject to the approval of 
the Regional Administrator as part of the program budget plan (PBP) 
process. Wherever feasible, State agencies shall coordinate their 
outreach efforts with those of public and private community service 
agencies and MSFW groups.

[[Page 423]]

    (b) In determining the extent of their outreach program, States 
shall be guided by the following statement of ETA policy:
    (1) State agencies should make sufficient penetration in the 
farmworker community so that a large number of MSFWs are aware of the 
full range of JS services.
    (2) Signficant MSFW Local offices should conduct especially vigorous 
outreach in their service areas.
    (3) State agencies in supply States should conduct particularly 
thorough outreach efforts with extensive follow-up activities which 
capitalize on the relatively long duration of MSFW residence in the 
State.
    (c) The plan shall be based on the actual conditions which exist in 
the particular State, taking into account the State agency's history of 
providing outreach services, the estimated number of MSFWs in the State, 
and the need for outreach services in that State. The approval of the 
Regional Administrator shall be based upon his/her consideration of the 
following features of the outreach plan:
    (1) Assessment of need. This assessment of need shall include:
    (i) A review of the previous year's agricultural activity in the 
State.
    (ii) A review of the previous year's MSFW activity in the State.
    (iii) A projected level of agricultural activity in the State for 
the coming year.
    (iv) A projected number of MSFWs in the State for the coming year, 
which shall take into account data supplied by CETA 303 grantees, other 
MSFW organizations, employer organizations and federal and/or State 
agency data sources such as the Department of Agriculture and the United 
States Employment Service.
    (v) A statement of the consideration given to the State Monitor 
Advocate's recommendation as set forth in the annual summary developed 
under Sec. 653.108(t).
    (2) Assessment of available resources. This assessment of the 
resources available for outreach shall include:
    (i) The level of funds available from all sources, including the 
funds specifically made available to the State agency for outreach.
    (ii) Resources made available through existing cooperative 
agreements with public and private community service agencies and MSFW 
groups.
    (iii) Where fewer resources are available for outreach than in a 
prior year, a statement of why fewer resources are available.
    (3) Proposed outreach activities. The proposed outreach activities 
shall be designed to meet the needs determined under paragraph (c)(1) of 
this section with the available resources determined under paragraph 
(c)(2) of this section. The plan for the proposed outreach activities 
shall include:
    (i) Numerical goals for the number of MSFWs to contacted during the 
fiscal year by JS staff. The number of MSFWs planned to be contacted by 
other agencies under cooperative arrangements during the fiscal year 
also should be included in the plan. These numerical goals shall be 
based on the number of MSFWs estimated to be in the State in the coming 
year, taking into account the varying concentration of MSFWs during the 
seasons in each geographic area, the range of services needed in each 
area and the number of JS and/or cooperating agency staff who will 
conduct outreach.
    (ii) Numerical goals for the staff years to be utilized for outreach 
during the fiscal year.
    (iii) The level of funding to be utilized for outreach during the 
fiscal year.
    (iv) The tools which will be used to conduct outreach contacts, 
including personal contact, printed matter, videotapes, slides, and/or 
cassette recordings.
    (v) The records to be maintained by the JS outreach staff--logs of 
daily contacts to include the number of MSFWs contacted and assistance 
provided. The name of the individual contacted should be recorded when:
    (A) An application for work is taken by an outreach worker,
    (B) A referral to a job is made by an outreach worker, and/or
    (C) A complaint is taken by an outreach worker.
    (d) In developing the outreach plan, the State agency shall solicit 
information and suggestions from CETA 303

[[Page 424]]

grantees, other appropriate MSFW groups, public agencies, agricultural 
employer organizations, and other interested organizations. In addition, 
at least 45 days before submitting its final outreach plan to the 
Regional Administrator, the State agency shall provide a proposed plan 
to CETA 303 grantees, public agencies, agricultural employer 
organizations, and other organizations expressing an interest and allow 
at least 30 days for review and comment. The State agency shall:
    (1) Consider any comments received in formulating its final proposed 
plan.
    (2) Inform all commenting parties in writing whether their comments 
have been incorporated and, if not, the reasons therefore.
    (3) Transmit the comments and recommendations received and its 
responses to the Regional Administrator with the submission of the plan. 
(If the comments are received after the submission of the plan, they may 
be sent separately to the Regional Administrator.)
    (e) The outreach plan shall be submitted as an essential part of the 
State's annual PBP. The resource requirement of the plan shall be 
reflected in the PBP budget request. The plan, including the resource 
requirement, shall be reviewed by the Regional Administrator during the 
annual PBP approval process. The State agency shall be required to 
implement the approved outreach plan as part of its compliance with the 
PBP.
    (f) The Regional Administrator shall review and evaluate the 
outreach plan, including the assessments of needs and resources, in 
light of the history of the State's outreach efforts and the statements 
of policy set forth in Sec. 653.107(b). He/she shall approve the plan 
only if it demonstrates that adequate outreach will be conducted. The 
approved outreach plan shall be available for review by interested 
parties.
    (g) As part of the annual PBP process, funding of State agencies 
shall be contingent upon the substantial and timely compliance of the 
State agency with its prior year outreach plan. However, if the Regional 
Administrator makes a finding of good faith efforts, he/she may fund a 
State agency even though it did not achieve substantial and timely 
compliance.
    (h) For purposes of hiring and assigning staff to outreach duties, 
State agencies shall seek, through merit system procedures, qualified 
candidates:
    (1) Who are from MSFW backgrounds, and/or
    (2) Who speak Spanish, and/or
    (3) Who are racially or ethnically representative of the MSFWs in 
the service area.
    (i) The five States with the highest estimated year round MSFW 
activity shall assign, in accordance with State merit staff 
requirements, full-time, year round staff to outreach duties. The 
remainder of the significant MSFW states shall make maximum efforts to 
hire outreach staff with MSFW experience for year round positions and 
shall assign outreach staff to work full-time during the period of the 
highest MSFW activity. Such outreach staff shall be bilingual if 
warranted by the characteristics of the MSFW population in the State, 
and shall spend a majority of their time in the field. The Regional 
Administrator may grant approval for a deviation from the requirements 
of this section if the State agency provides adequate evidence that 
outreach activities and service delivery to MSFWs would be improved 
through other staffing arrangements.
    (j) For purposes of this subpart, an outreach ``contact'' shall 
include either the presentation of information and offer of assistance 
specified in paragraphs (j)(1) and (j)(2) of this section, or the 
followup activity specified in paragraph (j)(3) of this section.
    (1) Outreach workers shall explain to MSFWs at their working, living 
or gathering areas, including day-haul sites, by means of written and 
oral presentations either spontaneous or recorded, in a language readily 
understood by them, the following;
    (i) The services available from the local office, including the 
availability of referrals to agricultural and nonagricultural 
employment, to training, to supportive services, as well as the 
availability of testing, counseling and other job development services;
    (ii) Types of specific employment opportunities which are currently 
available in the JS system;

[[Page 425]]

    (iii) Information on the JS complaint system and other organizations 
serving MSFWs;
    (iv) A basic summary of farmworker rights with respect to the terms 
and conditions of employment;
    (v) Provided, however, That outreach workers shall not enter work 
areas to perform outreach duties described in this section on an 
employer's property without permission of the employer, unless otherwise 
authorized to enter by law, shall not enter workers' living areas 
without the permission of the workers, and shall comply with appropriate 
State laws regarding access.
    (2) After making the presentation, outreach workers shall urge the 
MSFWs to go to the local office to obtain the full range of JS services. 
If an MSFW cannot or does not wish to visit the local JS office, the 
outreach workers shall offer to provide on-site the following:
    (i) Assistance in the preparation of applications;
    (ii) If an unemployed MSFW, assistance in obtaining referral to 
specific employment opportunities currently available; if an employed 
MSFW, information regarding the types of employment opportunities which 
will become available upon the date on which the MSFW indicates that he/
she will be available following his/her current employment.
    (iii) Assistance in the preparation of either JS or non-JS related 
complaints;
    (iv) Receipt and subsequent referral of complaints to the local 
office complaint specialist or local officer manager;
    (v) Referral to supportive services for which the individual or a 
family member may be eligible;
    (vi) As needed, assistance in making appointments and arranging 
transportation for individual MSFWs or members of their family to and 
from local offices or other appropriate agencies.
    (3) Outreach workers shall make follow-up contacts as are necessary 
and appropriate to provide to the maximum extent possible the assistance 
specified in paragraphs (j)(1) and (j)(2) of this section.
    (4) In addition to the foregoing outreach contacts, the State agency 
shall publicize the availability of JS services through such means as 
newspaper and electronic media publicity. Contacts with public and 
priviate community agencies, employers and/or employer organizations, 
and MSFW groups also shall be utilized to facilitate the widest possible 
distribution of information concerning JS services.
    (k) Outreach workers shall be alert to observe the working and 
living conditions of MSFWs and, upon observation, or upon receipt of 
information regarding a suspected violation of federal or State 
employment-related law, document and refer information to the local 
office manager for processing in accordance with Sec. 653.113.
    (l) Outreach workers shall be trained in local office procedures and 
in the services, benefits, and protections afforded MSFWs by the JS. 
They shall also be trained in the procedure for informal resolution of 
complaints. The program for such training shall be formulated by the 
State Administrator, pursuant to uniform guidelines developed by ETA, 
and each State's program shall be reviewed and commented upon in advance 
by the State MSFW Monitor Advocate.
    (m) During months when outreach activities are conducted, outreach 
workers shall maintain complete records of their contacts with MSFWs and 
the services they perform in accordance with a format developed by ETA. 
These records shall include a daily log, a copy of which shall be sent 
monthly to the local office manager and maintained on file for at least 
two years. These records shall include the number of contacts and names 
of contacts (where applicable), the services provided (e.g., whether a 
complaint was received, whether an application was taken, and whether a 
referral was made). Outreach workers also shall maintain records of each 
possible violation or complaint of which they have knowledge, and their 
actions in ascertaining the facts and referring the matters as provided 
herein. These records shall include a description of the circumstances 
and names of any employers who have refused outreach workers access to 
MSFWs pursuant to Sec. 653.107(l).

[[Page 426]]

    (n) During months when outreach activities are conducted, each local 
office manager shall file with the State MSFW Monitor Advocate a monthly 
summary report of outreach efforts. These reports shall summarize 
information collected, pursuant to paragraph (m) of this section. The 
local office manager and/or other appropriate State office staff members 
shall assess the performance of outreach workers by examining the 
overall quality and productivity of their work, including the services 
provided and the methods and tools used to offer services. Performance 
shall not be judged solely by the number of contacts made by the worker. 
The monthly reports and daily outreach logs shall be made available to 
the State MSFW Monitor Advocate and federal On-Site Review Teams. In 
addition, the distribution of any special funds for outreach, should 
funds become available, shall be based on the effectiveness and need of 
the State's outreach program as monitored by ETA.
    (o) Outreach workers shall not engage in political, unionization or 
antiunionization activities during the performance of their duties.
    (p) Outreach workers shall be provided with, carry and display, upon 
request, identification cards or other material identifying them as 
employees of the State agency.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.108  State agency self-monitoring.

    (a) State Administrators shall assure that their State agencies 
monitor their own compliance with JS regulations in serving MSFWs on an 
ongoing basis. The State Administrator shall have overall responsibility 
for State agency self-monitoring.
    (b) The State Administrator shall appoint a State MSFW Monitor 
Advocate. The State Administrator shall inform farmworker organizations 
and other organizations with expertise concerning MSFWs of the opening 
and encourage them to refer qualified applicants to apply through the 
State merit system prior to appointing a State MSFW Monitor Advocate. 
Among qualified candidates determined through State merit system 
procedures, the State agencies shall seek persons (1) who are from MSFW 
backgrounds, or (2) who speak Spanish or other languages of a 
significant proportion of the State MSFW population, or (3) who are 
racially or ethnically similar to the MSFWs in the State, or (4) who 
have substantial work experience in farmworker activities.
    (c) The State MSFW Monitor Advocate shall have direct, personal 
access, whenever he/she finds it necessary, to the State Administrator 
and shall work in the State central office. The State MSFW Monitor 
Advocate shall have status and compensation as approved by the civil 
service classification system and be comparable to other State positions 
assigned similar levels of tasks, complexity and responsibility.
    (d) The State MSFW Monitor Advocates shall be assigned staff 
necessary to fulfill effectively all of his/her duties as set forth in 
this subpart. The number of staff positions shall be determined by 
reference to:
    (1) The number of MSFWs in the State, as measured at the time of the 
peak MSFW population (MSFW activity), and (2) the need for monitoring 
activity in the State. The MSFW Monitor Advocates shall devote full time 
to Monitor Advocate functions, except that the USES Administrator may 
reallocate positions from States of low MSFW activity to States of 
higher MSFW activity and may approve a plan for less than full-time work 
in States of low MSFW activity. Any such plan must demonstrate that the 
State MSFW Monitor Advocate function can be effectively performed with 
part-time staffing.
    (e) All State MSFW Monitor Advocates and Assistant MSFW Monitor 
Advocates shall attend within the first three months of their tenure a 
training session conducted by the Regional MSFW Monitor Advocate. They 
shall also attend whatever additional training sessions are required by 
the Regional or National MSFW Monitor Advocate.

[[Page 427]]

    (f) The State MSFW Monitor Advocate shall provide any relevant 
documentation requested from the State agency by the Regional MSFW 
Monitor Advocate.
    (g) The State MSFW Monitor Advocate shall:
    (1) Conduct an ongoing review of the delivery of services and 
protections afforded by JS regulations to MSFWs by the State agency and 
local offices. The State MSFW Monitor Advocate, without delay, shall 
advise the State agency and local offices of (i) problems, deficiencies, 
or improper practices in the delivery of services and protections 
afforded by these regulations (including progress made in achieving 
affirmative action goals and timetables), and (ii) means to improve such 
delivery.
    (2) Participate in onsite local office MSFW formal monitoring 
reviews on a regular basis.
    (3) Assure that all significant MSFW local offices not reviewed 
onsite by Federal staff, are reviewed at least once a year by State 
staff, and that, if necessary, those local offices in which significant 
problems are revealed by required reports, management information, the 
JS complaint system or otherwise are reviewed as soon as possible.
    (4) Assure that the monitoring review format, developed by ETA, is 
used as a guideline in the conduct of local office MSFW onsite formal 
monitoring reviews. This format will ensure that applications and the 
application-taking process are reviewed during State onsite reviews by 
State MSFW Monitor Advocates and/or review staff, who shall check 
overall accuracy and quality, and offer technical advice on corrections 
or improvements.
    (5) Review the State agency's outreach plan, and on a random basis, 
the outreach workers' daily logs and other reports including those 
showing or reflecting the workers' activities, to ensure that they 
comply with the outreach plan.
    (h) Formal onsite MSFW monitoring reviews of local offices shall be 
conducted using the following procedures:
    (1) Before beginning such a review, the State MSFW Monitor Advocate 
and/or review staff shall study:
    (i) Program performance data,
    (ii) Reports of previous reviews,
    (iii) Corrective action plans developed as a result of previous 
reviews,
    (iv) Complaint logs, and
    (v) Complaints elevated from the office or concerning the office.
    (2) Upon completion of a local office onsite formal monitoring 
review, the State MSFW Monitor Advocate shall hold one or more wrap-up 
sessions with the local office manager and staff to discuss any obvious 
findings and offer initial recommendations and appropriate technical 
assistance.
    (3) After each review the State MSFW Monitor Advocate shall conduct 
an indepth analysis of the review data. The conclusions and 
recommendations of the State MSFW Monitor Advocate shall be put in 
writing, shall be sent to the State Administrator, to the offical of the 
State agency with line authority over the local office, and other 
appropriate State agency officials.
    (4) The state MSFW Monitor Advocate may recommend that the review 
responsibility set forth in this subsection be delegated to a 
responsible professional member of the administrative staff of the State 
agency, if and when the State Administrator finds such delegation 
necessary. In such event, the State MSFW Monitor Advocate shall be 
responsible for and shall approve the written report of the review.
    (5) The local office manager shall develop and propose a written 
corrective action plan. The plan shall be approved, or appropriately 
revised, by appropriate superior officials and the State MSFW Monitor 
Advocate. The plan shall include actions required to correct or to take 
major steps to correct any problems within 30 days or if the plan allows 
for more than 30 days for full compliance, the length of, and the 
reasons for, the extended period shall be specifically stated.
    (6) State agencies, through line supervisory staff, shall be 
responsible for assuring and documenting that the local office is in 
compliance within the time period designated in the plan. State agencies 
shall submit to the appropriate ETA regional offices copies of the 
onsite local office formal monitoring review reports and corrective 
action plans for significant local offices.

[[Page 428]]

    (i) The State MSFW Monitor Advocate shall participate in federal 
reviews conducted pursuant to subpart G.
    (j) At the discretion of the State Administrator, the State MSFW 
Monitor Advocate may be assigned the responsibility as the complaint 
specialist. The State MSFW Monitor Advocate shall participate in and 
monitor the performance of the complaint system, as set forth at 20 CFR 
658.400 et seq. The State MSFW Monitor Advocate shall review the local 
office managers' informal resolution of complaints relating to MSFWs and 
shall ensure that the State agency transmits copies of the logs of MSFW 
complaints to the regional office quarterly.
    (k) The State MSFW Monitor Advocate also shall serve as an advocate 
to improve services for MSFWs within JS. The State MSFW Monitor Advocate 
shall establish ongoing liaison with CETA 303 and other organizations 
serving farmworkers, and employers and/or employer organizations, in the 
State. The State MSFW Monitor Advocate shall meet frequently with 
representatives of these organizations to receive complaints, assist in 
referrals of alleged violations to enforcement agencies, receive input 
on improving coordination with JS or improving JS services to MSFWs.
    (l) The State MSFW Monitor Advocate shall conduct frequent field 
visits to the working and living areas of MSFWs, and shall discuss JS 
services and other employment-related programs with MSFWs, crew leaders, 
and employers. Records shall be kept of each such visit.
    (m) The State MSFW Monitor Advocate shall participate in the 
appropriate regional public meeting(s) held by the Department of Labor 
Regional Farm Labor Coordinated Enforcement Committee.
    (n) The State MSFW Monitor Advocate shall ensure that outreach 
efforts in all significant MSFW local offices are reviewed at least 
yearly to ensure that there is continuing compliance with 20 CFR 
653.107. This review will include accompanying at least one outreach 
worker from each significant MSFW local office on his/her visits to 
MSFWs' working and living areas. The State MSFW Monitor Advocate shall 
review findings from these reviews.
    (o) The State MSFW Monitor Advocate shall review and assess the 
adequacy of the annual State affirmative action plan for MSFWs, and 
shall report such findings to the State Administrator.
    (p) The State MSFW Monitor Advocate shall ensure that JS outreach 
activities are reviewed periodically at day-haul sites at which these 
activities are conducted. Complete records of such visits shall be kept. 
The State MSFW Monitor Advocate shall ensure that local offices and the 
State Administrator are advised of any deficiencies.
    (q) The State MSFW Monitor Advocate shall review on at least a 
quarterly basis all statistical and other MSFW-related data reported by 
significant MSFW local offices in order (1) to determine the extent to 
which the State agency has complied with regulations at Sec. 653.100 et 
seq., and (2) to identify the areas of inadequate compliance.
    (r) The State MSFW Monitor Advocate shall have full access to all 
statistical and other MSFW-related information gathered by State 
agencies and local offices and may interview State and local office 
staffs with respect to reporting methods. Subsequent to each review, the 
State MSFW Monitor Advocate shall consult, as necessary, with State and 
local offices and provide technical assistance to ensure accurate 
reporting.
    (s) The State MSFW Monitor Advocate shall review and comment on 
proposed State JS directives, manuals, and operating instructions 
relating to MSFWs and shall ensure (1) that they accurately reflect the 
requirements of the regulations, and (2) that they are clear and 
workable. The State MSFW Monitor Advocate also shall explain and make 
available at the requestor's cost, pertinent directives and procedures 
to employers, employer organizations, farmworkers, farmworker 
organizations and other parties expressing an interest in a readily 
identifiable directive or procedure issued and receive suggestions on 
how these documents can be improved.

[[Page 429]]

    (t) The State MSFW Monitor Advocate shall prepare for the State 
Administrator an annual summary of JS services to MSFWs within his/her 
State based on statistical data and his/her reviews and activities set 
forth in these regulations. The summary shall include an assessment of 
the State agency's activities related to MSFWs such as those covered in 
the State agency's PBP, outreach plan, and affirmative action plan, and 
the other matters with respect to which the State MSFW Monitor Advocate 
has responsibilities under these regulations. A copy of this summary 
shall be forwarded to the Regional Administrator by the State 
Administrator.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.109  Data collection.

    State agencies shall: (a) Collect data on MSFWs, including data on 
the number (1) contacted through outreach activities, (2) registering 
for service, (3) referred to agricultural jobs, (4) referred to non-
agricultural jobs, (5) placed in agricultural jobs, (6) placed in non-
agricultural jobs, (7) referred to training, (8) receiving counseling, 
(9) receiving job development, (10) receiving testing, (11) referred to 
supportive service, (12) receiving some service, (13) placed according 
to wage rates, and (14) placed according to duration. The State agencies 
also shall collect data on agricultural clearance orders (including 
field checks), MSFW complaints, and monitoring activities, as directed 
by ETA. These data shall be collected in accordance with the ESARS 
Handbook and applicable ETA Reports and Anlaysis Letters.
    (b) Collect data on the number of MSFWs who were served as to 
whether they were male, female, black, Hispanic, American Indian, Asian, 
or Pacific Islander.
    (c) Provide necessary training to State agency, including local 
office personnel, to assure accurate reporting of data;
    (d) Collect and submit to ETA as directed by ETA, data on MSFWs 
required by the PBP, and
    (e) Periodically collect and verify data required under this 
subsection, take necessary steps to ensure its validity, and collect and 
submit data for verification to ETA, as directed by ETA; and
    (f) Submit additional reports to the ETA at such times and 
containing such items as ETA directs.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.110  Disclosure of data.

    (a) State agencies shall disclose to the public, on written request, 
in conformance with applicable State and Federal law, the data collected 
by State and local offices pursuant to Sec. 653.109, if possible within 
10 working days after receipt of the request.
    (b) If a request for data held by a State agency is made to the ETA 
national or regional office, the ETA shall forward the request to the 
State agency for response.
    (c) If the requested data cannot be supplied within 10 working days 
of receipt by the State agency of the request, the State agency shall 
respond to the requestor in writing, giving the reason for the delay and 
specifying the date by which it expects to be able to comply.
    (d) State agency intra-agency memoranda and reports (or parts 
thereof) and memoranda and reports (or parts thereof) between the State 
agency and the ETA, however, to the extent that they contain statements 
of opinion rather than facts, may be withheld from public disclosure 
provided this reason for withholding is given to the requestor in 
writing. Similarly, documents or parts thereof, which, if disclosed, 
would constitute an unwarranted invasion of personal or employer 
privacy, may also be withheld provided the reason is given to the 
requestor in writing.

[[Page 430]]



Sec. 653.111  State agency staffing requirements.

    (a) On a statewide basis, staff representative of the racial and 
ethnic characteristics in the work force shall be distributed in 
substantially the same proportion among (1) all ``job groups'' (as that 
term is defined by the Office of Federal Contract Compliance Programs), 
and (2) all offices in the plan(s).
    (b)(1) As part of the PBP, each State agency shall develop and 
submit to the Regional Administrator affirmative action plans for all 
significant local offices within its jurisdiction (which, for the 
purposes of this provision, means those local offices representing the 
top 20 per cent of MSFW activity nationally). These affirmative action 
plans shall include goals and timetables and shall ensure that 
sufficient numbers of qualified, permanent minority staff are hired. 
Where qualified minority applicants are not available to be hired as 
permanent staff, qualified minority part-time, provisional, or temporary 
staff shall be hired in accordance with State merit system procedures, 
where applicable. These affirmative action plans shall be prepared on an 
individual office basis.
    (2) The affirmative action plans shall include an analysis of the 
racial and ethnic characteristics of the work force in the local office 
service area. To determine the ``work force'' for the purpose of this 
paragraph, the State agency shall include the racial and ethnic 
characteristics of any MSFW population which is not a part of the 
permanent work force by computing an estimate of the total work years 
MSFWs collectively spend in the area and including a number of workers 
equivalent to this estimate as part of the permanent work force. This 
computation shall be made by calculating the average length of time, as 
a fractional part of a year, MSFWs stay in the area and then multiplying 
this figure by the total estimated MSFW population in the area during 
the previous year.
    (3) The affirmative action plan also shall include an analysis of 
the local office staffing characteristics. The plan shall provide a 
comparison between the characteristics of the staff and the work force 
and determine if the composition of the local office staff(s) is 
representative of the racial and ethnic characteristics of the work 
force in the local office service area(s).
    (4) If the staff under-represents any of these characteristics, the 
State agency shall establish a staffing goal at a level equivalent to 
the percentage of the characteristics in the work force in the local 
office service areas. The State agency also shall establish a reasonable 
timetable for achieving the staffing goal by hiring or promoting 
available, qualified staff in the under-represented categories. In 
establishing timetables, the State agency shall consider the vacancies 
anticipated through expansion, contraction, and turnover in the 
office(s) and available funds, and all affirmative action plans shall 
establish timetables that are designed to achieve the staffing goal no 
later than December 31, 1983.
    (c) In addition, each State agency which has significant local 
offices, shall undertake special efforts to recruit MSFWs and persons 
from MSFW back-grounds for its staff, shall document achievements, and 
shall include in the affirmative action plan(s) a complete description 
of specific actions which the agency will take and time frames within 
which these actions will be taken.
    (d) In developing the affirmative action plan for significant local 
offices, the State agency shall solicit from CETA 303 and other 
appropriate MSFW groups, employer organizations and other interested 
organizations, estimates of the total MSFW population in each local 
office service area, and the average length of time the MSFWs stay in 
the area. In addition, State agencies shall solicit, consider, 
incorporate as appropriate, respond to and include copies of comments 
from CETA 303, other appropriate MSFW groups, employer organizations, 
and other interested organizations, following procedures set forth for 
the annual outreach plan at Sec. 653.107(d).
    (e) As part of the annual Program and Budget Plan (PBP) process, the 
funding of State agencies which are required to develop and implement 
affirmative action plans for significant local offices shall be 
contingent upon

[[Page 431]]

the timely submittal of adequate affirmative action plans and the 
substantial and timely attainment of the goals and timetables contained 
in those plans. However, if the Regional Administrator makes a finding 
of good faith efforts, he/she may fund a State agency even though it did 
not achieve substantial and timely compliance.
    (f) All State Employment Security Agencies (SESAs) required to 
develop affirmative action plans for significant local offices shall 
keep accurate records of their employment practices for those offices, 
including information on all applications. These records shall be 
maintained in accordance with the recordkeeping requirements concerning 
affirmative action which are established by ETA and distributed to the 
SESAs. All records shall be made available to the State MSFW Monitor 
Advocate, EEO staff and Federal On-Site Review Teams.
    (g) Affirmative action plans shall contain a description of specific 
steps to be taken for the adequate recruitment of MSFWs for all vacant 
positions in significant local offices and the central office. These 
steps shall include advertisements in newspapers, radio or other media, 
in a manner calculated to best reach the MSFW population, and contacts 
by outreach workers and the State MSFW Monitor Advocate with groups 
serving the MSFW population.
    (h) State EEO staff shall have the responsibility for developing 
affirmative action plans. The State MSFW Monitor Advocate(s) shall 
comment on the plan to the State Administrator. Upon submission of the 
affirmative action plan as part of the State agency's PBP submittal, the 
Regional MSFW Monitor Advocate shall review the affirmative action 
plan(s) as it pertains to MSFWs and comment to the Regional 
Administrator. As part of his/her regular reviews of State agency 
compliance, the Regional MSFW Monitor Advocate shall monitor the extent 
to which the State has complied with its affirmative action plan(s) as 
it pertains to MSFWs. The Regional MSFW Monitor Advocate's finding as to 
the adequacy of the plan(s) and as to the State's compliance with the 
plan(s) shall be considered in PBP decisions involving future funding of 
the State agency.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.112  State agency program budget plans.

    (a) Each State agency, in its annual program budget plan, shall 
describe its plan to carry out the requirements of this subpart in the 
following year. The plan shall include, where applicable, the outreach 
and affirmative action plans required by Secs. 653.107 and 653.111, 
respectively. For significant MSFW States, ETA shall establish program 
performance indicators reflecting equity indicators and indicators 
measuring minimum levels of service to MSFWs which the significant MSFW 
State agencies will be required to meet. These program performance 
indicator requirements shall be contained in the PBP Guidelines which 
ETA promulgates on an annual basis.
    (b) Equity indicators shall address JS controllable services and 
shall include, at a minimum, individuals referred to a job; receiving 
counselling; receiving job development; receiving some service; and 
referred to supportive service.
    (c) Minimum level of service indicators shall address other services 
to MSFWs and shall include, at a minimum, individuals placed in a job; 
placed in a job with a wage exceeding the Federal minimum wage by at 
least 50 cents/hour; placed long-term (150 days or more) in a non-
agricultural job; review of significant MSFW local offices; field checks 
on agricultural clearance orders; outreach contacts per staff day; and 
processing of complaints. The determination of the minimum service 
levels required of significant MSFW States for each year shall be based 
on the following:
    (1) Past State agency performance in serving MSFWs, as reflected in 
on-site reviews and data collected under Sec. 653.109;
    (2) The need for services to MSFWs in the following year, comparing 
prior and projected levels of MSFW activity;

[[Page 432]]

    (3) The ETA program priorities for the following year; and
    (4) Special circumstances and external factors existing in the 
particular State.
    (d) The Regional Administrator shall review this portion of the PBP, 
and approve it upon making a written determination that it is acceptable 
in light of the requirements of this subpart. The Regional 
Administrator's written determination shall be available to the public 
upon request.

(Approved by the Office of Management and Budget under control number 
1205-0039.)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39459, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.113  Processing apparent violations.

    (a) If a State agency employee observes, has reason to believe, or 
is in receipt of information regarding a suspected violation of 
employment related laws or JS regulations by an employer, except as 
provided at Sec. 653.503 (field checks) or Sec. 658.400 of this chapter 
(complaints), the employee shall document the suspected violation and 
refer this information to the local office manager.
    (b) If the employer has filed a job order with the JS office within 
the past 12 months, the local office shall attempt informal resolution. 
If the employer does not remedy the suspected violation within 5 working 
days, procedures at part 658, subpart F of this chapter shall be 
initiated and, if a violation of an employment related law is involved, 
the violation shall be referred to the appropriate enforcement agency in 
writing.
    (c) If the employer has not filed a job order with the local office 
during the past 12 months, the suspected violation of an employment 
related law shall be referred to the appropriate enforcement agency in 
writing.



               Subpart C--Services for Veterans [Reserved]



            Subpart D--Services to the Handicapped [Reserved]



                 Subpart E--Support Services [Reserved]



            Subpart F--Agricultural Clearance Order Activity

    Source:  45 FR 39466, June 10, 1980, unless otherwise noted.



Sec. 653.500  Purpose and scope of subpart.

    This section contains the requirements for acceptance and handling 
of intrastate and interstate job clearance orders seeking workers to 
perform agricultural or food processing work on a less than year round 
basis. Orders seeking workers to perform agricultural or food processing 
work on a year round basis which involves permanent relocation are not 
subject to the requirements of this subpart. This section, therefore, 
contains requirements which affect not only applicants who are 
categorized as MSFWs based on their past employment, but all workers who 
are recruited through the JS intrastate and interstate clearance systems 
for less than year round agricultural or food processing work.



Sec. 653.501  Requirements for accepting and processing clearance orders.

    (a) In view of the statutorily established basic function of the job 
service as a no-fee labor exchange, that is, as a forum for bringing 
together employers and job seekers, neither the ETA nor the State 
agencies are guarantors of the accuracy or truthfulness of information 
contained on job orders submitted by employers. Nor does any job order 
accepted or recruited upon by the JS constitute a contractual job offer 
to which the ETA or a State agency is in any way a party. Nevertheless, 
if the ETA or a State agency discovers that

[[Page 433]]

an employer's job order contains a material misrepresentation, the 
procedures of subpart F of part 658 of this chapter shall be followed.
    (b) Intrastate and interstate job orders shall include the language 
of the first two sentences of paragraph (a) of this section.
    (c) No local office or State agency shall place into intrastate or 
interstate clearance any job order seeking workers to perform 
agricultural or food processing work before reviewing it pursuant to 
paragraphs (d) or (e) of this section, as applicable.
    (d) No local office shall place a job order seeking workers to 
perform agricultural or food processing work into intrastate clearance 
unless:
    (1) The job order does not contain an unlawful discriminatory 
specification by race, color, religion, national origin, age, sex, or 
mental or physical status unrelated to job performance (handicap);
    (2) The employer has signed the job order and the job order states 
all the material terms and conditions of the employment, including:
    (i) The crop;
    (ii) The nature of the work;
    (iii) The anticipated period and hours of employment;
    (iv) The anticipated starting and ending date of employment and the 
anticipated number of days and hours per week for which work will be 
available;
    (v) An assurance that:
    (A) The employer will provide to workers referred through the 
clearance system the number of hours of work cited in paragraph 
(d)(2)(iv) of this section for the week beginning with the anticipated 
date of need, unless the employer has amended the date of need at least 
10 working days prior to the original date of need (pursuant to 
paragraph (d)(2)(xiii) of this section) by so notifying the order-
holding office. The State agency shall make a record of this 
notification and shall attempt to inform referred migrant workers of the 
change in accordance with the following procedure:
    (B) All workers referred through the clearance system, farm labor 
contractors on behalf of migrant workers or family heads on behalf of 
migrant family members referred through the clearance system shall be 
notified to contact a local job service office, preferably the order-
holding office, to verify the date of need cited no sooner than 9 
working days and no later than 5 working days prior to the original date 
of need cited on the job order; and that failure to do so will 
disqualify the referred migrant worker from the assurance provided in 
paragraphs (a) and (d) of this section.
    (C) If the worker referred through the clearance system contacts a 
local office (in any State) other than the order holding office, that 
local office shall assist the referred worker in contacting the order 
holding office on a timely basis. Such assistance shall include, if 
necessary, contacting the order holding office by telephone or other 
timely means on behalf of the worker referred through the clearance 
system.
    (D) If the employer fails to notify the order-holding office at 
least 10 working days prior to the original date of need the employer 
shall pay eligible (pursuant to paragraph (b) of this section) workers 
referred through the clearance system the specified hourly rate of pay, 
or in the absence of a specified hourly rate of pay, the higher of the 
Federal or State minimum wage for the first week starting with the 
originally anticipated date of need.
    (E) Employers may require workers to perform alternative work if the 
guarantee in this section is invoked and if such alternative work is 
stated on the job order.
    (F) For the purposes of this assurance, ``working days'' shall mean 
those days that the order-holding local office is open for public 
business.
    (vi) The hourly wage rate or the piece rate estimated in hourly wage 
rate equivalents for each activity and unit size;
    (vii) Any deductions to be made from wages;
    (viii) A specification of any non-monetary benefits to be provided 
by the employer;
    (ix) Any hours, days or weeks for which work is guaranteed, and, for 
each guaranteed week of work except as provided in paragraph (d)(2)(v) 
of this section, the exclusive manner in which the grarantee may be 
abated due

[[Page 434]]

to weather conditions or other acts of God beyond the employer's 
control;
    (x) Any bonus or work incentive payments or other expenses which 
will be paid by the employer in addition to the basic wage rate, 
including the anticipated time period(s) within which such payments will 
be made. No such payments, however, shall be made contingent upon the 
worker continuing employment beyond the period of employment specified 
in the job order or, in the case of any worker with children, beyond the 
time needed to return home for the beginning of the school year;
    (xi) An assurance that no extension of employment beyond the period 
of employment specified in the job order shall relieve the employer from 
paying the wages already earned, or if specified in the job order as a 
term of employment, providing transportation or paying transportation 
expenses to the worker's home;
    (xii) Assurances that the working conditions comply with applicable 
Federal and State minimum wage, child labor, social security, health and 
safety, farm labor contractor registration and other employment-related 
laws;
    (xiii) An assurance that the employer will expeditiously notify the 
order-holding local office or State agency by telephone immediately upon 
learning that a crop is maturing earlier or later, or that weather 
conditions, over-recruitment or other factors have changed the terms and 
conditions of employment. For orders submitted in conjunction with 
requests for foreign workers, an assurance that the employer will 
follow-up the telephone notification in writing.
    (xiv) An assurance that the employer, if acting as a farm labor 
contractor (``FLC'') or farm labor contractor employee (``FLCE'') on the 
order, has a valid FLC certificate or FLCE identification card; and
    (xv) An assurance of the availability of no cost or public housing 
which meets the Federal standards and which is sufficient to house the 
specified number of workers requested through the clearance system. This 
assurance shall cover the availability of housing for only those 
workers, and, when applicable, family members who are unable to return 
to their residence in the same day.
    (xvi) An assurance that outreach workers shall have reasonable 
access to the workers in the conduct of outreach activities pursuant to 
Sec. 653.107.
    (3) The job order contains all the material terms and conditions of 
the job, and the employer assures that all items therein are actual 
conditions of the job by signing the following statement: ``This job 
order describes the actual terms and conditions of the employment being 
offered by me and contains all the material terms and conditions of the 
job'';
    (4) The wages and working conditions offered are not less than the 
prevailing wages and working conditions among similarly employed 
agricultural workers in the area of intended employment or the 
applicable Federal or State minimum wage, whichever is higher. If the 
wages offered are expressed as piece rates or as base rates and bonuses, 
the employer shall make the method of calculating the wage and 
supporting materials available to JS staff who shall check if the 
employer's calculation of the estimated hourly wage rate is reasonably 
accurate and is not less than the prevailing wage rate or applicable 
Federal or State minimum wage, whichever is higher;
    (5) The employer has agreed to provide or pay for the transportation 
of the workers and their families on at least the same terms as 
transportation is commonly provided by employers in the area of intended 
employment to agricultural workers and their families recruited from the 
same area of supply;
    (6) JS staff have determined, through a preoccupancy housing 
inspection performed by JS staff or other appropriate public agencies, 
that the housing assured by the employer is in fact available, and meets 
the full set of standards set forth at 20 CFR part 654, subpart E which 
details applicable housing standards and contains provisions for 
conditional access to the clearance system; except that mobile range 
housing for sheepherders shall meet existing Departmental guidelines; 
and
    (7) The local office and employer have attempted and have not been 
able to obtain sufficient workers within the local labor market area, or 
the local

[[Page 435]]

office anticipates a shortage of local workers.
    (e) No state agency shall place a job order seeking workers to 
perform agricultural or food processing work with interstate clearance 
unless:
    (1) The job order meets the requirements set forth at paragraphs 
(d)(1) through (d)(6) of this section;
    (2) The State agency and the employer have attempted and have not 
been able to locate sufficient workers within the state, or the State 
agency anticipates a shortage of workers within the State; and
    (3) The order has been reviewed and approved by the ETA regional 
office within 10 working days after receipt from the State agency, and 
the Regional Administrator has approved the areas of supply to which the 
order shall be extended. Any denial by the Regional Administrator shall 
be in writing and set forth the reasons for the denial.
    (f) (1) The local office shall use the agricultural clearance form 
prescribed by ETA, and shall see that all necessary items on the form 
are completed, including items on attachments to the form prescribed by 
ETA.
    (2) (i) The original of an interstate agricultural clearance form 
shall be retained for the order-holding local office files. If the 
clearance order is submitted in conjunction with a request for 
certification of temporary alien agricultural workers, the procedures at 
20 CFR 655.204(a) shall be followed. For other clearance orders, the 
order-holding local office shall transmit a complete copy to the State 
office. The State office shall distribute additional copies of the form 
with all attachments except that the State agency may, at its 
discretion, delegate this distribution to the local office, as follows:
    (A) At least one clear copy to each of the State agencies selected 
for recruitment (areas of supply);
    (B) One copy to each applicant-holding ETA regional office;
    (C) One copy to the order-holding ETA regional office; and
    (D) One copy to the Regional Farm Labor Coordinated Enforcement 
Committee in the area of employment, Attn: ESA Regional Administrator.
    (ii) Applicant-holding offices shall provide workers referred on 
clearance orders with a checklist summarizing wages, working conditions 
and other material specifications on the job order. Such checklists, 
where necessary, shall be in English and Spanish. The checklist shall 
include language notifying the worker that a copy of the complete order 
is available for inspection. One copy of the form with all attachments 
shall be available for inspection in the applicant-holding office and 
the order-holding office. State agencies shall use a standard checklist 
format provided by ETA unless a variance has been approved by the 
Regional Administrator.
    (iii) The applicant-holding office shall give each referred worker a 
copy of a description of worker's rights developed by the National Farm 
Labor Coordinated Enforcement Committee.
    (g) The local office may place an intrastate or interstate order 
seeking workers to perform agricultural or food processing work for a 
specific farm labor contractor or worker preferred by the employer 
provided the order meets JS nondiscrimination criteria. The order would 
not meet such criteria, for example, if it requested a ``white male crew 
leader'' or ``any white male crew leader.''
    (h) In local offices which have been designated significant MSFW 
bilingual offices by ETA, and in any other local office with bilingual 
staff, bilingual (English-Spanish) staff shall assist all agricultural 
workers, upon request, to understand the terms and conditions of 
employment set forth in intrastate and interstate job orders and shall 
provide such workers with checklists in Spanish showing wage payment 
schedules, working conditions and other material specifications of the 
job order.
    (i) No agricultural or food processing order shall be included in 
job bank listings available outside the local office commuting area 
unless the order has been processed according to requirements for 
intrastate or interstate clearance contained in this subpart. If the job 
bank for the local office area incorporates offices beyond the local 
office commuting area, the order may be included in the listing but must 
be

[[Page 436]]

clearly designated as prohibiting referral from outside the community 
area, unless the requirements of this subpart are met.
    (j) If the labor supply State agency accepts a clearance order, the 
State agency shall actively recruit workers for referral. In the event a 
potential labor supply State agency rejects a clearance order, the 
reasons for rejection shall be documented and submitted to the Regional 
Administrator having jurisdiction over the State agency. The Regional 
Administrator will examine the reasons for rejection, and, if the 
Regional Administrator agrees, will inform the Regional Administrator 
with jurisdiction over the order-holding State agency of the rejection 
and the justifiable reasons. If the Regional Administrator who receives 
the notification of rejection does not concur with the reasons for 
rejection, that Regional Administrator will so inform the USES 
Administrator, who will make a final determination on the acceptance or 
rejection of the order.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39466, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 653.502  Changes in crop and recruitment situations.

    (a) If a labor demand State agency learns that a crop is maturing 
earlier than expected or that other material factors, including weather 
conditions and recruitment levels, have changed, the agency shall 
immediately contact the labor supply State agency, who shall in turn 
immediately inform crews and families scheduled through the JS clearance 
system of the changed circumstances and adjust arrangements on behalf of 
such crews of families.
    (b) When there is a delay in the date of need, procedures required 
of employers and workers at Sec. 653.501(d)(2)(v) shall be followed. 
State agencies shall document notifications by employers and contacts by 
individual migrant workers or crew leaders on behalf of migrant workers 
or family heads on behalf of migrant family members to verify the date 
of need.
    (c) In addition, if weather conditions, overrecruitment or other 
conditions have eliminated the scheduled job opportunities, the State 
agencies involved shall make every effort to place the workers in 
alternate job opportunities as soon as possible, especially if the 
worker(s) is already enroute or at the job site. JS staff shall keep 
records of actions under this section.



Sec. 653.503  Field checks.

    (a) The State agency, through its local offices or otherwise, shall 
conduct random, unannounced field checks at a significant number of 
agricultural worksites to which JS placements have been made through the 
intrastate or interstate clearance system. These field checks shall 
include visit(s) to the worksite at a time when workers are there. Both 
the employees and the employer shall be consulted, and JS shall 
determine and document whether wages, hours, working and housing 
conditions are as specified in job orders. JS staff shall keep records 
of all field checks. If State agency personnel observe or receive 
information, or otherwise have reason to believe that conditions are not 
as stated on the job order or that an employer is violating an 
employment related law, the State agency shall document the finding and 
attempt informal resolution. If the matter has not been resolved within 
5 working days, the State agency shall follow the procedures set forth 
at subpart F of part 658 of this chapter. Violations of employment 
related laws shall be referred to appropriate enforcement agencies in 
writing.
    (b) State agencies, to the maximum extent possible, shall make 
formal or informal arrangements with appropriate State and Federal 
enforcement agencies pursuant to which such agencies will agree to 
conduct compliance reviews in their areas of enforcement responsibility 
at agricultural worksites where the State agency has placed workers 
through the agricultural clearance system and to inform the State agency 
if violations are found. An enforcement agency compliance review shall 
satisfy the requirement for State agency field checks where all aspects 
of wages, hours, working and housing conditions have been reviewed by 
the

[[Page 437]]

enforcement agency reviews. The State agency shall supplement 
enforcement agency efforts with field checks focusing on areas not 
addressed by enforcement agencies. State agencies shall report 
difficulties in making such formal or informal arrangements with State 
enforcement agencies as well as deficiencies in State enforcement agency 
activities to the Regional Farm Labor Coordinated Enforcement Committee.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[46 FR 39466, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



PART 654--SPECIAL RESPONSIBILITIES OF THE EMPLOYMENT SERVICE SYSTEM--Table of Contents




         Subpart A--Responsibilities Under Executive Order 12073

Sec.
654.1  Purpose of subpart.
654.3  Description of Executive Order 12073.
654.4  Definitions.
654.5  Classification of labor surplus areas.
654.6  Termination of classification.
654.7  Publication of area classifications.
654.8  Services to firms and individuals in labor surplus areas.
654.9  Filing of complaints.
654.10  Transition provisions.

         Subpart B--Responsibilities Under Executive Order 10582

654.11  Purpose of subpart.
654.12  Description of Executive Order 10582.
654.13  Determination of areas of substantial unemployment.
654.14  Filing of complaints.

                        Subparts C-D  [Reserved]

               Subpart E--Housing for Agricultural Workers

                        Purpose and Applicability

654.400  Scope and purpose.
654.401  Applicability; transitional provisions.
654.402  Variances.
654.403  Conditional access to the intrastate or interstate clearance 
          system.

                            Housing Standards

654.404  Housing site.
654.405  Water supply.
654.406  Excreta and liquid waste disposal.
654.407  Housing.
654.408  Screening.
654.409  Heating.
654.410  Electricity and lighting.
654.411  Toilets.
654.412  Bathing, laundry, and handwashing.
654.413  Cooking and eating facilities.
654.414  Garbage and other refuse.
654.415  Insect and rodent control.
654.416  Sleeping facilities.
654.417  Fire, safety, and first aid.

    Source:  44 FR 1689, Jan. 5, 1979, unless otherwise noted.



         Subpart A--Responsibilities Under Executive Order 12073

    Authority:  41 U.S.C. 10a et seq; 29 U.S.C. 49 et seq; 15 U.S.C. 
644(n); E.O. 12073; 10582, as amended by E.O. 11051 and 12148.



Sec. 654.1  Purpose of subpart.

    This subpart implements the responsibilities of the Secretary of 
Labor in classifying labor surplus areas in accordance with Executive 
Order 12073 (Federal Procurement in Labor Surplus Areas). The Secretary 
of Labor has delegated responsibilities to the Assistant Secretary, 
Employment and Training Administration.
[44 FR 1689, Jan. 5, 1979, as amended at 48 FR 15616, Apr. 12, 1983]



Sec. 654.3  Description of Executive Order 12073.

    Executive Order 12073 requires executive agencies to emphasize 
procurement set-asides in labor surplus areas. The Secretary of Labor is 
responsible under this order for classifying and designating labor 
surplus areas.
[44 FR 1689, Jan. 5, 1979, as amended at 48 FR 15616, Apr. 12, 1983]



Sec. 654.4  Definitions.

    (a) Assistant Secretary shall mean Assistant Secretary for 
Employment and Training, U.S. Department of Labor.
    (b) Civil jurisdiction shall mean:
    (1) Cities of 25,000 or more population on the basis of the most 
recently available Bureau of the Census estimates; or
    (2) Towns and townships in the States of New Jersey, New York, 
Michigan, and Pennsylvania of 25,000 or more population and which 
possess

[[Page 438]]

powers and functions similar to cities; or
    (3) All counties, except those counties which contain any of the 
types of political jurisdictions defined in paragraphs (b) (1) and (2) 
of this section; or
    (4) All other counties are defined as ``balance of county'' (i.e., 
total county less component cities and townships identified in 
paragraphs (b) (1) and (2) of this section); or
    (5) County equivalents which are towns in the States of 
Massachusetts, Rhode Island and Connecticut.
    (c) Labor surplus area shall mean a civil jurisdiction that, in 
accordance with the criteria specified in Sec. 654.5, has been 
classified as a labor surplus area.
    (d) Reference period shall mean the two year period ending December 
31 of the year prior to the October 1 annual date of eligibility 
determination.
[44 FR 1689, Jan. 5, 1979, as amended at 44 FR 26071, May 5, 1979; 48 FR 
15616, Apr. 12, 1983; 53 FR 23347, June 21, 1988]



Sec. 654.5  Classification of labor surplus areas.

    (a) Basic criteria. The Assistant Secretary shall classify a civil 
jurisdiction as a labor surplus area whenever, as determined by the 
Bureau of Labor Statistics, the average unemployment rate for all 
civilian workers in the civil jurisdiction for the reference period is 
(1) 120 percent of the national average unemployment rate for civilian 
workers or higher for the reference period as determined by the Bureau 
of Labor Statistics, or (2) 10 percent or higher. No civil jurisdiction 
shall be classified as a labor surplus area if the average unemployment 
rate for all civilian workers for the reference period is less than 6.0 
percent.
    (b) Criteria for exceptional circumstances. The Assistant Secretary, 
upon petition submitted by the appropriate State employment security 
agency, may classify a civil jurisdiction, a Metropolitan Statistical 
Area, or a Primary Metropolitan Statistical Area as a labor surplus area 
whenever such an area meets or is expected to meet the unemployment 
tests established under Sec. 654.5(a) as a result of exceptional 
circumstances. For purposes of this paragraph ``exceptional 
circumstances'' shall mean catastrophic events, such as natural 
disasters, plant closings, and contract cancellations expected to have a 
long-term impact on labor market area conditions, discounting temporary 
or seasonal factors. For purposes of this paragraph, ``Metropolitan 
Statistical Area'' and ``Primary Metropolitan Statistical Area'' shall 
mean the areas officially defined and designated as such by the Office 
of Management and Budget.

(Approved by OMB under control number 1205-0207)

[48 FR 15616, Apr. 12, 1983, as amended at 53 FR 23347, June 21, 1988]



Sec. 654.6  Termination of classification.

    (a) Basic procedure. The Assistant Secretary shall terminate the 
classification of a civil jurisdiction as a labor surplus area after any 
year in which the Assistant Secretary determines that the criteria 
established under Sec. 654.5 (a) are no longer met.
    (b) Procedure for exceptional circumstances. The Assistant Secretary 
shall terminate the classification of a civil jurisdiction classified as 
a labor surplus area pursuant to the provisions of Sec. 654.5(b) after 
any year in which the Assistant Secretary determines that the 
exceptional circumstances criteria of that paragraph are no longer met.
[44 FR 1689, Jan. 5, 1979, as amended at 48 FR 15616, Apr. 12, 1983]



Sec. 654.7  Publication of area classifications.

    The Assistant Secretary shall publish annually a list of labor 
surplus areas together with geographic descriptions thereof. The 
Assistant Secretary periodically may cause these lists to be published 
in the Federal Register.
[44 FR 1689, Jan. 5, 1979, as amended at 48 FR 15616, Apr. 12, 1983]



Sec. 654.8  Services to firms and individuals in labor surplus areas.

    To carry out the purposes and policy objectives of Executive Order 
12073 and Executive Order 10582, the Assistant Secretary shall cooperate 
with and assist the State employment service agencies and the Secretary 
of Commerce, as appropriate, to:

[[Page 439]]

    (a) Provide relevant labor market data and related economic 
information to assist in the initiation of industrial expansion programs 
in labor surplus areas;
    (b) Identify upon request the skills and numbers of unemployed 
persons available for work in labor surplus areas, providing such 
information to firms interested in establishing new plants and 
facilities or expanding existing plants and facilities in such areas;
    (c) Identify the occupational composition and skill requirements of 
industries contemplating locating in labor surplus areas and make such 
information available to training and apprenticeship agencies and 
resources in the community for purposes of appropriate training and 
skill development;
    (d) Identify unemployed individuals in need of, and having the 
potential for, training in occupations and skills required by new or 
expanding industries and refer such individuals to appropriate training 
opportunities;
    (e) Receive job openings on a voluntary basis and/or under the 
mandatory listing program provided by 38 U.S.C. 2012 and Executive Order 
11701 and refer qualified unemployed workers to such openings, making 
appropriate efforts to refer to such openings qualified individuals who 
reside in the labor surplus area.
[44 FR 1689, Jan. 5, 1979, as amended at 48 FR 15616, Apr. 12, 1983]



Sec. 654.9  Filing of complaints.

    Complaints alleging that the Department of Labor has violated the 
labor surplus area regulations should be mailed to the Assistant 
Secretary for Employment and Training, U.S. Department of Labor, 
Washington, DC 20210. Such complaints should include: (a) The 
allegations of wrongdoing; (b) the date of the incident; and (c) any 
other relevant information available to the complainant. The Assistant 
Secretary shall make a determination and respond to the complainant 
after investigation of the incident. If the complaint is not resolved 
following this investigation, the Assistant Secretary, at his 
discretion, may offer, in writing by certified mail, the complainant a 
hearing before a Department of Labor Administrative Law Judge, provided 
that the complainant requests such a hearing from the Assistant 
Secretary within 20 working days of the certified date of receipt of the 
Assistant Secretary's offer of a hearing.
[48 FR 15616, Apr. 12, 1983]



Sec. 654.10  Transition provisions.

    The annual list of labor surplus areas for the period June 1, 1982, 
through May 31, 1983, shall be extended through September 30, 1983.
[48 FR 15616, Apr. 12, 1983]



         Subpart B--Responsibilities Under Executive Order 10582

    Authority:  41 U.S.C. 10a et seq.; 29 U.S.C. 49 et seq.; 15 U.S.C. 
644(n); E.O. 12073, E.O. 10582 as amended by E.O. 11051 and 12148.



Sec. 654.11  Purpose of subpart.

    This subpart implements the responsibilities of the Secretary of 
Labor in determining areas of substantial unemployment in accordance 
with Executive Order 10582 issued pursuant to the Buy American Act, 41 
U.S.C. 10a et seq.



Sec. 654.12  Description of Executive Order 10582.

    (a) Under the Buy American Act, heads of executive agencies are 
required to determine, as a condition precedent to the purchase by their 
agencies of materials of foreign origin for public use within the United 
States, (1) that the price of like materials of domestic origin is 
unreasonable, or (2) that the purchase of like materials of domestic 
origin is inconsistent with the public interest.
    (b) Section 3(c) of Executive Order 10582 issued pursuant to the Buy 
American Act permits executive agencies to reject a bid or offer to 
furnish materials of foreign origin in any situation in which the 
domestic supplier, offering the lowest price for furnishing the desired 
materials, undertakes to produce substantially all of the materials in 
areas of substantial unemployment, as determined by the Secretary of 
Labor.

[[Page 440]]



Sec. 654.13  Determination of areas of substantial unemployment.

    An area of substantial unemployment, for purposes of Executive Order 
10582, shall be any area classified as a labor surplus area at 
Sec. 654.5 of this part pursuant to the procedures set forth at subpart 
A of this part.



Sec. 654.14  Filing of complaints.

    Complaints arising under subpart B of this part alleging that the 
Department of Labor has violated the labor surplus area regulations 
shall be made pursuant to the procedures set forth at Sec. 654.9 of this 
part.
[48 FR 15616, Apr. 12, 1983]



                         Subparts C-D [Reserved]



               Subpart E--Housing for Agricultural Workers

    Authority:  29 U.S.C. 49k; 8 U.S.C. 1186(c)(4); 41 Op. A.G. 406 
(1959).

    Source:  45 FR 14182, Mar. 4, 1980, unless otherwise noted.

                        Purpose and Applicability



Sec. 654.400  Scope and purpose.

    (a) This subpart sets forth the Employment and Training 
Administration standards for agricultural housing. Local Job Service 
offices, as part of the State employment service agencies and in 
cooperation with the United States Employment Service, assist employers 
in recruiting agricultural workers from places outside the area of 
intended employment. The experiences of the employment service indicate 
that employees so referred have on many occasions been provided with 
inadequate, unsafe, and unsanitary housing conditions. To discourage 
this practice, it is the policy of the Federal-State employment service 
system, as set forth in Sec. 653.108 of this chapter, to deny its 
intrastate and interstate recruitment services to employers until the 
State employment service agency has ascertained that the employer's 
housing meets certain standards.
    (b) To implement this policy, Sec. 653.108 of this chapter provides 
that recruitment services shall be denied unless the employer has signed 
an assurance, a preoccupancy inspection has been conducted and the ES 
staff has ascertained that, with respect to intrastate clearance, if the 
workers are to be housed, the employer's housing meets or, with respect 
to interstate clearance, that the employer will provide housing for the 
workers which meets either the full set of standards set forth at 29 CFR 
1910.142 or the full set of standards set forth in this subpart. 
Whichever is applicable under the criteria set forth in Sec. 654.401; 
except that for mobile range housing for sheepherders, the housing shall 
meet existing Departmental guidelines.
[45 FR 14182, Mar. 4, 1980; 45 FR 22901, Apr. 4, 1980]



Sec. 654.401  Applicability; transitional provisions.

    (a) Employers whose housing was constructed in accordance with the 
ETA housing standards may continue to follow the full set of ETA 
standards set forth in this subpart only where prior to April 3, 1980 
the housing was completed or under construction, or where prior to March 
4, 1980 a contract for the construction of the specific housing was 
signed.
    (b) To effectuate these transitional provisions, agricultural 
housing to which this subpart applies and which complies with the full 
set of standards set forth in this subpart shall be considered to be in 
compliance with the Occupational Safety and Health Administration 
temporary labor camp standards at 29 CFR 1910.142.



Sec. 654.402  Variances.

    (a) An employer may apply for a permanent, structural variance from 
a specific standard(s) in this subpart by filing a written application 
for such a variance with the local Job Service office serving the area 
in which the housing is located. This application must be filed by June 
2, 1980 and must:
    (1) Clearly specify the standard(s) from which the variance is 
desired;
    (2) Provide adequate justification that the variance is necessary to 
obtain a beneficial use of an existing facility, and to prevent a 
practical difficulty or unnecessary hardship; and
    (3) Clearly set forth the specific alternative measures which the 
employer

[[Page 441]]

has taken to protect the health and safety of workers and adequately 
show that such alternative measures have achieved the same result as the 
standard(s) from which the employer desires the variance.
    (b) Upon receipt of a written request for a variance under paragraph 
(a) of this section, the local Job Service office shall send the request 
to the State office which, in turn, shall forward it to the Regional 
Administrator, Employment and Training Administration (RA). The RA shall 
review the matter and, after consultation with OSHA, shall either grant 
or deny the request for a variance.
    (c) The variance granted by the RA shall be in writing, shall state 
the particular standard(s) involved, and shall state as conditions of 
the variance the specific alternative measures which have been taken to 
protect the health and safety of the workers. The RA shall send the 
approved variance to the employer and shall send copies to the Regional 
Administrator of the Occupational Safety and Health Administration, the 
Regional Administrator of the Employment Standards Administration, and 
the appropriate State agency and the local Job Service office. The 
employer shall submit and the local Job Service office shall attach 
copies of the approved variance to each of the employer's job orders 
which is placed into intrastate or interstate clearance.
    (d) If the RA denies the request for a variance, the RA shall 
provide written notice stating the reasons for the denial to the 
employer, the appropriate State agency and the local Job Service office. 
The notice shall also offer the employer an opportunity to request a 
hearing before a DOL Hearing Officer, provided the employer requests 
such a hearing from the RA within 30 calendar days of the date of the 
notice. The request for a hearing shall be handled in accordance with 
the employment service complaint procedures set forth at Secs. 658.421 
(i) and (j), 658.422 and 658.423 of this chapter.
    (e) The procedures of paragraphs (a) through (d) of this section 
shall only apply to an employer who has chosen, as evidenced by its 
written request for a variance, to comply with the ETA housing standards 
at Secs. 654.404--654.417 of this subpart.



Sec. 654.403  Conditional access to the intrastate or interstate clearance system.

    (a) Filing requests for conditional access--(1) ``Noncriteria'' 
employers. Except as provided in paragraph (a)(2) of this section, an 
employer whose housing does not meet applicable standards may file with 
the local Job Service office serving the area in which its housing is 
located, a written request that its job orders be conditionally allowed 
into the intrastate or interstate clearance system, provided that the 
employer's request assures that its housing will be in full compliance 
with the requirements of the applicable housing standards at least 30 
calendar days (giving the specific date) before the housing is to be 
occupied.
    (2) ``Criteria'' employers. If the request for conditional access 
described in paragraph (a)(1) of this section is from an employer filing 
a job order pursuant to an application for temporary alien agricultural 
labor certification for H-2A alien agricultural workers or H-2 alien 
workers under subpart B or subpart C, respectively, of part 655 of this 
chapter, the request shall be filed with the RA as an attachment to the 
application for temporary alien agricultural labor certification.
    (3) Assurance. The employer's request pursuant to paragraphs (a)(1) 
or (a)(2) of this section shall contain an assurance that the housing 
will be in full compliance with the applicable housing standards at 
least 30 calendar days (stating the specific date) before the housing is 
to be occupied.
    (b) Processing requests--(1) State agency processing. Upon receipt 
of a written request for conditional access to the intrastate or 
interstate clearance system under paragraph (a)(1) of this section, the 
local Job Service office shall send the request to the State office, 
which, in turn, shall forward it to the Regional Administrator, 
Employment and Training Administration, (RA).
    (2) Reqional office processing and determination. Upon receipt of a 
request for conditional access pursuant to paragraph (a)(2) or paragraph 
(b)(1) of this section, the RA shall review the matter

[[Page 442]]

and, as appropriate, shall either grant or deny the request.
    (c) Authorization. The authorization for conditional access to the 
intrastate or interstate clearance system shall be in writing, and shall 
state that although the housing does not comply with the applicable 
standards, the employer's job order may be placed into intrastate or 
interstate clearance until a specified date. The RA shall send the 
authorization to the employer and shall send copies to the appropriate 
State agency and local Job Service office. The employer shall submit and 
the local Job Service shall attach copies of the authorization to each 
of the employer's job orders which is placed into intrastate or 
interstate clearance.
    (d) Notice of denial. If the RA denies the request for conditional 
access to the intrastate or interstate clearance system, the RA shall 
provide written notice to the employer, the appropriate State agency, 
and the local Job Service office, stating the reasons for the denial.
    (e) Inspection. (1) The local Job Service office serving the area 
containing the housing of any employer granted conditional access to the 
intrastate or interstate clearance system shall assure that the housing 
is inspected no later than the date by which the employer has promised 
to have its housing in compliance with the requirements of this subpart. 
An employer, however, may request an earlier preliminary inspection. If, 
on the date set forth in the authorization, the housing is not in full 
compliance with the applicable housing standards as assured in the 
request for conditional access, the local Job Service office shall 
afford the employer five calendar days to bring the housing into full 
compliance. After the five-calendar-day period, if the housing is not in 
full compliance with the applicable housing standards as assured in the 
request for conditional access, the local Job Service office 
immediately:
    (i) Shall notify the RA;
    (ii) Shall remove the employer's job orders from intrastate and 
interstate clearance; and
    (iii) Shall, if workers have been recruited against these orders, in 
cooperation with the employment service agencies in other States, make 
every reasonable attempt to locate and notify the appropriate crew 
leaders or workers, and to find alternative and comparable employment 
for the workers.
[52 FR 20506, June 1, 1987]

                            Housing Standards



Sec. 654.404  Housing site.

    (a) Housing sites shall be well drained and free from depressions in 
which water may stagnate. They shall be located where the disposal of 
sewage is provided in a manner which neither creates nor is likely to 
create a nuisance, or a hazard to health.
    (b) Housing shall not be subject to, or in proximity to conditions 
that create or are likely to create offensive odors, flies, noise, 
traffic, or any similar hazards.
    (c) Grounds within the housing site shall be free from debris, 
noxious plants (poison ivy, etc.) and uncontrolled weeds or brush.
    (d) The housing site shall provide a space for recreation reasonably 
related to the size of the facility and the type of occupancy.



Sec. 654.405  Water supply.

    (a) An adequate and convenient supply of water that meets the 
standards of the State health authority shall be provided.
    (b) A cold water tap shall be available within 100 feet of each 
individual living unit when water is not provided in the unit. Adequate 
drainage facilities shall be provided for overflow and spillage.
    (c) Common drinking cups shall not be permitted.



Sec. 654.406  Excreta and liquid waste disposal.

    (a) Facilities shall be provided and maintained for effective 
disposal of excreta and liquid waste. Raw or treated liquid waste shall 
not be discharged or allowed to accumulate on the ground surface.
    (b) Where public sewer systems are available, all facilities for 
disposal of excreta and liquid wastes shall be connected thereto.

[[Page 443]]

    (c) Where public sewers are not available, a subsurface septic tank-
seepage system or other type of liquid waste treatment and disposal 
system, privies or portable toilets shall be provided. Any requirements 
of the State health authority shall be complied with.



Sec. 654.407  Housing.

    (a) Housing shall be structurally sound, in good repair, in a 
sanitary condition and shall provide protection to the occupants against 
the elements.
    (b) Housing shall have flooring constructed of rigid materials, 
smooth finished, readily cleanable, and so located as to prevent the 
entrance of ground and surface water.
    (c) The following space requirements shall be provided:
    (1) For sleeping purposes only in family units and in dormitory 
accommodations using single beds, not less than 50 square feet of floor 
space per occupant;
    (2) For sleeping purposes in dormitory accommodations using double 
bunk beds only, not less than 40 square feet per occupant;
    (3) For combined cooking, eating, and sleeping purposes not less 
than 60 square feet of floor space per occupant.
    (d) Housing used for families with one or more children over 6 years 
of age shall have a room or partitioned sleeping area for the husband 
and wife. The partition shall be of rigid materials and installed so as 
to provide reasonable privacy.
    (e) Separate sleeping accommodations shall be provided for each sex 
or each family.
    (f) Adequate and separate arrangements for hanging clothing and 
storing personal effects for each person or family shall be provided.
    (g) At least one-half of the floor area in each living unit shall 
have a minimum ceiling height of 7 feet. No floor space shall be counted 
toward minimum requirements where the ceiling height is less than 5 
feet.
    (h) Each habitable room (not including partitioned areas) shall have 
at least one windown or skylight opening directly to the out-of-doors. 
The minimum total window or skylight area, including windows in doors, 
shall equal at least 10 percent of the usable floor area. The total 
openable area shall equal at least 45 percent of the minimum window or 
skylight area required, except where comparably adequate ventilation is 
supplied by mechanical or some other method.



Sec. 654.408  Screening.

    (a) All outside openings shall be protected with screening of not 
less than 16 mesh.
    (b) All screen doors shall be tight fitting, in good repair, and 
equipped with self-closing devices.



Sec. 654.409  Heating.

    (a) All living quarters and service rooms shall be provided with 
properly installed, operable heating equipment capable of maintaining a 
temperature of at least 68 deg. F. if during the period of normal 
occupancy the temperature in such quarters falls below 68 deg..
    (b) Any stoves or other sources of heat utilizing combustible fuel 
shall be installed and vented in such a manner as to prevent fire 
hazards and a dangerous concentration of gases. No portable heaters 
other than those operated by electricity shall be provided. If a solid 
or liquid fuel stove is used in a room with wooden or other combustible 
flooring, there shall be a concrete slab, insulated metal sheet, or 
other fireproof material on the floor under each stove, extending at 
least 18 inches beyond the perimeter of the base of the stove.
    (c) Any wall or ceiling within 18 inches of a solid or liquid fuel 
stove or a stovepipe shall be of fireproof material. A vented metal 
collar shall be installed around a stovepipe, or vent passing through a 
wall, ceiling, floor or roof.
    (d) When a heating system has automatic controls, the controls shall 
be of the type which cut off the fuel supply upon the failure or 
interruption of the flame or ignition, or whenever a predetermined safe 
temperature or pressure is exceeded.
[45 FR 14182, Mar. 4, 1980; 45 FR 22901, Apr. 4, 1980]



Sec. 654.410  Electricity and lighting.

    (a) All housing sites shall be provided with electric service.
    (b) Each habitable room and all common use rooms, and areas such as:

[[Page 444]]

Laundry rooms, toilets, privies, hallways, stairways, etc., shall 
contain adequate ceiling or wall-type light fixtures. At least one wall-
type electrical convenience outlet shall be provided in each individual 
living room.
    (c) Adequate lighting shall be provided for the yard area, and 
pathways to common use facilities.
    (d) All wiring and lighting fixtures shall be installed and 
maintained in a safe condition.



Sec. 654.411  Toilets.

    (a) Toilets shall be constructed, located and maintained so as to 
prevent any nuisance or public health hazard.
    (b) Water closets or privy seats for each sex shall be in the ratio 
of not less than one such unit for each 15 occupants, with a minimum of 
one unit for each sex in common use facilities.
    (c) Urinals, constructed of nonabsorbent materials, may be 
substituted for men's toilet seats on the basis of one urinal or 24 
inches of trough-type urinal for one toilet seat up to a maximum of one-
third of the required toilet seats.
    (d) Except in individual family units, separate toilet 
accommodations for men and women shall be provided. If toilet facilities 
for men and women are in the same building, they shall be separated by a 
solid wall from floor to roof or ceiling. Toilets shall be distinctly 
marked ``men'' and ``women'' in English and in the native language of 
the persons expected to occupy the housing.
    (e) Where common use toilet facilities are provided, an adequate and 
accessible supply of toilet tissue, with holders, shall be furnished.
    (f) Common use toilets and privies shall be well lighted and 
ventilated and shall be clean and sanitary.
    (g) Toilet facilities shall be located within 200 feet of each 
living unit.
    (h) Privies shall not be located closer than 50 feet from any living 
unit or any facility where food is prepared or served.
    (i) Privy structures and pits shall be fly tight. Privy pits shall 
have adequate capacity for the required seats.



Sec. 654.412  Bathing, laundry, and handwashing.

    (a) Bathing and handwashing facilities, supplied with hot and cold 
water under pressure, shall be provided for the use of all occupants. 
These facilities shall be clean and sanitary and located within 200 feet 
of each living unit.
    (b) There shall be a minimum of 1 showerhead per 15 persons. 
Showerheads shall be spaced at least 3 feet apart, with a minimum of 9 
square feet of floor space per unit. Adequate, dry dressing space shall 
be provided in common use facilities. Shower floors shall be constructed 
of nonabsorbent nonskid materials and sloped to properly constructed 
floor drains. Except in individual family units, separate shower 
facilities shall be provided each sex. When common use shower facilities 
for both sexes are in the same building they shall be separated by a 
solid nonabsorbent wall extending from the floor to ceiling, or roof, 
and shall be plainly designated ``men'' or ``women'' in English and in 
the native language of the persons expected to occupy the housing.
    (c) Lavatories or equivalent units shall be provided in a ratio of 1 
per 15 persons.
    (d) Laundry facilities, supplied with hot and cold water under 
pressure, shall be provided for the use of all occupants. Laundry trays 
or tubs shall be provided in the ratio of 1 per 25 persons. Mechanical 
washers may be provided in the ratio of 1 per 50 persons in lieu of 
laundry trays, although a minimum of 1 laundry tray per 100 persons 
shall be provided in addition to the mechanical washers.



Sec. 654.413  Cooking and eating facilities.

    (a) When workers or their families are permitted or required to cook 
in their individual unit, a space shall be provided and equipped for 
cooking and eating. Such space shall be provided with:
    (1) A cookstove or hot plate with a minimum of two burners; and (2) 
adequate food storage shelves and a counter for food preparation; and 
(3) provisions for mechanical refrigeration of food at a temperature of 
not more than 45 deg. F.; and (4) a table and chairs or

[[Page 445]]

equivalent seating and eating arrangements, all commensurate with the 
capacity of the unit; and (5) adequate lighting and ventilation.
    (b) When workers or their families are permitted or required to cook 
and eat in a common facility, a room or building separate from the 
sleeping facilities shall be provided for cooking and eating. Such room 
or building shall be provided with:
    (1) Stoves or hot plates, with a minimum equivalent of two burners, 
in a ratio of 1 stove or hot plate to 10 persons, or 1 stove or hot 
plate to 2 families; and (2) adequate food storage shelves and a counter 
for food preparation; and (3) mechanical refrigeration for food at a 
temperature of not more than 45 deg. F.; and (4) tables and chairs or 
equivalent seating adequate for the intended use of the facility; and 
(5) adequate sinks with hot and cold water under pressure; and (6) 
adequate lighting and ventilation; and (7) floors shall be of 
nonabsorbent, easily cleaned materials.
    (c) When central mess facilities are provided, the kitchen and mess 
hall shall be in proper proportion to the capacity of the housing and 
shall be separate from the sleeping quarters. The physical facilities, 
equipment and operation shall be in accordance with provisions of 
applicable State codes.
    (d) Wall surface adjacent to all food preparation and cooking areas 
shall be of nonabsorbent, easily cleaned material. In addition, the wall 
surface adjacent to cooking areas shall be of fire-resistant material.



Sec. 654.414  Garbage and other refuse.

    (a) Durable, fly-tight, clean containers in good condition of a 
minimum capacity of 20 gallons, shall be provided adjacent to each 
housing unit for the storage of garbage and other refuse. Such 
containers shall be provided in a minimum ratio of 1 per 15 persons.
    (b) Provisions shall be made for collection of refuse at least twice 
a week, or more often if necessary. The disposal of refuse, which 
includes garbage, shall be in accordance with State and local law.



Sec. 654.415  Insect and rodent control.

    Housing and facilities shall be free of insects, rodents, and other 
vermin.



Sec. 654.416  Sleeping facilities.

    (a) Sleeping facilities shall be provided for each person. Such 
facilities shall consist of comfortable beds, cots, or bunks, provided 
with clean mattresses.
    (b) Any bedding provided by the housing operator shall be clean and 
sanitary.
    (c) Triple deck bunks shall not be provided.
    (d) The clear space above the top of the lower mattress of a double 
deck bunk and the bottom of the upper bunk shall be a minimum of 27 
inches. The distance from the top of the upper mattress to the ceiling 
shall be a minimum of 36 inches.
    (e) Beds used for double occupancy may be provided only in family 
accommodations.



Sec. 654.417  Fire, safety, and first aid.

    (a) All buildings in which people sleep or eat shall be constructed 
and maintained in accordance with applicable State or local fire and 
safety laws.
    (b) In family housing and housing units for less than 10 persons, of 
one story construction, two means of escape shall be provided. One of 
the two required means of escape may be a readily accessible window with 
an openable space of not less than 24 x 24 inches.
    (c) All sleeping quarters intended for use by 10 or more persons, 
central dining facilities, and common assembly rooms shall have at least 
two doors remotely separated so as to provide alternate means of escape 
to the outside or to an interior hall.
    (d) Sleeping quarters and common assembly rooms on the second story 
shall have a stairway, and a permanent, affixed exterior ladder or a 
second stairway.
    (e) Sleeping and common assembly rooms located above the second 
story shall comply with the State and local fire and building codes 
relative to multiple story dwellings.
    (f) Fire extinguishing equipment shall be provided in a readily 
accessible place located not more than 100 feet

[[Page 446]]

from each housing unit. Such equipment shall provide protection equal to 
a 2\1/2\ gallon stored pressure or 5-gallon pump-type water 
extinguisher.
    (g) First aid facilities shall be provided and readily accessible 
for use at all time. Such facilities shall be equivalent to the 16 unit 
first aid kit recommended by the American Red Cross, and provided in a 
ratio of 1 per 50 persons.
    (h) No flammable or volatile liquids or materials shall be stored in 
or adjacent to rooms used for living purposes, except for those needed 
for current household use.
    (i) Agricultural pesticides and toxic chemicals shall not be stored 
in the housing area.



PART 655--TEMPORARY EMPLOYMENT OF ALIENS IN THE UNITED STATES--Table of Contents




Sec.
655.0  Scope and purpose of part.
655.00  Authority of the Regional Administrator under subparts A, B, and 
          C.

   Subpart A--Labor Certification Process for Temporary Employment in 
 Occupations Other Than Agriculture, Logging, or Registered Nursing in 
                    the United States (H-2B Workers)

655.1  Scope and purpose of subpart A.
655.2  Applications.
655.3  Determinations.
655.4  Territory of Guam.

   Subpart B--Labor Certification Process for Temporary Agricultural 
             Employment in the United States (H-2A Workers)

655.90  Scope and purpose of subpart B.
655.92  Authority of the Regional Administrator.
655.93  Special circumstances.
655.100  Overview of subpart and definition of terms.
655.101  Temporary alien agricultural labor certification applications.
655.102  Contents of job offers.
655.103  Assurances.
655.104  Determinations based on acceptability of H-2A applications.
655.105  Recruitment period.
655.106  Referral of U.S. workers; determinations based on U.S. worker 
          availability and adverse effect; activities after receipt of 
          the temporary alien agricultural labor certification.
655.107  Adverse effect wage rates (AEWRs).
655.108  H-2A applications involving fraud or willful misrepresentation.
655.110  Employer penalties for noncompliance with terms and conditions 
          of temporary alien agricultural labor certifications.
655.111  Petition for higher meal charges.
655.112  Administrative review and de novo hearing before an 
          administrative law judge.
655.113  Job Service Complaint System; enforcement of work contracts.

Subpart C--Labor Certification Process for Logging Employment and Non-H-
                       2A Agricultural Employment

655.200  General description of this subpart and definition of terms.
655.201  Temporary labor certification applications.
655.202  Contents of job offers.
655.203  Assurances.
655.204  Determinations based on temporary labor certification 
          applications.
655.205  Recruitment period.
655.206  Determinations of U.S. worker availability and adverse effect 
          on U.S. workers.
655.207  Adverse effect rates.
655.208  Temporary labor certification applications involving fraud or 
          willful misrepresentation.
655.209  Invalidation of temporary labor certifications.
655.210  Failure of employers to comply with the terms of a temporary 
          labor certification.
655.211  Petitions for higher meal charges.
655.212  Administrative-judicial reviews.
655.215  Territory of Guam.

   Subpart D--Attestations by Facilities Using Nonimmigrant Aliens as 
                            Registered Nurses

655.300  Purpose and scope of subparts D and E.
655.301  Overview of process.
655.302  Definitions.
655.310  Attestations.
655.315  State plans.
655.320  Appeals of acceptance and rejection of attestations submitted 
          for filing and of State plans.
655.350  Public access.

               Subpart E--Enforcement of H-1A Attestations

655.400  Enforcement authority of Administrator, Wage and Hour Division.
655.405  Complaints and investigative procedures.
655.410  Civil money penalties and other remedies.
655.415  Written notice and service of Administrator's determination.

[[Page 447]]

655.420  Request for hearing.
655.425  Rules of practice for administrative law judge proceedings.
655.430  Service and computation of time.
655.435  Administrative law judge proceedings.
655.440  Decision and order of administrative law judge.
655.445  Secretary's review of administrative law judge's decision.
655.450  Administrative record.
655.455  Notice to the Attorney General and the Employment and Training 
          Administration.
655.460  Non-applicability of the Equal Access to Justice Act.

    Subpart F--Attestations by Employers Using Alien Crewmembers for 
                   Longshore Activities in U.S. Ports

                           General Provisions

655.500  Purpose, procedure and applicability of subparts F and G of 
          this part.
655.501  Overview of responsibilities.
655.502  Definitions.
655.510  Employer attestations.
655.520  Special provisions regarding automated vessels.

                            Alaska Exception

655.530  Special provisions regarding the performance of longshore 
          activities at locations in the State of Alaska.
655.531  Who may submit attestations for locations in Alaska?
655.532  Where and when should attestations be submitted for locations 
          in Alaska?
655.533  What should be submitted for locations in Alaska?
655.534  The first attestation element for locations in Alaska: Bona 
          fide request for dispatch of United States longshore workers.
655.535  The second attestation element for locations in Alaska: 
          Employment of United States longshore workers.
655.536  The third attestation element for locations in Alaska: No 
          intention or design to influence bargaining representative 
          election.
655.537  The fourth attestation element for locations in Alaska: Notice 
          of filing.
655.538  Actions on attestations submitted for filing for locations in 
          Alaska.
655.539  Effective date and validity of filed attestations for locations 
          in Alaska.
655.540  Suspension or invalidation of filed attestations for locations 
          in Alaska.
655.541  Withdrawal of accepted attestations for locations in Alaska.

                              Public Access

655.550  Public access.

Appendix A to Subpart F--U.S. Seaports

  Subpart G--Enforcement of the Limitations Imposed on Employers Using 
        Alien Crewmembers for Longshore Activities in U.S. Ports

655.600  Enforcement authority of Administrator, Wage and Hour Division.
655.605  Complaints and investigative procedures.
655.610  Automated vessel exception to prohibition on utilization of 
          alien crewmember(s) to perform longshore activity(ies) at a 
          U.S. port.
655.615  Cease and desist order.
655.620  Civil money penalties and other remedies.
655.625  Written notice, service and Federal Register publication of 
          Administrator's determination.
655.630  Request for hearing.
655.635  Rules of practice for administrative law judge proceedings.
655.640  Service and computation of time.
655.645  Administrative law judge proceedings.
655.650  Decision and order of administrative law judge.
655.655  Secretary's review of administrative law judge's decision.
655.660  Administrative record.
655.665  Notice to the Attorney General and the Employment and Training 
          Administration.
655.670  Federal Register notice of determination of prevailing 
          practice.
655.675  Non-applicability of the Equal Access to Justice Act.

 Subpart H--Labor Condition Applications and Requirements for Employers 
   Using Nonimmigrants on H-1B Visas in Specialty Occupations and as 
                             Fashion Models

655.700  Purpose, procedure and applicability of subparts H and I.
655.705  Overview of responsibilities.
655.710  Complaints.
655.715  Definitions.
655.720  Addresses of Department of Labor regional offices.
655.730  Labor condition application.
655.731  The first labor condition statement: wages.
655.732  The second labor condition statement: working conditions.
655.733  The third labor condition statement: no strike or lockout.
655.734  The fourth labor condition statement: notice.
655.735  Special provisions for short-term placement of H-1B 
          nonimmigrants at place(s) of employment outside the area(s) of 
          intended employment listed on labor condition application.

[[Page 448]]

655.740  Labor condition application determinations.
655.750  Validity period of the labor condition application.
655.760  Public access; retention of records.

Appendix A to Subpart H--Guidance for Determination of the ``Actual 
          Wage''

       Subpart I--Enforcement of H-1B Labor Condition Applications

655.800  Enforcement authority of Administrator, Wage and Hour Division.
655.805  Complaints and investigative procedures.
655.810  Remedies.
655.815  Written notice and service of Administrator's determination.
655.820  Request for hearing.
655.825  Rules of practice for administrative law judge proceedings.
655.830  Service and computation of time.
655.835  Administrative law judge proceedings.
655.840  Decision and order of administrative law judge.
655.845  Secretary's review of administrative law judge's decision.
655.850  Administrative record.
655.855  Notice to the Employment and Training Administration and the 
          Attorney General.

 Subpart J--Attestations by Employers Using F-1 Students in Off-Campus 
                                  Work

655.900  Purpose, procedure and applicability of subparts J and K of 
          this part.
655.910  Overview of process.
655.920  Definitions.
655.930  Addresses of Department of Labor regional offices.
655.940  Employer attestations.
655.950  Public access.

Appendix A to Subpart J to Part 655--Documentation in Support of 
          Attestations Made by Employers

Subpart K--Enforcement of the Attestation Process for Attestations Filed 
         by Employers Utilizing F-1 Students in Off-campus Work

655.1000  Enforcement authority of Administrator, Wage and Hour 
          Division.
655.1005  Complaints and investigative procedures.
655.1010  Remedies.
655.1015  Written notice and service of Administrator's determination.
655.1020  Request for hearing.
655.1025  Rules of practice for administrative law judge proceedings.
655.1030  Service and computation of time.
655.1035  Administrative law judge proceedings.
655.1040  Decision and order of administrative law judge.
655.1045  Secretary's review of administrative law judge's decision.
655.1050  Administrative record.
655.1055  Notice to the Employment and Training Administration (ETA) and 
          the Attorney General (AG).
655.1060  Non-applicability of the Equal Access to Justice Act.

    Authority:  Section 655.0 issued under 8 U.S.C. 1101(a)(15)(H) (i) 
and (ii), 1182 (m) and (n), 1184, 1188, and 1288 (c) and (d); 29 U.S.C. 
49 et seq.; sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2103 (8 
U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8 
U.S.C. 1184 note); Pub. L. 103-206, 107 Stat 2419; and 8 CFR 
214.2(h)(4)(i).
    Section 655.00 issued under 8 U.S.C. 1101(a)(15)(H)(ii), 1184, and 
1188; 29 U.S.C. 49 et seq.; and 8 CFR 214.2(h)(4)(i).
    Subparts A and C issued under 8 U.S.C. 1101(a)(15)(H)(ii)(b) and 
1184; 29 U.S.C. 49 et seq.; and 8 CFR 214.2(h)(4)(i).
    Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184, and 
1188; and 29 U.S.C. 49 et seq.
    Subparts D and E issued under 8 U.S.C. 1101(a)(15)(H)(i)(a), 
1182(m), and 1184; 29 U.S.C. 49 et seq.; and sec. 3(c)(1), Pub. L. 101-
238, 103 Stat. 2099, 2103 (8 U.S.C. 1182 note).
    Subparts F and G issued under 8 U.S.C. 1184 and 1288 (c) and (d); 29 
U.S.C. 49 et seq.; and Pub. L. 103-206, 107 Stat 2419.
    Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b), 
1182(n), and 1184; 29 U.S.C. 49 et seq.; and sec. 303(a)(8), Pub. L. 
102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1182 note).
    Subparts J and K issued under 29 U.S.C. 49 et seq.; and sec. 221(a), 
Pub. L. 101-649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note).

    Source: 42 FR 45899, Sept. 13, 1977, unless otherwise noted.



Sec. 655.0  Scope and purpose of part.

    (a) Subparts A, B, and C. (1) General. Subparts A, B, and C of this 
part set out the procedures adopted by the Secretary to secure 
information sufficient to make factual determinations of: (i) Whether 
U.S. workers are available to perform temporary employment in the United 
States, for which an employer desires to employ nonimmigrant foreign 
workers, and (ii) whether the employment of aliens for such temporary 
work will adversely affect the wages or working conditions of similarly 
employed U.S. workers. These factual determinations (or a determination 
that there are not sufficient facts to make one or both of these 
determinations) are required to carry out the policies of

[[Page 449]]

the Immigration and Nationality Act (INA), that a nonimmigrant alien 
worker not be admitted to fill a particular temporary job opportunity 
unless no qualifed U.S. worker is available to fill the job opportunity, 
and unless the employment of the foreign worker in the job opportunity 
will not adversely affect the wages or working conditions of similarly 
employed U.S. workers.
    (a)(2) The Secretary's determinations. Before any factual 
determination can be made concerning the availability of U.S. workers to 
perform particular job opportunities, two steps must be taken. First, 
the minimum level of wages, terms, benefits, and conditions for the 
particular job opportunities, below which similarly employed U.S. 
workers would be adversely affected, must be established. (The 
regulations in this part establish such minimum levels for wages, terms, 
benefits, and conditions of employment.) Second, the wages, terms, 
benefits, and conditions offered and afforded to the aliens must be 
compared to the established minimum levels. If it is concluded that 
adverse effect would result, the ultimate determination of availability 
within the meaning of the INA cannot be made since U.S. workers cannot 
be expected to accept employment under conditions below the established 
minimum levels. Florida Sugar Cane League, Inc. v. Usery, 531 F. 2d 299 
(5th Cir. 1976).

Once a determination of no adverse effect has been made, the 
availability of U.S. workers can be tested only if U.S. workers are 
actively recruited through the offer of wages, terms, benefits, and 
conditions at least at the minimum level or the level offered to the 
aliens, whichever is higher. The regulations in this part set forth 
requirements for recruiting U.S. workers in accordance with this 
principle.
    (a)(3) Construction. This part and its subparts shall be construed 
to effectuate the purpose of the INA that U.S. workers rather than 
aliens be employed wherever possible. Elton Orchards, Inc. v. Brennan, 
508 F. 2d 493, 500 (1st Cir. 1974), Flecha v. Quiros, 567 F. 2d 1154 
(1st Cir. 1977). Where temporary alien workers are admitted, the terms 
and conditions of their employment must not result in a lowering of the 
terms and conditions of domestic workers similarly employed, Williams v. 
Usery, 531 F. 2d 305 (5th Cir. 1976); Florida Sugar Cane League, Inc. v. 
Usery, 531 F. 2d 299 (5th Cir. 1976), and the job benefits extended to 
any U.S. workers shall be at least those extended to the alien workers.
    (b) Subparts D and E. Subparts D and E of this part set forth the 
process by which health care facilities can file attestations with the 
Department of Labor for the purpose of employing or otherwise using 
nonimmigrant registered nurses under H-1A visas.
    (c) Subparts F and G. Subparts F and G of this part set forth the 
process by which employers can file attestations with the Department of 
Labor for the purpose of employing alien crewmembers in longshore work 
under D-visas and enforcement provisions relating thereto.
    (d) Subparts H and I of this part. Subparts H and I of this part set 
forth the process by which employers can file with, and the requirements 
for obtaining approval from, the Department of Labor of labor condition 
applications necessary for the purpose of petitioning INS for H-1B visas 
for aliens to be employed in specialty occupations or as fashion models 
of distinguished merit and ability, and the enforcement provisions 
relating thereto.
    (e) Subparts J and K of this part. Subparts J and K of this part set 
forth the process by which employers can file attestations with the 
Department of Labor for the purpose of employing nonimmigrant alien 
students on F-visas in off-campus employment and enforcement provisions 
relating thereto.
[43 FR 10312, Mar. 10, 1978, as amended at 52 FR 20507, June 1, 1987; 55 
FR 50510, Dec. 6, 1990; 56 FR 24667, May 30, 1991; 56 FR 54738, Oct. 22, 
1991; 56 FR 56875, Nov. 6, 1991; 57 FR 1337, Jan. 13, 1992; 57 FR 40989, 
Sept. 8, 1992]



Sec. 655.00  Authority of the Regional Administrator under subparts A, B, and C.

    Pursuant to the regulations under this part, temporary labor 
certification determinations under subparts A, B, and C of this part are 
ordinarily made by the Regional Administrator of an

[[Page 450]]

Employment and Training Administration region. The Director, however, 
may direct that certain types of applications or certain applications 
shall be handled by, and the determinations made by, the United States 
Employment Service (USES) in Washington, DC. In those cases the Regional 
Administrator will informally advise the employer or agent of the name 
of the official who will make determinations with respect to the 
application.
[43 FR 10313, Mar. 10, 1978, as amended at 52 FR 20507, June 1, 1987; 55 
FR 50510, Dec. 6, 1990]



   Subpart A--Labor Certification Process for Temporary Employment in 
 Occupations Other Than Agriculture, Logging, or Registered Nursing in 
                    the United States (H-2B Workers)



Sec. 655.1  Scope and purpose of subpart A.

    This subpart sets forth the procedures governing the labor 
certification process for the temporary employment of nonimmigrant 
aliens in the United States in occupations other than agriculture, 
logging, or registered nursing.
[55 FR 50510, Dec. 6, 1990]



Sec. 655.2  Applications.

    Application forms for certification of temporary employment of 
nonimmigrant aliens may be obtained from and should be filed in 
duplicate with the local office of the State employment service serving 
the area of proposed employment.

(Approved by the Office of Management and Budget under control number 
1205-0015)


(Pub. L. No. 96-511)
[33 FR 7570, May 22, 1968, as amended at 49 FR 18295, Apr. 30, 1984. 
Redesignated and amended at 55 FR 50510, Dec. 6, 1990]



Sec. 655.3  Determinations.

    (a) When received, applications for certification shall be forwarded 
by the local office of the State employment service to the appropriate 
Regional Administrator, Employment and Training Administration, who will 
issue them if he or she finds that qualified persons in the United 
States are not available and that the terms of employment will not 
adversely affect the wages and working conditions of workers in the 
United States similarly employed.
    (b) In making this finding, such matter as the employer's attempts 
to recruit workers and the appropriateness of the wages and working 
conditions offered, will be considered. The policies of the United 
States Employment Service set forth in part 652 of this chapter and 
subparts B and C of this part shall be followed in making the findings.
    (c) In any case in which the Regional Administrator, Employment and 
Training Administration, determines after examination of all the 
pertinent facts before him or her that certification should not be 
issued, he or she shall promptly so notify the employer requesting the 
certification. Such notification shall contain a statement of the 
reasons on which the refusal to issue a certification is based.
    (d) The certification or notice of denial thereof is to be used by 
the employer to support its visa petition, filed with the District 
Director of the Immigration and Naturalization Service.
[33 FR 7570, May 22, 1968, as amended at 43 FR 10311, Mar. 10, 1978. 
Redesignated and amended at 55 FR 50510, Dec. 6, 1990]



Sec. 655.4  Territory of Guam.

    Subpart A of this part does not apply to temporary employment in the 
Territory of Guam, and the Department of Labor does not certify to the 
Immigration and Naturalization Service (INS) the temporary employment of 
nonimmigrant aliens under H-2B visas in the Territory of Guam. Pursuant 
to INS regulations, that function is performed by the Governor of Guam, 
or the Governor's designated representative within the Territorial 
Government.
[56 FR 56875, Nov. 6, 1991]



   Subpart B--Labor Certification Process for Temporary Agricultural 
             Employment in the United States (H-2A Workers)

    Source:  52 FR 20507, June 1, 1987, unless otherwise noted.

[[Page 451]]



Sec. 655.90  Scope and purpose of subpart B.

    (a) General. This subpart sets out the procedures established by the 
Secretary of Labor to acquire information sufficient to make factual 
determinations of: (1) Whether there are sufficient able, willing, and 
qualified U.S. workers available to perform the temporary and seasonal 
agricultural employment for which an employer desires to import 
nonimmigrant foreign workers (H-2A workers); and (2) whether the 
employment of H-2A workers will adversely effect the wages and working 
conditions of workers in the U.S. similarly employed. Under the 
authority of the INA, the Secretary of Labor has promulgated the 
regulations in this subpart. This subpart sets forth the requirements 
and procedures applicable to requests for certification by employers 
seeking the services of temporary foreign workers in agriculture. This 
subpart provides the Secretary's methodology for the two-fold 
determination of availability of domestic workers and of any adverse 
effect which would be occasioned by the use of foreign workers, for 
particular temporary and seasonal agricultural jobs in the United 
States.
    (b) The statutory standard. (1) A petitioner for H-2A workers must 
apply to the Secretary of Labor for a certification that, as stated in 
the INA:

    (A) there are not sufficient workers who are able, willing, and 
qualified, and who will be available at the time and place needed, to 
perform the labor or services involved in the petition, and

    (B) the employment of the alien in such labor or services will not 
adversely affect the wages and working conditions of workers in the 
United States similarly employed.

    (2) Section 216(b) of the INA further requires that the Secretary 
may not issue a certification if the conditions regarding U.S. worker 
availability and adverse effect are not met, and may not issue a 
certification if, as stated in the INA:

    (1) There is a strike or lockout in the course of a labor dispute 
which, under the regulations, precludes such certification.
    (2)(A) The employer during the previous two-year period employed H-
2A workers and the Secretary has determined, after notice and 
opportunity for a hearing, that the employer at any time during that 
period substantially violated a material term or condition of the labor 
certification with respect to the employment of domestic or non-
immigrant workers.
    (B) No employer may be denied certification under subparagraph (A) 
for more than three years for any violation described in such 
subparagraph.
    (3) The employer has not provided the Secretary with satisfactory 
assurances that if the employment for which the certification is sought 
is not covered by State workers' compensation law, the employer will 
provide, at no cost to the worker, insurance covering injury and disease 
arising out of and in the course of the worker's employment which will 
provide benefits at least equal to those provided under the State 
workers' compensation law for comparable employment.
    (4) The Secretary determines that the employer has not made positive 
recruitment efforts within a multistate region of traditional or 
expected labor supply where the Secretary finds that there are a 
significant number of qualified United States workers who, if recruited, 
would be willing to make themselves available for work at the time and 
place needed. Positive recruitment under this paragraph is in addition 
to, and shall be conducted within the same time period as, the 
circulation through the interstate employment service system of the 
employer's job offer. The obligation to engage in positive recruitment . 
. . shall terminate on the date the H-2A workers depart for the 
employer's place of employment.

    (3) Regarding the labor certification determination itself, section 
216(c)(3) of the INA, as quoted in the following, specifically directs 
the Secretary to make the certification if:

    (i) the employer has complied with the criteria for certification 
(including criteria for the recruitment of eligible individuals as 
prescribed by the Secretary), and
    (ii) the employer does not actually have, or has not been provided 
with referrals of, qualified individuals who have indicated their 
availability to perform such labor or services on the terms and 
conditions of a job offer which meets the requirements of the Secretary.

    (c) The Secretary's determinations. Before any factual determination 
can be made concerning the availability of U.S. workers to perform 
particular job opportunities, two steps must be taken. First, the 
minimum level of wages, terms, benefits, and conditions for the 
particular job opportunities below which similarly employed U.S.

[[Page 452]]

workers would be adversely affected must be established. (The 
regulations in this subpart establish such minimum levels for wages, 
terms, benefits, and conditions of employment). Second, the wages, 
terms, benefits, and conditions offered and afforded to the aliens must 
be compared to the established minimum levels. If it is concluded that 
adverse effect would result, the ultimate determination of availability 
within the meaning of the INA cannot be made since U.S. workers cannot 
be expected to accept employment under conditions below the established 
minimum levels. Florida Sugar Cane League, Inc. v. Usery, 531 F. 2d 299 
(5th Cir. 1976). Once a determination of no adverse effect has been 
made, the availability of U.S. workers can be tested only if U.S. 
workers are actively recruited through the offer of wages, terms, 
benefits, and conditions at least at the minimum level or the level 
offered to the aliens, whichever is higher. The regulations in this 
subpart set forth requirements for recruiting U.S. workers in accordance 
with this principle.
    (d) Construction. This subpart shall be construed to effectuate the 
purpose of the INA that U.S. workers rather than aliens be employed 
wherever possible. Elton Orchards, Inc. v. Brennan, 508 F. 2d 493, 500 
(1st Cir. 1974); Flecha v. Quiros, 567 F.2d 1154, 1156 (1st Cir. 1977). 
Where temporary alien workers are admitted, the terms and conditions of 
their employment must not result in a lowering of the wages, terms, and 
conditions of domestic workers similarly employed. Williams v. Usery, 
531 F. 2d 305, 306 (5th Cir. 1976), cert. denied, 429 U.S. 1000, and the 
job benefits extended to any U.S. workers shall be at least those 
extended to the alien workers.



Sec. 655.92  Authority of the Regional Administrator.

    Under this subpart, the accepting for consideration and the making 
of temporary alien agricultural labor certification determinations are 
ordinarily performed by the Regional Administrator (RA) of an Employment 
and Training Administration region, who, in turn, may delegate this 
responsibility to a designated staff member. The Director of the United 
States Employment Service, however, may direct that certain types of 
applications or certain applications shall be handled by, and the 
determinations made by USES in Washington, DC. In those cases, the RA 
will informally advise the employer or agent of the name of the official 
who will make determinations with respect to the application.



Sec. 655.93  Special circumstances.

    (a) Systematic process. The regulations under this subpart are 
designed to provide a systematic process for handling applications from 
the kinds of employers who have historically utilized nonimmigrant alien 
workers in agriculture, usually in relation to the production or 
harvesting of a particular agricultural crop for market, and which 
normally share such characteristics as:
    (1) A fixed-site farm, ranch, or similar establishment;
    (2) A need for workers to come to their establishment from other 
areas to perform services or labor in and around their establishment;
    (3) Labor needs which will normally be controlled by environmental 
conditions, particularly weather and sunshine; and
    (4) A reasonably regular workday or workweek.
    (b) Establishment of special procedures. In order to provide for a 
limited degree of flexibility in carrying out the Secretary's 
responsibilities under the INA, while not deviating from the statutory 
requirements to determine U.S. worker availability and make a 
determination as to adverse effect, the Director has the authority to 
establish special procedures for processing H-2A applications when 
employers can demonstrate upon written application to and consultation 
with the Director that special procedures are necessary. In a like 
manner, for work in occupations characterized by other than a reasonably 
regular workday or workweek, such as the range production of sheep or 
other livestock, the Director has the authority to establish monthly, 
weekly, or bi-weekly adverse effect wage rates for those occupations, 
for a Statewide or other geographical area, other than the rates 
established pursuant to Sec. 655.107 of this part, provided that the 
Director

[[Page 453]]

uses a methodology to establish such adverse effect wage rates which is 
consistent with the methodology in Sec. 655.107(a). Prior to making 
determinations under this paragraph (b), the Director may consult with 
employer representatives, appropriate RAs, and worker representatives.
    (c) Construction. This subpart shall be construed to permit the 
Director to continue and, where the Director deems appropriate, to 
revise the special procedures previously in effect for the handling of 
applications for sheepherders in the Western States (and to adapt such 
procedures to occupations in the range production of other livestock) 
and for custom combine crews.



Sec. 655.100  Overview of this subpart and definition of terms.

    (a) Overview--(1) Filing applications. This subpart provides 
guidance to an employer who desires to apply for temporary alien 
agricultural labor certification for the employment of H-2A workers to 
perform agricultural employment of a temporary or seasonal nature. The 
regulations in this subpart provide that such employer shall file an H-
2A application, including a job offer, on forms prescribed by the 
Employment and Training Administration (ETA), which describes the 
material terms and conditions of employment to be offered and afforded 
to U.S. workers and H-2A workers, with the Regional Administrator (RA) 
having jurisdiction over the geographical area in which the work will be 
performed. The entire application shall be filed with the RA no less 
than 60 calendar days before the first date of need for workers, and a 
copy of the job offer shall be submitted at the same time to the local 
office of the State employment service agency which serves the area of 
intended employment. Under the regulations, the RA will promptly review 
the application and notify the applicant in writing if there are 
deficiencies which render the application not acceptable for 
consideration, and afford the applicant a five-calendar-day period for 
resubmittal of an amended application or an appeal of the RA's refusal 
to approve the application as acceptable for consideration. Employers 
are encouraged to file their applications in advance of the 60-calendar-
day period mentioned above in this paragraph (a)(1). Sufficient time 
should be allowed for delays that might arise due to the need for 
amendments in order to make the application acceptable for 
consideration.
    (2) Amendment of applications. This subpart provides for the 
amendment of applications, at any time prior to the RA's certification 
determination, to increase the number of workers requested in the 
initial application; without requiring, under certain circumstances, an 
additional recruitment period for U.S. workers.
    (3) Untimely applications. If an H-2A application does not satisfy 
the specified time requirements, this subpart provides for the RA's 
advice to the employer in writing that the certification cannot be 
granted because there is not sufficient time to test the availability of 
U.S. workers; and provides for the employer's right to an administrative 
review or a de novo hearing before an administrative law judge. 
Emergency situations are provided for, wherein the RA may waive the 
specified time periods.
    (4) Recruitment of U.S. workers; determinations--(i) Recruitment. 
This subpart provides that, where the application is accepted for 
consideration and meets the regulatory standards, the State agency and 
the employer begin to recruit U.S. workers. If the employer has complied 
with the criteria for certification, including recruitment of U.S. 
workers, by 20 calendar days before the date of need specified in the 
application (except as provided in certain cases), the RA makes a 
determination to grant or deny, in whole or in part, the application for 
certification.
    (ii) Granted applications. This subpart provides that the 
application for temporary alien agricultural labor certification is 
granted if the RA finds that the employer has not offered foreign 
workers higher wages or better working conditions (or has imposed less 
restrictions on foreign workers) than those offered and afforded to U.S. 
workers; that sufficient U.S. workers who are able, willing, and 
qualified will not be available at the time and place needed to perform 
the work for which H-2A workers are being requested; and that the 
employment of such aliens

[[Page 454]]

will not adversely affect the wages and working conditions of similarly 
employed U.S. workers.
    (iii) Fees--(A) Amount. This subpart provides that each employer 
(except joint employer associations) of H-2A workers shall pay to the RA 
fees for each temporary alien agricultural labor certification received. 
The fee for each employer receiving a temporary alien agricultural labor 
certification is $100 plus $10 for each job opportunity for H-2A workers 
certified, provided that the fee to an employer for each temporary alien 
agricultural labor certification received shall be no greater than 
$1,000. In the case of a joint employer association receiving a 
temporary alien agricultural labor certification, each employer-member 
receiving a temporary alien agricultural labor certification shall pay a 
fee of $100 plus $10 for each job opportunity for H-2A workers 
certified, provided that the fee to an employer for each temporary alien 
agricultural labor certification received shall be no greater than 
$1,000. The joint employer association will not be charged a separate 
fee.
    (B) Timeliness of payment. The fee must be received by the RA no 
later than 30 calendar days after the granting a each temporary alien 
agricultural labor certification. Fees received any later are untimely. 
Failure to pay fees in a timely manner is a substantial violation which 
may result in the denial of future temporary alien agricultural labor 
certifications.
    (iv) Denied applications. This subpart provides that if the 
application for temporary alien agricultural labor certification is 
denied, in whole or in part, the employer may seek review of the denial, 
or a de novo hearing, by an administrative law judge as provided in this 
subpart.
    (b) Definitions of terms used in this subpart. For the purposes of 
this subpart:
    Accept for consideration means, with respect to an application for 
temporary alien agricultural labor certification, the action by the RA 
to notify the employer that a filed temporary alien agricultural labor 
certification application meets the adverse effect criteria necessary 
for processing. An application accepted for consideration ultimately 
will be approved or denied in a temporary alien agricultural labor 
certification determination.
    Administrative law judge means a person within the Department of 
Labor Office of Administrative Law Judges appointed pursuant to 5 U.S.C. 
3105; or a panel of such persons designated by the Chief Administrative 
Law Judge from the Board of Alien Labor Certification Appeals 
established by part 656 of this chapter, but which shall hear and decide 
appeals as set forth in Sec. 655.112 of this part. ``Chief 
Administrative Law Judge'' means the chief official of the Department of 
Labor Office of Administrative Law Judges or the Chief Administrative 
Law Judge's designee.
    Adverse effect wage rate (AEWR) means the wage rate which the 
Director has determined must be offered and paid, as a minimum, to every 
H-2A worker and every U.S. worker for a particular occupation and/or 
area in which an employer employs or seeks to employ an H-2A worker so 
that the wages of similarly employed U.S. workers will not be adversely 
affected.
    Agent means a legal entity or person, such as an association of 
agricultural employers, or an attorney for an association, which (1) is 
authorized to act on behalf of the employer for temporary alien 
agricultural labor certification purposes, and (2) is not itself an 
employer, or a joint employer, as defined in this paragraph (b).
    Director means the chief official of the United States Employment 
Service (USES) or the Director's designee.
    DOL means the United States Department of Labor.
    Eligible worker means a U.S. worker, as defined in this section.
    Employer means a person, firm, corporation or other association or 
organization which suffers or permits a person to work and (1) which has 
a location within the United States to which U.S. workers may be 
referred for employment, and which proposes to employ workers at a place 
within the United States and (2) which has an employer relationship with 
respect to employees under this subpart as indicated by the fact that it 
may hire, pay, fire, supervise or otherwise control the

[[Page 455]]

work of any such employee. An association of employers shall be 
considered the sole employer if it has the indicia of an employer set 
forth in this definition. Such an association, however, shall be 
considered as a joint employer with an employer member if it shares with 
the employer member one or more of the definitional indicia.
    Employment Service (ES) and Employment Service (ES) System mean, 
collectively, the USES, the State agencies, the local offices, and the 
ETA regional offices.
    Employment Standards Administration means the agency within the 
Department of Labor (DOL), which includes the Wage and Hour Division, 
and which is charged with the carrying out of certain functions of the 
Secretary under the INA.
    Employment and Training Administration (ETA) means the agency within 
the Department of Labor (DOL) which includes the United States 
Employment Service (USES).
    Federal holiday means a legal public holiday as defined at 5 U.S.C. 
6103.
    H-2A worker means any nonimmigrant alien admitted to the United 
States for agricultural labor or services of a temporary or seasonal 
nature under section 101(a)(15)(H)(ii)(a) of the INA (8 U.S.C. 
1101(a)(15)(H)(ii)(a)).
    Immigration and Naturalization Service (INS) means the component of 
the U.S. Department of Justice which makes the determination under the 
INA on whether or not to grant visa petitions to employers seeking H-2A 
workers to perform temporary agricultural work in the United States.
    INA means the Immigration and Nationality Act, as amended (8 U.S.C. 
1101 et seq.).
    Job offer means the offer made by an employer or potential employer 
of H-2A workers to both U.S. and H-2A workers describing all the 
material terms and conditions of employment, including those relating to 
wages, working conditions, and other benefits.
    Job opportunity means a job opening for temporary, full-time 
employment at a place in the United States to which U.S. workers can be 
referred.
    Local office means the State agency's office which serves a 
particular geographic area within a State.
    Positive recruitment means the active participation of an employer 
or its authorized hiring agent in locating and interviewing applicants 
in other potential labor supply areas and in the area where the 
employer's establishment is located in an effort to fill specific job 
openings with U.S. workers.
    Prevailing means, with respect to certain benefits other than wages 
provided by employers and certain practices engaged in by employers, 
that:
    (i) Fifty percent or more of employers in an area and for an 
occupation engage in the practice or offer the benefit; and
    (ii) This 50 percent or more of employers also employs 50 percent or 
more of U.S. workers in the occupation and area (including H-2A and non-
H-2A employers for purposes of determinations concerning the provision 
of family housing, frequency of wage payments, and workers supplying 
their own bedding, but non-H-2A employers only for determinations 
concerning the provision of advance transportation and the utilization 
of farm labor contractors).
    Regional Administrator, Employment and Training Administration (RA) 
means the chief ETA official of a DOL regional offfice or the RA's 
designee.
    Secretary means the Secretary of Labor or the Secretary's designee.
    Solicitor of Labor means the Solicitor, United States Department of 
Labor, and includes employees of the Office of the Solicitor of Labor 
designated by the Solicitor to perform functions of the Solicitor under 
this subpart.
    State agency means the State employment service agency designated 
under Sec. 4 of the Wagner-Peyser Act to cooperate with the USES in the 
operation of the ES System.
    Temporary alien agricultural labor certification means the 
certification made by the Secretary of Labor with respect to an employer 
seeking to file with INS a visa petition to import an alien as an H-2A 
worker, pursuant to sections 101(a)(15)(H)(ii)(a), 214(a) and (c), and 
216 of the INA that (1) there are not sufficient workers who are able, 
willing, and qualified, and who will be available at the time and place 
needed, to perform the agricultural labor or services involved in the 
petition, and

[[Page 456]]

(2) the employment of the alien in such agricultural labor or services 
will not adversely affect the wages and working conditions of workers in 
the United States similarly employed (8 U.S.C. 1101(a)(15)(H)(ii)(a), 
1184 (a) and (c), and 1186).
    Temporary alien agricultural labor certification determination means 
the written determination made by the RA to approve or deny, in whole or 
in part, an application for temporary alien agricultural labor 
certification.
    United States Employment Service (USES) means the agency of the U.S. 
Department of Labor, established under the Wagner-Peyser Act, which is 
charged with administering the national system of public employment 
offices and carrying out certain functions of the Secretary under the 
INA.
    United States (U.S.) worker means any worker who, whether a U.S. 
national, a U.S. citizen, or an alien, is legally permitted to work in 
the job opportunity within the United States (as defined at 
Sec. 101(a)(38) of the INA (8 U.S.C. 1101(a)(38)).
    Wages means all forms of cash remuneration to a worker by an 
employer in payment for personal services.
    (c) Definition of agricultural labor or services of a temporary or 
seasonal nature. For the purposes of this subpart, ``agricultural labor 
or services of a temporary or seasonal nature'' means the following:
    (1) ``Agricultural labor or services''. Pursuant to section 
101(a)(15)(H)(ii)(a) of the INA (8 U.S.C. 1101(a)(15)(H)(ii)(a)), 
``agricultural labor or services'' is defined for the purposes of this 
subpart as either ``agricultural labor'' as defined and applied in 
section 3121(g) of the Internal Revenue Code of 1954 (26 U.S.C. 3121(g)) 
or ``agriculture'' as defined and applied in section 3(f) of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 203(f)). An occupation included 
in either statutory definition shall be ``agricultural labor or 
services'', notwithstanding the exclusion of that occupation from the 
other statutory definition. For informational purposes, the statutory 
provisions are quoted below:
    (i) ``Agricultural labor''. Section 3121(g) of the Internal Revenue 
Code of 1954 (26 U.S.C. 3121(g)), quoted as follows, defines the term 
``agricultural labor'' to include all service performed:

    (1) On a farm, in the employ of any person, in connection with 
cultivating the soil, or in connection with raising or harvesting any 
agricultural or horticultural commodity, including the raising, 
shearing, feeding, caring for, training, and management of livestock, 
bees, poultry, and furbearing animals and wildlife;
    (2) Services performed in the employ of the owner or tenant or other 
operator of a farm, in connection with the operation, or maintenance of 
such farm and its tools and equipment, or in salvaging timber or 
clearing land of brush and other debris left by a hurricane, if the 
major part of such service is performed on a farm;
    (3) In connection with the production or harvesting of any commodity 
defined as an agricultural commodity in section 15(g) of the 
Agricultural Marketing Act, as amended (12 U.S.C. 1141j), or in 
connection with the ginning of cotton, or in connection with the 
operation or maintenance of ditches, canals, reservoirs, or waterways, 
not owned or operated for profit, used exclusively for supplying and 
storing water for farming purposes;
    (4) (A) In the employ of the operator of a farm in handling, 
planting, drying, packing, packaging, processing, freezing, grading, 
storing, or delivering to storage or to market or to a carrier for 
transportation to market, in its unmanufactured state, any agricultural 
or horticultural commodity; but only if such operator produced more than 
one-half of the commodity with respect to which such service is 
performed;
    (B) In the employ of a group of operators of farms (other than a 
cooperative organization) in the performance of service described in 
subparagraph (A), but only if such operators produced all of the 
commodity with respect to which such service is performed. For purposes 
of this subparagraph, any unincorporated group of operators shall be 
deemed a cooperative organization if the number of operators comprising 
such group is more than 20 at any time during the calendar quarter in 
which such service is performed;
    (C) The provisions of subparagraphs (A) and (B) shall not be deemed 
to be applicable with respect to service performed in connection with 
commercial canning or commercial freezing or in connection with any 
agricultural or horticultural commodity after its delivery to a terminal 
market for distribution for consumption; or
    (5) On a farm operated for profit if such service is not in the 
course of the employer's trade or business or is domestic service in a 
private home of the employer.
    As used in this subsection, the term ``farm'' includes stock, dairy, 
poultry, fruit,

[[Page 457]]

fur-bearing animal, and truck farms, plantations, ranches, nurseries, 
ranges, greenhouses or other similar structures used primarily for the 
raising of agricultural or horticultural commodities, and orchards.

    (ii) ``Agriculture'' Section 203(f) of title 29, United States Code, 
(section 3(f) of the Fair Labor Standards Act of 1938, as codified), 
quoted as follows, defines ``agriculture'' to include:

    (f) * * * farming in all its branches and among other things 
includes the cultivation and tillage of the soil, dairying, the 
production, cultivation, growing, and harvesting of any agricultural or 
horticultural commodities (including commodities as defined as 
agricultural commodities in section 1141j(g) of Title 12), the raising 
of livestock, bees, fur-bearing animals, or poultry, and any practices 
(including any forestry or lumbering operations) performed by a farmer 
or on a farm as an incident to or in conjunction with such farming 
operations, including preparation for market, delivery to storage or to 
market or to carriers for transportation to market.

    (iii) ``Agricultural commodity''. Section 1141j(g) of title 12, 
United States Code, (section 15(g) of the Agricultural Marketing Act, as 
amended), quoted as follows, defines ``agricultural commodity'' to 
include:

    (g) * * * in addition to other agricultural commodities, crude gum 
(oleoresin) from a living tree, and the following products as processed 
by the original producer of the crude gum (oleoresin) from which 
derived: Gum spirits of turpentine, and gum rosin, as defined in section 
92 of Title 7.

    (iv) ``Gum rosin''. Section 92 of title 7, United States Code, 
quoted as follows, defines ``gum spirits of turpentine'' and ``gum 
rosin'' as--

    (c) ``Gum spirits of turpentine'' means spirits of turpentine made 
from gum (oleoresin) from a living tree.

                                * * * * *

    (h) ``Gum rosin'' means rosin remaining after the distillation of 
gum spirits of turpentine.

    (2) ``Of a temporary or seasonal nature''--(i) ``On a seasonal or 
other temporary basis''. For the purposes of this subpart, ``of a 
temporary or seasonal nature'' means ``on a seasonal or other temporary 
basis'', as defined in the Employment Standards Administration's Wage 
and Hour Division's regulation at 29 CFR 500.20 under the Migrant and 
Seasonal Agricultural Worker Protection Act (MSPA).
    (ii) MSPA definition. For informational purposes, the definition of 
``on a seasonal or other temporary basis'', as set forth at 29 CFR 
500.20, is provided below:

    ``On a seasonal or other temporary basis'' means:

                                * * * * *

    Labor is performed on a seasonal basis, where, ordinarily, the 
employment pertains to or is of the kind exclusively performed at 
certain seasons or periods of the year and which, from its nature, may 
not be continuous or carried on throughout the year. A worker who moves 
from one seasonal activity to another, while employed in agriculture or 
performing agricultural labor, is employed on a seasonal basis even 
though he may continue to be employed during a major portion of the 
year.

                                * * * * *

    A worker is employed on ``other temporary basis'' where he is 
employed for a limited time only or his performance is contemplated for 
a particular piece of work, usually of short duration. Generally, 
employment, which is contemplated to continue indefinitely, is not 
temporary.

                                * * * * *

    ``On a seasonal or other temporary basis'' does not include the 
employment of any foreman or other supervisory employee who is employed 
by a specific agricultural employer or agricultural association 
essentially on a year round basis.

                                * * * * *

    ``On a seasonal or other temporary basis'' does not include the 
employment of any worker who is living at his permanent place of 
residence, when that worker is employed by a specific agricultural 
employer or agricultural association on essentially a year round basis 
to perform a variety of tasks for his employer and is not primarily 
employed to do field work.

    (iii) ``Temporary''. For the purposes of this subpart, the 
definition of ``temporary'' in paragraph (c)(2)(ii) of this

[[Page 458]]

section refers to any job opportunity covered by this subpart where the 
employer needs a worker for a position, either temporary or permanent, 
for a limited period of time, which shall be for less than one year, 
unless the original temporary alien agricultural labor certification is 
extended based on unforeseen circumstances, pursuant to 
Sec. 655.106(c)(3) of this part.
[52 FR 20507, June 1, 1987, as amended at 57 FR 43123, Sept. 17, 1992]



Sec. 655.101  Temporary alien agricultural labor certification applications.

    (a) General--(1) Filing of application. An employer who anticipates 
a shortage of U.S. workers needed to perform agricultural labor or 
services of a temporary or seasonal nature may apply to the RA in whose 
region the area of intended employment is located, for a temporary alien 
agricultural labor certification for temporary foreign workers (H-2A 
workers). A signed application for temporary alien agricultural worker 
certification shall be filed by the employer, or by an agent of the 
employer, with the RA. At the same time, a duplicate application shall 
be submitted to the local office serving the area of intended 
employment.
    (2) Applications filed by agents. If the temporary alien 
agricultural labor certification application is filed by an agent on 
behalf of an employer, the agent may sign the application if the 
application is accompanied by a signed statement from the employer which 
authorizes the agent to act on the employer's behalf. The employer may 
authorize the agent to accept for interview workers being referred to 
the job and to make hiring commitments on behalf of the employer. The 
statement shall specify that the employer assumes full responsibility 
for the accuracy of the application, for all representations made by the 
agent on the employer's behalf, and for compliance with all regulatory 
and other legal requirements.
    (3) Applications filed by associations. If an association of 
agricultural producers which uses agricultural labor or services files 
the application, the association shall identify whether it is: (i) The 
sole employer; (ii) a joint employer with its employer-member employers; 
or (iii) the agent of its employer-members. The association shall submit 
documentation sufficient to enable the RA to verify the employer or 
agency status of the association; and shall identify by name and address 
each member which will be an employer of H-2A workers.
    (b) Application form. Each H-2A application shall be on a form or 
forms prescribed by ETA. The application shall state the total number of 
workers the employer anticipates employing in the agricultural labor or 
service activity during the covered period of employment. The 
application shall include:
    (1) A copy of the job offer which will be used by each employer for 
the recruitment of U.S. and H-2A workers. The job offer shall state the 
number of workers needed by the employer, based upon the employer's 
anticipation of a shortage of U.S. workers needed to perform the 
agricultural labor or services, and the specific estimated date on which 
the workers are needed. The job offer shall comply with the requirements 
of Secs. 655.102 and 653.501 of this chapter, and shall be signed by the 
employer or the employer's agent on behalf of the employer; and
    (2) An agreement to abide by the assurances required by Sec. 655.103 
of this part.
    (c) Timeliness. Applications for temporary alien agricultural labor 
certification are not required to be filed more than 60 calendar days 
before the first day of need. The employer shall be notified by the RA 
in writing within seven calendar days of filing the application if the 
application is not approved as acceptable for consideration. The RA's 
temporary alien agricultural labor certification determination on the 
approved application shall be made no later than 20 calendar days before 
the date of need if the employer has complied with the criteria for 
certification. To allow for the availability of U.S. workers to be 
tested, the following process applies:
    (1) Application filing date. The entire H-2A application, including 
the job offer, shall be filed with the RA, in duplicate, no less than 60 
calendar days before the first date on which the employer estimates that 
the workers are needed. Applications may be filed in

[[Page 459]]

person; may be mailed to the RA (Attention: H-2A Certifying Officer) by 
certified mail, return receipt requested; or delivered by guaranteed 
commercial delivery which will ensure delivery to the RA and provide the 
employer with a documented acknowledgment of receipt of the application 
by the RA. Any application received 60 calendar days before the date of 
need will have met the minimum timeliness of filing requirement as long 
as the application is eventually approved by the RA as being acceptable 
for processing.
    (2) Review of application; recruitment; certification determination 
period. Section 655.104 of this part requires the RA to promptly review 
the application, and to notify the applicant in writing within seven 
calendar days of any deficiencies which render the application not 
acceptable for consideration and to afford an opportunity for 
resubmittal of an amended application. The employer shall have five 
calendar days in which to file an amended application. Section 655.106 
of this part requires the RA to grant or deny the temporary alien 
agricultural labor certification application no later than 20 calendar 
days before the date on which the workers are needed, provided that the 
employer has complied with the criteria for certification, including 
recruitment of eligible individuals. Such recruitment, for the employer, 
the State agencies, and DOL to attempt to locate U.S. workers locally 
and through the circulation of intrastate and interstate agricultural 
clearance job orders acceptable under Sec. 653.501 of this chapter and 
under this subpart, shall begin on the date that an acceptable 
application is filed, except that the local office shall begin to 
recruit workers locally beginning on the date it first receives the 
application. The time needed to obtain an application acceptable for 
consideration (including the job offer) after the five-calendar-day 
period allowed for an amended application will postpone day-for-day the 
certification determination beyond the 20 calendar days before the date 
of need, provided that the RA notifies the applicant of any deficiencies 
within seven calendar days after receipt of the application. Delays in 
obtaining an application acceptable for consideration which are directly 
attributable to the RA will not postpone the certification determination 
beyond the 20 calendar days before the date of need. When an employer 
resubmits to the RA (with a copy to the local office) an application 
with modifications required by the RA, and the RA approves the modified 
application as meeting necessary adverse effect standards, the modified 
application will not be rejected solely because it now does not meet the 
60-calendar-day filing requirement. If an application is approved as 
being acceptable for processing without need for any amendment within 
the seven-calendar-day review period after initial filing, recruitment 
of U.S. workers will be considered to have begun on the date the 
application was received by the RA; and the RA shall make the temporary 
alien agricultural labor certification determination required by 
Sec. 655.106 of this part no later than 20 calendar days before the date 
of need provided that other regulatory conditions are met.
    (3) Early filing. Employers are encouraged, but not required, to 
file their applications in advance of the 60-calendar-day minimum period 
specified in paragraph (c)(1) of this section, to afford more time for 
review and discussion of the applications and to consider amendments, 
should they be necessary. This is particularly true for employers 
submitting H-2A applications for the first time who may not be familiar 
with the Secretary's requirements for an acceptable application or U.S. 
worker recruitment. Such employers particularly are encouraged to 
consult with DOL and local office staff for guidance and assistance well 
in advance of the minimum 60-calendar-day filing period.
    (4) Local recruitment; preparation of clearance orders. At the same 
time the employer files the H-2A application with the RA, a copy of the 
application shall be submitted to the local office which will use the 
job offer portion--of the application to prepare a local job order and 
begin to recruit U.S. workers in the area of intended employment. The 
local office also shall begin preparing an agricultural clearance order, 
but such order will not be used to recruit workers in other geographical 
areas

[[Page 460]]

until the employer's H-2A application is accepted for consideration and 
the clearance order is approved by the RA and the local office is so 
notified by the RA.
    (5) First-time employers of H-2A workers. With respect only to those 
applications filed on or before May 31, 1989, and notwithstanding the 
time requirements in paragraphs (c)(1) through (c)(4) of this section, 
under the following circumstances the RA shall make the certification 
determination required by Sec. 655.106 of this part no later than 10 
calendar days before the date of need:
    (i) The employer would be a first-time employer of H-2A workers 
(and, prior to June 1, 1987, did not use or apply for certification to 
use H-2 agricultural workers under the INA as then in effect) and has 
not previously applied for a temporary alien agricultural labor 
certification to use H-2A workers;
    (ii) The RA, the employer, and the ES System have had a reasonable 
opportunity to test the availability of U.S. workers under the 
conditions of a job offer which has been determined to be acceptable by 
the RA in accordance with the provisions of Secs. 655.102 and 655.103 of 
this part at least 30 calendar days before the date of need; and
    (iii) The RA has determined that the employer has otherwise made 
good faith efforts to comply with the requirements of this subpart.
    (d) Amendments to application to increase number of workers. 
Applications may be amended at any time, prior to an RA certification 
determination, to increase the number of workers requested in the 
initial application by not more than 20 percent (50 percent for 
employers of less than ten workers) without requiring an additional 
recruitment period for U.S. workers. Requests for increases above the 
percent prescribed, without additional recruitment, may be approved only 
when the need for additional workers could not have been foreseen, and 
that crops or commodities will be in jeopardy prior to the expiration of 
an additional recruitment period.
    (e) Minor amendments to applications. Minor technical amendments may 
be requested by the employer and made to the application and job offer 
prior to the certification determination if the RA determines they are 
justified and will have no significant effect upon the RA's ability to 
make the labor certification determination required by Sec. 655.106 of 
this part. Amendments described at paragraph (d) of this section are not 
``minor technical amendments''.
    (f) Untimely applications--(1) Notices of denial. If an H-2A 
application, or any part thereof, does not satisfy the time requirements 
specified in paragraph (c) of this section, and if the exception in 
paragraph (d) of this section does not apply, the RA may then advise the 
employer in writing that the certification cannot be granted because, 
pursuant to paragraph (c) of this section, there is not sufficient time 
to test the availability of U.S. workers. The notice of denial shall 
inform the employer of its right to an administrative review or de novo 
hearing before an administrative law judge.
    (2) Emergency situations. Notwithstanding paragraph (f)(1) of this 
section, in emergency situations the RA may waive the time period 
specified in this section on behalf of employers who have not made use 
of temporary alien agricultural workers (H-2 or H-2A) for the prior 
year's agricultural season or for any employer which has other good and 
substantial cause (which may include unforeseen changes in market 
conditions), provided that the RA has an opportunity to obtain 
sufficient labor market information on an expedited basis to make the 
labor certification determination required by Sec. 216 of the INA (8 
U.S.C. 1186). In making this determination, the RA will accept 
information offered by and may consult with representatives of the U.S. 
Department of Agriculture.
    (g) Length of job opportunity. The employer shall set forth on the 
application sufficient information concerning the job opportunity to 
demonstrate to the RA that the need for the worker is ``of a temporary 
or seasonal nature'', as defined at Sec. 655.100(c)(2) of this part. Job 
opportunities of 12 months or more are presumed to be permanent in 
nature. Therefore, the RA shall not grant a temporary alien agricultural 
labor certification where the job opportunity

[[Page 461]]

has been or would be filled by an H-2A worker for a cumulative period, 
including temporary alien agricultural labor certifications and 
extensions, of 12 months or more, except in extraordinary circumstances.



Sec. 655.102  Contents of job offers.

    (a) Preferential treatment of aliens prohibited. The employer's job 
offer to U.S. workers shall offer the U.S. workers no less than the same 
benefits, wages, and working conditions which the employer is offering, 
intends to offer, or will provide to H-2A workers. Conversely, no job 
offer may impose on U.S. workers any restrictions or obligations which 
will not be imposed on the employer's H-2A workers. This does not 
relieve the employer from providing to H-2A workers at least the same 
level of minimum benefits, wages, and working conditions which must be 
offered to U.S. workers consistent with this section.
    (b) Minimum benefits, wages, and working conditions. Except when 
higher benefits, wages or working conditions are required by the 
provisions of paragraph (a) of this section, DOL has determined that in 
order to protect similarly employed U.S. workers from adverse effect 
with respect to benefits, wages, and working conditions, every job offer 
which must accompany an H-2A application always shall include each of 
the following minimum benefit, wage, and working condition provisions:
    (1) Housing. The employer shall provide to those workers who are not 
reasonably able to return to their residence within the same day 
housing, without charge to the worker, which may be, at the employer's 
option, rental or public accommodation type housing.
    (i) Standards for employer-provided housing. Housing provided by the 
employer shall meet the full set of DOL Occupational Safety and Health 
Administration standards set forth at 29 CFR 1910.142, or the full set 
of standards at Secs. 654.404-654.417 of this chapter, whichever are 
applicable, except as provided for under paragraph (b)(1)(iii) of this 
section. Requests by employers, whose housing does not meet the 
applicable standards, for conditional access to the intrastate or 
interstate clearance system, shall be processed under the procedures set 
forth at Sec. 654.403 of this chapter.
    (ii) Standards for range housing. Housing for workers principally 
engaged in the range production of livestock shall meet standards of the 
DOL Occupational Safety and Health Administration for such housing. In 
the absence of such standards, range housing for sheepherders and other 
workers engaged in the range production of livestock shall meet 
guidelines issued by ETA.
    (iii) Standards for other habitation. Rental, public accomodation, 
or other substantially similar class of habitation must meet local 
standards for such housing. In the absence of applicable local 
standards, State standards shall apply. In the absence of applicable 
local or State standards, Occupational Safety and Health Administration 
standards at 29 CFR 1910.142 shall apply. Any charges for rental housing 
shall be paid directly by the employer to the owner or operator of the 
housing. When such housing is to be supplied by an employer, the 
employer shall document to the satisfaction of the RA that the housing 
complies with the local, State, or federal housing standards applicable 
under this paragraph (b)(1)(iii).
    (iv) Charges for public housing. If public housing provided for 
migrant agricultural workers under the auspices of a local, county, or 
State government is secured by an employer, and use of the public 
housing unit normally requires charges from migrant workers, such 
charges shall be paid by the employer directly to the appropriate 
individual or entity affiliated with the housing's management.
    (v) Deposit charges. Charges in the form of deposits for bedding or 
other similar incidentals related to housing shall not be levied upon 
workers by employers who provide housing for their workers. However, 
employers may require workers to reimburse them for damage caused to 
housing by the individual workers found to have been responsible for 
damage which is not the result of normal wear and tear related to 
habitation.
    (vi) Family housing. When it is the prevailing practice in the area 
of intended employment and the occupation

[[Page 462]]

to provide family housing, family housing shall be provided to workers 
with families who request it.
    (2) Workers' compensation. The employer shall provide, at no cost to 
the worker, insurance, under a State workers' compensation law or 
otherwise, covering injury and disease arising out of and in the course 
of the worker's employment which will provide benefits at least equal to 
those provided under the State workers' compensation law, if any, for 
comparable employment. The employer shall furnish the name of the 
insurance carrier and the insurance policy number, or, if appropriate, 
proof of State law coverage, to the RA prior to the issuance of a labor 
certification.
    (3) Employer-provided items. Except as provided below, the employer 
shall provide, without charge including deposit charge, to the worker 
all tools, supplies, and equipment required to perform the duties 
assigned; the employer may charge the worker for reasonable costs 
related to the worker's refusal or negligent failure to return any 
property furnished by the employer or due to such worker's willful 
damage or destruction of such property. Where it is a common practice in 
the particular area, crop activity and occupation for workers to provide 
tools and equipment, with or without the employer reimbursing the 
workers for the cost of providing them, such an arrangement is 
permissible if approved in advance by the RA.
    (4) Meals. Where the employer has centralized cooking and eating 
facilities designed to feed workers, the employer shall provide each 
worker with three meals a day. When such facilities are not available, 
the employer either shall provide each worker with three meals a day or 
shall furnish free and convenient cooking and kitchen facilities to the 
workers which will enable the workers to prepare their own meals. Where 
the employer provides the meals, the job offer shall state the charge, 
if any, to the worker for such meals. Until a new amount is set pursuant 
to this paragraph (b)(4), the charge shall not be more than $5.26 per 
day unless the RA has approved a higher charge pursuant to Sec. 655.111 
of this part. Each year the charge allowed by this paragraph (b)(4) will 
be changed by the same percentage as the 12-month percent change in the 
Consumer Price Index for All Urban Consumers for Food between December 
of the year just concluded and December of the year prior to that. The 
annual adjustments shall be effective on the date of their publication 
by the Director as a notice in the Federal Register.
    (5) Transportation; daily subsistence--(i) Transportation to place 
of employment. The employer shall advance transportation and subsistence 
costs (or otherwise provide them) to workers when it is the prevailing 
practice of non-H-2A agricultural employers in the occupation in the 
area to do so, or when such benefits are extended to H-2A workers. The 
amount of the transportation payment shall be no less (and shall not be 
required to be more) than the most economical and reasonable similar 
common carrier transportation charges for the distances involved. If the 
employer has not previously advanced such transportation and subsistence 
costs to the worker or otherwise provided such transportation or 
subsistence directly to the worker by other means and if the worker 
completes 50 percent of the work contract period, the employer shall pay 
the worker for costs incurred by the worker for transportation and daily 
subsistence from the place from which the worker has come to work for 
the employer to the place of employment. The amount of the daily 
subsistence payment shall be at least as much as the employer will 
charge the worker for providing the worker with three meals a day during 
employment. If no charges will be made for meals and free and convenient 
cooking and kitchen facilities will be provided, the amount of the 
subsistence payment shall be no less than the amount permitted under 
paragraph (b)(4) of this section.
    (ii) Transportation from place of employment. If the worker 
completes the work contract period, the employer shall provide or pay 
for the worker's transportation and daily subsistence from the place of 
employment to the place from which the worker, disregarding intervening 
employment, came to work for the employer, or, if

[[Page 463]]

the worker has contracted with a subsequent employer who has not agreed 
in that contract to provide or pay for the worker's transportation and 
daily subsistence expenses from the employer's worksite to such 
subsequent employer's worksite, the employer shall provide or pay for 
such expenses; except that, if the worker has contracted for employment 
with a subsequent employer who, in that contract, has agreed to pay for 
the worker's transportation and daily subsistence expenses from the 
employer's worksite to such subsequent employer's worksite, the employer 
is not required to provide or pay for such expenses.
    (iii) Transportation between living quarters and worksite. The 
employer shall provide transportation between the worker's living 
quarters (i.e., housing provided by the employer pursuant to paragraph 
(b)(1) of this section) and the employer's worksite without cost to the 
worker, and such transportation will be in accordance with applicable 
laws and regulations. This paragraph (b)(5)(iii) is applicable to the 
transportation of workers eligible for housing, pursuant to paragraph 
(b)(1) of this section.
    (6) Three-fourths guarantee--(i) Offer to worker. The employer shall 
guarantee to offer the worker employment for at least three-fourths of 
the workdays of the total periods during which the work contract and all 
extensions thereof are in effect, beginning with the first workday after 
the arrival of the worker at the place of employment and ending on the 
expiration date specified in the work contract or in its extensions, if 
any. If the employer affords the U.S. or H-2A worker during the total 
work contract period less employment than that required under this 
paragraph (b)(6), the employer shall pay such worker the amount which 
the worker would have earned had the worker, in fact, worked for the 
guaranteed number of days. For purposes of this paragraph (b)(6), a 
workday shall mean the number of hours in a workday as stated in the job 
order and shall exclude the worker's Sabbath and federal holidays. An 
employer shall not be considered to have met the work guarantee if the 
employer has merely offered work on three-fourths of the workdays if 
each workday did not consist of a full number of hours of work time 
specified in the job order. The work shall be offered for at least 
three-fourths of the workdays (that is, 3/4 x (number of days) x 
(specified hours)). Therefore, if, for example, the contract contains 20 
eight-hour workdays, the worker shall be offered employment for 120 
hours during the 20 workdays. A worker may be offered more than the 
specified hours of work on a single workday. For purposes of meeting the 
guarantee, however, the worker shall not be required to work for more 
than the number hours specified in the job order for a workday, or on 
the worker's Sabbath or Federal holidays.
    (ii) Guarantee for piece-rate-paid worker. If the worker will be 
paid on a piece rate basis, the employer shall use the worker's average 
hourly piece rate earnings or the AEWR, whichever is higher, to 
calculate the amount due under the guarantee.
    (iii) Failure to work. Any hours which the worker fails to work, up 
to a maximum of the number of hours specified in the job order for a 
workday, when the worker has been offered an opportunity to do so 
pursuant to paragraph (b)(6)(i) of this section and all hours of work 
actually performed (including voluntary work over 8 hours in a workday 
or on the worker's Sabbath or federal holidays) may be counted by the 
employer in calculating whether the period of guaranteed employment has 
been met.
    (iv) Displaced H-2A worker. The employer shall not be liable for 
payment under this paragraph (b)(6) with respect to an H-2A worker whom 
the RA certifies is displaced because of the employer's compliance with 
Sec. 655.103(e) of this part.
    (7) Records. (i) The employer shall keep accurate and adequate 
records with respect to the workers' earnings including field tally 
records, supporting summary payroll records and records showing the 
nature and amount of the work performed; the number of hours of work 
offered each day by the employer (broken out by hours offered both in 
accordance with and over and above the three-fourths guarantee at 
paragraph (b)(6) of this section); the hours actually worked

[[Page 464]]

each day by the worker; the time the worker began and ended each 
workday; the rate of pay (both piece rate and hourly, if applicable); 
the worker's earnings per pay period; the worker's home address; and the 
amount of and reasons for any and all deductions made from the worker's 
wages;
    (ii) If the number of hours worked by the worker is less than the 
number offered in accordance with the three-fourths guarantee at 
paragraph (b)(6) of this section, the records shall state the reason or 
reasons therefore.
    (iii) Upon reasonable notice, the employer shall make available the 
records, including field tally records and supporting summary payroll 
records for inspection and copying by representatives of the Secretary 
of Labor, and by the worker and representatives designated by the 
worker; and
    (iv) The employer shall retain the records for not less than three 
years after the completion of the work contract.
    (8) Hours and earnings statements. The employer shall furnish to the 
worker on or before each payday in one or more written statements the 
following information:
    (i) The worker's total earnings for the pay period;
    (ii) The worker's hourly rate and/or piece rate of pay;
    (iii) The hours of employment which have been offered to the worker 
(broken out by offers in accordance with and over and above the 
guarantee);
    (iv) The hours actually worked by the worker;
    (v) An itemization of all deductions made from the worker's wages; 
and
    (vi) If piece rates are used, the units produced daily.
    (9) Rates of pay. (i) If the worker will be paid by the hour, the 
employer shall pay the worker at least the adverse effect wage rate in 
effect at the time the work is performed, the prevailing hourly wage 
rate, or the legal federal or State minimum wage rate, whichever is 
highest, for every hour or portion thereof worked during a pay period; 
or
    (ii)(A) If the worker will be paid on a piece rate basis and the 
piece rate does not result at the end of the pay period in average 
hourly piece rate earnings during the pay period at least equal to the 
amount the worker would have earned had the worker been paid at the 
appropriate hourly rate, the worker's pay shall be supplemented at that 
time so that the worker's earnings are at least as much as the worker 
would have earned during the pay period if the worker had been paid at 
the appropriate hourly wage rate for each hour worked; and the piece 
rate shall be no less than the piece rate prevailing for the activity in 
the area of intended employment; and
    (B) If the employer who pays by the piece rate requires one or more 
minimum productivity standards of workers as a condition of job 
retention,
    (1) Such standards shall be specified in the job offer and be no 
more than those required by the employer in 1977, unless the RA approves 
a higher minimum; or
    (2) If the employer first applied for H-2 agricultural or H-2A 
temporary alien agricultural labor certification after 1977, such 
standards shall be no more than those normally required (at the time of 
the first application) by other employers for the activity in the area 
of intended employment, unless the RA approves a higher minimum.
    (10) Frequency of pay. The employer shall state the frequency with 
which the worker will be paid (in accordance with the prevailing 
practice in the area of intended employment, or at least twice monthly 
whichever is more frequent).
    (11) Abandonment of employment; or termination for cause. If the 
worker voluntarily abandons employment before the end of the contract 
period, or is terminated for cause, and the employer notifies the local 
office of such abandonment or termination, the employer will not be 
responsible for providing or paying for the subsequent transportation 
and subsistence expenses of any worker for whom the employer would have 
otherwise been required to pay such expenses under paragraph (b)(5)(ii) 
of this section, and that worker is not entitled to the ``three-fourths 
guarantee'' (see paragraph (b)(6) of this section).
    (12) Contract impossibility. If, before the expiration date 
specified in the work contract, the services of the

[[Page 465]]

worker are no longer required for reasons beyond the control of the 
employer due to fire, hurricane, or other Act of God which makes the 
fulfillment of the contract impossible the employer may terminate the 
work contract. In the event of such termination of a contract, the 
employer shall fulfill the three-fourths guarantee at paragraph (b)(6) 
of this section for the time that has elapsed from the start of the work 
contract to its termination. In such cases the employer will make 
efforts to transfer the worker to other comparable employment acceptable 
to the worker. If such transfer is not effected, the employer shall:
    (i) Offer to return the worker, at the employer's expense, to the 
place from which the worker disregarding intervening employment came to 
work for the employer,
    (ii) Reimburse the worker the full amount of any deductions made 
from the worker's pay by the employer for transportation and subsistence 
expenses to the place of employment, and
    (iii) Notwithstanding whether the employment has been terminated 
prior to completion of 50 percent of the work contract period originally 
offered by the employer, pay the worker for costs incurred by the worker 
for transportation and daily subsistence from the place from which the 
worker, without intervening employment, has come to work for the 
employer to the place of employment. Daily subsistence shall be computed 
as set forth in paragraph (b)(5)(i) of this section. The amount of the 
transportation payment shall be no less (and shall not be required to be 
more) than the most economical and reasonable similar common carrier 
transportation charges for the distances involved.
    (13) Deductions. The employer shall make those deductions from the 
worker's paycheck which are required by law. The job offer shall specify 
all deductions not required by law which the employer will make from the 
worker's paycheck. All deductions shall be reasonable. The employer may 
deduct the cost of the worker's transportation and daily subsistence 
expenses to the place of employment which were borne directly by the 
employer. In such cases, the job offer shall state that the worker will 
be reimbursed the full amount of such deductions upon the worker's 
completion of 50 percent of the worker's contract period. However, an 
employer subject to the Fair Labor Standards Act (FLSA) may not make 
deductions which will result in payments to workers of less than the 
federal minimum wage permitted by the FLSA as determined by the 
Secretary at 29 CFR part 531.
    (14) Copy of work contract. The employer shall provide to the 
worker, no later than on the day the work commences, a copy of the work 
contract between the employer and the worker. The work contract shall 
contain all of the provisions required by paragraphs (a) and (b) of this 
section. In the absence of a separate, written work contract entered 
into between the employer and the worker, the required terms of the job 
order and application for temporary alien agricultural labor 
certification shall be the work contract.
    (c) Appropriateness of required qualifications. Bona fide 
occupational qualifications specified by an employer in a job offer 
shall be consistent with the normal and accepted qualifications required 
by non-H-2A employers in the same or comparable occupations and crops, 
and shall be reviewed by the RA for their appropriateness. The RA may 
require the employer to submit documentation to substantiate the 
appropriateness of the qualification specified in the job offer; and 
shall consider information offered by and may consult with 
representatives of the U.S. Department of Agriculture.
    (d) Positive recruitment plan. The employer shall submit in writing, 
as a part of the application, the employer's plan for conducting 
independent, positive recruitment of U.S. workers as required by 
Secs. 655.103 and 655.105(a) of this part. Such a plan shall include a 
description of recruitment efforts (if any) made prior to the actual 
submittal of the application. The plan shall describe how the employer 
will engage in positive recruitment of U.S. workers to an extent (with 
respect to both effort and location(s)) no less than that of non-H-2A 
agricultural employers of comparable or smaller size in the area of 
employment. When it is the prevailing

[[Page 466]]

practice in the area of employment and for the occupation for non-H-2A 
agricultural employers to secure U.S. workers through farm labor 
contractors and to compensate farm labor contractors with an override 
for their services, the employer shall describe how it will make the 
same level of effort as non-H-2A agricultural employers and provide an 
override which is no less than that being provided by non-H-2A 
agricultural employers.



Sec. 655.103  Assurances.

    As part of the temporary alien agricultural labor certification 
application, the employer shall include in the job offer a statement 
agreeing to abide by the conditions of this subpart. By so doing, the 
employer makes each of the following assurances:
    (a) Labor disputes. The specific job opportunity for which the 
employer is requesting H-2A certification is not vacant because the 
former occupant is on strike or being locked out in the course of a 
labor dispute.
    (b) Employment-related laws. During the period for which the 
temporary alien agricultural labor certification is granted, the 
employer shall comply with applicable federal, State, and local 
employment-related laws and regulations, including employment-related 
health and safety laws.
    (c) Rejections and terminations of U.S. workers. No U.S. worker will 
be rejected for or terminated from employment for other than a lawful 
job-related reason, and notification of all rejections or terminations 
shall be made to the local office.
    (d) Recruitment of U.S. workers. The employer shall independently 
engage in positive recruitment until the foreign workers have departed 
for the employer's place of employment and shall cooperate with the ES 
System in the active recruitment of U.S. workers by:
    (1) Assisting the ES System to prepare local, intrastate, and 
interstate job orders using the information supplied on the employer's 
job offer;
    (2) Placing advertisements (in a language other than English, where 
the RA determines appropriate) for the job opportunities in newspapers 
of general circulation and/or on the radio, as required by the RA:
    (i) Each such advertisement shall describe the nature and 
anticipated duration of the job opportunity; offer at least the adverse 
effect wage rate; give the \3/4\ guarantee; state that work tools, 
supplies and equipment will be provided by the employer; state that 
housing will also be provided, and that transportation and subsistence 
expenses to the worksite will be provided or paid by the employer upon 
completion of 50% of the work contract, or earlier, if appropriate; and
    (ii) Each such advertisement shall direct interested workers to 
apply for the job opportunity at a local employment service office in 
their area;
    (3) Cooperating with the ES System and independently contacting farm 
labor contractors, migrant workers and other potential workers in other 
areas of the State and/or Nation by letter and/or telephone; and
    (4) Cooperating with the ES System in contacting schools, business 
and labor organizations, fraternal and veterans' organizations, and 
nonprofit organizations and public agencies such as sponsors of programs 
under the Job Training Partnership Act throughout the area of intended 
employment and in other potential labor supply areas in order to enlist 
them in helping to find U.S. workers.
    (e) Fifty-percent rule. From the time the foreign workers depart for 
the employer's place of employment, the employer, except as provided for 
by Sec. 655.106(e)(1) of this part, shall provide employment to any 
qualified, eligible U.S. worker who applies to the employer until 50% of 
the period of the work contract, under which the foreign worker who is 
in the job was hired, has elapsed. In addition, the employer shall offer 
to provide housing and the other benefits, wages, and working conditions 
required by Sec. 655.102 of this part to any such U.S. worker and shall 
not treat less favorably than H-2A workers any U.S. worker referred or 
transferred pursuant to this assurance.
    (f) Other recruitment. The employer shall perform the other specific 
recruitment and reporting activities specified in the notice from the RA 
required by Sec. 655.105(a) of this part, and shall engage in positive 
recruitment of U.S. workers to an extent (with respect

[[Page 467]]

to both effort and location) no less than that of non-H-2A agricultural 
employers of comparable or smaller size in the area of employment. When 
it is the prevailing practice in the area of employment and for the 
occupation for non-H-2A agricultural employers to secure U.S. workers 
through farm labor contractors and to compensate farm labor contractors 
with an override for their services, the employer shall make the same 
level of effort as non-H-2A agricultural employers and shall provide an 
override which is no less than that being provided by non-H-2A 
agricultural employers. Where the employer has centralized cooking and 
eating facilities designed to feed workers, the employer shall not be 
required to provide meals through an override. The employer shall not be 
required to provide for housing through an override.
    (g) Retaliation prohibited. The employer shall not intimidate, 
threaten, restrain, coerce, blacklist, discharge, or in any manner 
discriminate against, and shall not cause any person to intimidate, 
threaten, restrain, coerce, blacklist, discharge, or in any manner 
discriminate against, any person who has with just cause:
    (1) Filed a complaint under or related to Sec. 216 of the INA (8 
U.S.C. 1186), or this subpart or any other DOL regulation promulgated 
pursuant to Sec. 216 of the INA;
    (2) Instituted or caused to be instituted any proceeding under or 
related to Sec. 216 of the INA, or this subpart or any other DOL 
regulation promulgated pursuant to Sec. 216 of the INA (8 U.S.C. 1186);
    (3) Testified or is about to testify in any proceeding under or 
related to Sec. 216 of the INA (8 U.S.C. 1186), or this subpart or any 
other DOL regulation promulgated pursuant to Sec. 216 of the INA;
    (4) Consulted with an employee of a legal assistance program or an 
attorney on matters related to Sec. 216 of the INA (8 U.S.C. 1186), or 
this subpart or any other DOL regulation promulgated pursuant to 
Sec. 216 of the INA; or
    (5) Exercised or asserted on behalf of himself/herself or others any 
right or protection afforded by Sec. 216 of the INA (8 U.S.C. 1186), or 
this subpart or any other DOL regulation promulgated pursuant to 
Sec. 216 of the INA.
    (h) Fees. The application shall include the assurance that fees will 
be paid in a timely manner, as follows:
    (1) Amount. The fee for each employer receiving a temporary alien 
agricultural labor certification is $100 plus $10 for each job 
opportunity for H-2A workers certified, provided that the fee for an 
employer for each temporary alien agricultural labor certification 
received shall be no greater than $1,000. In the case of a joint 
employer association receiving a temporary alien agricultural labor 
certification, the fee for each employer-member receiving a temporary 
alien agricultural labor certification shall be $100 plus $10 for each 
job opportunity for H-2A workers certified, provided that the fee for an 
employer for each temporary alien agricultural labor certification 
received shall be no greater than $1,000. The joint employer association 
will not be charged a separate fee. Fees shall be paid by a check or 
money order made payable to ``Department of Labor'', and are 
nonrefundable. In the case of employers of H-2A workers which are 
members of a joint employer association applying on their behalf, the 
aggregate fees for all employers of H-2A workers under the application 
may be paid by one check or money order.
    (2) Timeliness. Fees received by the RA within 30 calendar days 
after the date of the temporary alien agricultural labor certification 
determination are timely.
[52 FR 20507, June 1, 1987, as amended by 55 FR 29358, July 19, 1990]



Sec. 655.104  Determinations based on acceptability of H-2A applications.

    (a) Local office activities. The local office, using the job offer 
portion of the H-2A application, shall promptly prepare a local job 
order and shall begin to recruit U.S. workers in the area of intended 
employment. The RA should notify the State or local office by telephone 
no later than seven calendar days after the application was received by 
the RA if the application has been accepted for consideration. Upon 
receiving such notice or seven calendar days after the application is 
received by the local office, whichever is earlier, the local office 
shall promptly prepare an agricultural clearance order which

[[Page 468]]

will permit the recruitment of U.S. workers by the Employment Service 
System on an intrastate and interstate basis.
    (b) Regional office activities. The RA, upon receipt of the H-2A 
application, shall promptly review the application to determine whether 
it is acceptable for consideration under the timeliness and adverse 
effect criteria of Secs. 655.101-655.103 of this part. If the RA 
determines that the application does not meet the requirements of 
Secs. 655.101-655.103, the RA shall not accept the application for 
consideration on the grounds that the availability of U.S. workers 
cannot be adequately tested because the benefits, wages and working 
conditions do not meet the adverse effect criteria; however, if the RA 
determines that the application is not timely in accordance with 
Sec. 655.101 of this part and that neither the first-year employer 
provisions of Sec. 655.101(c)(5) nor the emergency provisions of 
Sec. 655.101(f) apply, the RA may determine not to accept the 
application for consideration because there is not sufficient time to 
test the availability of U.S. workers.
    (c) Rejected applications. If the application is not accepted for 
consideration, the RA shall notify the applicant in writing (by means 
normally assuring next-day delivery) within seven calendar days of the 
date the application was received by the RA with a copy to the local 
office. The notice shall:
    (1) State all the reasons the application is not accepted for 
consideration, citing the relevant regulatory standards;
    (2) Offer the applicant an opportunity for the resubmission within 
five calendar days of a modified application, stating the modifications 
needed in order for the RA to accept the application for consideration;
    (3) Offer the applicant an opportunity to request an expedited 
administrative review of or a de novo administrative hearing before an 
administrative law judge of the nonacceptance; the notice shall state 
that in order to obtain such a review or hearing, the employer, within 
seven calendar days of the date of the notice, shall file by facsimile 
(fax), telegram, or other means normally assuring next day delivery a 
written request to the Chief Administrative Law Judge of the Department 
of Labor (giving the address) and simultaneously serve a copy on the RA; 
the notice shall also state that the employer may submit any legal 
arguments which the employer believes will rebut the basis of the RA's 
action; and
    (4) State that if the employer does not request an expedited 
administrative-judicial review or a de novo hearing before an 
administrative law judge within the seven calendar days no further 
consideration of the employer's application for temporary alien 
agricultural labor certification will be made by any DOL official.
    (d) Appeal procedures. If the employer timely requests an expedited 
administrative review or de novo hearing before an administrative law 
judge pursuant to paragraph (c)(3) of this section, the procedures at 
Sec. 655.112 of this part shall be followed.
    (e) Required modifications. If the application is not accepted for 
consideration by the RA, but the RA's written notification to the 
applicant is not timely as required by Sec. 655.101 of this part, the 
certification determination will not be extended beyond 20 calendar days 
before the date of need. The notice will specify that the RA's temporary 
alien agricultural labor certification determination will be made no 
later than 20 calendar days before the date of need, provided that the 
applicant submits the modifications to the application which are 
required by the RA within five calendar days and in a manner specified 
by the RA which will enable the test of U.S. worker availability to be 
made as required by Sec. 655.101 of this part within the time available 
for such purposes.
[42 FR 45899, Sept. 13, 1977, as amended at 59 FR 41875, Aug. 15, 1994]



Sec. 655.105  Recruitment period.

    (a) Notice of acceptance of application for consideration; required 
recruitment. If the RA determines that the H-2A application meets the 
requirements of Secs. 655.101-655.103 of this part, the RA shall 
promptly notify the employer (by means normally assuring next-day 
delivery) in writing with copies to the State agency. The notice shall 
inform

[[Page 469]]

the employer and the State agency of the specific efforts which will be 
expected from them during the following weeks to carry out the 
assurances contained in Sec. 655.103 with respect to the recruitment of 
U.S. workers. The notice shall require that the job order be laced into 
intrastate clearance and into interstate clearance to such States as the 
RA shall determine to be potential sources of U.S. workers. The notice 
may require the employer to engage in positive recruitment efforts 
within a multi-State region of traditional or expected labor supply 
where the RA finds, based on current information provided by a State 
agency and such information as may be offered and provided by other 
sources, that there are a significant number of able and qualified U.S. 
workers who, if recruited, would likely be willing to make themselves 
available for work at the time and place needed. In making such a 
finding, the RA shall take into account other recent recruiting efforts 
in those areas and will attempt to avoid requiring employers to futilely 
recruit in areas where there are a significant number of local employers 
recruiting for U.S. workers for the same types of occupations. Positive 
recruitment is in addition to, and shall be conducted within the same 
time period as, the circulation through the interstate clearance system 
of an agricultural clearance order. The obligation to engage in such 
positive recruitment shall terminate on the date H-2A workers depart for 
the employer's place of work. In determining what positive recruitment 
shall be required, the RA will ascertain the normal recruitment 
practices of non-H-2A agricultural employers in the area and the kind 
and degree of recruitment efforts which the potential H-2A employer made 
to obtain H-2A workers. The RA shall ensure that the effort, including 
the location(s) of the positive recruitment required of the potential H-
2A employer, during the period after filing the application and before 
the date the H-2A workers depart their prior location to come to the 
place of employment, shall be no less than: (1) The recruitment efforts 
of non-H-2A agricultural employers of comparable or smaller size in the 
area of employment; and (2) the kind and degree of recruitment efforts 
which the potential H-2A employer made to obtain H-2A workers.
    (b) Recruitment of U.S. workers. After an application for temporary 
alien agricultural labor certification is accepted for processing 
pursuant to paragraph (a) of this section, the RA, under the direction 
of the ETA national office and with the assistance of other RAs with 
respect to areas outside the region, shall provide overall direction to 
the employer and the State agency with respect to the recruitment of 
U.S. workers.
    (c) Modifications. At any time during the recruitment effort, the 
RA, with the Director's concurrence, may require modifications to a job 
offer when the RA determines that the job offer does not contain all the 
provisions relating to minimum benefits, wages, and working conditions, 
required by Sec. 655.102(b) of this part. If any such modifications are 
required after an application has been accepted for consideration by the 
RA, the modifications must be made; however, the certification 
determination shall not be delayed beyond the 20 calendar days prior to 
the date of need as a result of such modification.
    (d) Final determination. By 20 calendar days before the date of need 
specified in the application, except as provided for under 
Secs. 655.101(c)(2) and 655.104(e) of this part for untimely modified 
applications, the RA, when making a determination of the availability of 
U.S. workers, shall also make a determination as to whether the employer 
has satisfied the recruitment assurances in Sec. 655.103 of this part. 
If the RA concludes that the employer has not satisfied the requirements 
for recruitment of U.S. workers, the RA shall deny the temporary alien 
agricultural labor certification, and shall immediately notify the 
employer in writing with a copy to the State agency and local office. 
The notice shall contain the statements specified in Sec. 655.104(d) of 
this part.
    (e) Appeal procedure. With respect to determinations by the RA 
pursuant to this section, if the employer timely requests an expedited 
administrative review or a de novo hearing before an administrative law 
judge, the procedures

[[Page 470]]

in Sec. 655.112 of this part shall be followed.



Sec. 655.106  Referral of U.S. workers; determinations based on U.S. worker availability and adverse effect; activities after receipt of the temporary alien 
          agricultural labor certification.

    (a) Referral of able, willing, and qualified eligible U.S. workers. 
With respect to the referral of U.S. workers to job openings listed on a 
job order accompanying an application for temporary alien agricultural 
labor certification, no U.S. worker-applicant shall be referred unless 
such U.S. worker has been made aware of the terms and conditions of and 
qualifications for the job, and has indicated, by accepting referral to 
the job, that she or he meets the qualifications required and is able, 
willing, and eligible to take such a job.
    (b) (1) Determinations. If the RA, in accordance with Sec. 655.105 
of this part, has determined that the employer has complied with the 
recruitment assurances and the adverse effect criteria of Sec. 655.102 
of this part, by the date specified pursuant to Sec. 655.101(c)(2) of 
this part for untimely modified applications or 20 calendar days before 
the date of need specified in the application, whichever is applicable, 
the RA shall grant the temporary alien agricultural labor certification 
request for enough H-2A workers to fill the employer's job opportunities 
for which U.S. workers are not available. In making the temporary alien 
agricultural labor certification determination, the RA shall consider as 
available any U.S. worker who has made a firm commitment to work for the 
employer, including those workers committed by other authorized persons 
such as farm labor contractors and family heads. Such a firm commitment 
shall be considered to have been made not only by workers who have 
signed work contracts with the employer, but also by those whom the RA 
determines are likely to sign a work contract. The RA shall count as 
available any U.S. worker who has applied to the employer (or on whose 
behalf an application has been made), but who was rejected by the 
employer for other than lawful job-related reasons or who has not been 
provided with a lawful job-related reason for rejection by the employer, 
as determined by the RA. The RA shall not grant a temporary alien 
agricultural labor certification request for any H-2A workers if the RA 
determines that:
    (i) Enough able, willing, and qualified U.S. workers have been 
identified as being available to fill all the employer's job 
opportunities;
    (ii) The employer, since the time the application was accepted for 
consideration under Sec. 655.104 of this part, has adversely affected 
U.S. workers by offering to, or agreeing to provide to, H-2A workers 
better wages, working conditions or benefits (or by offering to, or 
agreeing to impose on alien workers less obligations and restrictions) 
than those offered to U.S. workers;
    (iii) The employer during the previous two-year period employed H-2A 
workers and the RA has determined, after notice and opportunity for a 
hearing, that the employer at any time during that period substantially 
violated a material term or condition of a temporary alien agricultural 
labor certification with respect to the employment of U.S. or H-2A 
workers;
    (iv) The employer has not complied with the workers' compensation 
requirements at Sec. 655.102(b)(2) of this part; or
    (v) The employer has not satisfactorily complied with the positive 
recruitment requirements specified by this subpart.

Further, the RA, in making the temporary alien agricultural labor 
certification determination, will subtract from any temporary alien 
agricultural labor certification the specific verified number of job 
opportunities involved which are vacant because of a strike or other 
labor dispute involving a work stoppage, or a lockout, in the occupation 
at the place of employment (and for which H-2A workers have been 
requested). Upon receipt by the RA of such labor dispute information 
from any source, the RA shall verify the existence of the strike, labor 
dispute, or lockout and the vacancies directly attributable through the 
receipt by the RA of a written report from the State agency written 
following an investigation by the State agency (made under the oversight 
of the RA) of the situation and after the RA has consulted

[[Page 471]]

with the Director prior to making such a determination.
    (2) Fees. A temporary alien agricultural labor certification 
determination granting an application shall include a bill for the 
required fees. Each employer (except joint employer associations) of H-
2A workers under the application for temporary alien agricultural labor 
certification shall pay in a timely manner a nonrefundable fee upon 
issuance of the temporary alien agricultural labor certification 
granting the application (in whole or in part), as follows:
    (i) Amount. The fee for each employer receiving a temporary alien 
agricultural labor certification is $100 plus $10 for each job 
opportunity for H-2A workers certified, provided that the fee to an 
employer for each temporary alien agricultural labor certification 
received shall be no greater than $1,000. In the case of a joint 
employer association receiving a temporary alien agricultural labor 
certification, each employer-member receiving a temporary alien 
agricultural labor certification shall pay a fee of $100 plus $10 for 
each job opportunity for H-2A workers certified, provided that the fee 
to an employer for each temporary alien agricultural labor certification 
received shall be no greater than $1,000. The joint employer association 
will not be charged a separate fee. The fees shall be paid by check or 
money order made payable to ``Department of Labor''. In the case of 
employers of H-2A workers which are members of a joint employer 
association applying on their behalf, the aggregate fees for all 
employers of H-2A workers under the application may be paid by one check 
or money order.
    (ii) Timeliness. Fees received by the RA no more than 30 calendar 
days after the date of the temporary alien agricultural labor 
certification determination are timely.
    (c) Changes to temporary alien agricultural labor certifications; 
temporary alien agricultural labor certifications involving employer 
associations--(1) Changes. Temporary alien agricultural labor 
certifications are subject to the conditions and assurances made during 
the application process. Any changes in the level of benefits, wages, 
and working conditions an employer may wish to make at any time during 
the work contract period must be approved by the RA after written 
application by the employer, even if such changes have been agreed to by 
an employee. Temporary alien agricultural labor certifications shall be 
for the specific period of time specified in the employer's job offer, 
which shall be less than twelve months; shall be limited to the 
employer's specific job opportunities; and may not be transferred from 
one employer to another, except as provided for by paragraph (c)(2) of 
this section.
    (2) Associations--(i) Applications. If an association is requesting 
a temporary alien agricultural labor certification as a joint employer, 
the temporary alien agricultural labor certification granted under this 
section shall be made jointly to the association and to its employer 
members. Except as provided in paragraph (c)(2)(iii) of this section, 
such workers may be transferred among its producer members to perform 
work for which the temporary alien agricultural labor certification was 
granted, provided the association controls the assignment of such 
workers and maintains a record of such assignments. All temporary alien 
agricultural labor certifications to associations may be used for the 
certified job opportunities of any of its members. If an association is 
requesting a temporary alien agricultural labor certification as a sole 
employer, the temporary alien agricultural labor certification granted 
pursuant to this section shall be made to the association only.
    (ii) Referrals and transfers. For the purposes of complying with the 
``fifty-percent rule'' at Sec. 655.103(e) of this part, any association 
shall be allowed to refer or transfer workers among its members (except 
as provided in paragraph (c)(2)(iii) of this section), and an 
association acting as an agent for its members shall not be considered a 
joint employer merely because of such referral or transfer.
    (iii) Ineligible employer-members. Workers shall not be transferred 
or referred to an association's member, if that member is ineligible to 
obtain any or any additional workers, pursuant to Sec. 655.110 of this 
part.

[[Page 472]]

    (3) Extension of temporary alien agricultural labor certification--
(i) Short-term extension. An employer who seeks an extension of two 
weeks or less of the temporary alien agricultural labor certification 
shall apply for such extension to INS. If INS grants such an extension, 
the temporary alien agricultural labor certification shall be deemed 
extended for such period as is approved by INS. No extension granted 
under this paragraph (c)(3)(i) shall be for a period longer than the 
original work contract period of the temporary alien agricultural labor 
certification.
    (ii) Long-term extension. For extensions beyond the period which may 
be granted by INS pursuant to paragraph (c)(3)(i) of this section, an 
employer, after 50 percent of the work contract period has elapsed, may 
apply to the RA for an extension of the period of the temporary alien 
agricultural labor certification, for reasons related to weather 
conditions or other external factors beyond the control of the employer 
(which may include unforeseen changes in market conditions), provided 
that the employer's need for an extension is supported in writing by the 
employer, with documentation showing that the extension is needed and 
could not have been reasonably foreseen by the employer. The RA shall 
grant or deny the request for extension of the temporary alien 
agricultural labor certification based on available information, and 
shall notify the employer of the decision on the request in writing. The 
RA shall not grant an extension where the total work contract period, 
including past temporary alien labor certifications for the job 
opportunity and extensions, would be 12 months or more, except in 
extraordinary circumstances. The RA shall not grant an extension where 
the temporary alien agricultural labor certification has already been 
extended by INS pursuant to paragraph (c)(3)(i) of this section.
    (d) Denials of applications. If the RA does not grant the temporary 
alien agricultural labor certification (in whole or in part) the RA 
shall notify the employer by means reasonably calculated to assure next-
day delivery. The notification shall contain all the statements required 
in Sec. 655.104(c) of this part. If a timely request is made for an 
administrative-judicial review or a de novo hearing by an administrative 
law judge, the procedures of Sec. 655.112 of this part shall be 
followed.
    (e) Approvals of applications--(1) Continued recruitment of U.S. 
workers. After a temporary alien agricultural labor certification has 
been granted, the employer shall continue its efforts to recruit U.S. 
workers, until the H-2A workers have departed for the employer's place 
of employment, and shall notify the local office, in writing, of the 
exact date on which the H-2A workers depart for the employer's place of 
employment. The employer, however, shall keep an active job order on 
file until the ``50-percent rule'' assurance at Sec. 655.103(e) of this 
part is met, except as provided for by paragraph (f) of this section.
    (2) Referrals by ES System. The ES System shall continue to refer to 
the employer U.S. workers who apply as long as there is an active job 
order on file.
    (f) Exceptions. (1) ``Fifty-percent rule'' inapplicable to small 
employers. The assurance requirement at Sec. 655.103(e) of this part 
does not apply to any employer who:
    (i) Did not, during any calendar quarter during the preceding 
calendar year, use more than 500 ``man-days'' of agricultural labor, as 
defined in section 3(u) of the Fair Labor Standards Act of 1938 (29 
U.S.C. 203(u)), and so certifies to the RA in the H-2A application; and
    (ii) Is not a member of an association which has applied for a 
temporary alien agricultural labor certification under this subpart for 
its members; and
    (iii) Has not otherwise ``associated'' with other employers who are 
applying for H-2A workers under this subpart, and so certifies to the 
RA.
    (2) Displaced H-2A workers. An employer shall not be liable for 
payment under Sec. 655.102(b)(6) of this part with respect to an H-2A 
worker whom the RA certifies is displaced due to compliance with 
Sec. 655.103(e) of this part.
    (g) Withholding of U.S. workers prohibited. (1) Complaints. Any 
employer who has reason to believe that a person or entity has willfully 
and knowingly withheld U.S. workers prior to the arrival at the job site 
of H-2A workers in

[[Page 473]]

order to force the hiring of U.S. workers under Sec. 655.103(e) of this 
part may submit a written complaint to the local office. The complaint 
shall clearly identify the person or entity whom the employer believes 
has withheld the U.S. workers, and shall specify sufficient facts to 
support the allegation (e.g., dates, places, numbers and names of U.S. 
workers) which will permit an investigation to be conducted by the local 
office.
    (2) Investigations. The local office shall inform the RA by 
telephone that a complaint under the provisions of paragraph (g) of this 
section has been filed and shall immediately investigate the complaint. 
Such investigation shall include interviews with the employer who has 
submitted the complaint, the person or entity named as responsible for 
withholding the U.S. workers, and the individual U.S. workers whose 
availability has purportedly been withheld. In the event the local 
office fails to conduct such interviews, the RA shall do so.
    (3) Reports of findings. Within five working days after receipt of 
the complaint, the local office shall prepare a report of its findings, 
and shall submit such report (including recommendations) and the 
original copy of the employer's complaint to the RA.
    (4) Written findings. The RA shall immediately review the employer's 
complaint and the report of findings submitted by the local office, and 
shall conduct any additional investigation the RA deems appropriate. No 
later than 36 working hours after receipt of the employer's complaint 
and the local office's report, the RA shall issue written findings to 
the local office and the employer. Where the RA determines that the 
employer's complaint is valid and justified, the RA shall immediately 
suspend the application of Sec. 655.103(e) of this part to the employer. 
Such suspension of Sec. 655.103(e) of this part under these 
circumstances shall not take place, however, until the interviews 
required by paragraph (g)(2) of this section have been conducted. The 
RA's determination under the provisions of this paragraph (g)(4) shall 
be the final decision of the Secretary, and no further review by any DOL 
official shall be given to it.
    (h) Requests for new temporary alien agricultural labor 
certification determinations based on nonavailability of able, willing, 
and qualified U.S. workers--(1) Standards for requests. If a temporary 
alien agricultural labor certification application has been denied (in 
whole or in part) based on the RA's determination of the availability of 
able, willing, and qualified U.S. workers, and, on or after 20 calendar 
days before the date of need specified in the temporary alien 
agricultural labor certification determination, such U.S. workers 
identified as being able, willing, qualified, and available are, in 
fact, not able, willing, qualified, or available at the time and place 
needed, the employer may request a new temporary alien agricultural 
labor certification determination from the RA. The RA shall 
expeditiously, but in no case later than 72 hours after the time a 
request is received, make a determination on the request.
    (2) Filing requests. The employer's request for a new determination 
shall be made directly to the RA. The request may be made to the RA by 
telephone, but shall be confirmed by the employer in writing as required 
by paragraphs (h)(2)(i) or (ii) of this section.
    (i) Workers not able, willing, qualified, or eligible. If the 
employer asserts that any worker who has been referred by the ES System 
or by any other person or entity is not an eligible worker or is not 
able, willing, or qualified for the job opportunity for which the 
employer has requested H-2A workers, the burden of proof is on the 
employer to establish that the individual referred is not able, willing, 
qualified, or eligible because of lawful job-related reasons. The 
employer's burden of proof shall be met by the employer's submission to 
the RA, within 72 hours of the RA's receipt of the request for a new 
determination, of a signed statement of the employer's assertions, which 
shall identify each rejected worker by name and shall state each lawful 
job-related reason for rejecting that worker.
    (ii) U.S. workers not available. If the employer telephonically 
requests the new determination, asserting solely that U.S. workers are 
not available, the employer shall submit to the RA a

[[Page 474]]

signed statement confirming such assertion. If such signed statement is 
not received by the RA within 72 hours of the RA's receipt of the 
telephonic request for a new determination, the RA may make the 
determination based solely on the information provided telephonically 
and the information (if any) from the local office.
    (3) Regional office review--(i) Expeditious review. The RA 
expeditiously shall review the request for a new determination. The RA 
may request a signed statement from the local office in support of the 
employer's assertion of U.S. worker nonavailability or referred U.S. 
workers not being able, willing, or qualified because of lawful job-
related reasons.
    (ii) New determination. If the RA determines that the employer's 
assertion of nonavailability is accurate and that no able, willing, or 
qualified U.S. worker has been refused or is being refused employment 
for other than lawful job-related reasons, the RA shall, within 72 hours 
after receipt of the employer's request, render a new determination. 
Prior to making a new determination, the RA promptly shall ascertain 
(which may be through the ES System or other sources of information on 
U.S. worker availability) whether able, willing, and qualified 
replacement U.S. workers are available or can be reasonably expected to 
be present at the employer's establishment within 72 hours from the date 
the employer's request was received.
    (iii) Notification of new determination. If the RA cannot identify 
sufficient able, willing, and qualified U.S. workers who are or who are 
likely to be available, the RA shall grant the employer's new 
determination request (in whole or in part) based on available 
information as to replacement U.S. worker availability. The RA's 
notification to the employer on the new determination shall be in 
writing (by means normally assuring next-day delivery), and the RA's 
determination under the provisions of this paragraph (h)(3) shall be the 
final decision of the Secretary, and no further review shall be given to 
an employer's request for a new H-2A determination by any DOL official. 
However, this does not preclude an employer from submitting subsequent 
requests for new determinations, if warranted, based on subsequent facts 
concerning purported nonavailability of U.S. workers or referred workers 
not being eligible workers or not able, willing, or qualified because of 
lawful job-related reasons.
52 FR 20507, June 1, 1987, as amended by 55 FR 29358, July 19, 1990]



Sec. 655.107  Adverse effect wage rates (AEWRs).

    (a) Computation and publication of AEWRs. Except as otherwise 
provided in this section, the AEWRs for all agricultural employment 
(except for those occupations deemed inappropriate under the special 
circumstances provisions of Sec. 655.93 of this part) for which 
temporary alien agricultural labor certification is being sought shall 
be equal to the annual weighted average hourly wage rate for field and 
livestock workers (combined) for the region as published annually by the 
U.S. Department of Agriculture (USDA) based on the USDA quarterly wage 
survey. The Director shall publish, at least once in each calendar year, 
on a date or dates to be determined by the Director, AEWRs for each 
State (for which USDA publishes regional data), calculated pursuant to 
this paragraph (a) as a notice or notices in the Federal Register.
    (b) Higher prevailing wage rates. If, as the result of a State 
agency prevailing wage survey determination, the prevailing wage rate in 
an area and agricultural activity (as determined by the State agency 
survey and verified by the Director) is found to be higher that the AEWR 
computed pursuant to paragraph (a) of this section, the higher 
prevailing wage rate shall be offered and paid to all workers by 
employers seeking temporary alien agricultural labor certification for 
that agricultural activity and area.
    (c) Federal minimum wage rate. In no event shall an AEWR computed 
pursuant to this section be lower than the hourly wage rate published in 
29 U.S.C. 206(a)(1) and currently in effect.
[52 FR 20507, June 1, 1987, as amended at 54 FR 28046, July 5, 1989]

[[Page 475]]



Sec. 655.108  H-2A applications involving fraud or willful misrepresentation.

    (a) Referral for investigation. If possible fraud or willful 
misrepresentation involving a temporary alien agricultural labor 
certification application is discovered prior to a final temporary alien 
agricultural labor certification determination or if it is learned that 
the employer or agent (with respect to an application) is the subject of 
a criminal indictment or information filed in a court, the RA shall 
refer the matter to the INS and DOL Office of the Inspector General for 
investigation. The RA shall continue to process the application and may 
issue a temporary alien agricultural labor certification.
    (b) Continued processing. If a court finds an employer or agent not 
guilty of fraud or willful misrepresentation, or if the Department of 
Justice decides not to prosecute an employer or agent, the RA shall not 
deny the temporary alien agricultural labor certification application on 
the grounds of fraud or willful misrepresentation. The application, of 
course, may be denied for other reasons pursuant to this subpart.
    (c) Terminated processing. If a court or the INS determines that 
there was fraud or willful misrepresentation involving a temporary alien 
agricultural labor certification application, the application is 
thereafter invalid, consideration of the application shall be terminated 
and the RA shall return the application to the employer or agent with 
the reasons therefor stated in writing.



Sec. 655.110  Employer penalties for noncompliance with terms and conditions of temporary alien agricultural labor certifications.

    (a) Investigation of violations. If, during the period of two years 
after a temporary alien agricultural labor certification has been 
granted (in whole or in part), the RA has reason to believe that an 
employer violated a material term or condition of the temporary alien 
agricultural labor certification, the RA shall, except as provided in 
paragraph (b) of this section, investigate the matter. If, after the 
investigation, the RA determines that a substantial violation has 
occurred, the RA, after consultation with the Director, shall notify the 
employer that a temporary alien agricultural certification request will 
not be granted for the next period of time in a calendar year during 
which the employer would normally be expected to request a temporary 
alien agricultural labor certification, and any application subsequently 
submitted by the employer for that time period will not be accepted by 
the RA. If multiple or repeated substantial violations are involved, the 
RA's notice to the employer shall specify that the prospective denial of 
the temporary alien agricultural labor certification will apply not only 
to the next anticipated period for which a temporary alien agricultural 
labor certification would normally be requested, but also to any periods 
within the coming two or three years; two years for two violations, or 
repetitions of the same violations, and three years for three or more 
violations, or repetitions thereof. The RA's notice shall be in writing, 
shall state the reasons for the determinations, and shall offer the 
employer an opportunity to request an expedited administrative review or 
a de novo hearing before an administrative law judge of the 
determination within seven calendar days of the date of the notice. If 
the employer requests an expedited administrative review or a de novo 
hearing before an administrative law judge, the procedures in 
Sec. 655.112 of this part shall be followed.
    (b) Employment Standards Administration investigations. The RA may 
make the determination described in paragraph (a) of this section based 
on information and recommendations provided by the Employment Standards 
Administration, after an Employment Standards Administration 
investigation has been conducted in accordance with the Employment 
Standards Administration procedures, that an employer has not complied 
with the terms and conditions of employment prescribed as a condition 
for a temporary alien agricultural labor certification. In such 
instances, the RA need not conduct any investigation of his/her own, and 
the subsequent notification to the employer and other procedures 
contained in paragraph (a) of this section will

[[Page 476]]

apply. Penalties invoked by the Employment Standards Administration for 
violations of temporary alien agricultural labor certification terms and 
conditions shall be treated and handled separately from sanctions 
available to the RA, and an employer's obligations for compliance with 
the Employment Standards Administration's enforcement penalties shall 
not absolve an employer from sanctions applied by ETA under this section 
(except as noted in paragraph (a) of this section).
    (c) Less than substantial violations--(1) Requirement of special 
procedures. If, after investigation as provided for under paragraph (a) 
of this section, or an Employment Standards Administration notification 
as provided under paragraph (b) of this section, the RA determines that 
a less than substantial violation has occurred, but the RA has reason to 
believe that past actions on the part of the employer may have had and 
may continue to have a chilling or otherwise negative effect on the 
recruitment, employment, and retention of U.S. workers, the RA may 
require the employer to conform to special procedures before and after 
the temporary alien labor certification determination (including special 
on-site positive recruitment and streamlined interviewing and referral 
techniques) designed to enhance U.S. worker recruitment and retention in 
the next year as a condition for receiving a temporary alien 
agricultural labor certification. Such requirements shall be reasonable, 
and shall not require the employer to offer better wages, working 
conditions and benefits than those specified in Sec. 655.102 of this 
part, and shall be no more than deemed necessary to assure employer 
compliance with the test of U.S. worker availability and adverse effect 
criteria of this subpart. The RA shall notify the employer in writing of 
the special procedures which will be required in the coming year. The 
notification shall state the reasons for the imposition of the 
requirements, state that the employer's agreement to accept the 
conditions will constitute inclusion of them as bona fide conditions and 
terms of a temporary alien agricultural labor certification, and shall 
offer the employer an opportunity to request an administrative review or 
a de novo hearing before an administrative law judge. If an 
administrative review or de novo hearing is requested, the procedures 
prescribed in Sec. 655.112 of this part shall apply.
    (2) Failure to comply with special procedures. If the RA determines 
that the employer has failed to comply with special procedures required 
pursuant to paragraph (c)(1) of this section, the RA shall send a 
written notice to the employer, stating that the employer's otherwise 
affirmative temporary alien agricultural labor certification 
determination will be reduced by twenty-five percent of the total number 
of H-2A aliens requested (which cannot be more than those requested in 
the previous year) for a period of one year. Notice of such a reduction 
in the number of workers requested shall be conveyed to the employer by 
the RA in the RA's written temporary alien agricultural labor 
certification determination required by Sec. 655.101 of this part (with 
the concurrence of the Director). The notice shall offer the employer an 
opportunity to request an administrative review or a de novo hearing 
before an administrative law judge. If an administrative review or de 
novo hearing is requested, the procedures prescribed in Sec. 655.112 of 
this part shall apply, provided that if the administrative law judge 
affirms the RA's determination that the employer has failed to comply 
with special procedures required by paragraph (c)(1) of this section, 
the reduction in the number of workers requested shall be twenty-five 
percent of the total number of H-2A aliens requested (which cannot be 
more than those requested in the previous year) for a period of one 
year.
    (d) Penalties involving members of associations. If, after 
investigation as provided for under paragraph (a) of this section, or 
notification from the Employment Standards Administration under 
paragraph (b) of this section, the RA determines that a substantial 
violation has occurred, and if an individual producer member of a joint 
employer association is determined to have committed the violation, the 
denial of temporary alien agricultural labor certification penalty 
prescribed in paragraph (a) shall apply only to

[[Page 477]]

that member of the association unless the RA determines that the 
association or other association member participated in, had knowledge 
of, or had reason to know of the violation, in which case the penalty 
shall be invoked against the association or other association member as 
well.
    (e) Penalties involving associations acting as joint employers. If, 
after investigation as provided for under paragraph (a) of this section, 
or notification from the Employment Standards Administration under 
paragraph (b) of this section, the RA determines that a substantial 
violation has occurred, and if an association acting as a joint employer 
with its members is determined to have committed the violation, the 
denial of temporary alien agricultural labor certification penalty 
prescribed in paragraph (a) of this section shall apply only to the 
association, and shall not be applied to any individual producer member 
of the association unless the RA determines that the member participated 
in, had knowledge of, or reason to know of the violation, in which case 
the penalty shall be invoked against the association member as well.
    (f) Penalties involving associations acting as sole employers. If, 
after investigation as provided for under paragraph (a) of this section, 
or notification from the Employment Standards Administration under 
paragraph (b) of this section, the RA determines that a substantial 
violation has occurred, and if an association acting as a sole employer 
is determined to have committed the violation, no individual producer 
member of the association shall be permitted to employ certified H-2A 
workers in the crop and occupation for which the H-2A workers had been 
previously certified for the sole employer association unless the 
producer member applies for temporary alien agricultural labor 
certification under the provisions of this subpart in the capacity of an 
individual employer/applicant or as a member of a joint employer 
association, and is granted temporary alien agricultural labor 
certification by the RA.
    (g) Types of violations--(1) Substantial violation. For the purposes 
of this subpart, a substantial violation is one or more actions of 
commission or omission on the part of the employer or the employer's 
agent, with respect to which the RA determines:
    (i)(A) That the action(s) is/are significantly injurious to the 
wages, benefits, or working conditions of 10 percent or more of an 
employer's U.S. and/or H-2A workforce; and that:
    (1) With respect to the action(s), the employer has failed to comply 
with one or more penalties imposed by the Employment Standards 
Administration for violation(s) of contractual obligations found by that 
agency (if applicable), or with one or more decisions or orders of the 
Secretary or a court pursuant to Sec. 216 of the INA (8 U.S.C. 1186), 
this subpart, or 29 CFR part 501 (Employment Standards Administration 
enforcement of contractual obligations); or
    (2) The employer has engaged in a pattern or practice of actions 
which are significantly injurious to the wages, benefits, or working 
conditions of 10 percent or more of an employer's U.S. and/or H-2A 
workforce;
    (B) That the action(s) involve(s) impeding an investigation of an 
employer pursuant to Sec. 216 of the INA (8 U.S.C. 1186), this subpart, 
or 29 CFR part 501 (Employment Standards Administration enforcement of 
contractual obligations);
    (C) That the employer has not paid the necessary fee in a timely 
manner;
    (D) That the employer is not currently eligible to apply for a 
temporary alien agricultural labor certification pursuant to 
Sec. 655.210 of this part (failure of an employer to comply with the 
terms of a temporary alien agricultural labor certification in which the 
application was filed under subpart C of this part prior to June 1, 
1987); or
    (E) That there was fraud involving the application for temporary 
alien agricultural labor certification of that the employer made a 
material misrepresentation of fact during the application process; and
    (ii) That there are no extenuating circumstances involved with the 
action(s) described in paragraph (g)(1)(i) of this section (as 
determined by the RA).
    (2) Less than substantial violation. For the purposes of this 
subpart, a less

[[Page 478]]

than substantial violation is an action of commission or omission on the 
part of the employer or the employer's agent which violates a 
requirement of this subpart, but is not a substantial violation.



Sec. 655.111  Petition for higher meal charges.

    (a) Filing petitions. Until a new amount is set pursuant to this 
paragraph (a), the RA may permit an employer to charge workers up to 
$6.58 for providing them with three meals per day, if the employer 
justifies the charge and submits to the RA the documentation required by 
paragraph (b) of this section. In the event the employer's petition for 
a higher meal charge is denied in whole or in part, the employer may 
appeal such denial. Such appeals shall be filed with the Chief 
Administrative Law Judge. Administrative law judges shall hear such 
appeals according to the procedures in 29 CFR part 18, except that the 
appeal shall not be considered as a complaint to which an answer is 
required. The decision of the administrative law judge shall be the 
final decision of the Secretary. Each year the maximum charge allowed by 
this paragraph (a) will be changed by the same percentage as the twelve-
month percent change for the Consumer Price Index for all Urban 
Consumers for Food between December of the year just concluded and 
December of the year prior to that. The annual adjustments shall be 
effective on the date of their publication by the Director as a notice 
in the Federal Register. However, an employer may not impose such a 
charge on a worker prior to the effective date contained in the RA's 
written confirmation of the amount to be charged.
    (b) Required documentation. Documentation submitted shall include 
the cost of goods and services directly related to the preparation and 
serving of meals, the number of workers fed, the number of meals served 
and the number of days meals were provided. The cost of the following 
items may be included: Food; kitchen supplies other than food, such as 
lunch bags and soap; labor costs which have a direct relation to food 
service operations, such as wages of cooks and restaurant supervisors; 
fuel, water, electricity, and other utilities used for the food service 
operation; and other costs directly related to the food service 
operation. Charges for transportation, depreciation, overhead and 
similar charges may not be included. Receipts and other cost records for 
a representative pay period shall be available for inspection by the RA 
for a period of one year.



Sec. 655.112  Administrative review and de novo hearing before an administrative law judge.

    (a) Administrative review--(1) Consideration. Whenever an employer 
has requested an administrative review before an administrative law 
judge of a decision not to accept for consideration a temporary alien 
agricultural labor certification application, of the denial of a 
temporary alien agricultural labor certification, or of a penalty under 
Sec. 655.110 of this part, the RA shall send a certified copy of the ETA 
case file to the Chief Administrative Law Judge by means normally 
assuring next-day delivery. The Chief Administrative Law Judge shall 
immediately assign an administrative law judge (which may be a panel of 
such persons designated by the Chief Administrative Law Judge from the 
Board of Alien Labor Certification Appeals established by part 656 of 
this chapter, but which shall hear and decide the appeal as set forth in 
this section) to review the record for legal sufficiency. The 
administrative law judge shall not remand the case and shall not receive 
additional evidence.
    (2) Decision. Within five working days after receipt of the case 
file the administrative law judge shall, on the basis of the written 
record and after due consideration of any written submissions submitted 
from the parties involved or amici curiae, either affirm, reverse, or 
modify the RA's denial by written decision. The decision of the 
administrative law judge shall specify the reasons for the action taken 
and shall be immediately provided to the employer, RA, the Director, and 
INS by means normally assuring next-day delivery. The administrative law 
judge's decision shall be the final decision of the Secretary and no 
further review shall be given to the temporary alien agricultural labor 
certification application or

[[Page 479]]

the temporary alien agricultural labor certification determination by 
any DOL official.
    (b) De novo hearing--(1) Request for hearing; conduct of hearing. 
Whenever an employer has requested a de novo hearing before an 
administrative law judge of a decision not to accept for consideration a 
temporary alien agricultural labor certification application, of the 
denial of a temporary alien agricultural labor certification, or of a 
penalty under Sec. 655.110 of this part, the RA shall send a certified 
copy of the case file to the Chief Administrative Law Judge by means 
normally assuring next-day delivery. The Chief Administrative Law Judge 
shall immediately assign an administrative law judge (which may be a 
panel of such persons designated by the Chief Administrative Law Judge 
from the Board of Alien Labor Certification Appeals established by part 
656 of this chapter, but which shall hear and decide the appeal as set 
forth in this section) to conduct the de novo hearing. The procedures 
contained in 29 CFR part 18 shall apply to such hearings, except that:
    (i) The appeal shall not be considered to be a complaint to which an 
answer is required,
    (ii) The administrative law judge shall ensure that, at the request 
of the employer, the hearing is scheduled to take place within five 
working days after the administrative law judge's receipt of the case 
file, and
    (iii) The administrative law judge's decision shall be rendered 
within ten working days after the hearing.
    (2) Decision. After a de novo hearing, the administrative law judge 
shall either affirm, reverse, or modify the RA's determination, and the 
administrative law judge's decision shall be provided immediately to the 
employer, RA, Director, and INS by means normally assuring next-day 
delivery. The administrative law judge's decision shall be the final 
decision of the Secretary, and no further review shall be given to the 
temporary alien agricultural labor certification application or the 
temporary alien agricultural labor certification determination by any 
DOL official.
[52 FR 20507, June 1, 1987, as amended at 59 FR 41876, Aug. 15, 1994]



Sec. 655.113  Job Service Complaint System; enforcement of work contracts.

    Complaints arising under this subpart may be filed through the Job 
Service Complaint System, as described in 20 CFR part 658, subpart E. 
Complaints which involve worker contracts shall be referred by the local 
office to the Employment Standards Administration for appropriate 
handling and resolution. See 29 CFR part 501. As part of this process, 
the Employment Standards Administration may report the results of its 
investigation to ETA for consideration of employer penalties under 
Sec. 655.110 of this part or such other action as may be appropriate.



Subpart C--Labor Certification Process for Logging Employment and Non-H-
                       2A Agricultural Employment

    Source:  43 FR 10313, Mar. 10, 1978, unless otherwise noted.



Sec. 655.200  General description of this subpart and definition of terms.

    (a) This subpart applies to applications for temporary alien 
agricultural labor certification filed before June 1, 1987, and to 
applications for temporary alien labor certification for logging 
employment.
    (b) An employer who desires to use foreign workers for temporary 
employment must file a temporary labor certification application 
including a job offer for U.S. workers with a local office of a State 
employment service agency. The employer should file an application a 
minimum of 80 days before the estimated date of need for the workers. If 
filed 80 days before need, sufficient time is allowed for the 60-day 
recruitment period required by the regulations and a determination by 
the Regional Administrator (RA) as to the availability of U.S. workers 
20 days before the date of need. Shortly after the application has been 
filed, the RA makes a determination as to whether or not the application 
has been filed in enough time to recruit U.S. workers and whether or not 
the job offer for U.S. workers offers wages and working conditions which 
will not adversely affect the wages and working conditions

[[Page 480]]

of similarly employed U.S. workers, as prescribed in the regulations in 
this subpart. If the application does not meet the regulatory wage and 
working condition standards, the RA shall deny the temporary labor 
certification application and offer the employer an administrative-
judicial review of the denial by a Department of Labor Hearing Officer. 
If the application is not timely, the RA has discretion, as set forth in 
these regulations, to either deny the application or permit the process 
to proceed reasonably with the employer recruiting U.S. workers upon 
such terms as will accomplish the purposes of the INA and the INS 
regulations. Where the application is timely and meets the regulatory 
standards, the State employment service agency, the employer, and the 
Department of Labor recruit U.S. workers for 60 days. At the end of the 
60 days, the RA grants the temporary labor certification if the RA finds 
that (1) the employer has not offered foreign workers higher wages or 
better working conditions (or less restrictions) than that offered to 
U.S. workers, and (2) U.S. workers are not available for the employer's 
job opportunities. If the temporary labor certification is denied, the 
employer may seek an administrative-judicial review of the denial by a 
Department of Labor Hearing Officer as provided in these regulations. 
The Department of Labor thereafter advises the Immigration and 
Naturalization Service (INS) of approvals and denials of temporary labor 
certifications. The INS may accept or reject this advice. 8 CFR 
214.2(h)(3). The INS makes the final decision as to whether or not to 
grant visas to the foreign workers. 8 U.S.C. 1184(a).
    (c) Definitions for terms used in this subpart. Administrator means 
the chief official of the United States Employment Service or the 
Administrator's designee.
    Adverse effect rate means the wage rate which the Administrator has 
determined must be offered and paid to foreign and U.S. workers for a 
particular occupation and/or area so that the wages of similarly 
employed U.S. workers will not be adversely affected. The Administrator 
may determine that the prevailing wage rate in the area and/or 
occupation is the adverse effect rate, if the use (or non-use) of aliens 
has not depressed the wages of similarly employed U.S. workers. The 
Administrator may determine that a wage rate higher than the prevailing 
wage rate is the adverse effect rate if the Administrator determines 
that the use of aliens has depressed the wages of similarly employed 
U.S. workers.
    Agent means a legal person, such as an association of employers, 
which (1) is authorized to act as an agent of the employer for temporary 
labor certification purposes, and (2) which is not itself an employer, 
or a joint employer, as defined in this section.
    Area of intended employment means the area within normal commuting 
distance of the place (address) of intended employment. If the place of 
intended employment is within a Standard Metropolitan Statistical Area 
(SMSA), any place within the SMSA is deemed to be within normal 
commuting distance of the place of intended employment.
    Employer means a person, firm, corporation or other association or 
organization (1) which currently has a location within the United States 
to which U.S. workers may be referred for employment, and which proposes 
to employ a worker at a place within the United States and (2) which has 
an employer relationship with respect to employees under this subpart as 
indicated by the fact that it hires, pays, fires, supervises and 
otherwise controls the work of such employees. An association of 
employers shall be considered an employer if it has all of the indicia 
of an employer set forth in this definition. Such an association, 
however, shall be considered as a joint employer with the employer 
member if it shares with the employer member one or more of the 
definitional indicia.
    Employment and Training Administration (ETA) means the agency within 
the Department of Labor (DOL) which includes the United States 
Employment Service (USES).
    Hearing Officer means a Department of Labor official, whether 
Administrative Law Judge or Hearing Officer, who is authorized to 
conduct administrative hearings.
    Immigration and Naturalization Service (INS) means the component of 
the U.S.

[[Page 481]]

Department of Justice which makes the determination under the 
Immigration and Nationality Act (INA) on whether or not to grant a visa 
to an alien seeking to perform temporary agricultural or logging work in 
the United States.
    Job opportunity means a job opening for temporary, full-time 
employment at a place in the United States to which U.S. workers can be 
referred.
    Local office means an office of a State employment service agency 
which serves a particular geographic area within a State.
    Regional Administrator, Employment and Training Administration (RA) 
means the chief official of the Employment and Training Administration 
(ETA) in a Department of Labor (DOL) regional office.
    Secretary means the Secretary of Labor or the Secretary's designee.
    State agency means the State employment service agency.
    Temporary labor certification means the advice given by the 
Secretary of Labor to the Immigration and Naturalization Service, 
pursuant to the regulations of that agency at 8 CFR 214.2(h)(3)(i), that 
(1) there are not sufficient U.S. workers who are qualified and 
available to perform the work and (2) the employment of the alien will 
not adversely affect the wages and working conditions of similarly 
employed U.S. workers.
    United States Employment Service (USES) means the agency of the U.S. 
Department of Labor, established under the Wagner-Peyser Act of 1933, 
which is charged with administering the national system of public 
employment offices and carrying out the functions of the Secretary under 
the Immigration and Nationality Act.
    United States workers means any worker who, whether U.S. national, 
citizen or alien, is legally permitted to work permanently within the 
United States.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[43 FR 10313, Mar. 10, 1978, as amended at 49 FR 18295, Apr. 30, 1984; 
52 FR 20524, June 1, 1987]



Sec. 655.201  Temporary labor certification applications.

    (a) (1) An employer who anticipates a labor shortage of workers for 
agricultural or logging employment may request a temporary labor 
certification for temporary foreign workers by filing, or by having an 
agent file, in duplicate, a temporary labor certification application, 
signed by the employer, with a local office in the area of intended 
employment.
    (2) If the temporary labor certification application is filed by an 
agent, however, the agent may sign the application if the application is 
accompanied by a letter from each employer the agent represents, signed 
by the employer, which authorizes the agent to act on the employer's 
behalf and which states that the employer assumes full responsibility 
for the accuracy of the application, for all representations made by the 
agent on the employer's behalf, and for the fulfillment of all legal 
requirements arising under this subpart.
    (3) If an association of employers files the application, the 
association shall identify and submit documents to verify whether, in 
accordance with the definitions at Sec. 655.200, it is: (i) The 
employer, (ii) a joint employer with its member employers, or (iii) the 
agent of its employer members.
    (b) Every temporary labor certification application shall include:
    (1) A copy of the job offer which will be used by the employer (or 
each employer) for the recruitment of both U.S. and foreign workers. The 
job offer for each employer shall state the number of workers needed by 
the employer, and shall be signed by the employer. The job offer shall 
comply with the requirements of Secs. 655.202 and 653.108 of this 
chapter;
    (2) The assurances required by Sec. 655.203; and
    (3) The specific estimated date of need of workers.
    (c) The entire temporary labor certification application shall be 
filed with the local office in duplicate and in sufficient time to allow 
the State agency to attempt to recruit U.S. workers locally and through 
the Employment Service intrastate and interstate clearance system for 60 
calendar days prior

[[Page 482]]

to the estimated date of need. Section 655.206 requires the RA to grant 
or deny the temporary labor certification application by the end of the 
60 calendar days, or 20 days from the estimated date of need, whichever 
is later. That section also requires the RA to offer employers an 
expedited administrative-judicial review in cases of denials of the 
temporary labor certification applications. Following an administrative-
judicial review, the employer has a right to contest any denial before 
the INS pursuant to 8 CFR 214.2(h)(3)(i). Finally, employers need time, 
after the temporary labor certification determination, to complete the 
process for bringing foreign workers into the United States, or to bring 
an appeal of a denial of an application for the labor certification. 
Therefore, employers should file their temporary labor certification 
applications at least 80 days before the estimated date of need 
specified in the application.
    (d) Applications may be amended at any time prior to RA 
determination to increase the number of workers requested in the 
original application for labor certification by not more than 15 percent 
without requiring an additional recruitment period for U.S. workers. 
Requests for increases beyond 15 percent may be approved only when it is 
determined that, based on past experience, the need for additional 
workers could not be foreseen and that a critical need for the workers 
would exist prior to the expiration of an additional recruitment period.
    (e) If a temporary labor certification application, or any part 
thereof, does not satisfy the time requirements specified in paragraph 
(c) of this section, and if the exception in paragraph (d) of this 
section does not apply, the local office shall immediately send both 
copies directly to the appropriate Regional Administrator (RA). The RA 
may then advise the employer and the INS in writing that the temporary 
labor certification cannot be granted because, pursuant to the 
regulations at paragraph (c) of this section, there is not sufficient 
time to test the availability of U.S. workers. The notice of denial to 
the employer shall inform the employer of the right to administrative-
judicial review and to ultimately petition INS for the admission of the 
aliens. In emergency situations, however, the RA may waive the time 
period specified in this section on behalf of employers who have not 
made use of temporary alien workers for the prior year's harvest or for 
other good and substantial cause, provided the RA has sufficient labor 
market information to make the labor certification determinations 
required by 8 CFR 214.2(h)(3)(i).

(Approved by the Office of Management and Budget under control number 
1205-0015)

[43 FR 10313, Mar. 10, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 655.202  Contents of job offers.

    (a) So that the employment of aliens will not adversely affect the 
wages and working conditions of similarly employed U.S. workers, each 
employer's job offer to U.S. workers must offer U.S. workers at least 
the same benefits which the employer is offering, intends to offer, or 
will afford, to temporary foreign workers. Conversely, no job offer may 
impose on U.S. workers any restrictions or obligations which will not be 
imposed on the employer's foreign workers. For example, if the employer 
intends to advance transportation costs to foreign workers either 
directly or indirectly (by having them paid by the foreign government 
involved), the employer must offer to advance the transportation costs 
of U.S. workers.
    (b) Except when higher benefits, wages or working conditions are 
required by the provisions of paragraph (a) of this section, the 
Administrator has determined that, in order to protect similarly 
employed U.S. workers from adverse effect with respect to wages and 
working conditions, every job offer for U.S. workers must always include 
the following minimal benefit, wage, and working condition provisions:
    (1) The employer will provide the worker with housing without charge 
to the worker. The housing will meet the full set of standards set forth 
at 29 CFR 1910.142 or the full set of standards set forth at part 654, 
subpart E of this chapter, whichever is applicable under the criteria of 
20 CFR 654.401; except

[[Page 483]]

that, for mobile range housing for sheepherders, the housing shall meet 
existing Departmental guidelines. When it is the prevailing practice in 
the area of intended employment to provide family housing, the employer 
will provide such housing to such workers.
    (2) (i) If the job opportunity is covered by the State workers' 
compensation law, the worker will be eligible for workers' compensation 
for injury and disease arising out of and in the course of worker's 
employment; or
    (ii) If the job opportunity is not covered by the State workers' 
compensation law, the employer will provide at no cost to the worker, 
insurance covering injury and disease arising out of and in the course 
of the worker's employment which will provide benefits at least equal to 
those provided under the State workers' compensation law for comparable 
employment;
    (3) The employer will provide without cost to the worker all tools, 
supplies and equipment required to perform the duties assigned and, if 
any of these items are provided by the worker, the employer will 
reimburse the worker for the cost of those so provided;
    (4) The employer will provide the worker with three meals a day, 
except that where under prevailing practice or longstanding arrangement 
at the establishment workers prepare their meals, employers need furnish 
only free and convenient cooking and kitchen facilities. Where the 
employer provides the meals, the job offer shall state the cost to the 
worker for such meals. Until a new amount is set pursuant to this 
paragraph (b)(4), the cost shall not be more than $4.94 per day unless 
the RA has approved a higher cost pursuant to Sec. 655.211 of this part. 
Each year the charge allowed by this paragraph (b)(4) will be changed by 
the 12-month percent change for the Consumer Price Index for All Urban 
Consumers for Food between December of the year just concluded and 
December of the year prior to that. The annual adjustments shall be 
effective on their publication by the Administrator in the Federal 
Register.
    (5) (i) The employer will provide or pay for the worker's 
transportation and daily subsistence from the place, from which the 
worker, without intervening employment, will come to work for the 
employer, to the place of employment, subject to the deductions allowed 
by paragraph (b)(13) of this section. The amount of the daily 
subsistence payment shall be at least as much as the amount the employer 
willl charge the worker for providing the worker with three meals a day 
during employment;
    (ii) If the worker completes the work contract period, the employer 
will provide or pay for the worker's transportation and daily 
subsistence from the place of employment to the place, from which the 
worker, without intervening employment, came to work for the employer, 
unless the worker has contracted for employment with a subsequent 
employer who, in that contract, has agreed to pay for the worker's 
transportation and daily subsistence expenses from the employer's 
worksite to such subsequent employer's worksite; and
    (iii) The employer will provide transportation between the worker's 
living quarters and the employer's worksite without cost to the worker, 
and such transportation will be in accordance with applicable laws and 
regulations;
    (6) (i) The employer guarantees to offer the worker employment for 
at least three-fourths of the workdays of the total period during which 
the work contract and all extensions thereof are in effect, beginning 
with the first workday after the arrival of the worker at the place of 
employment and ending on the termination date specified in the work 
contract, or in its extensions if any. For purposes of this paragraph, a 
workday shall mean any period consisting of 8 hours of work time. An 
employer shall not be considered to have met the work guarantee if the 
employer has merely offered work on three-fourths of the workdays. The 
work must be offered for at least three-fourths of the 8 hour workdays. 
(That is, \3/4\  x  (number of days  x  8 hours.)) Therefore, if, for 
example, the contract contains 20 workdays, the worker must be offered 
employment for 120 hours during the 20 workdays. A worker may be offered 
more than 8 hours of work on a single workday. For purposes of meeting 
the guarantee, however, the

[[Page 484]]

worker may not be required to work for more than 8 hours per workday, or 
on the worker's Sabbath or Federal holidays;
    (ii) If the worker will be paid on a piece rate basis, the employer 
will use the worker's average hourly earnings to calculate the amount 
due under the guarantee; and
    (iii) Any hours which the worker fails to work when the worker has 
been offered an opportunity to do so pursuant to paragraph (b)(6)(i) of 
this section, and all hours of work actually performed (including 
voluntary work over 8 hours in a workday, or on the worker's Sabbath or 
Federal holidays) may be counted by the employer in calculating whether 
the period of guaranteed employment has been met;
    (7) (i) The employer will keep accurate and adequate records with 
respect to the workers' earnings, including field tally records, 
supporting summary payroll records, and records showing: The nature and 
amount of the work performed; the number of hours of work offered each 
day by the employer (broken out by hours offered both in accordance 
with, and over and above, the guarantee); the hours actually worked each 
day by the worker; the time the worker began and ended each workday; the 
rate of pay; the worker's earnings per pay period; and the amount of and 
reasons for any and all deductions made from the worker's wages;
    (ii) If the number of hours worked by the worker is less than the 
number offered in accordance with the guarantee, the records will state 
the reason or reasons therefor;
    (iii) The records, including field tally records and supporting 
summary payroll records, will be made available for inspection and 
copying by representatives of the Secretary of Labor, and by the worker 
and the worker's representatives; and
    (iv) The employer will retain the records for not less than three 
years after the completion of the contract;
    (8) The employer will furnish to the worker at or before each 
payday, in one or more written statements:
    (i) The worker's total earnings for the pay period;
    (ii) The worker's hourly rate or piece rate of pay;
    (iii) The hours of employment which have been offered to the worker 
(broken out by offers in accordance with, and over and above, the 
guarantee);
    (iv) The hours actually worked by the worker;
    (v) An itemization of all deductions made from the worker's wages; 
and
    (vi) If piece rates are used, the units produced daily;
    (9) (i) If the worker will be paid by the hour, the employer will 
pay the worker at least the adverse effect rate; or
    (ii)(A) If the worker will be paid on a piece rate basis, and the 
piece rate does not result at the end of the pay period in average 
hourly earnings during the pay period at least equal to the amount the 
worker would have earned had the worker been paid at the adverse effect 
rate, the worker's pay will be supplemented at that time so that the 
worker's earnings are at least as much as the worker would have earned 
during the pay period if the worker had been paid at the adverse effect 
rate.
    (B) If the employer who pays on a piece rate basis requires one or 
more minimum productivity standards of workers as a condition of job 
retention, (1) such standards shall be no more than those applied by the 
employer in 1977, unless the RA approves a higher minimum; or (2) if the 
employer first applied for temporary labor certification after 1977, 
such standards shall be no more than those normally required (at the 
time of that first application) by other employers for the activity in 
the area of intended employment, unless the RA approves a higher 
minimum.
    (10) The frequency with which the worker will be paid (in accordance 
with the prevailing practice in the area of intended employment, or at 
least biweekly whichever is more frequent);
    (11) If the worker voluntarily abandons employment before the end of 
the contract period, or is terminated for cause, the employer will not 
be responsible for providing or paying for the subsequent transportation 
and subsistence expenses of any worker for whom the employer would have 
otherwise been required to pay such expenses

[[Page 485]]

under paragraph (b)(5)(ii) of this section;
    (12) If, before the expiration date specified in the work contract, 
the services of the worker are no longer required for reasons beyond the 
control of the employer due to fire or other Act of God which makes the 
fulfillment of the contract impossible, and the RA so certifies, the 
employer may terminate the work contract. In such cases the employer 
will make efforts to transfer the worker to other comparable employment 
acceptable to the worker. If such transfer is not effected, the worker 
(i) will be returned to the place from which the worker, without 
intervening employment, came to work for the employer at the employer's 
expense; and
    (ii) Will be reimbursed the full amount of any deductions made from 
the worker's pay by the employer for transportation and subsistence 
expenses to the place of employment borne directly or indirectly by the 
employer;
    (13) The employer will make those deductions from the worker's 
paycheck which are required by law. The job offer shall specify all 
deductions, not required by law, which the employer will make from the 
worker's paycheck. All deductions shall be reasonable. The employer may 
deduct the cost of the worker's transportation and daily subsistence 
expenses to the place of employment which were borne directly by the 
employer; in such cases, however, the job offer shall state that the 
worker will be reimbursed the full amount of such deductions upon the 
worker's completion of 50 percent of the worker's contract period; and
    (14) The employer will provide the worker a copy of the work 
contract between the employer and the worker. The work contract shall 
contain all of the provisions required by paragraphs (a) and (b) of this 
section.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[43 FR 10313, Mar. 10, 1978, as amended at 45 FR 14185, Mar. 4, 1980; 49 
FR 18295, Apr. 30, 1984; 51 FR 30351, Aug. 26, 1986; 52 FR 11466, Apr. 
9, 1987]



Sec. 655.203  Assurances.

    As part of the temporary labor certification application, the 
employer shall include assurances, signed by the employer, that:
    (a) The job opportunity is not:
    (1) Vacant because the former occupant is on strike or being locked 
out in the course of a labor dispute; or
    (2) At issue in a labor dispute involving a work stoppage;
    (b) During the period for which the temporary labor certification is 
granted, the employer will comply with applicable Federal, State and 
local employment-related laws, including employment related health and 
safety laws;
    (c) The job opportunity is open to all qualified U.S. workers 
without regard to race, color, national origin, sex, or religion, and is 
open to U.S. workers with handicaps who are qualified to perform the 
work. No U.S. worker will be rejected for employment for other than a 
lawful job related reason;
    (d) The employer will cooperate with the employment service system 
in the active recruitment of U.S. workers until the foreign workers have 
departed for the employer's place of employment by;
    (1) Allowing the employment service system to prepare local, 
intrastate and interstate job orders using the information supplied on 
the employer's job offer;
    (2) Placing at least two advertisements for the job opportunities in 
local newspapers of general circulation.
    (i) Each such advertisement shall describe the nature and 
anticipated duration of the job opportunity; offer at least the adverse 
effect wage rate; give the \3/4\ guarantee; state that work tools, 
supplies and equipment will be provided by the employer; state that 
housing will also be provided, and that transportation and subsistence 
expenses to the worksite will be provided or paid for by the employer;
    (ii) Each advertisement shall direct interested workers to apply for 
the job opportunity at a local employment service office in their area;
    (3) Cooperating with the employment service system in contacting 
farm labor contractors, migrant workers and other potential workers in 
other areas

[[Page 486]]

of the State and/or Nation by letter and/or telephone;
    (4) Cooperating with the employment service system in contacting 
schools, business and labor organizations, fraternal and veterans 
organizations, and non-profit organizations and public agencies such as 
sponsors of programs under the Comprehensive Employment and Training 
Act, throughout the area of intended employment, in order to enlist them 
in helping to find U.S. workers; and
    (5) If the employer, or an association of employers of which the 
employer is a member, intends to negotiate and/or contract with the 
Government of a foreign nation or any foreign association, corporation 
or organization in order to secure foreign workers, making the same kind 
and degree of efforts to secure U.S. workers;
    (e) From the time the foreign workers depart for the employer's 
place of employment, the employer will provide employment to any 
qualified U.S. worker who applies to the employer until fifty percent of 
the period of the work contract, under which the foreign worker who is 
in the job was hired, has elapsed. In addition, the employer will offer 
to provide housing, and the other benefits, wages, and working 
conditions required by Sec. 655.202, to any such U.S. worker; and
    (f) Performing the other specific recruitment activities specified 
in the notice from the RA required by Sec. 655.205(a).



Sec. 655.204  Determinations based on temporary labor certification applications.

    (a) Within two working days after the temporary labor certification 
application has been filed with it, the local office shall mail the 
duplicate application directly to the appropriate RA.
    (b) The local office, using the job offer portion of its copy of the 
temporary labor certification application, shall promptly prepare a 
local job order and shall begin to recruit U.S. workers in the area of 
intended employment.
    (c) The RA, upon receipt of the duplicate temporary labor 
certification application, shall promptly review the application to 
determine whether it meets the requirements of Secs. 655.201-655.203 in 
order to determine whether the employer's application is (1) timely, and 
(2) contains offers of wages, benefits, and working conditions required 
to ensure that similarly employed U.S. workers will not be adversely 
affected. If the RA determines that the temporary labor certification 
application is not timely in accordance with Sec. 655.201 of this 
subpart, the RA may promptly deny the temporary labor certification on 
the grounds that, in accordance with that regulation, there is not 
sufficient time to adequately test the availability of U.S. workers. If 
the RA determines that the application does not meet the requirements of 
Secs. 655.202-655.203 because the wages, working conditions, benefits, 
assurances, job offer, etc. are not as required, the RA shall deny the 
certification on the grounds that the availability of U.S. workers 
cannot be adequately tested because the wages or benefits, etc. do not 
meet the adverse effect criteria.
    (d) If the certification is denied, the RA shall notify the employer 
in writing of the determination, with a copy to the local office and the 
Administrator. The notice shall:
    (1) State the reasons for the denial, citing the relevant 
regulations; and
    (2) Offer the employer an opportunity to request an expedited 
administrative-judicial review of the denial by a Department of Labor 
(DOL) Hearing Officer. The notice shall state that in order to obtain 
such a review, the employer must, within five calendar days of the date 
of the notice, file by facsimile (fax), telegram, or other means 
normally assuring next day delivery a written request for such a review 
to the Chief Administrative Law Judge of the Department of Labor (giving 
the address) and simultaneously serve a copy on the Regional 
Administrator. The notice shall also state that the employer's request 
for review should contain any legal arguments which the employer 
believes will rebut the basis of the RA's denial of certification; and
    (3) State that, if the employer does not request an expedited 
administrative-judicial review before a DOL Hearing Officer within the 
five days:

[[Page 487]]

    (i) The RA will advise the INS that the certification cannot be 
granted, giving the reasons therefor, and that an administrative-
judicial review of the denial was offered to the employer but not 
accepted, and enclosing, for INS review, the entire temporary labor 
certification application file; and
    (ii) The employer has the opportunity to submit evidence to the INS 
to rebut the bases of the RA's determination in accordance with the INS 
regulation at 8 CFR 214.2(h)(3)(i) but that no further review of the 
employer's application for temporary labor certification may be made by 
any Department of Labor official.
    (e) If the employer timely requests an expedited administrative-
judicial review pursuant to paragraph (d)(2) of this section, the 
procedures of Sec. 655.212 shall be followed.
[43 FR 10313, Mar. 10, 1978, as amended at 59 FR 41876, Aug. 15, 1994]



Sec. 655.205  Recruitment period.

    (a) If the RA determines that the temporary labor certification 
application meets the requirements of Secs. 655.201 through 655.203, the 
RA shall promptly notify the employer in writing, with copies to the 
State agency and local office. The notice shall inform the employer and 
the State agency of the specific efforts which will be expected from 
them during the following weeks to carry out the assurances contained in 
Sec. 655.203 with respect to the recruitment of U.S. workers. The notice 
shall require that the job order be placed both into intrastate 
clearance and into interstate clearance to such States as the RA shall 
determine to be potential sources of U.S. workers.
    (b) Thereafter, the RA, under the direction of the ETA national 
office and with the assistance of other RAs with respect to areas 
outside the region, shall provide overall direction to the employer and 
the State agency with respect to the recruitment of U.S. workers.
    (c) By the 60th day of the recruitment period, or 20 days before the 
date of need specified in the application, whichever is later, the RA, 
when making a determination of the availability of U.S. workers, shall 
also make a determination as to whether the employer has satisfied the 
recruitment assurances in Sec. 655.203. If the RA concludes that the 
employer has not satisfied the requirement for recruitment of U.S. 
workers, the RA shall deny the temporary labor certification, and shall 
immediately notify the employer in writing with a copy to the State 
agency and local office. The notice shall contain the statements 
specified in Sec. 655.204(d).
    (d) If the employer timely requests an expedited administrative-
judicial review before a DOL Hearing Officer, the procedures in 
Sec. 655.212 shall be followed.



Sec. 655.206  Determinations of U.S. worker availability and adverse effect on U.S. workers.

    (a) If the RA, in accordance with Sec. 655.205 has determined that 
the employer has complied with the recruitment assurances, the RA, by 
60th day of the recruitment period, or 20 days before the date of need 
specified in the application, whichever is later, shall grant the 
temporary labor certification for enough aliens to fill the employer's 
job opportunities for which U.S. workers are not available. In making 
this determination the RA shall consider as available for a job 
opportunity any U.S. worker who has made a firm commitment to work for 
the employer, including those workers committed by other authorized 
persons such as farm labor contractors and family heads; such a firm 
commitment shall be considered to have been made not only by workers who 
have signed work contracts with the employer, but also by those whom the 
RA determines are very likely to sign such a work contract. The RA shall 
also count as available any U.S. worker who has applied to the employer 
(or on whose behalf an application has been made), but who was rejected 
by the employer for other than lawful job-related related reasons unless 
the RA determines that:
    (1) Enough qualified U.S. workers have been found to fill all the 
employer's job opportunities; or
    (2) The employer, since the time of the initial determination under 
Sec. 655.204, has adversely affected U.S. workers by offering to, or 
agreeing to provide to, alien workers better wages,

[[Page 488]]

working conditions, or benefits (or by offering or agreeing to impose on 
alien workers less obligations and restrictions) than that offered to 
U.S. workers.
    (b) (1) Temporary labor certifications shall be considered subject 
to the conditions and assurances made during the application process. 
Temporary labor certifications shall be for a limited duration such as 
for ``the 1978 apple harvest season'' or ``until November 1, 1978'', and 
they shall never be for more than eleven months. They shall be limited 
to the employer's specific job opportunities; therefore, they may not be 
transferred from one employer to another.
    (2) If an association of employers is itself the employer, as 
defined in Sec. 655.200, certifications shall be made to the association 
and may be used for any of the job opportunities of its employer members 
and workers may be transferred among employer members.
    (3) If an association of employers is a joint employer with its 
employer members, as defined in Sec. 655.200, the certification shall be 
made jointly to the association and the employer members. In such cases 
workers may be transferred among the employer members provided the 
employer members and the association agree in writing to be jointly and 
severally liable for compliance with the temporary labor certification 
obligations set forth in this subpart.
    (c) If the RA denies the temporary labor certification in whole or 
part, the RA shall notify the employer in writing by means normally 
assuring next-day delivery. The notice shall contain all of the 
statements required in Sec. 655.204(d). If a timely request is made for 
an administrative-judicial review by a DOL Hearing Officer, the 
procedures of Sec. 655.212 shall be followed.
    (d) (1) After a temporary labor certification has been granted, the 
employer shall continue its efforts to actively recruit U.S. workers 
until the foreign workers have departed for the employer's place of 
employment. The employer, however, must keep an active job order on file 
until the assurance at Sec. 655.203(e) is met.
    (2) The ES system shall continue to actively recruit and refer U.S. 
workers as long as there is an active job order on file.
[43 FR 10313, Mar. 10, 1978, as amended at 59 FR 41876, Aug. 15, 1995]



Sec. 655.207  Adverse effect rates.

    (a) Except as otherwise provided in this section, the adverse effect 
rates for all agricultural and logging employment shall be the 
prevailing wage rates in the area of intended employment.
    (b)(1) For agricultural employment (except sheepherding) in the 
States listed in paragraph (b)(2) of this section, and for Florida 
sugarcane work, the adverse effect rate for each year shall be computed 
by adjusting the prior year's adverse effect rate by the percentage 
change (from the second year previous to the prior year) in the U.S. 
Department of Agriculture's (USDA's) average hourly wage rates for field 
and livestock workers (combined) based on the USDA Quarterly Wage 
Survey. The Administrator shall publish, at least once in each calendar 
year, on a date or dates he shall determine, adverse effect rates 
calculated pursuant to this paragraph (b) as a notice or notices in the 
Federal Register.
    (2) List of States. Arizona, Colorado, Connecticut, Florida (other 
than sugar cane work), Maine, Maryland, Massachusetts, New Hamsphire, 
New York, Rhode Island, Texas, Vermont, Virginia, and West Virginia. 
Other States may be added as appropriate.
    (3) Transition. Notwithstanding paragraphs (b) (1) and (2) of this 
section, the 1986 adverse effect rate for agricultural employment 
(except sheepherding) in the following States, and for Florida sugarcane 
work, shall be computed by adjusting the 1981 adverse effect rate 
(computed pursuant to 20 CFR 655.207(b)(1), 43 FR 10317; March 10, 1978) 
by the percentage change between 1980 and 1985 in the U.S. Department of 
Agriculture annual average hourly wage rates for field and livestock 
workers (combined) based on the USDA Quarterly survey: The States listed 
at 20 CFR 655.207(b)(2) (1985).
    (c) In no event shall an adverse effect rate for any year be lower 
than the

[[Page 489]]

hourly wage rate published in 29 U.S.C. 206(a)(1) and currently in 
effect.
[43 FR 10313, Mar. 10, 1978, as amended at 44 FR 32212, June 5, 1979; 48 
FR 40175, Sept. 2, 1983; 50 FR 25708, June 21, 1985; 51 FR 24141, July 
2, 1986; 52 FR 11466, Apr. 9, 1987]



Sec. 655.208  Temporary labor certification applications involving fraud or willful misrepresentation.

    (a) If possible fraud or willful misrepresentation involving a 
temporary labor certification application is discovered prior to a final 
temporary labor certification determination, or if it is learned that 
the employer or agent (with respect to an application) is the subject of 
a criminal indictment or information filed in a court, the RA shall 
refer the matter to the INS for investigation and shall notify the 
employer or agent in writing of this referral. The RA shall continue to 
process the application and may issue a qualified temporary labor 
certification.
    (b) If a court finds an employer or agent innocent of fraud or 
willful misrepresentation, or if the Department of Justice decides not 
to prosecute an employer or agent, the RA shall not deny the temporary 
labor certification application on the grounds of fraud or willful 
misrepresentation. The application, of course, may be denied for other 
reasons pursuant to this subpart.
    (c) If a court or the INS determines that there was fraud or willful 
misrepresentation involving a temporary labor certification application, 
the application shall be deemed invalidated, processing shall be 
terminated, and the application shall be returned to the employer or 
agent with the reasons therefor stated in writing.



Sec. 655.209  Invalidation of temporary labor certifications.

    After issuance, temporary labor certifications are subject to 
invalidation by the INS upon a determination, made in accordance with 
that agency's procedures or by a Court, of fraud or willful 
misrepresentation of a material fact involving the temporary labor 
certification application. If evidence of such fraud or willful 
misrepresentation becomes known to a Regional Administrator, Employment 
and Training Administration or to the Administrator, the Regional 
Administrator or Administrator as appropriate, shall notify the INS in 
writing.



Sec. 655.210  Failure of employers to comply with the terms of a temporary labor certification.

    (a) If, after the granting of a temporary labor certification, the 
RA has probable cause to believe that an employer has not lived up to 
the terms of the temporary labor certification, the RA shall investigate 
the matter. If the RA concludes that the employer has not complied with 
the terms of the labor certification, the RA may notify the employer 
that it will not be eligible to apply for a temporary labor 
certification in the coming year. The notice shall be in writing, shall 
state the reasons for the determination, and shall offer the employer an 
opportunity to request a hearing within 30 days of the date of the 
notice. If the employer requests a hearing within the 30-day period, the 
RA shall follow the procedures set forth at Sec. 658.421(i) (1), (2) and 
(3) of this chapter. The procedures contained in Secs. 658.421(j), 
658.422 and 658.423 of this chapter shall apply to such hearings.
    (b) No other penalty shall be imposed by the employment service on 
such an employer other than as set forth in paragraph (a) of this 
section.



Sec. 655.211  Petition for higher meal charges.

    (a) Until a new amount is set pursuant to this paragraph (a), the RA 
may permit an employer to charge workers up to $6.17 for providing them 
with three meals per day, if the employer justifies the charge and 
submits to the RA the documentary evidence required by paragraph (b) of 
this section. A denial in whole or in part shall be reviewable as 
provided in Sec. 655.212 of this part. Each year the maximum charge 
allowed by this paragraph (a) will be changed by the 12-month percent 
change for the Consumer Price Index for All Urban Consumers for Food 
between December of the year just concluded and December of the year 
prior to that. The annual adjustments shall be effective on their 
publication by the Administrator in the Federal Register.

[[Page 490]]

    (b) Evidence submitted shall include the cost of goods and services 
directly related to the preparation and serving of meals, the number of 
workers fed, the number of meals served and the number of days meals 
were provided. The cost of the following items may be included: Food; 
kitchen supplies other than food, such as lunch bags and soap; labor 
costs which have a direct relation to food service operations, such as 
wages of cooks and restaurant supervisors; fuel, water, electricity, and 
other utilities used for the food service operations; other costs 
directly related to the food service operation. Charges for 
transportation, depreciation, overhead, and similar charges may not be 
included. Receipts and other cost records for a representative pay 
period shall be available for inspection by the Secretary's 
representatives for a period of one year.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[43 FR 10313, Mar. 10, 1978, as amended at 49 FR 18295, Apr. 30, 1984; 
51 FR 30351, Aug. 26, 1986]



Sec. 655.212  Administrative-judicial reviews.

    (a) Whenever an employer has requested an administrative-judicial 
review of a denial of an application or a petition in accordance with 
Secs. 655.204(d), 655.205(d), 655.206(c), or 655.211, the Chief 
Administrative Law Judge shall immediately assign a Hearing Officer to 
review the record for legal sufficiency, and the Regional Administrator 
shall send a certified copy of the case file to the Chief Administrative 
Law Judge by means normally assuring next day delivery. The Hearing 
Officer shall not have authority to remand the case and shall not 
receive additional evidence. Any countervailing evidence advanced after 
decision by the Regional Administrator shall be subject to provisions of 
8 CFR 214.2(h)(3)(i).
    (b) The Hearing Officer, within five working days after receipt of 
the case file shall, on the basis of the written record and due 
consideration of any written memorandums of law submitted, either 
affirm, reverse or modify the RA's denial by written decision. The 
decision of the Hearing Officer shall specify the reasons for the action 
taken and shall be immediately provided to the employer, RA, 
Administrator, and INS by means normally assuring next-day delivery. The 
Hearing Officer's decision shall be the final decision of the Department 
of Labor and no further review shall be given to the temporary labor 
certification determination by any Department of Labor official.
[59 FR 41876, Aug. 15, 1994]



Sec. 655.215  Territory of Guam.

    Subpart C of this part does not apply to temporary employment in the 
Territory of Guam, and the Department of Labor does not certify to the 
Immigration and Naturalization Service (INS) the temporary employment of 
nonimmigrant aliens under H-2B visas in the Territory of Guam. Pursuant 
to INS regulations, that function is performed by the Governor of Guam, 
or the Governor's designated representative within the Territorial 
Government.
[56 FR 56876, Nov. 6, 1991]



   Subpart D--Attestations by Facilities Using Nonimmigrant Aliens as 
                            Registered Nurses

    Source:  59 FR 882, 897, Jan. 6, 1994, unless otherwise noted.



Sec. 655.300  Purpose and scope of subparts D and E.

    (a) Purpose. The Immigration and Nationality Act (INA) establishes 
the H-1A program to provide relief for the nursing shortage crisis. 
Subpart D of this part sets forth the procedure by which health care 
facilities seeking to use nonimmigrant registered nurses may submit 
attestations to the Department of Labor relating to the effects of the 
nursing shortage on their operations, their efforts to recruit and 
retain United States workers as registered nurses and certain 
information on wages and working conditions for nurses at the facility. 
Subpart E of this part sets forth complaint, investigation, and penalty 
provisions with respect to such attestations.

[[Page 491]]

    (b) Procedure. The INA establishes a procedure for health care 
facilities to follow in seeking admission to the United States for, or 
use of, nonimmigrant nurses under H-1A visas. The procedure is designed 
to reduce reliance on nonimmigrant nurses in the future, and calls of 
the health care facility to attest, and be able to demonstrate, that, 
e.g., there would be substantial disruption to health services without 
the nonimmigrant nurses and that it is taking timely and significant 
steps to develop, recruit, and retain U.S. nurses. Subparts D and E of 
this part set forth the specific requirements for those procedures.
    (c) Applicability. (1) Subparts D and E of this part apply to all 
facilities that seek the temporary admission or use of nonimmigrants as 
registered nurses.
    (2) During the period that the provisions of appendix 1603.D.4 of 
Annex 1603 of the North American Free Trade Agreement (NAFTA) apply, 
subparts D and E of this part shall apply to the entry of a nonimmigrant 
who is a citizen of Mexico under and pursuant to the provisions of 
section D of Annex 1603 of NAFTA.



Sec. 655.301  Overview of process.

    This section provides a context for the attestation process, to 
facilitate understanding by health care facilities that may seek 
nonimmigrant nurses under H-1A visas.
    (a) Federal agencies' responsibilities. The United States Department 
of Labor (DOL), Department of Justice, and Department of State are 
involved in the H-1A visa process. Within DOL, the Employment and 
Training Administration (ETA) and the Employment Standards 
Administration (ESA) have responsibility for different aspects of the 
process.
    (b) Health care facility's attestation responsibilities. Each health 
care facility seeking one or more H-1A nurses shall, as the first step, 
submit an attestation on Form ETA 9029, as described in Sec. 655.310 of 
this part, to the designated regional office of the Employment and 
Training Administration (ETA) of DOL. If the attestation is found to 
meet the requirements set at Sec. 655.310 (a) through (k) of this part, 
ETA shall accept the attestation for filing, shall return the cover form 
of the accepted attestation to the health care facility, and shall 
notify the Immigration and Naturalization Service (INS) of the 
Department of Justice of the filing. As discussed in Sec. 655.310 of 
this part, if the facility proposes to utilize alternative methods to 
comply with Attestation Elements I and/or IV, or asserts that taking a 
second timely and significant step under Element IV would be 
unreasonable, or claims a bona fide medical emergency exemption from 
Element IV as a worksite using one or more H-1A nurses through a nursing 
contractor only, additional supporting information and ETA review shall 
be required.
    (c) Visa petitions. Upon ETA's acceptance of the filing, the health 
care facility may then file with INS H-1A visa petitions for the 
admission of H-1A nurses, or to extend the stay of alien nurses 
currently working at the facility. the facility shall attach a copy of 
the accepted attestation form (Form ETA 9029) to the visa petition filed 
with INS. At the same time that the facility files a visa petition with 
INS, it shall also send a copy of the visa petition with INS, it shall 
also send a copy of the visa petition to the Chief, Division of Foreign 
Labor Certifications, U.S. Employment Service, Employment and Training 
Administration, Department of Labor, 200 Constitution Avenue, NW., room 
N-4456, Washington, DC 20210.
    (d) Visa issuance. INS assures that the nonimmigrants possess the 
required qualifications and credentials to be employed as nurses. See 8 
U.S.C. 1182(m)(1)). The Department of State is responsible for issuing 
the visa.
    (e) Board of Alien Labor Certification Appeals (BALCA) review of 
attestations accepted and not accepted for filing. The decision whether 
or not to accept for filing an attestation which ETA has reviewed, that 
is: an attestation where the facility is attesting to alternative 
methods of compliance with Element I and/or Element IV; an attestation 
where the facility is claiming that taking a second timely and 
significant step would not be reasonable; and/or an attestation where a 
facility that is not an employer of H-1A nurses is claiming a bond fide 
medical emergency as the

[[Page 492]]

basis for requesting a waiver of Element IV; may be appealed by any 
interested party to the BALCA.
    (f) Complaints. Complaints concerning misrepresentation in the 
attestation or failure of the health care facility to carry out the 
terms of the attestation may be filed with the Wage and Hour Division 
(Division), Employment Standards Administration (ESA) of DOL, according 
to the procedures set forth in subpart E of this part. Complaints of 
``misrepresentation'' may include assertions that a facility's 
attestations of compliance failed to meet the regulatory standards for 
attestation elements under which the attestation was accepted by ETA for 
filing without ETA review. The Division shall then investigate, and, 
where appropriate, after an opportunity for a hearing, assess sanctions 
and penalties. Subpart E of this part also provides that interested 
parties may obtain an administrative law judge hearing and may seek the 
Secretary's review of the administrative law judge's decision.



Sec. 655.302  Definitions.

    For the purposes of subparts D and E of this part:
    Accepted for filing means that the attestation and supporting 
documentation submitted by the health care facility have been received 
by the Employment and Training Administration of the Department of Labor 
(DOL) and have been found to be in compliance with the attestation 
requirements in Sec. 655.310 of this part.
    Act and INA mean the Immigration and Nationality Act, as amended, 8 
U.S.C. 1101 et seq.
    Administrative law judge means an official appointed pursuant to 5 
U.S.C. 3105.
    Administrator means the Administrator of the Wage and Hour Division, 
Employment Standards Administration, Department of Labor, and such 
authorized representatives as may be designated to perform any of the 
functions of the Administrator under subparts D and E of this part.
    Attorney General means the chief official of the U.S. Department of 
Justice or the Attorney General's designee.
    Board of Alien Labor Certification Appeals (BALCA) means a panel of 
one or more administrative law judges who serve on the permanent Board 
of Alien Labor Certification Appeals established by 20 CFR Part 656. 
BALCA consists of administrative law judges assigned to the Department 
of Labor and designated by the Chief Administrative Law Judge to be 
members of the Board of Alien Labor Certification Appeals.
    Bona fide medical emergency means a situation in which the services 
of one or more H-1A contract nurses are necessary at a worksite facility 
(which itself does not employ an H-1A nurse) to prevent death or serious 
impairment of health, and, because of the danger to life or health, 
nursing services for such situation are not elsewhere available in the 
geographic area.
    Certifying Officer means a Department of Labor official, or such 
official's designee, who makes determinations about whether or not H-1A 
attestations are acceptable for filing.
    Chief Administrative Law Judge means the chief official of the 
Office of the Administrative Law Judges of the Department of Labor or 
the Chief Administrative Law Judge's designee.
    Chief, Division of Foreign Labor Certifications, USES means the 
chief official of the Division of Foreign Labor Certifications within 
the United States Employment Service, Employment and Training 
Administration, Department of Labor, or the designee of the Chief, 
Division of Foreign Labor Certifications, USES.
    Date of filing means the date an attestation is ``accepted for 
filing'' by ETA.
    Department and DOL mean the United States Department of Labor.
    Director means the chief official of the United States Employment 
Service (USES), Employment and Training Administration, Department of 
Labor, or the Director's designee.
    Division means the Wage and Hour Division of the Employment 
Standards Administration, DOL.
    Employer means a person, firm, corporation, or other association or 
organization involved in the direct provision of health care services, 
which:
    (1) Suffers or permits a person to work;
    (2) Has a location within the United States to which U.S. workers 
may be referred for employment;

[[Page 493]]

    (3) Proposes to employ workers at a place within the United States; 
and
    (4) Has an employer-employee relationship with respect to employees 
under subpart D and E of this part, as indicated by the fact that it may 
hire, pay, fire, supervise or otherwise control the work of such 
employee.
    Employment means full-time work by an employee for an employer/
health care facility other than oneself. ``Full-time work'' means work 
where the nurse is regularly scheduled to work 40 hours or more per 
week, unless the facility documents as part of its attestation that it 
is common practice for the occupation at the facility or for the 
occupation in the geographic area for nurses to work fewer hours per 
week.
    Employment and Training Administration (ETA) means the agency within 
the Department of Labor (DOL) which includes the United States 
Employment Service (USES).
    Employment Standards Administration (ESA) means the agency within 
the Department of Labor (DOL) which includes the Wage and Hour Division.
    Facility means a user of nursing services with either a single site 
or a group of contiguous locations at which it provides health care 
services. ``Facility'' includes an employer of registered nurses which 
provides health care services in a home or other setting, such as a 
hospital, nursing home, or other site of employment, not owned or 
operated by the employer (e.g., a visiting nurse association or a 
nursing contractor). ``Facility'' also includes a private household 
which employs or seeks to employ one or more H-1A nurses, but does not 
include a private household which uses H-1A nurses only through a 
nursing contractor. Groups of structures which form a campus or separate 
buildings across the street from one another are a single facility. 
However, separate buildings or areas which are not physically connected 
or in immediate proximity are a single health care facility if they are 
in reasonable geographic proximity, used for the same purpose, and share 
the same nursing staff and equipment. An example is an entity which 
manages a nursing home and a hospital in the same area and which 
regularly shifts or rotates the nurses between the two. Non-contiguous 
sites, even within the same geographic area, which do not share the same 
nursing staff and operational purposes are not a single facility. For 
example, hospitals which are located on opposite sides of a 
municipality, but which are managed or owned by a single entity, are 
separate facilities if they do not regularly share nursing staff and 
operational purpose.
    Geographic area means the area within normal commuting distance of 
the place (address) of the intended worksite. If the geographic area 
does not include a sufficient number of facilities to make a prevailing 
wage determination, the term ``geographic area'' shall be expanded (by 
the State employment service, unless directed not to do so by the 
Director) with respect to the attesting facility to include a sufficient 
number of facilities to permit a prevailing wage determination to be 
made. If the place of the intended worksite is within a Metropolitan 
Statistical Area (MSA), any place within the MSA may be deemed to be 
within normal commuting distance of the place of intended employment.
    Governor means the chief elected official of a State or the 
Governor's designee.
    H-1A nurse means any nonimmigrant alien admitted to the United 
States to perform services as a nurse under section 101(a)(15)(H)(i)(a) 
of the Act (8 U.S.C. 1101(a)(15)(H)(i)(a)).
    Immigration and Naturalization Service (INS) means the component of 
the Department of Justice which makes the determination under the Act on 
whether to grant visa petitions to petitioners seeking the admission of 
nonimmigrant nurses under H-1A visas.
    Layoff means any involuntary separation of one or more staff nurses 
without cause/prejudice. If a staff nurse is separated from one 
specialized activity and is offered retraining and retention at the same 
facility in another activity involving direct patient care at the same 
wage and status, but refuses such training and retention, such 
separation shall not constitute a layoff. The layoff provision applies 
to staff nurses only, not to other health occupations. If the position 
occupied by the staff nurse is covered by a collective bargaining 
agreement, the collective bargaining

[[Page 494]]

agreement definition of ``layoff'' (if any) shall apply to that 
position.
    Lockout means a labor dispute involving a work stoppage, wherein an 
employer withholds work from its employees in order to gain a concession 
from them.
    Nurse means a person who is or will be authorized by a State Board 
of Nursing to engage in registered nursing practice in a State or U.S. 
territory or possession at a facility which provides health care 
services. A staff nurse means a nurse who provides nursing care directly 
to patients. In order to qualify under this definition of ``nurse'' the 
alien shall:
    (1) Have obtained a full and unrestricted license to practice 
nursing in the country where the alien obtained nursing education, or 
have received nursing education in the United States or Canada;
    (2) Have passed the examination given by the Commission on Graduates 
for Foreign Nursing Schools (CGFNS), or have obtained a full and 
unrestricted (permanent) license to practice as a registered nurse in 
the state of intended employment, or have obtained a full and 
unrestricted (permanent) license in any state or territory of the United 
States and received temporary authorization to practice as a registered 
nurse in the state of intended employment; and,
    (3) Be fully qualified and eligible under the laws (including such 
temporary or interim licensing requirements which authorize the nurse to 
be employed) governing the place of intended employment to practice as a 
registered nurse immediately upon admission to the United States, and be 
authorized under such laws to be employed by the employer. For purposes 
of this paragraph, the temporary or interim licensing may be obtained 
immediately after the alien enters the United States and registers to 
take the first available examination for permanent licensure.
    Nursing contractor means an entity that employs registered nurses 
and supplies these nurses, on a temporary basis and for a fee, to health 
care facilities or private homes.
    Prevailing wage means the average wage paid to similarly employed 
registered nurses within the geographic area.
    Secretary means the Secretary of Labor or the Secretary's designee.
    Similarly employed means employed by the same type of facility 
(acute care or long-term care) and working under like conditions, such 
as the same shift, on the same days of the week, and in the same 
specialty area.
    State means one of the 50 States, the District of Columbia, Puerto 
Rico, the U.S. Virgin Islands, and Guam.
    State employment security agency (SESA) means the State agency 
designated under section 4 of the Wagner-Peyser Act to cooperate with 
USES in the operation of the national system of public employment 
offices.
    Strike means a labor dispute wherein employees engage in a concerted 
stoppage or work (including stoppage by reason of the expiration of a 
collective-bargaining agreement) or engage in any concerted slowdown or 
other concerted interruption of operations.
    United States Employment Service (USES) means the agency of the 
Department of Labor, established under the Wagner-Peyser Act, which is 
charged with administering the national system of public employment 
offices.
    United States (U.S.) nurse means any nurse who is a U.S. citizen; is 
a U.S. national; is lawfully admitted for permanent residence; is 
granted the status of an alien admitted for temporary residence under 8 
U.S.C. 1160(a), 1161(a), or 1255a(a)(1); is admitted as a refugee under 
8 U.S.C. 1157; or is granted asylum under 8 U.S.C. 1158.
    United States (U.S.) worker means any worker who is a U.S. citizen; 
is a U.S. national; is lawfully admitted for permanent residence; is 
granted the status of an alien lawfully admitted for temporary residence 
under 8 U.S.C. 1160(a), 1161(a), or 1255(a)(1); is admitted as a refugee 
under 8 U.S.C. 1157; or is granted asylum under 8 U.S.C. 1158.
    United States is defined at 8 U.S.C. 1101(a)(38).
    Worksite means the health care facility or home where the nurse is 
involved

[[Page 495]]

in the practice of nursing. It is possible, in the case of nursing 
contractors, that the employer's physical location and the worksite 
facility's physical location will differ.



Sec. 655.310  Attestations.

    (a) Who may submit attestations? Any entity meeting the definition 
of ``facility'' in Sec. 655.302, may submit an attestation. The 
attestation shall include: a completed Form ETA 9029, which shall be 
signed by the chief executive officer of the facility (or the chief 
executive officer's designee); and explanatory statements prescribed in 
paragraphs (c) through (k) of this section. A nursing contractor that 
seeks to employ nonimmigrant nurses shall file its own attestation 
(including Form ETA 9029 and explanatory statements) as prescribed by 
this section, and, as part of its own attestation, shall attest that it 
shall refer H-1A nurses only to facilities that, with the exception of 
private households which themselves do not employ H-1A nurses, have 
current and valid attestations on file with ETA. Subparts D and E of 
this part shall apply both to the nursing contractor and to the worksite 
facility.
    (b) Where should attestations be submitted? Attestations shall be 
submitted, by U.S. mail or private carrier, to the U.S. Department of 
Labor ETA Regional Office which has jurisdiction over the geographic 
area where the H-1A nurse will be employed, as designated by the Chief, 
Division of Foreign Labor Certifications, USES. The addresses of the 
Certifying Officers are set forth in the instructions to Form ETA 9029.
    (c) What should be submitted?--(1) Form ETA 9029 and explanatory 
statements.
    (i) A completed and dated original Form ETA 9029, containing the 
required attestation elements and the original signature of the chief 
executive officer of the facility, shall be submitted, along with two 
copies of the completed, (signed, and dated) Form ETA 9029. (Copies of 
Form ETA 9029 are available at the address listed in paragraph (b) of 
this section.) In addition, explanations, where required, for the 
required attestation elements as to what documentation is available at 
the facility and how such documentation indicates compliance with the 
regulatory standards as prescribed in paragraphs (d) through (i) of this 
section. In addition,
    (A) If the facility is a nursing contractor, the special attestation 
element in paragraph (j) of this section; or
    (B) If the facility is a worksite (other than a private household 
which itself does not employ, seek to employ, or file a visa petition on 
behalf of an H-1A nurse), which will use H-1A nurses only through a 
nursing contractor, the special attestation element in paragraph (k) of 
this section, shall be submitted in triplicate with the Form ETA 9029.
    (ii) If the facility is proposing to meet alternative standards for 
substantial disruption (Element I) and/or the taking of timely and 
significant steps (Element IV), an explanation of the standards being 
proposed and an explanation of how these proposed standards are of 
comparable significance to those set forth in the statute shall be 
submitted in triplicate. If the facility is attesting that it can only 
take one timely and significant step (Element IV), it shall submit an 
explanation, in triplicate, demonstrating that taking a second step is 
unreasonable. If the facility uses H-1A nurses only through a nursing 
contractor, but claims a bona fide medical emergency exemption from 
Element IV, it shall submit a written explanation, in triplicate, 
demonstrating the existence of such an emergency. DOL may request 
additional explanation and/or documentation from a facility in the 
process of determining acceptability in cases described in this 
paragraph (c)(1)(ii).
    (2) Attestation elements. The attestation elements referenced in 
paragraph (c)(1) of this section are mandated by section 212(m)(2)(A) of 
the Act (8 U.S.C. 1182(m)(2)(A)). Section 212(m)(2)(A) of the Act 
requires covered facilities to attest as follows:
    (i) The attestation referred to in section 101(a)(15)(H)(i)(a) of 
the Act, with respect to a facility for which an alien will perform 
services, is an attestation as to the following:
    (A) There would be a substantial disruption through no fault of the 
facility in the delivery of health care services of the facility without 
the services of such an alien or aliens.

[[Page 496]]

    (B) The employment of the aliens will not adversely affect the wages 
and working conditions of registered nurses similarly employed.
    (C) The aliens employed by the facility will be paid the wage rate 
for registered nurses similarly employed by the facility.
    (D) Either--(1) The facility has taken and is taking timely and 
significant steps designed to recruit and retain sufficient registered 
nurses who are United States citizens or immigrants who are authorized 
to perform nursing services, in order to remove as quickly as reasonably 
possible the dependence of the facility on nonimmigrant registered 
nurses, or
    (2) The facility is subject to an approved State plan for the 
recruitment and retention of nurses (described in section 212(m)(3) of 
the Act; 8 U.S.C. 1182(m)(3)).
    (E) There is not a strike or lockout in the course of a labor 
dispute, and the employment of such an alien is not intended or designed 
to influence an election for a bargaining representative for registered 
nurses of the facility.
    (F) At the time of the filing of the petition for registered nurses 
under section 101(a)(15)(H)(i)(a) of the Act, notice of the filing has 
been provided by the facility to the bargaining representative of the 
registered nurses at the facility or, where there is no such bargaining 
representative, notice of the filing has been provided to registered 
nurses at the facility through posting in conspicuous locations.
    (ii) A facility is considered not to meet paragraph (c)(2)(i)(A) of 
this section (relating to an attestation of a substantial disruption in 
delivery of health care services) if the facility, within the previous 
year, has laid off registered nurses. A facility which lays off a 
registered nurse other than a staff nurse still meets the ``no layoff' 
requirement if, in its attestation, it attests that it will not replace 
the nurse with an H-1A nurse (either through promotion or otherwise) for 
a period of 1 year after the date of the layoff. Nothing in paragraph 
(c)(2)(i)(D) of this section shall be construed as requiring a facility 
to have taken significant steps described in such paragraph before 
December 18, 1989 (i.e., the date of enactment of the Immigration 
Nursing Relief Act of 1989).
    (d) The first attestation element: substantial disruption. The 
facility shall attest that ``there would be substantial disruption 
through no fault of the facility in the delivery of health care services 
of the facility without the services of such an alien or aliens.'' This 
element shall be met if the facility provides the following information:
    (1) Layoffs. The facility shall attest that it has not laid off 
nurses during the 12-month period prior to submitting the attestation. A 
facility which lays off a registered nurse other than a staff nurse 
still meets the ``no layoff'' requirement if, in its attestation it 
attests that it will not replace the nurse with an H-1A nurse (either 
through promotion or otherwise) for a period of 1 year after the date of 
the layoff.
    (2) Nursing shortage. (i) The facility shall attest to one of the 
following:
    (A) It has a current nurse vacancy rate of 7 percent or more. An 
explanatory statement does not have to be submitted for this attestation 
element, but documentation to support this attestation shall be 
maintained at the facility and shall be available for review in 
accordance with Sec. 655.350(b).
    (B) It is unable to utilize 7 percent or more of its total beds due 
to a shortage of nurses. An explanatory statement does not have to be 
submitted for this attestation element, but supporting documentation for 
this attestation shall be maintained at the facility and shall be 
available for review in accordance with Sec. 655.350(b).
    (C) It has had to eliminate or curtail the delivery of essential 
health care services due to a shortage of nurses, and provide brief 
explanatory information about the essential services eliminated or 
curtailed by the facility due to a nursing shortage, what documentation 
is available at the facility to substantiate this attestation, where 
this documentation is located and can be reviewed, and the applicable 
time period of the documentation.
    (D) It has been unable to effect established plans to provide needed 
new health care services in the community due to a shortage of nurses, 
and provide brief explanatory information

[[Page 497]]

about needed new services that have not been implemented by the facility 
due to a nursing shortage and which will be implemented with the 
availability of H-1A nurses, what documentation is available at the 
facility to substantiate this attestation, where this documentation is 
located and can be reviewed, and the applicable time period of the 
documentation.
    (ii) Other substantial disruption. When an attesting facility finds 
that the indicators in paragraphs (d)(2)(i) (A) through (D) of this 
section cannot be demonstrated, or that such indicators are 
inappropriate to that facility, but that without the services of H-1A 
nurses, substantial disruption in the delivery of health care services 
of the facility still would occur due to a shortage or nurses, the 
facility shall provide an explanation of how a shortage of nurses has 
caused a ``substantial disruption'' in the delivery of its health care 
services. Such explanation shall be sufficient to provide a clear 
showing of ``substantial disruption'' in the delivery of specific health 
care services due to a shortage of nurses, and shall clearly explain why 
the indicators in paragraphs (d)(2)(i) (A) through (D) of this section 
cannot be met by or are inappropriate to that facility. In addition to 
the documentation required to be maintained by attesting facilities 
described in paragraph (d)(3) of this section, facilities attesting 
under this paragraph also shall maintain and make available for 
inspection (as described elsewhere in this section) such additional 
documentation as is necessary to substantiate such claim of substantial 
disruption.
    (3) Documentation of facility's nursing positions. The attesting 
facility shall maintain and make available for inspection (as described 
in Sec. 655.350(b)) documentation substantiating:
    (i) The total number of nursing positions at the facility;
    (ii) The number of nursing vacancies at the facility during a 12-
month period ending no later than 3 months prior to submittal of the 
attestation;
    (iii) The number of nurses who left the facility during the same 12-
month period;
    (iv) The number of nurses hired by the facility during the same 12-
month period;
    (v) The overall staffing pattern for nursing positions at the 
facility; and
    (vi) A description of the facility's efforts to recruit U.S. nurses 
during the same 12-month period. The documentation on numbers of nurses, 
maintained for the purposes of this paragraph (d)(3), shall be broken 
out by numbers of U.S. nurses, nurses admitted under H-1 visas, nurses 
admitted under H-1A visas, nurses admitted under other nonimmigrant 
visas, and other nurses.
    (e) The second attestation element: no adverse effect. The facility 
shall attest that ``the employment of the alien will not adversely 
affect the wages and working conditions of registered nurses similarly 
employed.''
    (1) Wages. To meet the requirement of no adverse effect on wages, 
the facility shall attest that it shall pay each nurse of the facility 
at least the prevailing wage for the occupation in the geographic area. 
The facility shall pay the higher of the wage required pursuant to this 
paragraph (e) or the wage required pursuant to paragraph (f) of this 
section (i.e., the third attestation element: facility wage).
    (i) State employment security determination. The facility does not 
independently determine the prevailing wage. The State employment 
security agency (SESA) shall determine the prevailing wage for similarly 
employed nurses in the geographic area in accordance with administrative 
guidelines or regulations issued by ETA. The facility shall request the 
appropriate prevailing wage from the SESA not more than 90 days prior to 
the date the attestation is submitted to ETA. Once a facility obtains a 
prevailing wage determination from the SESA and files an attestation 
supported by that prevailing wage determination, the facility shall be 
deemed to have accepted the prevailing wage determination as accurate 
and appropriate (both to the occupational classification and wage) and 
thereafter shall not contest the legitimacy of the prevailing wage 
determination in an investigation or enforcement action. A facility may 
challenge a SESA prevailing wage determination through the Employment

[[Page 498]]

Service complaint system. See 20 CFR part 658, Subpart E. A facility 
which challenges a SESA prevailing wage determination shall obtain in 
final ruling from the Employment Service prior to filing an attestation. 
Any such challenge shall not require the SESA to divulge any employer 
wage data which was collected under the promise of confidentiality.
    (ii) Collectively bargained wage rates. Where wage rates for nurses 
at a facility are the result of arms-length collective bargaining, those 
rates shall be considered ``prevailing'' for that facility for the 
purposes of this subpart.
    (iii) Total compensation package. The prevailing wage finding under 
this paragraph (e)(1) relates to wages only. However, each item in the 
total compensation package for U.S., H-1A, and other nurses employed by 
the facility shall be the same within a given facility, including such 
items as housing assistance and other perquisites.
    (iv) Documentation of pay and total compensation. The facility shall 
maintain documentation summarizing its pay schedule and compensation 
package for nurses. See Sec. 655.350(b). The summary shall cover each 
category of nursing position in which H-1A nurses are or will be hired 
or promoted into and each category of nursing position in which H-1A 
nurses (or nurses admitted on H-1 visas) have been hired or promoted 
into. Categories of nursing positions not covered by the documentation 
shall not be covered by the attestation, and, therefore, such positions 
shall not be filled or held by H-1A nurses.
    (2) Working conditions. To meet the requirement of no adverse effect 
on working conditions, the facility shall attest that it shall afford 
equal treatment to U.S. and H-1A nurses with the same seniority, with 
respect to such working conditions as the number and scheduling of hours 
worked (including shifts, straight days, weekends); vacations; wards and 
clinical rotations; and overall staffing-patient patterns.
    (f) The third attestation element: facility/employer wage. The 
facility employing or seeking to employ the alien shall attest that 
``the alien employed by the facility will be paid the wage rate for 
registered nurses similarly employed by the facility.'' The facility 
shall maintain documentation substantiating compliance with this 
attestation which shall include a description of the factors taken into 
consideration by the facility in making compensation decisions for 
nurses and the facility pay schedule for nurses maintained pursuant to 
paragraph (e)(1) of this section. See Sec. 655.350(b). The facility 
shall pay the higher of the wage required pursuant to this paragraph (f) 
or the wage required pursuant to paragraph (e) of this section (i.e., 
the second attestation element: no adverse effect).
    (g) The fourth attestation element: timely and significant steps; or 
State plan. The facility may satisfy the fourth attestation element by 
satisfying Alternative I in paragraph (g)(1) of this section or by 
satisfying Alternative II in paragraph (g)(2) of this section.
    (1) Alternative I: Timely and significant steps. The facility shall 
attest that it ``has taken and is taking timely and significant steps 
designed to recruit and retain sufficient registered nurses who are 
United States citizens or immigrants who are authorized to perform 
nursing services, in order to remove as quickly as reasonably possible 
the dependence of the facility on nonimmigrant registered nurses.'' The 
facility shall take at least two such steps, unless it demonstrates that 
taking a second step is not reasonable. The steps described in this 
paragraph (g)(1) shall not be considered to be an exclusive list of the 
significant steps that may be taken to meet the conditions of this 
paragraph (g)(1). Nothing in this subpart or subpart E of this part 
shall require a facility to take more than one step, if the facility can 
demonstrate that taking a second step is not reasonable. The facility is 
not required to have taken any of these steps prior to December 18, 
1989. A facility choosing to take timely and significant steps other 
than those specifically described in paragraph (g)(1)(i)(A) of this 
section shall submit with its attestation a description of the steps it 
is proposing to take and an explanation of how the proposed steps are of 
comparable timeliness and significance to those described in paragraph 
(g)(1)(i)(A) of this section. A facility

[[Page 499]]

claiming that a second step is unreasonable shall submit an explanation 
of why such second step would be unreasonable.
    (i) Descriptions of steps--(A) Statutory steps. Each of the actions 
described in this paragraph (g)(1)(i)(A) shall be considered a 
significant step reasonably designed to recruit and retain U.S. nurses. 
A facility choosing any one of the following steps shall attest that its 
program(s) meets the regulatory requirements set forth for each and 
provide an explanation of how the requirements are satisfied by the 
program(s). In addition, the attesting facility shall maintain and make 
available for inspection (as described in Sec. 655.350(b) of this part) 
documentation specified in the particular step selected and/or 
documentation which provides a complete description of the nature and 
operation of its program(s) sufficient to substantiate its attestation 
and full compliance with the requirements for the particular step 
selected. Section 212(m)(2)(E) of the INA provides that a violation 
shall be found if a facility fails to meet a condition attested to. 
Thus, a facility shall be held responsible for all timely and 
significant steps to which it attests.
    (1) Step One: ``Operating a training program for registered nurses 
at the facility or financing (or providing participation in) a training 
program for registered nurses elsewhere.'' Training programs may include 
either courses leading to a higher degree (i.e., beyond an associate or 
a baccalaureate degree), or continuing education courses. If the program 
includes courses leading to a higher degree, they shall be courses which 
are part of a program accepted for degree credit by a college or 
university and accredited by a State Board of Nursing or a State Board 
of Higher Education (or its equivalent), as appropriate. If the program 
includes continuing education courses, they shall be courses which meet 
criteria established to qualify the nurses taking the courses to earn 
continuing education units accepted by a State Board of Nursing (or its 
equivalent). In either type of program, financing by the facility, 
either directly or arranged through a third party, shall cover the total 
tuition costs of such training. The number of U.S. nurses for whom such 
training actually is provided shall be no less than half of the number 
of nurses who left the facility during the 12-month period prior to 
submission of the attestation. (U.S. nurses to whom such training was 
offered, but who rejected such training, may be counted towards those 
provided training, but the facility, in such case, shall maintain 
documentation of such offer and rejection). See Sec. 655.350(b).
    (2) Step Two: ``Providing career development programs and other 
methods of facilitating health care workers to become registered 
nurses.'' This may include programs leading directly to a degree in 
nursing, or career ladder/career path programs which could ultimately 
lead to a degree in nursing. A facility choosing this step shall 
maintain as documentation a description of the content and eligibility 
requirements for both types of programs and an explanation of how the 
requirements of this paragraph (g)(1)(i)(A)(2) are satisfied by each 
program. Any such degree program shall be, at a minimum, either through 
an accredited community college (leading to an associate's degree), 4-
year college (a bachelor's degree), or diploma school, and the course of 
study shall be one accredited by a State Board of Nursing (or its 
equivalent). For career ladder or career path programs, the facility 
shall maintain documentation that the programs are normally part of a 
course of study or training which prepares a U.S. worker for enrolling 
in formal direct training leading to a degree in nursing, either through 
an accredited community college, a 4-year college, or a diploma school. 
See Sec. 655.350(b) of this part. Financing by the facility, either 
directly or arranged through a third party, shall cover the total costs 
of such programs. U.S. workers participating in such programs shall be 
working or have worked in health care occupations or health care 
facilities. The number of U.S. workers for whom such training is 
provided shall be equal to no less than half the average number of 
vacancies for nurses during the 12-month period prior to the submission 
of the attestation.

[[Page 500]]

    (3) Step Three: ``Paying registered nurses wages at a rate higher 
than currently being paid to registered nurses similarly employed in the 
geographic area.'' A facility choosing this step shall maintain 
documentation showing that its entire schedule of wages for nurses is at 
least 5 percent higher than the prevailing wages as determined by the 
SESA pursuant to paragraph (e)(1)(i) of this section, and it shall 
attest that such differentials shall be maintained throughout the period 
of the attestation's effectiveness.
    (4) Step Four: ``Providing adequate support services to free 
registered nurses from administrative and other non-nursing duties.'' 
Non-nursing duties include such activities as housekeeping duties; food 
preparation and delivery; transporting patients; providing occupational 
and respiratory therapy; answering telephones; running errands for 
patients; and clerical tasks. A facility choosing this step shall not 
require nurses at the facility to perform non-nursing duties. However, 
it is understood that on an infrequent non-recurring basis, nurses at 
the facility may perform one or more of the tasks encompassed by the 
duties listed above in this paragraph (g)(1)(i)(A)(4) or other non-
nursing duties. Facilities choosing this step shall maintain 
documentation showing what steps they have taken to ensure that nursing 
jobs do not include any of these duties and that such activity by nurses 
at the facility occurs without regularity and infrequently. Such a 
facility also shall maintain documentation with respect to any other 
steps being taken to relieve nurses from non-nursing duties, or to 
enhance the nursing function, such as computerizing certain writing and 
routine functions performed by nurses.
    (5) Step Five: ``Providing reasonable opportunities for meaningful 
salary advancement by registered nurses.'' Documentation for this step 
shall include documentation of systems for salary advancement based on 
factors such as merit, education, and specialty, and/or salary 
advancement based on length of service with other bases for wage 
differentials remaining constant.
    (i) Merit, education, and specialty. For salary advancement based on 
factors such as merit, education, and specialty, the facility shall 
maintain and make available for inspection documentation that it 
provides opportunities for professional development of its nurses which 
lead to salary advancement, e.g., opportunities for continuing 
education; in-house educational instruction; special committees, task 
forces, or projects considered of a professional development nature; 
participation in professional organizations; and writing for 
professional publications. Such opportunities shall be available to all 
the facility's nurses.
    (ii) Length of service. For salary advancement based on length of 
service, the facility shall maintain and make available for inspection 
documentation that it has clinical ladders in place which provide, 
annually, salary increases of 3 percent or more for a period of no less 
than 10 years, over and above the costs of living and merit, education, 
and specialty increases and differentials.
    (B) Other possible steps. The Act indicates that the five steps 
described in paragraphs (g)(1)(i)(A) (1) through (5) of this section are 
not an exclusive list of timely and significant steps which might 
qualify. Facilities are encouraged to be innovative in devising other 
timely and significant steps, but these shall be of timeliness and 
significance comparable to those in paragraphs (g)(1)(i)(A) (1) through 
(5) of this section to qualify. A facility may attest that it has taken 
and is taking other such steps and explain in its attestation what these 
steps are, their nature and scope, how they are effected and how they 
meet the statutory test of timeliness and significance comparable to 
those Steps One through Five described above. A facility choosing 
alternative steps shall attest that its program(s) meet(s) the statutory 
requirements of timeliness and significance in promoting the 
development, recruitment and retention of U.S. nurses, explaining how 
these requirements are satisfied by such program(s). In addition, the 
attesting facility shall maintain and make available for inspection (as 
described in Sec. 655.350(b)) documentation which provides a complete 
description of the nature and operation of its program(s) sufficient to 
substantiate its attestation and full

[[Page 501]]

compliance with the requirements of this paragraph (g)(1)(i)(B). 
Examples of such steps which--depending on the circumstances, the size 
and nature of the attesting facility, the nature and scope of the 
step(s) described, the number of persons affected, and other such 
factors--may meet these requirements are:
    (1) Monetary incentives--providing monetary incentives to nurses, 
through bonuses and merit pay plans not included in the base 
compensation package, for additional education, and for efforts leading 
to increased recruitment and retention of U.S. nurses. Such monetary 
incentives can be based on actions by nurses such as: Innovations to 
achieve better patient care, increased productivity, reduced waste, 
better safety; obtaining additional certification in a nursing 
specialty; unused sick leave; recruiting other U.S. nurses; staying with 
the facility for a given number of years; taking less desirable 
assignments (other than shift differential); participating in 
professional organizations, on task forces and on special committees; or 
contributing to professional publications. Facilities attesting to this 
step shall have a documented system for providing significant financial 
rewards in the form of bonuses or salary advancement to nurses 
participating in the activities described in this paragraph.
    (2) Special perquisites--providing nurses with special perquisites 
for dependent care or housing assistance of a nature and/or extent that 
constitute a ``significant'' factor in inducing employment and retention 
of U.S. nurses.
    (3) Work schedule options--providng nurses with non-mandatory work 
schedule options for part-time work, job-sharing, compressed work week 
or non-rotating shifts (provided, however, that H-1A nurses are employed 
only in full-time work) of a nature and/or extent that constitute a 
``significant'' factor in inducing employment and retention of U.S. 
nurses.
    (4) Other training options--providing training opportunities to 
become registered nurses to U.S. workers not currently in health care 
occupations by means of financial assistance (e.g., scholarship, loan or 
pay-back programs) to such persons.
    (ii) Unreasonableness of second step. The steps described in this 
paragraph (g)(1) shall not be considered to be an exclusive list of the 
significant steps that may be taken to meet the conditions of this 
paragraph (g)(1). Nothing in this subpart or subpart E of this part 
shall require a facility to take more than one step, if the facility can 
demonstrate that taking a second step is not reasonable. However, a 
facility shall make every effort to take at least two steps. A facility 
taking only one step shall provide an explanation with its attestation, 
and maintain documentation at the facility, relating to why taking a 
second step is not reasonable. The taking of a second step may be 
considered unreasonable if it would result in the facility's financial 
inability to continue providing the same quality and quantity of health 
care or if the provision of nursing services would otherwise be 
jeopardized by the taking of such a step. If the single step which is 
taken is one of the statutorily defined steps described in paragraphs 
(g)(1)(i)(A)(1) through (g)(1)(i)(A)(5) of this section, the facility 
shall explain with its attestation, and maintain documentation at the 
facility, with respect to each of the four statutory steps (described in 
paragraphs (g)(1)(i)(A)(1) through (g)(1)(i)(A)(5) of this section) not 
taken, relating to why it would be unreasonable for the facility to take 
such step and also shall explain with its attestation, and shall 
maintain and make available for inspection (as described in 
Sec. 655.350(b)) documentation demonstrating why it would be 
unreasonable for the facility to take any other steps designed to 
recruit, develop and retain sufficient U.S. nurses to meet its staffing 
needs. If the single step which is taken is not one of the five 
statutory steps described in paragraphs (g)(1)(i)(A)(1) through 
(g)(1)(i)(A)(5) of this section, the facility shall, with respect to 
each of the five statutory steps not taken, explain with its 
attestation, and maintain documentation and make available for 
inspection (as described in Sec. 655.350(b)) documentation, 
demonstrating why it would be unreasonable for the facility to take such 
step; the facility also shall explain with its attestation, and

[[Page 502]]

make available for inspection (as described in Sec. 655.350(b)) 
documentation demonstrating why it would be unreasonable for the 
facility to take any other steps designed to recruit and retain 
sufficient U.S. nurses to meet its staffing needs. On the basis of the 
explanation submitted by the facility, the Certifying Officer shall 
determine whether the requirements of this paragraph (g)(1)(ii) have 
been met. See paragraph (m) of this section regarding such 
determinations and administrative appeals therefrom.
    (iii) Alternative to criteria for each specific step. Instead of 
complying with the specific criteria for each of the steps in the second 
and succeeding years, a facility may include in its prior year's 
attestation, in addition to the actions taken under Steps One through 
Five, that it shall reduce the number of alien (H-1 and H-1A 
visaholders) nurses it utilizes within 1 year from the date of 
attestation by at least 10 percent, without reducing the quality or 
quantity of services provided. If this goal is achieved (as demonstrated 
by documentation maintained by the facility and made available for 
inspection, and indicated in its subsequent year's attestation), the 
facility's subsequent year's attestation may simply include the Form ETA 
9029, an explanation demonstrating that this goal has been achieved and 
an attestation that it shall again reduce the number of alien nurses it 
utilizes within 1 year from the date of attestation by at least 10 
percent. This alternative is designed to permit a facility to achieve 
the objectives of the Act, without subjecting the facility to detailed 
requirements and criteria as to the specific means of achieving that 
objective. The first, second, and succeeding years shall be consecutive.
    (2) Alternative II: subject to approved annual State plan. As an 
alternative to attesting to the timely and significant steps set forth 
in paragraph (g)(1) of this section, the facility may attest that it 
``is subject to an approved State plan for the recruitment and retention 
of nurses.'' The contents of the annual State plan are described in more 
detail in Sec. 655.315. For an individual facility to meet the 
requirements of this paragraph (g)(2), the annual State plan shall 
provide for the taking of timely and significant steps by that facility, 
and the facility shall maintain appropriate documentation with respect 
to those steps. See Sec. 655.350(b). To qualify for this Alternative II, 
the annual State plan shall have been approved prior to the date the 
facility submits its attestation to ETA for filing.
    (h) The fifth attestation element: No strike or lockout; no 
intention or design to influence bargaining representative election. The 
facility shall attest that ``there is not a strike or lockout in the 
course of a labor dispute, and the employment of such an alien is not 
intended or designated to influence an election for a bargaining 
representative for registered nurses of the facility.'' Labor disputes 
for purposes for this attestation element relate only to those involving 
nurses providing nursing services; other health service occupations are 
not included. This attestation element applies to strikes and lockouts 
and elections of bargaining representatives at both the facility 
employing the nurse and, in the case of nursing contractors, at the 
worksite facility.
    (1) Notice of strike or lockout. In order to remain in compliance 
with the no strike or lockout portion of this attestation element, if a 
strike or lockout of nurses at the facility occurs during the 1 year's 
validity of the attestation, the facility, within 3 days of the 
occurrence of the strike or lockout, shall submit to the ETA National 
Office, by U.S. mail or private carrier, written notice of the strike or 
lockout.
    (2) ETA notice to INS. Upon receiving from a facility a notice 
described in paragraph (h)(1) of this section, ETA shall examine the 
documentation, and may consult with the union at the facility or other 
appropriate entities. If ETA determines that the strike or lockout is 
covered under 8 CFR 214.2(h)(17), INS's Effect of strike regulation for 
``H'' visaholders, ETA shall certify to INS, in the manner set forth in 
that regulation, that a strike or other labor dispute involving a work 
stoppage of nurses is in progress at the facility.
    (i) The sixth attestation element: notice of filing. The facility 
shall attest that at the time of filing of the petition for

[[Page 503]]

registered nurses under section 101(a)(15)(H)(i)(a) of the Act, notice 
of filing has been provided by the facility to the bargaining 
representative of the registered nurses at the facility or, where there 
is no such bargaining representative, notice of the filing has been 
provided to registered nurses at the facility through posting in 
conspicuous locations. The requirement applies to providing notice of 
filing both for attestations submitted to ETA and for visa petitions 
filed with INS.
    (1) Notification of bargaining representative. No later than the 
date the attestation is mailed to DOL to be considered for filing, the 
facility shall notify the bargaining representative (if any) for nurses 
at the facility that the attestation is being submitted to DOL, and 
shall state in that notice that the attestation is available at the 
facility (explaining how it can be inspected or obtained) and at the 
national office of ETA for review by interested parties. No later than 
the date the facility transmits a visa petition for H-1A nurses to INS, 
the facility shall notify the bargaining representative (if any) for 
nurses at the facility that the visa petition is being submitted to INS, 
and shall state in that notice that the attestation and visa petition 
are available at the facility (explaining how they can be inspected or 
obtained) and at the national office of ETA for review by interested 
parties. Notices under this paragraph (i)(1) shall include the following 
statement: ``Complaints alleging misrepresentation of material facts in 
the attestation or failure to comply with the terms of the attestation 
may be filed with any office of the Wage and Hour Division of the United 
States Department of Labor.''
    (2) Posting notice. If there is no bargaining representative for 
nurses at the facility, when the facility submits and attestation to 
ETA, and each time the facility files an H-1A visa petition with INS, 
the facility shall post a written notice at the facility (and, in 
addition, at the worksite facility, if at a different location, such as 
in the case of nursing contractors), stating that the attestation and/or 
visa petition(s) have been filed and are available at the facility 
(explaining how these documents can be inspected or obtained) and at the 
national office of ETA for review by interested parties. In order for 
the facility to remain in compliance with this paragraph (i)(2), all 
such notices shall remain posted during the validity period of the 
attestation and the attestations and petitions shall be available for 
examination at the facility throughout this period of time. The notice 
of posting shall provide information concerning the availability of 
these documents for examination at the facility and at the national 
office of ETA, and shall include the following statement: ``Complaints 
alleging misrepresentation of material facts in the attestation or 
failure to comply with the terms of the attestation may be filed with 
any office the Wage and Hour Division of the United States Department of 
Labor.'' Such posted notices shall be clearly visible and unobstructed 
while posted, shall be posted in conspicuous places, where the 
facility's U.S. nurses readily can read the posted notice on the way to 
or from their duties. Appropriate locations for posting such notices 
include locations in the immediate proximity of mandatory Fair Labor 
Standards Act wage and hour notices and Occupational Safety and Health 
Act occupational safety and health notices.
    (j) Special provisions for nursing contractors. A nursing contractor 
submitting an attestation for filing as a facility shall attest, in 
addition to the first through sixth attestation elements, that it will 
refer H-1A nurses only to facilities that (with the exception of private 
households which themselves do not employ H-1A nurses) have valid 
attestations on file with ETA. The nursing contractor shall obtain from 
each such worksite facility a copy of that facility's Form ETA 9029, 
accepted for filing by ETA and then currently on file with ETA. The 
nursing contractor shall maintain a copy of such worksite facility's 
accepted attestation on file at the nursing contractor's principal 
office during the validity period of the nursing contractor's 
attestation or the period of time that any H-1A nurse in its employ is 
providing nursing services at the worksite facility, whichever is 
longer.
    (k) Special provisions for worksite facilities which are not 
employers of H-1A

[[Page 504]]

nurses and are not controlled by employers of H-1A nurses. A facility 
(other than a private household) which obtains the services of an H-1A 
nurse by contracting with a nursing contractor, but which is itself 
neither the employer of any H-1A nurse nor controlled by the employer of 
any H-1A nurse (see paragraph (k)(1) of this section), shall file an 
attestation with ETA pursuant to this subpart. Such a worksite facility 
may request from ETA a waiver of specific elements of the attestation to 
avoid duplicative attestations, in cases of temporary, emergency 
circumstances, with respect to information not within the knowledge of 
the attestor, or for other good cause. The attesting worksite facility 
shall be to ably demonstrate the existence of the circumstances or good 
cause which are asserted as the basis(es) for the request for a waiver 
of a particular element of the attestation, but need not submit such 
evidence with its request for waiver, except evidence with respect to a 
bona fide medical emergency (see paragraph (k)(3)(iii) of this section).
    (1) Worksites employing, seeking to employ, or filing visa petitions 
on behalf of H-1A nurses. An attestation with respect to which waiver is 
requested or granted pursuant to this paragraph (k) is not valid (i.e., 
is not ``on file and in effect'') for a worksite facility employing, 
seeking to employ, or filing a visa petition on behalf of H-1A nurses. 
Only an attestation meeting the requirements of paragraphs (a) through 
(i) of this section (and paragraph (j) of this section, in the case of a 
nursing contractor) can serve as the basis for a petition for an H-1A 
visa. A worksite facility which uses H-1A nurses only through a nursing 
contractor and, as part of its attestation, requests waiver of one or 
more attestation elements nevertheless shall file a complete attestation 
in order to be able to use such attestation as a basis for itself filing 
a visa petition for an H-1A nurse. Thus, a worksite facility should 
consider its future needs for H-1A nurses in filing attestations and 
requests for waiver pursuant to this paragraph (k).
    (2) Inapplicability of third attestation element: facility/employer 
wage. If a worksite facility uses H-1A nurses only through a nursing 
contractor, the third attestation element (facility/employer wage; see 
paragraph (f) of this section) is not applicable to that facility, since 
the worksite facility is not the employer of the H-1A nurse and does not 
guarantee the H-1A nurse's wage. The third attestation element is 
required only for the employer of the H-1A nurse(s), i.e., the third 
attestation element shall be included in the attestation of and met by 
the H-1A nurse's employer (i.e., the nursing contractor).
    (3) Waiver of attestation elements. ETA may consider, pursuant to 
this paragraph (k)(3) requests for waiver of certain attestation 
elements by a worksite facility which uses or will use an H-1A nurse 
provided by a nursing contractor (i.e., an ``H-1A contract nurse''), but 
which worksite facility itself does not employ, seek to employ, or file 
a visa petition on behalf of an H-1A nurse. Paragraphs (k)(3) (i) 
through (iii) of this section set forth different conditions for waiver 
depending on the number of workdays of H-1A contract nurse services the 
worksite facility will use. For the purposes of this paragraph (k)(3), a 
``workday'' shall consist of one H-1A contract nurse working for one 
normal shift in a day. Thus, for example, three normal shifts worked by 
each of a group of five H-1A contract nurses totals 15 workdays.
    (i) Minimal use of H-1A contract nurses by a worksite. Where the 
attesting worksite facility attests in its request for waiver pursuant 
to this paragraph (k)(3) that it will use no more than a total of 15 
workdays of H-1A contract nurse services in any 3-month period of the 
attestation's 1-year period of validity to meet emergency needs on a 
temporary basis, ETA may waive the first (substantial disruption), 
second (adverse effect), and fourth (timely and significant steps or 
State plan) elements of the attesting worksite facility's attestation. 
See paragraphs (d), (e), and (g) of this section; see also paragraphs 
(f) and (k)(2) of this section, with respect to the inapplicability of 
third attestation element (facility/employer wage). ETA shall not waive 
pursuant to this paragraph (k)(3)(i) the fifth attestation element 
(strike, lockout, or intent or design to influence bargaining 
representative election) or

[[Page 505]]

the sixth attestation element (notice). See paragraphs (h) and (i) of 
this section.
    (ii) Short-term use of H-1A contract nurses. Where the attesting 
worksite facility attests in its request for waiver pursuant to this 
paragraph (k)(3) that it will use no more than a total of 60 workdays of 
H-1A contract nurse services in any 3-month period of the attestation's 
1-year period of validity to meet temporary needs, ETA may waive the 
nursing shortage component of the first element (substantial disruption; 
see paragraphs (d)(2) and (d)(3) of this section) and may waive the 
fourth (timely and significant steps or State plan; see paragraph (g) of 
this section) element of the attesting worksite facility's attestation. 
See also paragraphs (f) and (k)(2) of this section, with respect to the 
inapplicability of third attestation element (facility/employer wage). 
ETA shall not waive pursuant to this paragraph (k)(3)(ii) the no-layoff 
component of the first attestation element (substantial disruption; see 
paragraph (d)(1) of this section); the second attestation element 
(adverse effect); the fifth attestation element (strike, lockout, or 
intent to influence a bargaining representative election); or the sixth 
attestation element (notice). See paragraphs (d), (e), (h), and (i) of 
this section.
    (iii) Long-term use of H-1A contract nurse services. Where the 
attesting worksite facility attests in its request for waiver pursuant 
to this paragraph (k)(3) that it will use more than 60 workdays of H-1A 
contract nurse services in any 3-month period of the attestation's 1-
year period of validity, ETA shall not waive any attestation element, 
except that, if the attestor documents a bona fide medical emergency 
warranting a waiver of the fourth attestation element (timely and 
significant steps or State plan) ETA may waive such element. See 
paragraph (g) of this section.
    (l) Agents of worksite facilities. A worksite facility (including a 
worksite facility which itself employs or seeks to employ an H-1A nurse) 
may authorize a nursing contractor to act as its agent in preparing and 
filing the worksite facility's attestation; however, a worksite facility 
using an agent for preparation and filing of the attestation is 
responsible for the contents of such attestation and remains liable for 
any violations which may be disclosed in any investigation under Subpart 
E of this Part, and the chief executive officer of the worksite facility 
shall sign the original attestation, as required by paragraph (c)(1)(i) 
of this section.
    (m) Actions on attestations submitted for filing. An attestation 
which meets the established criteria set forth in this Sec. 655.310 
shall be accepted for filing by ETA on the date it is signed by the 
Certifying Officer. ETA shall then follow the procedures set forth in 
paragraph (m)(1) of this section. An attestation submitted by a facility 
proposing alternative criteria or steps for the first and/or the fourth 
attestation elements, and/or proposing to take only one timely and 
significant step, and/or claiming a bona fide medical emergency 
exemption from the fourth attestation element shall be reviewed by ETA, 
and a determination shall be made by the Certifying Officer whether to 
accept or reject the attestation for filing. See paragraphs (d)(2)(ii), 
(g)(1)(i)(B), (g)(1)(ii), and (k)(3)(iii) of this section. The 
Certifying Officer may request additional explanation and/or 
documentation from the facility in making this determination. If the 
Certifying Officer does not contact the facility for such information or 
make any determination within 30 days of receiving the attestation, the 
attestation shall become accepted for filing. Upon the facility's 
submitting the attestation to ETA and providing the notice required by 
the sixth attestation element (see Sec. 655.310(i)), the attestation 
shall be available for public examination at the health care facility 
itself. When ETA accepts the attestation for filing, the Certifying 
Officer shall forward the attestation to the ETA National Office, where 
it shall be available for public examination. Information contesting an 
attestation received by ETA prior to the determination to accept or 
reject the attestation for filing shall not be made part of ETA's 
administrative record on the attestation, but shall be referred to ESA 
to be processed as a complaint pursuant to Subpart E of this part, and, 
if such attestation nevertheless is accepted by ETA

[[Page 506]]

for filing, the complaint will be handled by ESA under that subpart.
    (1) Acceptance. (i) If the attestation (and any explanatory 
statements that may be required) meet the requirements of this subpart, 
ETA shall accept the attestation for filing, shall, in the case of a 
facility intending to file a visa petition as the employer of an H-1A 
nurse, notify INS in writing of the filing, shall return to the facility 
one copy of the attestation form submitted by the facility, with ETA's 
acceptance indicated thereon, and shall forward one copy of the 
attestation with ETA's acceptance indicated thereon to the ETA National 
Office. The facility may then file a visa petition with INS for alien 
nurses in accordance with INS regulations.
    (ii) DOL is not the guarantor of the accuracy, truthfulness or 
adequacy of an attestation accepted for filing.
    (2) Appeals of acceptances. If an attestation which is subject to a 
determination under paragraph (d)(2)(ii), (g)(1)(i)(B), (g)(1)(ii), or 
(k)(3)(iii) of this section is accepted for filing, any interested party 
may appeal ETA's determination(s) on the element(s) that have been 
reviewed. Appeals of acceptances shall be filed with the BALCA, no later 
than 30 days after the date of acceptance, and will be considered under 
the procedures set forth at Sec. 655.320.
    (3) Appeals of rejections. If the attestation is not accepted for 
filing, which may occur as a result of a determination under paragraph 
(d)(2)(ii), (g)(1)(i)(B), (g)(1)(ii), or (k)(3)(iii) of this section, 
ETA shall notify the facility in writing, specifying the reasons for 
rejection and quoting the language of Sec. 655.320(a)(1). Any interested 
party may appeal such rejection to the BALCA, no later than 30 days 
after the date of rejection. Appeals of rejections shall be filed and 
considered under the procedures set forth at Sec. 655.320.
    (n) Effective date and validity of filed attestations. An 
attestation becomes filed and effective as of the date it is accepted 
and signed by the Certifying Officer and accepted thereby for filing. 
Such attestation is valid for the 12-month period beginning on the date 
of acceptance for filing, unless suspended or invalidated pursuant to 
Sec. 655.320 or subpart E. The filed attestation expires at the end of 
the 12-month period of validity.
    (o) Suspension or invalidation of filed attestation. Suspension or 
invalidation of an attestation may result from a BALCA decision 
reversing an ETA acceptance for filing; from investigations by the 
Administrator, Wage and Hour Division, of the facility's 
misrepresentation in or failure to carry out its attestation; or from a 
discovery by ETA that it made an error in its review of the attestation 
(in those cases where ETA performs such review pursuant to paragraph 
(d)(2)(ii), (g)(1)(i)(B), (g)(1)(ii), (k)(3)(iii) of this section) and 
that the explanation and documentation provided and maintained by the 
facility does not or did not meet the criteria set forth at Sec. 655.310 
(a) through (k). If an attestation is suspended or invalidated, DOL 
shall notify INS.
    (1) Result of BALCA or Wage and Hour Division action. If an 
attestation is suspended or invalidated as a result of a BALCA decision 
overruling an acceptance of the attestation for filing, or is suspended 
or invalidated as a result of a Wage and Hour Division action pursuant 
to subpart E, such suspension or invalidation may not be separately 
appealed, but shall be merged with appeals of BALCA's or the Wage and 
Hour Division's determination on the underlying violation.
    (2) Result of ETA action. If, after accepting an attestation for 
filing, ETA discovers that it erroneously accepted that attestation for 
filing, and, as a result, ETA suspends or invalidates that acceptance, 
the facility may appeal such suspension or invalidation pursuant to 
Sec. 655.320 as if that suspension or invalidation were a decision to 
reject the attestation for filing.
    (p) Facility's responsibilities during suspension and after 
invalidation or expiration of filed attestation. A facility shall comply 
with the terms of its attestation, even if such attestation is 
suspended, invalidated, or expired, as long as any H-1A nurse is at the 
facility, unless the attestation is superseded by a subsequent 
attestation accepted for filing by ETA.
    (q) Facilities subject to penalties. No attestation shall be 
accepted for filing

[[Page 507]]

from a nursing contractor or other facility which has failed to comply 
with any penalty, sanction, or other remedy assessed in a final agency 
action following an investigation by the Wage and Hour Division pursuant 
to subpart E.

(Approved by the Office of Management and Budget under control number 
1205-0305)

[59 FR 882, 897, Jan. 6, 1994, as amended at 59 FR 5487, Feb. 4, 1994]



Sec. 655.315  State plans.

    A State may submit an annual plan for the recruitment and retention 
of U.S. citizens and permanent resident aliens who are authorized to 
perform nursing services in the State.
    (a) Who should prepare and file the annual plan? The Governor of 
each State that chooses to submit an annual State plan shall be 
responsible for the preparation and filing of the annual plan. The 
Governor may designate any public and/or private organization(s) to 
assist the Governor in the development of the annual plan.
    (b) When and where should the annual plan be filed? If a State 
determines to file an annual State plan, the Governor shall submit the 
original plan, signed by the Governor, by U.S. mail or private carrier, 
to ETA at the following address: Director, U.S. Employment Service, 
Employment and Training Administration, Department of Labor, 200 
Constitution Avenue, NW., room N-4456, Washington, DC 20210. An annual 
State plan may be filed with ETA at any time. However, for an individual 
facility legitimately to attest to being subject to an annual State plan 
for the purposes of the fourth attestation element, Alternative II (see 
Sec. 655.310(g)(2)), such annual State plan shall have been approved 
prior to the date the attestation was submitted to ETA for filing and be 
in current effect. Therefore, if the Governor is aware that a facility 
within the State plans to submit an attestation for filing with ETA, the 
annual State plan should be mailed to ETA at least 35 days prior to the 
facility's submission of its attestation to ETA.
    (c) What overall issues shall the annual State plan address? The 
annual State plan shall address the overall issue of supply of and 
demand for nurses within the State, with particular emphasis on measures 
to develop a sufficient supply of U.S. nurses to meet projected demand. 
The State, as opposed to individual facilities, is in a position to--and 
may be expected to--address broad issues and perform such functions as 
conducting a Statewide needs assessment; overall management, 
facilitation and coordination among various interested entities within 
the State; and undertaking more regionally based approaches. The State 
is also in a position to devote resources which individual facilities 
may be lacking.
    (d) How should the annual State plan address the timely and 
significant steps? The annual State plan shall address all of the timely 
and significant steps in Sec. 655.310(g)(1)(i)(A)(1) through 
(g)(1)(i)(A)(5) generically, without regard to the specific criteria 
therein, on a Statewide basis. However, for the annual State plan to 
satisfy Alternative II of the fourth attestation requirement for an 
individual facility (see Sec. 655.310(g)(2)), the annual State plan 
shall indicate which of those timely and significant steps relate to 
individual facilities, and that each individual facility shall take such 
a step (either one step or more, as appropriate) to meet the appropriate 
specific criteria as set forth in Sec. 655.310(g)(1).
    (e) What other components may the annual State plan include? An 
annual State plan may include the following components:
    (1) The cooperation of high schools and colleges may be enlisted in 
counseling health workers and other individuals to enter the nursing 
profession.
    (2) Geographic and salary data may be made available to assist in 
linking nurses to facilities.
    (3) Publications of vacancies and programs may be made in industry 
and State newsletters.
    (4) Training films and videotapes, as well as information on housing 
and relocation services, may be developed and distributed.
    (5) Measures may be taken to encourage other health professionals to 
become nurses, such as: setting up home study programs with State 
licensing boards to allow work credits for purposes of meeting 
educational or State

[[Page 508]]

clinical requirements; entering into cooperative agreements for 
providing health care insurance and other job-related elements which 
would allow greater flexibility for those attempting to combine careers 
and school; providing monetary grants or long-term loans to persons 
preparing to become nurses.
    (6) Steps may be taken to encourage nurses who have left the nursing 
field to return to nursing, by providing such inducements as child care, 
holiday schedule adjustments, and substantial salary increases.
    (7) The State may profile and publicize those facilities with 
special model programs.
    (8) The annual State plan may place demands on facilities for 
comprehensive plans to reduce reliance on foreign nurses.
    (f) Approval and disapproval of annual State plans. Determinations 
of approval and disapproval of annual State plans shall be made by the 
Director, USES. The annual State plan shall be reviewed by ETA, in 
consultation with the Department of Health and Human Services, and a 
determination to approve or disapprove the annual State plan made within 
30 calendar days of ETA's receipt of the plan.
    (1) If the annual State plan is approved, the Director shall notify 
the Governor in writing.
    (2) If the annual State plan is disapproved, the Director shall 
notify the Governor in writing, specifying the reason(s) for 
disapproval. The notice shall state that within 30 calendar days of the 
date of the notice of disapproval, the Governor may correct the 
deficiencies noted in the disapproval and resubmit the annual State plan 
to ETA; and shall inform the state of its right to an appeal, by quoting 
the language of Sec. 655.320(a).
    (g) An approved annual State plan shall be valid for 12-month period 
beginning on the date of its approval by DOL.

(Approved by the Office of Management and Budget under control number 
1205-0305)



Sec. 655.320  Appeals of acceptance and rejection of attestations submitted for filing and of State plans.

    (a) Appeal right--(1) Attestations; when to file appeals from 
acceptances and rejections. On the basis that the explanation and 
documentation provided and maintained by the facility does not or did 
not meet the criteria set forth at Sec. 655.310(d)(2)(ii), 
(g)(1)(i)(B)(5), (g)(1)(ii), or (k)(3)(iii), an interested party may 
appeal an acceptance or rejection by ETA of an attestation submitted by 
a facility for filing in those cases where DOL performed an attestation 
review function under those provisions. The appeal shall be limited to 
ETA's determinations on the element(s) reviewed and shall not be an 
appeal as to any other element(s) in the attestation. An interested 
party may also appeal ETA's invalidation or suspension of a filed 
attestation due to a discovery by ETA that it made an error in its 
reviewing of the attestation (see Sec. 655.310(o). In the case of an 
appeal of an acceptance, the facility shall be a party to the appeal; in 
the case of the appeal of a rejection, invalidation, or suspension, the 
collective bargaining representative (if any) representing nurses at the 
facility shall be a party to the appeal. Appeals shall be in writing; 
shall set forth the grounds for the appeal; shall state if de novo 
consideration by BALCA is requested; and shall be mailed by certified 
mail within 30 calendar days of the date of the action from which the 
appeal is taken (i.e., the acceptance, rejection, suspension or 
invalidation of the attestation).
    (2) Annual State plans; when to file appeals from disapprovals. A 
Governor of a State may appeal ETA's disapproval of an annual State 
plan. Individual facilities in the State may file briefs as amici 
curiae. Appeals shall be in writing and shall be mailed by certified 
mail within 30 calendar days of the disapproval of the annual State 
plan.
    (3) Where to file appeals. Appeals made pursuant to this section 
shall be in writing and shall be mailed by certified mail to: Director, 
U.S. Employment Service, Employment and Training Administration, 
Department of Labor, 200

[[Page 509]]

Constitution Avenue, NW., Room N-4456, Washington, DC 20210.
    (4) Complaints. Appeals under this paragraph (a) shall not encompass 
questions of misrepresentation by a health care facility or 
nonperformance by such a facility of its attestation. Such complaints 
shall be filed with an office of the Wage and Hour Division, United 
States Department of Labor.
    (b) Transmittal to BALCA; case file. Upon receipt of an appeal 
pursuant to this section, the Certifying Officer (or, in the case of 
State plans, the Director, USES), shall send to BALCA a certified copy 
of the ETA case file, containing the attestation and supporting 
documentation and any other information or data considered by ETA in 
taking the action being appealed. The administrative law judge chairing 
BALCA shall assign a panel of one or more administrative law judges who 
serve on BALCA to review the record for legal sufficiency and to 
consider and rule on the appeal.
    (c) Consideration on the record; de novo hearings--(1) General. 
BALCA shall not remand, dismiss, or stay the case, except as provided in 
paragraph (c)(2) of this section, but may otherwise consider the appeal 
on the record or in a de novo hearing (on its own motion or on a party's 
request). Interested parties and amici curiae may submit briefs in 
accordance with a schedule set by BALCA. The ETA official making the 
determination from which the appeal was taken shall be represented by 
the Associate Solicitor for Employment and Training Legal Services, 
Office of the Solicitor, Department of Labor, or the Associate 
Solicitor's designee. If BALCA determines to hear the appeal on the 
record without a de novo hearing, BALCA shall render a decision within 
30 calendar days after BALCA's receipt of the case file. If BALCA 
determines to hear the appeal through a de novo hearing, the procedures 
contained in 29 CFR part 18 shall apply to such hearings, except that:
    (i) The appeal shall not be considered to be a complaint to which an 
answer is required;
    (ii) BALCA shall ensure that, at the request of the appellant, the 
hearing is scheduled to take place within a reasonable period after 
BALCA's receipt of the case file (see also the time period described in 
paragraph (c)(1)(iv) of this section);
    (iii) Technical rules of evidence, such as the Federal Rules of 
Evidence and subpart B of the Rules of Practice and Procedure for 
Administrative Hearings Before the Office of Administrative Law Judges 
(29 CFR part 18, subpart B), shall not apply to any hearing conducted 
pursuant to this subpart, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where reasonably 
necessary by BALCA in conducting the hearing; BALCA may exclude 
irrelevant, immaterial, or unduly repetitious evidence; the certified 
copy of the case file transmitted to BALCA by the Certifying Officer 
(or, in the case of State plans, the Director, USES), shall be part of 
the evidentiary record of the case and need not be removed into 
evidence; and
    (iv) BALCA's decision shall be rendered within 120 calendar days 
after BALCA's receipt of the case file.
    (2) Dismissals and stays. If the BALCA determines that the appeal is 
solely a question of misrepresentation by the facility or is solely a 
complaint of the facility's nonperformance of the attestation, BALCA 
shall dismiss the case and refer the matter to the Administrator, Wage 
and Hour Division, for action under subpart E. If the BALCA determines 
that the appeal is partially a question of misrepresentation by the 
facility or is partially a complaint of the facility's nonperformance of 
the attestation, BALCA shall refer the matter to the Administrator, Wage 
and Hour Division, for action under Subpart E of this part and shall 
stay BALCA consideration of the case pending final agency action on such 
referral. During such stay, the 120-day period described in paragraph 
(c)(1)(iv) of this section shall be suspended.
    (d) BALCA's decision. After consideration on the record or a de novo 
hearing, BALCA shall either affirm or reverse ETA's decision, and shall 
so notify the appellant; the Director, if the affirmation or denial 
involves a State plan; Certifying Officer; Chief, Division of Foreign 
Labor Certifications; and

[[Page 510]]

any other parties. See Sec. 655.450 custody of the record of the appeal.
    (e) Decisions on attestations. With respect to an appeal of the 
acceptance, rejection, suspension or invalidation of an attestation, the 
decision of BALCA shall be the final decision of the Secretary, and no 
further review shall be given to the matter by any DOL official.
    (f) Decisions on annual State plans. With respect to an appeal of 
the disapproval of an annual State plan, the decision of BALCA shall be 
the final decision by the Secretary, unless a petition for review of the 
BALCA decision is filed with the Secretary and the Secretary determines 
to review the decision.
    (1) Filing of petition for review. The Director or the State 
desiring review of the decision and order of BALCA may petition the 
Secretary to review the decision and order. To be effective, such 
petition shall be received by the Secretary within 30 days of the date 
of the decision and order. Copies of the petition shall be served on all 
parties and on BALCA.
    (2) Form of petition for review. No particular form is prescribed 
for any petition for Secretary's review permitted by this paragraph (f). 
However, any such petition shall:
    (i) Be dated;
    (ii) Be typewritten or legibly written;
    (iii) Specify the issue or issues stated in the BALCA decision and 
order giving rise to such petition;
    (iv) State the specific reason or reasons why the party petitioning 
for review believes such decision and order are in error;
    (v) Be signed by the party filing the petition or by an authorized 
representative of such party;
    (vi) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto; and
    (vii) Attach copies of BALCA's decision and order, and any other 
record documents which would assist the Secretary in determining whether 
review is warranted.
    (3) Notice of determination to review. Whenever the Secretary 
determines to review the decision and order of BALCA on an annual State 
plan, a notice of the Secretary's determination to do so shall be served 
upon BALCA and upon all parties to the proceeding within 30 days after 
the Secretary's receipt of the petition for review.
    (4) Hearing record. Upon receipt of the Secretary's notice, BALCA 
shall within 15 days forward the complete hearing record to the 
Secretary.
    (5) Contents of Secretary's notice. The Secretary's notice shall 
specify:
    (i) The issue or issues to be reviewed;
    (ii) The form in which submissions shall be made by the parties; and
    (iii) The time within which such submissions shall be made.
    (6) Filing of documents. All documents submitted to the Secretary 
pursuant to this paragraph (f) shall be filed with the Secretary of 
Labor, U.S. Department of Labor, Washington, DC 20210, Attention: 
Executive Director, Office of Administrative Appeals, Room S-4309. An 
original and two copies of all documents shall be filed. Documents are 
not deemed filed with the Secretary until actually received by the 
Secretary. All documents, including documents filed by mail, shall be 
received by the Secretary either on or before the due date.
    (7) Service of documents. Copies of all documents filed with the 
Secretary pursuant to this paragraph (f) shall be served simultaneously 
upon all other parties involved in the proceeding. Service upon the 
Director shall be in accordance with paragraph (a)(3) of this section.
    (8) Secretary's decision. The Secretary's final decision pursuant to 
this paragraph (f) shall be issued within 180 days from the date of the 
notice of intent to review. The Secretary's decision shall be served 
upon all parties and BALCA.
    (9) Transmittal of record. Upon issuance of the Secretary's decision 
under this paragraph (f), the Secretary shall transmit the entire record 
to the Chief Administrative Law Judge for custody pursuant to 
Sec. 655.450.



Sec. 655.350  Public access.

    (a) Public examination at ETA. ETA shall make available for public 
examination in Washington, DC, a list of facilities which have filed 
attestations, and such facilities' visa petitions (if

[[Page 511]]

any) for H-1A nurses, and for each such facility, a copy of the 
facility's attestation and any explanatory statements it has received; 
the annual State plan (if any) which relates to the facility's 
attestation; and a copy of each of the facility's H-1A visa petitions 
(if any) to INS. A copy of the latter shall be transmitted to ETA by the 
facility at the same time it is submitted to INS. The facility shall 
also forward to ETA a copy of the INS visa petition approval notice 
within 5 days after it is received from INS.
    (b) Public examination at facility. For the duration of the 
attestation's validity and thereafter for so long as the facility uses 
any H-1 or H-1A nurse under the attestation, the facility shall maintain 
a separate file containing the attestation and required documentation, 
and shall make this file available to any interested parties within 72 
hours upon written or oral request. If a party requests a copy of the 
file, the facility shall provide it and any charge for such copy shall 
not exceed the cost of reproduction.
    (c) Notice to public. ETA periodically shall publish a notice in the 
Federal Register announcing the names and addresses of facilities which 
have submitted attestations; facilities which have attestations on file; 
facilities which have submitted attestations which have been rejected 
for filing; facilities which have had attestations suspended; States 
which have submitted annual State plans; States which have approved 
annual State plans; and States which have submitted annual State plans 
which were disapproved.

(Approved by the Office of Management and Budget under control number 
1205-0305)

[59 FR 882, 897, Jan. 6, 1994, as amended at 59 FR 5487, Feb. 4, 1994]



               Subpart E--Enforcement of H-1A Attestations

    Source:  59 FR 882, 897, Jan. 6, 1994, unless otherwise noted.



Sec.  655.400  Enforcement authority of Administrator, Wage and Hour Division.

    (a) The Administrator shall perform all the Secretary's 
investigative and enforcement functions under 8 U.S.C. 1182(m) and 
subparts D and E of this part.
    (b) The Administrator, either pursuant to a complaint or otherwise, 
shall conduct such investigations as may be appropriate and, in 
connection therewith, enter and inspect such places and such records 
(and make transcriptions thereof), question such persons and gather such 
information as deemed necessary by the Administrator to determine 
compliance regarding the matters to which a health care facility has 
attested under section 212(m) of the INA (8 U.S.C. 1182(m)) and subparts 
D and E of this part.
    (c) A facility being investigated shall make available to the 
Administrator such records, information, persons, and places as the 
Administrator deems appropriate to copy, transcribe, question, or 
inspect. No facility shall interfere with any official of the Department 
of Labor performing an investigation, inspection or law enforcement 
function pursuant to 8 U.S.C. 1182(m) or subparts D or E of this part. 
In the event of such interference, the Administrator may deem the 
interference to be a violation and take such further actions as the 
Administrator considers appropriate. (Note: Federal criminal statutes 
prohibit certain interference with a Federal officer in the performance 
of official duties. 18 U.S.C. 111 and 1114.)
    (d) A facility subject to subparts D and E of this part shall at all 
times cooperate in administrative and enforcement proceedings. No 
facility shall intimidate, threaten, restrain, coerce, blacklist, 
discharge, or in any manner discriminate against any person because such 
person has:
    (1) Filed a complaint or appeal under or related to section 212(m) 
of the INA (8 U.S.C. 1182(m)) or subpart D or E of this part;
    (2) Testified or is about to testify in any proceeding under or 
related to section 212(m) of the INA (8 U.S.C. 1182(m)) or subpart D or 
E of this part;
    (3) Exercised or asserted on behalf of himself/herself or others any 
right or protection afforded by section 212(m) of the INA (8 U.S.C. 
1182(m)) or subpart D or E of this part.

[[Page 512]]

    (4) Consulted with an employee of a legal assistance program or an 
attorney on matters related to the Act or to subparts D or E of this 
part or any other DOL regulation promulgated pursuant to 8 U.S.C. 
1182(m).

In the event of such intimidation or restraint as are described in 
paragraph (d)(1), (2), (3), or (4) of this section, the Administrator 
may deem the conduct to be a violation and take such further actions as 
the Administrator considers appropriate.
    (e) A facility subject to subpart D and E of this part shall 
maintain a separate file containing its attestation and required 
documentation, and shall make that file or copies thereof available to 
interested parties, as required by Sec. 655.350(b). In the event of a 
facility's failure to maintain the file, to provide access, or to 
provide copies, the Administrator may deem the conduct to be a violation 
and take such further actions as the Administrator considers 
appropriate.
    (f) No health care facility shall seek to have an H-1A nurse, or any 
other nurse similarly employed by the employer, or any other employee 
waive rights conferred under the Act or under subpart D or E of this 
part. In the event of such waiver, the Administrator may deem the 
conduct to be a violation and take such further actions as the 
Administrator considers appropriate. Any agreement by an employee 
purporting to waive or modify any rights inuring to said person under 
the Act or subpart D or E of this part may be void as contrary to public 
policy, except that a waiver or modification of rights or obligations 
hereunder in favor of the Secretary shall be valid for purposes of 
enforcement of the provisions of the Act or subpart D and E of this 
part. This prohibition of waivers does not prevent agreements to settle 
litigation among private parties.
    (g) The Administrator shall, to the extent possible under existing 
law, protect the confidentiality of any complainant or other person who 
provides information to the Department.



Sec. 655.405  Complaints and investigative procedures.

    (a) The Administrator, through investigation, shall determine 
whether a facility has failed to perform any attested conditions, 
misrepresented any material facts in an attestation (including 
misrepresentation as to compliance with regulatory standards), or 
otherwise violated the Act or subpart D or E of this part.

    (Note: Federal criminal statutes provide penalties of up to $10,000 
and/or imprisonment of up to 5 years for knowing and willful submission 
of false statements to the Federal Government. 18 U.S.C. 1001; see also 
18 U.S.C. 1546).

    (b) Any aggrieved person or organization may file a complaint of a 
violation of the provisions of section 212(m) of the INA (8 U.S.C. 
1182(m)) or subpart D or E of this part. No particular form of complaint 
is required, except that the complaint shall be written or, if oral, 
shall be reduced to writing by the Wage and Hour Division official who 
receives the complaint. The complaint shall set forth sufficient facts 
for the Administrator to determine what part or parts of the attestation 
or regulations have allegedly been violated. Upon the request of the 
complainant, the Administrator shall, to the extent possible under 
existing law, maintain confidentiality regarding the complainant's 
identity; if the complainant wishes to be a party to the administrative 
hearing proceedings under this subpart, the complainant shall then waive 
confidentiality. The complaint may be submitted to any local Wage and 
Hour Division office; the addresses of such offices are found in local 
telephone directories. Inquiries concerning the enforcement program and 
requests for technical assistance regarding compliance may also be 
submitted to the local Wage and Hour Division office.
    (c) The Administrator shall determine whether there is reasonable 
cause to believe that the complaint warrants investigation and, if so, 
shall conduct an investigation, within 180 days of the receipt of a 
complaint. If the Administrator determines that the complaint fails to 
present reasonable cause for an investigation, the Administrator shall 
so notify the complainant, who may submit a new complaint, with such 
additional information as may be necessary.
    (d) When an investigation has been conducted, the Administrator 
shall,

[[Page 513]]

within 180 days of the receipt of a complaint, issue a written 
determination, stating whether a basis exists to make a finding that the 
facility failed to meet a condition of its attestation, or made a 
misrepresentation of a material fact therein, or otherwise violated the 
Act or subpart D or E. The determination shall specify any sanctions 
imposed due to violations. The Administrator shall provide a notice of 
such determination to the interested parties and shall inform them of 
the opportunity for a hearing pursuant to Sec. 655.420.



Sec. 655.410  Civil money penalties and other remedies.

    (a) The Administrator may assess a civil money penalty not to exceed 
$1,000 for each affected person with respect to whom there has been a 
violation of the attestation or subpart D or E of this part of and with 
respect to each instance in which such violation occurred. The 
Administrator also shall impose appropriate remedies, including the 
payment of back wages and the performance of attested obligations such 
as providing training.
    (b) In determining the amount of civil money penalty to be assessed 
for any violation, the Administrator shall consider the type of 
violation committed and other relevant factors. The matters which may be 
considered include, but are not limited to, the following:
    (1) Previous history of violation, or violations, by the facility 
under the Act and subpart D or E of this part;
    (2) The number of workers affected by the violation or violations;
    (3) The gravity of the violation or violations;
    (4) Efforts made by the violator in good faith to comply with the 
attestation or the State plan as provided in the Act and Subparts D and 
E of this part;
    (5) The violator's explanation of the violation or violations;
    (6) The violator's commitment to future compliance, taking into 
account the public health, interest or safety; and
    (7) The extent to which the violator achieved a financial gain due 
to the violation, or the potential financial loss or potential injury or 
adverse effect upon the workers.
    (c) The civil money penalty, back wages, and any other remedy 
determined by the Administrator to be appropriate, are immediately due 
for payment or performance upon the assessment by the Administrator, or 
the decision by an administrative law judge where a hearing is 
requested, or the decision by the Secretary where review is granted. The 
facility shall remit the amount of the civil money penalty, by certified 
check or money order made payable to the order of ``Wage and Hour 
Division, Labor.'' The remittance shall be delivered or mailed to the 
Wage and Hour Division Regional Office for the area in which the 
violations occurred. The payment of back wages, monetary relief, and/or 
the performance or any other remedy prescribed by the Administrator 
shall follow procedures established by the Administrator. The facility's 
failure to pay the civil money penalty, back wages, or other monetary 
relief, or to perform any other assessed remedy, shall result in the 
rejection by ETA of any future attestation submitted by the facility, 
until such payment or performance is accomplished.



Sec. 655.415  Written notice and service of Administrator's determination.

    (a) The Administrator's determination, issued pursuant to 
Sec. 655.405(d), shall be served on the complainant, the facility, and 
other interested parties by personal service or by certified mail at the 
parties' last known addresses. Where service by certified mail is not 
accepted by the party, the Administrator may exercise discretion to 
serve the determination by regular mail. Where the complainant has 
requested confidentiality, the Administrator shall serve the 
determination in a manner which will not breach that confidentiality.
    (b) The Administrator shall file with the Chief Administrative Law 
Judge, U.S. Department of Labor, a copy of the complaint and the 
Administrator's determination.
    (c) The Administrator's written determination required by 
Sec. 655.405(c) shall:

[[Page 514]]

    (1) Set forth the determination of the Administrator and the reason 
or reasons therefor; prescribe any remedies or penalties including the 
amount of any unpaid wages due, the actions required for compliance with 
the facility attestation and/or State plan, and the amount of any civil 
money penalty assessment and the reason or reasons therefor.
    (2) Inform the interested parties that they may request a hearing 
pursuant to Sec. 655.420.
    (3) Inform the interested parties that in the absence of a timely 
request for a hearing, received by the Chief Administrative Law Judge 
within 10 days of the date of the determination, the determination of 
the Administrator shall become final and not appealable.
    (4) Set forth the procedure for requesting a hearing, and give the 
address of the Chief Administrative Law Judge.
    (5) Inform the parties that, pursuant to Sec. 655.455, the 
Administrator shall notify the Attorney General and ETA of the 
occurrence of a violation by the employer.



Sec. 655.420  Request for hearing.

    (a) Any interested party desiring to request an administrative 
hearing on a determination issued pursuant to Sec. 655.405(d) shall make 
such request in writing to the Chief Administrative Law Judge at the 
address stated in the notice of determination.
    (b) An interested party may request a hearing in the following 
circumstances:
    (1) Where the Administrator determines that there is no basis for a 
finding of violation, the complainant or other interested party may 
request a hearing. In such a proceeding, the party requesting the 
hearing shall be the prosecuting party and the facility shall be the 
respondent; the Administrator may intervene as a party or appear as 
amicus curiae at any time in the proceeding, at the Administrator's 
discretion.
    (2) Where the Administrator determines that there is a basis for a 
finding of violation, the facility or other interested party may request 
a hearing. In such a proceeding, the Administrator shall be the 
prosecuting party and the facility shall be the respondent.
    (c) No particular form is prescribed for any request for hearing 
permitted by this part. However, any such request shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the notice of 
determination given rise to such request;
    (4) State the specific reason or reasons why the party requesting 
the hearing believes such determination is in error;
    (5) Be signed by the party making the request or by an authorized 
representative of such party; and
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto.
    (d) The request for such hearing shall be received by the Chief 
Administrative Law Judge, at the address stated in the Administrator's 
notice of determination, no later than 10 days after the date of the 
determination. An interested party which fails to meet this 10-day 
deadline for requesting a hearing may thereafter participate in the 
proceedings only by consent of the administrative law judge, either 
through intervention as a party pursuant to 29 CFR 18.10 (b) through (d) 
or through participation as an amicus curiae pursuant to 29 CFR 18.12.
    (e) The request may be filed in person, by facsimile transmission, 
by certified or regular mail, or by courier service. For the requesting 
party's protection, if the request is filed by mail, it should be 
certified mail. If the request is filed by facsimile transmission, the 
original of the request, signed by the requestor or authorized 
representative, shall be filed within 10 days of the date of the 
Administrator's notice of determination.
    (f) Copies of the request for a hearing shall be sent by the 
requestor to the Wage and Hour Division official who issued the 
Administrator's notice of determination, to the representative(s) of the 
Solicitor of Labor identified in the notice of determination, and to all 
known interested parties.

[[Page 515]]



Sec. 655.425  Rules of practice for administrative law judge proceedings.

    (a) Except as specifically provided in this subpart, and to the 
extent they do not conflict with the provisions of this subpart, the 
``Rules of Practice and Procedure for Administrative Hearings Before the 
Office of Administrative Law Judges'' established by the Secretary at 29 
CFR part 18 shall apply to administrative proceedings under this 
subpart.
    (b) As provided in the Administrative Procedure Act, 5 U.S.C. 556, 
any oral or documentary evidence may be received in proceedings under 
this part. The Federal Rules of Evidence and subpart B of the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges (29 CFR part 18, subpart B) shall not apply, 
but principles designed to ensure production of relevant and probative 
evidence shall guide the admission of evidence. The administrative law 
judge may exclude evidence which is inmaterial, irrelevant, or unduly 
repetitive.



Sec. 655.430  Service and computation of time.

    (a) Under this subpart, a party may serve any pleading or document 
by regular mail. Service is complete upon mailing to the last known 
address. No additional time for filing or response is authorized where 
service is by mail. In the interest of expeditious proceedings, the 
administrative law judge may direct the parties to serve pleadings or 
documents by a method other than regular mail.
    (b) Two (2) copies of all pleadings and other documents in any 
administrative law judge proceeding shall be served on the attorneys for 
the Administrator. One copy shall be served on the Associate Solicitor, 
Division of Fair Labor Standards, Office of the Solicitor, U.S. 
Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210, 
and one copy on the attorney representing the Administrator in the 
proceeding.
    (c) Time will be computed beginning with the day following the 
action and includes the last day of the period unless it is a Saturday, 
Sunday, or federally-observed holiday, in which case the time period 
includes the next business day.



Sec. 655.435  Administrative law judge proceedings.

    (a) Upon receipt of a timely request for a hearing filed pursuant to 
and in accordance with Sec. 655.420, the Chief Administrative Law Judge 
shall appoint an administrative law judge to hear the case.
    (b) Within 7 days following the assignment of the case, the 
administrative law judge shall notify all interested parties of the 
date, time and place of the hearing. All parties shall be given at least 
5 days notice of such hearing.
    (c) The date of the hearing shall be not more than 60 days from the 
date of the Administrator's determination. Because of the time 
constraints imposed by the Act, no requests for postponement shall be 
granted except for compelling reasons and by consent of all the parties 
to the proceeding.
    (d) The administrative law judge may prescribe a schedule by which 
the parties are permitted to file a prehearing brief or other written 
statement of fact or law. Any such brief or statement shall be served 
upon each other party in accordance with Sec. 655.430. Posthearing 
briefs will not be permitted except at the request of the administrative 
law judge. When permitted, any such brief shall be limited to the issue 
or issues specified by the administrative law judge, shall be due within 
the time prescribed by the administrative law judge, and shall be served 
on each other party in accordance with Sec. 655.430.



Sec. 655.440  Decision and order of administrative law judge.

    (a) Within 90 days after receipt of the transcript of the hearing, 
the administrative law judge shall issue a decision.
    (b) The decision of the administrative law judge shall include a 
statement of findings and conclusions, with reasons and basis therefore, 
upon each material issue presented on the record. The decision shall 
also include an appropriate order which may affirm, deny, reverse, or 
modify, in whole or in part, the determination of the Administrator; the 
reason or reasons for such

[[Page 516]]

order shall be stated in the decision. The administrative law judge 
shall not render determinations as to the legality of a regulatory 
provision or the constitutionality of a statutory provision.
    (c) The decision shall be served on all parties in person or by 
certified or regular mail.



Sec. 655.445  Secretary's review of administrative law judge's decision.

    (a) The Administrator or any interested party desiring review of the 
decision and order of an administrative law judge shall petition the 
Secretary to review the decision and order. To be effective, such 
petition shall be received by the Secretary within 30 days of the date 
of the decision and order. Copies of the petition shall be served on all 
parties and on the administrative law judge.
    (b) No particular form is prescribed for any petition for 
Secretary's review permitted by this subpart. However, any such petition 
shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the administrative law 
judge decision and order giving rise to such petition;
    (4) State the specific reason or reasons why the party petitioning 
for review believes such decision and order are in error;
    (5) Be signed by the party filing the petition or by an authorized 
representative of such party;
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto; and
    (7) Attach copies of the administrative law judge's decision and 
order, and any other record documents which would assist the Secretary 
in determining whether review is warranted.
    (c) Whenever the Secretary determines to review the decision and 
order of an administrative law judge, a notice of the Secretary's 
determination shall be served upon the administrative law judge and upon 
all parties to the proceeding within 30 days after the Secretary's 
receipt of the petition for review.
    (d) Upon receipt of the Secretary's notice, the Office of 
Administrative Law Judges shall within 15 days forward the complete 
hearing record to the Secretary.
    (e) The Secretary's notice shall specify:
    (1) The issue or issues to be reviewed;
    (2) The form in which submissions shall be made by the parties 
(e.g., briefs, oral argument);
    (3) The time within which such submissions shall be made.
    (f) All documents submitted to the Secretary shall be filed with the 
Secretary of Labor, U.S. Department of Labor, Washington, DC 20210, 
Attention: Executive Director, Office of Administrative Appeals, room S-
4309. An original and two copies of all documents shall be filed. 
Documents are not deemed filed with the Secretary until actually 
received by the Secretary. All documents, including documents filed by 
mail, shall be received by the Secretary either on or before the due 
date.
    (g) Copies of all documents filed with the Secretary shall be served 
upon all other parties involved in the proceeding. Service upon the 
Administrator shall be in accordance with Sec. 655.430(b).
    (h) The Secretary's final decision shall be issued within 180 days 
from the date of the notice of intent to review. The Secretary's 
decision shall be served upon all parties and the administrative law 
judge.
    (i) Upon issuance of the Secretary's decision, the Secretary shall 
transmit the entire record to the Chief Administrative Law Judge for 
custody pursuant to Sec. 655.450.



Sec. 655.450  Administrative record.

    The official record of every completed administrative hearing 
procedure provided by subparts D and E of this part shall be maintained 
and filed under the custody and control of the Chief Administrative Law 
Judge. Upon receipt of a complaint seeking review of the final agency 
action in a United States District Court, the Chief Administrative Law 
Judge shall certify the official record and shall transmit such record 
to the clerk of the court.

[[Page 517]]



Sec. 655.455  Notice to the Attorney General and the Employment and Training Administration.

    (a) The Administrator shall promptly notify the Attorney General and 
ETA of the final determination of a violation by an employer upon the 
earliest of the following events:
    (1) Where the Administrator determines that there is a basis for a 
finding of violation by an employer, and no timely request for hearing 
is made pursuant to Sec. 655.420; or
    (2) Where, after a hearing, the administrative law judge issues a 
decision and order finding a violation by an employer; or
    (3) Where the administrative law judge finds that there was no 
violation, and the Secretary, upon review, issues a decision pursuant to 
Sec. 655.445, holding that a violation was committed by an employer.
    (b) The Attorney General, upon receipt of the Administrator's notice 
pursuant to paragraph (a) of this section, shall not approve petitions 
filed with respect to that employer under section 212(m) of the INA (8 
U.S.C. 1182(m)) during a period of at least 12 months from the date of 
receipt of the Administrator's notification.
    (c) ETA, upon receipt of the Administrator's notice pursuant to 
paragraph (a) of this section, shall suspend the employer's attestation 
under subparts D and E of this part, and shall not accept for filing any 
attestation submitted by the employer under subparts D and E of this 
part, for a period of 12 months from the date of receipt of the 
Administrator's notification or for a longer period if such is specified 
by the Attorney General for visa petitions filed by that employer under 
section 212(m) of the INA.



Sec. 655.460  Non-applicability of the Equal Access to Justice Act.

    A proceeding under subpart D or E of this part is not subject to the 
Equal Access to Justice Act, as amended, 5 U.S.C. 504. In such a 
proceeding, the administrative law judge shall have no authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.



    Subpart F--Attestations by Employers Using Alien Crewmembers for 
                   Longshore Activities in U.S. Ports

    Source:  60 FR 3956, 3976, Jan. 19, 1995, unless otherwise noted.

                           General Provisions



Sec. 655.500  Purpose, procedure and applicability of subparts F and G of this part.

    (a) Purpose. (1) Section 258 of the Immigration and Nationality Act 
(``Act'') prohibits nonimmigrant alien crewmembers admitted to the 
United States on D-visas from performing longshore work at U.S. ports 
except in five specific instances:
    (i) Where the vessel's country of registration does not prohibit 
U.S. crewmembers from performing longshore work in that country's ports 
and nationals of a country (or countries) which does not prohibit U.S. 
crewmembers from performing longshore work in that country's ports hold 
a majority of the ownership interest in the vessel, as determined by the 
Secretary of State (henceforth referred to as the ``reciprocity 
exception'');
    (ii) Where there is in effect in a local port one or more collective 
bargaining agreement(s), each covering at least thirty percent of the 
longshore workers, and each permitting the activity to be performed 
under the terms of such agreement(s);
    (iii) Where there is no collective bargaining agreement covering at 
least thirty percent of the longshore workers at the particular port and 
an attestation with accompanying documentation has been filed with the 
Department of Labor attesting that, among other things, the use of alien 
crewmembers to perform a particular activity of longshore work is 
permitted under the prevailing practice of the particular port 
(henceforth referred to as the ``prevailing practice exception'');
    (iv) Where the longshore work is to be performed at a particular 
location in the State of Alaska and an attestation with accompanying 
documentation has been filed with the Department of Labor attesting 
that, among

[[Page 518]]

other things, before using alien crewmembers to perform the activity 
specified in the attestation, the employer will make a bona fide request 
for and employ United States longshore workers who are qualified and 
available in sufficient numbers from contract stevedoring companies, 
labor organizations recognized as exclusive bargaining representatives 
of United States longshore workers, and private dock operators 
(henceforth referred to as the ``Alaska exception''); or
    (v) Where the longshore work involves an automated self-unloading 
conveyor belt or vacuum-actuated system on a vessel and the 
Administrator has not previously determined that an attestation must be 
filed pursuant to this part as a basis for performing those functions 
(henceforth referred to as the ``automated vessel exception'').
    (2) The term ``longshore work'' does not include the loading or 
unloading of hazardous cargo, as determined by the Secretary of 
Transportation, for safety and environmental protection. The Department 
of Justice, through the Immigration and Naturalization Service (INS), 
determines whether an employer may use alien crewmembers for longshore 
work at U.S. ports. In those cases where an employer must file an 
attestation in order to perform such work, the Department of Labor shall 
be responsible for accepting the filing of such attestations. Subpart F 
of this part sets forth the procedure for filing attestations with the 
Department of Labor for employers proposing to use alien crewmembers for 
longshore work at U.S. ports under the prevailing practice exception, 
the Alaska exception, and where it has been determined that an 
attestation is required under the automated vessel exception listed in 
paragraph (a)(1)(iv) of this section. Subpart G of this part sets forth 
complaint, investigation, and penalty provisions with respect to such 
attestations.
    (b) Procedure. (1) Under the prevailing practice exception in sec. 
258(c) of the Act, and in those cases where it has been determined that 
an attestation is required under the automated vessel exception for 
longshore work to be performed at locations other than in the State of 
Alaska, the procedure involves filing an attestation with the Department 
of Labor attesting that:
    (i) The use of alien crewmembers for a particular activity of 
longshore work is the prevailing practice at the particular port;
    (ii) The use of alien crewmembers is not during a strike or lockout 
nor designed to influence the election of a collective bargaining 
representative; and
    (iii) Notice of the attestation has been provided to the bargaining 
representative of longshore workers in the local port, or, where there 
is none, notice has been provided to longshore workers employed at the 
local port.
    (2) Under the automated vessel exception in sec. 258(c) of the Act, 
no attestation is required in cases where longshore activity consists of 
the use of an automated self-unloading conveyor belt or vacuum-actuated 
system on a vessel. The legislation creates a rebuttable presumption 
that the use of alien crewmembers for the operation of such automated 
systems is the prevailing practice. In order to overcome such 
presumption, it must be shown by the preponderance of the evidence 
submitted by any interested party, that the use of alien crewmembers for 
such activity is not the prevailing practice at the particular port, 
that it is during a strike or lockout, or that it is intended or 
designed to influence an election of a bargaining representative for 
workers in the local port.
    (3) Under the Alaska exception in sec. 258(d) of the Act, and in 
those cases where it has been determined that an attestation is required 
under the automated vessel exception consisting of the use of such 
equipment for longshore work to be performed in the State of Alaska, the 
procedure involves filing an attestation with the Department of Labor 
attesting that:
    (i) The employer will make a bona fide request for United States 
longshore workers who are qualified and available in sufficient numbers 
to perform the activity at the particular time and location from the 
parties to whom notice has been provided under paragraph (b)(3)(iv) (B) 
and (C) of this section, except that:
    (A) Wherever two or more contract stevedoring companies which meet 
the

[[Page 519]]

requirements of section 32 of the Longshore and Harbor Workers' 
Compensation Act (33 U.S.C. 932) have signed a joint collective 
bargaining agreement with a single labor organization recognized as an 
exclusive bargaining representative of United States longshore workers 
within the meaning of the National Labor Relations Act (29 U.S.C. 141 et 
seq.), the employer may request longshore workers from only one such 
contract stevedoring company, and
    (B) A request for longshore workers to an operator of a private dock 
may be made only for longshore work to be performed at that dock and 
only if the operator meets the requirements of section 32 of the 
Longshore and Harbor Workers' Compensation Act (33 U.S.C. 932);
    (ii) The employer will employ all United States longshore workers 
made available in response to the request made pursuant to paragraph 
(b)(3)(i) of this section who are qualified and available in sufficient 
numbers and who are needed to perform the longshore activity at the 
particular time and location attested to;
    (iii) The use of alien crewmembers for such activity is not intended 
or designed to influence and election of a bargaining representative for 
workers in the State of Alaska; and
    (iv) Notice of the attestation has been provided to:
    (A) Labor organizations which have been recognized as exclusive 
bargaining representatives of United States longshore workers within the 
meaning of the National Labor Relations Act (29 U.S.C. 141 et seq.) and 
which make available or intend to make available workers to the 
particular location where the longshore work is to be performed;
    (B) Contract stevedoring companies which employ or intend to employ 
United States longshore workers at that location; and
    (C) Operators of private docks at which the employer will use 
longshore workers.
    (c) Applicability. Subparts F and G of this part apply to all 
employers who seek to employ alien crewmembers for longshore work at 
U.S. ports under the prevailing practice exception, to all employers who 
seek to employ alien crewmembers for longshore work at locations in the 
State of Alaska under the Alaska exception, to all employers claiming 
the automated vessel exception, and to those cases where it has been 
determined that an attestation is required under the automated vessel 
exception.



Sec. 655.501  Overview of responsibilities.

    This section provides a context for the attestation process, to 
facilitate understanding by employers that may seek to employ alien 
crewmembers for longshore work under the prevailing practice exception, 
under the Alaska exception, and in those cases where an attestation is 
necessary under the automated vessel exception.
    (a) Department of Labor's responsibilities. The United States 
Department of Labor (DOL) administers the attestation process. Within 
DOL, the Employment and Training Administration (ETA) shall have 
responsibility for setting up and operating the attestation process; the 
Employment Standards Administration's Wage and Hour Division shall be 
responsible for investigating and resolving any complaints filed 
concerning such attestations.
    (b) Employer attestation responsibilities. (1) Each employer seeking 
to use alien crewmembers for longshore work at a local U.S. port 
pursuant to the prevailing practice exception or where an attestation is 
required under the automated vessel exception for longshore work to be 
performed at locations other than in the State of Alaska shall, as the 
first step, submit an attestation on Form ETA 9033, as described in 
Sec. 655.510 of this part, to ETA at the address set forth at 
Sec. 655.510(b) of this part. If ETA accepts the attestation for filing, 
pursuant to Sec. 655.510 of this part, ETA shall return the cover form 
of the accepted attestation to the employer, and, at the same time, 
shall provide notice of the filing to the Immigration and Naturalization 
Service (INS) office having jurisdiction over the port where longshore 
work will be performed.
    (2) Each employer seeking to use alien crewmembers for longshore 
work at a particular location in the State of Alaska pursuant to the 
Alaska exception or where an attestation is required

[[Page 520]]

under the automated vessel exception for longshore work to be performed 
at a particular location in Alaska shall submit, as a first step, an 
attestation on Form ETA 9033-A, as described in Sec. 655.533 of this 
part, to ETA at the address of the Seattle regional office as set forth 
at Sec. 655.532 of this part. The address appears in the instructions to 
Form ETA 9033-A. ETA shall return the cover form of the accepted 
attestation to the employer, and, at the same time, shall provide notice 
of the filing to the INS office having jurisdiction over the location 
where longshore work will be performed.
    (c) Complaints. Complaints concerning misrepresentation in the 
attestation, failure of the employer to carry out the terms of the 
attestation, or complaints that an employer is required to file an 
attestation under the automated vessel exception, may be filed with the 
Wage and Hour Division, according to the procedures set forth in subpart 
G of this part. Complaints of ``misrepresentation'' may include 
assertions that an employer has attested to the use of alien crewmembers 
only for a particular activity of longshore work and has thereafter used 
such alien crewmembers for another activity of longshore work. If the 
Division determines that the complaint presents reasonable cause to 
warrant an investigation, the Division shall then investigate, and, 
where appropriate, after an opportunity for a hearing, assess sanctions 
and penalties. Subpart G of this part further provides that interested 
parties may obtain an administrative law judge hearing on the Division's 
determination after an investigation and may seek the Secretary's review 
of the administrative law judge's decision. Subpart G of this part also 
provides that a complainant may request that the Wage and Hour 
Administrator issue a cease and desist order in the case of either 
alleged violation(s) of an attestation or longshore work by alien 
crewmember(s) employed by an employer allegedly not qualified for the 
claimed automated vessel exception. Upon the receipt of such a request, 
the Division shall notify the employer, provide an opportunity for a 
response and an informal meeting, and then rule on the request, which 
shall be granted if the preponderance of the evidence submitted supports 
the complainant's position.



Sec. 655.502  Definitions.

    For the purposes of subparts F and G of this part:
    Accepted for filing means that a properly completed attestation on 
Form ETA 9033, including accompanying documentation for each of the 
requirements in Sec. 655.510 (d) through (f) of this part, or a properly 
completed attestation on Form ETA 9033-A, including accompanying 
documentation for the requirement in Sec. 655.537 of this part in the 
case of an attestation under the Alaska exception, submitted by the 
employer or its designated agent or representative has been received and 
filed by the Employment and Training Administration of the Department of 
Labor (DOL). (Unacceptable attestations under the prevailing practice 
exception are described at Sec. 655.510(g)(2) of this part. Unacceptable 
attestations under the Alaska exception are described at Sec. 655.538(b) 
of this part.)
    Act and INA mean the Immigration and Nationality Act, as amended, 8 
U.S.C. 1101 et seq.
    Activity means any activity relating to loading cargo; unloading 
cargo; operation of cargo-related equipment; or handling of mooring 
lines on the dock when a vessel is made fast or let go.
    Administrative law judge means an official appointed pursuant to 5 
U.S.C. 3105.
    Administrator means the Administrator of the Wage and Hour Division, 
Employment Standards Administration, Department of Labor, or such 
authorized representatives as may be designated to perform any of the 
functions of the Administrator under subparts F and G of this part.
    Attestation means documents submitted by an employer attesting to 
and providing accompanying documentation to show that, under the 
prevailing practice exception, the use of alien crewmembers for a 
particular activity of longshore work at a particular U.S. port is the 
prevailing practice, and is not during a strike or lockout nor intended 
to influence an election of a bargaining representative for workers; and 
that notice of the attestation has

[[Page 521]]

been provided to the bargaining representative, or, where there is none, 
to the longshore workers at the local port. Under the Alaska exception, 
such documents shall show that, before using alien crewmen to perform 
longshore work, the employer will make bona fide requests for dispatch 
of United States longshore workers who are qualified and available in 
sufficient numbers and that the employer will employ all such United 
States longshore workers in response to such a request for dispatch; 
that the use of alien crewmembers is not intended or designed to 
influence an election of a bargaining representative for workers in the 
State of Alaska; and that notice of the attestation has been provided to 
labor organizations recognized as exclusive bargaining representatives 
of United States longshore workers, contract stevedoring companies, and 
operators of private docks at which the employer will use longshore 
workers.
    Attesting employer means an employer who has filed an attestation.
    Attorney General means the chief official of the U.S. Department of 
Justice or the Attorney General's designee.
    Automated vessel means a vessel equipped with an automated self-
unloading conveyor belt or vacuum-actuated system which is utilized for 
loading or unloading cargo between the vessel and the dock.
    Certifying Officer means a Department of Labor official who makes 
determinations about whether or not to accept attestations:
    (1) A regional Certifying Officer designated by a Regional 
Administrator, Employment and Training Administration (RA) makes such 
determinations in a regional office of the Department;
    (2) A national Certifying Officer makes such determinations in the 
national office of the USES.
    Chief, Division of Foreign Labor Certifications, USES means the 
chief official of the Division of Foreign Labor Certifications within 
the United States Employment Service, Employment and Training 
Administration, Department of Labor, or the designee of the Chief, 
Division of Foreign Labor Certifications, USES.
    Chief Administrative Law Judge means the chief official of the 
Office of the Administrative Law Judges of the Department of Labor or 
the Chief Administrative Law Judge's designee.
    Contract stevedoring company means a stevedoring company which is 
licensed to do business in the State of Alaska and which meets the 
requirements of section 32 of the Longshore and Harbor Workers' 
Compensation Act (33 U.S.C. 932).
    Crewmember means any nonimmigrant alien admitted to the United 
States to perform services under sec. 101(a)(15)(D)(i) of the Act (8 
U.S.C. 1101(a)(15)(D)(i)).
    Date of filing means the date an attestation is accepted for filing 
by ETA.
    Department and DOL mean the United States Department of Labor.
    Director means the chief official of the United States Employment 
Service (USES), Employment and Training Administration, Department of 
Labor, or the Director's designee.
    Division means the Wage and Hour Division of the Employment 
Standards Administration, DOL.
    Employer means a person, firm, corporation, or other association or 
organization, which suffers or permits, or proposes to suffer or permit, 
alien crewmembers to perform longshore work at a port within the U.S. 
For purposes of Secs. 655.530 through 655.541, which govern the 
performance of longshore activities by alien crewmembers under the 
Alaska exception, ``employer'' includes any agent or representative 
designated by the employer.
    Employment and Training Administration (ETA) means the agency within 
the Department of Labor (DOL) which includes the United States 
Employment Service (USES).
    Employment Standards Administration (ESA) means the agency within 
the Department of Labor (DOL) which includes the Wage and Hour Division.
    Immigration and Naturalization Service (INS) means the component of 
the Department of Justice which makes the determination under the Act on 
whether an employer of alien crewmembers may use such crewmembers for 
longshore work at a U.S. port.

[[Page 522]]

    Lockout means a labor dispute involving a work stoppage, wherein an 
employer withholds work from its employees in order to gain a concession 
from them.
    Longshore work means any activity (except safety and environmental 
protection work as described in sec. 258(b)(2) of the Act) relating to 
the loading or unloading of cargo, the operation of cargo related 
equipment (whether or not integral to the vessel), or the handling of 
mooring lines on the dock when the vessel is made fast or let go, in the 
United States or the coastal waters thereof.
    Longshore worker means a U.S. worker who performs longshore work.
    Port means a geographic area, either on a seacoast, lake, river or 
any other navigable body of water, which contains one or more publicly 
or privately owned terminals, piers, docks, or maritime facilities, 
which is commonly thought of as a port by other government maritime-
related agencies, such as the Maritime Administration. U.S. ports 
include, but are not limited to, those listed in Appendix A to this 
subpart.
    Qualified and available in sufficient numbers means the full 
complement of qualified longshore workers needed to perform the 
longshore activity, as determined by industry standards in the State of 
Alaska, including safety considerations.
    Regional Administrator, Employment and Training Administration (RA) 
means the chief official of the Employment and Training Administration 
(ETA) in a Department of Labor (DOL) regional office.
    Secretary means the Secretary of Labor or the Secretary's designee.
    Strike means a labor dispute wherein employees engage in a concerted 
stoppage of work (including stoppage by reason of the expiration of a 
collective-bargaining agreement) or engage in any concerted slowdown or 
other concerted interruption of operations.
    Unanticipated emergency means an unexpected and unavoidable 
situation, such as one involving severe weather conditions, natural 
disaster, or mechanical breakdown, where cargo must be immediately 
loaded on, or unloaded from, a vessel.
    United States is defined at 8 U.S.C. 1101(a)(38).
    United States Employment Service (USES) means the agency of the 
Department of Labor, established under the Wagner-Peyser Act, which is 
charged with administering the national system of public employment 
offices.
    United States (U.S.) worker means a worker who is a U.S. citizen, a 
U.S. national, a permanent resident alien, or any other worker legally 
permitted to work indefinitely in the United States.



Sec. 655.510  Employer attestations.

    (a) Who may submit attestations? An employer (or the employer's 
designated U.S. agent or representative) seeking to employ alien 
crewmembers for a particular activity of longshore work under the 
prevailing practice exception shall submit an attestation, provided 
there is not in effect in the local port any collective bargaining 
agreement covering at least 30 percent of the longshore workers. An 
attestation is required for each port at which the employer intends to 
use alien crewmembers for longshore work. The attestation shall include: 
A completed Form ETA 9033, which shall be signed by the employer (or the 
employer's designated agent or representative); and facts and evidence 
prescribed in paragraphs (d) through (f) of this section. This 
Sec. 655.510 shall not apply in the case of longshore work performed at 
a particular location in the State of Alaska. The procedures governing 
the filing of attestations under the Alaska exception are set forth at 
Secs. 655.530 through 655.541.
    (b) Where and when should attestations be submitted? (1) 
Attestations must be submitted, by U.S. mail, private carrier, or 
facsimile transmission to the U.S. Department of Labor ETA Regional 
Office(s) which are designated by the Chief, Division of Foreign Labor 
Certifications, USES. Attestations must be received and date-stamped by 
DOL at least 14 calendar days prior to the date of the first performance 
of the intended longshore activity, and shall be accepted for filing or 
returned by ETA in accordance with paragraph (g) of this section within 
14 calendar days

[[Page 523]]

of the date received by ETA. An attestation which is accepted by ETA 
solely because it was not reviewed within 14 days is subject to 
subsequent invalidation pursuant to paragraph (i) of this section. Every 
employer filing an attestation shall have an agent or representative 
with a United States address. Such address shall be clearly indicated on 
the Form ETA 9033. In order to ensure that an attestation has been 
accepted for filing prior to the date of the performance of the 
longshore activity, employers are advised to take mailing time into 
account to make sure that ETA receives the attestation at least 14 days 
prior to the first performance of the longshore activity.
    (2) Unanticipated Emergencies. ETA may accept for filing 
attestations received after the 14-day deadline when due to an 
unanticipated emergency, as defined in Sec. 655.502 of this part. When 
an employer is claiming an unanticipated emergency, it shall submit 
documentation to support such a claim. ETA shall then make a 
determination on the validity of the claim, and shall accept the 
attestation for filing or return it in accordance with paragraph (g) of 
this section. ETA shall in no case accept an attestation received later 
than the date of the first performance of the activity.
    (c) What should be submitted? (1) Form ETA 9033 with accompanying 
documentation. For each port, a completed and dated original Form ETA 
9033, or facsimile transmission thereof, containing the required 
attestation elements and the original signature of the employer (or the 
employer's designated agent or representative) shall be submitted, along 
with two copies of the completed, signed, and dated Form ETA 9033. (If 
the attestation is submitted by facsimile transmission, the attestation 
containing the original signature shall be maintained at the U.S. 
business address of the employer's designated agent or representative). 
Copies of Form ETA 9033 are available at all Department of Labor ETA 
Regional Offices and at the National Office. In addition, the employer 
shall submit two sets of all facts and evidence to show compliance with 
each of the attestation elements as prescribed by the regulatory 
standards in paragraphs (d) through (f) of this section. In the case of 
an investigation pursuant to subpart G of this part, the employer shall 
have the burden of proof to establish the validity of each attestation. 
The employer shall maintain in its records at the office of its U.S. 
agent, for a period of at least 3 years from the date of filing, 
sufficient documentation to meet its burden of proof, which shall at a 
minimum include the documentation described in this Sec. 655.510, and 
shall make the documents available to Department of Labor officials upon 
request.
    Whenever any document is submitted to a Federal agency or retained 
in the employer's records pursuant to this part, the document either 
shall be in the English language or shall be accompanied by a written 
translation into the English language certified by the translator as to 
the accuracy of the translation and his/her competency to translate.
    (2) Statutory precondition regarding collective bargaining 
agreements. (i) The employer may file an attestation only when there is 
no collective bargaining agreement in effect in the port covering 30 
percent or more of the longshore workers in the port. The employer shall 
attest on the Form ETA 9033 that no such collective bargaining agreement 
exists at the port at the time that the attestation is filed.
    (ii) The employer is not required to submit with the Form ETA 9033 
documentation substantiating that there is no collective bargaining 
agreement in effect in the port covering 30 percent or more of the 
longshore workers. If a complaint is filed which presents reasonable 
cause to believe that such an agreement exists, the Department shall 
conduct an investigation. In such an investigation, the employer shall 
have the burden of proving that no such collective bargaining agreement 
exists.
    (3) Ports for which attestations may be filed. Employers may file an 
attestation for a port which is listed in appendix A (U.S. Seaports) to 
this subpart. Employers may also file an attestation for a particular 
location not in appendix A to this subpart if additional facts and 
evidence are submitted with the attestation to demonstrate that the 
location is a port, meeting all of the criteria as defined by 
Sec. 655.502 of this part.

[[Page 524]]

    (4) Attestation elements. The attestation elements referenced in 
paragraph (c)(1) of this section are mandated by sec. 258(c)(1)(B) of 
the Act (8 U.S.C. 1288(c)(1)(B)). Section 258(c)(1)(B) of the Act 
requires employers who seek to have alien crewmembers engage in a 
longshore activity to attest as follows:
    (i) The performance of the activity by alien crewmembers is 
permitted under the prevailing practice of the particular port as of the 
date of filing of the attestation;
    (ii) The use of the alien crewmembers for such activity is not 
during a strike or lockout in the course of a labor dispute, and is not 
intended or designed to influence an election of a bargaining 
representative for workers in the local port; and
    (iii) Notice of the attestation has been provided by the owner, 
agent, consignee, master, or commanding officer to the bargaining 
representative of longshore workers in the local port, or, where there 
is no such bargaining representative, notice has been provided to 
longshore workers employed at the local port.
    (d) The first attestation element: prevailing practice. For an 
employer to be in compliance with the first attestation element, it is 
required to have been the prevailing practice during the 12-month period 
preceding the filing of the attestation, for a particular activity of 
longshore work at the particular port to be performed by alien 
crewmembers. For each port, a prevailing practice can exist for any of 
four different types of longshore work: loading of cargo, unloading of 
cargo, operation of cargo-related equipment, or handling of mooring 
lines. It is thus possible that at a particular port it is the 
prevailing practice for alien crewmembers to unload vessels but not the 
prevailing practice to load them. An employer shall indicate on the 
attestation form which of the four longshore activities it is claiming 
is the prevailing practice for such work to be performed by alien 
crewmembers.
    (1) Establishing a prevailing practice.
    (i) In establishing that a particular activity of longshore work is 
the prevailing practice at a particular port, an employer shall submit 
facts and evidence to show that in the 12-month period preceding the 
filing of the attestation, one of the following conditions existed:
    (A) Over fifty percent of vessels docking at the port used alien 
crewmembers for the activity; or
    (B) Alien crewmembers made up over fifty percent of the workers in 
the port who engaged in the activity.
    (ii) Prevailing practice after Secretary of State determination of 
non-reciprocity. Section 258(d) of the Act provides a reciprocity 
exception (separate from the prevailing practice exception) to the 
prohibition on performance of longshore work by alien crewmembers in 
U.S. ports. However, this reciprocity exception becomes nonapplicable 
where the Secretary of State determines that, for a particular activity 
of longshore work, a particular country (by law, regulation, or 
practice) prohibits such activity by U.S. crewmembers in its ports. When 
the Secretary of State places a country on the non-reciprocity list 
(which means, for the purposes of this section, Prohibitions on 
longshore work by U.S. nationals; listing by country at 22 CFR 89.1), 
crewmembers on vessels from that country (that is, vessels that are 
registered in that country or vessels whose majority ownership interest 
is held by nationals of that country) are not permitted to perform 
longshore work in U.S. waters, absent applicability of some exception 
other than the reciprocity exception. The Secretary of State's 
determination has the following effects in the establishment of a 
prevailing practice for a particular longshore activity at a particular 
U.S. port for purposes of the prevailing practice exception.
    (A) An employer from any country, other than the country which is 
placed on the non-reciprocity list, may include the longshore activities 
performed by alien crewmembers on all vessels in establishing the 
prevailing practice for a particular longshore activity in a particular 
port.
    (B) An employer from a country which is placed on the non-
reciprocity list may file an attestation for the prevailing practice 
exception under the standards and requirements established in this 
subpart F (except as provided in paragraph (d)(1)(ii)(C) of this 
section), provided that the attestation is filed at

[[Page 525]]

least 12 months after the date on which the employer's country is placed 
on the list.
    (C) An employer from a country which is placed on the non-
reciprocity list may file an attestation pursuant to the prevailing 
practice exception earlier than 12 months from the date on which the 
employer's country is placed on the list, except that the following 
restrictions shall apply to such attestation:
    (1) The employer shall submit facts and evidence to show that, for 
the 12-month period preceding the date of the attestation, the use of 
alien crewmembers to perform a particular activity of longshore work was 
permitted by the prevailing practice in the port (as defined in 
paragraph (d)(1)(i) of this section) without considering or including 
such activity by crewmembers on vessels from the employer's country; or
    (2) The employer shall submit facts and evidence (including data on 
activities performed by crewmembers on vessels from the employer's 
country) to show that the use of alien crewmembers to perform a 
particular activity of longshore work was permitted by the prevailing 
practice in the port (as defined in paragraph (d)(1)(i) of this section) 
for one of two periods--
    (i) For the employer whose country has not previously been on the 
non-reciprocity list, the period is the continuous 12-month period prior 
to May 28, 1991 (the effective date of section 258 of the Act); or
    (ii) For the employer whose country was at some time on the non-
reciprocity list, but was subsequently removed from the non-reciprocity 
list and then restored to the non-reciprocity list (on one or more 
occasions), the period is the last continuous 12-month period during 
which the employer's country was not under the reciprocity exception 
(that is, was listed on the non-reciprocity list).
    (iii) For purposes of this paragraph (d)(1):
    (A) ``Workers in the port engaged in the activity'' means any person 
who performed the activity in any calendar day;
    (B) Vessels shall be counted each time they dock at the particular 
port):
    (C) Vessels exempt from section 258 of the INA for safety and 
environmental protection shall not be included in counting the number of 
vessels which dock at the port (see Department of Transportation 
Regulations); and
    (D) Automated vessels shall not be included in counting the number 
of vessels which dock at the port. For establishing a prevailing 
practice under the automated vessel exception see Sec. 655.520 of this 
part.
    (2) Documentation. In assembling the facts and evidence required by 
paragraph (d)(1) of this section, the employer may consult with the port 
authority which has jurisdiction over the local port, the collective 
bargaining representative(s) of longshore workers at the local port, 
other employers, or any other entity which is familiar with the 
practices at the port. Such documentation shall include a written 
summary of a survey of the experience of shipmasters who entered the 
local port in the previous year; or a letter, affidavit, or other 
written statement from an appropriate local port authority regarding the 
use of alien crewmembers to perform the longshore activity at the port 
in the previous year; or other documentation of comparable weight. 
Written statements from collective bargaining representatives and/or 
shipping agents with direct knowledge of practices regarding the use of 
alien crewmembers in the local port may also be pertinent. Such 
documentation shall accompany the Form ETA 9033, and any underlying 
documentation which supports the employer's burden of proof shall be 
maintained in the employer's records at the office of the U.S. agent as 
required by paragraph (c)(1) of this section.
    (e) The second attestation element: no strike or lockout; no 
intention or design to influence bargaining representative election. (1) 
The employer shall attest that, at the time of submitting the 
attestation, there is not a strike or lockout in the course of a labor 
dispute covering the employer's activity, and that it will not use alien 
crewmembers during a strike or lockout after filing the attestation. The 
employer shall also attest that the employment of such

[[Page 526]]

aliens is not intended or designed to influence an election for a 
bargaining representative for workers in the local port. Labor disputes 
for purposes of this attestation element relate only to those involving 
longshore workers at the port of intended employment. This attestation 
element applies to strikes and lockouts and elections of bargaining 
representatives at the local port where the use of alien crewmembers for 
longshore work is intended.
    (2) Documentation. As documentation to substantiate the requirement 
in paragraph (e)(1) of this section, an employer may submit a statement 
of the good faith efforts made to determine whether there is a strike or 
lockout at the particular port, as, for example, by contacting the port 
authority or the collective bargaining representative for longshore 
workers at the particular port.
    (f) The third attestation element: notice of filing. The employer of 
alien crewmembers shall attest that at the time of filing the 
attestation, notice of filing has been provided to the bargaining 
representative of the longshore workers in the local port, or, where 
there is no such bargaining representative, notice of the filing has 
been provided to longshore workers employed at the local port through 
posting in conspicuous locations and through other appropriate means.
    (1) Notification of bargaining representative. No later than the 
date the attestation is received by DOL to be considered for filing, the 
employer of alien crewmembers shall notify the bargaining representative 
(if any) of longshore workers at the local port that the attestation is 
being submitted to DOL. The notice shall include a copy of the Form ETA 
9033, shall state the activity(ies) for which the attestation is 
submitted, and shall state in that notice that the attestation and 
accompanying documentation are available at the national office of ETA 
for review by interested parties. The employer may have its owner, 
agent, consignee, master, or commanding officer provide such notice. 
Notices under this paragraph (f)(1) shall include the following 
statement: ``Complaints alleging misrepresentation of material facts in 
the attestation and/or failure to comply with the terms of the 
attestation may be filed with any office of the Wage and Hour Division 
of the United States Department of Labor.''
    (2) Posting notice where there is no bargaining representative. If 
there is no bargaining representative of longshore workers at the local 
port when the employer submits an attestation to ETA, the employer shall 
provide written notice to the port authority for distribution to the 
public on request. In addition, the employer shall post one or more 
written notices at the local port, stating that the attestation with 
accompanying documentation has been submitted, the activity(ies) for 
which the attestation has been submitted, and that the attestation and 
accompanying documentation are available at the national office of ETA 
for review by interested parties. Such posted notice shall be clearly 
visible and unobstructed, and shall be posted in conspicuous places 
where the longshore workers readily can read the posted notice on the 
way to or from their duties. Appropriate locations for posting such 
notices include locations in the immediate proximity of mandatory Fair 
Labor Standards Act wage and hour notices and Occupational Safety and 
Health Act occupational safety and health notices. The notice shall 
include a copy of the Form ETA 9033 filed with DOL, shall provide 
information concerning the availability of supporting documents for 
examination at the national office of ETA, and shall include the 
following statement: ``Complaints alleging misrepresentation of material 
facts in the attestation and/or failure to comply with the terms of the 
attestation may be filed with any office of the Wage and Hour Division 
of the United States Department of Labor.''
    (3) Documentation. The employer shall provide a statement setting 
forth the name and address of the person to whom the notice was provided 
and where and when the notice was posted and shall attach a copy of the 
notice.
    (g) Actions on attestations submitted for filing. Once an 
attestation has been received from an employer, a determination shall be 
made by the regional Certifying Officer whether to accept the 
attestation for filing or return it. The regional Certifying Officer may 
request

[[Page 527]]

additional explanation and/or documentation from the employer in making 
this determination. An attestation which is properly filled out and 
which includes accompanying documentation for each of the requirements 
set forth at Sec. 655.510(d) through (f) shall be accepted for filing by 
ETA on the date it is signed by the regional Certifying Officer unless 
it falls within one of the categories set forth in paragraph (g)(2) of 
this section. Once an attestation is accepted for filing, ETA shall then 
follow the procedures set forth in paragraph (g)(1) of this section. 
Upon acceptance of the employer's attestation by ETA, the attestation 
and accompanying documentation will be forwarded and shall be available 
in a timely manner for public examination at the ETA national office. 
ETA shall not consider information contesting an attestation received by 
ETA prior to the determination to accept or return the attestation for 
filing. Such information shall not be made part of ETA's administrative 
record on the attestation, but shall be referred to ESA to be processed 
as a complaint pursuant to subpart G of this part if the attestation is 
accepted by ETA for filing.
    (1) Acceptance. (i) If the attestation is properly filled out and 
includes accompanying documentation for each of the requirements at 
Sec. 655.510(d) through (f), and does not fall within one of the 
categories set forth at paragraph (g)(2) of this section, ETA shall 
accept the attestation for filing, provide notification to the INS 
office having jurisdiction over the port where longshore work will be 
performed, and return to the employer, or the employer's agent or 
representative at a U.S. address, one copy of the attestation form 
submitted by the employer, with ETA's acceptance indicated thereon. The 
employer may then use alien crewmembers for the particular activity of 
longshore work at the U.S. port cited in the attestation in accordance 
with INS regulations.
    (ii) DOL is not the guarantor of the accuracy, truthfulness or 
adequacy of an attestation accepted for filing.
    (2) Unacceptable attestations. ETA shall not accept an attestation 
for filing and shall return such attestation to the employer, or the 
employer's agent or representative at a U.S. address, when one of the 
following conditions exists:
    (i) When the Form ETA 9033 is not properly filled out. Examples of 
improperly filled out Form ETA 9033's include instances where the 
employer has neglected to check all the necessary boxes, or where the 
employer has failed to include the name of the port where it intends to 
use the alien crewmembers for longshore work, or where the employer has 
named a port that is not listed in appendix A and has failed to submit 
facts and evidence to support a showing that the location is a port as 
defined by Sec. 655.502, or when the employer has failed to sign the 
attestation or to designate an agent in the United States;
    (ii) When the Form ETA 9033 with accompanying documentation is not 
received by ETA at least 14 days prior to the date of performance of the 
first activity indicated on the Form ETA 9033; unless the employer is 
claiming an unanticipated emergency, has included documentation which 
supports such claim, and ETA has found the claim to be valid;
    (iii) When the Form ETA 9033 does not include accompanying 
documentation for each of the requirements set forth at Sec. 655.510 (d) 
through (f);
    (iv) When the accompanying documentation required by paragraph (c) 
of this section submitted by the employer, on its face, is inconsistent 
with the requirements set forth at Sec. 655.510 (d) through (f). 
Examples of such a situation include instances where the Form ETA 9033 
pertains to one port and the accompanying documentation to another; 
where the Form ETA 9033 pertains to one activity of longshore work and 
the accompanying documentation obviously refers to another; or where the 
documentation clearly indicates that only thirty percent, instead of the 
required fifty percent, of the activity attested to is performed by 
alien crewmembers;
    (v) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, after an investigation pursuant to subpart G of this 
part, that the particular activity of longshore work which the employer 
has attested is the prevailing practice at a particular port,

[[Page 528]]

is not, in fact, the prevailing practice at the particular port;
    (vi) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, that a cease and desist order has been issued pursuant 
to subpart G of this part, with respect to the attesting employer's 
performance of the particular activity and port, in violation of a 
previously accepted attestation;
    (vii) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, after an investigation pursuant to subpart G of this 
part, that the particular employer has misrepresented or failed to 
comply with an attestation previously submitted and accepted for filing, 
but in no case for a period of more than one year after the date of the 
Administrator's notice and provided that INS has not advised ETA that 
the prohibition is in effect for a lesser period; or
    (viii) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, that the employer has failed to comply with any 
penalty, sanction, or other remedy assessed in a final agency action 
following an investigation by the Wage and Hour Division pursuant to 
subpart G of this part.
    (3) Resubmission. If the attestation is not accepted for filing 
pursuant to the categories set forth in paragraph (g)(2) of this 
section, ETA shall return to the employer, or the employer's agent or 
representative, at a U.S. address, the attestation form and accompanying 
documentation submitted by the employer. ETA shall notify the employer, 
in writing, of the reason(s) that the attestation is unacceptable. When 
an attestation is found to be unacceptable pursuant to paragraphs (g)(2) 
(i) through (iv) of this section, the employer may resubmit the 
attestation with the proper documentation. When an attestation is found 
to be unacceptable pursuant to paragraphs (g)(2) (v) through (viii) of 
this section and returned, such action shall be the final decision of 
the Secretary of Labor.
    (h) Effective date and validity of filed attestations. An 
attestation is filed and effective as of the date it is accepted and 
signed by the regional Certifying Officer. Such attestation is valid for 
the 12-month period beginning on the date of acceptance for filing, 
unless suspended or invalidated pursuant to subpart G of this part or 
paragraph (i) of this section. The filed attestation expires at the end 
of the 12-month period of validity.
    (i) Suspension or invalidation of filed attestations. Suspension or 
invalidation of an attestation may result from enforcement action(s) 
under subpart G of this part (i.e., investigation(s) conducted by the 
Administrator or cease and desist order(s) issued by the Administrator 
regarding the employer's misrepresentation in or failure to carry out 
its attestation); or from a discovery by ETA that it made an error in 
accepting the attestation because such attestation falls within one of 
the categories set forth in paragraph (g)(2) of this section.
    (1) Result of Wage and Hour Division action. Upon the determination 
of a violation under subpart G of this part, the Administrator shall, 
pursuant to Sec. 655.660(b), notify the Attorney General of the 
violation and of the Administrator's notice to ETA.
    (2) Result of ETA action. If, after accepting an attestation for 
filing, ETA finds that the attestation is unacceptable because it falls 
within one of the categories set forth at paragraph (g)(2) of this 
section, and as a result, ETA suspends or invalidates the attestation, 
ETA shall notify the Attorney General of such suspension or invalidation 
and shall return a copy of the attestation form to the employer, or the 
employer's agent or representative, at a U.S. address. ETA shall notify 
the employer, in writing, of the reason(s) that the attestation is 
suspended or invalidated. When an attestation is found to be suspended 
or invalidated pursuant to paragraphs (g)(2) (i) through (iv) of this 
section, the employer may resubmit the attestation with the proper 
documentation. When an attestation is suspended or invalidated because 
it falls within one of the categories in paragraphs (g)(2) (v) through 
(viii) of this section, such action shall be the final decision of the 
Secretary of Labor, except as set forth in subpart G of this part.
    (j) Withdrawal of accepted attestations. (1) An employer who has 
submitted an attestation which has been accepted

[[Page 529]]

for filing may withdraw such attestation at any time before the 12-month 
period of its validity terminates, unless the Administrator has found 
reasonable cause under subpart G to commence an investigation of the 
particular attestation. Such withdrawal may be advisable, for example, 
when the employer learns that the particular activity(ies) of longshore 
work which it has attested is the prevailing practice to perform with 
alien crewmembers may not, in fact, have been the prevailing practice at 
the particular port at the time of filing. Requests for such withdrawals 
shall be in writing and shall be directed to the regional Certifying 
Officer.
    (2) Withdrawal of an attestation shall not affect an employer's 
liability with respect to any failure to meet the conditions attested to 
which took place before the withdrawal, or for misrepresentations in an 
attestation. However, if an employer has not yet performed the 
particular longshore activity(ies) at the port in question, the 
Administrator will not find reasonable cause to investigate unless it is 
alleged, and there is reasonable cause to believe, that the employer has 
made misrepresentations in the attestation or documentation thereof, or 
that the employer has not in fact given the notice attested to.


(Approved by the Office of Management and Budget under Control No. 1205-
0309)



Sec. 655.520  Special provisions regarding automated vessels.

    In general, an attestation is not required in the case of a 
particular activity of longshore work consisting of the use of automated 
self-unloading conveyor belt or vacuum-actuated systems on a vessel. The 
legislation creates a rebuttable presumption that the use of alien 
crewmembers for the operation of such automated systems is the 
prevailing practice. In order to overcome such presumption, it must be 
shown by the preponderance of the evidence submitted by any interested 
party, that the use of alien crewmembers for such activity is not the 
prevailing practice. Longshore work involving the use of such equipment 
shall be exempt from the attestation requirement only if the activity 
consists of using that equipment. If the automated equipment is not used 
in the particular activity of longshore work, an attestation is required 
as described under Sec. 655.510 of this part if it is the prevailing 
practice in the port to use alien crewmembers for this work, except that 
in all cases, where an attestation is required for longshore work to be 
performed at a particular location in the State of Alaska, an employer 
shall file such attestation under the Alaska exception pursuant to 
Secs. 655.530 through 655.541 on Form ETA 9033-A. When automated 
equipment is used in the particular activity of longshore work, an 
attestation is required only if the Administrator finds, based on a 
preponderance of the evidence which may be submitted by any interested 
party, that the performance of the particular activity of longshore work 
is not the prevailing practice at the port, or was during a strike or 
lockout or intended to influence an election of a bargaining 
representative for workers in the local port, or if the Administrator 
issues a cease and desist order against use of the automated equipment 
without such attestation.
    (a) Procedure when attestation is required. If it is determined 
pursuant to subpart G of this part that an attestation is required for 
longshore work consisting of the use of automated equipment at a 
location other than in the State of Alaska, the employer shall comply 
with all the requirements set forth at Sec. 655.510 of this part except 
paragraph (d) of Sec. 655.510. In lieu of complying with Sec. 655.510(d) 
of this part, the employer shall comply with paragraph (b) of this 
section. If it is determined pursuant to subpart G of this part that an 
attestation is required for longshore work consisting of the use of 
automated equipment at a particular location in the State of Alaska, the 
employer shall comply with all the requirements set forth at 
Secs. 655.530 through 655.541 of this part.
    (b) The first attestation element: prevailing practice for automated 
vessels. For an employer to be in compliance with the first attestation 
element, it is required to have been the prevailing

[[Page 530]]

practice that over fifty percent (as described in paragraph (b)(1) of 
this section) of a particular activity of longshore work which was 
performed through the use of automated self-unloading conveyor belt or 
vacuum-actuated equipment at the particular port during the 12-month 
period preceding the filing of the attestation, was performed by alien 
crewmembers. For purposes of this paragraph (b), only automated vessels 
shall be included in counting the number of vessels which dock at the 
port.
    (1) Establishing a prevailing practice. (i) In establishing that the 
use of alien crewmembers to perform a particular activity of longshore 
work consisting of the use of self-unloading conveyor belt or vacuum-
actuated systems on a vessel is the prevailing practice at a particular 
port, an employer shall submit facts and evidence to show that in the 
12-month period preceding the filing of the attestation, one of the 
following conditions existed:
    (A) Over fifty percent of the automated vessels docking at the port 
used alien crewmembers for the activity (for purposes of this paragraph 
(b)(1), a vessel shall be counted each time it docks at the particular 
port); or
    (B) Alien crewmembers made up over fifty percent of the workers who 
performed the activity with respect to such automated vessels.
    (ii) Prevailing practice after Secretary of State determination of 
non-reciprocity. Section 258(d) of the Act provides a reciprocity 
exception (separate from the prevailing practice exception) to the 
prohibition on performance of longshore work by alien crewmembers in 
U.S. ports. However, this reciprocity exception becomes nonapplicable 
where the Secretary of State determines that, for a particular activity 
of longshore work, a particular country (by law, regulation, or 
practice) prohibits such activity by U.S. crewmembers in its ports. When 
the Secretary of State places a country on the non-reciprocity list 
(which means, for the purposes of this section, Prohibitions on 
longshore work by U.S. nationals; listing by country at 22 CFR 89.1), 
crewmembers on vessels from that country (that is, vessels that are 
registered in that country or vessels whose majority ownership interest 
is held by nationals of that country) are not permitted to perform 
longshore work in U.S. waters, absent applicability of some exception 
other than the reciprocity exception. The Secretary of State's 
determination has the following effects in the establishment of a 
prevailing practice for a particular longshore activity at a particular 
U.S. port for purposes of the prevailing practice exception.
    (A) An employer from any country, other than the country which is 
placed on the non-reciprocity list, may include the longshore activities 
performed by alien crewmembers on all vessels in establishing the 
prevailing practice for a particular longshore activity in a particular 
port.
    (B) An employer from a country which is placed on the non-
reciprocity list may file an attestation for the prevailing practice 
exception under the standards and requirements established in this 
subpart F (except as provided in paragraph (b)(1)(ii)(C) of this 
section), provided that the attestation is filed at least 12 months 
after the date on which the employer's country is placed on the list.
    (C) An employer from a country which is placed on the non-
reciprocity list may file an attestation pursuant to the prevailing 
practice exception earlier than 12 months from the date on which the 
employer's country is placed on the list, except that the following 
restrictions shall apply to such attestation:
    (1) The employer shall submit facts and evidence to show that, for 
the 12-month period preceding the date of the attestation, the use of 
alien crewmembers to perform a particular activity of longshore work was 
permitted by the prevailing practice in the port (as defined in 
paragraph (d)(1)(i) of this section) without considering or including 
such activity by crewmembers on vessels from the employer's country; or
    (2) The employer shall submit facts and evidence (including data on 
activities performed by crewmembers on vessels from the employer's 
country) to show that the use of alien crewmembers to perform a 
particular activity of longshore work was permitted by the prevailing 
practice in the port (as

[[Page 531]]

defined in paragraph (b)(1)(i) of this section) for one of two periods--
    (i) For the employer whose country has not previously been on the 
non-reciprocity list, the period is the continuous 12-month period prior 
to May 28, 1991 (the effective date of section 258 of the Act); or
    (ii) For the employer whose country was at some time on the non-
reciprocity list, but was subsequently removed from the non-reciprocity 
list and then restored to the non-reciprocity list (on one or more 
occasions), the period is the last continuous 12-month period during 
which the employer's country was not under the reciprocity exception 
(that is, was listed on the non-reciprocity list).
    (2) Documentation. In assembling the documentation described in 
paragraph (b)(1) of this section, the employer may consult with the port 
authority which has jurisdiction over the local port, the collective 
bargaining representative(s) of longshore workers at the local port, 
other employers, or any other entity which is familiar with the 
practices at the port. The documentation shall include a written summary 
of a survey of the experience of shipmasters who entered the local port 
in the previous year; or a letter, affidavit, or other written statement 
from an appropriate local port authority regarding the use of alien 
crewmembers to perform the longshore activity at the port in the 
previous year; or other documentation of comparable weight. Written 
statements from collective bargaining representatives and/or shipping 
agents with direct knowledge of practices regarding the use of alien 
crewmembers may also be pertinent. Such documentation shall accompany 
the Form ETA 9033, and any underlying documentation which supports the 
employer's burden of proof shall be maintained in the employer's records 
at the office of the U.S. agent as required under Sec. 655.510(c)(1) of 
this part.

(Approved by the Office of Management and Budget under Control No. 1205-
0309)

                            Alaska Exception



Sec. 655.530  Special provisions regarding the performance of longshore activities at locations in the State of Alaska.

    Applicability. Section Sec. 655.510 of this part shall not apply to 
longshore work performed at locations in the State of Alaska. The 
performance of longshore work by alien crewmembers at locations in the 
State of Alaska shall instead be governed by Secs. 655.530 through 
655.541. The use of alien crewmembers to perform longshore work in 
Alaska consisting of the use of an automated self-unloading conveyor 
belt or vacuum-actuated system on a vessel shall continue to be governed 
by the provisions of Sec. 655.520 of this part, except that, if the 
Administrator finds, based on a preponderance of the evidence which may 
be submitted by any interested party, that an attestation is required 
because the performance of the particular activity of longshore work is 
not the prevailing practice at the location in the State of Alaska, or 
was during a strike or lockout or intended to influence an election of a 
bargaining representative for workers at that location, or if the 
Administrator issues a cease and desist order against use of the 
automated equipment without such an attestation, the required 
attestation shall be filed pursuant to the Alaska exception at 
Secs. 655.530 through 655.541 and not the prevailing practice exception 
at Sec. 655.510.



Sec. 655.531  Who may submit attestations for locations in Alaska?

    In order to use alien crewmembers to perform longshore activities at 
a particular location in the State of Alaska an employer shall submit an 
attestation on Form ETA 9033-A. As noted at Sec. 655.502, 
``Definitions,'' for purposes of Secs. 655.530 through 655.541, which 
govern the performance of longshore activities by alien crewmembers 
under the Alaska exception, ``employer'' includes any agent or 
representative designated by the employer. An employer may file a single 
attestation for multiple locations in the State of Alaska.

[[Page 532]]



Sec. 655.532  Where and when should attestations be submitted for locations in Alaska?

    (a) Attestations shall be submitted, by U.S. mail, private carrier, 
or facsimile transmission to the U.S. Department of Labor regional 
office of the Employment and Training Administration in Seattle, 
Washington. Except as provided in paragraph (b) of this section, 
attestations shall be received and date-stamped by the Department at 
least 30 calendar days prior to the date of the first performance of the 
longshore activity. The attestation shall be accepted for filing or 
returned by ETA in accordance with Sec. 655.538 within 14 calendar days 
of the date received by ETA. An attestation which is accepted by ETA 
solely because it was not reviewed within 14 days is subject to 
subsequent invalidation pursuant to Sec. 655.540 of this part. An 
employer filing an attestation shall have an agent or representative 
with a United States address. Such address shall be clearly indicated on 
the Form ETA 9033-A. In order to ensure that an attestation has been 
accepted for filing prior to the date of the first performance of the 
longshore activity, employers are advised to take mailing time into 
account to make sure that ETA receives the attestation at least 30 days 
prior to the first performance of the longshore activity.
    (b) Late filings. ETA may accept for filing attestations received 
after the 30-day deadline where the employer could not have reasonably 
anticipated the need to file an attestation for the particular location 
at that time. When an employer states that it could not have reasonably 
anticipated the need to file the attestation at that time, it shall 
submit documentation to ETA to support such a claim. ETA shall then make 
a determination on the validity of the claim and shall accept the 
attestation for filing or return it in accordance with Sec. 655.538 of 
this part. ETA in no case shall accept an attestation received less than 
24 hours prior to the first performance of the activity.



Sec. 655.533  What should be submitted for locations in Alaska?

    (a) Form ETA 9033-A with accompanying documentation. A completed and 
dated original Form ETA 9033-A, or facsimile transmission thereof, 
containing the required attestation elements and the original signature 
of the employer or the employer's agent or designated representative, 
along with two copies of the completed, signed, and dated Form ETA 9033-
A shall be submitted to ETA. (If the attestation is submitted by 
facsimile transmission, the attestation containing the original 
signature shall be maintained at the U.S. business address of the 
employer's designated agent or representative). Copies of Form ETA 9033-
A are available at all Department of Labor Regional offices and at the 
National office. In addition, the employer shall submit two sets of 
facts and evidence to show compliance with the fourth attestation 
element at Sec. 655.537 of this part. In the case of an investigation 
pursuant to subpart G of this part, the employer has the burden of proof 
to establish the validity of each attestation. The employer shall 
maintain in its records at the office of its U.S. agent, for a period of 
at least 3 years from the date of filing, sufficient documentation to 
meet its burden of proof, which shall at a minimum include the 
documentation described in Secs. 655.530 through --------.541, and shall 
make the documents available to Department of Labor officials upon 
request. Whenever any document is submitted to a Federal agency or 
retained in the employer's records pursuant to this part, the document 
shall either be in the English language or shall be accompanied by a 
written translation into the English language certified by the 
translator as to the accuracy of the translation and his/her competency 
to translate.
    (b) Attestation elements. The attestation elements referenced in 
Secs. 655.534 through 655.537 of this part are mandated by Sec. 
258(d)(1) of the Act (8 U.S.C. 1288(d)(1)). Section 258(d)(1) of the Act 
requires employers who seek to have alien crewmembers engage in 
longshore activity at locations in the State of Alaska to attest as 
follows:
    (1) The employer will make a bona fide request for United States 
longshore workers who are qualified and available in sufficient numbers 
to perform the activity at the particular time and location from the 
parties to

[[Page 533]]

whom notice has been provided under Sec. 655.537(a)(1) (ii) and (iii), 
except that:
    (i) Wherever two or more contract stevedoring companies have signed 
a joint collective bargaining agreement with a single labor organization 
recognized as an exclusive bargaining representative of United States 
longshore workers within the meaning of the National Labor Relations Act 
(29 U.S.C. 141 et seq.), the employer may request longshore workers from 
only one such contract stevedoring company, and
    (ii) A request for longshore workers to an operator of a private 
dock may be made only for longshore work to be performed at that dock 
and only if the operator meets the requirements of section 32 of the 
Longshore and Harbor Workers' Compensation Act (33 U.S.C. 932);
    (2) The employer will employ all United States longshore workers 
made available in response to the request made pursuant to 
Sec. 655.534(a)(1) who are qualified and available in sufficient numbers 
and who are needed to perform the longshore activity at the particular 
time and location to which the employer has attested;
    (3) The use of alien crewmembers for such activity is not intended 
or designed to influence an election of a bargaining representative for 
workers in the State of Alaska; and
    (4) Notice of the attestation has been provided to:
    (i) Labor organizations which have been recognized as exclusive 
bargaining representatives of United States longshore workers within the 
meaning of the National Labor Relations Act (29 U.S.C. 141 et seq.) and 
which make available or intend to make available workers to the 
particular location where the longshore work is to be performed;
    (ii) Contract stevedoring companies which employ or intend to employ 
United States longshore workers at that location; and
    (iii) Operators of private docks at which the employer will use 
longshore workers.



Sec. 655.534  The first attestation element for locations in Alaska: Bona fide request for dispatch of United States longshore workers.

    (a) The first attestation element shall be satisfied when the 
employer signs Form ETA 9033-A, attesting that, before using alien 
crewmembers to perform longshore work during the validity period of the 
attestation, the employer will make a bona fide request for United 
States longshore workers who are qualified and available in sufficient 
numbers to perform the specified longshore activity from the parties to 
whom notice is provided under Sec. 655.537(a)(1) (ii) and (iii). 
Although an employer is required to provide notification of filing to 
labor organizations recognized as exclusive bargaining representatives 
of United States longshore workers pursuant to Sec. 655.537(a)(1)(i) of 
this part, an employer need not request dispatch of United States 
longshore workers directly from such parties. The requests for dispatch 
of United States longshore workers pursuant to this section shall be 
directed to contract stevedoring companies which employ or intend to 
employ United States longshore workers at that location, and to 
operators of private docks at which the employer will use longshore 
workers. An employer is not required to request dispatch of United 
States longshore workers from private dock operators or contract 
stevedoring companies which do not meet the requirements of section 32 
of the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 932) 
or, in the case of contract stevedoring companies, which are not 
licensed to do business in the State of Alaska.
    (1) Wherever two or more contract stevedoring companies have signed 
a joint collective bargaining agreement with a single qualified labor 
organization, the employer may request longshore workers from only one 
of such contract stevedoring companies. A qualified labor organization 
is one which has been recognized as an exclusive bargaining 
representative of United States longshore workers within the meaning of 
the National Labor Relations Act (29 U.S.C. 141 et seq.) and

[[Page 534]]

which makes available or intends to make available workers to the 
particular location where the longshore work is to be performed.
    (2) A request for longshore workers to an operator of a private dock 
may be made only for longshore work to be performed at that dock.
    (3) An employer shall not be required to request longshore workers 
from a party if that party has notified the employer in writing that it 
does not intend to make available United States longshore workers who 
are qualified and available in sufficient numbers to the time and 
location at which the longshore work is to be performed.
    (4) A party that has provided such written notice to the employer 
under paragraph (a)(3) of this section may subsequently notify the 
employer in writing that it is prepared to make available United States 
longshore workers who are qualified and available in sufficient numbers 
to perform the longshore activity at the time and location where the 
longshore work is to be performed. In that event, the employer's 
obligations to that party under Secs. 655.534 and 655.535 of this part 
shall recommence 60 days after its receipt of such notice.
    (5) When a party has provided written notice to the employer under 
paragraph (a)(3) of this section that it does not intend to dispatch 
United States longshore workers to perform the longshore work attested 
to by the employer, such notice shall expire upon the earliest of the 
following events:
    (i) When the terms of such notice specify an expiration date at 
which time the employer's obligation to that party under Secs. 655.534 
and 655.535 of this part shall recommence;
    (ii) When retracted pursuant to paragraph (a)(4) of this section; or
    (iii) Upon the expiration of the validity of the attestation.
    (b) Documentation. To substantiate the requirement in paragraph (a) 
of this section, an employer shall develop and maintain documentation to 
meet the employer's burden of proof under the first attestation element. 
The employer shall retain records of all requests for dispatch of United 
States longshore workers to perform the longshore work attested to. Such 
documentation shall consist of letters, telephone logs, facsimiles or 
other memoranda to show that, before using alien crewmembers to perform 
longshore work, the employer made a bona fide request for United States 
longshore workers who are qualified and available in sufficient numbers 
to perform the longshore activity. At a minimum, such documentation 
shall include the date the request was made, the name and telephone 
number of the particular individual(s) to whom the request for dispatch 
was directed, and the number and composition of full work units 
requested. Further, whenever any party has provided written notice to 
the employer under paragraph (a)(3) of this section, the employer shall 
retain the notice for the period of time specified in Sec. 655.533 of 
this part, and, if appropriate, any subsequent notice by that party that 
it is prepared to make available United States longshore workers at the 
times and locations attested to.



Sec. 655.535  The second attestation element for locations in Alaska: Employment of United States longshore workers.

    (a) The second attestation element shall be satisfied when the 
employer signs Form ETA 9033-A, attesting that during the validity 
period of the attestation, the employer will employ all United States 
longshore workers made available in response to the request for dispatch 
who, in compliance with applicable industry standards in the State of 
Alaska, including safety considerations, are qualified and available in 
sufficient numbers and are needed to perform the longshore activity at 
the particular time and location attested to.
    (1) In no case shall an employer filing an attestation be required 
to hire less than a full work unit of United States longshore workers 
needed to perform the longshore activity nor be required to provide 
overnight accommodations for the longshore workers while employed. For 
purposes of this section, ``full work unit'' means the full complement 
of longshore workers needed to perform the longshore activity, as 
determined by industry standards in the State of Alaska, including 
safety considerations. Where the makeup of a

[[Page 535]]

full work unit is covered by one or more collective bargaining 
agreements in effect at the time and location where longshore work is to 
be performed, the provisions of such agreement(s) shall be deemed to be 
in conformance with industry standards in the State of Alaska.
    (2) In no case shall an employer be required to provide 
transportation to the vessel where the longshore work is to be 
performed, except where:
    (i) Surface transportation is available; for purposes of this 
section, ``surface transportation'' means a tugboat or other vessel 
which is appropriately insured, operated by licensed personnel, and 
capable of safely transporting U.S. longshore workers from shore to a 
vessel on which longshore work is to be performed;
    (ii) Such transportation may be safely accomplished; and
    (iii)(A) Travel time to the vessel does not exceed one-half hour 
each way; and
    (B) Travel distance to the vessel from the point of embarkation does 
not exceed 5 miles; for purposes of this section, ``point of 
embarkation'' means a dock or landing at which U.S. longshore workers 
may be safely boarded for transport from shore to a vessel on which 
longshore work is to be performed; or
    (C) In the cases of Wide Bay, Alaska, and Klawock/Craig, Alaska, 
travel time does not exceed 45 minutes each way and travel distance to 
the vessel from the point of embarkation does not exceed 7.5 miles, 
unless the party responding to the request for dispatch agrees to lesser 
time and distance specifications.
    (3) If a United States longshore worker is capable of getting to and 
from the vessel where longshore work is to be performed when the vessel 
is beyond the time and distance limitations specified in paragraph 
(a)(2)(iii) of this section, and where all of the other criteria 
governing the employment of United States longshore workers under this 
subpart are met (e.g., ``qualified and available in sufficient 
numbers''), the employer is still obligated to employ the worker to 
perform the longshore activity. In such instance, however, the employer 
shall not be required to provide such transportation nor to reimburse 
the longshore worker for the cost incurred in transport to and from the 
vessel.
    (4) Where an employer is required to provide transportation to the 
vessel because it is within the time and distance limitations specified 
in (a)(2)(iii) of this section, the employer also shall be required to 
provide return transportation to the point of embarkation.
    (b) Documentation. To substantiate the requirement in paragraph (a) 
of this section, an employer shall develop and maintain documentation to 
meet the employer's burden of proof. Such documentation shall include 
records of payments to contract stevedoring companies or private dock 
operators, payroll records for United States longshore workers employed, 
or other documentation to show clearly that the employer has met its 
obligation to employ all United States longshore workers made available 
in response to a request for dispatch who are qualified and available in 
sufficient numbers. The documentation shall specify the number of full 
work units employed pursuant to this section, the composition of such 
full work units (i.e., number of workers by job title), and the date(s) 
and location(s) where the longshore work was performed. The employer 
also shall develop and maintain documentation concerning the provision 
of transportation from the point of embarkation to the vessel on which 
longshore work is to be performed. Each time one or more United States 
longshore workers are dispatched in response to the request under 
Sec. 655.534, the employer shall retain a written record of whether 
transportation to the vessel was provided and the time and distance from 
the point of embarkation to the vessel.



Sec. 655.536  The third attestation element for locations in Alaska: No intention or design to influence bargaining representative election.

    (a) The employer shall attest that use of alien crewmembers to 
perform the longshore activity specified on the Form ETA 9033-A is not 
intended or designed to influence an election of a bargaining 
representative for workers in the State of Alaska.

[[Page 536]]

    (b) Documentation. The employer need not develop nor maintain 
documentation to substantiate the statement referenced in paragraph (a) 
of this section. In the case of an investigation, however, the employer 
has the burden of proof to show that the use of alien crewmembers to 
perform the longshore activity specified on the Form ETA 9033-A was not 
intended nor designed to influence an election of a bargaining 
representative for workers in the State of Alaska.



Sec. 655.537  The fourth attestation element for locations in Alaska: Notice of filing.

    (a)(1) The employer shall attest that at the time of filing the 
attestation, notice of filing has been provided to:
    (i) Labor organizations which have been recognized as exclusive 
bargaining representatives of United States longshore workers within the 
meaning of the National Labor Relations Act (29 U.S.C. 141 et seq.) and 
which make available or intend to make available workers to the 
particular location where the longshore work is to be performed;
    (ii) Contract stevedoring companies which employ or intend to employ 
United States longshore workers at the location where the longshore work 
is to be performed; and
    (iii) Operators of private docks at which the employer will use 
longshore workers.
    (2) The notices provided under paragraph (a)(1) of this section 
shall include a copy of the Form ETA 9033-A to be submitted to ETA, 
shall provide information concerning the availability of supporting 
documents for public examination at the national office of ETA, and 
shall include the following statement: ``Complaints alleging a 
misrepresentation of material facts in the attestation and/or failure to 
comply with the terms of the attestation may be filed with any office of 
the Wage and Hour Division of the United States Department of Labor.''
    (b) The employer shall request a copy of the Certificate of 
Compliance issued by the district director of the Office of Workers' 
Compensation Programs under section 37 of the Longshore and Harbor 
Workers' Compensation Act (33 U.S.C. 932) from the parties to whom 
notice is provided pursuant to paragraphs (a)(1) (ii) and (iii) of this 
section. An employer's obligation to make a bona fide request for 
dispatch of U.S. longshore workers under Sec. 655.534 of this part 
before using alien crewmembers to perform the longshore work attested to 
shall commence upon receipt of the copy of the Certificate of 
Compliance.
    (c) Documentation. The employer shall develop and maintain 
documentation sufficient to meet its burden of proving the validity of 
the statement referenced in paragraphs (a) and (b) of this section and 
attested to on the Form ETA 9033-A. Such documentation shall include a 
copy of the notices provided, as required by paragraph (a)(1) of this 
section, and shall be submitted to ETA along with the Form ETA 9033-A.



Sec. 655.538  Actions on attestations submitted for filing for locations in Alaska.

    Once an attestation has been received from an employer, a 
determination shall be made by the regional certifying officer whether 
to accept the attestation for filing or return it. The regional 
certifying officer may request additional explanation and/or 
documentation from the employer in making this determination. An 
attestation which is properly filled out and which includes accompanying 
documentation for the requirement set forth at Sec. 655.537 of this part 
shall be accepted for filing by ETA on the date it is signed by the 
regional certifying officer unless it falls within one of the categories 
set forth in paragraph (b) of this section. Once an attestation is 
accepted for filing, ETA shall then follow the procedures set forth in 
paragraph (a)(1) of this section. Upon acceptance of the employer's 
attestation by ETA, the attestation and accompanying documentation shall 
be forwarded to and be available for public examination at the ETA 
national office in a timely manner. ETA shall not consider information 
contesting an attestation received by ETA prior to the determination to 
accept or return the attestation for filing. Such information shall not 
be made a part of ETA's administrative record on the attestation, but 
shall be

[[Page 537]]

referred to ESA to be processed as a complaint pursuant to subpart G of 
this part if the attestation is accepted by ETA for filing.
    (a) Acceptance. (1) If the attestation is properly filled out and 
includes accompanying documentation for the requirement set forth at 
Sec. 655.537, and does not fall within one of the categories set forth 
at paragraph (b) of this section, ETA shall accept the attestation for 
filing, provide notification to the INS office having jurisdiction over 
the location where longshore work will be performed, and return to the 
employer, or the employer's agent or representative at a U.S. address, 
one copy of the attestation form submitted by the employer, with ETA's 
acceptance indicated thereon. Before using alien crewmembers to perform 
the longshore work attested to on Form ETA 9033-A, the employer shall 
make a bona fide request for and employ United States longshore workers 
who are qualified and available in sufficient numbers pursuant to 
Secs. 655.534 and 655.535. Where such a request for dispatch of United 
States longshore workers is unsuccessful, either in whole or in part, 
any use of alien crewmembers to perform longshore activity shall be in 
accordance with INS regulations.
    (2) DOL is not the guarantor of the accuracy, truthfulness or 
adequacy of an attestation accepted for filing.
    (b) Unacceptable attestations. ETA shall not accept an attestation 
for filing and shall return such attestation to the employer, or the 
employer's agent or representative at a U.S. address, when any one of 
the following conditions exists:
    (1) When the Form ETA 9033-A is not properly filled out. Examples of 
improperly filled out Form ETA 9033-A's include instances where the 
employer has neglected to check all the necessary boxes, where the 
employer has failed to include the name of any port, city, or other 
geographical reference point where longshore work is to be performed, or 
where the employer has failed to sign the attestation or to designate an 
agent in the United States.
    (2) When the Form ETA 9033-A with accompanying documentation is not 
received by ETA at least 30 days prior to the first performance of the 
longshore activity, unless the employer is claiming that it could not 
have reasonably anticipated the need to file the attestation for that 
location at that time, and has included documentation which supports 
this contention, and ETA has found the claim to be valid.
    (3) When the Form ETA 9033-A does not include accompanying 
documentation for the requirement set forth at Sec. 655.537.
    (4) When the accompanying documentation submitted by the employer 
and required by Sec. 655.537, on its face, is inconsistent with that 
section. Examples of such a situation include an instance where the Form 
ETA 9033-A indicates that the longshore work will be performed at a 
particular private dock and the documentation required under the notice 
attestation element indicates that notice was provided to an operator of 
a different private dock, or where the longshore work is to be performed 
at a particular time and location in the State of Alaska and the notice 
of filing provided to qualified labor organizations and contract 
stevedoring companies indicates that the longshore work is to be 
performed at a different time and/or location.
    (5) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, after an investigation pursuant to subpart G of this 
part, that a cease and desist order has been issued pursuant to subpart 
G of this part, with respect to the attesting employer's performance of 
longshore work at a particular location in the State of Alaska, in 
violation of a previously accepted attestation.
    (6) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, after an investigation pursuant to subpart G of this 
part, that the particular employer has misrepresented or failed to 
comply with an attestation previously submitted and accepted for filing, 
but in no case for a period of more than one year after the date of the 
Administrator's notice and provided that INS has not advised ETA that 
the prohibition is in effect for a lesser period.
    (7) When the Administrator, Wage and Hour Division, has notified 
ETA, in writing, that the employer has failed to comply with any 
penalty, sanction,

[[Page 538]]

or other remedy assessed in a final agency action following an 
investigation by the Wage and Hour Division pursuant to subpart G of 
this part.
    (c) Resubmission. If the attestation is not accepted for filing 
pursuant to paragraph (b) of this section, ETA shall return to the 
employer, or the employer's agent or representative, at a U.S. address, 
the attestation form and accompanying documentation submitted by the 
employer. ETA shall notify the employer, in writing, of the reason(s) 
that the attestation is unacceptable. When an attestation is found to be 
unacceptable pursuant to paragraph (b) (1), (2), (3), or (4) of this 
section, the employer may resubmit the corrected attestation with the 
proper documentation. When an attestation is found to be unacceptable 
pursuant to paragraph (b) (5), (6), or (7) of this section and returned, 
such action shall be the final decision of the Secretary of Labor.



Sec. 655.539  Effective date and validity of filed attestations for locations in Alaska.

    An attestation is filed and effective as of the date it is accepted 
and signed by the regional certifying officer. Such attestation is valid 
for the 12-month period beginning on the date of acceptance for filing, 
unless suspended or invalidated pursuant to Sec. 655.540 of this part. 
The filed attestation expires at the end of the 12-month period of 
validity.



Sec. 655.540  Suspension or invalidation of filed attestations for locations in Alaska.

    Suspension or invalidation of an attestation may result from 
enforcement action(s) under subpart G of this part (i.e., 
investigation(s) conducted by the Administrator or cease and desist 
order(s) issued by the Administrator regarding the employer's 
misrepresentation in or failure to carry out its attestation); or from a 
discovery by ETA that it made an error in accepting the attestation 
because such attestation falls within one of the categories set forth in 
Sec. 655.538(b).
    (a) Result of Wage and Hour Division action. Upon the determination 
of a violation under subpart G of this part, the Administrator shall, 
pursuant to Sec. 655.665(b), notify the Attorney General of the 
violation and of the Administrator's notice to ETA.
    (b) Result of ETA action. If, after accepting an attestation for 
filing, ETA finds that the attestation is unacceptable because it falls 
within one of the categories set forth at Sec. 655.538(b) and, as a 
result, ETA suspends or invalidates the attestation, ETA shall notify 
the Attorney General of such suspension or invalidation and shall return 
a copy of the attestation form to the employer, or the employer's agent 
or representative at a U.S. address. ETA shall notify the employer, in 
writing, of the reason(s) that the attestation is suspended or 
invalidated.



Sec. 655.541  Withdrawal of accepted attestations for locations in Alaska.

    (a) An employer who has submitted an attestation which has been 
accepted for filing may withdraw such attestation at any time before the 
12-month period of its validity terminates, unless the Administrator has 
found reasonable cause under subpart G to commence an investigation of 
the particular attestation. Such withdrawal may be advisable, for 
example, when the employer learns that the country in which the vessel 
is registered and of which nationals of such country hold a majority of 
the ownership interest in the vessel has been removed from the non-
reciprocity list (which means, for purposes of this section, 
Prohibitions on longshore work by U.S. nationals; listing by country at 
22 CFR 89.1). In that event, an attestation would no longer be required 
under subpart F of this part, since upon being removed from the non-
reciprocity list the performance of longshore work by alien crewmembers 
would be permitted under the reciprocity exception at sec. 258(e) of the 
Act (8 U.S.C. 1288(e)). Requests for withdrawals shall be in writing and 
shall be directed to the regional certifying officer.
    (b) Withdrawal of an attestation shall not affect an employer's 
liability with respect to any failure to meet the conditions attested to 
which took place before the withdrawal, or for misrepresentations in an 
attestation. However, if an employer has not yet performed

[[Page 539]]

the longshore activities at the location(s) in question, the 
Administrator shall not find reasonable cause to investigate unless it 
is alleged, and there is reasonable cause to believe, that the employer 
has made misrepresentations in the attestation or documentation thereof, 
or that the employer has not in fact given the notice attested to.

                              Public Access



Sec. 655.550  Public access.

    (a) Public examination at ETA. ETA shall make available for public 
examination in Washington, DC, a list of employers which have filed 
attestations under this subpart, and for each such employer, a copy of 
the employer's attestation and accompanying documentation it has 
received.
    (b) Notice to public. ETA periodically shall publish a list in the 
Federal Register identifying under this subpart employers which have 
submitted attestations; employers which have attestations on file; and 
employers which have submitted attestations which have been found 
unacceptable for filing.

(Approved by the Office of Management and Budget under Control No. 1205-
0309)

                 Appendix A to Subpart F--U.S. Seaports

    The list of 224 seaports includes all major and most smaller ports 
serving ocean and Great Lakes commerce.

                          North Atlantic Range

Bucksport, ME
Eastport, ME
Portland, ME
Searsport, ME
Portsmouth, NH
Boston, MA
Fall River, MA
New Bedford, MA
Providence, RI
Bridgeport, CT
New Haven, CT
New London, CT
Albany, NY
New York, NY/NJ
Camden, NJ
Gloucester City, NJ
Paulsboro, NJ
Chester, PA
Marcus Hook, PA
Philadelphia, PA
Delaware City, DE
Wilmington, DE
Baltimore, MD
Cambridge, MD
Alexandria, VA
Chesapeake, VA
Hopewell, VA
Newport News, VA
Norfolk, VA
Portsmouth, VA
Richmond, VA

                          South Atlantic Range

Morehead City, NC
Southport, NC
Wilmington, NC
Charleston, SC
Georgetown, SC
Port Royal, SC
Brunswick, GA
Savannah, GA
St. Mary, GA
Cocoa, FL
Fernandina Beach, FL
Fort Lauderdale, FL
Fort Pierce, FL
Jacksonville, FL
Miami, FL
Palm Beach, FL
Port Canaveral, FL
Port Everglades, FL
Riviera, FL
Aguadilla, PR
Ceiba, PR
Guanica, PR
Guayanilla, PR
Humacao, PR
Jobos, PR
Mayaguez, PR
Ponce, PR
San Juan, PR
Vieques, PR
Yabucoa, PR
Alucroix, VI
Charlotte Amalie, VI
Christiansted, VI
Frederiksted, VI
Limetree Bay, VI

                           North Pacific Range

Astoria, OR
Bandon, OR
Columbia City, OR
Coos Bay, OR
Mapleton, OR
Newport, OR
Portland, OR
Rainier, OR
Reedsport, OR
St. Helens, OR
Toledo, OR
Anacortes, WA
Bellingham, WA
Edmonds (Edwards Point), WA
Everett, WA
Ferndale, WA
Friday Harbor, WA

[[Page 540]]

Grays Harbor, WA
Kalama, WA
Longview, WA
Olympia, WA
Point Wells, WA
Portage, WA
Port Angeles, WA
Port Gamble, WA
Port Townsend, WA
Raymond, WA
Seattle, WA
Tacoma, WA
Vancouver, WA
Willapa Harbor, WA
Winslow, WA

                            Great Lakes Range

Duluth, MN
Silver Bay, MN
Green Bay, WI
Kenosha, WI
Manitowoc, WI
Milwaukee, WI
Sheboygan, WI
Superior, WI
Alpena, MI
Bay City, MI
Detroit, MI
De Tour Village, MI
Essexville, MI
Ferrysburg, MI
Grand Haven, MI
Marine City, MI
Muskegon, MI
Port Huron, MI
Presque Isle, MI
Rogers City, MI
Saginaw, MI
Sault Ste Marie, MI
Chicago, IL
Ashtabula, OH
Cincinnati, OH
Cleveland, OH
Conneaut, OH
Fairport, OH
Huron, OH
Lorain, OH
Sandusky, OH
Toledo, OH
Erie, PA
Buffalo, NY
Odgensburg, NY
Oswego, NY
Rochester, NY
Burns Harbor, IN
E. Chicago, IN
Gary, IN

                            Gulf Coast Range

Panama City, FL
Pensacola, FL
Port Manatee, FL
Port St. Joe, FL
Tampa, FL
Mobile, AL
Gulfport, MS
Pascagoula, MS
Baton Rouge, LA
Gretna, LA
Lake Charles, LA
Louisiana Offshore Oil Port, LA
New Orleans, LA
Beaumont, TX
Brownsville, TX
Corpus Christi, TX
Freeport, TX
Galveston, TX
Harbor Island, TX
Houston, TX
Orange, TX
Port Arthur, TX
Port Isabel, TX
Port Lavaca, TX
Port Neches, TX
Sabine, TX
Texas City, TX

                           South Pacific Range

Alameda, CA
Antioch, CA
Benicia, CA
Carlsbad, CA
Carpinteria, CA
Crockett, CA
El Segundo, CA
Eureka, CA
Estero Bay, CA
Gaviota, CA
Huntington Beach, CA
Long Beach, CA
Los Angeles, CA
Mandalay Beach, CA
Martinez, CA
Moss Landing, CA
Oakland, CA
Pittsburg, CA
Port Costa, CA
Port Hueneme, CA
Port San Luis, CA
Redwood City, CA
Richmond, CA
Sacramento, CA
San Diego, CA
San Francisco, CA
Selby, CA
Stockton, CA
Vallejo, CA
Ventura, CA
Barbers Point, HI
Hilo, HI
Honolulu, HI
Kahului, HI
Kaunakakai, HI
Kawaihae, HI
Nawiliwili, HI
Port Allen, HI

[[Page 541]]



  Subpart G--Enforcement of the Limitations Imposed on Employers Using 
        Alien Crewmembers for Longshore Activities in U.S. Ports

    Source:  60 FR 3969, 3977, Jan. 19, 1995, unless otherwise noted.



Sec. 655.600  Enforcement authority of Administrator, Wage and Hour Division.

    (a) The Administrator shall perform all the Secretary's 
investigative and enforcement functions under section 258 of the INA (8 
U.S.C. 1288) and subparts F and G of this part.
    (b) The Administrator, pursuant to a complaint, shall conduct such 
investigations as may be appropriate and, in connection therewith, enter 
and inspect such places and such records (and make transcriptions or 
copies thereof), question such persons and gather such information as 
deemed necessary by the Administrator to determine compliance regarding 
the matters which are the subject of the investigation.
    (c) An employer being investigated shall make available to the 
Administrator such records, information, persons, and places as the 
Administrator deems appropriate to copy, transcribe, question, or 
inspect. No employer subject to the provisions of section 258 of the INA 
(8 U.S.C. 1288) and subparts F and G of this part shall interfere with 
any official of the Department of Labor performing an investigation, 
inspection or law enforcement function pursuant to 8 U.S.C. 1288 or 
subpart F or G of this part. Any such interference shall be a violation 
of the attestation and subparts F and G of this part, and the 
Administrator may take such further actions as the Administrator 
considers appropriate. (Note: Federal criminal statutes prohibit certain 
interference with a Federal officer in the performance of official 
duties. 18 U.S.C. 111 and 18 U.S.C. 1114.)
    (d)(1) An employer subject to subparts F and G of this part shall at 
all times cooperate in administrative and enforcement proceedings. No 
employer shall intimidate, threaten, restrain, coerce, blacklist, 
discharge, retaliate, or in any manner discriminate against any person 
because such person has:
    (i) Filed a complaint or appeal under or related to section 258 of 
the INA (8 U.S.C. 1288) or subpart F or G of this part;
    (ii) Testified or is about to testify in any proceeding under or 
related to section 258 of the INA (8 U.S.C. 1288) or subpart F or G of 
this part;
    (iii) Exercised or asserted on behalf of himself or herself or 
others any right or protection afforded by section 258 of the INA (8 
U.S.C. 1288) or subpart F or G of this part.
    (iv) Consulted with an employee of a legal assistance program or an 
attorney on matters related to section 258 of the Act or to subpart F or 
G of this part or any other DOL regulation promulgated pursuant to 8 
U.S.C. 1288.
    (2) In the event of such intimidation or restraint as are described 
in paragraph (d)(1) of this section, the conduct shall be a violation of 
the attestation and subparts F and G of this part, and the Administrator 
may take such further actions as the Administrator considers 
appropriate.
    (e) The Administrator shall, to the extent possible under existing 
law, protect the confidentiality of any person who provides information 
to the Department in confidence in the course of an investigation or 
otherwise under subpart F or G of this part. However, confidentiality 
will not be afforded to the complainant or to information provided by 
the complainant.



Sec. 655.605  Complaints and investigative procedures.

    (a) The Administrator, through an investigation, shall determine 
whether a basis exists to make a finding that:
    (1) An attesting employer has--
    (i) Failed to meet conditions attested to; or
    (ii) Misrepresented a material fact in an attestation.

    (Note: Federal criminal statutes provide penalties of up to $10,000 
and/or imprisonment of up to 5 years for knowing and willful submission 
of false statements to the Federal Government. 18 U.S.C. 1001; see also 
18 U.S.C. 1546.); or

    (2) In the case of an employer operating under the automated vessel 
exception to the prohibition on utilizing alien crewmembers to perform

[[Page 542]]

longshore activity(ies) at a U.S. port, the employer--
    (i) Is utilizing alien crewmember(s) to perform longshore 
activity(ies) at a port where the prevailing practice has not been to 
use such workers for such activity(ies); or
    (ii) Is utilizing alien crewmember(s) to perform longshore 
activities:
    (A) During a strike or lockout in the course of a labor dispute at 
the U.S. port; and/or
    (B) With intent or design to influence an election of a bargaining 
representative for workers at the U.S. port; or
    (3) An employer failed to comply in any other manner with the 
provisions of subpart F or G of this part.
    (b) Any aggrieved person or organization may file a complaint of a 
violation of the provisions of subpart F or G of this part.
    (1) No particular form of complaint is required, except that the 
complaint shall be written or, if oral, shall be reduced to writing by 
the Wage and Hour Division official who receives the complaint.
    (2) The complaint shall set forth sufficient facts for the 
Administrator to determine--
    (i) Whether, in the case of an attesting employer, there is 
reasonable cause to believe that particular part or parts of the 
attestation or regulations have been violated; or
    (ii) Whether, in the case of an employer claiming the automated 
vessel exception, the preponderance of the evidence submitted by any 
interested party shows that conditions exist that would require the 
employer to file an attestation.
    (3) The complaint may be submitted to any local Wage and Hour 
Division office; the addresses of such offices are found in local 
telephone directories. The office or person receiving such a complaint 
shall refer it to the office of the Wage and Hour Division administering 
the area in which the reported violation is alleged to have occurred.
    (c) The Administrator shall determine whether there is reasonable 
cause to believe that the complaint warrants investigation. If the 
Administrator determines that the complaint fails to present reasonable 
cause for an investigation, the Administrator shall so notify the 
complainant, who may submit a new complaint, with such additional 
information as may be necessary. There shall be no hearing pursuant to 
Sec. 655.625 for the Administrator's determination not to conduct an 
investigation. If the Administrator determines that an investigation on 
the complaint is warranted, the investigation shall be conducted and a 
determination issued within 180 calendar days of the Administrator's 
receipt of the complaint, or later for good cause shown.
    (d) In conducting an investigation, the Administrator may consider 
and make part of the investigation file any evidence or materials that 
have been compiled in any previous investigation regarding the same or a 
closely related matter.
    (e) In conducting an investigation under an attestation, the 
Administrator shall take into consideration the employer's burden to 
provide facts and evidence to establish the matters asserted. In 
conducting an investigation regarding an employer's eligibility for the 
automated vessel exception, the Administrator shall not impose the 
burden of proof on the employer, but shall consider all evidence from 
any interested party in determining whether the employer is not eligible 
for the exception.
    (f) In an investigation regarding the use of alien crewmembers to 
perform longshore activity(ies) in a U.S. port (whether by an attesting 
employer or by an employer claiming the automated vessel exception), the 
Administrator shall accept as conclusive proof a previous Departmental 
determination, published in the Federal Register pursuant to 
Sec. 655.670, establishing that such use of alien crewmembers is not the 
prevailing practice for the activity(ies) and U.S. port at issue. The 
Administrator shall give appropriate weight to a previous Departmental 
determination published in the Federal Register pursuant to 
Sec. 655.670, establishing that at the time of such determination, such 
use of alien crewmembers was the prevailing practice for the 
activity(ies) and U.S. port at issue.
    (g) When an investigation has been conducted, the Administrator 
shall,

[[Page 543]]

within the time period specified in paragraph (c) of this section, issue 
a written determination as to whether a basis exists to make a finding 
stated in paragraph (a) of this section. The determination shall be 
issued and an opportunity for a hearing shall be afforded in accordance 
with the procedures specified in Sec. 655.625(d) of this part.



Sec. 655.610  Automated vessel exception to prohibition on utilization of alien crewmember(s) to perform longshore activity(ies) at a U.S. port.

    (a) The Act establishes a rebuttable presumption that the prevailing 
practice in U.S. ports is for automated vessels (i.e., vessels equipped 
with automated self- unloading conveyor belts or vacuum-actuated 
systems) to use alien crewmembers to perform longshore activity(ies) 
through the use of the self-unloading equipment. An employer claiming 
the automated vessel exception does not have the burden of establishing 
eligibility for the exception.
    (b) In the event of a complaint asserting that an employer claiming 
the automated vessel exception is not eligible for such exception, the 
Administrator shall determine whether the preponderance of the evidence 
submitted by any interested party shows that:
    (1) It is not the prevailing practice at the U.S. port to use alien 
crewmember(s) to perform the longshore activity(ies) through the use of 
the self-unloading equipment; or
    (2) The employer is using alien crewmembers to perform longshore 
activity(ies)--
    (i) During a strike or lockout in the course of a labor dispute at 
the U.S. port; and/or
    (ii) With intent or design to influence an election of a bargaining 
representative for workers at the U.S. port.
    (c) In making the prevailing practice determination required by 
paragraph (b)(1) of this section, the Administrator shall determine 
whether, in the 12-month period preceding the date of the 
Administrator's receipt of the complaint, one of the following 
conditions existed:
    (1) Over fifty percent of the automated vessels docking at the port 
used alien crewmembers for the activity (for purposes of this paragraph 
(c)(1) of this section, a vessel shall be counted each time it docks at 
the particular port); or
    (2) Alien crewmembers made up over fifty percent of the workers who 
performed the activity with respect to such automated vessels.
    (d) An interested party, complaining that the automated vessel 
exception is not applicable to a particular employer, shall provide to 
the Administrator evidence such as:
    (1) A written summary of a survey of the experience of masters of 
automated vessels which entered the local port in the previous year, 
describing the practice in the port as to the use of alien crewmembers;
    (2) A letter, affidavit, or other written statement from an 
appropriate local port authority regarding the use of alien crewmembers 
to perform the longshore activity at the port in the previous year;
    (3) Written statements from collective bargaining representatives 
and/or shipping agents with direct knowledge of practices regarding the 
use of alien crewmembers at the port in the previous year.



Sec. 655.615  Cease and desist order.

    (a) If the Administrator determines that reasonable cause exists to 
conduct an investigation with respect to an attestation, the complainant 
may request that the Administrator enter a cease and desist order 
against the employer against whom the complaint is lodged.
    (1) The request for a cease and desist order may be filed along with 
the complaint, or may be filed subsequently. The request, including all 
accompanying documents, shall be filed in duplicate with the same Wage 
and Hour Division office that received the complaint.
    (2) No particular form is prescribed for a request for a cease and 
desist order pursuant to this paragraph (a). However, any such request 
shall:
    (i) Be dated;
    (ii) Be typewritten or legibly written;
    (iii) Specify the attestation provision(s) with respect to which the 
employer allegedly failed to comply and/or submitted 
misrepresentation(s) of material fact(s);

[[Page 544]]

    (iv) Be accompanied by evidence to substantiate the allegation(s) of 
noncompliance and/or misrepresentation;
    (v) Be signed by the complaining party making the request or by the 
authorized representative of such party;
    (vi) Include the address at which such complaining party or 
authorized representative desires to receive further communications 
relating thereto.
    (3) Upon receipt of a request for a cease and desist order, the 
Administrator shall promptly notify the employer of the request. The 
Administrator's notice shall:
    (i) Inform the employer that it may respond to the request and meet 
with a Wage and Hour Division official within 14 calendar days of the 
date of the notice;
    (ii) Be served upon the employer by facsimile transmission, in 
person, or by certified or regular mail, at the address of the U.S. 
agent stated on the employer's attestation;
    (iii) Be accompanied by copies of the complaint, the request for a 
cease and desist order, the evidence submitted by the complainant, and 
any evidence from other investigation(s) of the same or a closely 
related matter which the Administrator may incorporate into the record. 
(Any such evidence from other investigation(s) shall also be made 
available for examination by the complaining party at the Wage and Hour 
Division office which issued the notice.)
    (4) No particular form is prescribed for the employer's response to 
the complaining party's request for a cease and desist order under this 
paragraph (a), however, any such response shall:
    (i) Be dated;
    (ii) Be submitted by facsimile transmission, in person, by certified 
or regular mail, or by courier service to the Wage and Hour Division 
office which issued the notice of the request;
    (iii) Be received by the appropriate Wage and Hour Division office 
no later than 14 calendar days from the date of the notice of the 
request;
    (iv) Be typewritten or legibly written;
    (v) Explain, in any detail desired by the employer, the employer's 
grounds or reasons as to why the Administrator should deny the requested 
cease and desist order;
    (vi) Be accompanied by evidence to substantiate the employer's 
grounds or reasons as to why the Administrator should deny the requested 
cease and desist order;
    (vii) Specify whether the employer desires an informal meeting with 
a Wage and Hour Division official;
    (viii) Be signed by the employer or its authorized representative; 
and
    (ix) Include the address at which the employer or its authorized 
representative desires to receive further communications relating 
thereto, if such address is different from the address of the U.S. agent 
stated on the attestation.
    (5) In the event the employer requests a meeting with a Wage and 
Hour Division official, the Administrator shall provide the employer and 
the complaining party, or their authorized representatives, an 
opportunity for such a meeting to present their views regarding the 
evidence and arguments submitted by the parties. This shall be an 
informal meeting, not subject to any procedural rules. The meeting shall 
be held within the 14 calendar days permitted for the employer's 
response to the request for the cease and desist order, and shall be 
held at a time and place set by the Wage and Hour Division official, who 
shall notify the parties.
    (6) After receipt of the employer's timely response and after any 
informal meeting which may have been held with the parties, the 
Administrator shall promptly issue a written determination, either 
denying the request or issuing a cease and desist order. In making the 
determination, the Administrator shall consider all the evidence 
submitted, including any evidence from the same or a closely related 
matter which the Administrator has incorporated into the record and 
provided to the employer. If the Administrator determines that the 
complaining party's position is supported by a preponderance of the 
evidence submitted, the Administrator shall order that the employer 
cease the activities specified in the determination, until the 
completion of the Administrator's investigation and any subsequent 
proceedings

[[Page 545]]

pursuant to Sec. 655.625 of this part, unless the prohibition is lifted 
by subsequent order of the Administrator because it is later determined 
that the employer's position was correct. While the cease and desist 
order is in effect, ETA shall suspend the subject attestation, either in 
whole or in part, and shall not accept any subsequent attestation from 
the employer for the activity(ies) and U.S. port or location in the 
State of Alaska at issue.
    (7) The Administrator's cease and desist order shall be served on 
the employer at the address of its designated U.S. based representative 
or at the address specified in the employer's response, by facsimile 
transmission, personal service, or certified mail.
    (b) If the Administrator determines that reasonable cause exists to 
conduct an investigation with respect to a complaint that a non-
attesting employer is not entitled to the automated vessel exception to 
the requirement for the filing of an attestation, a complaining party 
may request that the Administrator enter a cease and desist order 
against the employer against whom the complaint is lodged.
    (1) The request for a cease and desist order may be filed along with 
the complaint, or may be filed subsequently. The request, including all 
accompanying documents, shall be filed in duplicate with the same Wage 
and Hour Division office that received the complaint.
    (2) No particular form is prescribed for a request for a cease and 
desist order pursuant to this paragraph. However, any such request 
shall:
    (i) Be dated;
    (ii) Be typewritten or legibly written;
    (iii) Specify the circumstances which allegedly require that the 
employer be denied the use of the automated vessel exception;
    (iv) Be accompanied by evidence to substantiate the allegation(s);
    (v) Be signed by the complaining party making the request or by the 
authorized representative of such party; and
    (vi) Include the address at which such complaining party or 
authorized representative desires to receive further communications 
relating thereto.
    (3) Upon receipt of a request for a cease and desist order, the 
Administrator shall notify the employer of the request. The 
Administrator's notice shall:
    (i) Inform the employer that it may respond to the request and meet 
with a Wage and Hour Division official within 14 calendar days of the 
date of the notice;
    (ii) Be served upon the employer by facsimile transmission, in 
person, or by certified or regular mail, at the employer's last known 
address; and
    (iii) Be accompanied by copies of the complaint, the request for a 
cease and desist order, the evidence submitted by the complainant, and 
any evidence from other investigation(s) of the same or a closely 
related matter which the Administrator may incorporate into the record. 
(Any such evidence from other investigation(s) shall also be made 
available for examination by the complaining party at the Wage and Hour 
Division office which issued the notice.)
    (4) No particular form is prescribed for the employer's response to 
the complaining party's request for a cease and desist order under this 
paragraph (b). However, any such response shall:
    (i) Be dated;
    (ii) Be submitted by facsimile transmission, in person, by certified 
or regular mail, or by courier service to the Wage and Hour Division 
office which issued the notice of the request;
    (iii) Be received by the appropriate Wage and Hour Division office 
no later than 14 calendar days from the date of the notice of the 
request;
    (iv) Be typewritten or legibly written;
    (v) Explain, in any detail desired by the employer, the employer's 
grounds or reasons as to why the Administrator should deny the requested 
cease and desist order;
    (vi) Be accompanied by evidence to substantiate the employer's 
grounds or reasons as to why the Administrator should deny the requested 
cease and desist order;
    (vii) Specify whether the employer desires an informal meeting with 
a Wage and Hour Division official;
    (viii) Be signed by the employer or its authorized representative; 
and

[[Page 546]]

    (ix) Include the address at which the employer or its authorized 
representative desires to receive further communications relating 
thereto.
    (5) In the event the employer requests a meeting with a Wage and 
Hour Division official, the Administrator shall provide the employer and 
the complaining party, or their authorized representatives, an 
opportunity for such a meeting to present their views regarding the 
evidence and arguments submitted by the parties. This shall be an 
informal meeting, not subject to any procedural rules. The meeting shall 
be held within the 14 calendar days permitted for the employer's 
response to the request for the cease and desist order, and shall be 
held at a time and place set by the Wage and Hour Division official, who 
shall notify the parties.
    (6) After receipt of the employer's timely response and after any 
informal meeting which may have been held with the parties, the 
Administrator shall promptly issue a written determination, either 
denying the request or issuing a cease and desist order. If the 
Administrator determines that the complaining party's position is 
supported by a preponderance of the evidence submitted, the 
Administrator shall order that the employer cease the use of alien 
crewmembers to perform the longshore activity(ies) specified in the 
order. In making the determination, the Administrator shall consider all 
the evidence submitted, including any evidence from the same or a 
closely related matter which the Administrator has incorporated into the 
record and provided to the employer. The order shall remain in effect 
until the completion of the investigation and any subsequent hearing 
proceedings pursuant to Sec. 655.625 of this part, unless the employer 
files and maintains on file with ETA an attestation pursuant to 
Sec. 655.520 of this part or unless the prohibition is lifted by 
subsequent order of the Administrator because it is later determined 
that the employer's position was correct.
    (7) The Administrator's cease and desist order shall be served on 
the employer or its designated representative by facsimile transmission, 
personal service, or by certified mail at the address specified in the 
employer's response or, if no such address was specified, at the 
employer's last known address.



Sec. 655.620  Civil money penalties and other remedies.

    (a) The Administrator may assess a civil money penalty not to exceed 
$5,000 for each alien crewmember with respect to whom there has been a 
violation of the attestation or subpart F or G of this part. The 
Administrator may also impose appropriate remedy(ies).
    (b) In determining the amount of civil money penalty to be assessed, 
the Administrator shall consider the type of violation committed and 
other relevant factors. The factors which may be considered include, but 
are not limited to, the following:
    (1) Previous history of violation, or violations, by the employer 
under the Act and subpart F or G of this part;
    (2) The number of workers affected by the violation or violations;
    (3) The gravity of the violation or violations;
    (4) Efforts made by the violator in good faith to comply with the 
provisions of 8 U.S.C. 1288(c) and subparts F and G of this part;
    (5) The violator's explanation of the violation or violations;
    (6) The violator's commitment to future compliance; and/or
    (7) The extent to which the violator achieved a financial gain due 
to the violation, or the potential financial loss, potential injury or 
adverse effect with respect to other parties.
    (c) The civil money penalty, and any other remedy determined by the 
Administrator to be appropriate, are immediately due for payment or 
performance upon the assessment by the Administrator, or the decision by 
an administrative law judge where a hearing is requested, or the 
decision by the Secretary where review is granted. The employer shall 
remit the amount of the civil money penalty, by certified check or money 
order made payable to the order of ``Wage and Hour Division, Labor.'' 
The remittance shall be delivered or mailed to the Wage and Hour 
Division office for the area in which the violations occurred. The 
performance of any other remedy prescribed by

[[Page 547]]

the Administrator shall follow procedures established by the 
Administrator. The employer's failure to pay the civil money penalty, or 
to perform any other remedy prescribed by the Administrator, shall 
result in the rejection by ETA of any future attestation submitted by 
the employer, until such payment or performance is accomplished.



Sec. 655.625  Written notice, service and Federal Register publication of Administrator's determination.

    (a) The Administrator's determination, issued pursuant to 
Sec. 655.605 of this part, shall be served on the complainant, the 
employer, and other known interested parties by personal service or by 
certified mail at the parties' last known addresses. Where service by 
certified mail is not accepted by the party, the Administrator may 
exercise discretion to serve the determination by regular mail.
    (b) Where the Administrator determines the prevailing practice 
regarding the use of alien crewmember(s) to perform longshore 
activity(ies) in a U.S. port (whether the Administrator's investigation 
involves an employer operating under an attestation, or under the 
automated vessel exception), the Administrator shall, simultaneously 
with issuance of the determination, publish in the Federal Register a 
notice of the determination. The notice shall identify the 
activity(ies), the U.S. port, and the prevailing practice regarding the 
use of alien crewmembers. The notice shall also inform interested 
parties that they may request a hearing pursuant to Sec. 655.630 of this 
part, within 15 days of the date of the determination.
    (c) The Administrator shall file with the Chief Administrative Law 
Judge, U.S. Department of Labor, a copy of the complaint and the 
Administrator's determination.
    (d) The Administrator's written determination required by 
Sec. 655.605 of this part shall:
    (1) Set forth the determination of the Administrator and the reason 
or reasons therefor, and in the case of a finding of violation(s) by an 
attesting employer, prescribe any remedies, including the amount of any 
civil money penalties assessed and the reason therefor, and/or any other 
remedies required for compliance with the employer's attestation.
    (2) Inform the interested parties that they may request a hearing 
pursuant to Sec. 655.625 of this part.
    (3) Inform the interested parties that in the absence of a timely 
request for a hearing, received by the Chief Administrative Law Judge 
within 15 calendar days of the date of the determination, the 
determination of the Administrator shall become final and not 
appealable.
    (4) Set forth the procedure for requesting a hearing, and give the 
address of the Chief Administrative Law Judge (with whom the request 
must be filed) and the representative(s) of the Solicitor of Labor (upon 
whom copies of the request must be served).
    (5) Inform the parties that, pursuant to Sec. 655.665, the 
Administrator shall notify ETA and the Attorney General of the 
occurrence of a violation by the attesting employer or of the non-
attesting employer's ineligibility for the automated vessel exception.



Sec. 655.630  Request for hearing.

    (a) Any interested party desiring to request an administrative 
hearing on a determination issued pursuant to Secs. 655.605 and 655.625 
of this part shall make such request in writing to the Chief 
Administrative Law Judge at the address stated in the notice of 
determination.
    (b) Interested parties may request a hearing in the following 
circumstances:
    (1) The complainant or any other interested party may request a 
hearing where the Administrator determines, after investigation, that 
there is no basis for a finding that an attesting employer has committed 
violation(s) or that the employer is eligible for the automated vessel 
exception. In such a proceeding, the requesting party and the employer 
shall be parties; the Administrator may intervene as a party or appear 
as amicus curiae at any time in the proceeding, at the Administrator's 
discretion.
    (2) The employer or any other interested party may request a hearing 
where the Administrator determines,

[[Page 548]]

after investigation, that there is a basis for a finding that an 
attesting employer has committed violation(s) or that a non- attesting 
employer is not eligible for the automated vessel exception. In such a 
proceeding, the Administrator and the employer shall be parties.
    (c) No particular form is prescribed for any request for hearing 
permitted by this section. However, any such request shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the notice of 
determination giving rise to such request;
    (4) State the specific reason or reasons why the party requesting 
the hearing believes such determination is in error;
    (5) Be signed by the party making the request or by an authorized 
representative of such party; and
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto.
    (d) The request for such hearing must be received by the Chief 
Administrative Law Judge, at the address stated in the Administrator's 
notice of determination, no later than 15 calendar days after the date 
of the determination. An interested party that fails to meet this 15-day 
deadline for requesting a hearing may thereafter participate in the 
proceedings only by consent of the administrative law judge, either 
through intervention as a party pursuant to 29 CFR 18.10 (b) through (d) 
or through participation as an amicus curiae pursuant to 18 CFR 18.12.
    (e) The request may be filed in person, by facsimile transmission, 
by certified or regular mail, or by courier service. For the requesting 
party's protection, if the request is filed by mail, it should be by 
certified mail. If the request is filed by facsimile transmission, the 
original of the request, signed by the requestor or authorized 
representative, shall be filed within ten days.
    (f) Copies of the request for a hearing shall be sent by the 
requestor to the Wage and Hour Division official who issued the 
Administrator's notice of determination, to the representative(s) of the 
Solicitor of Labor identified in the notice of determination, and to all 
known interested parties.



Sec. 655.635  Rules of practice for administrative law judge proceedings.

    (a) Except as specifically provided in this subpart, and to the 
extent they do not conflict with the provisions of this subpart, the 
``Rules of Practice and Procedure for Administrative Hearings Before the 
Office of Administrative Law Judges'' established by the Secretary at 29 
CFR part 18 shall apply to administrative proceedings under this 
subpart.
    (b) As provided in the Administrative Procedure Act, 5 U.S.C. 556, 
any oral or documentary evidence may be received in proceedings under 
this part. The Federal Rules of Evidence and subpart B of the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges (29 CFR part 18, subpart B) shall not apply, 
but principles designed to ensure production of relevant and probative 
evidence shall guide the admission of evidence. The administrative law 
judge may exclude evidence which is immaterial, irrelevant, or unduly 
repetitive.



Sec. 655.640  Service and computation of time.

    (a) Under this subpart, a party may serve any pleading or document 
by regular mail. Service on a party is complete upon mailing to the last 
known address or, in the case of the attesting employer, to the 
employer's designated representative in the U.S. No additional time for 
filing or response is authorized where service is by mail. In the 
interest of expeditious proceedings, the administrative law judge may 
direct the parties to serve pleadings or documents by a method other 
than regular mail.
    (b) Two (2) copies of all pleadings and other documents in any 
administrative law judge proceeding shall be served on the attorneys for 
the Administrator. One copy shall be served on the Associate Solicitor, 
Division of Fair Labor Standards, Office of the Solicitor, U.S. 
Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210, 
and

[[Page 549]]

one copy on the attorney representing the Administrator in the 
proceeding.
    (c) Time will be computed beginning with the day following the 
action and includes the last day of the period unless it is a Saturday, 
Sunday, or federally-observed holiday, in which case the time period 
includes the next business day.



Sec. 655.645  Administrative law judge proceedings.

    (a) Upon receipt of a timely request for a hearing filed pursuant to 
and in accordance with Sec. 655.630 of this part, the Chief 
Administrative Law Judge shall promptly appoint an administrative law 
judge to hear the case.
    (b) Within seven calendar days following the assignment of the case, 
the administrative law judge shall notify all interested parties of the 
date, time and place of the hearing. All parties shall be given at least 
fourteen calendar days' notice of such hearing.
    (c) The date of the hearing shall be not more than 60 calendar days 
from the date of the Administrator's determination. Because of the time 
constraints imposed by the Act, no requests for postponement shall be 
granted except for compelling reasons. Even if such reasons are shown, 
no extension of the hearing date beyond 60 days from the date of the 
Administrator's determination shall be granted except by consent of all 
the parties to the proceeding.
    (d) The administrative law judge may prescribe a schedule by which 
the parties are permitted to file a prehearing brief or other written 
statement of fact or law. Any such brief or statement shall be served 
upon each other party in accordance with Sec. 655.640 of this part. 
Posthearing briefs will not be permitted except at the request of the 
administrative law judge. When permitted, any such brief shall be 
limited to the issue or issues specified by the administrative law 
judge, shall be due within the time prescribed by the administrative law 
judge, and shall be served on each other party in accordance with 
Sec. 655.640 of this part.
    (e) In reaching a decision, the administrative law judge shall, in 
accordance with the Act, impose the following burden of proof--
    (1) The attesting employer shall have the burden of producing facts 
and evidence to establish the matters required by the attestation at 
issue;
    (2) The burden of proof as to the applicability of the automated 
vessel exception shall be on the party to the hearing who is asserting 
that the employer is not eligible for the exception.
    (f) The administrative law judge proceeding shall not be an appeal 
or review of the Administrator's ruling on a request for a cease and 
desist order pursuant to Sec. 655.615.



Sec. 655.650  Decision and order of administrative law judge.

    (a) Within 90 calendar days after receipt of the transcript of the 
hearing, the administrative law judge shall issue a decision. If any 
party desires review of the decision, including judicial review, a 
petition for Secretary's review thereof shall be filed as provided in 
Sec. 655.655 of this subpart. If a petition for review is filed, the 
decision of the administrative law judge shall be inoperative unless and 
until the Secretary issues an order affirming the decision, or, unless 
and until 30 calendar days have passed after the Secretary's receipt of 
the petition for review and the Secretary has not issued notice to the 
parties that the Secretary will review the administrative law judge's 
decision.
    (b) The decision of the administrative law judge shall include a 
statement of findings and conclusions, with reasons and basis therefor, 
upon each material issue presented on the record. The decision shall 
also include an appropriate order which may affirm, deny, reverse, or 
modify, in whole or in part, the determination of the Administrator; the 
reason or reasons for such order shall be stated in the decision. The 
administrative law judge shall not render determinations as to the 
legality of a regulatory provision or the constitutionality of a 
statutory provision.
    (c) The decision shall be served on all parties in person or by 
certified or regular mail.

[[Page 550]]



Sec. 655.655  Secretary's review of administrative law judge's decision.

    (a) The Administrator or any interested party desiring review of the 
decision and order of an administrative law judge shall petition the 
Secretary to review the decision and order. To be effective, such 
petition shall be received by the Secretary within 30 calendar days of 
the date of the decision and order. Copies of the petition shall be 
served on all parties and on the administrative law judge.
    (b) No particular form is prescribed for any petition for 
Secretary's review permitted by this subpart. However, any such petition 
shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the administrative law 
judge decision and order giving rise to such petition;
    (4) State the specific reason or reasons why the party petitioning 
for review believes such decision and order are in error;
    (5) Be signed by the party filing the petition or by an authorized 
representative of such party;
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto; and
    (7) Attach copies of the administrative law judge's decision and 
order, and any other record documents which would assist the Secretary 
in determining whether review is warranted.
    (c) Whenever the Secretary determines to review the decision and 
order of an administrative law judge, a notice of the Secretary's 
determination shall be served upon the administrative law judge and upon 
all parties to the proceeding within 30 calendar days after the 
Secretary's receipt of the petition for review.
    (d) Upon receipt of the Secretary's notice, the Office of 
Administrative Law Judges shall within fifteen calendar days forward the 
complete hearing record to the Secretary.
    (e) The Secretary's notice may specify:
    (1) The issue or issues to be reviewed;
    (2) The form in which submissions shall be made by the parties 
(e.g., briefs); and
    (3) The time within which such submissions shall be made.
    (f) All documents submitted to the Secretary shall be filed with the 
Secretary of Labor, U.S. Department of Labor, Washington, DC 20210, 
Attention: Executive Director, Office of Administrative Appeals, room S-
4309. An original and two copies of all documents shall be filed. 
Documents are not deemed filed with the Secretary until actually 
received by the Secretary. All documents, including documents filed by 
mail, shall be received by the Secretary either on or before the due 
date.
    (g) Copies of all documents filed with the Secretary shall be served 
upon all other parties involved in the proceeding. Service upon the 
Administrator shall be in accordance with Sec. 655.640(b) of this part.
    (h) The Secretary's final decision shall be issued within 180 
calendar days from the date of the notice of intent to review. The 
Secretary's decision shall be served upon all parties and the 
administrative law judge.
    (i) Upon issuance of the Secretary's decision, the Secretary shall 
transmit the entire record to the Chief Administrative Law Judge for 
custody pursuant to Sec. 655.660 of this part.



Sec. 655.660  Administrative record.

    The official record of every completed administrative hearing 
procedure provided by subparts F and G of this part shall be maintained 
and filed under the custody and control of the Chief Administrative Law 
Judge. Upon receipt of a complaint seeking review of the final agency 
action in a United States District Court, the Chief Administrative Law 
Judge shall certify the official record and shall transmit such record 
to the clerk of the court.



Sec. 655.665  Notice to the Attorney General and the Employment and Training Administration.

    (a) The Administrator shall promptly notify the Attorney General and 
ETA of the entry of a cease and desist order pursuant to Sec. 655.615 of 
this part. The order shall remain in effect until the completion of the 
Administrator's investigation and any subsequent proceedings pursuant to 
Sec. 655.630 of this

[[Page 551]]

part, unless the Administrator notifies the Attorney General and ETA of 
the entry of a subsequent order lifting the prohibition.
    (1) The Attorney General, upon receipt of notification from the 
Administrator that a cease and desist order has been entered against an 
employer:
    (i) Shall not permit the vessels owned or chartered by the attesting 
employer to use alien crewmembers to perform the longshore activity(ies) 
at the port or location in the State of Alaska specified in the cease 
and desist order; and
    (ii) Shall, in the case of an employer seeking to utilize the 
automated vessel exception, require that such employer not use alien 
crewmembers to perform the longshore activity(ies) at the port or 
location in the State of Alaska specified in the cease and desist order, 
without having on file with ETA an attestation pursuant to Sec. 655.520 
of this part.
    (2) ETA, upon receipt of the Administrator's notice shall, in the 
case of an attesting employer, suspend the employer's attestation, 
either in whole or in part, for the activity(ies) and port or location 
in the State of Alaska specified in the cease and desist order.
    (b) The Administrator shall notify the Attorney General and ETA of 
the final determination of a violation by an attesting employer or of 
the ineligibility of an employer for the automated vessel exception, 
upon the earliest of the following events:
    (1) Where the Administrator determines that there is a basis for a 
finding of violation by an attesting employer or a finding of 
nonapplicability of the automated vessel exception, and no timely 
request for hearing is made pursuant to Sec. 655.630 of this part;
    (2) Where, after a hearing, the administrative law judge issues a 
decision and order finding a violation by an attesting employer or 
finding inapplicable the automated vessel exception, and no timely 
petition for review to the Secretary is made pursuant to Sec. 655.655 of 
this part; or
    (3) Where a petition for review is taken from an administrative law 
judge's decision finding a violation or finding inapplicable the 
automated vessel exception, and the Secretary either declines within 
thirty days to entertain the appeal, pursuant to Sec. 655.655(c) of this 
part, or the Secretary affirms the administrative law judge's 
determination; or
    (4) Where the administrative law judge finds that there was no 
violation by an attesting employer or that the automated vessel 
exception does apply, and the Secretary, upon review, issues a decision 
pursuant to Sec. 655.655 of this part, holding that a violation was 
committed by an attesting employer or holding that the automated vessel 
exception does not apply.
    (c) The Attorney General, upon receipt of notification from the 
Administrator pursuant to paragraph (b) of this section:
    (1) Shall not permit the vessels owned or chartered by the attesting 
employer to enter any port of the U.S. for a period of up to one year;
    (2) Shall, in the case of an employer determined to be ineligible 
for the automated vessel exception, thereafter require that such 
employer not use alien crewmembers(s) to perform the longshore 
activity(ies) at the specified port or location in the State of Alaska 
without having on file with ETA an attestation pursuant to Sec. 655.520 
of this part; and
    (3) Shall, in the event that the Administrator's notice constitutes 
a conclusive determination (pursuant to Sec. 655.670) that the 
prevailing practice at a particular U.S. port does not permit the use of 
nonimmigrant alien crewmembers for particular longshore activity(ies), 
thereafter permit no employer to use alien crewmembers for the 
particular longshore activity(ies) at that port.
    (d) ETA, upon receipt of the Administrator's notice pursuant to 
paragraph (b) of this section:
    (1) Shall, in the case of an attesting employer, suspend the 
employer's attestation, either in whole or in part, for the port or 
location at issue and for any other U.S. port, and shall not accept for 
filing any attestation submitted by the employer for a period of 12 
months or for a shorter period if such is specified for that employer by 
the Attorney General; and
    (2) Shall, if the Administrator's notice constitutes a conclusive 
determination (pursuant to Sec. 655.670) that

[[Page 552]]

the prevailing practice at a particular U.S. port does not permit the 
use of alien crewmembers for the longshore activity(ies), thereafter 
accept no attestation under the prevailing practice exception on Form 
ETA 9033 from any employer for the performance of the activity(ies) at 
that port, and shall invalidate any current attestation under the 
prevailing practice exception on Form ETA 9033 for any employer for the 
performance of the activity(ies) at that port.



Sec. 655.670  Federal Register notice of determination of prevailing practice.

    (a) Pursuant to Sec. 655.625(b), the Administrator shall publish in 
the Federal Register a notice of the Administrator's determination of 
any investigation regarding the prevailing practice for the use of alien 
crewmembers for particular longshore activity(ies) in a particular U.S. 
port (whether under an attestation or under the automated vessel 
exception). Where the Administrator has determined that the prevailing 
practice in that U.S. port does not permit such use of alien 
crewmembers, and no timely request for a hearing is filed pursuant to 
Sec. 655.630, the Administrator's determination shall be the conclusive 
determination for purposes of the Act and subparts F and G of this part; 
the Attorney General and ETA shall, upon notice from the Administrator, 
take the actions specified in Sec. 655.665. Where the Administrator has 
determined that the prevailing practice in that U.S. port at the time of 
the investigation permits such use of alien crewmembers, the 
Administrator shall, in any subsequent investigation, give that 
determination appropriate weight, unless the determination is reversed 
in proceedings under Sec. 655.630 or Sec. 655.655.
    (b) Where an interested party, pursuant to Sec. 655.630, requests a 
hearing on the Administrator's determination, the Administrator shall, 
upon the issuance of the decision of the administrative law judge, 
publish in the Federal Register a notice of the judge's decision as to 
the prevailing practice for the longshore activity(ies) and U.S. port at 
issue, if the administrative law judge:
    (1) Reversed the determination of the Administrator published in the 
Federal Register pursuant to paragraph (a) of this section; or
    (2) Determines that the prevailing practice for the particular 
activity in the port does not permit the use of alien crewmembers.
    (c) If the administrative law judge determines that the prevailing 
practice in that port does not permit such use of alien crewmembers, the 
judge's decision shall be the conclusive determination for purposes of 
the Act and subparts F and G of this part (unless and until reversed by 
the Secretary on discretionary review pursuant to Sec. 655.655). The 
Attorney General and ETA shall upon notice from the Administrator, take 
the actions specified in Sec. 655.665.
    (d) In the event that the Secretary, upon discretionary review 
pursuant to Sec. 655.655, issues a decision that reverses the 
administrative law judge on a matter on which the Administrator has 
published notices in the Federal Register pursuant to paragraphs (a) and 
(b) of this section, the Administrator shall publish in the Federal 
Register a notice of the Secretary's decision and shall notify the 
Attorney General and ETA.
    (1) Where the Secretary reverses the administrative law judge and 
determines that, contrary to the judge's decision, the prevailing 
practice for the longshore activity(ies) in the U.S. port at issue does 
not permit the use of alien crewmembers, the Secretary's decision shall 
be the conclusive determination for purposes of the Act and subparts F 
and G of this part. Upon notice from the Administrator, the Attorney 
General and ETA shall take the actions specified in Sec. 655.665.
    (2) Where the Secretary reverses the administrative law judge and 
determines that, contrary to the judge's decision, the use of alien 
crewmembers is permitted by the prevailing practice for the longshore 
activity(ies) in the U.S. port at issue, the judge's decision shall no 
longer have the conclusive effect specified in paragraph (b) of this 
section. Upon notice from the Administrator, the Attorney General and 
ETA shall cease the actions specified in Sec. 655.665.

[[Page 553]]



Sec. 655.675  Non-applicability of the Equal Access to Justice Act.

    A proceeding under subpart G of this part is not subject to the 
Equal Access to Justice Act, as amended, 5 U.S.C. 504. In such a 
proceeding, the administrative law judge shall have no authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.



 Subpart H--Labor Condition Applications and Requirements for Employers 
   Using Nonimmigrants on H-1B Visas In Specialty Occupations and as 
                             Fashion Models

    Source:  59 FR 65659, 65676, Dec. 20, 1994, unless otherwise noted.



Sec. 655.700  Purpose, procedure and applicability of subparts H and I.

    (a) Purpose. With respect to nonimmigrant workers entering the 
United States (U.S.) on H-1B visas pursuant to the Immigration and 
Nationality Act (INA):
    (1) Establishes an annual ceiling of 65,000 (exclusive of spouses 
and children) on the number of foreign workers who may be issued H-1B 
visas;
    (2) Defines the scope of eligible occupations for which 
nonimmigrants may be issued H-1B visas and specifies the qualifications 
that are required for entry as an H-1B nonimmigrant;
    (3) Requires an employer seeking to employ H-1B nonimmigrants to 
file a labor condition application (LCA) with and have it certified by 
the Department of Labor (DOL) before a nonimmigrant may be provided H-1B 
status by the Immigration and Naturalization Service (INS); and
    (4) Establishes a system for the receipt and investigation of 
complaints, as well as for the imposition of fines and penalties for 
misrepresentation or for failure to fulfill a condition of the labor 
condition application. 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), 
1184(g)(1)(A), and 1184(i).
    (b) Procedure for obtaining an H-1B visa classification. Before a 
nonimmigrant may be admitted to work in a ``specialty occupation'' or as 
a fashion model of distinguished merit and ability in the United States 
under the H-1B visa classification, there are certain steps which must 
be followed:
    (1) First, an employer shall submit to DOL, and obtain DOL 
certification of, a labor condition application. The requirements for 
obtaining a certified labor condition application are provided in this 
subpart. The labor condition application (Form ETA 9035) and 
instructions may be obtained from DOL Regional Offices listed in 
Sec. 655.720 of this part.
    (2) After obtaining DOL certification of a labor condition 
application, the employer may submit a nonimmigrant visa petition (INS 
Form I-129), together with the certified labor condition application, to 
INS, requesting H-1B classification for the foreign worker. The 
requirements concerning the submission of a petition to, and its 
processing by, INS are set forth in INS regulations. The INS petition 
(Form I-129) may be obtained from an INS district or area office.
    (3) If INS approves the H-1B classification, the nonimmigrant then 
may apply for an H-1B visa abroad at a consular office of the Department 
of State, or apply to the INS for a change of visa status if already in 
the United States.
    (c) Applicability. (1) Subparts H and I of this part apply to all 
employers seeking to employ foreign workers under the H-1B visa 
classification in specialty occupations or as fashion models of 
distinguished merit and ability.
    (2) During the period that the provisions of Appendix 1603.D.4 of 
Annex 1603 of the North American Free Trade Agreement (NAFTA) apply, 
subparts H and I of this part shall apply to the entry and employment of 
a nonimmigrant who is a citizen of Mexico under and pursuant to the 
provisions of section D or Annex 1603 of NAFTA in the case of all 
professions set out in Appendix 1603.D.1 of Annex 1603 of NAFTA other 
than registered nurses. Therefore, the references in this part to ``H-1B 
nonimmigrant'' apply to such nonimmigrants, who are classified by INS as 
``TN.'' In the case of a registered nurse, the provisions of 20 CFR part 
655, subparts D and E, and 29 CFR part 504, subparts D and E, shall 
apply.

[[Page 554]]



Sec. 655.705  Overview of responsibilities.

    Three federal agencies are involved in the process which leads to H-
1B nonimmigrant classification. The employer also has continuing 
responsibilities under the process. This section briefly describes the 
responsibilities of each of these entities.
    (a) Department of Labor responsibilities. DOL administers the labor 
condition application process and enforcement provisions.
    (1) The Employment and Training Administration (ETA), DOL, is 
responsible for receiving and certifying labor condition applications in 
accordance with subpart H of this part. ETA is also responsible for 
compiling and maintaining a list of labor condition applications and 
makes such list available for public examination at the Department of 
Labor, 200 Constitution Avenue, NW., room N4456, Washington, DC 20210.
    (2) The Employment Standards Administration (ESA), DOL, is 
responsible, in accordance with subpart I of this part, for 
investigating and determining, pursuant to a complaint or otherwise, an 
employer's misrepresentation in or failure to comply with labor 
condition applications or the employment of H-1B nonimmigrants.
    (b) Immigration and Naturalization Service (INS) and Department of 
State (DOS) responsibilities. The Immigration and Naturalization Service 
(INS) accepts the employer's petition (INS Form I-129) with the DOL-
certified labor condition application attached. INS is responsible for 
approving the nonimmigrant's H-1B visa classification. In doing so, the 
INS determines whether the occupation named in the labor condition 
application is a specialty occupation or whether the individual is a 
fashion model of distinguished merit and ability, and whether the 
qualifications of the nonimmigrant meet the statutory requirements for 
H-1B visa classification. If the petition is approved, INS will notify 
the U.S. Consulate where the nonimmigrant intends to apply for the visa 
unless the nonimmigrant is in the U.S. and eligible to adjust status 
without leaving this country. See 8 U.S.C. 1184(i). The Department of 
State, through U.S. Embassies and Consulates, is responsible for issuing 
H-1B visas.
    (c) Employer's responsibilities. Each employer seeking an H-1B 
nonimmigrant in a specialty occupation or as a fashion model of 
distinguished merit and ability has several responsibilities.
    (1) The employer shall submit a completed labor condition 
application on Form ETA 9035 and one copy to the regional office of ETA 
serving the area where the nonimmigrant will be employed. If the labor 
condition application is certified by ETA, a copy will be returned to 
the employer.
    (2) The employer shall make a filed labor condition application and 
necessary supporting documentation (as identified under this subpart) 
available for public examination at the employer's principal place of 
business in the U.S. or at the place of employment within one working 
day after the date on which the labor condition application is filed 
with ETA.
    (3) The employer then may submit a copy of the certified labor 
condition application to INS with a completed petition (INS Form I-129) 
requesting H-1B classification.
    (4) The employer should not allow the nonimmigrant worker to begin 
work, even though a labor condition application has been certified by 
DOL, until INS grants the worker authorization to work in the United 
States for that employer.
    (5) The employer shall develop sufficient documentation to meet its 
burden of proof with respect to the validity of the statements made in 
its labor condition application and the accuracy of information provided 
in the event that such statement or information is challenged. The 
employer shall also maintain such documentation at its principal place 
of business in the U.S. and shall make such documentation available to 
DOL for inspection and copying upon request.



Sec. 655.710  Complaints.

    Complaints concerning misrepresentation in the labor condition 
application or failure of the employer to meet a condition specified in 
the application shall be filed with the Administrator,

[[Page 555]]

Wage and Hour Division (Administrator), ESA, according to the procedures 
set forth in subpart I of this part. The Administrator, either pursuant 
to a complaint or otherwise, shall investigate where appropriate, and 
after an opportunity for a hearing, assess appropriate sanctions and 
penalties.



Sec. 655.715  Definitions.

    For the purposes of subparts H and I of this part:
    Actual wage means the wage rate paid by the employer to all 
individuals with experience and qualifications similar to the H-1B 
nonimmigant's experience and qualifications for the specific employment 
in question at the place of employment. The actual wage established by 
the employer is not an average of the wage rates paid to all workers 
employed in the occupation.
    Administrative Law Judge (ALJ) means an official appointed pursuant 
to 5 U.S.C. 3105.
    Administrator means the Administrator of the Wage and Hour Division, 
Employment Standards Administration, Department of Labor, and such 
authorized representatives as may be designated to perform any of the 
functions of the Administrator under subpart H or I of this part.
    Aggrieved party means a person or entity whose operations or 
interests are adversely affected by the employer's alleged non-
compliance with the labor condition application and includes, but is not 
limited to:
    (1) A worker whose job, wages, or working conditions are adversely 
affected by the employer's alleged non-compliance with the labor 
condition application;
    (2) A bargaining representative for workers whose jobs, wages, or 
working conditions are adversely affected by the employer's alleged non-
compliance with the labor condition application;
    (3) A competitor adversely affected by the employer's alleged non-
compliance with the labor condition application; and
    (4) A government agency which has a program that is impacted by the 
employer's alleged non-compliance with the labor condition application.
    Area of intended employment means the area within normal commuting 
distance of the place (address) of employment where the H-1B 
nonimmigrant is or will be employed. If the place of employment is 
within a Metropolitan Statistical Area (MSA), any place within the MSA 
is deemed to be within normal commuting distance of the place of 
employment. (See definition of ``place of employment.'')
    Attorney General means the chief official of the U.S. Department of 
Justice or the Attorney General's designee.
    Authorized agent and authorized representative mean an official of 
the employer who has the legal authority to commit the employer to the 
statements in the labor condition application.
    Certification means the determination by a certifying officer that a 
labor condition application is not incomplete and does not contain 
obvious inaccuracies.
    Certify means the act of making a certification.
    Certifying Officer and Regional Certifying Officer mean a Department 
of Labor official, or such official's designee, who makes determinations 
about whether or not to certify labor condition applications.
    Chief Administrative Law Judge (Chief ALJ) means the chief official 
of the Office of the Administrative Law Judges of the Department of 
Labor or the Chief Administrative Law Judge's designee.
    Department and DOL mean the United States Department of Labor.
    Division means the Wage and Hour Division of the Employment 
Standards Administration, DOL.
    Employer means a person, firm, corporation, contractor, or other 
association or organization in the United States:
    (1) Which suffers or permits a person to work within the United 
States;
    (2) Which has an employer-employee relationship with respect to 
employees under this part, as indicated by the fact that it may hire, 
pay, fire, supervise or otherwise control the work of any such employee; 
and
    (3) Which has an Internal Revenue Service tax identification number.
    Employment and Training Administration (ETA) means the agency within 
the

[[Page 556]]

Department which includes the United States Employment Service (USES).
    Employment Standards Administration (ESA) means the agency within 
the Department which includes the Wage and Hour Division.
    Immigration and Naturalization Service (INS) means the component of 
the Department of Justice which makes the determination under the INA on 
whether to grant visa petitions of employers seeking the admission of 
nonimmigrants under H-1B visas for the purpose of employment.
    INA means the Immigration and Nationality Act, as amended, 8 U.S.C. 
1101 et seq.
    Independent authoritative source means a professional, business, 
trade, educational or governmental association, organization, or other 
similar entity, not owned or controlled by the employer, which has 
recognized expertise in an occupational field.
    Independent authoritative source survey means a survey of wages 
conducted by an independent authoritative source and published in a 
book, newspaper, periodical, loose-leaf service, newsletter, or other 
similar medium, within the 24-month period immediately preceding the 
filing of the employer's application. Such survey shall:
    (1) Reflect the average wage paid to workers similarly employed in 
the area of intended employment;
    (2) Be based upon recently collected data--e.g., within the 24-month 
period immediately preceding the date of publication of the survey; and
    (3) Represent the latest published prevailing wage finding by the 
authoritative source for the occupation in the area of intended 
employment.
    Interested party means a person or entity who or which may be 
affected by the actions of an H-1B employer or by the outcome of a 
particular investigation and includes any person, organization, or 
entity who or which has notified the Department of his/her/its interest 
or concern in the Administrator's determination.
    Lockout means a labor dispute involving a work stoppage, wherein an 
employer withholds work from its employees in order to gain a concession 
from them.
    Occupation means the occupational or job classification in which the 
H-1B nonimmigrant is to be employed.
    Period of intended employment means the time period between the 
starting and ending dates inclusive of the H-1B nonimmigrant's intended 
period of employment in the occupational classification at the place of 
employment as set forth in the labor condition application.
    Place of employment means the worksite or physical location where 
the work actually is performed. (See definition of ``Area of Intended 
Employment.'')
    Required wage rate means the rate of pay which is the higher of:
    (1) The actual wage for the specific employment in question; or
    (2) The prevailing wage rate (determined as of the time of filing 
the application) for the occupation in which the H-1B nonimmigrant is to 
be employed in the geographic area of intended employment. The 
prevailing wage rate must be no less than the minimum wage required by 
Federal, State, or local law.
    Secretary means the Secretary of Labor or the Secretary's designee.
    Specialty occupation means an occupation that requires theoretical 
and practical application of a body of highly specialized knowledge, and 
attainment of a bachelor's or higher degree (or its equivalent) in the 
specific specialty as a minimum for entry into the occupation in the 
United States. The nonimmigrant in a specialty occupation shall possess 
the following qualifications: (1) Full state licensure to practice in 
the occupation, if licensure is required for the occupation; (2) 
completion of the required degree; or (3) experience in the specialty 
equivalent to the completion of such degree and recognition of expertise 
in the specialty through progressively responsible positions relating to 
the specialty. 8 U.S.C. 1184(i). Determinations of specialty occupation 
and of nonimmigrant qualifications are made by INS.
    Specific employment in question means the set of duties and 
responsibilities performed or to be performed by the H-1B nonimmigrant 
at the place of employment.

[[Page 557]]

    State means one of the 50 States, the District of Columbia, Guam, 
Puerto Rico, and the U.S. Virgin Islands.
    State Employment Security Agency (SESA) means the State agency 
designated under section 4 of the Wagner-Peyser Act to cooperate with 
USES in the operation of the national system of public employment 
offices.
    Strike means a labor dispute wherein employees engage in a concerted 
stoppage of work (including stoppage by reason of the expiration of a 
collective-bargaining agreement) or engage in any concerted slowdown or 
other concerted interruption of operation.
    United States Employment Service (USES) means the agency of the 
Department of Labor, established under the Wagner-Peyser Act, which is 
charged with administering the national system of public employment 
offices.
    Wage rate means the remuneration (exclusive of fringe benefits) to 
be paid, stated in terms of amount per hour, day, month or year (see 
definition of ``Required Wage Rate'').



Sec. 655.720  Addresses of Department of Labor regional offices.

    Region I (Connecticut, Maine, Massachusetts, New Hampshire, Rhode 
Island, and Vermont): One Congress Street 10th Floor, Boston, 
Massachusetts 02114-2023. Telephone: 617-565-4446.
    Region II (New York, New Jersey, Puerto Rico, and the Virgin 
Islands): 201 Varick Street, Room 755, New York, New York 10014. 
Telephone: 212-337-2186.
    Region III (Delaware, District of Columbia, Maryland, Pennsylvania, 
Virginia, and West Virginia): 3535 Market St., Post Office Box 8796, 
Philadelphia, Pennsylvania 19101. Telephone: 215-596-6363.
    Region IV (Alabama, Florida, Georgia, Kentucky, Mississippi, North 
Carolina, South Carolina, and Tennessee): 1371 Peachtree Street, NE., 
Atlanta, Georgia 30309. Telephone: 404-347-3938.
    Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and 
Wisconsin): 230 South Dearborn Street, Room 605, Chicago, Illinois 
60604. Telephone: 312-353-1550.
    Region VI (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas): 
525 Griffin Street, Room 311, Dallas, Texas 75202. Telephone: 214-767-
4989.
    Region VII (Iowa, Kansas, Missouri, and Nebraska): 1100 Main, Rm. 
1050, Kansas City, Missouri 64105. Telephone: 816-426-3796.
    Region VIII (Colorado, Montana, North Dakota, South Dakota, Utah, 
and Wyoming): 1999 Broadway, Rm. 1780, Denver, Colorado 80202. 
Telephone: 303-391-5742.
    Region IX (Arizona, California, Guam, Hawaii, and Nevada): 71 
Stevenson Street, Room 805, San Francisco, California 94105. Telephone: 
415-744-7618.
    Region X (Alaska, Idaho, Oregon, and Washington): 1111 Third Avenue, 
Suite 900, Seattle, Washington 98101-3212. Telephone: 206-553-7700.



Sec. 655.730  Labor condition application.

    (a) Who must submit labor condition applications? An employer, or 
the employer's authorized agent or representative, which meets the 
definition of employer set forth in Sec. 655.715 of this part and 
intends to employ an H-1B nonimmigrant in a specialty occupation or as a 
fashion model of distinguished merit and ability shall submit a labor 
condition application to DOL. Attorneys and agents submitting 
applications on an employer's behalf shall submit, also, a completed INS 
Form G-28.
    (b) Where and when should a labor condition application be 
submitted? A labor condition application shall be submitted, by U.S. 
mail, private carrier, or facsimile transmission, to the ETA regional 
office shown in Sec. 655.720 of this part in whose geographic area of 
jurisdiction the H-1B nonimmigrant will be employed no earlier than six 
months before the beginning date of the period of intended employment 
shown on the LCA. It is the employer's responsibility to ensure that a 
complete and accurate application is received by the appropriate 
regional office of ETA. Incomplete or obviously inaccurate applications 
will not be certified. The regional office shall process all 
applications sequentially upon receipt regardless of the method used by 
the employer to submit the application and shall make a determination to 
certify or not certify the labor condition application within 7 working 
days of the date the

[[Page 558]]

application is received and date-stamped by the Department. If the 
application is submitted by facsimile transmission, the application 
containing the original signature shall be maintained by the employer as 
set forth at Sec. 655.760(a)(1) of this part.
    (c) What should be submitted? Form ETA 9035.
    (1) General. One completed and dated original Form ETA 9035 
containing the labor condition statements referenced in Secs. 655.731 
through 655.734 of this part, bearing the employer's original signature 
(or that of the employer's authorized agent or representative) and one 
copy of the completed and dated original Form ETA 9035 shall be 
submitted to ETA (see paragraph (b) of this section and 
Sec. 655.760(a)(1) of this part with respect to applications filed by 
facsimile transmission). Copies of Form ETA 9035 are available at the 
addresses listed in Sec. 655.720 of this part; photocopies of the form 
(obtained from any source) also are permitted. Each application shall 
identify the occupational classification for which the labor condition 
application is being submitted and shall state:
    (i) The occupation, by Dictionary of Occupational Titles (DOT) 
Three-Digit Occupational Groups code and by the employer's own title for 
the job;
    (ii) The number of H-1B nonimmigrants sought;
    (iii) The gross wage rate to be paid to each H-1B nonimmigrant, 
expressed on an hourly, weekly, biweekly, monthly or annual basis;
    (iv) The starting and ending dates of the H-1B nonimmigrants' 
employment;
    (v) The place(s) of intended employment; and
    (vi) The prevailing wage for the occupation in the area of intended 
employment and the specific source (e.g., name of published survey) 
relied upon by the employer to determine the wage. If the wage is 
obtained from a SESA, the appropriate box must be checked and the wage 
provided; wages obtained from a source other than a SESA must be 
identified along with the wage;
    (2) Mutiple positions or places of employment. The employer shall 
file a separate LCA for each occupation in which the employer intends to 
employ one or more H-1B nonimmigrants. All places of employment covered 
by the application must be located within the jurisdiction of a single 
ETA regional office, or, if the nonimmigrant(s) is(are) to be employed 
sequentially in various places of employment, the application is to be 
submitted to the regional office having jurisdiction over the initial 
place of employment; and
    (3) Full-time and part-time jobs. The position(s) covered by the LCA 
may be full-time or part-time or a mix of both.
    (d) Content of the labor condition application. An employer's labor 
condition application shall contain the labor condition statements 
referenced in Secs. 655.731 through 655.734 of this part, which provide 
that no individual may be admitted or provided status as an H-1B 
nonimmigrant in an occupational classification unless the employer has 
filed with the Secretary an application stating that:
    (1) The employer is offering and will offer during the period of 
authorized employment to H-1B nonimmigrants no less than the greater of 
the following:
    (i) The actual wage paid to the employer's other employees at the 
worksite with similar experience and qualifications for the specific 
employment in question; or
    (ii) The prevailing wage level for the occupational classification 
in the area or intended employment;
    (2) The employer will provide working conditions for such 
nonimmigrants that will not adversely affect the working conditions of 
workers similarly employed;
    (3) There is not a strike or lockout in the course of a labor 
dispute in the occupational classification at the place of employment;
    (4) The employer has provided and will provide notice of the filing 
of the labor condition application to:
    (i)(A) The bargaining representative of the employer's employees in 
the occupational classification in the area of intended employment for 
which the H-1B nonimmigrants are sought, in the manner described in 
Sec. 655.734(a)(1)(i); or
    (B) If there is no such bargaining representative, posts notice of 
the filing of the labor condition application in conspicuous locations 
in the employer's

[[Page 559]]

establishment(s) in the area of intended employment, in the manner 
described in Sec. 655.734(a)(1)(ii) of this subpart and, in the manner 
described in Sec. 655.734(a)(2) of this subpart; and
    (ii) H-1B nonimmigrants at the time that such nonimmigrants actually 
report to work; and
    (5) The employer has provided the information about the occupation 
required in paragraph (c) of this section.

(Approved by the Office of Management and Budget under control number 
1205-0310)

[59 FR 65659, 65676, Dec. 20, 1994, as amended at 60 FR 4029, Jan. 19, 
1995]



Sec. 655.731  The first labor condition statement: wages.

    An employer seeking to employ H-1B nonimmigrants in a specialty 
occupation or as a fashion model of distinguished merit and ability 
shall state on Form ETA 9035 that it will pay the H-1B nonimmigrants the 
required wage rate.
    (a) Establishing the wage requirement. The first labor condition 
application requirement shall be satisfied when the employer signs Form 
ETA 9035 attesting that, for the entire period of authorized employment, 
the required wage rate will be paid to the H-1B nonimmigrant's; that is, 
that the wage shall be the greater of: the actual wage rate (as 
specified in paragraph (a)(1) of this section) or the prevailing wage 
(as specified in paragraph (a)(2) of this section).
    (1) The actual wage is the wage rate paid by the employer to all 
other individuals with similar experience and qualifications for the 
specific employment in question. In determining such wage level, the 
following factors may be considered: experience, qualifications, 
education, job responsibility and function, specialized knowledge, and 
other legitimate business factors. ``Legitimate business factors,'' for 
purposes of this paragraph (a), means those that it is reasonable to 
conclude are necessary because they conform to recognized principles or 
can be demonstrated by accepted rules and standards. Where there are 
other employees with substantially similar experience and qualifications 
in the specific employment in question--i.e., they have substantially 
the same duties and responsibilities as the H-1B nonimmigrant--the 
actual wage shall be the amount paid to these other employees. Where no 
such other employees exist at the place of employment, the actual wage 
shall be the wage paid to the H-1B nonimmigrant by the employer. Where 
the employer's pay system or scale provides for adjustments during the 
period of the LCA--e.g., cost of living increases or other periodic 
adjustments, higher entry rate due to market conditions, or the employee 
moves into a more advanced level in the same occupation--such 
adjustments shall be provided to similarly employed H-1B nonimmigrants 
(unless the prevailing wage is higher than the actual wage). Examples 
illustrating these principles may be found in appendix A to this subpart 
H.
    (2) The prevailing wage for the occupational classification in the 
area of intended employment must be determined as of the time of filing 
the application. The employer shall base the prevailing wage on the best 
information available as of the time of filing the application. The 
employer is not required to use any specific methodology to determine 
the prevailing wage and may utilize a SESA, an independent authoritative 
source, or other legitimate sources of wage data. One of the following 
sources shall be used to establish the prevailing wage:
    (i) A wage determination for the occupation and area issued under 
the Davis-Bacon Act, 40 U.S.C. 276a et seq. (see also 29 CFR part 1), or 
the McNamara-O'Hara Service Contract Act, 41 U.S.C. 351 et seq. (see 
also 29 CFR part 4) (which shall be available through the SESA);
    (ii) A union contract which was negotiated at arms-length between a 
union and the employer, which contains a wage rate applicable to the 
occupation; or
    (iii) If the job opportunity is in an occupation which is not 
covered by paragraph (a)(2) (i) or (ii) of this section, the prevailing 
wage shall be the average rate of wages, that is, the rate of wages to 
be determined, to the extent feasible, by adding the wages paid to 
workers similarly employed in the area of intended employment and 
dividing

[[Page 560]]

the total by the number of such workers. Since it is not always feasible 
to determine such an average rate of wages with exact precision, the 
wage set forth in the application shall be considered as meeting the 
prevailing wage standard if it is within 5 percent of the average rate 
of wages. See paragraph (c) of this section, regarding payment of 
required wages. See also paragraph (d)(4) of this section, regarding 
enforcement. The prevailing wage rate under this paragraph (a)(2)(iii) 
shall be based on the best information available. The Department 
believes that the following prevailing wage sources are, in order of 
priority, the most accurate and reliable:
    (A) A SESA Determination. Upon receipt of a written request for a 
prevailing wage determination, the SESA will determine whether the 
occupation is covered by a Davis-Bacon or Service Contract Act wage 
determination, and, if not, whether it has on file current prevailing 
wage information for the occupation.This information will be provided by 
the SESA to the employer in writing in a timely manner. Where the 
prevailing wage is not immediately available, the SESA will conduct a 
prevailing wage survey using the methods outlined at 20 CFR 656.40 and 
other administrative guidelines or regulations issued by ETA.
    (1) An employer who chooses to utilize a SESA prevailing wage 
determination shall file the labor condition application not more than 
90 days after the date of issuance of such SESA wage determination. Once 
an employer obtains a prevailing wage determination from the SESA and 
files an LCA supported by that prevailing wage determination, the 
employer is deemed to have accepted the prevailing wage determination 
(both as to the occupational classification and wage) and thereafter may 
not contest the legitimacy of the prevailing wage determination through 
the Employment Service complaint system or in an investigation or 
enforcement action. Prior to filing the LCA, the employer may challenge 
a SESA prevailing wage determination through the Employment Service 
complaint system, by filing a complaint with the SESA. See 20 CFR 
658.410 through 658.426. Employers which challenge a SESA prevailing 
wage determination must obtain a final ruling from the Employment 
Service complaint system prior to filing an LCA based on such 
determination. In any challenge, the SESA shall not divulge any employer 
wage data which was collected under the promise of confidentiality.
    (2) If the employer is unable to wait for the SESA to produce the 
requested prevailing wage determination for the occupation in question, 
or for the Employment Service complaint system process to be completed, 
the employer may rely on other legitimate sources of available wage 
information in filing the LCA, as set forth in paragraph (a)(2)(iii) (B) 
and (C) of this section. If the employer later discovers, upon receipt 
of a prevailing wage determination from the SESA, that the information 
relied upon produced a wage that was below the prevailing wage for the 
occupation in the area of intended employment and the employer was 
paying below the SESA-determined wage, no wage violation will be found 
if the employer retroactively compensates the H-1B nonimmigrant(s) for 
the difference between the wage paid and the prevailing wage, within 30 
days of the employer's receipt of the SESA determination.
    (3) In all situations where the employer obtains the prevailing wage 
determination from the SESA, the Department will accept that prevailing 
wage determination as correct and will not question its validity where 
the employer has maintained a copy of the SESA prevailing wage 
determination. A complaint alleging inaccuracy of a SESA prevailing wage 
determination, in such cases, will not be investigated.
    (B) An independent authoritative source. The employer may use an 
independent authoritative wage source in lieu of a SESA prevailing wage 
determination. The independent authoritative source survey must meet all 
the criteria set forth in paragraph (b)(3)(iii)(B) of this section.
    (C) Another legitimate source of wage information. The employer may 
rely on other legitimate sources of wage data to obtain the prevailing 
wage. The other legitimate source survey must

[[Page 561]]

meet all the criteria set forth in paragraph (b)(3)(iii) of this 
section. The employer will be required to demonstrate the legitimacy of 
the wage in the event of an investigation.
    (iv) For purposes of this section, ``similarly employed'' means 
``having substantially comparable jobs in the occupational 
classification in the area of intended employment,'' except that if no 
such workers are employed by employers other than the employer applicant 
in the area of intended employment, ``similarly employed'' means:
    (A) Having jobs requiring a substantially similar level of skills 
within the area of intended employment; or
    (B) If there are no substantially comparable jobs in the area of 
intended employment, having substantially comparable jobs with employers 
outside of the area of intended employment.
    (v) A prevailing wage determination for labor condition application 
purposes made pursuant to this section shall not permit an employer to 
pay a wage lower than that required under any other applicable Federal, 
State or local law.
    (vi) Where a range of wages is paid by the employer to individuals 
in an occupational classification or among individuals with similar 
experience and qualifications for the specific employment in question, a 
range is considered to meet the prevailing wage requirement so long as 
the bottom of the wage range is at least the prevailing wage rate.
    (3) Once the prevailing wage rate is established, the H-1B employer 
than shall compare this wage with the actual wage rate for the specific 
employment in question at the place of employment and must pay the H-1B 
nonimmigrant at least the higher of the two wages.
    (b) Documentation of the wage statement. (1) The employer shall 
develop and maintain documentation sufficient to meet its burden of 
proving the validity of the wage statement required in paragraph (a) of 
this section and attested to on Form ETA 9035. The documentation shall 
be made available to DOL upon request. Documentation shall also be made 
available for public examination to the extent required by 
Sec. 655.760(a) of this part. The employer shall also document that the 
wage rate(s) paid to H-1B nonimmigrant(s) is(are) no less than the 
required wage rate(s). The documentation shall include information about 
the employer's wage rate for all other employees for the specific 
employment in question at the place of employment, beginning with the 
date the labor condition application was submitted and continuing 
throughout the period of employment. The records shall be retained for 
the period of time specified in Sec. 655.760 of this part. The payroll 
records for each such employee shall include:
    (i) Employee's full name;
    (ii) Employee's home address;
    (iii) Employee's occupation;
    (iv) Employee's rate of pay;
    (v) Hours worked each day and each week by the employee if paid on 
other than a salary basis, or the prevailing or actual wage is expressed 
as an hourly wage;
    (vi) Total additions to or deductions from pay each pay period by 
employee; and
    (vii) Total wages paid each pay period, date of pay and pay period 
covered by the payment by employee.
    (2) Actual wage. In addition to payroll data required by paragraph 
(b)(1) of this section (and also by the Fair Labor Standards Act), the 
employer shall retain documentation specifying the basis it used to 
establish the actual wage. The employer shall show how the wage set for 
the H-1B nonimmigrant relates to the wages paid by the employer to all 
other individuals with similar experience and qualifications for the 
specific employment in question at the place of employment. Where 
adjustments are made in the employer's pay system or scale during the 
validity period of the LCA, the employer shall retain documentation 
explaining the changes and clearly showing that, after such adjustments, 
the wages paid to the H-1B nonimmigrant are at least the greater of the 
adjusted actual wage or the prevailing wage for the occupation and area 
of intended employment. See appendix A to subpart H.
    (3) Prevailing wage. The employer also shall retain documentation 
regarding its determination of the prevailing wage. This source 
documentation shall

[[Page 562]]

not be submitted to ETA with the labor condition application, but shall 
be retained at the employer's place of business for the length of time 
required in Sec. 655.760(c) of this part. Such documentation shall 
consist of the documentation described in paragraph (b)(3) (i), (ii), or 
(iii) of this section and the documentation described in paragraph 
(b)(1) of this section.
    (i) If the employer used a wage determination issued pursuant to the 
provisions of the Davis-Bacon Act, 40 U.S.C. 276a et seq. (see 29 CFR 
part 1), or the McNamara-O'Hara Service Contract Act, 41 U.S.C. 351 et 
seq. (see 29 CFR part 4), the documentation shall include a copy of the 
determination showing the wage rate for the occupation in the area of 
intended employment.
    (ii) If the employer used an applicable wage rate from a union 
contract which was negotiated at arms-length between a union and the 
employer, the documentation shall include an excerpt from the union 
contract showing the wage rate(s) for the occupation.
    (iii) If the employer did not use a wage covered by the provisions 
of paragraph (b)(3) (i) or (ii) of this section, the employer's 
documentation shall consist of:
    (A) A copy of the prevailing wage finding from the SESA for the 
occupation within the area of intended employment; or
    (B) A copy of the prevailing wage survey for the occupation within 
the area of intended employment published by an independent 
authoritative source. For purposes of this paragraph (b)(3)(iii)(B), a 
prevailing wage survey for the occupation in the area of intended 
employment published by an authoritative independent source shall mean a 
survey of wages published in a book, newspaper, periodical, loose-leaf 
service, newsletter, or other similar medium, within the 24-month period 
immediately preceding the filing of the employer's application. Such 
survey shall:
    (1) Reflect the average wage paid to workers similarly employed in 
the area of intended employment;
    (2) Be based upon recently collected data--e.g., within the 24-month 
period immediately preceding the date of publication of the survey; and
    (3) Represent the latest published prevailing wage finding by the 
independent authoritative source for the occupation in the area of 
intended employment; or
    (C) A copy of the prevailing wage survey or other source data 
acquired from a legitimate source of wage information that was used to 
make the prevailing wage determination. For purposes of paragraph 
(b)(3)(iii)(C) of this section, a prevailing wage provided by another 
legitimate source of such wage information shall be one which:
    (1) Reflects the weighted average wage paid to workers similarly 
employed in the area of intended employment;
    (2) Is based on the most recent and accurate information available; 
and
    (3) Is reasonable and consistent with recognized standards and 
principles in producing a prevailing wage.
    (c) Satisfaction of required wage obligation. (1) The required wage 
must be paid to the employee, cash in hand, free and clear, when due, 
except that deductions made in accordance with paragraph (c)(7) of this 
section may reduce the cash wage below the level of the required wage.
    (2) ``Wages paid,'' for purposes of satisfying the H-1B required 
wage, shall consist only of those payments that meet all the following 
criteria:
    (i) Payments shown in the employer's payroll records as earnings for 
the employee, and disbursed to the employee, cash in hand, free and 
clear, when due, except for deductions authorized by paragraph (c)(7) of 
this section;
    (ii) Payments reported to the Internal Revenue Service (IRS) as the 
employee's earnings, with appropriate withholding for the employee's tax 
paid to the IRS (in accordance with the Internal Revenue Code of 1986, 
26 U.S.C. 1, et seq.);
    (iii) Payments of the tax reported and paid to the IRS as required 
by the Federal Insurance Contributions Act, 26 U.S.C. 3101, et seq. 
(FICA). The employer must be able to document that the payments have 
been so reported to IRS and that both the employer's and employee's 
taxes have been paid except that when the H-1B nonimmigrant is a

[[Page 563]]

citizen of a foreign country with which the President of the United 
States has entered into an agreement as authorized by section 233 of the 
Social Security Act, 42 U.S.C. 433 (i.e., an agreement establishing a 
totalization arrangement between the social security system of the 
United States and that of the foreign country), the employer's 
documentation shall show that all appropriate reports have been filed 
and taxes have been paid in the employee's home country.
    (iv) Payments reported, and so documented by the employer, as the 
employee's earnings, with appropriate employer and employee taxes paid 
to all other appropriate Federal, State, and local governments in 
accordance with any other applicable law.
    (3) For salaried employees, wages will be due in pro-rated 
installments (e.g., annual salary divided into 26 bi-weekly pay periods, 
where employer pays bi-weekly) paid no less often than monthly except 
that, in the event that the employer intends to use some other form of 
nondiscretionary payment to supplement the employee's regular/pro-rata 
pay in order to meet the required wage obligation (e.g., a quarterly 
production bonus), the employer's documentation of wage payments 
(including such supplemental payments) must show the employer's 
commitment to make such payment and the method of determining the amount 
thereof, and must show unequivocally that the required wage obligation 
was met for prior pay periods and, upon payment and distribution of such 
other payments that are pending, will be met for each current or future 
pay period.
    (4) For hourly-wage employees, the required wages will be due for 
all hours worked and/or for any nonproductive time (as specified in 
paragraph (c)(5) of this section) at the end of the employer's ordinary 
pay period (e.g., weekly) but in no event less frequently than monthly.
    (5)(i) For the purpose of DOL administration and enforcement of the 
H-1B program, an H-1B nonimmigrant is considered to be under the control 
or employ of the LCA-filing employer, and therefore shall receive the 
full wage which the LCA-filing employer is required to pay, beginning no 
later than the first day the H-1B nonimmigrant is in the United States 
and continuing throughout the nonimmigrant's period of employment. 
Therefore if the H-1B nonimmigrant is in a nonproductive status for 
reasons such as training, lack of license, lack of assigned work or any 
other reason, the employer will be required to pay the salaried employee 
the full pro-rata amount due, or to pay the hourly-wage employee for a 
full-time week (40 hours or such other number of hours as the employer 
can demonstrate to be full-time employment for the occupation and area 
involved) at the required wage for the occupation listed on the LCA. If 
the employer's LCA carries a designation of ``part-time employment,'' 
the employer will be required to pay the nonproductive employee for at 
least the number of hours indicated on the I-129 petition filed by the 
employer with the INS. If during a subsequent enforcement action by the 
Administrator it is determined that an employee designated in the LCA as 
part-time was in fact working full-time or regularly working more hours 
than reflected on the I-129 petition, the employer will be held to the 
factual standard disclosed by the enforcement action.
    (ii) If, however, during the period of employment, an H-1B 
nonimmigrant experiences a period of nonproductive status due to 
conditions unrelated to employment which render the nonimmigrant unable 
to work--e.g., maternity leave, automobile accident which temporarily 
incapacitates the nonimmigrant, caring for an ill relative--then the 
employer shall not be obligated to pay the required wage rate during 
that period provided that the INS permits the employee to remain in the 
U.S. without being paid and provided further that such period is not 
subject to payment under other statutes such as the Family and Medical 
Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities 
Act (42 U.S.C. 12101 et seq.).
    (6) If the employee works in an occupation other than that 
identified on the employer's LCA, the employer's required wage 
obligation is based on the occupation identified on the LCA, and not on 
whatever wage standards may

[[Page 564]]

be applicable in the occupation in which the employee may be working.
    (7) ``Authorized deduction,'' for purposes of the H-1B required wage 
obligation, means a deduction from wages in complete compliance with one 
of the following sets of criteria--
    (i) Deduction which is required by law (e.g., income tax; FICA); or
    (ii) Deduction which is authorized by a collective bargaining 
agreement, or is reasonable and customary in the occupation and/or area 
of employment (e.g., union dues; contribution to premium for health 
insurance policy covering all employees; savings or retirement fund 
contribution for plan(s) in compliance with the Employee Retirement 
Income Security Act, 29 U.S.C. 1001, et seq.), except that the deduction 
may not recoup a business expense(s) of the employer; the deduction must 
have been revealed to the worker prior to the commencement of employment 
and, if the deduction was a condition of employment, had been clearly 
identified as such; and the deduction must be made against wages of U.S. 
workers as well as H-1B nonimmigrants (where there are U.S. workers); or
    (iii) Deduction which meets the following requirements:
    (A) Is made in accordance with a voluntary, written authorization by 
the employee (Note: an employee's mere acceptance of a job which carries 
a deduction as a condition of employment does not constitute voluntary 
authorization, even if such condition were stated in writing);
    (B) Is for a matter principally for the benefit of the employee 
(Note: housing and food allowances would be considered to meet this 
``benefit of employee'' standard, unless the employee is in travel/per 
diem status, or unless the circumstances indicate that the arrangements 
for the employee's housing or food are principally for the convenience 
or benefit of the employer (e.g., employee living at worksite in ``on 
call'' status));
    (C) Is not a recoupment of the employer's business expense (e.g., 
tools and equipment; transportation costs where such transportation is 
an incident of and necessary to the employment; living expenses when the 
employee is traveling on the employer's business) (for purposes of this 
section, initial transportation from and end-of-employment travel to the 
worker's home country shall not be considered a business expense);
    (D) Is an amount that does not exceed the fair market value or the 
actual cost (whichever is lower) of the matter covered (Note: the 
employer must document the cost and value); and
    (E) Is an amount that does not exceed the limits set for garnishment 
of wages in the Consumer Credit Protection Act, 15 U.S.C. 1673, and the 
regulations of the Secretary pursuant to that Act, 29 CFR part 870, 
under which garnishment(s) may not exceed 25% of an employee's 
disposable earnings for a workweek.
    (8) Any unauthorized deduction taken from wages is considered by the 
Department to be non-payment of that amount of wages, and, in the event 
of an investigation, will result in back wage assessment (plus civil 
money penalties and/or disqualification from H-1B and other immigration 
programs (pursuant to Sec. 655.810(b)), if willful).
    (9) Where the employer depresses the employee's wages below the 
required wage by imposing on the employee any of the employer's business 
expense(s), the Department will consider the amount to be an 
unauthorized deduction from wages even if the matter is not shown in the 
employer's payroll records as a deduction.
    (10) Where the employer makes deduction(s) for repayment of loan(s) 
or wage advance(s) made to the employee, the Department, in the event of 
an investigation, will require the employer to establish the legitimacy 
and purpose(s) of the loan(s) or wage advance(s), with reference to the 
standards set out in paragraph (c)(7) of this section.
    (d) Enforcement actions. (1) In the event that a complaint is filed 
pursuant to subpart I of this part, alleging a failure to meet the 
``prevailing wage'' condition or a material misrepresentation by the 
employer regarding the payment of the required wage, or pursuant to such 
other basis for investigation as the Administrator may find, the 
Administrator shall determine

[[Page 565]]

whether the employer has the documentation required in paragraph (b)(3) 
of this section, and whether the documentation supports the employer's 
wage attestation. Where the documentation is either nonexistent or is 
insufficient to determine the prevailing wage (e.g., does not meet the 
criteria specified in this section, in which case the Administrator may 
find a violation of paragraph (b)(1), (2), or (3), of this section); or 
where, based on significant evidence regarding wages paid for the 
occupation in the area of intended employment, the Administrator has 
reason to believe that the prevailing wage finding obtained from an 
independent authoritative source or another legitimate source varies 
substantially from the wage prevailing for the occupation in the area of 
intended employment; or where the employer has been unable to 
demonstrate that the prevailing wage determined by another legitimate 
source is in accordance with the regulatory criteria, the Administrator 
may contact ETA, which shall provide the Administrator with a prevailing 
wage determination, which the Administrator shall use as the basis for 
determining violations and for computing back wages, if such wages are 
found to be owed. The 30-day investigatory period shall be suspended 
while ETA makes the prevailing wage determination and, in the event that 
the employer timely challenges the determination through the Employment 
service complaint system (see Sec. 655.731(d)(2) of this part), shall be 
suspended until the Employment Service complaint system process is 
completed and the Administrator's investigation can be resumed.
    (2) In the event the Administrator obtains a prevailing wage from 
ETA pursuant to paragraph (d)(1) of this section, the employer may 
challenge the ETA prevailing wage only through the Employment Service 
complaint system. See 20 CFR part 658, subpart E. Notwithstanding the 
provisions of 20 CFR 658.421 and 658.426, the appeal shall be initiated 
at the ETA regional office level. Such challenge shall be initiated 
within 10 days after the employer receives ETA's prevailing wage 
determination from the Administrator. In any challenge to the wage 
determination, neither ETA nor the SESA shall divulge any employer wage 
data which was collected under the promise of confidentiality.
    (i) Where the employer timely challenges an ETA prevailing wage 
determination obtained by the Administrator, the 30-day investigative 
period shall be suspended until the employer obtains a final ruling from 
the Employment Service complaint system. Upon such final ruling, the 
investigation and any subsequent enforcement proceeding shall continue, 
with ETA's prevailing wage determination serving as the conclusive 
determination for all purposes.
    (ii) Where the employer does not challenge ETA's prevailing wage 
determination obtained by the Administrator, such determination shall be 
deemed to have been accepted by the employer as accurate and appropriate 
(both as to the occupational classification and wage) and thereafter 
shall not be subject to challenge in a hearing pursuant to Sec. 655.835 
of this part.
    (3) For purposes of this paragraph (d), ETA may consult with the 
appropriate SESA to ascertain the prevailing wage applicable under the 
circumstances of the particular complaint.
    (4) No prevailing wage violation will be found if the employer paid 
a wage that is equal to or more than 95 percent of the prevailing wage 
as required by paragraph (a)(2)(iii) of this section. If the employer 
paid a wage that is less than 95 percent of the prevailing wage, the 
employer will be required to pay 100 percent of the prevailing wage.



Sec. 655.732  The second labor condition statement: working conditions.

    An employer seeking to employ H-1B nonimmigrants in specialty 
occupations or as fashion models of distinguished merit and ability 
shall state on Form ETA 9035 that the employment of H-1B nonimmigrants 
will not adversely affect the working conditions of workers similarly 
employed in the area of intended employment.
    (a) For purposes of this section, ``similarly employed'' shall mean 
``having substantially comparable jobs in the occupational 
classification at the worksite and in the area of intended employment.'' 
If no such workers are

[[Page 566]]

employed at the worksite or by employers other than the employer 
applicant in the area of intended employment ``similarly employed'' 
shall mean:
    (1) Having jobs requiring a substantially similar level of skills at 
the worksite or within the area of intended employment; or
    (2) If there are no substantially comparable jobs at the worksite or 
in the area of intended employment, having substantially comparable jobs 
with employers outside of the area of intended employment.
    (b) Establishing the working conditions requirement. The second 
labor condition application requirement shall be satisfied when the 
employer signs the labor condition application attesting that for the 
period of intended employment its employment of H-1B nonimmigrants will 
not adversely affect the working conditions of workers similarly 
employed. Working conditions encompass matters including hours, shifts, 
vacation periods, and fringe benefits. The employer's obligation 
regarding working conditions shall extend for the longer of two periods: 
the validity period of the certified LCA or the period during which the 
H-1B nonimmigrant(s) is(are) employed by the employer.
    (c) Documentation of the working condition statement. (1) In the 
event an enforcement action is initiated pursuant to subpart I of this 
part, the employer shall document the validity of its prevailing working 
conditions statement referenced in paragraph (b) of this section and 
attested to on Form ETA 9035. The employer must be able to show that the 
working conditions of similarly employed workers were not adversely 
affected by the employment of an H-1B nonimmigrant--e.g., that the 
working conditions are similar to working conditions which preceded the 
employment of the H-1B nonimmigrant, or, if there are no similarly 
employed workers working for the employer, are similar to those existing 
in like business establishments to the employer's in the area of 
employment.
    (2) In the event that an investigation is conducted pursuant to 
subpart I of this part concerning whether the employer failed to satisfy 
the prevailing working conditions statement referenced in paragraph (b) 
of this section and attested to on Form ETA 9035, the Administrator 
shall determine whether the employer has produced the documentation 
required in paragraph (c)(1) of this section, and whether the 
documentation is sufficient to support the employer's prevailing working 
conditions statement. If the employer fails to produce any documentation 
to support its burden of proof demonstrating that there is no adverse 
effect on the working conditions of workers similarly employed, the 
Administrator shall find a violation of paragraph (c)(1) of this 
section. Examples of documentation which employers should either 
maintain or produce include any relevant information which discusses the 
working conditions for the industry, occupation and locale, such as 
published studies, surveys, or articles and documentation regarding 
working conditions at the worksite, such as fringe benefit packages, 
which pre-existed the employment of the H-1B nonimmigrant. If the 
documentation is insufficient to determine whether the employment of H-
1B nonimmigrants has or has not adversely affected the working 
conditions of workers similarly employed in the area of employment, the 
Administrator may contact ETA, which shall provide the Administrator 
with advice regarding the working conditions of similarly employed 
workers in the area of employment.



Sec. 655.733  The third labor condition statement: no strike or lockout.

    An employer seeking to employ H-1B nonimmigrants shall state on Form 
ETA 9035 that there is not at that time a strike or lockout in the 
course of a labor dispute in the occupational classification at the 
place of employment. A strike or lockout which occurs after the labor 
condition application is filed by the employer with DOL is covered by 
INS regulations at 8 CFR 214.2(h)(17).
    (a) Establishing the no strike or lockout requirement. The third 
labor condition application requirement shall be satisfied when the 
employer signs the labor condition application attesting that, as of the 
date the application is filed, the employer is not involved in a strike,

[[Page 567]]

lockout, or work stoppage in the course of a labor dispute in the 
occupational classification in the area of intended employment. Labor 
disputes for the purpose of this section relate only to those disputes 
involving employees of the employer working at the place of employment 
in the occupational classification named in the labor condition 
application. See also INS regulations at 8 CFR 214.2(h)(17) for effects 
of strikes or lockouts in general on the H-1B nonimmigrant's employment.
    (1) Strike or lockout subsequent to certification of labor condition 
application. In order to remain in compliance with the no strike or 
lockout labor condition statement, if a strike or lockout of workers in 
the same occupational classification as the H-1B nonimmigrant occurs at 
the place of employment during the validity of the labor condition 
application, the employer, within three days of the occurrence of the 
strike or lockout, shall submit to ETA, by U.S. mail, facsimile (FAX), 
or private carrier, written notice of the strike or lockout. Further, 
the employer shall not place, assign, lease, or otherwise contract out 
an H-1B nonimmigrant, during the entire period of the labor condition 
application's validity, to any place of employment where there is a 
strike or lockout in the course of a labor dispute in the same 
occupational classification as the H-1B nonimmigrant. Finally, the 
employer shall not use the labor condition application in support of any 
petition filings for H-1B nonimmigrants to work in such occupational 
classification at such place of employment until ETA determines that the 
strike or lockout has ended.
    (2) ETA notice to INS. Upon receiving from an employer a notice 
described in paragraph (a)(1) of this section, ETA shall examine the 
documentation, and may consult with the union at the employer's place of 
business or other appropriate entities. If ETA determines that the 
strike or lockout is covered under INS's ``Effect of strike'' regulation 
for ``H'' visa holders, ETA shall certify to INS, in the manner set 
forth in that regulation, that a strike or other labor dispute involving 
a work stoppage of workers in the same occupational classification as 
the H-1B nonimmigrant is in progress at the place of employment. See 8 
CFR 214.2(h)(17).
    (b) Documentation of the third labor condition statement. The 
employer need not develop nor maintain documentation to substantiate the 
statement referenced in paragraph (a) of this section. In the case of an 
investigation, however, the employer has the burden of proof to show 
that there was no strike or lockout in the course of a labor dispute for 
the occupational classification in which an H-1B nonimmigrant is 
employed, either at the time the application was filed or during the 
validity period of the LCA.



Sec. 655.734  The fourth labor condition statement: notice.

    An employer seeking to employ H-1B nonimmigrants shall state on Form 
ETA 9035 that the employer has provided notice of the filing of the 
labor condition application to the bargaining representative of the 
employer's employees in the occupational classification in which the H-
1B nonimmigrants will be employed or are intended to be employed in the 
area of intended employment, or, if there is no such bargaining 
representative, has posted notice of filing in conspicuous locations in 
the employer's establishment(s) in the area of intended employment, in 
the manner described in this section.
    (a) Establishing the notice requirement. The fourth labor condition 
application requirement shall be established when the conditions of 
paragraphs (a)(1) and (a)(2) of this section are met.
    (1)(i) Where there is a collective bargaining representative for the 
occupational classification in which the H-1B nonimmigrants will be 
employed, on or within 30 days before the date the labor condition 
application is filed with ETA, the employer shall provide notice to the 
bargaining representative that a labor condition application is being, 
or will be, filed with ETA. The notice shall identify the number of H-1B 
nonimmigrants the employer is seeking to employ; the occupational 
classification in which the H-1B nonimmigrants will be employed; the 
wages offered; the period of employment; and the location(s) at which 
the H-1B nonimmigrants will be employed. Notice

[[Page 568]]

under this paragraph (a)(1)(i) shall include the following statement: 
``Complaints alleging misrepresentation of material facts in the labor 
condition application and/or failure to comply with the terms of the 
labor condition application may be filed with any office of the Wage and 
Hour Division of the United States Department of Labor.''
    (ii) Where there is no collective bargaining representative, the 
employer shall, on or within 30 days before the date the labor condition 
application is filed with ETA, provide a notice of the filing of the 
labor condition application to its employees by posting a notice in at 
least two conspicuous locations at each place of employment where any H-
1B nonimmigrant will be employed. The notice shall indicate that H-1B 
nonimmigrants are sought; the number of such nonimmigrants the employer 
is seeking; the occupational classification; the wages offered; the 
period of employment; the location(s) at which the H-1B nonimmigrants 
will be employed; and that the labor condition application is available 
for public inspection at the employer's principal place of business in 
the U.S. or at the worksite. The notice shall also include the 
statement: ``Complaints alleging misrepresentation of material facts in 
the labor condition application and/or failure to comply with the terms 
of the labor condition application may be filed with any office of the 
Wage and Hour Division of the United States Department of Labor.'' The 
posting of exact copies of the labor condition application shall be 
sufficient to meet the requirements of this paragraph (a)(1)(ii).
    (A) The notice shall be of sufficient size and visibility, and shall 
be posted in two or more conspicuous places so that the employer's 
workers at the place(s) of employment can easily see and read the posted 
notice(s).
    (B) Appropriate locations for posting the notices include, but are 
not limited to, locations in the immediate proximity of wage and hour 
notices required by 29 CFR 516.4 or occupational safety and health 
notices required by 29 CFR 1903.2(a).
    (C) The notices shall be posted on or within 30 days before the date 
the labor condition application is filed and shall remain posted for a 
total of 10 days.
    (D) Where the employer places any H-1B nonimmigrant(s) at one or 
more worksites not contemplated at the time of filing the application, 
but which are within the area of intended employment listed on the LCA, 
the employer is required to post notice(s) at such worksite(s) on or 
before the date any H-1B nonimmigrant begins work, which notice shall 
remain posted for a total of ten days.
    (2) The employer shall, no later than the date the H-1B nonimmigrant 
reports to work at the place of employment, provide the H-1B 
nonimmigrant with a copy of the labor condition application certified by 
the Department.
    (b) Documentation of the fourth labor condition statement. The 
employer shall develop and maintain documentation sufficient to meet its 
burden of proving the validity of the statement referenced in paragraph 
(a) of this section and attested to on form ETA 9035. Such documentation 
shall include a copy of the dated notice and the name and address of the 
collective bargaining representative to whom the notice was provided. 
Where there is no collective bargaining representative, the employer 
shall note and retain the dates when, and locations where, the notice 
was posted and shall retain a copy of the posted notice.
    (c) Records retention; records availability. The employer's 
documentation shall not be submitted to ETA with the labor condition 
application, but shall be retained for the period of time specified in 
Sec. 655.760(c) of this part. The documentation shall be made available 
for public examination as required in Sec. 655.760(a) of this part, and 
shall be made available to DOL upon request.



Sec. 655.735  Special provisions for short-term placement of H-1B nonimmigrants at place(s) of employment outside the area(s) of intended employment listed on 
          labor condition application.

    (a) Subject to the conditions specified in paragraph (b) of this 
section, an employer may place H-1B nonimmigrant(s) at worksite(s) 
(place(s) of employment) within areas of employment not listed on the 
employer's labor condition application(s)--whether or

[[Page 569]]

not the employer owns or controls such worksite(s)--without filing new 
labor condition application(s) for the area(s) of intended employment 
which would encompass such worksite(s).
    (b) The following restrictions shall be fully satisfied by an 
employer which places H-1B nonimmigrant(s) at worksite(s) (place(s) of 
employment) within areas of employment not listed on the employer's 
labor condition application(s):
    (1) The employer has fully satisfied the requirements of 
Secs. 655.730 through 655.734 of this part with regard to worksite(s) 
located within the area(s) of intended employment listed on the 
employer's labor condition application(s).
    (2) The employer shall not place, assign, lease, or otherwise 
contract out any H-1B nonimmigrant(s) to any worksite where there is a 
strike or lockout in the course of a labor dispute in the same 
occupational classification(s) as the H-1B nonimmigrant(s).
    (3) For every day of the H-1B nonimmigrant's(s') placement outside 
the LCA-listed area of employment, the employer shall pay such worker(s) 
the required wage (based on the prevailing wage at such worker's(s) 
permanent work site, or the employer's actual wage, whichever is higher) 
plus per diem and transportation expenses (for both workdays and non-
workdays) at rate(s) no lower than the rate(s) prescribed for Federal 
Government employees on travel or temporary assignment, as set out in 41 
CFR Part 301-7 and Ch. 301, App. A.
    (4) The employer's placement(s) of H-1B nonimmigrant(s) at any 
worksite(s) in an area of employment not listed on the employer's labor 
condition application(s) shall be limited to a cumulative total of 
ninety workdays within a three-year period, beginning on the first day 
on which the employer placed an H-1B nonimmigrant at any worksite within 
such area of employment. For purposes of this section, ``workday'' shall 
mean any day on which one or more H-1B nonimmigrants perform any work at 
any worksite(s) within the area of employment. For example, one 
``workday'' would be counted for a day on which seven H-1B nonimmigrants 
worked at three worksites within one city, and one ``workday'' would be 
counted for a day on which one H-1B nonimmigrant worked at one worksite 
within a city. The employer may rotate such workers into worksites 
within such area of employment or may maintain a constant work force. 
However, on the first day after the accumulation of 90 workdays, the 
employer shall not have any such H-1B nonimmigrant(s) at any worksite(s) 
within such area of employment not included on a certified LCA.
    (c) At the accumulation of the 90 workdays described in paragraph 
(b)(4) of this section, the employer shall have ended its placement of 
all H-1B nonimmigrant(s) at any worksite(s) within the area of 
employment not listed on the labor condition application, or shall have 
filed and received a certified labor condition application for the 
area(s) of intended employment encompassing such worksite(s) and 
performed all actions required in connection with such filing(s) (e.g., 
determination of the prevailing wage; notice to collective bargaining 
representative or on-site notice to workers).
    (d) At any time during the 90-day period described in paragraph 
(b)(4) of this section, the employer may file a labor condition 
application for the area of intended employment encompassing such 
worksite(s), performing all actions required in connection with such 
labor condition application. Upon certification of such LCA, the 
employer's obligation to pay Federal per diem rates to the H-1B 
nonimmigrant(s) shall terminate. (However, see 
Sec. 655.731(c)(7)(iii)(C) regarding payment of business expenses for 
employee's travel on employer's business.)



Sec. 655.740  Labor condition application determinations.

    (a) Actions on labor condition applications submitted for filing. 
Once a labor condition application has been received from an employer, a 
determination shall be made by the ETA regional Certifying Officer 
whether to certify the labor condition application or return it to the 
employer not certified.
    (1) Certification of labor condition application. Where all items on 
Form ETA 9035 have been completed, the form is not obviously inaccurate, 
and it contains the signature of the employer or

[[Page 570]]

its authorized agent or representative, the regional Certifying Officer 
shall certify the labor condition application unless it falls within one 
of the categories set forth in paragraph (a)(2) of this section. The 
Certifying Officer shall make a determination to certify or not certify 
the labor condition application within 7 working days of the date the 
application is received and date-stamped by the Department. If the labor 
condition application is certified, the regional Certifying Officer 
shall return a certified copy of the labor condition application to the 
employer or the employer's authorized agent or representative. The 
employer shall file the certified labor condition application with the 
appropriate INS office in the manner prescribed by INS. The INS shall 
determine whether each occupational classification named in the 
certified labor condition application is a specialty occupation or is a 
fashion model of distinguished merit and ability.
    (2) Determinations not to certify labor condition applications. ETA 
shall not certify a labor condition application and shall return such 
application to the employer or the employer's authorized agent or 
representative, when either or both of the following two conditions 
exists:
    (i) When the Form ETA 9035 is not properly completed. Examples of a 
Form ETA 9035 which is not properly completed include instances where 
the employer has failed to check all the necessary boxes; or where the 
employer has failed to state the occupational classification, number of 
nonimmigrants sought, wage rate, period of intended employment, place of 
intended employment, or prevailing wage and its source; or where the 
application does not contain the signature of the employer or the 
employer's authorized agent or representative.
    (ii) When the Form ETA ETA 9035 contains obvious inaccuracies. An 
obvious inaccuracy will be found if the employer files an application in 
error--e.g., where the Administrator, Wage and Hour Division, after 
notice and opportunity for a hearing pursuant to subpart I of this part, 
has notified ETA in writing that the employer has been disqualified from 
employing H-1B nonimmigrants under section 212(n)(2) of the INA. 
Examples of other obvious inaccuracies include stating a wage rate below 
the FLSA minimum wage, submitting a labor condition application earlier 
than six months before the beginning date of the period of intended 
employment, identifying multiple occupations on a single labor condition 
application, identifying places of employment within the jurisdiction of 
more than one ETA regional office on a single labor condition 
application, identifying a wage which is below the prevailing wage 
listed on the LCA, or identifying a wage range where the bottom of such 
wage range is lower than the prevailing wage listed on the LCA.
    (3) Correction and resubmission of labor condition application. If 
the labor condition application is not certified pursuant to paragraph 
(a)(2) (i) or (ii) of this section, ETA shall return it to the employer, 
or the employer's authorized agent or representative, explaining the 
reasons for such return without certification. The employer may 
immediately submit a corrected application to ETA. A ``resubmitted'' or 
``corrected'' labor condition application shall be treated as a new 
application by the regional office (i.e., on a ``first come, first 
served'' basis) except that if the labor condition application is not 
certified pursuant to paragraph (a)(2)(ii) of this section because of 
notification by the Administrator of the employer's disqualification, 
such action shall be the final decision of the Secretary and no 
application shall be resubmitted by the employer.
    (b) Challenges to labor condition applications. ETA shall not 
consider information contesting a labor condition application received 
by ETA prior to the determination on the application. Such information 
shall not be made part of ETA's administrative record on the 
application, but shall be referred to ESA to be processed as a complaint 
pursuant to subpart I of this part, and, if such application is 
certified by ETA, the complaint will be handled by ESA under subpart I 
of this part.
    (c) Truthfulness and adequacy of information. DOL is not the 
guarantor of the accuracy, truthfulness or adequacy of a certified labor 
condition application.

[[Page 571]]

The burden of proof is on the employer to establish the truthfulness of 
the information contained on the labor condition application.



Sec. 655.750  Validity period of the labor condition application.

    (a) Validity of certified labor condition applications. A labor 
condition application which has been certified pursuant to the 
provisions of Sec. 655.740 of this part shall be valid for the period of 
employment indicated on Form ETA 9035 by the authorized DOL official; 
however, in no event shall the validity period of a labor condition 
application begin before the application is certified or exceed three 
years. Where the labor condition application contains multiple periods 
of intended employment, the validity period shall extend to the latest 
date indicated or three years, whichever comes first.
    (b) Withdrawal of certified labor condition applications. (1) An 
employer who has filed a labor condition application which has been 
certified pursuant to Sec. 655.740 of this part may withdraw such labor 
condition application at any time before the expiration of the validity 
period of the application, provided that:
    (i) H-1B nonimmigrants are not employed at the place of employment 
pursuant to the labor condition application; and
    (ii) The Administrator has not commenced an investigation of the 
particular application. Any such request for withdrawal shall be null 
and void; and the employer shall remain bound by the labor condition 
application until the enforcement proceeding is completed, at which time 
the application may be withdrawn.
    (2) Requests for withdrawals shall be in writing and shall be 
directed to the regional ETA Certifying Officer.
    (3) An employer shall comply with the ``required wage rate'' and 
``prevailing working conditions'' statements of its labor condition 
application required under Secs. 655.731 and 655.732 of this part, 
respectively, even if such application is withdrawn, at any time H-1B 
nonimmigrants are employed pursuant to the application, unless the 
application is superseded by a subsequent application which is certified 
by ETA.
    (4) An employer's obligation to comply with the ``no strike or 
lockout'' and ``notice'' statements of its labor condition application 
(required under Secs. 655.733 and 655.734 of this part, respectively), 
shall remain in effect and the employer shall remain subject to 
investigation and sanctions for misrepresentation on these statements 
even if such application is withdrawn, regardless of whether H-1B 
nonimmigrants are actually employed, unless the application is 
superseded by a subsequent application which is certified by ETA.
    (5) Only for the purpose of assuring the labor standards protections 
afforded under the H-1B program, where an employer files a petition with 
INS under the H-1B classification pursuant to a certified LCA that had 
been withdrawn by the employer, such petition filing binds the employer 
to all obligations under the withdrawn LCA immediately upon receipt of 
such petition by INS.
    (c) Invalidation or suspension of a labor condition application. (1) 
Invalidation of a labor condition application shall result from 
enforcement action(s) by the Administrator, Wage and Hour Division, 
under subpart I of this part--e.g., a final determination finding the 
employer's failure to meet the application's condition regarding strike 
or lockout; or the employer's willful failure to meet the wage and 
working conditions provisions of the application; or the employer's 
substantial failure to meet the notice of specification requirements of 
the application; see Secs. 655.734 and 655.760 of this part; or the 
misrepresentation of a material fact in an application. Upon notice by 
the Administrator of the employer's disqualification, ETA shall 
invalidate the application and notify the employer, or the employer's 
authorized agent or representative. ETA shall notify the employer in 
writing of the reason(s) that the application is invalidated. When a 
labor condition application is invalidated, such action shall be the 
final decision of the Secretary.
    (2) Suspension of a labor condition application may result from a 
discovery by ETA that it made an error in certifying the application 
because such application is incomplete, contains one or more obvious 
inaccuracies, or has

[[Page 572]]

not been signed. In such event, ETA shall immediately notify INS and the 
employer. When an application is suspended, the employer may immediately 
submit to the certifying officer a corrected or completed application. 
If ETA does not receive a corrected application within 30 days of the 
suspension, or if the employer was disqualified by the Administrator, 
the application shall be immediately invalidated as described in 
paragraph (c) of this section.
    (3) An employer shall comply with the ``required wages rate'' and 
``prevailing working conditions'' statements of its labor condition 
application required under Secs. 655.731 and 655.732 of this part, 
respectively, even if such application is suspended or invalidated, at 
any time H-1B nonimmigrants are employed pursuant to the application, 
unless the application is superseded by a subsequent application which 
is certified by ETA.
    (4) An employer's obligation to comply with the ``no strike or 
lockout'' and ``notice'' statements of its labor condition application 
(required under Secs. 655.733 and 655.734 of this part, respectively), 
shall remain in effect and the employer shall remain subject to 
investigation and sanctions for misrepresentation on these statements 
even if such application is suspended or invalidated, regardless of 
whether H-1B nonimmigrants are actually employed, unless the application 
is superseded by a subsequent application which is certified by ETA.
    (d) Employers subject to disqualification. No labor condition 
application shall be certified for an employer which has been found to 
be disqualified from participation, in the H-1B program as determined in 
a final agency action following an investigation by the Wage and Hour 
Division pursuant to subpart I of this part.



Sec. 655.760  Public access; retention of records.

    (a) Public examination. The employer shall make a filed labor 
condition application and necessary supporting documentation available 
for public examination at the employer's principal place of business in 
the U.S. or at the place of employment within one working day after the 
date on which the labor condition application is filed with DOL. The 
following documentation shall be necessary:
    (1) A copy of the completed labor condition application, Form ETA 
9035. If the application is submitted by facsimile transmission, the 
application containing the original signature shall be maintained by the 
employer;
    (2) Documentation which provides the wage rate to be paid the H-1B 
nonimmigrant;
    (3) A full, clear explanation of the system that the employer used 
to set the ``actual wage'' the employer has paid or will pay workers in 
the occupation for which the H-1B nonimmigrant is sought, including any 
periodic increases which the system may provide--e.g., memorandum 
summarizing the system or a copy of the employer's pay system or scale 
(payroll records are not required, although they shall be made available 
to the Department in an enforcement action).
    (4) A copy of the documentation the employer used to establish the 
``prevailing wage'' for the occupation for which the H-1B nonimmigrant 
is sought (a general description of the source and methodology is all 
that is required to be made available for public examination; the 
underlying individual wage data relied upon to determine the prevailing 
wage is not a public record, although it shall be made available to the 
Department in an enforcement action); and
    (5) A copy of the document(s) with which the employer has satisfied 
the union/employee notification requirements of Sec. 655.734 of this 
part.
    (b) National list of applications. ETA shall compile and maintain on 
a current basis a list of the labor condition applications. Such list 
shall be by employer, showing the occupational classification, wage 
rate(s), number of nonimmigrants sought, period(s) of intended 
employment, and date(s) of need for each employer's application. The 
list shall be available for public examination at the Department of 
Labor, 200 Constitution Avenue, NW., Room N-4456, Washington, DC 20210.
    (c) Retention of records. Either at the employer's principal place 
of business in the U.S. or at the place of employment, the employer 
shall retain copies

[[Page 573]]

of the labor condition application, required wage information, and 
documentation showing provision of notice to bargaining representatives 
or employees at the place of employment for a period of one year beyond 
the end of the period of employment specified on the labor condition 
application or one year from the date the labor condition application 
was withdrawn, except that if an enforcement action is commenced, the 
documentation shall be retained until the enforcement proceeding is 
completed through the procedures set forth in subpart I of this part. 
Required payroll records for the H-1B employees and other employees in 
the occupational classification shall be retained at the employer's 
principal place of business in the U.S. or at the place of employment 
for a period of three years from the date(s) of the creation of the 
record(s), except that if an enforcement action is commenced, all 
payroll records shall be retained until the enforcement proceeding is 
completed through the procedures set forth in subpart I of this part.

(Approved by the Office of Management and Budget under control number 
1205-0310)

[59 FR 65659, 65676, Dec. 20, 1994, as amended at 60 FR 4029, Jan. 19, 
1995]

  Appendix A to Subpart H--Guidance for Determination of the ``Actual 
                                 Wage''

    In determining the required wage rate, in addition to obtaining the 
prevailing wage, the employer must establish the actual wage for the 
occupation in which the H-1B nonimmigrant is employed by the employer. 
For purposes of establishing its compensation system for workers in an 
occupational category, an employer may take into consideration objective 
standards relating to experience, qualifications, education, specific 
job responsibility and function, specialized knowledge, and other 
legitimate business factors. The use of any or all these factors is at 
the discretion of the employer. The employer must have and document an 
objective system used to determine the wages of non-H-1B workers, and 
apply that system to H-1B nonimmigrants as well. It is not sufficient 
for the employer simply to calculate an average wage of all non-H-1B 
employees in an occupation; the actual wage is not an ``average wage''.
    The documents explaining the system must be maintained in the public 
disclosure file. The explanation of the compensation system must be 
sufficiently detailed to enable a third party to apply the system to 
arrive at the actual wage rate computed by the employer for any H-1B 
nonimmigrant. The computation of the H-1B nonimmigrant's individual 
actual wage rate must be documented in the H-1B nonimmigrant's personnel 
file.
    Assuming the actual wage is higher than the prevailing wage and thus 
is the required wage rate, if an employer gives its employees a raise at 
year's end or if the system provides for other adjustments in wages, H-
1B nonimmigrants must also be given the raise (consistent with 
legitimate employer-established criteria such as level of performance, 
attendance, etc.). This is consistent with Congressional intent that H-
1B nonimmigrants and similarly employed U.S. workers be provided the 
same wages.
    Where the employer's pay system or scale provides adjustments during 
the validity period of the LCA--e.g., cost-of-living increase or other 
annual adjustments, increase in the entry-level rate for the occupation 
due to market forces, or the employee moves into a more advanced level 
in the same occupation--the employer shall retain documentation 
explaining the changes and clearly showing that, after such adjustments, 
the wages paid to the H-1B nonimmigrant are at least the greater of the 
adjusted actual wage or the prevailing wage for the occupation in the 
area of intended employment.
    The following examples illustrate these principles:
    (1) Worker A is paid $10.00 per hour and supervises two employees. 
Worker B, who is similarly qualified and performs substantially the same 
job duties except for supervising other employees, is paid $8.00 per 
hour because he/she has no supervisory responsibility.
    The compensation differential is acceptable because it is based upon 
a relevant distinction in job duties, responsibilities, and functions: 
The difference in the supervisory responsibilities of the two employees. 
The actual wage in this occupation at the worksite for workers with 
supervisory responsibility is $10.00 per hour; the actual wage in this 
occupation at the worksite for workers without supervisory 
responsibility is $8.00 per hour.
    (2) Systems Analyst A has experience with a particular software 
which the employer is interested in purchasing, of which none of the 
employer's current employees have knowledge. The employer buys the 
software and hires Systems Analyst A on an H-1B visa to train the other 
employees in its application. The employer pays Systems Analyst A more 
than its other Systems Analysts who are otherwise similarly qualified.

[[Page 574]]

    The compensation differential is acceptable because of the 
distinction in the specialized knowledge and the job duties of the 
employees. Systems Analyst A, in addition to the qualifications and 
duties normally associated with this occupation at the employer's 
worksite, is also specially knowledgeable and responsible for training 
the employer's other Systems Analysts in a new software package. As a 
result, Systems Analyst A commands a higher actual wage. However, if the 
employer employs other similarly qualified systems analysts who also 
have unique knowledge and perform similar duties in training other 
analysts in their area of expertise, the actual wage for Systems Analyst 
A would have to be at least equivalent to the actual wage paid to such 
similarly employed analysts.
    (3) An employer seeks a scientist to conduct AIDS research in the 
employer's laboratory. Research Assistants A (a U.S. worker) and B (an 
H-1B nonimmigrant) both hold Ph.D's in the requisite field(s) of study 
and have the same number of years of experience in AIDS research. 
However, Research Assistant A's experience is on the cutting edge of a 
breakthrough in the field and his/her work history is distinguished by 
frequent praise and recognition in writing and through awards. Research 
Assistant B (the nonimmigrant) has a respectable work history but has 
not conducted research which has been internationally recognized. 
Employer pays Research Assistant A $10,000 per year more than Research 
Assistant B in recognition of his/her unparalleled expertise and 
accomplishments. The employer now wants to hire a third Research 
Assistant on an H-1B visa to participate in the work.
    The differential between the salary paid Research Assistant A (the 
U.S. worker) and Research Assistant B (an H-1B nonimmigrant) is 
acceptable because it is based upon the specialized knowledge, expertise 
and experience of Research Assistant A, demonstrated in writing. The 
employer is not required to pay Research Assistant B the same wage rate 
as that paid Research Assistant A, even though they may have the same 
job titles. The actual wage required for the third Research Assistant, 
to be hired on an H-1B visa, would be the wage paid to Research 
Assistant B unless he/she has internationally recognized expertise 
similar to that of Research Assistant A. As set out in 
Sec. 655.731(1)(A) the employer must have and document the system used 
in determining the actual wage of H-1B nonimmigrants. The explanation of 
the system must be such that a third party may use the system to arrive 
at the actual wage paid the H-1B nonimmigrant.
    (4) Employer located in City X seeks experienced mechanical 
engineers. In City X, the prevailing wage for such engineers is $49,500 
annually. In setting the salaries of U.S. workers, employer pays its 
nonsupervisory mechanical engineers with 5 to 10 years of experience 
between $50,000 and $75,000 per year, using defined pay scale ``steps'' 
tied to experience. Employer hires engineers A, B, and C, who each have 
five years of experience and similar qualifications and will perform 
substantially the same nonsupervisory job duties. Engineer A is from 
Japan, where he/she earns the equivalent of $80,000 per year. Engineer B 
is from France and had been earning the equivalent of $50,000 per year. 
Engineer C is from India and had been earning the equivalent of $20,000 
per year. Employer pays Engineer A $80,000 per year, Engineer B $50,000, 
and Engineer C $20,000 as the employer has had a long-established system 
of maintaining the home-country pay levels of temporary foreign workers.
    The INA requires that the employer pay the H-1B nonimmigrant at 
least the actual wage or the prevailing wage, whichever is greater, but 
there is no prohibition against paying an H-1B nonimmigrant a greater 
wage. Therefore, Engineer A may lawfully be paid the $80,000 per year. 
Engineer B's salary of $50,000 is acceptable, since this is the 
employer's actual wage for an engineer with Engineer B's experience and 
duties. Engineer C's salary, however, at a rate of $20,000 per year, is 
unacceptable under the law, even given the employer's ``long-established 
`home country' system,'' since $20,000 would be below both the actual 
wage and the prevailing wage. The latter situation is an example of an 
illegitimate business factor, i.e., a system to maintain salary parity 
with peers in the country of origin, which yields a wage below the 
required wage levels.



       Subpart I--Enforcement of H-1B Labor Condition Applications

    Source:  59 FR 65672, 65676, Dec. 20, 1994, unless otherwise noted.



Sec. 655.800  Enforcement authority of Administrator, Wage and Hour Division.

    (a) Authority of Administrator. The Administrator shall perform all 
the Secretary's investigative and enforcement functions under section 
212(n) of the INA (8 U.S.C. 1182(n)) and subparts H and I of this part.
    (b) Conduct of investigations. The Administrator, either pursuant to 
a complaint or otherwise, shall conduct such investigations as may be 
appropriate and, in connection therewith, enter and inspect such places 
and such records (and make transcriptions or copies thereof), question 
such persons and

[[Page 575]]

gather such information as deemed necessary by the Administrator to 
determine compliance regarding the matters which are the subject of the 
investigation.
    (c) Availability of records. An employer being investigated shall 
make available to the Administrator such records, information, persons, 
and places as the Administrator deems appropriate to copy, transcribe, 
question, or inspect. No employer subject to the provisions of section 
212(n) of the INA (8 U.S.C. 1182(n)) and/or subpart H or I of this part 
shall interfere with any official of the Department of Labor performing 
an investigation, inspection or law enforcement function pursuant to 8 
U.S.C. 1182(n) or subpart H or I of this part. Any such interference 
shall be a violation of the labor condition application and the 
regulations in subparts H and I of this part, and the Administrator may 
take such further actions as the Administrator considers appropriate.

    (Note: Federal criminal statutes prohibit certain interference with 
a Federal officer in the performance of official duties. 18 U.S.C. 111 
and 18 U.S.C. 1114.)

    (d) Employer cooperation. (1) An employer subject to subpart H or I 
of this part shall at all times cooperate in administrative and 
enforcement proceedings. No employer shall intimidate, threaten, 
restrain, coerce, blacklist, discharge, retaliate, or in any manner 
discriminate against any person because such person has:
    (i) Filed a complaint or appeal under or related to section 212(n) 
of the INA (8 U.S.C. 1182(n)) or subpart H or I of this part;
    (ii) Testified or is about to testify in any proceeding under or 
related to section 212(n) of the INA (8 U.S.C. 1182(n)) or subpart H or 
I of this part;
    (iii) Exercised or asserted on behalf of himself or herself or 
others any right or protection afforded by section 212(n) of the INA (8 
U.S.C. 1182(n)) or subpart H or I of this part;
    (iv) Consulted with an employee of a legal assistance program or an 
attorney on matters related to section 212(n) of the INA (8 U.S.C. 
1182(n)) or to subpart H or I of this part or any other DOL regulation 
promulgated pursuant to 8 U.S.C. 1182(n).
    (2) In the event of such intimidation or restraint as are described 
in this paragraph (d), the conduct shall be a violation of the labor 
condition application and subparts H and I of this part, and the 
Administrator may take such further actions as the Administrator 
considers appropriate.
    (e) Confidentiality. The Administrator shall, to the extent possible 
under existing law, protect the confidentiality of any person who 
provides information to the Department in confidence in the course of an 
investigation or otherwise under subpart H or I of this part.



Sec. 655.805  Complaints and investigative procedures.

    (a) The Administrator, through an investigation either pursuant to a 
complaint or otherwise, shall determine whether an H-1B employer has:
    (1) Filed a labor condition application with ETA which misrepresents 
a material fact.

    (Note: Federal criminal statutes provide penalties of up to $10,000 
and/or imprisonment of up to 5 years for knowing and willful submission 
of false statements to the Federal Government. 18 U.S.C. 1001; see also 
18 U.S.C. 1546);

    (2)(i) Willfully failed to pay wages as required under Sec. 655.731 
of this part;
    (ii) Willfully failed to provide the working conditions required 
under Sec. 655.732 of this part;
    (3) Filed a labor condition application for H-1B nonimmigrants 
during a strike or lockout in the course of a labor dispute in the 
occupational classification at the place of employment (see Sec. 655.733 
of this part); or
    (4) Substantially failed to provide notice of the filing of the 
labor condition application as required in Sec. 655.734 of this part;
    (5) Substantially failed to be specific on the labor condition 
application as to the number of workers sought, the occupational 
classification in which the H-1B nonimmigrants will be employed, or the 
wage rate and conditions under which the H-1B nonimmigrants will be 
employed;
    (6) Failed to pay wages as required under Sec. 655.731 of this part, 
for purposes of the assessment of back wages (pursuant to 
Sec. 655.810(a) of this part);

[[Page 576]]

    (7) Failed to make available for public examination the application 
and necessary document(s) at the employer's principal place of business 
or worksite as required in Sec. 655.760(a);
    (8) Failed to retain documentation as required by Sec. 655.760(c) of 
this part; or
    (9) Failed otherwise to comply in any other manner with the 
provisions of subpart H or I of this part.
    (b) For purposes of this part, ``willful failure'' means a knowing 
failure or a reckless disregard with respect to whether the conduct was 
contrary to Section 212(n)(1)(A) (i) or (ii) of the INA, or Sec. 655.731 
or 655.732 of this part. See McLaughlin v. Richland Shoe Co., 486 U.S. 
128 (1988); see also Trans World Airlines v. Thurston, 469 U.S. 111 
(1985).
    (c) Pursuant to Secs. 655.740(a)(1) and 655.750 of this part, the 
provisions of this part become applicable upon the date of ETA's 
notification that the employer's labor condition application is 
certified, whether or not the employer hires any H-1B nonimmigrants in 
the occupation for the period of employment covered in the labor 
condition application. Should the period of employment specified in the 
labor condition application expire or should the employer withdraw the 
application in accordance with Sec. 655.750(b) of this part, the 
provisions of this part will no longer apply with respect to such 
application, except as provided in Sec. 655.750(b) (3) and (4) of this 
part.
    (d) Any aggrieved person or organization (including bargaining 
representatives and governmental officials) may file a complaint 
alleging a violation described in paragraph (a) of this section.
    (1) No particular form of complaint is required, except that the 
complaint shall be written or, if oral, shall be reduced to writing by 
the Wage and Hour Division official who receives the complaint.
    (2) The complaint shall set forth sufficient facts for the 
Administrator to determine whether an investigation is warranted, in 
that there is reasonable cause to believe that a violation as described 
in paragraph (a) of this section has been committed. This determination 
shall be made within 10 days of the date that the complaint is received 
by a Wage and Hour Division official. If the Administrator determines 
that the complaint fails to present reasonable cause for an 
investigation, the Administrator shall so notify the complainant, who 
may submit a new complaint, with such additional information as may be 
necessary. No hearing pursuant to this subpart shall be available where 
the Administrator determines that an investigation on a complaint is not 
warranted.
    (3) If the Administrator determines that an investigation on a 
complaint is warranted, the complaint shall be accepted for filing; an 
investigation shall be conducted and a determination issued within 30 
calendar days of the date of filing.
    (4) In the event that the Administrator seeks a prevailing wage 
determination from ETA pursuant to Sec. 655.731(d) of this part, or 
advice as to prevailing working conditions from ETA pursuant to 
Sec. 655.732(c)(2) of this part, the 30-day investigation period shall 
be suspended from the date of the Administrator's request to the date of 
the Administrator's receipt of the wage determination (or, in the event 
that the employer challenges the wage determination through the 
Employment Service complaint system, to the date of the completion of 
such complaint process) or advice as to prevailing working conditions.
    (5) A complaint must be filed not later than 12 months after the 
latest date on which the alleged violation(s) were committed, which 
would be the date on which the employer allegedly failed to perform an 
action or fulfill a condition specified in the LCA, or allegedly took an 
action which, through such action or inaction, demonstrates a 
misrepresentation of a material fact in the LCA regarding such action or 
inaction. This jurisdictional bar does not affect the scope of the 
remedies which may be assessed by the Administrator. Where, for example, 
a complaint is timely filed, back wages may be assessed for a period 
prior to one year before the filing of a complaint.
    (6) A complaint may be submitted to any local Wage and Hour Division 
office. The addresses of such offices are found in local telephone 
directories. The office or person receiving such a complaint shall refer 
it to the office of

[[Page 577]]

the Wage and Hour Division administering the area in which the reported 
violation is alleged to have occurred.
    (e) When an investigation has been conducted, the Administrator 
shall, pursuant to Sec. 655.815 of this part, issue a written 
determination as to whether or not any violation(s) as described in 
paragraph (a) of this section has been committed.



Sec. 655.810  Remedies.

    (a) Upon determining that the employer has failed to pay wages as 
required by Sec. 655.731 of this part, the Administrator shall assess 
and oversee the payment of back wages to any H-1B nonimmigrant employed 
by the employer in the specific employment in question. The back wages 
shall be equal to the difference between the amount that should have 
been paid and the amount that actually was paid to such nonimmigrant(s);
    (b) Upon determining that the employer has committed any 
violation(s) described in Sec. 655.805(a) of this part (other than a 
violation of Sec. 655.805(a)(6)), the Administrator may assess a civil 
money penalty not to exceed $1,000 per violation. In determining the 
amount of civil money penalty to be assessed, the Administrator shall 
consider the type of violation committed and other relevant factors. The 
factors which may be considered include, but are not limited to, the 
following:
    (1) Previous history of violation, or violations, by the employer 
under the INA and subpart H or I of this part;
    (2) The number of workers affected by the violation or violations;
    (3) The gravity of the violation or violations;
    (4) Efforts made by the violator in good faith to comply with the 
provisions of 8 U.S.C. 1182(n) and subparts H and I of this part;
    (5) The violator's explanation of the violation or violations;
    (6) The violator's commitment to future compliance; and
    (7) The extent to which the violator achieved a financial gain due 
to the violation, or the potential financial loss, potential injury or 
adverse effect with respect to other parties.
    (c) In addition to back wages and civil money penalties, the 
Administrator may impose such other administrative remedy(ies) under 
this subpart as the Administrator deems appropriate.
    (d) The civil money penalties, back wages, and/or any other 
remedy(ies) determined by the Administrator to be appropriate are 
immediately due for payment or performance upon the assessment by the 
Administrator, or upon the decision by an administrative law judge where 
a hearing is timely requested, or the decision by the Secretary where 
review is granted. The employer shall remit the amount of the civil 
money penalty by certified check or money order made payable to the 
order of ``Wage and Hour Division, Labor.'' The remittance shall be 
delivered or mailed to the Wage and Hour Division office in the manner 
directed in the Administrator's notice of determination. The performance 
of any other remedy prescribed by the Administrator shall follow 
procedures established by the Administrator. Distribution of back wages 
shall be administered in accordance with existing procedures established 
by the Administrator.



Sec. 655.815  Written notice and service of Administrator's determination.

    (a) The Administrator's determination, issued pursuant to 
Sec. 655.805 of this part, shall be served on the complainant, the 
employer, and other known interested parties by personal service or by 
certified mail at the parties' last known addresses. Where service by 
certified mail is not accepted by the party, the Administrator may 
exercise discretion to serve the determination by regular mail.
    (b) The Administrator shall file with the Chief Administrative Law 
Judge, U.S. Department of Labor, a copy of the complaint and the 
Administrator's determination.
    (c) The Administrator's written determination required by 
Sec. 655.805 of this part shall:
    (1) Set forth the determination of the Administrator and the reason 
or reasons therefor, and in the case of a finding of violation(s) by an 
employer, prescribe any remedies, including the amount of any back wages 
assessed,

[[Page 578]]

the amount of any civil money penalties assessed and the reason 
therefor, and/or any other remedies assessed.
    (2) Inform the interested parties that they may request a hearing 
pursuant to Sec. 655.820 of this part.
    (3) Inform the interested parties that in the absence of a timely 
request for a hearing, received by the Chief Administrative Law Judge 
within 15 calendar days of the date of the determination, the 
determination of the Administrator shall become final and not 
appealable.
    (4) Set forth the procedure for requesting a hearing, give the 
addresses of the Chief Administrative Law Judge (with whom the request 
must be filed) and the representative(s) of the Solicitor of labor (upon 
whom copies of the request must be served).
    (5) Inform the parties that, pursuant to Sec. 655.855 of this part, 
the Administrator shall notify ETA and the Attorney General of the 
occurrence of a violation by the employer.



Sec. 655.820  Request for hearing.

    (a) Any interested party desiring to request an administrative 
hearing in accordance with section 556 of title 5, United States Code, 
on a determination issued pursuant to Secs. 655.805 and 655.815 of this 
part shall make such request in writing to the Chief Administrative Law 
Judge at the address stated in the notice of determination.
    (b) Interested parties may request a hearing in the following 
circumstances:
    (1) The complainant or any other interested party may request a 
hearing where the Administrator determines, after investigation, that 
there is no basis for a finding that an employer has committed 
violation(s). In such a proceeding, the party requesting the hearing 
shall be the prosecuting party and the employer shall be the respondent; 
the Administrator may intervene as a party or appear as amicus curiae at 
any time in the proceeding, at the Administrator's discretion.
    (2) The employer or any other interested party may request a hearing 
where the Administrator determines, after investigation, that the 
employer has committed violation(s). In such a proceeding, the 
Administrator shall be the prosecuting party and the employer shall be 
the respondent.
    (c) No particular form is prescribed for any request for hearing 
permitted by this section. However, any such request shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the notice of 
determination giving rise to such request;
    (4) State the specific reason or reasons why the party requesting 
the hearing believes such determination is in error;
    (5) Be signed by the party making the request or by an authorized 
representative of such party; and
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto.
    (d) The request for such hearing shall be received by the Chief 
Administrative Law Judge, at the address stated in the Administrator's 
notice of determination, no later than 15 calendar days after the date 
of the determination. An interested party which fails to meet this 15-
day deadline for requesting a hearing may thereafter participate in the 
proceedings only by consent of the administrative law judge, either 
through intervention as a party pursuant to 29 CFR 18.10 (b) through (d) 
or through participation as an amicus curiae pursuant to 29 CFR 18.12.
    (e) The request may be filed in person, by facsimile transmission, 
by certified or regular mail, or by courier service. For the requesting 
party's protection, if the request is by mail, it should be by certified 
mail. If the request is by facsimile transmission, the original of the 
request, signed by the requestor or authorized representative, shall be 
filed within ten days.
    (f) Copies of the request for a hearing shall be sent by the 
requestor to the Wage and Hour Division official who issued the 
Administrator's notice of determination, to the representative(s) of the 
Solicitor of Labor identified in the notice of determination, and to all 
known interested parties.

[[Page 579]]



Sec. 655.825  Rules of practice for administrative law judge proceedings.

    (a) Except as specifically provided in this subpart, and to the 
extent they do not conflict with the provisions of this subpart, the 
``Rules of Practice and Procedure for Administrative Hearings Before the 
Office of Administrative Law Judges'' established by the Secretary at 29 
CFR part 18 shall apply to administrative proceedings under this 
subpart.
    (b) As provided in the Administrative Procedure Act, 5 U.S.C. 556, 
any oral or documentary evidence may be received in proceedings under 
this part. The Federal Rules of Evidence and subpart B of the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges (29 CFR part 18, subpart B) shall not apply, 
but principles designed to ensure production of relevant and probative 
evidence shall guide the admission of evidence. The administrative law 
judge may exclude evidence which is immaterial, irrelevant, or unduly 
repetitive.



Sec. 655.830  Service and computation of time.

    (a) Under this subpart, a party may serve any pleading or document 
by regular mail. Service on a party is complete upon mailing to the last 
known address. No additional time for filing or response is authorized 
where service is by mail. In the interest of expeditious proceedings, 
the administrative law judge may direct the parties to serve pleadings 
or documents by a method other than regular mail.
    (b) Two (2) copies of all pleadings and other documents in any 
administrative law judge proceeding shall be served on the attorneys for 
the Administrator. One copy shall be served on the Associate Solicitor, 
Division of Fair Labor Standards, Office of the Solicitor, U.S. 
Department of Labor, 200 Constitution Avenue NW., Room N-2716, 
Washington, DC 20210, and one copy shall be served on the attorney 
representing the Administrator in the proceeding.
    (c) Time will be computed beginning with the day following the 
action and includes the last day of the period unless it is a Saturday, 
Sunday, or federally-observed holiday, in which case the time period 
includes the next business day.



Sec. 655.835  Administrative law judge proceedings.

    (a) Upon receipt of a timely request for a hearing filed pursuant to 
and in accordance with Sec. 655.820 of this part, the Chief 
Administrative Law Judge shall promptly appoint an administrative law 
judge to hear the case.
    (b) Within 7 calendar days following the assignment of the case, the 
administrative law judge shall notify all interested parties of the 
date, time and place of the hearing. All parties shall be given at least 
fourteen calendar days notice of such hearing.
    (c) The date of the hearing shall be not more than 60 calendar days 
from the date of the Administrator's determination. Because of the time 
constraints imposed by the INA, no request for postponement shall be 
granted except for compelling reasons. Even where such reasons are 
shown, no request for postponement of the hearing beyond the 60-day 
deadline shall be granted except by consent of all the parties to the 
proceeding.
    (d) The administrative law judge may prescribe a schedule by which 
the parties are permitted to file a prehearing brief or other written 
statement of fact or law. Any such brief or statement shall be served 
upon each other party in accordance with Sec. 655.830 of this part. 
Posthearing briefs will not be permitted except at the request of the 
administrative law judge. When permitted, any such brief shall be 
limited to the issue or issues specified by the administrative law 
judge, shall be due within the time prescribed by the administrative law 
judge, and shall be served on each other party in accordance with 
Sec. 655.830 of this part.



Sec. 655.840  Decision and order of administrative law judge.

    (a) Within 60 calendar days after the date of the hearing, the 
administrative law judge shall issue a decision. If any party desires 
review of the decision, including judicial review, a petition for 
Secretary's review thereof shall be filed as provided in Sec. 655.845 of 
this subpart. If a petition for review is filed, the decision of the 
administrative law

[[Page 580]]

judge shall be inoperative unless and until the Secretary issues an 
order affirming the decision, or, unless and until 30 calendar days have 
passed after the Secretary's receipt of the petition for review and the 
Secretary has not issued notice to the parties that the Secretary will 
review the administrative law judge's decision.
    (b) The decision of the administrative law judge shall include a 
statement of findings and conclusions, with reasons and basis therefor, 
upon each material issue presented on the record. The decision shall 
also include an appropriate order which may affirm, deny, reverse, or 
modify, in whole or in part, the determination of the Administrator; the 
reason or reasons for such order shall be stated in the decision.
    (c) In the event that the Administrator's determination(s) of wage 
violation(s) and computation of back wages are based upon a wage 
determination obtained by the Administrator from ETA during the 
investigation (pursuant to Sec. 655.731(d) of this part), and the 
administrative law judge determines that the Administrator's request was 
not warranted (under the standards in Sec. 655.731(d) of this part), the 
administrative law judge shall remand the matter to the Administrator 
for further proceedings on the issue(s) of the existence of wage 
violation(s) and/or the amount(s) of back wages owed. If there is no 
such determination and remand by the administrative law judge, the 
administrative law judge shall accept such wage determination as 
accurate. Such wage determination is one made by ETA, from which the 
employer did not file a timely complaint through the Employment Service 
complaint system or from which the employer has appealed through the ES 
complaint system and a final decision therein has been issued. See 
Sec. 655.731 of this part; see also 20 CFR 658.420 through 658.426. 
Under no circumstances shall the administrative law judge determine the 
validity of the wage determination or require source data obtained in 
confidence by ETA or the SESA, or the names of establishments contacted 
by ETA or the SESA, to be submitted into evidence or otherwise 
disclosed.
    (d) The administrative law judge shall not render determinations as 
to the legality of a regulatory provision or the constitutionality of a 
statutory provision.
    (e) The decision shall be served on all parties in person or by 
certified or regular mail.



Sec. 655.845  Secretary's review of administrative law judge's decision.

    (a) The Administrator or any interested party desiring review of the 
decision and order of an administrative law judge shall petition the 
Secretary to review the decision and order. To be effective, such 
petition shall be received by the Secretary within 30 calendar days of 
the date of the decision and order. Copies of the petition shall be 
served on all parties and on the administrative law judge.
    (b) No particular form is prescribed for any petition for 
Secretary's review permitted by this subpart. However, any such petition 
shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the administrative law 
judge decision and order giving rise to such petition;
    (4) State the specific reason or reasons why the party petitioning 
for review believes such decision and order are in error;
    (5) Be signed by the party filing the petition or by an authorized 
representative of such party;
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto; and
    (7) Attach copies of the administrative law judge's decision and 
order, and any other record documents which would assist the Secretary 
in determining whether review is warranted.
    (c) Whenever the Secretary determines to review the decision and 
order of an administrative law judge, a notice of the Secretary's 
determination shall be served upon the administrative law judge and upon 
all parties to the proceeding within 30 calendar days after the 
Secretary's receipt of the petition for review.
    (d) Upon receipt of the Secretary's notice, the Office of 
Administrative

[[Page 581]]

Law Judges shall within fifteen calendar days forward the complete 
hearing record to the Secretary.
    (e) The Secretary's notice shall specify:
    (1) The issue or issues to be reviewed;
    (2) The form in which submissions shall be made by the parties 
(e.g., briefs);
    (3) The time within which such submissions shall be made.
    (f) All documents submitted to the Secretary shall be filed with the 
Secretary of Labor, U.S. Department of Labor, Washington, DC 20210, 
Attention: Executive Director, Office of Administrative Appeals, Room S-
4309. An original and two copies of all documents shall be filed. 
Documents are not deemed filed with the Secretary until actually 
received by the Secretary. All documents, including documents filed by 
mail, shall be received by the Secretary either on or before the due 
date.
    (g) Copies of all documents filed with the Secretary shall be served 
upon all other parties involved in the proceeding. Service upon the 
Administrator shall be in accordance with Sec. 655.830(b) of this part.
    (h) The Secretary's final decision shall be issued within 180 
calendar days from the date of the notice of intent to review. The 
Secretary's decision shall be served upon all parties and the 
administrative law judge.
    (i) Upon issuance of the Secretary's decision, the Secretary shall 
transmit the entire record to the Chief Administrative Law Judge for 
custody pursuant to Sec. 655.850 of this part.



Sec. 655.850  Administrative record.

    The official record of every completed administrative hearing 
procedure provided by subparts H and I of this part shall be maintained 
and filed under the custody and control of the Chief Administrative Law 
Judge. Upon receipt of a complaint seeking review of the final agency 
action in a United States District Court, the Chief Administrative Law 
Judge shall certify the official record and shall transmit such record 
to the clerk of the court.



Sec. 655.855  Notice to the Employment and Training Administration and the Attorney General.

    (a) The Administrator shall notify the Attorney General and ETA of 
the final determination of a violation listed under Sec. 655.805(a) (1) 
through (5) by an employer upon the earliest of the following events:
    (1) Where the Administrator determines that there is a basis for a 
finding of violation by an employer, and no timely request for hearing 
is made pursuant to Sec. 655.820 of this part; or
    (2) Where, after a hearing, the administrative law judge issues a 
decision and order finding a violation by an employer, and no timely 
petition for review to the Secretary is made pursuant to Sec. 655.845 of 
this part; or
    (3) Where a petition for review is taken from an administrative law 
judge's decision finding a violation and the Secretary either declines 
within thirty days to entertain the appeal, pursuant to Sec. 655.845(c) 
of this part, or the Secretary affirms the administrative law judge's 
determination; or
    (4) Where the administrative law judge finds that there was no 
violation by an employer, and the Secretary, upon review, issues a 
decision pursuant to Sec. 655.845 of this part, holding that a violation 
was committed by an employer.
    (b) The Attorney General, upon receipt of notification from the 
Administrator pursuant to paragraph (a) of this section, shall not 
approve petitions filed with respect to that employer under sections 204 
or 214(c) of the INA (8 U.S.C. 1154 and 1184(c)) during a period of at 
least one year for nonimmigrants to be employed by the employer.
    (c) ETA, upon receipt of the Administrator's notice pursuant to 
paragraph (a) of this section, shall invalidate the employer's labor 
condition application(s) under subparts H and I of this part, and shall 
not accept for filing any application or attestation submitted by the 
employer under 20 CFR part 656 or subparts A, B, C, D, E, H, or I of 
this part, for a period of 12 months or for a longer period if such is 
specified by the Attorney General for visa petitions filed by that 
employer under sections 204 and 214(c) of the INA.

[[Page 582]]



 Subpart J--Attestations by Employers Using F-1 Students in Off-Campus 
                                  Work

    Source:  56 FR 56865, 56876, Nov. 6, 1991, unless otherwise noted.



Sec. 655.900  Purpose, procedure and applicability of subparts J and K of this part.

    (a) Purpose. The Immigration Act of 1990 (Act) at section 221 
creates a three-year work authorization program beginning October 1, 
1991, for aliens admitted as F-1 students described in subparagraph (F) 
of section 101 (a)(15) of the Immigration and Nationality Act. 8 U.S.C. 
1101(a)(15)(F). The Act specifies that the Attorney General shall grant 
an alien authorization to be employed in a position unrelated to the 
alien's field of study (i.e., a position not involving curricular or 
post-graduate practical training) and off-campus if:
    (1) The alien has completed one year of school as an F-1 student and 
is maintaining good academic standing at the educational institution;
    (2) The employer provides the educational institution and the 
Secretary of Labor with an attestation regarding recruitment and rate of 
pay specified in paragraph (b) of this section; and
    (3) The alien will not be employed more than 20 hours each week 
during the academic term (but may be employed on a full-time basis 
during vacation periods and between academic terms).

Subpart J of this part sets forth the procedure for filing attestations 
with the Department of Labor (the Department or DOL) for employers who 
seek to use F-1 students for off-campus work. Subpart K of this part 
sets forth complaint, investigation, and disqualification provisions 
with respect to such attestations.
    (b) Procedure. (1) An employer must comply with the following 
procedure in order to hire F-1 students for off-campus employment:
    (i) Recruit for 60 days before filing an attestation;
    (ii) File the attestation with the DOL and the Designated School 
Official (DSO) of the educational institution before hiring any F-1 
student(s);
    (iii) Hire F-1 student(s) during the 90-day period following the 
last day of the recruitment period; and
    (iv) Initiate a new 60-day recruitment effort in order to hire any 
F-1 student(s), under the valid attestation, after the 90-day hiring 
period. (A job order placed with the SESA as part of the employer's 
initial recruitment which remains ``open'' with the SESA shall satisfy 
the requirement regarding a new 60-day recruitment effort.)
    (2) The employer's attestation shall state that the employer:
    (i) Has recruited unsuccessfully for at least 60 days for the 
position and will recruit for 60 days for each position in which an F-1 
student is hired under that attestation until September 30, 1996; and
    (ii) Will provide for payment to the alien and to other similarly 
situated workers at a rate not less than the actual wage for the 
occupation at the place of employment, or if greater, the prevailing 
wage for the occupation in the area of intended employment.
    (3) The employer shall file the attestation with the Designated 
School Official (DSO) of each educational institution from which it 
seeks to hire F-1 students. In fulfilling this requirement, the employer 
may file the attestation initially:
    (i) With the appropriate Regional Office of ETA only; or
    (ii) Simultaneously with the DSO and the appropriate Regional Office 
of ETA.

In either instance, under paragraph (b)(3) of this section, ETA will 
return to the employer a copy of the attestation with ETA's acceptance 
indicated thereon. The employer must then send a copy of each accepted 
attestation to the DSO. Where the employer has chosen to file the 
attestation simultaneously with DOL and the DSO, as described in 
paragraph (b)(3)(ii) of this section, the employer shall provide a copy 
of the accepted attestation to the DSO within 15 days after receiving 
the accepted attestation from DOL. The employer shall also retain the 
accepted attestation and produce it in the event the Department conducts 
an investigation to determine if the employer has made an attestation 
that is materially

[[Page 583]]

false or has failed to pay wages in accordance with the attestation. In 
no case may an employer hire an F-1 student for off-campus employment 
without first filing an attestation with DOL and the DSO. The employer 
may not file the attestation with the DSO before it is filed with DOL or 
in the absence of filing the attestation with DOL. The DSO may treat an 
attestation as accepted for filing by DOL for the purpose of authorizing 
F-1 student employment upon its receipt by the school.
    (4) The employer may file an attestation for one or more openings in 
the same occupation, or one or more positions in more than one 
occupation, provided that all occupations are listed on the attestation 
and all positions are located within the same geographic area of 
intended employment.
    (5) The attestation shall be deemed ``accepted for filing'' on the 
date it is received by DOL. Where the attestation is not completed as 
set forth at Sec. 655.940(f)(1) of this part, it shall be returned to 
the employer which will have 15 days to correct the deficiency or it 
will be rejected. If the attestation is rejected, DOL will notify INS. 
Attestations deemed unacceptable under Sec. 655.940(f)(2) of this part 
may not be resubmitted.
    (c) Applicability. Subparts J and K of this part apply to all 
employers who seek to employ F-1 students in off-campus work in 
positions unrelated to their field(s) of study.
    (d) Final date. ETA will not accept attestations under this program 
after September 30, 1996.
    (e) Revalidation of employer attestations in effect on November 30, 
1995. Any employer's attestation which was valid on November 30, 1995, 
is revalidated effective on November 30, 1995, and shall remain valid 
through September 30, 1996, unless withdrawn or invalidated.
[56 FR 56865, 56876, Nov. 6, 1991, as amended at 59 FR 64776, 64777, 
Dec. 15, 1994; 60 FR 61210, 61211, Nov. 29, 1995]



Sec. 655.910  Overview of process.

    This section provides a context for the attestation process to 
facilitate understanding by employers that seek to employ F-1 students 
in off-campus work.
    (a) Department of Labor's responsibilities. The Department of Labor 
(DOL) administers the attestation process. Within DOL, the Employment 
and Training Administration (ETA) shall have responsibility for 
accepting and filing employer attestations on behalf of F-1 students; 
the Employment Standards Administration (ESA) shall be responsible for 
conducting any investigations concerning such attestations.
    (b) Employer attestation responsibilities. Prior to hiring any F-1 
student(s) for off-campus employment, an employer must submit an 
attestation on Form ETA-9034, as described in Sec. 655.940 of this part, 
to the Employment and Training Administration (ETA) of DOL at the 
address set forth at Sec. 655.930 of this part.
    (1) The attesting employer shall file the attestation with the 
Designated School Official (DSO) of each educational institution from 
which it seeks to hire F-1 students. If the employer is filing the 
attestation with the DSO simultaneously to filing it with DOL, or prior 
to DOL's accepting it, the employer must provide the DSO with a copy of 
the accepted attestation within 15 days after receiving the attestation 
from DOL.
    (2)(i) Each attestation shall be valid through September 30, 1996. 
Throughout the validity period of the attestation, the employer may hire 
F-1 students as needed, during the 90-day period immediately following 
each 60-day recruitment period, for the positions specified on Form ETA-
9034, at the required wage rate, from any educational institution in the 
geographic area of intended employment. In order to employ F-1 students 
in any occupation(s) different from the occupation(s) specified in the 
attestation, the employer shall file a new attestation with ETA.
    (ii) The employer shall have the burden of proving the truthfulness 
and accuracy of each attestation element in the event that such 
attestation element is challenged in an investigation.
    (iii) Substantiating documentation in support of each attestation 
element must be maintained by the employer and shall be made available 
to DOL for inspection and copying upon request. If the employer 
maintains the specific

[[Page 584]]

documentation recommended in appendix A of this subpart, and the 
documentation is found to be truthful, accurate, and substantiates 
compliance, it shall meet the burden of proof. If the employer chooses 
to support its attestation in a manner other than in accordance with 
appendix A of this subpart, the employer's documentation must be of 
equal probative value to that shown in appendix A of this subpart in the 
event of an investigation.
    (c) Designated School Official (DSO) responsibilities. The 
Department notes that the basic responsibilities of the DSO are outlined 
in INS regulations at 8 CFR 214.2(f).
    (1) DOL understands INS regulations to mean that the DSO at the 
educational institution is expected to assure that, prior to authorizing 
the off-campus employment of any F-1 student(s):
    (i) It has received an attestation from the prospective employer;
    (ii) The prospective employer has not been disqualified from 
participation in the F-1 student work authorization program (Employers 
disqualified from participation in the program are listed in the Federal 
Register. See Sec. 655.950(b) of this part); and
    (iii) The F-1 student(s) has completed one year of study and is 
maintaining good academic standing at the institution.
    (2) It is also understood that the DSO will not authorize F-1 
student(s) to work in excess of 20 hours per week during the academic 
term, and that the DSO shall notify ETA when the employer of F-1 
student(s) has not provided the educational institution with an accepted 
copy of the attestation within 90 days of its receipt of the attestation 
from the employer.
    (d) Complaints. (1) Complaints alleging that an attestation is 
materially false or that wages were not paid in accordance with the 
attestation may be filed by any aggrieved party with the Wage and Hour 
Division (Administrator), of the Employment Standards Administration, 
DOL, according to the procedures set forth in subpart K of this part.
    (i) Examples of violations that may be alleged in a complaint 
include:
    (A) The employer failed to pay an F-1 student the prevailing wage 
for the occupation in the area of intended employment;
    (B) The employer failed to pay the actual wage for the position(s) 
at the employer's place of business; or
    (C) The employer's recruitment efforts demonstrated that qualified 
U.S. workers were available for the position(s) filled by F-1 students.
    (ii) The Administrator shall review the allegations contained in the 
complaint to determine if there are reasonable grounds to conduct an 
investigation. If, after investigation, the Administrator finds a 
violation, the Administrator shall disqualify the employer (after notice 
and opportunity for a hearing) from employing F-1 students and shall so 
notify INS.
    (2) Complaints alleging that an F-1 student is not maintaining the 
required academic standing or is working in excess of the authorized 
number of hours of employment per week shall be filed with the INS.
    (e) Termination of program. The pilot F-1 student visa program of 
section 221 of the Immigration Act of 1990 expires after September 30, 
1996, and the Department of Labor will not accept any further employer 
attestations after that date. 8 U.S.C. 1184 note. However, complaints 
and appeals arising out of actions occurring prior to September 30, 
1996, will continue to be received, investigated, and processed under 
the standards and procedures of subparts J and K of this part. 
Therefore, subparts J and K of this part remain in effect through the 
completion of such enforcement.
[56 FR 56865, 56876, Nov. 6, 1991, as amended at 59 FR 64777, Dec. 15, 
1994; 60 FR 61210, 61211, Nov. 29, 1995]



Sec. 655.920  Definitions.

    For the purposes of subparts J and K of this part:
    Accepted for filing means that an attestation submitted by the 
employer or his designated agent or representative has been received and 
filed by the Employment and Training Administration of the Department of 
Labor.
    Act means the Immigration Act of 1990, as amended.

[[Page 585]]

    Actual wage means the wage rate paid by the attesting employer to 
all similarly situated employees in the occupation at the worksite at 
the time of employment.
    Administrative Law Judge means an official appointed pursuant to 5 
U.S.C. 3105.
    Administrator means the Administrator of the Wage and Hour Division, 
Employment Standards Administration, Department of Labor, or such 
authorized representatives as may be designated to perform any of the 
functions of the Administrator under subparts J and K of this part.
    Area of intended employment means the geographic area within normal 
commuting distance of the place (address) of intended employment. If the 
place of intended employment is within a Metropolitan Statistical Area 
(MSA), any place within the MSA is deemed to be within normal commuting 
distance of the place of intended employment.
    Attestation means a properly completed Form ETA-9034.
    Attesting employer means any employer who has filed an attestation 
required by section 221 of the Act.
    Attorney General means the chief official of the U.S. Department of 
Justice or the Attorney General's designee.
    Chief Administrative Law Judge means the chief official of the 
Office of the Administrative Law Judges of the Department of Labor or 
the Chief Administrative Law Judge's designee.
    Date of filing means the date an attestation is received by ETA as 
indicated by the date stamped on the attestation.
    Department and DOL mean the United States Department of Labor.
    Designated School Official (DSO) means the official of the 
educational institution who has authority to authorize off-campus 
employment of F-1 students pursuant to Immigration and Naturalization 
Service regulations at 8 CFR parts 214 and 274a.
    Educational institution means the educational institution at which 
an alien admitted to the United States as an F-1 student is enrolled in 
a full course of study.
    Employer means a person, firm, corporation, or other association or 
organization, which suffers or permits a person to work; and
    (1) Which has a location within the United States to which U.S. 
workers may be referred for employment, and which proposes to employ 
workers at a place within the United States; and
    (2) Which has an employer-employee relationship with respect to 
employees under subparts J and K of this part, as indicated by the fact 
that it may hire, fire, supervise or otherwise control the work of any 
such employee.
    Employment and Training Administration (ETA) means the agency within 
the Department which includes the United States Employment Service 
(USES).
    Employment Standards Administration (ESA) means the agency within 
the Department which includes the Wage and Hour Division.
    F-1 nonimmigrant student (F-1 student) means an alien who has an F-1 
visa. See 8 U.S.C. 1101(A)(15)(F)(i). lNS grants such a visa to an alien 
who has a residence in a foreign country which he/she has no intention 
of abandoning, who is a bona fide student qualified to pursue a full 
course of study and who entered the United States temporarily and solely 
for the purpose of pursuing such a course of study at an established 
institution of learning or other recognized place of study in the United 
States, particularly designated by him/her and approved by the Attorney 
General after consultation with the Department of Education of the 
United States. For purposes of subparts J and K, the term ``F-1 
student'' shall refer to F-1 student(s) who will be employed in off-
campus employment unrelated to their field(s) of study.
    Immigration and Naturalization Service (lNS) means the component of 
the Department of Justice which administers the Department of Justice's 
principal functions under the Act.
    INA means the Immigration and Nationality Act, as amended, 8 U.S.C. 
1101 et seq.
    Independent authoritative source means a professional, business, 
trade, educational or governmental association, organization, or other 
similar entity, not owned or controlled by the employer, which has a 
recognized expertise in the occupational field.

[[Page 586]]

    Independent authoritative source survey means a survey of wages 
conducted by an independent authoritative source and published in a 
book, newspaper, periodical, looseleaf service, newsletter, or other 
similar medium, within the 24-month period immediately preceding the 
filing of the employer's attestation and each succeeding annual 
prevailing wage update. Such survey shall:
    (1) Reflect the average wage paid to workers similarly employed in 
the area of intended employment;
    (2) Be based upon recently collected data--e.g., within the 24-month 
period immediately preceding the date of publication of the survey; and
    (3) Represent the latest published prevailing wage finding by the 
authoritative source for the occupation in the area of intended 
employment.
    Position means a single job opening in an occupation for which the 
attesting employer has recruited and either proposes to fill or has 
filled with an F-1 student.
    Regional Certifying Officer means the official in the Employment and 
Training Administration in a Department of Labor regional office (or 
his/her designee) who is authorized to act on labor certifications and 
employment attestations on behalf of the Secretary of Labor.
    Required wage rate means the rate of pay which is the higher of:
    (1) The actual establishment wage rate for the occupation in which 
the F-1 student is to be (or is) employed; or
    (2) The prevailing wage rate (adjusted on an annual basis) for the 
occupation in which the F-1 student is to be (or is) employed in the 
geographic area of intended employment.
    Secretary means the Secretary of Labor or the Secretary's designee.
    United States is defined at 8 U.S.C. 1101(a)(38).
    United States (U.S.) worker means any U.S. citizen or alien who is 
legally permitted to work indefinitely within the United States.



Sec. 655.930  Addresses of Department of Labor regional offices.

    Region I (Connecticut, Maine, Massachusetts, New Hampshire, Rhode 
Island, and Vermont): One Congress Street 10th Floor, Boston, MA 02114-
2021. Telephone: 617-565-4446.
    Region II (New York, New Jersey, Puerto Rico, and the Virgin 
Islands): 201 Varick Street, room 755, New York, NY 10014. Telephone: 
212-660-2185.
    Region III (Delaware, District of Columbia, Maryland, Pennsylvania, 
Virginia, and West Virginia): Post Office Box 8796, Philadelphia, PA 
19101. Telephone: 215-596-6363.
    Region IV (Alabama, Florida, Georgia, Kentucky, Mississippi, North 
Carolina, South Carolina, and Tennessee): 1371 Peachtree Street, NE., 
Atlanta, GA 30309. Telephone: 404-347-3938.
    Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and 
Wisconsin): 230 South Dearborn Street, room 605, Chicago, IL 60604. 
Telephone: 312-353-1550.
    Region VI (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas): 
525 Griffin Street, room 314, Dallas, TX 75202. Telephone: 214-767-4989.
    Region VII (Iowa, Kansas, Missouri, and Nebraska) 911 Walnut Street, 
Kansas City, MO 64106. Telephone: 816-426-3796.
    Region VIII (Colorado, Montana, North Dakota, South Dakota, Utah, 
and Wyoming) 1961 Stout Street, 16th Floor, Denver, CO 80294. Telephone: 
303-844-4613.
    Region IX (Arizona, California, Guam, Hawaii, and Nevada) 71 
Stevenson Street, room 830, San Francisco, CA 94119. Telephone: 415-744-
6647.
    Region X (Alaska, Idaho, Oregon, and Washington) 1111 Third Avenue, 
room 900, Seattle, WA 98101. Telephone: 206-553-5297.

    The telephone numbers set forth in this section are not toll-free.



Sec. 655.940  Employer attestations.

    (a) Who may submit attestations? An employer (or the employer's 
designated agent or representative) seeking to employ F-1 student(s) for 
off-campus work shall submit an attestation on Form ETA-9034. The 
attestation shall be signed by the employer (or the employer's 
designated agent or representative). For this purpose, the employer's 
authorized agent or representative shall mean an official of the 
employer who has the legal authority to commit the employer to the terms 
and conditions of F-1 student attestations.
    (b) Where and when should attestations be submitted? (1) 
Attestations shall be submitted, by U.S. mail, private carrier, or 
facsimile transmission, to the appropriate ETA Regional office, as 
defined in Sec. 655.920 of this part, not later than 60 days after the 
employer's recruitment period (see paragraph (d) of

[[Page 587]]

this section) has ended and shall be accepted for filing, returned, or 
rejected by ETA in accordance with paragraph (f) of this section.
    (2) Attestations shall also be submitted to the Designated School 
Official (DSO) at each educational institution from which the employer 
seeks to hire any F-1 student(s). Attestations may be filed 
simultaneously with ETA and the DSO, or the employer may file the 
approved attestation with the DSO. However, in no case shall the 
employer file the attestation with the DSO before filing the attestation 
with ETA or in the absence of filing the attestation with ETA.
    (3) If the attestation is submitted simultaneously with ETA and the 
DSO, and ETA does not receive its copy of the attestation, the 
Administrator, for purposes of enforcement proceedings under subpart K 
of this part, shall consider that the attestation was accepted for 
filing by ETA as of the date the attestation is received by the DSO.
    (c) What should be submitted? (1) Form ETA-9034. One completed and 
dated original Form ETA-9034 (or a facsimile), containing the 
attestation elements referenced in paragraphs (d) and (e) of this 
section, and the original signature (or a facsimile of the original 
signature) of the employer (or the employer's authorized agent or 
representative) and one copy of Form ETA-9034 shall be submitted to ETA. 
Each attestation form shall identify the position(s) for which the 
attestation is provided, state the occupational division in which the 
position is located, by Dictionary of Occupational Titles (DOT) Two-
Digit Occupational Divisions code, and shall state the rate(s) of pay 
for the position(s). The DOT Two-Digit Occupational Division code is 
required for DOL recordkeeping and reporting purposes only and should 
not be used by the employer to determine the prevailing wage, as it is 
too general for this purpose. (Copies of Form ETA-9034 are available at 
the addresses listed in Sec. 655.930 of this part). When an employer has 
filed an attestation by facsimile transmission, the employer shall 
retain in its files the original of the attestation which contains the 
employer's original signature.
    (2) The employer may file an attestation for a single position or 
for multiple positions in the same occupation, or in multiple 
occupations, provided that all positions are located within the same 
geographic area of intended employment.
    (3) If the employer files the attestation simultaneously with ETA 
and the DSO, or files the attestation first with ETA and subsequently 
files with the DSO before an accepted copy is returned from ETA to the 
employer, the employer shall, within fifteen days of receipt of ETA's 
notification of acceptance of the attestation for filing, provide an 
exact copy of the accepted attestation to the DSO at each educational 
institution from which the employer seeks to employ an F-1 student. The 
DSO shall notify ETA if the educational institution has not been 
provided with a copy of the attestation indicating that it was accepted 
for filing by ETA within 90 days from the date that the attestation was 
filed with the DSO.
    (4) Attestation Elements. The attestation elements referenced in 
Sec. 655.940 (d) and (e) of this section are mandated by section 
221(a)(2) of the Act (8 U.S.C. 1184 note). Section 221(a)(2) of the Act 
provides that one of the conditions for the Attorney General to grant F-
1 students work authorization, as described in INA section 
101(a)(15)(F), to be employed off-campus in positions unrelated to their 
field of study, is that the employer provides the educational 
institution and the Secretary with an attestation that the employer:
    (i) Has recruited for at least 60 days for the position; and
    (ii) Will pay the F-1 student and all other similarly situated 
workers at a rate not less than the ``required wage rate'' (see 
Sec. 655.920 of this part).
    (d) The first attestation element: 60-day recruitment. An employer 
seeking to employ an F-1 student shall attest on Form ETA-9034 that it 
has recruited for at least 60 days for the position(s) and that a 
sufficient number of U.S. workers were not able, qualified, and 
available for the position(s).
    (1) Establishing the 60-day recruitment requirement. (i) The first 
attestation element is demonstrated if the employer attests that:

[[Page 588]]

    (A) It has recruited unsuccessfully for U.S. workers for at least 60 
days for the position prior to filing the attestation; and
    (B) It will conduct at least 60 days of unsuccessful recruitment for 
U.S. workers for each position in which, and at each time at which 
(until September 30, 1996), an F-1 student is subsequently employed.
    (ii) To satisfy paragraph (d)(1)(i)(A) of this section, the employer 
shall recruit for the position for 60 consecutive days by posting the 
job vacancy (or help wanted) notice at the worksite and by placing a job 
order with the State Employment Service agency (SESA) local office which 
services the worksite.
    (iii) To satisfy paragraph (d)(1)(i)(B) of this section, the 
employer shall either:
    (A) Recruit for each position vacancy in the manner required by 
paragraph (d)(1)(ii) of this section; or
    (B) File an ``open job order'' with the SESA local office which 
services the worksite. The employer shall accept referrals from the SESA 
local office on the ``open job order''.
    (2) Documenting the first attestation element. In the event of an 
investigation, the employer shall have the burden of proving that it has 
complied with the elements described in paragraph (d)(1) of this section 
and attested to on ETA Form 9034. Documentation that is truthful, 
accurate and substantiates compliance as identified in Appendix A to 
this subpart shall be sufficient to meet the employer's burden of proof. 
The employer retains the right to meet its burden of proof in proving 
its attestation through other sufficient means.
    (i) Documentation shall not be submitted to ETA or to the DSO with 
the attestation, but employers must be able to produce sufficient 
documentary evidence to substantiate the attestation in the event of an 
investigation. Such documentation shall be made available to DOL as 
described in Secs. 655.900(b)(3) and 655.1000(c) of this part.
    (ii) Because complaints may be filed and enforcement proceedings may 
be conducted during a considerable period after the recruitment, the 
employer should be able to produce such substantiating documentary 
evidence for a period of no less than 18 months after the close of the 
recruitment period or, in the event of an investigation, for the period 
of the enforcement proceeding under subpart K of this part.
    (e) The second attestation element: wages. An employer seeking to 
employ F-1 students shall state on Form ETA-9034 that it will pay the F-
1 student(s) and other similarly employed worker(s) the ``required wage 
rate'' as defined in Sec. 655.920 of this part. For purposes of this 
paragraph ``similarly employed'' shall mean employees of the employer 
working in the same positions under like conditions, such as the same 
shift on the same days of the week. Neither the actual wage rate nor a 
prevailing wage determination for attestation purposes made pursuant to 
this section shall permit an employer to pay a wage lower than that 
required under any other Federal, State, or local law.
    (1) Establishing the wage requirement. The second attestation 
element shall be satisfied when the employer signs Form ETA-9034, 
attesting that for the validity period of the attestation the ``required 
wage rate'' will be paid to the F-1 student(s) and other similarly 
situated workers; that is, that the wage will be no less than the actual 
wage rate paid to workers similarly employed at the worksite, or the 
prevailing wage (adjusted on an annual basis) for the occupation in the 
area of intended employment, whichever is higher. The employer's 
obligation to pay the ``required wage rate'' for the position(s) named 
in the attestation shall continue throughout the validity period of the 
attestation; the employer's determination of the prevailing wage shall 
be updated annually, beginning with the date of the attestation. The 
prevailing wage rate for a position(s) named in the attestation, unless 
the subject of a Davis-Bacon Act or McNamara-O'Hara Service Contract Act 
wage determination described in paragraph (b)(4)(i) of appendix A of 
this subpart or a union contract as described in paragraph (b)(4)(ii) of 
appendix A of this subpart, shall be: The average rate of wages paid to 
workers

[[Page 589]]

similarly employed in the area of intended employment. Since it is not 
always feasible to determine such an average rate of wages with exact 
precision, the wage set forth in the application shall be considered as 
meeting the prevailing wage standard if it is within 5 percent of the 
average rate of wages. For purposes of this section, ``similarly 
employed'' means having substantially comparable jobs in the 
occupational category in the area of intended employment, except that if 
no such workers are employed by employers other than the employer 
applicant in the area of intended employment ``similarly employed'' 
shall mean:
    (i) Having jobs requiring a substantially similar level of skills 
within the area of intended employment; or
    (ii) If there are no substantially comparable jobs in the area of 
intended employment, having substantially comparable jobs with employers 
outside of the area of intended employment.
    (2) Documentation of the second attestation element. In the event of 
a complaint and investigation, the employer shall have the burden of 
proving the validity of and compliance with the attestation element 
referenced in paragraph (e)(1) of this section and attested to on ETA 
Form 9034. Documentation that the Department finds to be truthful, 
accurate and substantiates compliance as identified in appendix A of 
this subpart should be sufficient to meet the employer's burden of 
proof. The employer retains the right to meet its burden of proof in 
proving its attestation through other sufficient means.
    (i) Documentation shall not be submitted to ETA or to the DSO with 
the attestation, but the employer must substantiate its attestation with 
appropriate documentation in the event of an investigation. Such 
documentation shall be made available to DOL as described in 
Secs. 655.900(b)(3) and 655.1000(c) of this part.
    (ii) Because complaints may be filed and enforcement proceedings may 
be conducted during a considerable period after the determination the 
employer should be able to produce documentation substantiating its 
attestation for a period of no less than 18 months after the 
determination or update, or in the event of an investigation, for the 
period of the enforcement proceedings under subpart K of this part.
    (f) Actions on attestations submitted for filing. Upon receipt of an 
attestation pursuant to this subpart, the Regional Certifying Officer 
shall determine whether the attestation is properly completed and 
whether there is cause to return the attestation to the employer as 
unacceptable.
    (1) Acceptable Attestations. (i) Where all items on Form ETA-9034 
have been completed and the attestation contains the signature of the 
employer or its authorized representative, the Regional Certifying 
Officer, except as provided in paragraph (f)(2)(ii) of this section, 
shall accept the attestation for filing. The Regional Certifying Officer 
shall return a copy of the accepted attestation to the employer or the 
employer's designated agent or representative, with ETA's acceptance 
indicated thereon. An attestation which is properly filled out in 
accordance with this section shall be deemed accepted for filing as of 
the date it is received by ETA as indicated by the date stamped thereon.
    (ii) The employer shall file a copy of the accepted attestation with 
the DSO at the educational institution pursuant to Sec. 655.940(c)(3) of 
this part.
    (2) Unacceptable Attestations. ETA shall not accept an attestation 
for filing and shall return such attestation as unaccepted to the 
employer or the employer's designated agent or representative, when any 
one of the following conditions exists:
    (i) Form ETA-9034 is not properly completed. Examples of Form ETA-
9034 which is not properly completed include: instances where the 
employer has failed to complete all of the necessary items; or where the 
employer has failed to identify the position(s) or state the rate(s) of 
pay; or where the attestation does not contain the original signature 
(or facsimile of the signature when the attestation is submitted by 
facsimile transmission) of the employer or its authorized 
representative.
    (ii) The Administrator, Wage and Hour Division, after notice and 
opportunity for a hearing pursuant to subpart K of this part, has 
notified ETA in writing that the employer has been disqualified from 
employing F-1 students

[[Page 590]]

under section 221 of the Immigration Act.
    (3) If the attestation is not accepted for filing pursuant to 
paragraph (f)(2)(i) of this section, ETA shall return it to the employer 
or the employer's agent or representative with written and dated 
notification of the reason(s) that the attestation is unacceptable. If 
the employer does not complete and return the attestation within 15 days 
of the date of such notification (as stated in paragraph (f)(4) of this 
section), ETA shall invalidate the attestation and shall notify the 
Attorney General of such invalidation. The Attorney General may then use 
such notification in its enforcement responsibilities. Employers shall 
not employ F-1 students without a valid attestation.
    (4) Resubmission. When the attestation is determined to be 
unacceptable and is returned to the employer for completion pursuant to 
paragraph (f)(2)(i) of this section, the employer may resubmit the 
attestation. The employer shall resubmit the attestation within 15 days 
of the date of nonacceptance to avoid the invalidation of its 
attestation and ETA's notice to the Attorney General. Upon resubmission, 
if the attestation is determined to be acceptable pursuant to paragraph 
(f)(1) of this section, the Regional Certifying Officer shall accept the 
attestation for filing as of the original date of receipt by ETA, and 
shall return a copy of the attestation to the employer with ETA's 
acceptance indicated thereon.
    (g) Challenges to Attestations. (1) ETA will not consider, prior to 
the acceptance or return of the attestation, information contesting an 
attestation received by ETA. Such information shall not be made part of 
ETA's administrative record on the attestation, but shall be referred to 
the Administrator to be processed as a complaint pursuant to subpart K 
of this part, and, if such attestation is accepted for filing by ETA, 
the complaint shall be handled by ESA under subpart K of this part.
    (2) DOL is not the guarantor of the accuracy, truthfulness or 
adequacy of an attestation accepted for filing pursuant to this subpart.
    (h) Effective date and validity of filed attestations. (1) A 
properly completed attestation accepted pursuant to paragraph (f)(1) of 
this section shall be deemed accepted for filing as of the date it is 
received and date stamped by the Regional Certifying Officer and shall 
be valid for the duration of the F-1 student work authorization program 
which expires on September 30, 1996, unless withdrawn pursuant to 
paragraph (i) of this section or invalidated pursuant to paragraph (j) 
of this section or subpart K of this part.
    (2) During the validity period of an attestation which has been 
accepted for filing as described in paragraph (f)(1) of this section, 
the attesting employer may hire, during the 90-day period following the 
last day of its 60-day recruitment period, or at any time if the 
employer has placed an ``open job order'' with the SESA as part of their 
recruitment effort, F-1 students as needed from as many educational 
institutions as it deems necessary to fill the positions described in 
the attestation, at the location(s) specified in the attestation, and at 
the ``required wage rate.'' The employer shall provide a copy of the 
accepted attestation to the DSO at each educational institution from 
which it hires any F-1 student(s).
    (3) The DSO may grant work authorization for an F-1 student to be 
employed by a particular attesting employer for the duration of the F-1 
student's course of study or until September 30, 1996, whichever period 
is shorter, provided the F-1 student continues to be employed by the 
attesting employer and is otherwise eligible for F-1 student work 
authorization as determined by the Attorney General.
    (i) Withdrawal of accepted attestations. (1) An employer who has 
submitted an attestation which has been accepted for filing may withdraw 
such attestation at any time before the expiration of the validity 
period of the attestation, unless the Administrator has found reasonable 
cause to commence an investigation of the attestation under subpart K of 
this part. Requests for such withdrawals shall be in writing and shall 
be directed to the Regional Certifying Officer with whom the attestation 
was filed.
    (2) Upon the Regional Certifying Officer's receipt of an employer's 
written request to withdraw an attestation, it shall be the employer's 
responsibility

[[Page 591]]

to promptly notify the DSO at each school where F-1 students it employs 
are enrolled.
    (3) Withdrawal of an attestation shall not affect an employer's 
liability with respect to any failure to meet the conditions attested to 
which took place before the withdrawal, or for material 
misrepresentations in an attestation. However, if an employer has not 
yet employed any F-1 student(s) pursuant to the attestation, the 
Administrator shall not find reasonable cause to investigate unless it 
is alleged, and there is reasonable cause to believe, that the employer 
has made material misrepresentations in the attestation.
    (j) Invalidation of filed attestation. Invalidation of an 
attestation may result from enforcement action(s) by the Administrator, 
Wage and Hour Division, under subpart K of this part (i.e., 
investigation(s) conducted by the Administrator regarding the employer's 
material misrepresentation of an attestation element or failure to pay 
wages in accordance with attestation). Invalidation of an attestation 
may also result where ETA determines that the attestation is 
unacceptable and the employer fails to resubmit the attestation to ETA 
within 15 days.
    (1) Result of Wage and Hour Division action. Upon a determination of 
a violation under subpart K of this part, the Administrator shall notify 
ETA and shall notify the Attorney General of the violation and of the 
Administrator's notice to ETA.
    (2) Result of ETA action. If, after accepting an attestation for 
filing, ETA finds that it is unacceptable because it falls within one of 
the categories set forth at paragraph (f)(2)(i) of this section, ETA 
shall return the attestation to the employer for correction and 
resubmission within 15 days. If the employer fails to resubmit the 
attestation within 15 days of the date of the notification, ETA shall 
invalidate the attestation. ETA shall notify the Attorney General of 
such invalidation. Where the attestation has been invalidated, ETA shall 
return a copy of the attestation form to the employer, or the employer's 
agent or representative, and shall notify the employer in writing of the 
reason(s) that the attestation is invalidated. When an attestation is 
invalidated pursuant to paragraph (f)(2)(ii) of this section, ETA shall 
invalidate all attestations filed by the employer. Such action shall be 
the final decision of the Secretary of Labor and is not subject to 
appeal.
    (k) Employers subject to disqualification. No attestation shall be 
accepted for filing from an employer which has been found to be 
disqualified from participation in the F-1 student work authorization 
program as determined in a final agency action following an 
investigation by the Administrator pursuant to subpart K of this part.

(Approved by the Office of Management and Budget under control number 
1205-0315)

[56 FR 56865, 56876, Nov. 6, 1991, as amended at 59 FR 64777, Dec. 15, 
1994; 60 FR 61210, 61211, Nov. 29, 1995]



Sec. 655.950  Public access.

    (a) Public examination at ETA. ETA shall compile and maintain a list 
of employers who filed attestations specifying the occupation(s), 
geographical location, and wage rate(s) attested to. The list shall be 
available for public inspection at the ETA office at which the 
attestation was filed and such list shall be updated monthly.
    (b) Notice to Public. ETA shall publish semiannually a list in the 
Federal Register of employers which have been disqualified from 
participating in the F-1 student work authorization program pursuant to 
Sec. 655.940(k) of this part.

    Appendix A to Subpart J to Part 655--Documentation in Support of 
                     Attestations Made by Employers

    This appendix sets forth the documentation that the Department of 
Labor considers to be sufficient to satisfy the employer's burden of 
proof regarding substantiate attestations made on Form ETA-9034, 
pursuant to subpart J of this part, provided the documentation is found 
to be truthful, accurate, and substantiates compliance. The employer 
retains the right to meet its burden of proof in proving its 
attestations through other sufficient means. The employer's failure to 
substantiate its attestation in the event of an investigation shall be 
found to be a violation.
    (a) Documenting the first attestation element. The employer shall 
have the burden of proving that it has complied with the recruitment 
requirements described in regulations

[[Page 592]]

at Sec. 655.940(d)(1) of this part and attested to on ETA Form-9034. The 
employer's failure to satisfy the burden of proof through the production 
of adequate documentation shall be found to be a violation.
    (1) Documentation shall not be submitted to ETA or to the DSO with 
the attestation, but shall be made available to DOL as described in 
Secs. 655.900(b)(3) and 655.1000(c) of this part. To be effective in 
satisfying the burden of proof, the documentation should be 
contemporaneous with the recruitment, not created after the fact and 
particularly not after the commencement of an investigation under 
subpart K of this part.
    (2) Because complaints may be filed and enforcement proceedings may 
be conducted during a considerable period after the recruitment, the 
employer should maintain the documentation for a period of no less than 
18 months after the close of the recruitment period or, in the event of 
an investigation, for the period of the enforcement proceeding under 
subpart K of this part.
    (3) The employer should be able to produce the following 
documentation:
    (i) Evidence that a job order for the position was on file with the 
SESA local office within the area of intended employment for at least 60 
consecutive days. Such evidence of a job order should include the 
employer's contemporaneous written statement setting forth the name and 
address of the SESA office with which the job order was placed; the name 
of the SESA employee with whom the job order was placed; the date on 
which the order was placed; and the dates on which the job order was on 
file with the SESA office.
    (ii) Evidence that a vacancy notice announcing the position was 
posted for 60 consecutive days at the worksite. Evidence should include 
a copy of the notice that was posted at the worksite, the dates when the 
notice was posted, and a description of the specific location at the 
worksite at which the notice was posted.
    (iii) Evidence that a job order for the position was continuously on 
file and ``open'' with the SESA local office within the area of intended 
employment, throughout the validity period of the attestation. Such 
evidence should include the employer's contemporaneous written statement 
setting forth the name and address of the SESA office with which the job 
order was placed; the name of the SESA employee with whom the job order 
was placed; the date on which the order was placed; and the dates on 
which the job order was on file with the SESA office.
    (iv) Evidence that the employer was unsuccessful in recruiting a 
sufficient number of U.S. workers who are able, qualified, and available 
for the position(s) through the SESA job order and the worksite posting 
notice. Such evidence should include a contemporaneous written summary 
of the results of recruitment for each position for which an attestation 
was filed by the employer. Such summary should include:
    (A) The number of job openings in each occupation included in the 
occupation;
    (B) The number of U.S. workers and F-1 students that applied for 
each position;
    (C) The number of U.S. workers that were hired;
    (D) The number of F-1 students that were hired;
    (E) The number of U.S. workers that were not hired; and
    (F) The lawful job-related reason(s) for which each U.S. worker was 
not hired. An example of a job-related reason for which a U.S. worker 
can be rejected for a job opportunity is that the U.S. worker does not 
have the training and experience required for the position.
    (4) Investigations. In the event that an investigation is conducted 
pursuant to regulations at subpart K of this part, concerning whether 
the employer failed to satisfy its recruitment requirement, in that it 
failed to conduct recruitment or to hire qualified U.S. worker(s) for a 
position for which an F-1 student(s) was hired, the Administrator shall 
determine whether the employer has produced documentation sufficient to 
prove the employer's compliance with the attestation requirements.
    (i) Where the focus of the investigation is upon whether recruitment 
was conducted, the employer shall have satisfied its burden of proof if 
the documentation described in paragraphs (a)(3) (i), (ii), and (iii) of 
this appendix is produced, provided the documentation is found to be 
truthful, accurate and substantiates compliance.
    (ii) Where the focus of the investigation is upon whether the 
employer's recruitment of U.S. workers was unsuccessful because the 
employer declined to hire U.S. worker(s) without lawful reason(s) for 
such action, the employer shall have satisfied the burden of proof if 
the documentation described in paragraph (a)(3)(iv) of this appendix is 
produced, provided that the Administrator has no significant evidence 
which reasonably shows that the employer's recruitment or hiring was 
deficient. In determining whether the employer has demonstrated that 
U.S. workers were rejected for lawful job-related reasons, the 
Administrator may contact ETA which shall provide the Administrator with 
advice as to whether U.S. workers were properly rejected.
    (b) Documentation of the second attestation element. The employer 
shall have the burden of proving the validity of and compliance with the 
attestation element referenced in Sec. 655.940(e) of this part and 
attested to on Form ETA-9034.
    (1) The employer shall be prepared to produce documentation 
sufficient to satisfy this requirement. Documentation shall not be 
submitted to ETA or to the DSO with the

[[Page 593]]

attestation, but shall be made available to DOL as described in 
Secs. 655.900(b)(3) and Sec. 655.1000(c) of this part. The documentation 
specified in paragraphs (b) (4) and (5) of this appendix will be 
sufficient to satisfy the employer's burden of proof, provided the 
documentation is found to be truthful, accurate and substantiates 
compliance upon investigation. The employer's failure to satisfy the 
burden of proof through the production of adequate documentation shall 
be found to be a violation.
    (2) To be effective in satisfying the employer's burden of proof 
regarding the determination of the prevailing wage, the employer's 
documentation should be contemporaneous with the determination or the 
annual update of the prevailing wage, not created after the fact and 
particularly not after the commencement of an investigation under 
subpart K of this part.
    (3) Because complaints may be filed and enforcement proceedings may 
be conducted during a considerable period after the determination or the 
annual update, the employer should be prepared to produce documentation 
for a period of no less than 18 months after the determination or 
update, or in the event of an investigation, for the period of the 
enforcement proceedings under subpart K of this part.
    (4) Documentation described in paragraphs (b) (1) through (3) of 
this appendix should consist of the following:
    (i) If the position is in an occupation which is the subject of a 
wage determination in the area under the provisions of the Davis-Bacon 
Act, 40 U.S.C. 276a et seq., (see 29 CFR part 1) or the McNamara-O'Hara 
Service Contract Act, 41 U.S.C. 351 et seq., (see 29 CFR part 4), an 
excerpt from the wage determination showing the wage rate for the 
occupation in the area of intended employment; or
    (ii) If the position is covered by a union contract which was 
negotiated at arms-length between a union and the employer, an excerpt 
from the union contract showing the wage rate(s) for the occupation(s) 
set forth in the union contract.
    (iii) If position is not covered by the provisions of paragraph 
(b)(4) (i) or (ii) of this appendix, the employers's documentation shall 
consist of:
    (A) A prevailing wage finding from the SESA for the occupation 
within the area of employment; or
    (B) A prevailing wage survey for the occupation in the area of 
intended employment published by an independent authoritative source as 
defined in Sec. 655.920 of this part. For purposes of this paragraph 
(b)(4)(iii)(B) ``prevailing wage survey'' means a survey of wages 
published in a book, newspaper, periodical, looseleaf service, 
newsletter, or other similar medium, within the 24-month period 
immediately preceding the filing of the employer's attestation and each 
succeeding annual prevailing wage update. Such survey shall:
    (1) Reflect the average wage paid to workers similarly employed in 
the area of intended employment;
    (2) Be based upon recently collected data, e.g., within the 24-month 
period immediately preceding the date of publication of the survey; and
    (3) Represent the latest published prevailing wage finding by the 
authoritative source for the occupation in the area of intended 
employment.
    (5) The employer should be prepared to produce documentation to 
prove the payment of the required wage, including payroll records, 
commencing on the date on which the employer first employs the F-1 
student, showing the wages paid to employees in the occupation(s) named 
in the attestation at the worksite. Such payroll records maintained in 
accordance with regulations under the Fair Labor Standards Act (see 29 
CFR part 516) would include for each employee in the occupation:
    (i) The rate(s) of pay, including shift differentials, if any;
    (ii) The employee's earnings per pay period;
    (iii) The number of hours worked per week by the employee; and
    (iv) The amount of and reasons for any and all deductions made from 
the employee's wages.
    (6) Investigations. In the event that an investigation is conducted 
pursuant to subpart K of this part, concerning whether the employer made 
a material misrepresentation regarding the required wage or failed to 
pay the required wage, the Administrator shall determine whether the 
employer has produced documentation sufficient to satisfy the burden of 
proof.
    (i) The employer's documentation of the prevailing wage 
determination shall be found to be sufficient where the determination is 
pursuant to the Davis-Bacon Act or Service Contract Act wage 
determination or a SESA determination.
    (ii) Where the employer's prevailing wage determination is based on 
a survey by an independent authoritative source, the Administrator shall 
consider the employer's documentation to be sufficient, provided that it 
satisfies the standards for independent authoritative source surveys and 
is properly applied, and provided further that the Administrator has no 
significant evidence which reasonably shows that the prevailing wage 
finding obtained by the employer from an independent authoritative 
source varies substantially from the wage prevailing for the occupation 
in the area of intended employment. In the event such significant 
evidence shows a substantial variance, the Administrator may contact 
ETA, which shall provide the Administrator with a prevailing

[[Page 594]]

wage determination, which the Administrator shall use as the basis for 
the determination as to violations. ETA may consult with the appropriate 
SESA to ascertain the prevailing wage applicable to the occupation under 
investigation.

(Approved by the Office of Management and Budget under control number 
1205-0315)



Subpart K--Enforcement of the Attestation Process for Attestations Filed 
         by Employers Utilizing F-1 Students in Off-Campus Work

    Source:  56 FR 56872, 56876, Nov. 6, 1991, unless otherwise noted.



Sec. 655.1000  Enforcement authority of Administrator, Wage and Hour Division.

    (a) The Administrator shall perform all the Secretary's 
investigative and enforcement functions under section 221 of the Act and 
subparts J and K of this part.
    (b) The Administrator shall conduct such investigations as may be 
appropriate and, in connection therewith, enter and inspect such places 
and such records (and make transcriptions or copies thereof), question 
such persons and gather such information as deemed necessary to 
determine compliance with section 221(a) of the Act and subparts J and K 
of this part.
    (c) An employer being investigated pursuant to this subpart shall 
have the burden of proof as to compliance with section 221(a) of the Act 
and the validity of its attestation, and in this regard shall make 
available to the Administrator such records, information, persons, and 
places as the Administrator deems appropriate to copy, transcribe, 
question, or inspect. No employer subject to the provisions of section 
221 of the Act and subparts J and K of this part shall interfere with 
any official of the Department of Labor performing an investigation, 
inspection or law enforcement function pursuant to section 221 of the 
Act or subpart J or K of this part. Any such interference shall be a 
violation of the attestation and subparts J and K of this part, and the 
Administrator may take such further actions as the Administrator deems 
appropriate.

    Note: Federal criminal statutes prohibit certain interference with a 
Federal officer in the performance of official duties. 18 U.S.C. 111 and 
18 U.S.C. 1114.)

    (d) An employer subject to subparts J and K of this part shall at 
all times cooperate in administrative and enforcement proceedings. No 
employer shall intimidate, threaten, restrain, coerce, blacklist, 
discharge, or in any manner discriminate against any person because such 
person has:
    (1) Filed a complaint or appeal under or related to section 221 of 
the Act or subparts J or K of this part;
    (2) Testified or is about to testify in any proceeding under or 
related to section 221 of the Act or subpart J or K of this part;
    (3) Exercised or asserted on behalf of himself or herself or others 
any right or protection afforded by section 221 of the Act or subpart J 
or K of this part.
    (4) Consulted with an employee of a legal assistance program or an 
attorney on matters related to section 221 of the Act or to subpart J or 
K of this part or any other DOL regulation promulgated pursuant to 
section 221 of the Act. In the event of any intimidation or restraint as 
described in this section, the conduct shall be a violation of the 
attestation and these regulations, and the Administrator may take such 
further actions as the Administrator considers appropriate.
    (e) The Administrator shall, to the extent possible under existing 
law, protect the confidentiality of any person, including any 
complainant, who provides information to the Department in confidence 
during the course of an investigation or otherwise under subpart J or K 
of this part.



Sec. 655.1005  Complaints and investigative procedures.

    (a) The Administrator, through an investigation, shall determine 
whether an employer of F-1 students has:
    (1) Provided an attestation which is materially false

    Note: Federal criminal statutes provide penalties of up to $10,000 
and/or imprisonment of up to 5 years for knowing and willful submission 
of false statements to the Federal Government. 18 U.S.C. 1001; see also 
18 U.S.C. 1546.


[[Page 595]]


    (2) Failed to pay the appropriate wage rate as required under 
Sec. 655.940(e) of this part; or
    (3) Failed to comply with the provisions of subpart J or K of this 
part.
    (b) Any aggrieved person or organization may file a complaint 
alleging a violation of the provisions of subpart J or K of this part. 
No particular form is required, except that the complaint shall be 
written or, if oral, shall be reduced to writing by the Wage and Hour 
Division official who receives the complaint. The complaint shall set 
forth sufficient facts for the Administrator to determine whether there 
is reasonable cause to believe that a particular part or parts of the 
attestation or regulations may have been violated. The complaint may be 
submitted to any local Wage and Hour Division office, the addresses of 
which can be found in local telephone directories. The office or person 
receiving such a complaint shall refer it to the office of the Wage and 
Hour Division administering the area in which the reported violation is 
alleged to have occurred.
    (c) The Administrator shall determine whether there is reasonable 
cause to believe that a complaint warrants investigation. If it is 
determined that a complaint fails to present reasonable cause, the 
Administrator shall so notify the complainant, who may submit a new 
complaint with such additional information as may be available. If the 
Administrator determines that reasonable cause exists, an investigation 
will be conducted.
    (d) In the event that the Administrator, after an investigation, 
determines that the employer has committed any violation(s) described in 
paragraph (a) of this section, the Administrator shall issue a written 
determination to the employer in accordance with Sec. 655.1015 of this 
part and an opportunity for a hearing shall be afforded in accordance 
with the procedures specified in Sec. 655.1020 of this part.



Sec. 655.1010  Remedies.

    Where the Administrator, after notice and opportunity for a hearing, 
determines that an employer has committed a violation identified in 
Sec. 655.1005(a) of this part, the employer shall be disqualified from 
employing F-1 student(s) under section 221 of the Act. The Administrator 
shall so notify the Attorney General and ETA pursuant to Sec. 655.1055 
of this part. Upon receipt of the Administrator's notice, the Attorney 
General and ETA shall take the action specified in Sec. 655.1055 of this 
part, i.e., cancel any existing attestation(s) or work authorizations, 
and shall not accept future attestation(s) or grant new work 
authorization(s) with respect to that employer.



Sec. 655.1015  Written notice and service of Administrator's determination.

    (a) The Administrator's written determination, issued pursuant to 
Secs. 655.1005 and 655.1010 of this part, shall be served on the 
employer by personal service or by certified mail at the address of the 
employer or the employer's agent shown on the attestation. Where service 
by certified mail is not accepted by the employer, the Administrator may 
exercise discretion to serve the determination by regular mail.
    (b) The Administrator's written determination, issued pursuant to 
Secs. 655.1005 and 655.1010 of this part, shall:
    (1) Set forth the Administrator's determination of the violation(s) 
and the Administrator's reason or reasons therefor.
    (2) Inform the employer that it may request a hearing pursuant to 
Sec. 655.1020 of this part.
    (3) Inform the employer that in the absence of a timely request for 
a hearing, received by the Chief Administrative Law Judge within 15 
calendar days of the date of the determination, the determination of the 
Administrator shall become final and not appealable.
    (4) Set forth the procedure for requesting a hearing, and give the 
addresses of the Chief Administrative Law Judge (with whom the request 
must be filed) and the representative of the Solicitor of Labor (who 
must be served with a copy of the request).
    (5) Inform the employer that, if no timely request for a hearing is 
filed pursuant to Sec. 655.1020 of this part, the employer shall be 
disqualified from employing F-1 students, effective upon the expiration 
of the period for filing a request for a hearing. In such event, the 
Administrator shall, pursuant to

[[Page 596]]

Sec. 655.1055 of this part, notify ETA and the Attorney General of the 
occurrence of a violation by the employer, and that the employer has 
been disqualified from employing F-1 students.



Sec. 655.1020  Request for hearing.

    (a) An employer desiring to request an administrative hearing on a 
determination issued pursuant to Sec. 655.1015 of this part shall make 
such request in writing to the Chief Administrative Law Judge at the 
address stated in the notice of determination. Copies of the request 
shall be served upon the Wage and Hour Division official who issued the 
notice of determination and upon the representative of the Solicitor of 
Labor identified in the notice of determination.
    (b) No particular form is prescribed for any request for hearing 
permitted by this section. However, any such request shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the notice of 
determination giving rise to such request;
    (4) State the specific reason or reasons why the employer believes 
such determination is in error;
    (5) Be signed by the employer making the request or by an authorized 
representative of the employer; and
    (6) Include the address at which the employer or authorized 
representative desires to receive further communications relating 
thereto.
    (c) The request for such hearing must be received by the Chief 
Administrative Law Judge, at the address stated in the Administrator's 
notice of determination, no later than 15 calendar days after the date 
of the determination.
    (d) The request may be filed in person, by facsimile transmission, 
by certified or regular mail, or by courier service. For the requesting 
party's protection, if the request is by mail, it should be by certified 
mail. If the request is by facsimile transmission, the original of the 
request, signed by the employer or authorized representative, shall be 
filed within ten days thereafter.
    (e) A copy of the request for a hearing shall be sent by the 
requestor to the Administrator at the address shown on the 
Administrator's notice of determination.



Sec. 655.1025  Rules of practice for administrative law judge proceedings.

    (a) Except as specifically provided in this subpart, and to the 
extent they do not conflict with the provisions of this subpart, the 
``Rules of Practice and Procedure for Administrative Hearings Before the 
Office of Administrative Law Judges'' established by the Secretary at 29 
CFR part 18 shall apply to administrative proceedings under this
    (b) As provided in the Administrative Procedure Act, 5 U.S.C. 556, 
any oral or documentary evidence may be received in proceedings under 
this part. The Federal Rules of Evidence and subpart B of the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges (29 CFR part 18, subpart B) shall not apply, 
but principles designed to ensure production of relevant and probative 
evidence shall guide the admission of evidence. The administrative law 
judge may exclude evidence which is immaterial, irrelevant, or unduly 
repetitive.



Sec. 655.1030  Service and computation of time.

    (a) Under this subpart, a party may serve any pleading or document 
by regular mail. Service on a party is complete upon mailing to the last 
known address. No additional time for filing or response is authorized 
where service is by mail. In the interest of expeditious proceedings, 
the administrative law judge may direct the parties to serve pleadings 
or documents by a method other than regular mail.
    (b) Two (2) copies of all pleadings and other documents in any 
administrative law judge proceeding shall be served on the attorneys for 
the Administrator. One copy shall be served on the Associate Solicitor, 
Division of Fair Labor Standards, Office of the Solicitor, U.S. 
Department of Labor, 200 Constitution Avenue NW., room N-2716, 
Washington, DC 20210, and one copy on the attorney representing the 
Administrator in the proceeding.

[[Page 597]]

    (c) Time under this subpart shall be computed beginning with the day 
following the action and includes the last day of the period unless it 
is a Saturday, Sunday, or federally-observed holiday, in which case the 
time period includes the next business day.



Sec. 655.1035  Administrative law judge proceedings.

    (a) Upon receipt of a timely request for a hearing filed pursuant to 
and in accordance with Sec. 655.1020 of this part, the Chief 
Administrative Law Judge shall promptly appoint an administrative law 
judge to hear the case.
    (b) The date of the hearing shall be not more than 60 calendar days 
from the date of the Chief Administrative Law Judge's receipt of the 
request for hearing.
    (c) The administrative law judge may prescribe a schedule by which 
the parties are permitted to file a prehearing brief or other written 
statement of fact or law. Any such brief or statement shall be served 
upon each other party in accordance with Sec. 655.1030 of this part. 
Posthearing briefs shall not be permitted except at the request of the 
administrative law judge. When permitted, any such brief shall be 
limited to the issue or issues specified by the administrative law 
judge, shall be due within the time prescribed by the administrative law 
judge, and shall be served in accordance with Sec. 655.1030 of this 
part.
    (d) Amicus curiae participation or intervention by interested 
parties may be permitted by the administrative law judge in his/her 
discretion pursuant to 29 CFR 18.10. If such participation is granted, 
the amicus curiae and/or intervenor shall serve all documents and be 
served by the parties in accordance with Sec. 655.1030 of this part. In 
no event, however, shall such participation be permitted to delay the 
proceedings beyond the deadline specified in paragraphs (b) and (c) of 
this section.



Sec. 655.1040  Decision and order of administrative law judge.

    (a) Within 90 calendar days after receipt of the transcript of the 
hearing, the administrative law judge shall issue a decision.
    (b) The decision of the administrative law judge shall include a 
statement of findings and conclusions, with reasons and basis therefore, 
upon each material issue presented on the record. The decision shall 
also include an appropriate order which may affirm, deny, reverse, or 
modify, in whole or in part, the determination of the Administrator; the 
reason or reasons for such order shall be stated in the decision.
    (c) The administrative law judge, in accordance with Sec. 655.940 
(d) and (e) of this part, shall impose upon the employer the burden of 
proving the validity of and compliance with the attestation.
    (d) If the administrative law judge finds that the employer has 
failed to pay the required wage rate or has provided an attestation 
which is materially false, the judge shall order that the employer be 
disqualified from employing F-1 students.
    (e) In the event that the Administrator's determination(s) of wage 
violation(s) is based upon a wage determination obtained by the 
Administrator from ETA during the investigation (paragraph (b)(6) of 
appendix A of subpart J of this part), the administrative law judge 
shall not determine the prevailing wage rate de novo, but shall, based 
on the evidence (including the ETA administrative record), either accept 
the wage determination or vacate the wage determination. If the wage 
determination is vacated, the administrative law judge shall remand the 
case to the Administrator, who may then refer the matter to ETA and, 
upon the issuance of a new wage determination by ETA, resubmit the case 
to the administrative law judge. Under no circumstances shall source 
data obtained in confidence by ETA, or the names of establishments 
contacted by ETA, be submitted into evidence or otherwise disclosed.
    (f) The administrative law judge shall not render determinations as 
to the legality of a regulatory provision or the constitutionality of a 
statutory provision.
    (g) The decision shall be served on all parties in person or by 
certified or regular mail.

[[Page 598]]



Sec. 655.1045  Secretary's review of administrative law judge's decision.

    (a) Any party desiring review of the decision and order of an 
administrative law judge shall petition the Secretary to review the 
decision and order. To be effective, such petition must be received by 
the Secretary within 30 calendar days of the date of the decision and 
order. Copies of the petition shall be served on all parties and the 
administrative law judge.
    (b) No particular form is prescribed for any petition for the 
Secretary's review permitted by this subpart. However, any such petition 
shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the administrative law 
judge decision and order giving rise to such petition;
    (4) State the specific reason or reasons why the party petitioning 
for review believes such decision and order are in error;
    (5) Be signed by the party filing the petition or by an authorized 
representative of such party;
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto; and
    (7) Attach copies of the administrative law judge's decision and 
order, and any other record documents which would assist the Secretary 
in determining whether review is warranted.
    (c) Whenever the Secretary determines to review the decision and 
order of an administrative law judge, a notice of the Secretary's 
determination shall be served upon the administrative law judge and all 
parties within 30 calendar days after the Secretary's receipt of the 
petition for review.
    (d) Upon receipt of the Secretary's notice, the Office of 
Administrative Law Judges shall within 15 calendar days forward the 
complete hearing record to the Secretary.
    (e) The Secretary's notice may specify:
    (1) The issue or issues to be reviewed;
    (2) The form in which submissions shall be made by the parties 
(e.g., briefs);
    (3) The time within which such submissions shall be made.
    (f) All documents submitted to the Secretary shall be filed with the 
Secretary of Labor, U.S. Department of Labor, Washington, DC 20210, 
Attention: Executive Director, Office of Administrative Appeals, room S-
4309. An original and two copies of all documents shall be filed. 
Documents are not deemed filed with the Secretary until actually 
received by the Secretary. All documents, including documents filed by 
mail, must be received by the Secretary either on or before the due 
date.
    (g) Copies of all documents filed with the Secretary shall be served 
upon all other parties involved in the proceeding. Service upon the 
Administrator shall be in accordance with Sec. 655.1030(b) of this part.
    (h) The Secretary's final decision shall be issued within 180 
calendar days from the date of the notice of intent to review. The 
Secretary's decision shall be served upon all parties and the 
administrative law judge.
    (i) Upon issuance of the Secretary's decision, the Secretary shall 
transmit the entire record to the Chief Administrative Law Judge for 
custody pursuant to Sec. 655.1050 of this part.



Sec. 655.1050  Administrative record.

    The official record of every completed administrative hearing 
procedure provided by subpart K of this part shall be maintained and 
filed under the custody and control of the Chief Administrative Law 
Judge. Upon receipt of a complaint seeking review of the final agency 
action in a United States District Court, the Chief Administrative Law 
Judge shall certify the official record and shall transmit such record 
to the clerk of the court.



Sec. 655.1055  Notice to the Employment and Training Administration (ETA) and the Attorney General (AG).

    (a) The Administrator shall notify the Attorney General and ETA of 
the final determination of a violation by an employer, and of the 
disqualification of the employer from employing F-1 students, upon the 
earliest of the following events:
    (1) When the Administrator issues a written determination that the 
employer has committed a violation, and

[[Page 599]]

no timely request for hearing is made by the employer pursuant to 
Sec. 655.1020 of this part; or
    (2) When, after a hearing on a timely request pursuant to 
Sec. 655.1020 of this part, the administrative law judge issues a 
decision and order finding a violation by the employer; or
    (3) When, although the administrative law judge found that there was 
no violation by the employer, the Secretary, upon subsequent review upon 
a timely request pursuant to Sec. 655.1045 of this part, issues a 
decision finding that a violation was committed by the employer.
    (b) The Attorney General, upon receipt of notification from the 
Administrator pursuant to paragraph (a) of this section, shall take 
appropriate action to cancel work authorization to F-1 students for 
employment with that employer, and to prevent issuance of new work 
authorization with respect to that employer.
    (1) The Administrator's notice to the Attorney General shall, to the 
extent known from the investigation, specify the school(s) which issued 
work authorization for the F-1 students who were employed by the 
employer. The Attorney General shall inform the appropriate authority at 
each of the specified school(s) that any work authorization(s) issued 
for F-1 student(s) to be employed by that employer shall immediately be 
revoked, and that no new work authorization shall be issued for 
employment of F-1 student(s) by that employer. The Attorney General 
shall, in addition, take any other appropriate action to effectuate the 
disqualification of that employer through revocation of work 
authorization(s) at any other school(s) that may authorize employment 
with the disqualified employer.
    (2) A copy of the Administrator's notice to the Attorney General may 
also be sent by the Administrator to each school identified in the 
notice as a school from which F-1 students have been employed by the 
disqualified employer. Such copy of the Administrator's notice, upon 
receipt by the school, shall constitute sufficient notice for the DSO to 
revoke work authorization(s) and to refuse to issue new work 
authorization(s) for employment of F-1 students by that employer. Any 
school which issued or may issue work authorization(s) for employment of 
any F-1 student(s) by the employer, but which was not known by the 
Administrator to have done so, or notified by copy of the 
Administrator's decision, shall comply with any instructions from the 
Attorney General regarding revocation and nonissuance of work 
authorization for employment of any F-1 student(s) by the employer. In 
addition, any school (whether or not it received a copy of the 
Administrator's notice to the Attorney General regarding the employer) 
shall revoke F-1 work authorization(s) and refuse to issue new F-1 work 
authorization(s) for any employer which is identified as a disqualified 
employer on the list published periodically in the Federal Register by 
ETA.
    (3) Continued or new employment of any F-1 student by the employer 
shall constitute a violation of the INA's employer sanctions provisions, 
irrespective of whether the F-1 student's work authorization has been 
formally revoked by the DSO or INS.
    (c) ETA, upon receipt of the Administrator's notice pursuant to 
paragraph (a) of this section, shall cancel any F-1 attestation filed by 
the employer under subpart J of this part, shall not accept for filing 
any attestation submitted by the employer, and shall so notify the 
employer.



Sec. 655.1060  Non-applicability of the Equal Access to Justice Act.

    A proceeding under subpart K of this part is not subject to the 
Equal Access to Justice Act, as amended, 5 U.S.C. 504. In such a 
proceeding, the administrative law judge shall have no authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.



PART 656--LABOR CERTIFICATION PROCESS FOR PERMANENT EMPLOYMENT OF ALIENS IN THE UNITED STATES--Table of Contents




                Subpart A--Purpose and Scope of Part 656

Sec.
656.1  Purpose and scope of part 656.

[[Page 600]]

656.2  Description of the Immigration and Nationality Act and of the 
          Department of Labor's role thereunder.
656.3  Definitions, for purposes of this part, of terms used in this 
          part.

       Subpart B--Occupational Labor Certification Determinations

656.10  Schedule A.
656.11  Schedule B.

                 Subpart C--Labor Certification Process

656.20  General filing instructions.
656.21  Basic labor certification process.
656.21a  Applications for labor certifications for occupations 
          designated for special handling.
656.22  Applications for labor certification for Schedule A occupations.
656.23  Applications for labor certifications for Schedule B 
          occupations; requests for waivers from Schedule B.
656.24  Labor certification determinations.
656.25  Procedures following a labor certification determination.
656.26  Board of Alien Labor Certification Appeals review of denials of 
          labor certification.
656.27  Consideration by and decisions of the Board of Alien Labor 
          Certification Appeals.
656.28  Document transmittal following the grant of a labor 
          certification.
656.29  Filing of a new application after the denial of a labor 
          certification.
656.30  Validity of and invalidation of labor certifications.
656.31  Labor certification applications involving fraud or willful 
          misrepresentation.
656.32  Fees for services and documents.

               Subpart D--Determination of Prevailing Wage

656.40  Determination of prevailing wage for labor certification 
          purposes.

      Subpart E--Petitioning Process for Federal Research Agencies

656.50  Petitioning process.

                          Subpart F--Addresses

656.60  Addresses of Department of Labor regional offices.
656.62  Locations of Immigration and Naturalization Service offices.

    Authority:  8 U.S.C. 1182(a)(5)(A); 29 U.S.C. 49 et seq.; section 
122, Pub. L. 101-649, 109 Stat. 4978.

    Source:  45 FR 83933, Dec. 19, 1980, unless otherwise noted.



                Subpart A--Purpose and Scope of Part 656



Sec. 656.1  Purpose and scope of part 656.

    (a) Under section 212(a)(5)(A) of the Immigration and Nationality 
Act (lNA) (8 U.S.C. 1182(a)(5)(A)) certain aliens may not obtain a visa 
for entrance into the United States in order to engage in permanent 
employment unless the Secretary of Labor has first certified to the 
Secretary of State and to the Attorney General that:
    (1) There are not sufficient United States workers, who are able, 
willing, qualified and available at the time of application for a visa 
and admission into the United States and at the place where the alien is 
to perform the work, and
    (2) The employment of the alien will not adversely affect the wages 
and working conditions of United States workers similarly employed.
    (b) The regulations under this part set forth the procedures whereby 
such immigrant labor certifications may be applied for, and given or 
denied.
    (c) Correspondence and questions concerning the regulations in this 
part should be addressed to: Division of Foreign Labor Certifications, 
United States Employment Service, Department of Labor, Washington, DC 
20210.
[45 FR 83933, Dec. 19, 1980, as amended at 56 CFR 54927, Oct. 23, 1991]



Sec. 656.2  Description of the Immigration and Nationality Act and of the Department of Labor's role thereunder.

    (a)(1) Description of the Act. The Immigration and Nationality Act 
(Act) (8 U.S.C. 1101 et seq.) regulates the admission of aliens into the 
United States. The Act designates the Attorney General and the Secretary 
of State as the principal administrators of its provisions.
    (2) The Immigration and Naturalization Service (INS) performs most 
of the Attorney General's functions under the Act. See 8 CFR 2.1.
    (3) The consular offices of the Department of State throughout the 
world are generally the initial contact for aliens in foreign countries 
who wish to come to the United States. These offices determine the type 
of visa for

[[Page 601]]

which an alien may be eligible, obtain visa eligibility documentation, 
and issue visas.
    (b) Burden of Proof under the Act. Section 291 of the Act (8 U.S.C. 
1361) states in pertinent part, that:

    Whenever any person makes application for a visa or any other 
documentation required for entry, or makes application for admission, or 
otherwise attempts to enter the United States, the burden of proof shall 
be upon such person to establish that he is eligible to receive such 
visa or such document, or is not subject to exclusion under any 
provision of this Act * * *.

    (c)(1) Role of the Department of Labor. The role of the Department 
of Labor under the Act derives from section 212(a)(5)(A) (8 U.S.C. 
1182(a)(5)(A)), which provides that any alien who seeks admission or 
status as an immigrant for the purpose of employment under paragraph (2) 
or (3) of section 203(b) of the Act shall be excluded unless the 
Secretary of Labor has first certified to the Secretary of State and to 
the Attorney General that:
    (i) There are not sufficient United States workers, who are able, 
willing, qualified, and available at the time of application for a visa 
and admission to the United States and at the place where the alien is 
to perform such skilled or unskilled labor, and
    (ii) The employment of such alien will not adversely affect the 
wages and working conditions of workers in the United States similarly 
employed.
    (2) The certification is referred to in this part 656 as a ``labor 
certification''.
    (3) The Department of Labor issues labor certifications in two 
instances: For the permanent employment of aliens; and for temporary 
employment of aliens in the United States classified under 8 U.S.C. 
1101(a)(15)(H)(ii) pursuant to regulations of the Immigration and 
Naturalization Service at 8 CFR 214.2(h)(4) and sections 
101(a)(15)(H)(ii), 214, and 218 of the Act. See 8 U.S.C. 
1101(a)(15)(H)(ii), 1184, and 1188. The Department also administers 
attestation and labor condition application programs relating to the 
admission and/or work authorization of the following nonimmigrants: 
registered nurses (H-1A visas), professionals (H-1B visas), crewmembers 
performing longshore work (D visas), and students (F-1 visas), 
classified under 8 U.S.C. 1101(a)(15)(H)(i)(a), 1101(a)(15)(H)(i)(b), 
1101(a)(15)(D), and 1101(a)(15)(F), respectively. See also 8 U.S.C. 1184 
(c), (m), and (n), and 1288; and Public Law 101-649 section 221, 8 
U.S.C. 1184 note. The regulations under this part 656 apply only to 
labor certifications for permanent employment.
[56 CFR 54927, Oct. 23, 1991]



Sec. 656.3  Definitions, for purposes of this part, of terms used in this part.

    Act means the Immigration and Nationality Act, as amended, 8 U.S.C. 
1101 et seq.
    Administrative Law Judge means an official appointed pursuant to 5 
U.S.C. 3105.
    Agent means a person who is not an employee of an employer, and who 
has been designated in writing to act on behalf of an alien or employer 
in connection with an application for labor certification.
    Application means an Application for Alien Employment Certification 
form and any other documents submitted by an alien and/or employer (or 
their agents) in applying for a labor certification under this part.
    Area of intended employment means the area within normal commuting 
distance of the place (address) of intended employment. If the place of 
intended employment is within a Metropolitan Statistical Area (MSA), any 
place within the MSA is deemed to be within normal commuting distance of 
the place of intended employment.
    Assistant Secretary means the Assistant Secretary of Labor for 
Employment and Training, the chief official of the Employment and 
Training Administration.
    Attorney means any person who is a member in good standing of the 
bar of the highest court of any State, Possession, Territory, or 
Commonwealth of the United States, or the District of Columbia, and who 
is not under any order of any court or of the Board of Immigration 
Appeals suspending, enjoining, restraining, disbarring, or otherwise 
restricting him or her in the practice of law.
    Attorney General means the chief official of the U.S. Department of 
Justice

[[Page 602]]

or the designee of the Attorney General.
    Board of Alien Labor Certification Appeals means the permanent Board 
of Alien Labor Certification Appeals established by this part, chaired 
by the Chief Administrative Law Judge, and consisting of Administrative 
Law Judges assigned to the Department of Labor and designated by the 
Chief Administrative Law Judge to be members of the Board of Alien Labor 
Certification Appeals. The Board of Alien Labor Certification Appeals is 
located in Washington, DC, and reviews and decides appeals in 
Washington, DC.
    Certifying Officer means a Department of Labor official who makes 
determinations about whether or not to grant applications for labor 
certifications:
    (1) A regional Certifying Officer designated by a Regional 
Administrator, Employment and Training Administration (RA) makes such 
determinations in a regional office of the Department;
    (2) A national Certifying Officer makes such determinations in the 
national office of the USES.
    (3) The addresses of the regional Certifying Officers are set forth 
in Sec. 656.60 of this part.
    Chief Administrative Law Judge means the chief official of the 
Office of Administrative Law Judges of the Department of Labor.
    Consular Officer means an official of the U.S. Department of State 
who handles applications for labor certifications pursuant to this part.
    Director means the chief official of the United States Employment 
Service or the Director's designee.
    Employment means permanent full-time work by an employee for an 
employer other than oneself. For purposes of this definition an investor 
is not an employee.
    Employment and Training Administration (ETA) means the agency within 
the Department of Labor (DOL) which includes the United States 
Employment Service (USES).
    Employer means a person, association, firm, or a corporation which 
currently has a location within the United States to which U.S. workers 
may be referred for employment, and which proposes to employ a full-time 
worker at a place within the United States or the authorized 
representative of such a person, association, firm, or corporation. For 
purposes of this definition an ``authorized representative'' means an 
employee of the employer whose position or legal status authorizes the 
employee to act for the employer in labor certification matters.
    Federal research agency means a major organizational component of a 
Federal cabinet level agency or other agency operating with appropriated 
funds that has as its primary purpose the performance of scientific 
research. Federal research agencies are presumed to be doing 
nonproprietary research. To be considered a major organizational 
component of a cabinet level agency or other agency operating with 
appropriated funds for the purpose of this part the organizational 
component or other agency must be administered by a person who is no 
lower than Level V (or the equivalent) of the Executive Schedule (see 5 
U.S.C. 5316).
    Final Determination form means the form used by the Certifying 
Officer to notify employers (and aliens) of labor certification 
determinations (and was formerly known as the ``Determination and 
Transmittal form'').
    Immigration and Naturalization Service (INS) means the agency within 
the U.S. Department of Justice which administers that Department's 
principal functions under the Act.
    Immigration Officer means an official of the Immigration and 
Naturalization Service (INS) who handles applications for labor 
certifications pursuant to this part.
    INS, see Immigration and Naturalization Service.
    Job opportunity means a job opening for employment at a place in the 
United States to which U.S. workers can be referred.
    Labor certification means the certification to the Secretary of 
State and to the Attorney General of the determination by the Secretary 
of Labor pursuant to section 212(a)(14) of the Immigration and 
Nationality Act (8 U.S.C. 1182(a)(14)):
    (1) That there are not sufficient U.S. workers who are able, 
willing, qualified, and available at the time of an

[[Page 603]]

alien's application for a visa and admission to the United States and at 
the place where the alien is to perform the work; and
    (2) That the employment of the alien will not adversely affect the 
wages and working conditions of similarly employed U.S. workers.
    Local Employment Service office and local office mean a full-time 
office of a State Employment Service agency (also known as a State 
Employment Security Agency (SESA) also known as a State employment 
service), which is maintained for the purpose of providing placement and 
other services of the Employment Service System, and which serves a 
particular geographic area within a State. Unless specified otherwise in 
this part, the local office performing the functions required by this 
part shall be the local Employment Service office serving the area where 
the job opportunity is located.
    Notice of Findings means a notice which sets for the bases upon 
which a Certifying Officer intends to deny a labor certification unless 
the bases are satisfactorily rebutted.
    Occupation designated for special handling means an occupation, 
described at Sec. 656.21a, for which DOL has determined that special 
labor market tests are appropriate.
    Physicians (and/or surgeons) means persons who apply the art and 
science of medicine or surgery primarily in patient care to the 
diagnosis, prevention, and treatment of human diseases, disorders of the 
mind, and pregnancy. This definition includes persons practicing 
medicine, surgery, osteopathy, psychiatry, and opthamology. The 
physician or surgeon may specialize in treating a specific area of the 
body, or a particular disease, sex, or age group.
    Professional nurses means persons who apply the art and science and 
nursing, which reflects comprehension of principles derived from the 
physical, biological, and behavioral sciences. Professional nursing 
generally includes the making of clinical judgements concerning the 
observation, care, and counsel of persons requiring nursing care; and 
administering of medicines and treatments prescribed by the physician or 
dentist; the participation in activities for the promotion of health and 
the prevention of illness in others. A program of study for professional 
nurses generally includes theory and practice in clinical areas such as: 
obstetrics, surgery, pediatrics, psychiatry, and medicine. This 
definition includes only those occupations within Occupational Group No. 
075 of the Dictionary of Occupational Title (4th ed.)
    Regional Administrator, Employment and Training Administration (RA) 
means the chief official of the Employment and Training Administration 
(ETA) in a Department of Labor (DOL) regional office.
    Schedule A means the list of occupations set forth at Sec. 656.10, 
with respect to which the Director has determined that there are not 
sufficient United States workers who are able, willing, qualified and 
available, and that the employment of aliens in such occupations will 
not adversely affect the wages and working conditions of United States 
workers similarly employed.
    Schedule B means the list of occupations set forth in Sec. 656.11, 
with respect to which the Director has determined that there are 
generally sufficient United States workers who are able, willing, 
qualified and available, and that the employment of aliens in such 
occupations will generally adversely affect the wages and working 
conditions of the United States workers similarly employed.
    Secretary means the Secretary of Labor, the chief official of the 
U.S. Department of Labor, or the Secretary's designee.
    Secretary of State means the chief official of the U.S. Department 
of State or the Secretary of State's designee.
    United States, when used in a geographic sense, means the fifty 
States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, 
and Guam.
    United States Employment Service (USES) means the agency of the U.S. 
Department of Labor, established under the Wagner-Peyser Act (29 U.S.C. 
49 et seq.), which is charged with administering the national system of 
public employment offices (the Employment Service (ES) System) and with 
carrying out the functions of the Secretary under section 212(a)(14) of

[[Page 604]]

the Immigration and Nationality Act (8 U.S.C. 1182(a)(14)).
    United States worker means any worker who is a U.S. citizen; is a 
U.S. national; is lawfully admitted for permanent residence; is granted 
the status of an alien lawfully admitted for permanent residence under 8 
U.S.C. 1160(a), 1161(a), or 1255a(a)(1); is admitted as a refugee under 
8 U.S.C. 1157; or is granted asylum under 8 U.S.C. 1158.
[45 FR 83933, Dec. 19, 1980, as amended at 52 FR 11219, Apr. 8, 1987; 52 
FR 20596, June 2, 1987; 56 FR 54930, Oct. 23, 1991. Redesignated and 
amended at 56 FR 54930, Oct. 23, 1991; 63 FR 13767, Mar. 20, 1998]

    Effective Date Note: At 63 FR 13767, Mar. 20, 1998, Sec. 656.3 was 
amended by adding the definition of ``Federal research agency'', 
effective May 4, 1998.



       Subpart B--Occupational Labor Certification Determinations



Sec. 656.10  Schedule A.

    The Director, United States Employment Service (Director), has 
determined that there are not sufficient United States workers who are 
able, willing, qualified, and available for the occupations listed below 
on Schedule A and that the wages and working conditions of United States 
workers similarly employed will not be adversely affected by the 
employment of aliens in Schedule A occupations. An alien seeking a labor 
certification for an occupation listed on Schedule A may apply for that 
labor certification pursuant to Sec. 656.22.

                               Schedule A

    (a) Group I:
    (1) Persons who will be employed as physical therapists, and who 
possess all the qualifications necessary to take the physical therapist 
licensing examination in the State in which they propose to practice 
physical therapy.
    (2) Aliens who will be employed as professional nurses; and (i) who 
have passed the Commission on Graduates of Foreign Nursing Schools 
(CGFNS) Examination; or (ii) who hold a full and unrestricted license to 
practice professional nursing in the State of intended employment.
    (3) Definitions of Group I occupations:
    (i) ``Physical therapist'' means a person who applies the art and 
science of physical therapy to the treatment of patients with 
disabilities, disorders and injuries to relieve pain, develop or restore 
function, and maintain performance, using physical means, such as 
exercise, massage, heat, water, light, and electricity, as prescribed by 
a physician (or surgeon).
    (ii) ``Professional nurse'' is defined in Sec. 656.50.
    (b) Group II:
    Aliens (except for aliens in the performing arts) of exceptional 
ability in the sciences or arts including college and university 
teachers of exceptional ability who have been practicing their science 
or art during the year prior to application and who intend to practice 
the same science or art in the United States. For purposes of this 
group, the term ``science or art'' means any field of knowledge and/or 
skill with respect to which colleges and universities commonly offer 
specialized courses leading to a degree in the knowledge and/or skill. 
An alien, however, need not have studied at a college or university in 
order to qualify for the Group II occupation.
[45 FR 83933, Dec. 19, 1980, as amended at 52 FR 20596, June 2, 1987; 56 
FR 54927, Oct. 23, 1991]



Sec. 656.11  Schedule B.

    (a) The Director has determined that there generally are sufficient 
United States workers who are able, willing, qualified and available for 
the occupations listed below on Schedule B and that the wages and 
working conditions of United States workers similarly employed will 
generally be adversely affected by the employment in the United States 
of aliens in Schedule B occupations. An employer seeking a labor 
certification for an occupation listed on Schedule B may petition for a 
waiver pursuant to Sec. 656.23.

                               Schedule B

(1) Assemblers
(2) Attendants, Parking Lot
(3) Attendants (Service Workers such as Personal Service Attendants, 
Amusement and Recreation Service Attendants)
(4) Automobile Service Station Attendants
(5) Bartenders
(6) Bookkeepers II
(7) Caretakers
(8) Cashiers
(9) Charworkers and Cleaners
(10) Chauffeurs and Taxicab Drivers
(11) Cleaners, Hotel and Motel
(12) Clerks, General
(13) Clerks, Hotel
(14) Clerks and Checkers, Grocery Stores
(15) Clerk Typists
(16) Cooks, Short Order
(17) Counter and Fountain Workers

[[Page 605]]

(18) Dining Room Attendants
(19) Electric Truck Operators
(20) Elevator Operators
(21) Floorworkers
(22) Groundskeepers
(23) Guards
(24) Helpers, any industry
(25) Hotel Cleaners
(26) Household Domestic Service Workers
(27) Housekeepers
(28) Janitors
(29) Key Punch Operators
(30) Kitchen Workers
(31) Laborers, Common
(32) Laborers, Farm
(33) Laborers, Mine
(34) Loopers and Toppers
(35) Material Handlers
(36) Nurses' Aides and Orderlies
(37) Packers, Markers, Bottlers and Related
(38) Porters
(39) Receptionists
(40) Sailors and Deck Hands
(41) Sales Clerks, General
(42) Sewing Machine Operators and Handstitchers
(43) Stock Room and Warehouse Workers
(44) Streetcar and Bus Conductors
(45) Telephone Operators
(46) Truck Drivers and Tractor Drivers
(47) Typists, Lesser Skilled
(48) Ushers, Recreation and Amusement
(49) Yard Workers

    (b) Descriptions of Schedule B occupations--(1) Assemblers perform 
one or more repetitive tasks to assemble components and subassemblies 
using hand or power tools to mass produce a variety of components, 
products or equipment. They perform such activities as riveting, 
drilling, filing, bolting, soldering, spot welding, cementing, gluing, 
cutting and fitting. They may use clamps or other work aids to hold 
parts during assembly, inspect or test components, or tend previously 
set-up or automatic machines.
    (2) Attendants, Parking Lot park automobiles for customers in 
parking lots or garages and may collect fees based on time span of 
parking.
    (3) Attendants (Service Workers such as Personal Service Attendants, 
Amusement and Recreation Service Attendants) perform a variety of 
routine tasks attending to the personal needs of customers at such 
places as amusement parks, bath houses, clothing check-rooms, and 
dressing rooms, including such tasks as taking and issuing tickets, 
checking and issuing clothing and supplies, cleaning premises and 
equipment, answering inquiries, checking lists, and maintaining simple 
records.
    (4) Automobile Service Station Attendants service automotive 
vehicles with fuel, lubricants, and automotive accessories at drive-in 
service facilities; may also compute charges and collect fees from 
customers.
    (5) Bartenders prepare, mix, and dispense alcoholic beverages for 
consumption by bar customers, and compute and collect charges for 
drinks.
    (6) Bookkeepers II keep records of one facet of an establishment's 
financial transactions by maintaining one set of books; specialize in 
such areas as accounts-payable, accounts-receivable, or interest accrued 
rather than a complete set of records.
    (7) Caretakers perform a combination of duties to keep a private 
home clean and in good condition such as cleaning and dusting furniture 
and furnishings, hallways and lavatories; beating, vacuuming, and 
scrubbing rugs; washing windows, waxing and polishing floors; removing 
and hanging draperies; cleaning and oiling furnances and other 
equipment; repairing mechanical and electrical appliances; and painting.
    (8) Cashiers receive payments made by customers for goods or 
services, make change, give receipts, operate cash registers, balance 
cash accounts, prepare bank deposits and perform other related duties.
    (9) Charworkers and Cleaners keep the premises of commercial 
establishments, office buildings, or apartment hosues in clean and 
orderly condition by performing, according to a set routine, such tasks 
as mopping and sweeping floors, dusting and polishing furniture and 
fixtures, and vacuuming rugs.
    (10) Chauffeurs and Taxicab Drivers drive automobiles to convey 
passengers according to the passengers' instructions.
    (11) Cleaners, Hotel and Motel clean hotel rooms and halls, sweep 
and mop floors, dust furniture, empty wastebaskets, and make beds.
    (12) Clerks, General perform a variety of routine clerical tasks not 
requiring knowledge of systems or procedures such as copying and posting 
data, proofreading records or forms, counting, weighing, or measuring 
material,

[[Page 606]]

routing correspondence, answering telephones, conveying messages, and 
running errands.
    (13) Clerks, Hotel perform a variety of routine tasks to serve hotel 
guests such as registering guests, dispensing keys, distributing mail, 
collecting payments, and adjusting complaints.
    (14) Clerks and Checkers, Grocery Stores itemize, total, and receive 
payments for purchases in grocery stores, usually using cash registers; 
often assist customers in locating items, stock shelves, and keep stock-
control and sales-transaction records.
    (15) Clerk Typists perform general clerical work which, for the 
majority of duties, requires the use of typewriters: perform such 
activities as typing reports, bills, application forms, shipping 
tickets, and other matters from clerical records, filing records and 
reports, posting information to records, sorting and distributing mail, 
answering phones and similar duties.
    (16) Cooks--Short Order prepare and cook to order all kinds of 
short-preparation-time foods; may perform such activities as carving 
meats, filling orders from a steamtable, preparing sandwiches, salads 
and beverages, and serving meals over a counter.
    (17) Counter and Fountain Workers serve food to patrons at lunchroom 
counters, cafeterias, soda fountains, or similar public eating places; 
take orders from customers and frequently prepare simple items, such as 
desert dishes; itemize and total checks; receive payment and make 
change; clean work areas and equipment.
    (18) Dining Room Attendants facilitate food service in eating places 
by performing such tasks as removing dirty dishes, replenishing linen 
and silver supplies, serving water and butter to patrons, and cleaning 
and polishing equipment.
    (19) Electric Truck Operators drive gasoline- or electric-powered 
industrial trucks or tractors equipped with forklift, elevating 
platform, or trailer hitch to move and stack equipment and materials in 
a warehouse, storage yard, or factory.
    (20) Elevator Operators operate elevators to transport passengers 
and freight between building floors.
    (21) Floorworkers perform a variety of routine tasks in support of 
other workers in and around such work sites as factory floors and 
service areas, frequently at the beck and call of others; perform such 
tasks as cleaning floors, materials and equipment, distributing 
materials and tools to workers, running errands, delivering messages, 
emptying containers, and removing materials from work areas to storage 
or shipping areas.
    (22) Groundskeepers maintain grounds of industrial, commercial, or 
public property in good condition by performing such tasks as cutting 
lawns, trimming hedges, pruning trees, repairing fences, planting 
flowers, and shoveling snow.
    (23) Guards guard and patrol premises of industrial or business 
establishments or similar types of property to prevent theft and other 
crimes and prevent possible injury to others.
    (24) Helpers (any industry) perform a variety of duties to assist 
other workers who are usually of a higher level of competency of 
expertness by furnishing such workers with materials, tools, and 
supplies, cleaning work areas, machines and equipment, feeding or 
offbearing machines, and/or holding materials or tools.
    (25) Hotel Cleaners perform routine tasks to keep hotel premises 
neat and clean such as cleaning rugs, washing walls, ceilings and 
windows, moving furniture, mopping and waxing floors, and polishing 
metalwork.
    (26) Household Domestic Service Workers perform a variety of tasks 
in private households, such as cleaning, dusting, washing, ironing, 
making beds, maintaining clothes, marketing, cooking, serving food, and 
caring for children or disabled persons. This definition, however, 
applies only to workers who have had less than one year of documented 
full-time paid experience in the tasks to be performed, working on a 
live-in or live-out basis in private households or in public or private 
institutions or establishments where the worker has performed tasks 
equivalent to tasks normally associated with the maintenance of a 
private household. This definition does not include household workers 
who primarily provide health or instructional services.

[[Page 607]]

    (27) Housekeepers supervise workers engaged in maintaining interiors 
of commercial residential buildings in a clean and orderly fashion, 
assign duties to cleaners (hotel and motel), charworkers, and hotel 
cleaners, inspect finished work, and maintain supplies of equipment and 
materials.
    (28) Janitors keep hotels, office buildings, apartment houses, or 
similar buildings in clean and orderly condition, and tend furnaces and 
boilers to provide heat and hot water; perform such tasks as sweeping 
and mopping floors, emptying trash containers, and doing minor painting 
and plumbing repairs; often maintain their residence at their places of 
work.
    (29) Keypunch Operators, using machines similar in action to 
typewriters, punch holes in cards in such a position that each hole can 
be identified as representing a specific item of information. These 
punched cards may be used with electronic computers or tabulating 
machines.
    (30) Kitchen Workers perform routine tasks in the kitchens of 
restaurants. Their primary responsibility is to maintain work areas and 
equipment in a clean and orderly fashion by performing such tasks as 
mopping floors, removing trash, washing pots and pans, transferring 
supplies and equipment, and washing and peeling vegetables.
    (31) Laborers, Common perform routine tasks, upon instructions and 
according to set routine, in an industrial, construction or 
manufacturing environment such as loading and moving equipment and 
supplies, cleaning work areas, and distributing tools.
    (32) Laborers, Farm plant, cultivate, and harvest farm products, 
following the instructions of supervisors, often working as members of a 
team. Their typical tasks are watering and feeding livestock, picking 
fruit and vegetables, and cleaning storage areas and equipment.
    (33) Laborers, Mine perform routine tasks in underground or surface 
mines, pits, or quarries, or at tipples, mills, or preparation plants 
such as cleaning work areas, shoveling coal onto conveyors, pushing mine 
cars from working faces to haulage roads, and loading or sorting 
material onto wheelbarrows.
    (34) Loopers and Toppers (i) tend machines that shear nap, loose 
threads, and knots from cloth surfaces to give uniform finish and 
texture, (ii) operate looping machines to close openings in the toes of 
seamless hose or join knitted garment parts, (iii) loop stitches or 
ribbed garment parts on the points of transfer bars to facilitate the 
transfer of garment parts to the needles of knitting machines.
    (35) Material Handlers load, unload, and convey materials within or 
near plants, yards, or worksites under specific instructions.
    (36) Nurses' Aides and Orderlies assist in the care of hospital 
patients by performing such activities as bathing, dressing and 
undressing patients and giving alcohol rubs, serving and collecting food 
trays, cleaning and shaving hair from the skin areas of operative cases, 
lifting patients onto and from beds, transporting patients to treatment 
units, changing bed linens, running errands, and directing visitors.
    (37) Packers, Markers, Bottlers, and Related pack products into 
containers, such as cartons or crates, mark identifying information on 
articles, insure that filled bottles are properly sealed and marked, 
often working in teams on or at end of assembly lines.
    (38) Porters (i) carry baggage by hand or handtruck for airline, 
railroad or bus passengers, and perform related personal services in and 
around public transportation environments.
    (ii) Keep building premises, working areas in production departments 
of industrial organizations, or similar sites in clean and orderly 
condition.
    (39) Receptionists receive clients or customers coming into 
establishments, ascertain their wants, and direct them accordingly; 
perform such activities as arranging appointments, directing callers to 
their destinations, recording names, times, nature of business and 
persons seen and answering phones.
    (40) Sailors and Deck Hands stand deck watches and perform a variety 
of tasks to preserve painted surfaces of ships and to maintain lines, 
running gear, and cargo handling gear in safe operating condition; 
perform such tasks as mopping decks, chipping rust, painting chipped 
areas, and splicing rope.

[[Page 608]]

    (41) Sales Clerks, General receive payment for merchandise in retail 
establishments, wrap or bag merchandise, and keep shelves stocked.
    (42) Sewing Machine Operators and Hand-Stitchers (i) operate single- 
or multiple-needle sewing machines to join parts in the manufacture of 
such products as awnings, carpets, and gloves; specialize in one type of 
sewing machine limited to joining operations.
    (ii) Join and reinforce parts of articles such as garments and 
curtains, sew button-holes and attach fasteners to such articles, or sew 
decorative trimmings on such articles, using needles and threads.
    (43) Stock Room and Warehouse Workers receive, store, ship, and 
distribute materials, tools, equipment, and products within 
establishments as directed by others.
    (44) Streetcar and Bus Conductors collect fares or tickets from 
passengers, issue transfers, open and close doors, announce stops, 
answer questions, and signal operators to start or stop.
    (45) Telephone Operators operate telephone switchboards to relay 
incoming and internal calls to phones in an establishment, and make 
connections with external lines for outgoing calls; often take messages, 
supply information and keep records of calls and charges; often are 
involved primarily in establishing, or aiding telephone users in 
establishing, local or long distance telephone connections.
    (46) Truck Drivers and Tractor Drivers (i) drive trucks to transport 
materials, merchandise, equipment or people to and from specified 
destinations, such as plants, railroad stations, and offices.
    (ii) Drive tractors to move materials, draw implements, pull out 
objects imbedded in the ground, or pull cables of winches to raise, 
lower, or load heavy materials or equipment.
    (47) Typists, Lesser Skilled type straight-copy material, such as 
letters, reports, stencils, and addresses, from drafts or corrected 
copies. They are not required to prepare materials involving the 
understanding of complicated technical terminology, the arrangement and 
setting of complex tabular detail or similar items. Their typing speed 
in English does not exceed 52 words per minute on a manual typewriter 
and/or 60 words per minute on an electric typewriter and their error 
rate is 12 or more errors per 5 minute typing period on representative 
business correspondence.
    (48) ``Ushers (Recreation and Amusement)'' assist patrons at 
entertainment events to find seats, search for lost articles, and locate 
facilities.
    (49) Yard Workers maintain the grounds of private residences in good 
order by performing such tasks as mowing and watering lawns, planting 
flowers and shrubs, and repairing and painting fences. They work on the 
instructions of private employers.
    (c) Requests for waivers from Schedule B. Any employer who desires a 
labor certification involving a Schedule B occupation may request such a 
waiver by submitting a written request along with the Application for 
Alien Employment Certification form at the appropriate local employment 
service office pursuant to Sec. 656.23.
    (d) The Administrator may revise Schedule B from time to time on the 
Administrator's own initiative, upon the request of a Regional 
Administrator, Employment and Training Administration, or upon the 
written request of any other person which sets forth reasonable grounds 
therefor. Such requests should be mailed to the Administrator, United 
States Employment Service, room 8000, Patrick Henry Building, 601 D 
Street, NW., Washington, DC 20213.
[45 FR 83933, Dec. 19, 1980, as amended at 56 FR 54927, Oct. 23, 1991]



                 Subpart C--Labor Certification Process



Sec. 656.20  General filing instructions.

    (a) A request for a labor certification on behalf of any alien who 
is required by the Act to become a beneficiary of a labor certification 
in order to obtain permanent resident status in the United States may be 
filed as follows:
    (1) Except as provided in paragraphs (a)(2) through (4) of this 
section, an application for a labor certification shall be filed 
pursuant to this section and Sec. 656.21.
    (2) An employer seeking a labor certification for an occupation 
designated

[[Page 609]]

for special handling shall apply for a labor certification pursuant to 
this section and Sec. 656.21a.
    (3) An alien seeking labor certification for an occupation listed on 
Schedule A may apply for a labor certification pursuant to this section 
and Sec. 656.22.
    (4) An employer seeking a labor certification for an occupation 
listed on Schedule B shall apply for a waiver and a labor certification 
pursuant to this section and Secs. 656.21 and 656.23.
    (b) (1) Aliens and employers may have agents represent them 
throughout the labor certification process. If an alien and/or an 
employer intends to be represented by an agent, the alien and/or the 
employer shall sign the statement set forth on the Application for Alien 
Employment Certification form: That the agent is representing the alien 
and/or employer and that the alien and/or employer takes full 
responsibility for the accuracy of any representations made by the 
agent.
    (2) Aliens and employers may have attorneys represent them. Each 
attorney shall file a notice of appearance on Immigration and 
Naturalization Service (INS) Form G-28, naming the attorney's client or 
clients. Whenever, under this part, any notice or other document is 
required to be sent to an employer or alien, the document shall be sent 
to their attorney or attorneys who have filed notices of appearance on 
INS Form G-28, if they have such an attorney or attorneys.
    (3) (i) It is contrary to the best interests of U.S. workers to have 
the alien and/or agents or attorneys for the alien participate in 
interviewing or considering U.S. workers for the job offered the alien. 
As the beneficiary of a labor certification application, the alien 
cannot represent the best interests of U.S. workers in the job 
opportunity. The alien's agent and/or attorney cannot represent the 
alien effectively and at the same time truly be seeking U.S. workers for 
the job opportunity. Therefore, the alien and/or the alien's agent and/
or attorney may not interview or consider U.S. workers for the job 
offered to the alien, unless the agent and/or attorney is the employer's 
representative as described in paragraph (b)(3)(ii) of this section.
    (ii) The employer's representative who interviews or considers U.S. 
workers for the job offered to the alien shall be the person who 
normally interviews or considers, on behalf of the employer, applicants 
for job opportunities such as that offered the alien, but which do not 
involve labor certifications.
    (4) No person under suspension or disbarment from practice before 
the United States Department of Justice's Board of Immigration Appeals 
pursuant to 8 CFR 292.3 shall be permitted to act as an agent, 
representative, or attorney for an employer and/or alien under this 
part.
    (c) Job offers filed on behalf of aliens on the Application for 
Alien Employment Certification form must clearly show that:
    (1) The employer has enough funds available to pay the wage or 
salary offered the alien;
    (2) The wage offered equals or exceeds the prevailing wage 
determined pursuant to Sec. 656.40, and the wage the employer will pay 
to the alien when the alien begins work will equal or exceed the 
prevailing wage which is applicable at the time the alien begins work;
    (3) The wage offered is not based on commissions, bonuses or other 
incentives, unless the employer guarantees a wage paid on a weekly, bi-
weekly, or monthly basis;
    (4) The employer will be able to place the alien on the payroll on 
or before the date of the alien's proposed entrance into the United 
States;
    (5) The job opportunity does not involve unlawful discrimination by 
race, creed, color, national origin, age, sex, religion, handicap, or 
citizenship;
    (6) The employer's job opportunity is not:
    (i) Vacant because the former occupant is on strike or is being 
locked out in the course of a labor dispute involving a work stoppage; 
or
    (ii) At issue in a labor dispute involving a work stoppage;
    (7) The employer's job opportunity's terms, conditions and 
occupational environment are not contrary to Federal, State or local 
law; and
    (8) The job opportunity has been and is clearly open to any 
qualified U.S. worker.

[[Page 610]]

    (9) The conditions of employment listed in paragraphs (c) (1) 
through (8) of this section shall be sworn (or affirmed) to, under 
penalty of perjury pursuant to 28 U.S.C. 1746, on the Application for 
Alien Employment Certification form.
    (d) If the application involves labor certification as a physician 
(or surgeon) (except a physician (or surgeon) of international renown), 
the labor certification application shall include the following 
documentation:
    (1) (i) Documentation which shows clearly that the alien has passed 
parts I and II of the National Board of Medical Examiners Examination 
(NBMEE), or the Foreign Medical Graduate Examination in the Medical 
Sciences (FMGEMS) offered by the Educational Commission for Foreign 
Medical Graduates (ECFMG); or
    (ii) Documentation which shows clearly that:
    (A) The alien was on January 9, 1978, a doctor of medicine fully and 
permanently licensed to practice medicine in a State within the United 
States;
    (B) The alien was on January 9, 1978, practicing medicine in a State 
within the United States; or
    (iii) The alien is a graduate of a school of medicine accredited by 
a body or bodies approved for the purpose by the Secretary of Education 
or that Secretary's designee (regardless of whether such school of 
medicine is in the United States).
    (e) Whenever any document is submitted to a State or Federal agency 
pursuant to this part, the document either shall be in the English 
language or shall be accompanied by a written translation into the 
English language, certified by the translator as to the accuracy of the 
translation and his/her competency to translate.
    (f) The forms required under this part for applications for labor 
certification are available at U.S. Consular offices abroad, at INS 
offices in the United States, and at local offices of the State; job 
service agencies. The forms will contain instructions on how to comply 
with the documentation requirements for applying for a labor 
certification under this part.
    (g)(1) In applications filed under Secs. 656.21 (Basic Process), 
656.21a (Special Handling) and 656.22 (Schedule A), the employer shall 
document that notice of the filing of the Application for Alien 
Employment Certification was provided:
    (i) To the bargaining representative(s) (if any) of the employer's 
employees in the occupational classification for which certification of 
the job opportunity is sought in the employer's location(s) in the area 
of intended employment.
    (ii) If there is no such bargaining representative, by posted notice 
to the employer's employees at the facility or location of the 
employment. The notice shall be posted for at least 10 consecutive days. 
The notice shall be clearly visible and unobstructed while posted and 
shall be posted in conspicuous places, where the employer's U.S. workers 
can readily read the posted notice on their way to or from their place 
of employment. Appropriate locations for posting notices of the job 
opportunity include, but are not limited to, locations in the immediate 
vicinity of the wage and hour notices required by 20 CFR 516.4 or 
occupational safety and health notices required by 20 CFR 1903.2(a).
    (2) In the case of a private household, notice is required under 
this paragraph (g) only if the household employs one or more U.S. 
workers at the time the application for labor certification is filed 
with a local Employment Service office.
    (3) Any notice of the filing of an Application for Alien Employment 
Certification shall:
    (i) state that applicants should report to the employer, not to the 
local Employment Service office;
    (ii) State that the notice is being provided as a result of the 
filing of an application for permanent alien labor certification for the 
relevant job opportunity; and
    (iii) State that any person may provide documentary evidence bearing 
on the application to the local Employment Service Office and/or the 
regional Certifying Officer of the Department of Labor.
    (4) If an application is filed under Sec. 656.21 and does not 
involve a request for reduction in recruitment, the notice shall be 
provided in conjunction

[[Page 611]]

with the recruitment required under Sec. 656.21(f) of this part, shall 
contain the information required for advertisements by Secs. 656.21 
(g)(3) through (g)(8), and shall contain the information required by 
paragraph (g)(3) of this section.
    (5) If an application is filed under the reduction in recruitment 
provisions at Sec. 656.21(i) of this part, the notice does not have to 
be posted in conjunction with the recruitment required under 
Sec. 656.21(f) of this part, but shall include the information required 
for advertisements by Secs. 656.21 (g)(3) through (g)(8), and the 
requirements of paragraph (g)(3) of this section;
    (6) If an application is filed on behalf of a college and university 
teacher pursuant to Sec. 656.21a(a)(1)(iii) of this part, the notice 
shall include the information required for advertisements by 
Sec. 656.21a(a)(1)(iii)(B), and the requirements of paragraph (g)(3) of 
this section.
    (7) If an application is filed on behalf of an alien represented to 
be of exceptional ability in the performing arts, the notice required by 
this paragraph (g) shall include the information required for 
advertisements by Secs. 656.21a(a)(iv)(B) (1) through (7) of this part, 
and the requirements of paragraph (g)(3) of this section.
    (8) If an application is filed under the Schedule A procedures at 
Sec. 656.22 of this part, the notice shall contain a description of the 
job and rate of pay, and the requirements of paragraphs (g)(3) (ii) and 
(iii) of this section.
    (h)(1)(i) Any person may submit to the local Employment Service 
office or to the Certifying Officer documentary evidence bearing on an 
application for permanent alien labor certification filed under the 
basic labor certification process at Sec. 656.21 of this part or under 
the special handling procedures at Sec. 656.21a of this part.
    (ii) Documentary evidence submitted pursuant to paragraph (h)(1)(i) 
of this section may include information on available workers, 
information on wages and working conditions, and information on the 
employer's failure to meet terms and conditions with respect to the 
employment of alien workers and co-workers. The Certifying Officer shall 
consider this information in making his or her determination.
    (2)(ii) Any person may submit to the appropriate INS office 
documentary evidence of fraud or willful misrepresentation in a Schedule 
A application filed under Sec. 656.22 of this part or a sheepherder 
application filed under Sec. 656.21a(b) of this part.
    (B) Documentary evidence submitted pursuant to paragraph (h)(2)(i) 
of this section shall be limited to information relating to possible 
fraud or willful misrepresentation. The INS may consider this 
information pursuant to Sec. 656.31 of this part.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[45 FR 83933, Dec. 19, 1980, as amended at 49 FR 18295, Apr. 30, 1984; 
56 FR 54927, Oct. 23, 1991]



Sec. 656.21  Basic labor certification process.

    (a) Except as otherwise provided by Secs. 656.21a and 656.22, an 
employer who desires to apply for a labor certification on behalf of an 
alien shall file, signed by hand and in duplicate, a Department of Labor 
Application for Alien Employment Certification form and any attachments 
required by this part with the local Employment Service office serving 
the area where the alien proposes to be employed. The employer shall set 
forth on the Application for Alien Employment Certification form, as 
appropriate, or in attachments:
    (1) A statement of the qualifications of the alien, signed by the 
alien;
    (2) A description of the job offer for the alien employment, 
including the items required by paragraph (b) of this section; and
    (3) If the application involves a job offer as a live-in household 
domestic service worker:
    (i) A statement describing the household living accommodations;
    (ii) Two copies of the employment contract, each signed and dated by 
both the employer and the alien (not by their agents). The contract 
shall clearly state:
    (A) The wages to be paid on an hourly and weekly basis;

[[Page 612]]

    (B) Total hours of employment per week, and exact hours of daily 
employment;
    (C) That the alien is free to leave the employer's premises during 
all non-work hours except that the alien may work overtime if paid for 
the overtime at no less than the legally required hourly rate;
    (D) That the alien will reside on the employer's premises;
    (E) Complete details of the duties to be performed by the alien;
    (F) The total amount of any money to be advanced by the employer 
with details of specific items, and the terms of repayment by the alien 
of any such advance by the employer;
    (G) That in no event shall the alien be required to give more than 
two weeks' notice of intent to leave the employment contracted for and 
that the employer must give the alien at least two weeks' notice before 
terminating employment;
    (H) That a duplicate contract has been furnished to the alien;
    (I) That a private room and board will be provided at no cost to the 
worker; and
    (J) Any other agreement or conditions not specified on the 
Application for Alien Employment Certification form; and
    (iii) (A) Documentation of the alien's paid experience in the form 
of statements from past or present employers setting forth the dates 
(month and year) employment started and ended, hours of work per day, 
number of days worked per week, place where the alien worked, detailed 
statement of duties performed on the job, equipment and appliances used, 
and the amount of wages paid per week or month. The total paid 
experience must be equal to one full year's employment on a full-time 
basis. For example, two year's experience working half-days is the 
equivalent of one year's full time experience. Time spent in a household 
domestic service training course cannot be included in the required one 
year of paid experience.
    (B) Each statement must contain the name and address of the person 
who signed it and show the date on which the statement was signed. A 
statement not in the English language shall be accompanied by a written 
translation into the English language certified by the translator as to 
the accuracy of the translation, and as to the translator's competency 
to translate.
    (b) Except for labor certification applications involving 
occupations designated for special handling (see Sec. 656.21a) and 
Schedule A occupations (see Secs. 656.10 and 656.22), the employer shall 
submit, as a part of every labor certification application, on the 
Application for Alien Employment Certification form or in attachments, 
as appropriate, the following clear documentation:
    (1) If the employer has attempted to recruit U.S. workers prior to 
filing the application for certification, the employer shall document 
the employer's reasonable good faith efforts to recruit U.S. workers 
without success through the Employment Service System and/or through 
other labor referral and recruitment sources normal to the occupation:
    (i) this documentation shall include documentation of the employer's 
recruitment efforts for the job opportunity which shall:
    (A) List the sources the employer may have used for recruitment, 
including, but not limited to, advertising; public and/or private 
employment agencies; colleges or universities; vocational, trade, or 
technical schools; labor unions; and/or development or promotion from 
within the employer's organization;
    (B) Identify each recruitment source by name;
    (C) Give the number of U.S. workers responding to the employer's 
recruitment;
    (D) Give the number of interviews conducted with U.S. workers;
    (E) Specify the lawful job-related reasons for not hiring each U.S. 
worker interviewed; and
    (F) Specify the wages and working conditions offered to the U.S. 
workers; and
    (ii) If the employer advertised the job opportunity prior to filing 
the application for certification, the employer shall include also a 
copy of at least one such advertisement.
    (2) The employer shall document that the job opportunity has been 
and is

[[Page 613]]

being described without unduly restrictive job requirements:
    (i) The job opportunity's requirements, unless adequately documented 
as arising from business necessity:
    (A) Shall be those normally required for the job in the United 
States;
    (B) Shall be those defined for the job in the Dictionary of 
Occupational Titles (D.O.T.) including those for subclasses of jobs;
    (C) Shall not include requirements for a language other than 
English.
    (ii) If the job opportunity involves a combination of duties, for 
example engineer-pilot, the employer must document that it has normally 
employed persons for that combination of duties and/or workers 
customarily perform the combination of duties in the area of intended 
employment, and or the combination job opportunity is based on a 
business necessity.
    (iii) If the job opportunity involves a requirement that the worker 
live on the employer's premises, the employer shall document adequately 
that the requirement is a business necessity.
    (iv) If the job opportunity has been or is being described with an 
employer preference, the employer preference shall be deemed to be a job 
requirement for purposes of this paragraph (b)(2).
    (3) The employer shall document that its other efforts to locate and 
employ U.S. workers for the job opportunity, such as recruitment efforts 
by means of private employment agencies, labor unions, advertisements 
placed with radio or TV stations, recruitment at trade schools, 
colleges, and universities or attempts to fill the job opportunity by 
development or promotion from among its present employees, have been and 
continue to be unsuccessful. Such efforts may be required after the 
filing of an application if appropriate to the occupation.
    (4) If unions are customarily used as a recruitment source in the 
area or industry, the employer shall document that they were unable to 
refer U.S. workers.
    (5) The employer shall document that its requirements for the job 
opportunity, as described, represent the employer's actual minimum 
requirements for the job opportunity, and the employer has not hired 
workers with less training or experience for jobs similar to that 
involved in the job opportunity or that it is not feasible to hire 
workers with less training or experience than that required by the 
employer's job offer.
    (6) If U.S. workers have applied for the job opportunity, the 
employer shall document that they were rejected solely for lawful job-
related reasons.
    (c) The local office shall determine if the application is for a 
labor certification involving Schedule A. If the application is for a 
Schedule A labor certification, the local office shall advise the 
employer that the forms must be filed with an INS or Consular Office 
pursuant to Sec. 656.22, and shall explain that the Administrator has 
determined that U.S. workers in the occupation are unavailable 
throughout the United States (unless a geographic limitation is 
applicable) and that the employment of the alien in the occupation will 
not adversely affect U.S. workers similarly employed.
    (d) The local office shall date stamp the application (see 
Sec. 656.30 for the significance of this date), and shall make sure that 
the Application for Alien Employment Certification form is complete. If 
it is not complete the local office shall return it to the employer and 
shall advise the employer to refile it when it is completed.
    (e) The local office shall calculate, to the extent of its expertise 
using wage information available to it, the prevailing wage for the job 
opportunity pursuant to Sec. 656.40 and shall put its finding into 
writing. If the local office finds that the rate of wages offered is 
below the prevailing wage, it shall advise the employer in writing to 
increase the amount offered. If the employer refuses to do so, the local 
office shall advise the employer that the refusal is a ground for denial 
of the application by the Certifying Officer; and that if the denial 
becomes final, the application will have to be refiled at the local 
office as a new application.
    (f) The local office, using the information on job offer portion of 
the Application for Alien Employment Certification form, shall prepare 
and process an Employment Service job order:

[[Page 614]]

    (1) If the job offer is acceptable, the local office, in cooperation 
with the employer, then shall attempt to recruit United States workers 
for the job opportunity for a period of thirty days, by placing the job 
order into the regular Employment Service recruitment system.
    (2) If the employer's job offer is discriminatory or otherwise 
unacceptable as a job order under the Employment Service (ES) 
Regulations (parts 651-658 of this chapter), the local office, as 
appropriate, either shall contact the employer to try to remedy the 
defect or shall return the Application for Alien Employment 
Certification form to the employer with instructions on how to remedy 
the defect. If the employer refuses to remedy the defect, the local 
office shall advise the employer that it is unable to recruit U.S. 
workers for the job opportunity and that the application will be 
transmitted to the Certifying Officer for determination.
    (g) In conjunction with the recruitment efforts under paragraph (f) 
of this section, the employer shall place an advertisement for the job 
opportunity in a newspaper of general circulation or in a professional, 
trade, or ethnic publication, whichever is appropriate to the occupation 
and most likely to bring responses from able, willing, qualified, and 
available U.S. workers. The employer may request the local office's 
assistance in drafting the text. The advertisement shall:
    (1) Direct applicants to report or send resumes, as appropriate for 
the occupation to the local office for referral to the employer;
    (2) Include a local office identification number and the complete 
address or telephone number of the local office, but shall not identify 
the employer;
    (3) Describe the job opportunity with particularity;
    (4) State the rate of pay, which shall not be below the prevailing 
wage for the occupation, as calculated pursuant to Sec. 656.40;
    (5) Offer prevailing working conditions;
    (6) State the employer's minimum job requirements;
    (7) Offer training if the job opportunity is the type for which 
employers normally provide training;
    (8) Offer wages, terms, and conditions of employment which are no 
less favorable than those offered to the alien; and
    (9) If published in a newspaper of general circulation, be published 
for at least three consecutive days; or, if published in a professional, 
trade, or ethnic publication, be published in the next published 
edition.
    (h) The employer shall supply the local office with required 
documentation or requested information in a timely manner. If 
documentation or requested information is not received within 45 
calendar days of the date of the request the local office shall return 
the Application for Alien Employment Certification form, and any 
supporting documents submitted by the employer and/or the alien, to the 
employer to be filed as a new application.
    (i) The Certifying Officer may reduce the employer's recruitment 
efforts required by Secs. 656.21(f) and/or 656.21(g) of this part if the 
employer satisfactorily documents that the employer has adequately 
tested the labor market with no success at least at the prevailing wage 
and working conditions; but no such reduction may be granted for job 
offers involving occupations listed on Schedule B.
    (1) To request a reduction of recruitment efforts pursuant to this 
paragraph (i), the employer shall file a written request along with the 
Application for Alien Employment Certification form at the appropriate 
local Job Service office. The request shall contain:
    (i) Documentary evidence (which shall include, but is not limited 
to, a pre-application notice posted consistent with Sec. 656.20(g) of 
this part) that within the immediately preceding six months the employer 
has made good faith efforts to recruit U.S. workers for the job 
opportunity, at least at the prevailing wage and working conditions, 
through sources normal to the occupation; and
    (ii) Any other information which the employer believes will support 
the contention that further recruitment will be unsuccessful.
    (2) Upon receipt of a written request for a reduction in recruitment 
efforts pursuant to this paragraph (i), the

[[Page 615]]

local office shall date stamp the request and the application form and 
shall review and process the application pursuant to this Sec. 656.21, 
but without regard to Secs. 656.21(f), 656.21(g), and 656.21(j)(1) of 
this part, advertisement, and job order; and the wait for results).
    (3) After reviewing and processing the application pursuant to 
paragraph (i)(2) of this section, the local office (and the State 
Employment Service office) shall process the application pursuant to 
paragraphs (j)(2) and (k) of this section.
    (4) The Certifying Officer shall review the documentation submitted 
by the employer and the comments of the local office. The Certifying 
Officer shall notify the employer and the local (or State) Employment 
Service office of the Certifying Officer's decision on the request to 
reduce partially or completely the recruitment efforts required of the 
employer.
    (5) Unless the Certifying Officer decides to reduce completely the 
recruitment efforts required of the employer, the Certifying Officer 
shall return the application to the local (or State) office so that the 
employer might recruit workers to the extent required in the Certifying 
Officer's decision, and in the manner required by Secs. 656.20(g), 
656.21(f), 656.21(g), and 656.21 (j) of this part (i.e., by post-
application internal notice, employment service job order, and 
advertising; and a wait for results). If the Certifying Officer decides 
to reduce completely the recruitment efforts required of the employer, 
the Certifying Officer then shall determine, pursuant to Sec. 656.24 
whether to grant or to deny the application.
    (j) (1) The employer shall provide to the local office a written 
report of the results of all the employer's post-application recruitment 
efforts during the 30-day recruitment period; except that for job 
opportunities advertised in professional and trade, or ethnic 
publications, the written report shall be provided no less than 30 
calendar days from the date of the publication of the employer's 
advertisement. The report of recruitment results shall:
    (i) Identify each recruitment source by name;
    (ii) State the number of U.S. workers responding to the employer's 
recruitment;
    (iii) State the names, addresses, and provide resumes (if any) of 
the U.S. workers interviewed for the job opportunity and job title of 
the person who interviewed each worker; and
    (iv) Explain, with specificity, the lawful job-related reasons for 
not hiring each U.S. worker interviewed.
    (2) If, after the required recruitment period, the recruitment is 
not successful, the local office shall send the application, its 
prevailing wage finding, copies of all documents in the particular 
application file, and any additional appropriate information (such as 
local labor market data), to the Employment Service agency's State 
office or, if authorized, to the regional Certifying Officer.
    (k) A Employment Service agency's State office which receives an 
application pursuant to paragraph (j)(2) of this section may add 
appropriate data or comments, and shall transmit the application 
promptly to the appropriate Certifying Officer.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[45 FR 83933, Dec. 19, 1980, as amended at 46 FR 3830, Jan. 16, 1981; 49 
FR 18295, Apr. 30, 1984; 56 FR 54928, Oct. 23, 1991]



Sec. 656.21a  Applications for labor certifications for occupations designated for special handling.

    (a) An employer shall apply for a labor certification to employ an 
alien as a college or university teacher or an alien represented to be 
of exceptional ability in the performing arts by filing, in duplicate, 
an Application for Alien Employment Certification form, and any 
attachments required by this part, with the local Employment Service 
office serving the area where the alien proposes to be employed.
    (1) The employer shall set forth the following on the Application 
for Alien Employment Certification form, as appropriate, or in 
attachments:
    (i) A statement of the qualifications of the alien, signed by the 
alien.
    (ii) A full description of the job offer for the alien employment.

[[Page 616]]

    (iii) If the application involves a job offer as a college or 
university teacher, the employer shall submit documentation to show 
clearly that the employer selected the alien for the job opportunity 
pursuant to a competitive recruitment and selection process, through 
which the alien was found to be more qualified than any of the United 
States workers who applied for the job. For purposes of this paragraph 
(a)(1)(iii), evidence of the ``competitive recruitment and selection 
process'' shall include:
    (A) A statement, signed by an official who has actual hiring 
authority, from the employer outlining in detail the complete 
recruitment procedure undertaken; and which shall set forth:
    (1) The total number of applicants for the job opportunity;
    (2) The specific lawful job-related reasons why the alien is more 
qualified than each U.S. worker who applied for the job; and
    (3) A final report of the faculty, student, and/or administrative 
body making the recommendation or selection of the alien, at the 
completion of the competitive recruitment and selection process;
    (B) A copy of at least one advertisement for the job opportunity 
placed in a national professional journal, giving the name and the 
date(s) of publication; and which states the job title, duties, and 
requirements;
    (C) Evidence of all other recruitment sources utilized; and
    (D) A written statement attesting to the degree of the alien's 
educational or professional qualifications and academic achievements.
    (E) Applications for permanent alien labor certification for job 
opportunities as college and university teachers shall be filed within 
18 months after a selection is made pursuant to a competitive 
recruitment and selection process.
    (iv) If the application is for an alien represented to have 
exceptional ability in the performing arts, the employer shall document 
that the alien's work experience during the past twelve months did 
require, and the alien's intended work in the United States will 
require, exceptional ability; and shall submit:
    (A) Documentation to show this exceptional ability, such as:
    (1) Documents attesting to the current widespread acclaim and 
international recognition accorded to the alien, and receipt of 
internationally recognized prizes or awards for excellence;
    (2) Published material by or about the alien, such as critical 
reviews or articles in major newspapers, periodicals, and/or trade 
journals (the title, date, and author of such material shall be 
indicated);
    (3) Documentary evidence of earnings commensurate with the claimed 
level of ability;
    (4) Playbills and starbillings;
    (5) Documents attesting to the outstanding reputation of theaters, 
concert halls, night clubs, and other establishments in which the alien 
has appeared, or is scheduled to appear; and/or
    (6) Documents attesting to the outstanding reputation of repertory 
companies, ballet troupes, orchestras, or other organizations in which 
or with which the alien has performed during the past year in a leading 
or starring capacity; and
    (B) A copy of at least one advertisement placed in a national 
publication appropriate to the occupation (and a statement of the 
results of that recruitment) which shall:
    (1) Identify the employer's name, address, and the location of the 
employment, if other than the employer's location;
    (2) Describe the job opportunity with particularity;
    (3) State the rate of pay, which shall not be below the prevailing 
wage for the occupation, as calculated pursuant to Sec. 656.40;
    (4) Offer prevailing working conditions;
    (5) State the employer's minimum job requirements;
    (6) Offer training if the job opportunity is the type for which 
employers normally provide training; and
    (7) Offer wages, terms, and conditions of employment which are no 
less favorable than those offered to the alien; and
    (C) Documentation that unions, if customarily used as a recruitment

[[Page 617]]

source in the area or industry, were unable to refer equally qualified 
U.S. workers.
    (2) The local Employment Service office, upon receipt of an 
application for a college or university teacher or an alien represented 
to have exceptional ability in the performing arts, shall follow the 
application processing and prevailing wage determination procedures set 
forth in Secs. 656.21 (d) and (e), and shall transmit a file containing 
the application, the local office's prevailing wage findings, and any 
other information it determines is appropriate, to the State Employment 
Service agency office, or if authorized by the State office, to the 
appropriate Certifying Officer.
    (3) If the local office transmits the file described in paragraph 
(a)(3) of this section to the State office, the State office shall 
follow the procedures set forth at Sec. 656.21(k).
    (b) (1) An employer shall apply for a labor certification to employ 
an alien (who has been employed legally as a nonimmigrant sheepherder in 
the United States for at least 33 of the preceding 36 months) as a 
sheepherder by filing an Application for Alien Employment Certification 
form, and any attachments required by this paragraph (b), directly with 
a Department of State Consular Officer or with a District Office of INS, 
not with a local or State office of a State Employment Service agency, 
and not with an office of DOL. The documentation for such an application 
shall include:
    (i) A completed Application for Alien Employment Certification form, 
including the Job Offer for Alien Employment, and the Statement of 
Qualification of Alien; and
    (ii) A signed letter or letters from all U.S. employers who have 
employed the alien as a sheepherder during the immediately preceding 36 
months, attesting that the alien has been employed in the United States 
lawfully and continuously as a sheepherder, for at least 33 of the 
immediately preceding 36 months.
    (2) An Immigration Officer, or a Consular Officer, shall review the 
application and the letters attesting to the alien's previous employment 
as a sheepherder in the United States, and shall determine whether or 
not the alien and the employer(s) have met the requirements of this 
paragraph (b).
    (i) The determination of the Immigration or Consular Officer 
pursuant to this paragraph (b) shall be conclusive and final. The 
employer(s) and the alien, therefore, may not make use of the review 
procedures set forth at Secs. 656.26 and 656.27.
    (ii) If the alien and the employer(s) have met the requirements of 
this paragraph (b), the Immigration or Consular Officer shall indicate 
on the Application for Alien Employment Certification form the 
occupation, the immigration or consular office which made the 
determination pursuant to this paragraph (b), and the date of the 
determination (see Sec. 656.30 of this part for the significance of this 
date). The Immigration or Consular Officer then shall forward promptly 
to the Director copies of the Application for Alien Employment 
Certification form, without the attachments.
    (c) If an application for a college or university teacher, an alien 
represented to be of exceptional ability in the performing arts, or a 
sheepherder does not meet the requirements for an occupation designated 
for special handling under this section, the application may be filed 
pursuant to Sec. 656.21.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[45 FR 83933, Dec. 19, 1980, as amended at 49 FR 18295, Apr. 30, 1984; 
56 FR 54928, Oct. 23, 1991]



Sec. 656.22  Applications for labor certification for Schedule A occupations.

    (a) An employer shall apply for a labor certification for a Schedule 
A occupation by filing an Application for Alien Employment Certification 
in duplicate with the appropriate Immigration and Naturalization Service 
office, not with the Department of Labor or a State Employment Service 
office.
    (b) The Application for Alien Employment Certification form shall 
include:
    (1) Evidence of prearranged employment for the alien beneficiary by 
having an employer complete and sign the job offer description portion 
of the application form. There is, however, no

[[Page 618]]

need for the employer to provide the other documentation required under 
Sec. 656.21 of this part for non-Schedule A occupations.
    (2) Evidence that notice of filing the application for Alien 
Employment Certification was provided to the bargaining representative 
or the employer's employees as prescribed in Sec. 656.20(g)(3) of this 
part.
    (c) An employer seeking labor certification under Group I of 
Schedule A shall file, as part of its labor certification application, 
documentary evidence of the following:
    (1) An employer seeking Schedule A labor certification for an alien 
to be employed as a physical therapist (Sec. 656.10(a)(1) of this part) 
shall file as part of its labor certification application a letter or 
statement signed by an authorized State physical therapy licensing 
official in the State of intended employment, stating that the alien is 
qualified to take that State's written licensing examination for 
physical therapists. Application for certification of permanent 
employment as a physical therapist may be made only pursuant to this 
Sec. 656.22 and not pursuant to Secs. 656.21, 656.21a, or 656.23 of this 
part.
    (2) An employer seeking a Schedule A labor certification as a 
professional nurse (Sec. 656.10(a)(2) of this part) shall file, as part 
of its labor certification application, documentation that the alien has 
passed the Commission on Graduates of Foreign Nursing Schools (CGFN) 
Examination; or that the alien holds a full and unrestricted (permanent) 
license to practice nursing in the State of intended employment. 
Application for certification of employment as a professional nurse may 
be made only pursuant to this Sec. 656.22(c), and not pursuant to 
Secs. 656.21, 656.21a, or 656.23 of this part.
    (d) An employer seeking labor certification on behalf of an alien 
under Group II of Schedule A shall file, as part of its labor 
certification application, documentary evidence testifying to the 
widespread acclaim and international recognition accorded the alien by 
recognized experts in their field; and documentation showing that the 
alien's work in that field during the past year did, and the alien's 
intended work in the United States will, require exceptional ability. In 
addition, the employer shall file, as part of the labor certification 
application, documentation concerning the alien from at least two of the 
following seven groups:
    (1) Documentation of the alien's receipt of internationally 
recognized prizes or awards for excellence in the field for which 
certification is sought.
    (2) Documentation of the alien's membership in international 
associations, in the field for which certification is sought, which 
require outstanding achievement of their members, as judged by 
recognized international experts in their disciplines or fields.
    (3) Published material in professional publications about the alien, 
relating to the alien's work in the field for which certification is 
sought, which shall include the title, date, and author of such 
published material.
    (4) Evidence of the alien's participation on a panel, or 
individually, as a judge of the work of others in the same or in an 
allied field of specialization to that for which certification is 
sought.
    (5) Evidence of the alien's original scientific or scholarly 
research contributions of major significance in the field for which 
certification is sought.
    (6) Evidence of the alien's authorship of published scientific or 
scholarly articles in the field for which certification is sought, in 
international professional journals or professional journals with an 
international circulation.
    (7) Evidence of the display of the alien's work, in the field for 
which certification is sought, at artistic exhibitions in more than one 
country.
    (e) An Immigration Officer shall determine whether the employer and 
alien have met the applicable requirements of Sec. 656.20 of this part, 
of this section, and of Schedule A (Sec. 656.10 of this part); shall 
review the application; and shall determine whether or not the alien is 
qualified for and intends to pursue the Schedule A occupation.
    (1) The Immigration Officer may request an advisory opinion as to 
whether the alien is qualified for the Schedule A occupation from the 
Division of Foreign Labor Certifications, United States Employment 
Service, Washington, DC 20210.

[[Page 619]]

    (2) The Schedule A determination of INS shall be conclusive and 
final. The employer, therefore, may not make use of the review 
procedures at Sec. 656.26 of this part.
    (f) If the alien qualifies for the occupation, the Immigration 
Officer shall indicate the occupation on the Application for Alien 
Employment Certification form. The Immigration Officer then shall 
promptly forward a copy of the Application for Alien Employment 
Certification form, without attachments, to the Director, indicating 
thereon the occupation, the Immigration Officer who made the Schedule A 
determination, and the date of the determination (see Sec. 656.30 of 
this part for the significance of this date).
[56 FR 54929, Oct 23, 1991]



Sec. 656.23  Applications for labor certifications for Schedule B occupations; requests for waivers from Schedule B.

    (a) Occupations listed on Schedule B require little or no education 
or experience, and employees can be trained quickly to perform them 
satisfactorily. In addition, many of these occupations are entry jobs in 
their industries which offer opportunities for high school graduates and 
other U.S. workers who otherwise would have difficulty finding their 
first employment and gaining work experience. The Director has 
determined that there is generally a nationwide surplus of U.S. workers 
who are available for and who can qualify for Schedule B job 
opportunities which offer prevailing wages and working conditions.
    (b) Some of the occupations on Schedule B are also often 
characterized by relatively low wages, long and irregular working hours, 
and poor working conditions which lead to excessive turnover. In most 
instances, the Director has determined through past experience that the 
employment of aliens has failed to resolve such employment problems 
since the aliens, like U.S. workers, often quickly move to other jobs. 
This results in an adverse effect upon the wages and working conditions 
of U.S. workers who are employed in occupations which require similar 
education and experience.
    (c) Therefore, the Director has determined that for occupations 
listed on Schedule B U.S. workers are generally available throughout the 
United States, and that the employment of aliens in Schedule B 
occupations will generally adversely affect the wages and working 
conditions of U.S. workers similarly employed.
    (d) An individual employer or the employer's attorney or agent may 
petition the regional Certifying Officer for the geographic area in 
which the job opportunity is located for a Schedule B waiver on behalf 
of an alien with respect to a specific job opportunity. The petition 
shall be submitted to the local office serving the geographic area of 
intended employment. The petition shall include a written request for a 
Schedule B waiver, a completed Application for Alien Employment 
Certification form, and the following:
    (1) The documentation required by Secs. 656.20(b), (c), (e), (f), 
and (g) and 656.21; and
    (2) Documentary verification, which the employer has obtained from 
the local job service office which contains the job opportunity in its 
administrative area, that the employer has had a job order for the same 
job on file with the same local office for a period of 30 calendar days 
and that the local office and the employer, using the job order, were 
not able to obtain a qualified U.S. worker.
    (e) The regional Certifying Officer, using the procedures and 
standards set forth in Sec. 656.24, shall either grant or deny the 
waiver and shall inform the employer of the determination in writing.
    (f) If the waiver is granted, the regional Certifying Officer shall 
issue a labor certification.
    (g) If the waiver is denied, the regional Certifying Officer shall 
follow the procedures set forth at paragraphs (c) through (g) of 
Sec. 656.25.

(Approved by the Office of Management and Budget under control number 
1205-0015)

[45 FR 83933, Dec. 19, 1980, as amended at 49 FR 18295, Apr. 30, 1984; 
56 FR 54929, Oct. 23, 1991]

[[Page 620]]



Sec. 656.24  Labor certification determinations.

    (a) If the labor certification presents a special or unique problem, 
the regional Certifying Officer may refer the application to the 
national Certifying Officer for determination. If the Director has 
directed that certain types of applications or specific applications be 
handled in the USES national office, the regional Certifying Officer 
shall refer such applications to the national Certifying Officer.
    (b) The regional or national Certifying Officer, as appropriate, 
shall make a determination either to grant the labor certification or to 
issue a Notice of Findings on the basis of whether or not:
    (1) The employer has met the requirements of this part. However, 
where the Certifying Officer determines that the employer has committed 
harmless error, the Certifying Officer nevertheless may grant the labor 
certification, Provided, That the labor market has been tested 
sufficiently to warrant a finding of unavailability of and lack of 
adverse effect on U.S. workers. Where the Certifying Officer makes such 
a determination, the Certifying Officer shall document it in the 
application file.
    (2) There is in the United States a worker who is able, willing, 
qualified and available for and at the place of the job opportunity 
according to the following standards:
    (i) The Certifying Officer, in judging whether a U.S. worker is 
willing to take the job opportunity, shall look at the documented 
results of the employer's and the Local (and State) Employment Service 
office's recruitment efforts, and shall determine if there are other 
appropriate sources of workers where the employer should have recruited 
or might be able to recruit U.S. workers.
    (ii) The Certifying Officer shall consider a U.S. worker able and 
qualified for the job opportunity if the worker, by education, training, 
experience, or a combination thereof, is able to perform in the normally 
accepted manner the duties involved in the occupation as customarily 
performed by other U.S. workers similarly employed, except that, if the 
application involves a job opportunity as a college or university 
teacher, or for an alien whom the Certifying Officer determines to be 
currently of exceptional ability in the performing arts, the U.S. worker 
must be at least as qualified as the alien.
    (iii) In determining whether U.S. workers are available, the 
Certifying Officer shall consider as many sources as are appropriate and 
shall look to the nationwide system of public employment offices (the 
``Employment Service'') as one source.
    (iv) In determining whether a U.S. worker is available at the place 
of the job opportunity, the Certifying Officer shall consider U.S. 
workers living or working in the area of intended employment, and may 
also consider U.S. workers who are willing to move from elsewhere to 
take the job at their own expenses, or, if the prevailing practice among 
employers employing workers in the occupation in the area of intended 
employment is to pay such relocation expenses, at the employer's 
expense.
    (3) The employment of the alien will have an adverse effect upon the 
wages and working conditions of U.S. workers similarly employed. In 
making this determination the Certifying Officer shall consider such 
things as labor market information, the special circumstances of the 
industry, organization, and/or occupation, the prevailing wage in the 
area of intended employment, and the prevailing working conditions, such 
as hours, in the occupation.
[45 FR 83933, Dec. 19, 1980, as amended at 56 FR 54930, Oct. 23, 1991]



Sec. 656.25  Procedures following a labor certification determination.

    (a) After making a labor certification determination, the Certifying 
Officer shall notify the employer in writing of the determination and 
shall send a copy of the notice to the alien.
    (b) If a labor certification is granted, the Certifying Officer 
shall follow the document transmittal procedures set forth at 
Sec. 656.28.
    (c) If a labor certification is not granted, the Certifying Officer 
shall issue to the employer, with a copy to

[[Page 621]]

the alien, a Notice of Findings, as defined in Sec. 656.50. The Notice 
of Findings shall:
    (1) Contain the date on which the Notice of Findings was issued;
    (2) State the specific bases on which the decision to issue the 
Notice of Findings was made;
    (3) Specify a date, 35 calendar days from the date of the Notice of 
Findings, by which documentary evidence and/or written argument may be 
submitted to cure the defects or to otherwise rebut the bases of the 
determination, and advise that if the rebuttal evidence and/or argument 
have not been mailed by certified mail by the date specified:
    (i) The Notice of Findings shall automatically become the final 
decision of the Secretary denying the labor certification;
    (ii) Failure to file a rebuttal in a timely manner shall constitute 
a refusal to exhaust available administrative remedies; and
    (iii) The administrative-judicial review procedure provided in 
Sec. 656.26 shall not be available; and
    (4) Quote the rebuttal procedures set forth at paragraphs (d), (e), 
and (f) of this section.
    (d) Written rebuttal arguments and evidence may be submitted;
    (1) By the employer; and
    (2) By the alien, but only if the employer also has submitted a 
rebuttal.
    (e) (1) Documentary evidence and/or written arguments to rebut all 
of the bases of a Notice of Findings, which may include evidence that 
the defects noticed therein have been cured, shall be mailed by 
certified mail on or before the date specified in the Notice of Findings 
to the Certifying Officer who issued the Notice of Findings.
    (2) Failure to file a rebuttal in a timely manner shall constitute a 
failure to exhaust available administrative appellate remedies.
    (3) All findings in the Notice of Findings not rebutted shall be 
deemed admitted.
    (f) If a rebuttal, as described above, is submitted on time, the 
Certifying Officer shall review that evidence in relation to the 
evidence in the file, and shall then either grant or deny the labor 
certification pursuant to the standards set forth in Sec. 656.24(b).
    (g) The Certifying Officer shall send a Final Determination form to 
the employer, and shall send a copy to the alien.
    (1) If a labor certification is granted, the Certifying Officer 
shall follow the document transmittal procedures set forth at 
Sec. 656.28.
    (2) If the labor certification is denied, the Final Determination 
form shall:
    (i) Contain the date of the determination;
    (ii) State the reasons for the determination;
    (iii) Quote the request for review procedures at Sec. 656.26 (a) and 
(b); and
    (iv) Advise that, if a request for review is not made within the 
specified time, the denial shall become the final determination of the 
Secretary.



Sec. 656.26  Board of Alien Labor Certification Appeals review of denials of labor certification.

    (a) If a labor certification is denied, a request for review of the 
denial may be made to the Board of Alien Labor Certification Appeals:
    (1) By the employer; and
    (2) By the alien, but only if the employer also requests such a 
review.
    (b) (1) The request for review shall be in writing and shall be 
mailed by certified mail to the Certifying Officer who denied the 
application within 35 calendar days of the date of the determination, 
that is, by the date specified on the Final Determination form; shall 
clearly identify the particular labor certification determination from 
which review is sought; shall set forth the particular grounds for the 
request; and shall include all the documents which accompanied the Final 
Determination form.
    (2) Failure to file a request for review in a timely manner shall 
constitute a failure to exhaust available administrative remedies.
    (3) If the denial of labor certification involves an application for 
a job opportunity as a college or university teacher or an application 
on behalf of an alien represented to be of exceptional ability in the 
performing arts, the employer may designate the names and addresses of 
persons or organizations of

[[Page 622]]

specialized competence which the employer has asked to submit amicus 
briefs.
    (4) The request for review, statements, briefs, and other 
submissions of the parties and amicus curiae shall contain only legal 
argument and only such evidence that was within the record upon which 
the denial of labor certification was based.
    (c) Upon the receipt of a request for review, the Certifying Officer 
shall immediately assemble an indexed Appeal File:
    (1) The Appeal File shall be in chronological order, shall have the 
index on top followed by the most recent document, and shall have 
numbered pages. The Appeal File shall contain the request for review, 
the complete application file, and copies of all the written material, 
such as pertinent parts and pages of surveys and/or reports upon which 
the denial was based.
    (2) The Certifying Officer shall send the Appeal File to the Board 
of Alien Labor Certification Appeals, Office of Administrative Law 
Judges, 800 K Street, NW., suite 400, Washington, DC 20001-8002.
    (3) In denials involving college and university teachers and aliens 
represented to be of exceptional ability in the performing arts, two 
additional copies of the Appeal File shall be sent to the Board of Alien 
Labor Certification Appeals.
    (4) The Certifying Officer shall send a copy of the Appeal File to 
the Solicitor of Labor, Attn: Associate Solicitor for Employment and 
Training Legal Services, suite N2101--Frances Perkins Bldg., 200 
Constitution Avenue NW., Washington, DC 20210.
    (5) Unless the certification was denied by the national Certifying 
Officer, the Certifying Officer shall send a copy of the Appeal File to 
the Director.
    (6) The Certifying Officer shall send copies of the index to the 
Appeal File to the employer and to the alien. The Certifying Officer 
shall afford the employer and the alien the opportunity to examine the 
complete Appeal File at the office of the Certifying Officer, for the 
purpose of satisfying the employer and the alien as to the contents. The 
employer and/or the alien may furnish or suggest directly to the Board 
of Alien Labor Certification Appeals the addition of any documentation 
which is not in the Appeal File, but which was submitted prior to the 
issuance of the Final Determination form. The employer and/or the alien 
shall submit such documentation in writing, and shall send a copy to the 
Associate Solicitor for Employment and Training Legal Services, Office 
of the Solicitor, U.S. Department of Labor, Washington, DC 20210.
    (d)--(h) [Reserved]
    (i) If a labor certification has been ordered granted, the 
Certifying Officer shall grant the certification and shall follow the 
document transmittal procedures set forth at Sec. 656.28.
[45 FR 83933, Dec. 19, 1980, as amended at 52 FR 11218, Apr. 8, 1987; 56 
FR 54930, Oct. 23, 1991]



Sec. 656.27  Consideration by and decisions of the Board of Alien Labor Certification Appeals.

    (a) Designations. In considering requests for review before it, the 
Board of Alien Labor Certification Appeals may sit in panels of three 
members. The Chief Administrative Law Judge may designate any Board of 
Alien Labor Certification Appeals member to submit proposed findings and 
recommendations to the Board of Alien Labor Certification Appeals or to 
any duly designated panel thereof to consider a particular case.
    (b) Briefs and Statements of Position. In considering requests for 
review before it, the Board of Alien Labor Certification Appeals shall 
afford all parties 21 days to submit or decline to submit any 
appropriate Statement of Position or legal brief. The Department of 
Labor shall be represented solely by the Solicitor of Labor or the 
Solicitor's designated representative. In the cases involving college or 
university teachers and aliens represented to be of exceptional ability 
in the performing arts, if the employer has designated a person or 
organization to submit an amicus curiae brief, the Board of Alien Labor 
Certification Appeals shall afford amicus curiae 21 days to submit a 
brief. Briefs, statements, and amicus curiae briefs submitted pursuant 
to this paragraph (b) shall be deemed timely if either mailed or 
delivered to the Board

[[Page 623]]

of Alien Labor Certification Appeals on or before the end of the 21-day 
period set forth in this paragraph, and shall be consistent with the 
requirements of Sec. 656.26(b)(4) of this part.
    (c) Review on the record. The Board of Alien Labor Certification 
Appeals shall review the denial of labor certification on the basis of 
the record upon which the denial of labor certification was made, the 
request for review, and any Statements of Position or legal briefs 
submitted and shall:
    (1) Affirm the denial of the labor certification; or
    (2) Direct the Certifying Officer to grant the certification; or
    (3) Remand the matter to the Certifying Officer for further 
consideration or factfinding and determination; or
    (4) Direct that a hearing on the case be held pursuant to paragraph 
(f) of this section.
    (d) Notifications of decisions. The Board of Alien Labor 
Certification Appeals shall notify the employer, the alien, the 
Certifying Officer, and the Solicitor of Labor of the decision pursuant 
to paragraph (c) of this section, and shall return the record to the 
Certifying Officer unless the case has been set for hearing pursuant to 
paragraph (f) of this section.
    (e) Remanded cases. If the case is remanded, the Certifying Officer 
shall do the additional factfinding or consideration in accordance with 
Secs. 656.24 and 656.25 of this part, but such factfinding and 
consideration shall be limited to the issues for which the case has been 
remanded.
    (f) Hearings. (1) Notification of hearing. If the case has been set 
for a hearing, the Board of Alien Labor Certification Appeals shall 
notify the employer, the alien, the Certifying Officer, and the 
Solicitor of Labor of the date, time, and place of the hearing, and that 
the hearing may be rescheduled upon written request and for good cause 
shown.
    (2) Hearing procedure. (i) The ``Rules of Practice and Procedure For 
Administrative Hearings Before the Office of Administrative Law 
Judges'', set forth at 29 CFR part 18, shall apply to hearings pursuant 
to this paragraph (f).
    (ii) For the purposes of this paragraph (f)(2), references in 29 CFR 
part 18 to: ``administrative law judge'' shall mean the Board of Alien 
Labor Certification Appeals member or the Board of Alien Labor 
Certification Appeals panel duly designated pursuant to Sec. 656.27(a) 
of this part; ``Office of Administrative Law Judges'' shall mean the 
Board of Alien Labor Certification Appeals; and ``Chief Administrative 
Law Judge'' shall mean the Chief Administrative Law Judge in that 
official's function of chairing the Board of Alien Labor Certification 
Appeals.
[52 FR 11218, Apr. 8, 1987]



Sec. 656.28  Document transmittal following the grant of a labor certification.

    If a labor certification is granted, except for labor certifications 
for occupations on Schedule A (Sec. 656.10) and for employment as a 
sheepherder pursuant to Sec. 656.21a(b), the Certifying Officer shall 
send the certified application containing the official labor 
certification stamp, supporting documentation, and complete Final 
Determination form to the employer, or, if appropriate, to the 
employer's agent, indicating that the employer should file all the 
documents with the appropriate INS office.
[56 FR 54930, Oct. 23, 1991]



Sec. 656.29  Filing of a new application after the denial of a labor certification.

    (a) A new application for labor certification by the same employer 
involving the same occupation may be filed at any time after the 
expiration of 6 months from the date of a denial of certification by the 
Certifying Officer, except that, if the certification was denied solely 
because the wage or salary offered was below the prevailing wage, the 
employer may reapply immediately pursuant to Secs. 656.21, 656.21a, or 
656.23, as appropriate.
    (b) An alien who is denied a labor certification for a Schedule A 
occupation, except for employment as a physical therapist or as a 
professional nurse, may at any time have an employer file for a labor 
certification on the alien's behalf pursuant to Sec. 656.21. Labor 
certifications for professional nurses and for physical therapists shall 
be considered only pursuant to Secs. 656.10 and 656.22.

[[Page 624]]



Sec. 656.30  Validity of and invalidation of labor certifications.

    (a) Except as provided in paragraph (d) of this section, a labor 
certification is valid indefinitely. Labor certifications for Household 
Domestic Service Workers and teachers which were granted under the 
previous regulations at 29 CFR part 60 and which lapsed after one year, 
shall be deemed automatically revalidated on the effective date of this 
part.
    (b) (1) Labor certifications involving job offers shall be deemed 
validated as of the date of the local Employment Service office date-
stamped the application; and
    (2) Labor certifications for Schedule A occupations shall be deemed 
validated as of the date the applications were dated by the Immigration 
or Consular Officer.
    (c) (1) A labor certification for a Schedule A occupation is valid 
only for the occupation set forth on the Application for Alien 
Employment Certification form, the alien for whom certification was 
granted, and throughout the United States unless the certification 
contains a geographic limitation.
    (2) A labor certification involving a specific job offer is valid 
only for the particular job opportunity, the alien for whom 
certification was granted, and for the area of intended employment 
stated on the Application for Alien Employment Certification form.
    (d) After issuance labor certifications are subject to invalidation 
by the INS or by a Consul of the Department of State upon a 
determination, made in accordance with those agencies, procedures or by 
a Court, of fraud or willful misrepresentation of a material fact 
involving the labor certification application. If evidence of such fraud 
or willful misrepresentation becomes known to a RA or to the Director, 
the RA or Director, as appropriate, shall notify in writing the INS or 
State Department, as appropriate. A copy of the notification shall be 
sent to the regional or national office, as appropriate, of the 
Department of Labor's Office of Inspector General.
    (e) Certifying Officers shall issue duplicate labor certifications 
only upon the written request of a Consular or Immigration Officer. 
Certifying Officers shall issue such duplicate certifications only to 
the Consular or Immigration Officer who submitted the written request. 
An alien, employer, or an employer or alien's agent, therefore, may 
petition an Immigration or Consular Officer to request a duplicate from 
a Certifying Officer.
[45 FR 83933, Dec. 19, 1980, as amended at 56 FR 54930, Oct. 23, 1991]



Sec. 656.31  Labor certification applications involving fraud or willful misrepresentation.

    (a) If possible fraud or willful misrepresentation involving a labor 
certification is discovered prior to a final labor certification 
determination, the Certifying Officer shall refer the matter to the INS 
for investigation, shall notify the employer in writing, and shall send 
a copy of the notification to the alien, and to the Department of 
Labor's Office of Inspector General. If 90 days pass without the filing 
of a criminal indictment or information, the Certifying Officer shall 
continue to process the application.
    (b) If it is learned that an application is the subject of a 
criminal indictment or information filed in a Court, the processing of 
the application shall be halted until the judicial process is completed. 
The Certifying Officer shall notify the employer of this fact in writing 
and shall send a copy of the notification to the alien, and to the 
Department of Labor's Office of Inspector General.
    (c) If a Court finds that there was no fraud or willful 
misrepresentation, or if the Department of Justice decides not to 
prosecute, the Certifying Officer shall not deny the labor certification 
application on the grounds of fraud or willful misrepresentation. The 
application, of course, may be denied for other reasons pursuant to this 
part.
    (d) If a Court, the INS or the Department of State determines that 
there was fraud or willful misrepresentation involving a labor 
certification application, the application shall be deemed invalidated, 
processing shall be terminated, a notice of the termination and the 
reason therefor shall be sent by the Certifying Officer to the employer, 
and a copy of the notification shall be sent by the Certifying Officer 
to the alien,

[[Page 625]]

and to the Department of Labor's Office of Inspector General.



Sec. 656.32  Fees for services and documents.

    (a) No Department of Labor or State job service agency employee 
shall charge a fee in connection with the filing, determination, 
reconsideration, or review of applications for labor certification. Such 
employees, on request, shall advise applicants on the completion of 
applications and on procedures set forth in this part without charge. No 
charge shall be made for the issuance or transmission of a labor 
certification.
    (b) The Department of Labor's regulations under the Freedom of 
Information Act at 29 CFR part 70 on the Examination and Copying of 
Labor Department Documents provide that fees may be charged for special 
searching and copying services. These fees shall be applicable to 
requests to the Department for copies of documents in the custody of the 
Department which were produced pursuant to this part, except for 
official copies of labor certification documents.



               Subpart D--Determination of Prevailing Wage



Sec. 656.40  Determination of prevailing wage for labor certification purposes.

    (a) Whether the wage or salary stated in a labor certification 
application involving a job offer equals the prevailing wage as required 
by Sec. 656.21(b)(3), shall be determined as follows:
    (1) If the job opportunity is in an occupation which is subject to a 
wage determination in the area under the Davis-Bacon Act, 40 U.S.C. 276a 
et seq., 29 CFR part 1, or the McNamara-O'Hara Service Contract Act, 41 
U.S.C. 351 et seq., 29 CFR part 4, the prevailing wage shall be at the 
rate required under the statutory determination. Certifying Officers 
shall request the assistance of the DOL Employment Standards 
Adminstration wage specialists if they need assistance in making this 
determination.
    (2) If the job opportunity is in an occupation which is not covered 
by a prevailing wage determined under the Davis-Bacon Act or the 
McNamara-O'Hara Service Contract Act, the prevailing wage for labor 
certification purposes shall be:
    (i) The average rate of wages, that is, the rate of wages to be 
determined, to the extent feasible, by adding the wage paid to workers 
similarly employed in the area of intended employment and dividing the 
total by the number of such workers. Since it is not always feasible to 
determine such an average rate of wages with exact precision, the wage 
set forth in the application shall be considered as meeting the 
prevailing wage standard if it is within 5 percent of the average rate 
of wages; or
    (ii) If the job opportunity is covered by a union contract which was 
negotiated at arms-length between a union and the employer, the wage 
rate set forth in the union contract shall be considered as not 
adversely affecting the wages of U.S. workers similarly employed, that 
is, it shall be considered the ``prevailing wage'' for labor 
certification purposes.
    (b) For purposes of this section, except as provided in paragraph 
(c) of this section, ``similarly employed'' shall mean ``having 
substantially comparable jobs in the occupational category in the area 
of intended employment,'' except that, if no such workers are employed 
by employers other than the employer applicant in the area of intended 
employment, ``similarly employed'' shall mean:
    (1) ``Having jobs requiring a substantially similar level of skills 
within the area of intended employment''; or
    (2) If there are no substantially comparable jobs in the area of 
intended employment, ``having substantially comparable jobs with 
employers outside of the area of intended employment.''
    (c) For purposes of this section, similarly employed in the case of 
researchers employed by colleges and universities, Federally Funded 
Research and Development Centers (FFRDC's) administered by colleges and 
universities or Federal research agencies, means researchers employed by 
colleges and universities, FFRDC's administered by colleges and 
universities, and Federal research agencies in the area of intended 
employment.'' If no researchers

[[Page 626]]

are employed by colleges and universities, FFRDC's administered by 
colleges and universities, and Federal research agencies other than the 
employer applicant, researchers employed by colleges and universities, 
FFRDC's administered by colleges and universities, and Federal research 
agencies outside the area of intended employment shall be considered 
``similarly employed.''
    (d) A prevailing wage determination for labor certification purposes 
made pursuant to this section shall not permit an employer to pay a wage 
lower than that required under any other Federal, State or local law.
[45 FR 83933, Dec. 19, 1980, as amended at 63 FR 13767, Mar. 20, 1998]

    Effective Date Note: At 63 FR 13767, Mar. 20, 1998, Sec. 656.40 was 
amended in paragraph (b) introductory text by adding the phrase ``except 
as provided in paragraph (c) of this section,'' immediately after the 
phrase ``For purposes of this section,''; paragraph (c) is redesignated 
as paragraph (d), and a new paragraph (c) is added, effective May 4, 
1998.



      Subpart E--Petitioning Process for Federal Research Agencies

    Source: 63 FR 13767, Mar. 20, 1998, unless otherwise noted.

    Effective Date Note: At 63 FR 13767, Mar. 20, 1998, Subpart E was 
added, effective May 4, 1998.



Sec. 656.50  Petitioning process.

    (a) Federal research agencies seeking to have prevailing wages 
determined in accordance with Sec. 656.40(c)(2) shall file a petition 
with the Director, U.S. Employment Service.
    (b) The procedures and information to be included in the petition 
shall be in accordance with administrative directives issued by ETA that 
will specify the procedures to be followed and information that shall be 
filed in support of the petition by the requesting agency.
    (c) The Director shall make a determination either to grant or deny 
the petition on the basis of whether the petitioning agency is a Federal 
research agency, whether most researchers at the petitioning agency have 
a close relationship with teaching as well as research, and whether the 
employment environment for researchers at the petitioning agency 
provides significant intangible and nonpecuniary incentives of the 
nature found at colleges and universities.
    (d) Denials of agency petitions may be appealed to the Board of 
Alien Labor Certification Appeals.
    (1) The request for review shall be in writing and shall be mailed 
by certified mail to the Director, U.S. Employment Service, within 35 
calendar days of the date of the determination, that is by the date 
specified in the Director's determination; shall set forth the 
particular grounds for the request; and shall include all the documents 
which accompanied the Director's determination.
    (2) Failure to file a request for review in a timely manner shall 
constitute a failure to exhaust available administrative remedies.
    (e) Upon a request for review, the Director shall immediately 
assemble an indexed Appeal File.
    (1) The Appeal File shall be in chronological order, shall have the 
index on top followed by the most recent document. The Appeal File shall 
contain the request for review, the complete petition file, and copies 
of all the written material upon which the denial was based.
    (2) The Director shall send the Appeal File to the Board of Alien 
Labor Certification Appeals.
    (f) In considering requests for review of denied petitions, the 
Board of Alien Labor Certification Appeals shall be guided by 
Sec. 656.27.



                          Subpart F--Addresses



Sec. 656.60  Addresses of Department of Labor regional offices.

    Region I (Connecticut, Maine, Massachusetts, New Hampshire, Rhode 
Island, and Vermont): Room 1707, J. F. Kennedy Federal Building, 
Government Center, Boston, MA 02203.
    Region II (New York, New Jersey, Puerto Rico, and the Virgin 
Islands): 201 Varick Street, room 775, New York, NY 10014.
    Region III (Delaware, Maryland, Pennsylvania, Virginia, West 
Virginia and the District of Columbia): P.O. Box

[[Page 627]]

8796, Philadelphia, PA 19101 (3535 Market Street. Do not use street 
address for mailing purposes.)
    Region IV (Alabama, Florida, Georgia, Kentucky, Mississippi, North 
Carolina, South Carolina, and Tennessee): Room 405, 1371 Peachtree 
Street, NE., Atlanta, GA 30309.
    Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and 
Wisconsin): 230 S. Dearborn Street, Chicago, IL 60604.
    Region VI (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas): 
Room 317, 525 Griffin Square Building, Griffin and Young Streets, 
Dallas, TX 75202.
    Region VII (Iowa, Kansas, Missouri, and Nebraska): Room 1000, 
Federal Building, 911 Walnut Street, Kansas City, MO 64106.
    Region VIII (Colorado, Montana, North Dakota, South Dakota, Utah, 
and Wyoming): 1961 Stout Street, Denver, CO 80202.
    Region IX (Arizona, California, Guam, Hawaii, and Nevada): 71 
Stevenson Street, room 830, San Francisco, CA 94119.
    Region X (Alaska, Idaho, Oregon, and Washington): Room 1145 Federal 
Office Building, 909 First Avenue, Seattle, WA 98174.
    Virgin Islands--First National City Bank Building, Veterans Drive, 
St. Thomas, V.I. 00801.
[45 FR 83933, Dec. 19, 1980, amended at 56 FR 54930, Oct. 23, 1991]



Sec. 656.62  Locations of Immigration and Naturalization Service Offices.

    For the purposes of Secs. 656.21a(b) and 656.22, the locations of 
INS offices in the United States are listed at 8 CFR 100.4.



PART 657--PROVISIONS GOVERNING GRANTS TO STATE AGENCIES FOR EMPLOYMENT SERVICES ACTIVITIES [RESERVED]






PART 658--ADMINISTRATIVE PROVISIONS GOVERNING THE JOB SERVICE SYSTEM--Table of Contents




                         Subparts A-D [Reserved]

                 Subpart E--Job Service Complaint System

Sec.
658.400  Purpose and scope of subpart.
658.401  Types of complaints handled by the JS complaint system.

                    State Agency JS Complaint System

658.410  Establishment of State agency JS complaint system.
658.411  Filing and assignment of JS-related complaints.
658.412  Complaint resolution.
658.413  Initial handling of complaints by the State or local office.
658.414  Referral of non-JS-related complaints.
658.415  Transferring complaints to proper JS office.
658.416  Action on JS-related complaints.
658.417  Hearings.
658.418  Decision of the State hearing official.

                       Federal JS Complaint System

658.420  Establishment of JS complaint system at the ETA regional 
          office.
658.421  Handling of JS-related complaints.
658.422  Handling of non-JS-related complaints by the Regional 
          Administrator.
658.423  Handling of other complaints by the Regional Administrator.
658.424  Federal hearings.
658.425  Decision of DOL Administrative Law Judge.
658.426  Complaints against USES.

 Subpart F--Discontinuance of Services to Employers by the Job Service 
                                 System

658.500  Scope and purpose of subpart.
658.501  Basis for discontinuation of services.
658.502  Notification to employers.
658.503  Discontinuation of services.
658.504  Reinstatement of services.

  Subpart G--Review and Assessment of State Agency Compliance with Job 
                           Service Regulations

658.600  Scope and purpose of subpart.
658.601  State agency responsibility.
658.602  ETA national office responsibility.
658.603  ETA regional office responsibility.
658.604  Assessment and evaluation of program performance data.
658.605  Communication of findings to State agencies.

   Subpart H--Federal Application of Remedial Action to State Agencies

658.700  Scope and purpose of subpart.
658.701  Statements of policy.
658.702  Initial action by the Regional Administrator.
658.703  Emergency corrective action.
658.704  Remedial actions.
658.705  Decision to decertify.
658.706  Notice of decertification.
658.707  Requests for hearings.

[[Page 628]]

658.708  Hearings.
658.709  Conduct of hearings.
658.710  Decision of the Administrative Law Judge.
658.711  Decision of the Administrative Review Board.

    Authority:  Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et 
seq.; 38 U.S.C. chapters 41 and 42; 5 U.S.C. 301 et seq.; sections 
658.410, 658.411 and 658.413 also issued under 44 U.S.C. 3501 et seq.

    Source:  45 FR 39468, June 10, 1980, unless otherwise noted.



                        Subparts A-D--[Reserved]



                 Subpart E--Job Service Complaint System



Sec. 658.400  Purpose and scope of subpart.

    This subpart sets forth the regulations governing the Job Service 
complaint system at both the State and Federal levels.



Sec. 658.401  Types of complaints handled by the JS complaint system.

    (a) (1) The types of complaints (JS related complaints) which shall 
be handled to resolution by the JS complaint system are as follows: (i) 
Complaints against an employer about the specific job to which the 
applicant was referred by the JS involving violations of the terms and 
conditions of the job order or employment-related law (employer-related 
complaint) and (ii) complaints about Job Service actions or omissions 
under JS regulations (agency-related complaints). These complaint 
procedures are not applicable to UI, WIN or CETA complaints. Complaints 
alleging violations of UI, WIN or CETA regulations should be handled 
within the procedures set forth in the respective regulations.
    (2) A complaint shall be handled to resolution by these regulations 
only if it is made within one year of the alleged occurrence.
    (b) Complaints by veterans alleging employer violations of the 
mandatory listing requirements under 38 U.S.C. 2012 shall not be handled 
under this subpart. The State agency shall handle such complaints under 
the Department's regulations at 41 CFR part 60-250.
    (c) Complaints from MSFWs alleging violations of employment-related 
laws enforced by ESA or OSHA shall be taken in writing by the State 
agency and the ETA regional office and referred to ESA or OSHA pursuant 
to the procedures set forth in Secs. 658.414 and 658.422. All other 
complaints alleging violations of employment-related Federal, State or 
local laws other than JS regulations by employers, their agents, or DOL 
subagencies other than JS (non-JS related complaints) shall be logged by 
the State agency and the ETA regional office and the complainant shall 
be referred to the appropriate agency pursuant to procedures set forth 
in Secs. 658.414 and 658.422.
    (d) Certain types of complaints, such as, but not limited to, 
complaints by MSFWs, and complaints alleging unlawful discrimination, 
shall, as set forth in this subpart, be handled by specified officials 
of the State agency or of ETA.

                    State Agency JS Complaint System



Sec. 658.410  Establishment of State agency JS complaint system.

    (a) Each State agency shall establish and maintain a Job Service 
complaint system pursuant to this subpart.
    (b) The State Administrator shall have overall responsibility for 
the operation of the State agency JS complaint system. At the local 
office level, the local office manager shall be responsible for the 
management of the JS complaint system.
    (c) (1) State agencies shall ensure that centralized control 
procedures are established for the handling of complaints and files 
relating to the handling of complaints. The Manager or Administrator of 
the local or State office taking the complaint shall ensure that a 
central complaint log is maintained, listing all complaints received, 
and specifying for each complaint:
    (i) The name of the complainant,
    (ii) The name of the respondent (employer or State agency),
    (iii) The date the complaint is filed,
    (iv) Whether the complaint is by or on behalf of an MSFW,
    (v) Whether the complaint is JS-related,

[[Page 629]]

    (vi) If the complaint is JS-related, whether it is employer-related 
or agency-related,
    (vii) If the complaint is non-JS-related, the information required 
by Sec. 658.414(c), and
    (viii) The action taken, including for JS-related complaints, 
whether the complaint has been resolved.
    (2) Within one month after the end of the calendar quarter during 
which a local office receives an MSFW complaint (JS or non-JS related), 
the local office manager shall transmit a copy of that portion of the 
log containing the information on the MSFW complaint(s) or a separate 
listing of the relevant information from the log for each MSFW complaint 
to the State Administrator. Within two months after the end of each 
calendar quarter the State Administrator shall transmit copies of all 
local and State office complaint logs received for that quarter to the 
Regional Administrator.
    (3) State agencies shall ensure that any action taken by the 
responsible official, including referral, on a JS-related or non-JS 
related complaint from an MSFW alleging a violation of employment 
related laws enforced by ESA or OSHA is fully documented in a file 
containing all relevant information, including a copy of the original 
complaint form, a copy of any JS reports, any related correspondence, a 
list of actions taken, and a record of related telephone calls.
    (4) At the State office level, the State Administrator shall ensure 
that all JS-related complaints referred from local offices, and all 
correspondence relating thereto are logged with a notation of the nature 
of each item.
    (d) State agencies shall ensure that information pertaining to the 
use of the JS complaint system is publicized. This shall include the 
prominent display of an ETA-approved JS complaint system poster in each 
local office, satellite or district office, and at each State agency 
operated day-haul facility.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39468, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 658.411  Filing and assignment of JS-related complaints.

    (a) JS-related complaints may be filed in any office of the State 
job service agency.
    (b) Assignment of complaints to local office personnel shall be as 
follows:
    (1) All JS-related complaints filed with a local office, and 
alleging unlawful discrimination by race, color, religion, national 
origin, sex, age, or physical or mental status unrelated to job 
performance (handicap) shall be assigned to a local office Equal 
Opportunity (EO) representative if the local office has a trained and 
designated EO representative, or, if the local office does not have such 
a representative, shall be sent immediately to the State agency for 
logging and assignment to the EO representative or, where appropriate, 
handled in accordance with the procedures set forth at 29 CFR part 31. 
The EO representative shall refer complaints alleging discrimination by 
employers to the Equal Employment Opportunity Commission or other 
appropriate enforcement agency. Complaints retained by an EO 
representative shall be subject to the hearing and appeal rights as are 
normally provided in accordance with this subpart. The State agency 
complaint specialist shall follow-up with the EO representative or with 
other responsible enforcement agency monthly regarding MSFW complaints 
and quarterly regarding non-MSFW complaints, and shall inform the 
complainants of the status of the complaint periodically.
    (2) All JS-related and non-JS related complaints other than those 
described in paragraph (b)(1) of this section shall be handled by the 
local office manager or assigned by the local office manager to a local 
office employee trained in JS complaint procedures.
    (c) Assignment of complaints to State office personnel shall be as 
follows:
    (1) The handling of all JS-related complaints received by the State 
office alleging unlawful discrimination by race, color, religion, 
national origin,

[[Page 630]]

sex, age, physical or mental status unrelated to job performance 
(handicap) status shall be assigned to a State EO representative and, 
where appropriate, handled in accordance with procedures set forth at 29 
CFR part 31.
    (2) The handling of all other JS-related complaints and all non-JS-
related complaints received by the State office shall be assigned to a 
State agency official designated by the State Administrator, provided 
that the State agency official designated to handle MSFW complaints 
shall be the State MSFW Monitor Advocate.



Sec. 658.412  Complaint resolution.

    (a) A JS-related complaint is resolved when:
    (1) The complainant indicates satisfaction with the outcome, or
    (2) The complainant chooses not to elevate the complaint to the next 
level of review, or
    (3) The complainant or the complainant's authorized representative 
fails to respond within 20 working days or in cases where the 
complainant is an MSFW, 40 working days of a written request by the 
appropriate local or State office, or
    (4) The complainant exhausts the final level of review, or
    (5) A final determination has been made by the enforcement agency to 
which the complaint was referred.



Sec. 658.413  Initial handling of complaints by the State or local office.

    (a) There shall be an appropriate official available during regular 
office hours to take complaints in each local office.
    (b) Whenever an individual indicates an interest in making any 
complaint to a State agency office, the appropriate JS official shall 
offer to explain the operation of the JS complaint system. The 
appropriate JS official shall offer to take the complaint in writing if 
it is JS related, or if non-JS related, it alleges violations of 
employment related laws enforced by ESA or OSHA and is filed by or on 
behalf of an MSFW. The official shall require that the complainant put 
the complaint on the JS Complaint/Referral Form prescribed or approved 
by the ETA. The JS Complaint/Referral Form shall be used for all 
complaints taken by a State agency, including complaints about unlawful 
discrimination, except as provided in paragraph (c) of this section. The 
State agency official shall offer to assist the complainant in filling 
out the form and shall do so if the complainant desires such assistance. 
If the complainant also represents several other complainants, all such 
complainants shall be named on the JS Complaint/Referral Form. The 
complainant shall sign the completed form. The identity of the 
complainant(s) and any persons who furnish information relating to, or 
assisting in, an investigation of a complaint shall be kept confidential 
to the maximum extent possible, consistent with applicable law and a 
fair determination of the complaint. A copy of the completed JS 
Complaint/Referral Form shall be given to the complainant(s), and the 
complaint form shall be given to the appropriate JS official.
    (c) If a JS official receives a complaint in any form (e.g., a 
letter) which is signed by the complainant and includes sufficient 
information for the JS official to initiate an investigation, the 
document shall be treated as if it were a properly completed JS 
Complaint/Referral Form filed in person by the complainant. The JS 
official shall send a confirming letter to this effect to the 
complainant and shall give the document to the appropriate JS official. 
If the complainant has not provided sufficient information to 
investigate the matter expeditiously, the JS official shall request 
additional information from the complainant.
    (d) If the appropriate JS official determines that the complaint is 
not JS-related, the official shall follow the procedures set forth in 
Sec. 658.414.
    (e) If the appropriate JS official determines that the complaint is 
JS-related, the official shall ensure that the complaint is handled in 
accordance with this subpart E.
    (f) During the initial discussion with the complainant, the JS 
official receiving the complaint shall:
    (1) Make every effort to obtain all the information he/she perceives 
to be necessary to investigate the complaint;
    (2) Request that the complainant indicate all of the addresses 
through which he or she might be contacted

[[Page 631]]

during the investigation of the complaint;
    (3) Request that the complainant contact the JS before leaving the 
area if possible, and explain the need to maintain contact during the 
complaint investigation.

(Approved by the Office of Management and Budget under control number 
1205-0039)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[45 FR 39468, June 10, 1980, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 658.414  Referral of non-JS-related complaints.

    (a) To facilitate the operation of the coordinated enforcement 
procedures established at 29 CFR part 42, the State agency shall take 
from MSFWs in writing non-JS related complaints which allege violations 
of employment related laws enforced by ESA or OSHA. The official shall 
immediately refer the complaint to ESA or OSHA for prompt action. The JS 
official shall inform the MSFW of the enforcement agency (and the 
individual if known) to which the complaint will be referred and refer 
the complainant to other agencies, attorney, consumer advocate and/or 
other assistance where appropriate.
    (b) Upon receipt of all other non-JS related complaints, the JS 
official shall refer the complainant to the appropriate enforcement 
agency, another public agency, an attorney, a consumer advocate and/or 
other appropriate assistance.
    (c) For all non-JS-related complaints received pursuant to 
paragraphs (a) and (b) of this section, the appropriate JS official 
shall record the referral of the complainant and the complaint where 
paragraph (a) is applicable, and the agency or agencies (and 
individual(s), if known) to which the complainant and the complaint 
where paragraph (a) is applicable, were referred on the complaint log 
specified in Sec. 658.410(c)(1). The JS official shall also prepare and 
keep the file specified in Sec. 658.410(c)(3) for the complaints filed 
pursuant to paragraph (a) of this section.



Sec. 658.415  Transferring complaints to proper JS office.

    (a) Where a JS-related complaint deals with an employer, the proper 
office to handle the complaint initially is ordinarily the local office 
serving the area in which the employer is located. Where a JS-related 
complaint deals with an office of a State agency, the proper office to 
handle the complaint initially is the local office serving the area in 
which the alleged violation of the JS regulations occurred. Where an 
agency-related complaint deals with more than one office of a State 
agency, with an alleged agency-wide violation, or with the State office, 
the appropriate State agency official may direct that the State office 
of that agency handle the complaint initially.
    (b) The State Administrator shall establish a system whereby the 
office in which an JS-related complaint is filed, alleging a violation 
in that same State, ensures that the JS Complaint/Referral Form is 
adequately completed and then sent to the proper State or local office 
of that agency. A copy of the referral letter shall be sent to the 
complainant.
    (c) Whenever a JS-related complaint deals with an employer in 
another State or another State agency, the State JS agency shall send, 
after ensuring that the JS Complaint/Referral Form is adequately 
completed, a copy of the JS Complaint/Referral Form and copies of any 
relevant documents to the State agency in the other State. Copies of the 
referral letter shall be sent to the complainant, and copies of the 
complaint and referral letter shall be sent to the ETA Regional 
Office(s) with jurisdiction over the transferring and receiving State 
agencies.
    (d) The State agency receiving the complaint after an interstate 
transferral under paragraph (c) of this section shall handle the 
complaint as if it had been initially filed with that office.
    (e) The ETA regional office with jurisdiction over the receiving 
State shall follow-up with the receiving State agency to ensure the 
complaint is handled in accordance with these regulations.
    (f) If the JS complaint is against more than one State JS agency, 
the complaint shall so clearly state. The

[[Page 632]]

complaint shall be handled as separate complaints and shall be handled 
according to procedures at Sec. 658.416(c) and paragraph (c) of this 
section.



Sec. 658.416  Action on JS-related complaints.

    (a) The appropriate State agency official handling an JS-related 
complaint shall offer to assist the complainant through the provision of 
appropriate JS services. For complaints against employers, this may 
include such services as referring a worker-complainant to another job.
    (b) (1) If the JS-related complaint concerns violations of an 
employment-related law, the local or State office official shall refer 
the complaint to the appropriate enforcement agency and notify the 
complainant in writing of the referral. The agency shall follow-up with 
the enforcement agency monthly regarding MSFW complaints and quarterly 
regarding non-MSFW complaints, and shall inform the complainant of the 
status of the complaint periodically.
    (2) If the enforcement agency makes a final determination that the 
employer violated an employment related law, the State JS agency shall 
initiate procedures for discontinuation of services immediately in 
accordance with subpart F. The State agency shall notify the complainant 
and the employer of this action.
    (c) If the complaint is filed initially in a local office, and is 
not referred under paragraph (b), the appropriate local office official 
shall investigate and attempt to resolve the complaint immediately upon 
receipt. If resolution has not been achieved to the satisfaction of the 
complainant within 15 working days after receipt of the complaint, or 5 
working days with respect to complaints filed by or on behalf of MSFWs, 
the local office official shall send the complaint to the State office 
for resolution or further action except that if the local office has 
made a written request for information pursuant to Sec. 658.412(a)(3), 
these time periods shall not apply until the complainant's response is 
received in accordance with Sec. 658.412(a)(3). The local office shall 
notify the complainant and the respondent, in writing, of the results of 
its investigation pursuant to this paragraph, and of the referral to the 
State office.
    (d) If the complaint is filed initially with the State office, and 
is not transferred to a local office under Sec. 658.415(a), or not 
referred to an enforcement agency under paragraph (b) of this section, 
the appropriate State office official shall investigate and attempt to 
resolve the complaint immediately upon receipt. If the State office 
receives the complaint on referral from a local office, the State 
official shall attempt to resolve the complaint immediately and may, if 
necessary, conduct a further investigation. If resolution at the State 
office level has not been accomplished within 30 working days (20 
working days with respect to complaints by MSFWs) after the complaint 
was received by the State office (whether the complaint was received 
directly or from a local office pursuant to paragraph (c) of this 
section), the State office shall make a written determination regarding 
the complaint and shall send copies to the complainant and the 
respondent except that if the State office has made a written request 
for information pursuant to Sec. 658.412 (a)(3) these time periods shall 
not apply until the complainant's response is received in accordance 
with Sec. 658.412(a)(3). The determination must be sent by certified 
mail. The determination shall include all of the following:
    (1) The results of any State office investigation pursuant to this 
paragraph.
    (2) Conclusions reached on the allegations of the complaint.
    (3) An explanation of why the complaint was not resolved.
    (4) If the complaint is against an employer, and the State office 
has found that the employer has violated JS regulations, the 
determination shall state that the State will initiate procedures for 
discontinuation of services to the employer in accordance with subpart 
F.
    (5) If the complaint is against an employer and has not been 
referred to an enforcement agency pursuant to paragraph (b)(1) of this 
section, and the State office has found that the employer has not 
violated JS regulations, an offer to the complainant of the opportunity 
to request a hearing within

[[Page 633]]

20 working days after the certified date of receipt of the notification.
    (6) If the complaint is against the State agency, an offer to the 
complainant of the opportunity to request in writing a hearing within 20 
working days after the certified date of receipt of the notification.
    (e) If the State office, within 20 working days from the certified 
date of receipt of the notification provided for in paragraph (d) of 
this section, receives a written request for a hearing in response 
thereto, the State office shall refer the complaint to a State hearing 
official for hearing. The parties to whom the determination was sent 
(the State agency may also be a party) shall then be notified in writing 
by the State office that:
    (1) The parties will be notified of the date, time and place of the 
hearing;
    (2) The parties may be represented at the hearing by an attorney or 
other representative;
    (3) The parties may bring witnesses and/or documentary evidence to 
the hearing;
    (4) The parties may cross-examine opposing witnesses at the hearing;
    (5) The decision on the complaint will be based on the evidence 
presented at the hearing;
    (6) The State hearing official may reschedule the hearing at the 
request of a party or its representative; and
    (7) With the consent of the State agency's representative and of the 
State hearing official, the party who requested the hearing may withdraw 
the request for hearing in writing before the hearing.



Sec. 658.417  Hearings.

    (a) Hearings shall be held by State hearing officials. A State 
hearing official may be any State official authorized to hold hearings 
under State law. They may be, for example, the same referees who hold 
hearings under the State unemployment compensation law and/or the Work 
Incentive Program or any official of the State agency, authorized by 
State law to preside at State administrative hearings.
    (b) The State hearing official may decide to conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously in this fashion.
    (c) The State hearing official, upon the referral of a case for a 
hearing, shall:
    (1) Notify all involved parties of the date, time and place of the 
hearing; and
    (2) Re-schedule the hearing, as appropriate.
    (d) In conducting a hearing the State hearing official shall:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas, if empowered to do so under State law, if 
necessary;
    (3) Assure that all relevant issues are considered;
    (4) Rule on the introduction of evidence and testimony; and
    (5) Take any other action which is necessary to insure an orderly 
hearing.
    (e) The testimony at the hearing shall be recorded and may be 
transcribed when appropriate.
    (f) The parties shall be afforded the opportunity to present, 
examine, and cross-examine witnesses.
    (g) The State hearing official may elicit testimony from witnesses, 
but shall not act as advocate for any party.
    (h) The State hearing official shall receive and include in the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof shall be made available by the party submitting 
the document to other parties to the hearing upon request.
    (i) Technical rules of evidence shall not apply to hearings 
conducted pursuant to this section, but rules or principles designed to 
assure production of the most credible evidence available and to subject 
testimony to test by cross-examination, shall be applied where 
reasonably necessary by the State hearing official. The State hearing 
official may exclude irrelevant, immaterial, or unduly repetitious 
evidence.
    (j) The case record, or any portion thereof, shall be available for 
inspection and copying by any party at, prior to, or subsequent to the 
hearing upon request. Special procedures may be used for disclosure of 
medical and psychological records such as disclosure to

[[Page 634]]

a physician designated by the individual.
    (k) The State hearing official shall, if feasible, resolve the 
dispute by conciliation at any time prior to the conclusion of the 
hearing.
    (l) At the State hearing official's discretion, other appropriate 
individuals, organizations, or associations may be permitted to 
participate in the hearing as amicus curiae (friends of the court) with 
respect to specific legal or factual issues relevant to the complaint. 
Any documents submitted by the amicus curiae shall be included in the 
record.
    (m) The following standards shall apply to the location of hearings 
involving parties in more than one State or in locations within a State 
but which are separated geographically so that access to the hearing 
location is extremely inconvenient for one or more parties as determined 
by the State hearing official.
    (1) Whenever possible, the State hearing official shall hold a 
single hearing, at a location convenient to all parties or their 
representatives wishing to appear and present evidence, and with all 
such parties and/or their representatives present.
    (2) If a hearing location cannot be established by the State hearing 
official pursuant to paragraph (m)(1) of this section, the State hearing 
official may conduct, with the consent of the parties, the hearing by a 
telephone conference call from a State agency office with all parties 
and their representatives not choosing to be present at that location 
permitted to participate in the hearing from their distant locations.
    (3) Where the State agency does not have the facilities to conduct 
hearings by telephone pursuant to paragraph (m)(1) or (m)(2) of this 
section, the State agencies in the States where the parties are located 
shall take evidence and hold the hearing in the same manner as used for 
appealed interstate unemployment claims in those States, to the extent 
that such procedures are consistent with Sec. 658.416.



Sec. 658.418  Decision of the State hearing official.

    (a) The State hearing official may:
    (1) Rule that the case is improperly before it, that is, that there 
is a lack of jurisdiction over the case;
    (2) Rule that the complaint has been withdrawn properly and in 
writing;
    (3) Rule that reasonable cause exists to believe that the request 
has been abandoned or that repeated requests for re-scheduling are 
arbitrary and for the purpose of unduly delaying or avoiding a hearing;
    (4) Render such other rulings as are appropriate to the issues in 
question. However, the State hearing official shall not have 
jurisdiction to consider the validity or constitutionality of JS 
regulations or of the Federal statutes under which they are promulgated.
    (b) Based on the entire record, including the investigations and 
determinations of the local and State offices and any evidence provided 
at the hearing, the Sate hearing official shall prepare a written 
decision. The State hearing official shall send a copy of the decision 
stating the findings and conclusions of law and fact and the reasons 
therefor to the complainant, the respondent, entities serving as amicus 
capacity (if any), the State office, the Regional Administrator, and the 
Solicitor of Labor, Attn: Associate Solicitor for Employment and 
Training Legal Services, Department of Labor, room N2101, 200 
Constitution Avenue, NW., Washington, DC, 20210. The notification to the 
complainant and respondent must be sent certified mail.
    (c) All decisions of a State hearing official shall be accompanied 
by a written notice informing the parties (not including the Regional 
Administrator, the Solicitor of Labor, or entities serving in an amicus 
capacity) that, if they are not satisfied, they may, within 20 working 
days of the certified date of receipt of the decision, file an appeal in 
writing with the Regional Administrator. The notice shall give the 
address of the Regional Administrator.

                       Federal JS Complaint System



Sec. 658.420  Establishment of JS complaint system at the ETA regional office.

    (a) Each Regional Administrator shall establish and maintain a JS 
complaint system at the DOL regional office level.

[[Page 635]]

    (b) The Regional Administrator shall designate DOL officials to 
handle JS-related complaints as follows:
    (1) The handling of all JS-related complaints alleging 
discrimination by race, color, religion, national origin, sex, age, or 
physical or mental status unrelated to job performance (handicap), shall 
be assigned to a Regional Director for Equal Opportunity and Special 
Review (RDEOSR) and, where appropriate, handled in accordance with 
procedures at 29 CFR part 31.
    (2) The handling of all JS-related complaints other than those 
described in paragraphs (b)(1) of this section, shall be assigned to a 
regional office official designated by the Regional Administrator, 
provided that the regional office official designated to handle MSFW 
complaints shall be the Regional MSFW Monitor Advocate.
    (c) The Regional Administrator shall designate DOL officials to 
handle non-JS-related complaints in accordance with Sec. 658.422: 
Provided, That the regional official designated to handle MSFW non-JS-
related complaints shall be the Regional MSFW Monitor Advocate.
    (d) The Regional Administrator shall assure that all JS-related 
complaints and all correspondence relating thereto are logged, with a 
notation of the nature of each item.



Sec. 658.421  Handling of JS-related complaints.

    (a) No JS-related complaint shall be handled at the ETA regional 
office level until the complainant has exhausted the State agency 
administrative remedies set forth at Secs. 658.410 through 658.418. 
Therefore, if the Regional Administrator determines that any 
complainant, who has filed a JS-related complaint with the regional 
office, has not yet exhausted the administrative remedies at the State 
agency level, the Regional Administrator shall inform the complainant 
within 10 working days in writing that the complainant must first 
exhaust those remedies before the complaint may be filed in the regional 
office. A copy of this letter shall be sent to the State Administrator. 
However, nothing in this provision shall prevent an ETA regional office 
from accepting and handling to resolution a JS-related complaint 
pursuant to Sec. 658.423 or Sec. 658.702(c).
    (b) The ETA regional office shall be responsible for handling 
appeals of determinations made on complaints at the State level. An 
``appeal'' shall include any letter or other writing requesting review 
if it is received by the regional office and signed by a party to the 
complaint. Upon receipt of an appeal by the Regional Administrator after 
the exhaustion of State agency administrative remedies, the Regional 
Administrator immediately shall send for the complete State agency file, 
including the original JS Complaint/Referral Form.
    (c) The Regional Administrator shall review the file in the case and 
shall determine within ten (10) days whether any further investigation 
or action is appropriate, provided however that the Regional 
Administrator shall have twenty (20) working days to make this 
determination if legal advice is necessary.
    (d) If the Regional Administrator determines that no further action 
is warranted, the Regional Administrator shall send this determination 
in writing by certified mail to the appellant within five (5) days of 
his/her determination and may, in the Regional Administrator's 
discretion, offer the appellant a hearing before a DOL Administrative 
Law Judge, provided the appellant requests such a hearing in writing 
from the Regional Administrator within 20 working days of the certified 
date of receipt of the Regional Administrator's offer of hearing.
    (e) If the Regional Administrator determines that further 
investigation or other action is warranted, the Regional Administrator 
immediately shall undertake such an investigation, informal resolution 
or other action.
    (f) If the Regional Administrator determines to reverse or modify 
the decision of the State hearing official or the State Administrator, 
the Regional Administrator shall offer in writing by certified mail each 
party to the State hearing official's hearing or to whom the State 
office determination was sent, the opportunity for a hearing before a 
DOL Administrative Law Judge, provided the party requests such a hearing 
in writing within 20 working

[[Page 636]]

days of the certified date of the Regional Administrator's offer of 
hearing.
    (g) If the Regional Administrator finds reason to believe that a 
State agency or one of its local offices has violated JS regulations, 
the Regional Administrator shall follow the procedures set forth at 
subpart H of this part.
    (h) If the appeal is not resolved, pursuant to paragraph (e) of this 
section, to the appellant's satisfaction, the Regional Administrator 
may, in the Regional Administrator's discretion, offer the appellant in 
writing by certified mail a hearing before a DOL Administrative Law 
Judge provided the appellant requests such a hearing in writing from the 
Regional Administrator within 20 working days of the certified date of 
receipt of the Regional Administrator's offer of hearing.



Sec. 658.422  Handling of non-JS-related complaints by the Regional Administrator.

    (a) Each non-JS-related complaint filed by an MSFW alleging 
violations of employment related laws enforced by ESA or OSHA shall be 
taken in writing, and referrred to ESA or OSHA for prompt action 
pursuant to 29 CFR part 42.
    (b) Upon referring the complaint in accordance with paragraph (a) of 
this section, the regional official shall inform the complainant of the 
enforcement agency (and individual, if known) to which the complaint was 
referred and shall also refer the complainant to the enforcement agency, 
another public agency, an attorney, a consumer advocate and/or other 
appropriate assistance.
    (c) All other non-JS related complaints alleging violations of 
employment related laws shall be logged. The complainant shall be 
referred to the appropriate agency for assistance.
    (d) For all non-JS-related complaints received and/or referred, the 
appropriate regional official shall record the referral of the 
complainant (or complaint filed on behalf of an MSFW), and the agency or 
agencies (and individual(s) if known) to which the complainant (or 
complaint) was referred on a complaint log, similar to the one described 
in Sec. 658.410(c)(1). The appropriate regional official shall also 
prepare and keep the file specified in Sec. 658.410(c)(3).



Sec. 658.423  Handling of other complaints by the Regional Administrator.

    Whenever the regional office receives a JS-related complaint and the 
appropriate official determines that the nature and scope of the 
complaint are such that the time required to exhaust the administrative 
procedures at the State level would adversely affect a significant 
number of applicants, he/she shall take the complaint and follow up on 
the complaint as follows: for a complaint against an employer, the 
regional office shall handle the complaint in a manner consistent with 
the requirements imposed upon State agencies by Secs. 658.413 and 
658.416 of this part. A hearing shall be offered to the parties once the 
Regional Administrator makes a determination on the complaint. For a 
complaint against a State agency, the regional office shall follow 
procedures established at Sec. 658.702(c).



Sec. 658.424  Federal hearings.

    (a) If a party requests a hearing pursuant to Sec. 658.421 (d), (f), 
or (h) or Sec. 658.423, the Regional Administrator shall:
    (1) Send the party requesting the hearing and all other parties to 
the prior State agency hearing, a written notice containing the 
statements set forth at Sec. 658.416(e);
    (2) Compile four hearing files containing copies of all documents 
relevant to the case, indexed and compiled chronologically;
    (3) Send simultaneously one hearing file to the DOL Chief 
Administrative Law Judge, 800 K Street, NW., suite 400, Washington, DC 
20001-8002, one hearing file to the Administrator, and one hearing file 
to the Solicitor of Labor, Attn: Associate Solicitor for Employment and 
Training Legal Services, and retain one hearing file.
    (b) Upon the receipt of a hearing file, the DOL Administrative Law 
Judge designated by the Chief Administrative Law Judge shall notify the 
party requesting the hearing, all parties to the prior State hearing 
official hearing (if any), the State agency, the Regional Administrator, 
the Administrator, and

[[Page 637]]

the Solicitor of the receipt of the case. The DOL Administrative Law 
Judge shall afford the non-Federal parties 20 working days to submit 
legal arguments and supporting documentation, if any, in the case. The 
DOL Administrative Law Judge shall afford the Solicitor 20 working days 
to submit legal arguments and supporting documentation, if any, in the 
case on behalf of the Federal parties. After the 20 working days elapse, 
the Hearing Officer shall decide whether to schedule a hearing, or make 
a determination on the record.
    (c) The DOL Administrative Law Judge may decide to conduct hearings 
on more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously in this fashion.
    (d) At the DOL Administrative Law Judge's discretion, other 
appropriate individuals, organizations, or associations may be permitted 
to participate in the hearing as amicus curiae with respect to specific 
legal or factual issues relevant to the complaint. Any documents 
submitted by the amicus curiae shall be included in the record.
    (e) The following standards shall apply to the location of hearings 
involving parties in more than one State or in locations which are 
within a State but which are separated geographically so that access to 
the hearing location is extremely inconvenient for one or more parties 
as determined by the Administrative Law Judge.
    (1) Whenever possible, the Administrative Law Judge shall hold a 
single hearing, at a location convenient to all parties or their 
representatives wishing to appear and present evidence, and with all 
such parties and/or their representatives present.
    (2) If a hearing location cannot be established by the 
Administrative Law Judge at a location pursuant to paragraph (e)(1) of 
this section, the Administrative Law Judge may conduct, with the consent 
of the parties, the hearing by a telephone conference call from an 
office with all parties and their representatives not choosing to be 
present at that location permitted to participate in the hearing from 
their distant locations.
    (3) Where the Administrative Law Judge is unable to locate 
facilities to conduct hearings by telephone pursuant to paragraph (e)(1) 
or (e)(2) of this section, the Administrative Law Judge shall take 
evidence in the States where the parties are located and hold the 
hearing in the same manner as used for appealed interstate unemployment 
claims in those States, to the extent that such procedures are 
consistent with Sec. 658.416.
    (f) The DOL Administrative Law Judge shall:
    (1) Notify all involved parties of the date, time and place of the 
hearing; and
    (2) Re-schedule the hearing, as appropriate.
    (g) In conducting a hearing the DOL Administrative Law Judge shall:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas if necessary;
    (3) Consider all relevant issues which are raised;
    (4) Rule on the introduction of evidence and testimony;
    (5) Take any other action which is necessary to insure an orderly 
hearing.
    (h) The testimony at the hearing shall be recorded, and shall be 
transcribed if appropriate.
    (i) The parties to the hearing shall be afforded the opportunity to 
present, examine, and cross-examine witnesses. The DOL Administrative 
Law Judge may elicit testimony from witnesses, but shall not act as 
advocate for any party.
    (j) The DOL Administrative Law Judge shall receive, and make part of 
the record, documentary evidence offered by any party and accepted at 
the hearing. Copies thereof shall be made available by the party 
submitting the documentary evidence, to any part to the hearing upon 
request.
    (k) Technical rules of evidence shall not apply to hearings 
conducted pursuant to this part, but rules or principles designed to 
assure production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where reasonably 
necessary by the Administrative Law Judge conducting the hearing. The 
Administrative Law Judge

[[Page 638]]

may exclude irrelevant, immaterial, or unduly repetitious evidence.
    (l) The case record, or any portion thereof, shall be available for 
inspection and copying by any party to the hearing at, prior to, or 
subsequent to the hearing upon request. Special procedures may be used 
for disclosure of medical and psychological records such as disclosure 
to a physician designated by the individual concerned.
    (m) The DOL Administrative Law Judge shall, if feasible, encourage 
resolution of the dispute by conciliation at any time prior to the 
conclusion of the hearing.
[45 FR 39468, June 10, 1980, as amended at 56 FR 54708, Oct. 22, 1991]



Sec. 658.425  Decision of DOL Administrative Law Judge.

    (a) The DOL Administrative Law Judge may:
    (1) Rule that there is a lack of jurisdiction over the case;
    (2) Rule that the appeal has been withdrawn properly and in writing, 
with the written consent of all the parties;
    (3) Rule that reasonable cause exists to believe that the appeal has 
been abandoned or that repeated requests for re-scheduling are arbitrary 
and for the purpose of unduly delaying or avoiding a hearing; or
    (4) Render such other rulings as are appropriate to the issues in 
question. However, the DOL Administrative Law Judge shall not have 
jursidiction to consider the validity or constitutionality of JS 
regulations or of the Federal statutes under which they are promulgated.
    (b) Based on the entire record, including any legal briefs, the 
record before the State agency, the investigation (if any) and 
determination of the Regional Administrator, and evidence provided at 
the hearing, the DOL Administrative Law Judge shall prepare a written 
decision. The DOL Administrative Law Judge shall send a copy of the 
decision stating the findings and conclusions of law and fact and the 
reasons therefor to the parties to the hearing, including the State 
agency, the Regional Administrator, the Administrator, and the 
Solicitor, and to entities filing amicus briefs (if any).
    (c) The decision of the DOL Administrative Law Judge shall be the 
final decision of the Secretary.



Sec. 658.426  Complaints against USES.

    Complaints alleging that an ETA regional office or the national 
office of USES has violated JS regulations should be mailed to the 
Assistant Secretary for Employment and Training, U.S. Department of 
Labor, Washington, DC 20210. Such complaints should include:
    (a) The allegations of wrong-doing, (b) the date of the incident, 
(c) location of the incident, (d) who the complaint is against, and (e) 
any other relevant information available to the complainant. The 
Assistant Secretary or the Regional Administrator as designated shall 
make a determination and respond to the complainant after investigation 
of the complaint.



 Subpart F--Discontinuation of Services to Employers by the Job Service 
                                 System



Sec. 658.500  Scope and purpose of subpart.

    This subpart contains the regulations governing the discontinuation 
of services provided pursuant to 20 CFR part 653 to employers by the 
USES, including State agencies.



Sec. 658.501  Basis for discontinuation of services.

    (a) The State agency shall initiate procedures for discontinuation 
of services to employers who:
    (1) Submit and refuse to alter or withdraw job orders containing 
specifications which are contrary to employment-related laws;
    (2) Submit job orders and refuse to provide assurances, in 
accordance with paragraph (d) above, that the jobs offered are in 
compliance with employment-related laws, or to withdraw such job orders;
    (3) Are found through field checks or otherwise to have either 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders;
    (4) Are found by a final determination by an appropriate enforcement

[[Page 639]]

agency to have violated any employment-related laws and notification of 
this final determination has been provided to the JS by that enforcement 
agency;
    (5) Are found to have violated JS regulations pursuant to 
Sec. 658.416(d)(4);
    (6) Refuse to accept qualified workers referred through the 
clearance system;
    (7) Refuse to cooperate in the conduct of field checks conducted 
pursuant to Sec. 653.503; or
    (8) Repeatedly cause the initiation of the procedures for 
discontinuation of services pursuant to paragraphs (a)(1) through (6) of 
this section.
    (b) The State agency may discontinue services immediately if, in the 
judgment of the State Administrator, exhaustion of the administrative 
procedures set forth in this subpart at Secs. 658.501 through 658.502 
would cause substantial harm to a significant number of workers. In such 
instances, procedures at Sec. 658.503 (b) et seq. shall be followed.
    (c) For employers who are alleged to have not complied with the 
terms of the temporary labor certification, State agencies shall notify 
the Regional Adminstrator of the alleged non-compliance for 
investigation and pursuant to Sec. 655.210 consideration of 
ineligibility for subsequent temporary labor certification.



Sec. 658.502  Notification to employers.

    (a) The State agency shall notify the employer in writing that it 
intends to discontinue the provision of JS services pursuant to 20 CFR 
part 653 and the reason therefore:
    (1) Where the decision is based on submittal and refusal to alter or 
to withdraw job orders containing specifications contrary to employment-
related laws, the State agency shall specify the date the order was 
submitted, the job order involved, the specifications contrary to 
employment-related laws and the laws involved. The employer shall be 
notified in writing that all JS services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that the specifications are not 
contrary to employment-related laws, or
    (ii) Withdraws the specifications and resubmits the job order in 
compliance with all employment-related laws, or
    (iii) If the job is no longer available makes assurances that all 
future job orders submitted will be in compliance with all employment-
related laws, or
    (iv) Requests a hearing from the State agency pursuant to 
Sec. 658.417.
    (2) Where the decision is based on the employer's submittal of an 
order and refusal to provide assurances that the job is in compliance 
with employment-related laws or to withdraw the order, the State agency 
shall specify the date the order was submitted, the job order involved 
and the assurances involved. The employer shall be notified that all JS 
services will be terminated within 20 working days unless the employer 
within that time:
    (i) Resubmits the order with the appropriate assurances,
    (ii) If the job is no longer available, make assurances that all 
future job orders submitted will contain all necessary assurances that 
the job offered is in compliance with employment-related laws, or
    (iii) Requests a hearing from the State agency pursuant to 
Sec. 658.417.
    (3) Where the decision is based on a finding that the employer has 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders, the 
State agency shall specify the basis for that determination. The 
employer shall be notified that all JS services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that terms and conditions of 
employment were not misrepresented, or
    (ii) Provides adequate evidence that there was full compliance with 
the assurances made on the job orders, or
    (iii) Provides resolution of a complaint which is satisfactory to a 
complainant referred by the JS, and
    (iv) Provides adequate assurance that specifications on future 
orders will accurately represent the terms and conditions of employment 
and that there will be full compliance with all job order assurances, or
    (v) Requests a hearing from the State agency pursuant to 
Sec. 658.417.

[[Page 640]]

    (4) Where the decision is based on a final determination by an 
enforcement agency that the employer-related laws, the State agency 
shall specify the determination. The employer shall be notified that all 
JS services will be terminated in 20 working days unless the employer 
within that time:
    (i) Provides adequate evidence that the enforcement agency has 
reversed its ruling and that the employer did not violate employment-
related laws, or
    (ii) Provides adequate evidence that the appropriate fines have been 
paid and/or appropriate restitution has been made, and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future.
    (5) Where the decision is based on a finding of a violation of JS 
regulations under Sec. 658.416(d)(4), the State agency shall specify the 
finding. The employer shall be notified that all JS services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that the employer did not violate JS 
regulations, or
    (ii) Provides adequate evidence that appropriate restitution has 
been made or remedial action taken, and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future, or
    (iv) Requests a hearing from the State agency pursuant to 
Sec. 658.417.
    (6) Where the decision is based on an employer's failure to accept 
qualified workers referred through the clearance system, the State 
agency shall specify the workers referred and not accepted. The employer 
shall be notified that all JS services will be terminated in 20 working 
days unless the employer within that time:
    (i) Provides adequate evidence that the workers were accepted, or
    (ii) Provides adequate evidence that the workers were not available 
to accept the job, or
    (iii) Provides adequate evidence that the workers were not 
qualified, and
    (iv) Provides adequate assurances that qualified workers referred in 
the future will be accepted; or
    (v) Requests a hearing from the State agency pursuant to 
Sec. 658.417.
    (7) Where the decision is based on lack of cooperation in the 
conduct of field checks, the State agency shall specify the lack of 
cooperation, the employer shall be notified that all JS services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that he did cooperate, or
    (ii) Cooperates immediately in the conduct of field checks, and
    (iii) Provides assurances that he/she will cooperate in future field 
checks in further activity, or
    (iv) Requests a hearing from the State agency pursuant to 
Sec. 658.417.
    (b) If the employer chooses to respond pursuant to this section by 
providing documentary evidence or assurances, he/she must at the same 
time request a hearing if such hearing is desired in the event that the 
State agency does not accept the documentary evidence or assurances as 
adequate.
    (c) Where the decision is based on repeated initiation of procedures 
for discontinuation of services, the employer shall be notified that 
services have been terminated.
    (d) If the employer makes a timely request for a hearing, in 
accordance with this section, the State agency shall follow procedures 
set forth at Sec. 658.417 and notify the complainant whenever the 
discontinuation of services is based on a complaint pursuant to 
Sec. 658.501(a)(5).



Sec. 658.503  Discontinuation of services.

    (a) If the employer does not provide a satisfactory response in 
accordance with Sec. 658.502, within 20 working days, or has not 
requested a hearing, the State agency shall immediately terminate 
services to the employer.
    (b) If services are discontinued to an employer subject to Federal 
Contractor Job Listing Requirements, the State agency shall notify the 
ETA regional office immediately.

[[Page 641]]



Sec. 658.504  Reinstatement of services.

    (a) Services may be reinstated to an employer after discontinuation 
under Sec. 658.503, if:
    (1) The State is ordered to do so by a Federal Administrative Law 
Judge or Regional Administrator, or
    (2) (i) The employer provides adequate evidence that any policies, 
procedures or conditions responsible for the previous discontinuation of 
services have been corrected and that the same or similar difficulties 
are not likely to occur in the future, and
    (ii) The employer provides adequate evidence that the employer has 
responded adequately to any findings of an enforcement agency, State JS 
agency, or USES, including restitution to the complainant and the 
payment of any fines, which were the basis of the discontinuation of 
services.
    (b) The State agency shall notify, within 20 working days, the 
employer requesting reinstatement whether his request has been granted. 
If the State denies the request for reinstatement, the basis for the 
denial shall be specified and the employer shall be notified that he/she 
may request a hearing within 20 working days.
    (c) If the employer makes a timely request for a hearing, the State 
agency shall follow the procedures set forth at Sec. 658.417.
    (d) The State agency shall reinstate services to an employer if 
ordered to do so by a State hearing officer, Regional Administrator, or 
Federal Administrative Law Judge as a result of a hearing offered 
pursuant to paragraph (c) of this section.



  Subpart G--Review and Assessment of State Agency Compliance With Job 
                           Service Regulations

    Authority:  Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et 
seq. 5 U.S.C. 301 et seq.



Sec. 658.600  Scope and purpose of subpart.

    This subpart sets forth the regulations governing review and 
assessment of State agency compliance with the Job Service regulations 
at 20 CFR parts 601, 602, 603, 604, 620, 621, 651-658 and 29 CFR part 8. 
All recordkeeping and reporting requirements contained in parts 653 and 
658 have been approved by the Office of Management and Budget as 
required by the Federal Reports Act of 1942.



Sec. 658.601  State agency responsibility.

    (a) Each State agency shall establish and maintain a self-appraisal 
system for job service operations to determine success in reaching goals 
and to correct deficiencies in performance. The self-appraisal system 
shall include numerical (quantitative) appraisal and non-numerical 
(qualitative) appraisal.
    (1) Numerical appraisal at the local office level shall be conducted 
as follows:
    (i) Performance shall be measured on a quarterly-basis against 
planned service levels as stated in the State Program and Budget Plan 
(PBP). The State plan shall be consistent with numerical goals contained 
in local office plans.
    (ii) To appraise numerical activities/indicators, actual results as 
shown on the Employment Security Automated Reporting System (ESARS) 
tables and Cost Accounting Reports shall be compared to planned levels. 
Variances between achievement and plan shall be identified.
    (iii) When the numerical appraisal of required activities/indicators 
identifies significant variances from planned levels, additional 
analysis shall be conducted to isolate possible contributing factors. 
This data analysis shall include, as appropriate, comparisons to past 
performance, attainment of PBP goals and consideration of pertinent non-
numerical factors.
    (iv) Results of local office numerical reviews shall be documented 
and significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(6) shall be developed to address these 
deficiencies.
    (v) The result of local office appraisal, including corrective 
action plans, shall be communicated in writing to the next higher level 
of authority for review. This review shall cover adequacy of analysis, 
appropriateness of corrective actions, and need for higher level 
involvement. When this review is conducted at an area or district

[[Page 642]]

office, a report describing local office performance within the area or 
district jurisdiction shall be communicated to the central office on a 
quarterly basis.
    (2) Numerical appraisal at the central office level shall be 
conducted as follows:
    (i) Performance shall be measured on a quarterly basis against 
planned service levels as stated in the State Program and Budget Plan 
(PBP). The State plan shall be consistent with numerical goals contained 
in local office plans.
    (ii) To appraise these key numerical activities/indicators, actual 
results as shown on the Employment Security Automated Reporting System 
(ESARS) tables and Cost Accounting Reports shall be compared to planned 
levels. Variances between achievement and plan shall be identified.
    (iii) The central office shall review Statewide data, and 
performance against planned service levels as stated in the State 
Program and Budget Plan (PBP) on at least a quarterly basis to identify 
significant Statewide deficiencies and to determine the need for 
additional analysis, including identification of trends, comparisons to 
past performance, and attainment of PBP goals.
    (iv) Results of numerical reviews shall be documented and 
significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(5) of this section shall be developed to 
address these deficiencies. These plans shall be submitted to the ETA 
Regional Office as part of the periodic performance process described at 
20 CFR 658.603(d)(2).
    (3) Nonnumerical (qualitative) appraisal of local office job service 
title III activities shall be conducted at least annually as follows:
    (i) Each local office shall assess the quality of its services to 
applicants, employers, and the community and its compliance with Federal 
regulations.
    (ii) At a minimum, nonnumerical review shall include an assessment 
of the following factors:
    (A) Appropriateness of services provided to applicants and 
employers;
    (B) Timely delivery of services to applicants and employers;
    (C) Staff responsiveness to individual applicant and employer needs;
    (D) Thoroughness and accuracy of documents prepared in the course of 
service delivery; and
    (E) Effectiveness of JS interface with external organizations, i.e., 
other ETA funded programs, community groups, etc.
    (iii) Nonnumerical review methods shall include:
    (A) Observation of processes;
    (B) Review of documents used in service provisions; and
    (C) Solicitation of input from applicants, employers, and the 
community.
    (iv) The result of nonnumerical reviews shall be documented and 
deficiencies identified. A corrective action plan that addresses these 
deficiencies as described in paragraph (a)(6) of this section shall be 
developed.
    (v) The result of local office nonnumerical appraisal, including 
corrective actions, shall be communicated in writing to the next higher 
level of authority for review. This review shall cover thoroughness and 
adequacy of local office appraisal, appropriateness of corrective 
actions, and need for higher level involvement. When this review is 
conducted at an area or district level, a report summarizing local 
office performance within that jurisdiction shall be communicated to the 
central office on an annual basis.
    (4) As part of its oversight responsibilities, the central office 
shall conduct onsite reviews in those local offices which show 
continuing internal problems or deficiencies in performance as indicated 
by such sources as data analysis, nonnumerical appraisal, or other 
sources of information.
    (5) Nonnumerical (qualitative) review of central office job service 
activities shall be conducted as follows:
    (i) Central office operations shall be assessed annually to 
determine compliance with Federal regulations and to assess progress 
made on annually established work plans established for central office 
staff.
    (ii) Results of nonnumerical reviews shall be documented and 
deficiencies identified. A corrective action plan that addresses these 
deficiencies shall be developed.

[[Page 643]]

    (6) Corrective action plans developed to address deficiencies 
uncovered at any administrative level within the State as a result of 
the self-appraisal process shall include:
    (i) Specific descriptions of the type of action to be taken, the 
time frame involved and the assignment of responsibility.
    (ii) Provision for the delivery of technical assistance as needed.
    (iii) A plan to conduct follow-up on a timely basis to determine if 
action taken to correct the deficiencies has been effective.
    (7) (a) The provisions of the JS regulations which require numerical 
and nonnumerical assessment of service to special applicant groups, 
e.g., services to veterans at 20 CFR 653.221 through 653.230 and 
services to MSFWs at 20 CFR 653.108, are supplementary to the provisions 
of this section.
    (b) Each State Administrator and local office manager shall assure 
that their staffs know and carry out JS regulations, including 
regulations on performance standards and program emphases, and any 
corrective action plans imposed by the State agency or by the ETA.
    (c) Each State Administrator shall assure that the State agency 
complies with its approved program budget plan.
    (d) Each State Administrator shall assure to the maximum extent 
feasible the accuracy of data entered by the State agency into ETA 
required management information systems. Each State agency shall 
establish and maintain a data validation system pursuant to ETA 
instructions. The system shall review every local office at least once 
every four years. The system shall include the validation of time 
distribution reports and the review of data gathering procedures.



Sec. 658.602  ETA national office responsibility.

    The ETA national office shall:
    (a) Monitor ETA regional offices' carrying out of JS regulations;
    (b) From time to time, conduct such special reviews and audits as 
necessary to monitor ETA regional office and State agency compliance 
with JS regulations;
    (c) Offer technical assistance to the ETA regional offices and State 
agencies in carrying out JS regulations and programs;
    (d) Have report validation surveys conducted in support of resource 
allocations;
    (e) Develop tools and techniques for reviewing and assessing State 
agency performance and compliance with JS regulations.
    (f) ETA shall appoint a National MSFW Monitor Advocate, who shall 
devote full time to the duties set forth in this subpart. The National 
MSFW Monitor Advocate shall:
    (i) Review the effective functioning of the Regional and State MSFW 
Monitor Advocates;
    (ii) Review the performance of State agencies in providing the full 
range of JS services to MSFWs;
    (iii) Take steps to resolve or refer JS-related problems of MSFWs 
which come to his/her attention;
    (iv) Take steps to refer non JS-related problems of MSFWs which come 
to his/her attention;
    (v) Recommend to the Administrator changes in policy toward MSFWs; 
and
    (vi) Serve as an advocate to improve services for MSFWs within JS. 
The National MSFW Monitor Advocate shall be a member of the National 
Farm Labor Coordinated Enforcement Staff Level Working Committee.
    (1) The National MSFW Monitor Advocate shall be appointed by the 
Administrator after informing farmworker organizations and other 
organizations with expertise concerning MSFWs of the openings and 
encouraging them to refer qualified applicants to apply through the 
federal merit system. Among qualified candidates, determined through 
merit systems procedures, individuals shall be sought who meet the 
criteria used in the selection of the State MSFW Monitor Advocates, as 
provided in Sec. 653.108(b).
    (2) The National MSFW Monitor Advocate shall be assigned staff 
necessary to fulfill effectively all the responsibilities set forth in 
this subpart.
    (3) The National MSFW Monitor Advocate shall submit an annual report 
(``Annual Report'') to the Administrator, the ETA Assistant Secretary,

[[Page 644]]

and the National Farm Labor Coordinating Committee covering the matters 
set forth in this subpart.
    (4) The National MSFW Monitor Advocate shall monitor and assess 
State agency compliance with JS regulations affecting MSFWs on a 
continuing basis. His/her assessment shall consider
    (i) Information from Regional and State MSFW Monitor Advocates;
    (ii) Program performance data, including the service indicators;
    (iii) Periodic reports from regional offices;
    (iv) All federal on-site reviews;
    (v) Selected State on-site reviews;
    (vi) Other relevant reports prepared by USES;
    (vii) Information received from farmworker organizations and 
employers; and
    (viii) His/her personal observations from visits to State JS 
offices, agricultural work sites and migrant camps. In the Annual 
Report, the National MSFW Monitor Advocate shall include both a 
quantitative and qualitative analysis of his/her findings and the 
implementation of his/her recommendations by State and federal 
officials, and shall address the information obtained from all of the 
foregoing sources.
    (5) The National MSFW Monitor Advocate shall review the activities 
of the State/federal monitoring system as it applies to services to 
MSFWs and the JS complaint system including the effectiveness of the 
regional monitoring function in each region and shall recommend any 
appropriate changes in the operation of the system. The National MSFW 
Monitor Advocate's findings and recommendations shall be fully set forth 
in the Annual Report.
    (6) If the National MSFW Monitor Advocate finds that the 
effectiveness of any Regional MSFW Monitor Advocate has been 
substantially impeded by the Regional Administrator or other Regional 
Office official, he/she shall, if unable to resolve such problems 
informally, report and recommend appropriate actions directly to the 
Administrator. If the National MSFW Monitor Advocate receives 
information that the effectiveness of any State Monitor Advocate has 
been substantially impeded by the State Administrator or other State or 
federal JS official, he/she shall, in the absence of a satisfactory 
informal resolution at the regional level, report and recommend 
appropriate actions directly to the Administrator.
    (7) The National MSFW Monitor Advocate shall be informed of all 
proposed changes in policy and practice within USES, including JS 
regulations, which may affect the delivery of services to MSFWs. The 
National MSFW Monitor Advocate shall advise the Administrator concerning 
all such proposed changes which may adversely affect MSFWs. The National 
MSFW Monitor Advocate shall propose directly to the Administrator 
changes in JS policy and administration which may substantially improve 
the delivery of services to MSFWs. He/she shall also recommend changes 
in the funding of state agencies and/or adjustment or reallocation of 
the discretionary portions of funding formulae.
    (8) The National MSFW Monitor Advocate shall participate in the 
review and assessment activities required in this section and 
Sec. 658.700 et seq. As part of such participation, the National MSFW 
Monitor Advocate, or if he/she is unable to participate a Regional MSFW 
Monitor Advocate, shall accompany the National Office review team on 
National Office on-site reviews. The National MSFW Monitor Advocate 
shall engage in the following activities in the course of each State on-
site review:
    (i) He/she shall accompany selected outreach workers on their field 
visits.
    (ii) He/she shall participate in a random field check[s] of migrant 
camps or work site[s] where MSFWs have been placed on inter or intra 
state clearance orders.
    (iii) He/she shall contact local CETA 303 groups or other farmworker 
organizations as part of the on-site review, and, conduct an interview 
with representatives of the organizations.
    (iv) He/she shall meet with the State MSFW Monitor Advocate and 
discuss the full range of the JS services to MSFWs, including the 
monitoring and complaint systems.
    (9) In addition to the duties specified in paragraph (f)(8) of this 
section, the National MSFW Monitor Advocate each year during the harvest 
season

[[Page 645]]

shall visit the four states with the highest level of MSFW activity 
during the prior fiscal year, if they are not scheduled for a National 
Office on-site review during the current fiscal year, and shall:
    (i) Meet with the State MSFW Monitor Advocate and other central 
office staff to discuss MSFW service delivery, and (ii) contact 
representatives of MSFW organizations and interested employer 
organizations to obtain information concerning JS service delivery and 
coordination with other agencies.
    (10) The National MSFE Monitor Advocate shall perform the duties 
specified in Sec. 658.700. As part of this function, he/she shall 
monitor the performance of regional offices in imposing corrective 
action. The National MSFW Monitor Advocate shall report any deficiencies 
in performance to the Administrator.
    (11) The National MSFW Monitor Advocate shall establish routine and 
regular contacts with CETA 303 groups, other farmworker organizations 
and agricultural employers and/or employer organizations. He/she shall 
attend conferences or meetings of these groups wherever possible and 
shall report to the Administrator and the National Farm Labor 
Coordinated Enforcement Committee on these contacts when appropriate. 
The National MSFW Monitor Advocate shall include in the Annual Report 
recommendations as to how DOL might better coordinate JS and CETA 303 
services as they pertain to MSFWs.
    (12) In the event that any State or Regional MSFW Monitor Advocate, 
enforcement agency or MSFW group refers a matter to the National MSFW 
Monitor Advocate which requires emergency action, he/she shall assist 
them in obtaining action by appropriate agencies and staff, inform the 
originating party of the action taken, and, upon request, provide 
written conformation.
    (13) Through all the mechanisms provided in this subpart, the 
National MSFW Monitor Advocate shall aggressively seek to ascertain and 
remedy, if possible, systemic deficiencies in the provisions of JS 
services and protections afforded by these regulations to MSFWs. The 
National MSFW Monitor Advocate shall:
    (i) Use the regular reports on complaints submitted by State 
agencies and ETA regional offices to assess the adequacy of these 
systems and to determine the existence of systemic deficiencies.
    (ii) Provide technical assistance to ETA regional office and State 
agency staffs for administering the JS complaint system.
    (iii) Recommend to the Administrator specific instructions for 
action by regional office staff to correct any JS-related systemic 
deficiencies. Prior to any ETA review of regional office operations 
concerning JS services to MSFWs, the National MSFW Monitor Advocate 
shall provide to the Administrator a brief summary of JS-related 
services to MSFWs in that region and his/her recommendations for 
incorporation in the regional review materials as the Administrator and 
ETA reviewing organization deem appropriate.
    (iv) Recommend to the National Farm Labor Coordinated Enforcement 
Committee specific instructions for action by ESA and OSHA regional 
office staff to correct any non-JS-related systemic deficiencies of 
which he/she is aware.



Sec. 658.603  ETA regional office responsibility.

    (a) The Regional Administrator shall have responsibility for the 
regular review and assessment of State agency performance and compliance 
with JS regulations.
    (b) The Regional Administrator shall review and approve annual 
program budget plans for the State agencies within the region. In 
reviewing the program budget plans the Regional Administrator shall 
consider relevant factors including the following:
    (1) State agency compliance with JS regulations;
    (2) State agency performance against the goals and objectives 
established in the previous year's program budget plan;

[[Page 646]]

    (3) The effect which economic conditions and other external factors 
considered by the ETA in the resource allocation process may have had or 
are expected to have on State agency performance;
    (4) State agency adherence to national program emphasis; and
    (5) The adequacy and appropriateness of the program budget plan for 
carrying out JS programs.
    (c) The Regional Administrator shall assess the overall performance 
of State agencies on an ongoing basis through desk reviews and the use 
of required reporting systems and other available information.
    (d) As appropriate, Regional Administrators shall conduct or have 
conducted:
    (1) Comprehensive on-site reviews of State agencies and their 
offices to review State agency organization, management, and program 
operations;
    (2) Periodic performance reviews of State agency operation of JS 
programs to measure actual performance against the program budget plan, 
past performance, the performance of other State agencies, etc.;
    (3) Audits of State agency programs to review State agency program 
activity and to assess whether the expenditure of grant funds has been 
in accordance with the approved budget. Regional Administrators may also 
conduct audits through other agencies or organizations or may require 
the State agency to have audits conducted;
    (4) Validations of data entered into management information systems 
to assess:
    (i) The accuracy of data entered by the State agencies into 
management information system;
    (ii) Whether the State agencies' data validating and reviewing 
procedures conform to ETA instructions; and
    (iii) Whether State agencies have implemented any corrective action 
plans required by the ETA to remedy deficiencies in their validation 
programs;
    (5) Technical assistance programs to assist State agencies in 
carrying out JS regulations and programs;
    (6) Reviews to assess whether the State agency has complied with 
corrective action plans imposed by the ETA or by the State agency 
itself; and
    (7) Random, unannounced field checks of a sample of agricultural 
work sites to which JS placements have been made through the clearance 
system to determine and document whether wages, hours, working and 
housing conditions are as specified on the job order. If regional office 
staff find reason to believe that conditions vary from job order 
specifications, findings should be documented on the JS Complaint 
Referral Form and provided to the State agency to be handled as a 
complaint under Sec. 658.411(b).
    (e) The Regional Administrator shall provide technical assistance to 
State agencies to assist them in carrying out JS regulations and 
programs.
    (f) The Regional Administrator shall appoint a Regional MSFW Monitor 
Advocate who shall devote full time to the duties set forth in this 
subpart. The Regional MSFW Monitor Advocate shall:
    (i) Review the effective functioning of the State MSFW Monitor 
Advocates in his/her region;
    (ii) Review the performance of State agencies in providing the full 
range of JS services to MSFWs;
    (iii) Take steps to resolve JS-related problems of MSFWs which come 
to his/her attention;
    (iv) Recommend to the Regional Administrator changes in policy 
towards MSFWs;
    (v) Review the operation of the JS complaint system; and
    (vi) Serve as an advocate to improve service for MSFWs within JS. 
The Regional MSFW Monitor Advocate shall be a member of the Regional 
Farm Labor Coordinated Enforcement Committee.
    (1) The Regional MSFW Monitor Advocate shall be appointed by the 
Regional Administrator after informing farmworker organizations and 
other organizations in the region with expertise concerning MSFWs of the 
opening and encouraging them to refer qualified applicants to apply 
through the federal merit system. The Regional MSFW Monitor Advocate 
shall have direct personal access to the Regional Administrator wherever 
he/she finds it necessary. Among qualified candidates, individuals shall 
be sought who meet the criteria used in the selection of the

[[Page 647]]

State MSFW Monitor Advocates, as provided in Sec. 653.108(b).
    (2) The Regional Administrator shall ensure that staff necessary to 
fulfill effectively all the regional office responsibilities set forth 
in this subsection are assigned. The Regional MSFW Monitor Advocate 
shall notify the Regional Administrator of any staffing deficiencies and 
the Regional Administrator shall take appropriate action.
    (3) The Regional MSFW Monitor Advocate within the first three months 
of their tenure shall participate in a training session(s) approved by 
the National office.
    (4) At the regional level, the Regional MSFW Monitor Advocate shall 
have primary responsibility for (i) monitoring the effectiveness of the 
JS complaint system set forth at subpart E of this part; (ii) apprising 
appropriate State and ETA officials of deficiencies in the complaint 
system; and (iii) providing technical assistance to State MSFW Monitor 
Advocates in the region.
    (5) At the ETA regional level, the Regional MSFW Monitor Advocate 
shall have primary responsibility for ensuring that State agency 
compliance with JS regulations as they pertain to services to MSFWs is 
monitored by the regional office. He/she shall independently assess on a 
continuing basis the provision of JS services to MSFWs, seeking out and 
using:
    (i) Information from State MSWF Monitor Advocates, including all 
reports and other documents; (ii) program performance data; (iii) the 
periodic and other required reports from State JS offices; (iv) federal 
on-site reviews; (v) other reports prepared by the National office; (vi) 
information received from farmworker organizations and employers; and 
(vii) any other pertinent information which comes to his/her attention 
from any possible source. In addition, the Regional MSFW Monitor 
Advocate shall consider his/her personal observations from visits to JS 
offices, agricultural work sites and migrant camps. The Regional MSFW 
Monitor Advocate shall assist the Regional Administrator and other 
appropriate line officials in applying appropriate corrective and 
remedial actions to State agencies.
    (6) The Regional Administrator's quarterly report to the National 
office shall include the Regional MSFW Monitor Advocate's summary of 
his/her independent assessment as required in paragraph (f)(5) of this 
section. The fourth quarter summary shall include an annual summary from 
the region. The summary also shall include both a quantitative and a 
qualitative analysis of his/her reviews and shall address all the 
matters with respect to which he/she has responsibilities under these 
regulations.
    (7) The Regional MSFW Monitor Advocate shall review the activities 
and performance of the State MSFW Monitor Advocates and the State 
monitoring system in the region, and shall recommend any appropriate 
changes in the operation of the system to the Regional Administrator. 
The Regional MSFW Monitor Advocate's review shall include a 
determination whether the State MSFW Monitor Advocate (i) does not have 
adequate access to information, (ii) is being impeded in fulfilling his/
her duties, or (iii) is making recommendations which are being 
consistently ignored by State agency officials. If the Regional MSFW 
Monitor Advocate believes that the effectiveness of any State MSFW 
Monitor Advocate has been substantially impeded by the State 
Administrator, other State office officials, or any Federal officials, 
he/she shall report and recommend appropriate actions to the Regional 
Administrator. Information copies of the recommendations shall be 
provided the National MSFW Monitor Advocate.
    (8) The Regional MSFW Monitor Advocate shall be informed of all 
proposed changes in policy and practice within USES, including JS 
regulations, which may affect the delivery of services to MSFWs. He/she 
shall advise the Regional Administrator on all such proposed changes 
which, in his/her opinion, may adversely affect MSFWs or which may 
substantially improve the delivery of services to MSFWs. The Regional 
MSFW Monitor Advocate may also recommend changes in JS policy or 
regulations, as well as changes in the funding of State agencies and/or 
adjustments of reallocation of the discretionary portions of funding 
formulae as they pertain to MSFWs.

[[Page 648]]

    (9) The Regional MSFW Monitor Advocate shall participate in the 
review and assessment activities required in this section and 
Sec. 658.700 et seq. He/she, an Assistant, or another Regional MSFW 
Monitor Advocate, shall participate in national office and regional 
office on-site statewide reviews of JS services to MSFWs in States in 
the region. The Regional MSFW Monitor Advocate shall engage in the 
following activities in the course of participating in an on-site State 
agency review:
    (i) He/she shall accompany selected outreach workers on their field 
visits;
    (ii) He/she shall participate in a random field check of migrant 
camps or work sites where MSFWs have been placed on inter or intrastate 
clearance orders;
    (iii) He/she shall contact local CETA 303 groups or other farmworker 
organizations as part of the on-site review, and shall conduct 
interviews with representatives of the organizations; and
    (iv) He/she shall meet with the State MSFW Monitor Advocate and 
discuss the full range of the JS services to MSFWs, including the 
monitoring and complaint system.
    (10) During the calendar quarter preceding the time of peak MSFW 
activity in each State, the Regional MSFW Monitor Advocate shall meet 
with the State MSFW Monitor Advocate and shall review in detail the 
State agency's capability for providing full services to MSFWs as 
required by JS regulations, during the upcoming harvest season. The 
Regional MSFW Monitor Advocate shall offer technical assistance and 
recommend to the State agency and/or the Regional Administrator any 
changes in State policy or practice that he/she finds necessary.
    (11) The Regional MSFW Monitor Advocate each year during the peak 
harvest season shall visit each state in the region not scheduled for an 
on-site review during that fiscal year and shall:
    (i) Meet with the State MSFW Monitor Advocate and other central 
office staff to discuss MSFW service delivery, and (ii) contact 
representatives of MSFW organizations to obtain information concerning 
JS service delivery and coordination with other agencies and interested 
employer organizations.
    (12) The Regional MSFW Monitor Advocate shall initiate and maintain 
regular and personal contacts, including informal contacts in addition 
to those specifically required by these regulations, with State MSFW 
Monitor Advocates in the region. In addition, the Regional MSFW Monitor 
Advocate shall have personal and regular contact with the National MSFW 
Monitor Advocate. The Regional MSFW Monitor Advocate shall also 
establish routine and regular contacts with CETA 303 groups, other 
farmworker organizations and agricultural employers and/or employer 
organizations in his/her region. He/she shall attend conferences or 
meetings of these groups wherever possible and shall report to the 
Regional Administrator and the Regional Farm Labor Coordinated 
Enforcement Committee on these contacts when appropriate. He/she shall 
also make recommendations as to how DOL might better coordinate JS and 
CETA 303 services to MSFWs.
    (13) The Regional MSFW Monitor Advocate shall attend MSFW-related 
public meeting(s) conducted in the region, pursuant to 29 CFR 42.20. 
Following such meetings or hearings, the Regional MSFW Monitor Advocate 
shall take such steps or make such recommendations to the Regional 
Administrator, as he/she deems necessary to remedy problem(s) or 
condition(s) identified or described therein.
    (14) The Regional MSFW Monitor Advocate shall attempt to achieve 
regional solutions to any problems, deficiencies or improper practices 
concerning services to MSFWs which are regional in scope. Further, he/
she shall recommend policies, offer technical assistance or take any 
other necessary steps as he/she deems desirable or appropriate on a 
regional, rather than state-by-state basis, to promote region-wide 
improvement in JS services to MSFWs. He/she shall facilitate region-wide 
coordination and communication regarding provision of JS services to 
MSFWs among State MSFW Monitor Advocates, State Administrators and 
federal ETA officials to the greatest extent possible. In the event that 
any State or other Regional MSFW Monitor Advocate, enforcement agency, 
or MSFW group refers a matter to the Regional MSFW Monitor Advocate 
which

[[Page 649]]

requires emergency action, he/she shall assist them in obtaining action 
by appropriate agencies and staff, inform the originating party of the 
action taken, and, upon request, provide written confirmation.
    (15) The Regional MSFW Monitor Advocate shall initiate and maintain 
such contacts as he/she deems necessary with Regional MSFW Monitor 
Advocates in other regions to seek to resolve problems concerning MSFWs 
who work, live or travel through the region. He/she shall recommend to 
the Regional Administrator and/or the National office inter-regional 
cooperation on any particular matter, problem, or policy with respect to 
which inter-regional action is desirable.
    (16) The Regional MSFW Monitor Advocate shall establish regular 
contacts with the ESA and OSHA farmworker specialists in the region and, 
to the extent necessary, shall establish contacts with the staff of 
other DOL agencies represented on the Regional Farm Labor Coordinated 
Enforcement Committee. The Regional MSFW Monitor Advocate shall 
coordinate his/her efforts with specialists in the region to ensure that 
the policy specified in 29 CFR 42.20(c)(3) is followed.
    (17) The Regional MSFW Monitor Advocate shall participate in the 
regional reviews of State agency Program Budget Plans, and shall comment 
to the Regional Administrator as to the adequacy of the affirmative 
action plans, the outreach plans, and other specific plans included 
therein.



Sec. 658.604  Assessment and evaluation of program performance data.

    (a) State agencies shall compile program performance data required 
by ETA, including statistical information on program operations.
    (b) The ETA shall use the program performance data in assessing and 
evaluating whether the State agencies have complied with JS regulations 
and their State agency program budget plans.
    (c) In assessing and evaluating program performance data, the ETA 
shall act in accordance with the following general principles:
    (1) The fact that the program performance data from a State agency, 
whether overall or relative to a particular program activity, indicate 
poor program performance does not by itself constitute a violation of JS 
regulations or of the State agency's responsibilities under its State 
agency program budget plan;
    (2) Program performance data, however, may so strongly indicate that 
a State agency's performance is poor that the data may raise a 
presumption (prima facie case) that a State agency is violating JS 
regulations or the State agency program budget plan. A State agency's 
failure to meet the operational objectives set forth in the PBP shall 
raise a presumption that the agency is violating JS regulations and/or 
its PBP. In such cases the ETA shall afford the State agency an 
opportunity to rebut the presumption of a violation pursuant to the 
procedures at subpart H of this part.
    (3) The ETA shall take into account that certain program performance 
data may measure items over which State agencies have direct or 
substantial control while other data may measure items over which the 
State agency has indirect or minimal control.
    (i) Generally, for example, a State agency has direct and 
substantial control over the delivery of job services such as referrals 
to jobs, job development contacts, applicant counseling, referrals to 
supportive services and the conduct of field checks.
    (ii) State agencies, however, have only indirect control over the 
outcome of services. State agencies, for example, cannot guarantee that 
an employer will hire a referred applicant, nor can they guarantee that 
the terms and conditions of employment will be as stated on a job order.
    (iii) Outside forces, moreover, such as a sudden heavy increase in 
unemployment rates, a strike by State agency employees, or a severe 
drought or flood may skew the results measured by program performance 
data;
    (4) The ETA shall consider a State agency's failure to keep accurate 
and complete program performance data required by JS regulations as a 
violation of the JS regulations.

[[Page 650]]



Sec. 656.605  Communication of findings to State agencies.

    (a) The Regional Administrator shall inform State agencies in 
writing of the results of review and assessment activities and, as 
appropriate, shall discuss with the State Administrator the impact or 
action required by ETA as a result of review and assessment activities.
    (b) The ETA national office shall transmit the results of any review 
and assessment activities conducted by it to the Regional Administrator 
who shall send the information to the State agency.
    (c) Whenever the review and assessment indicates a State agency 
violation of JS regulations or its State agency program budget plan, the 
Regional Administrator shall follow the procedures set forth at subpart 
H of this part.
    (d) Regional Administrators shall follow-up any corrective action 
plan imposed on a State agency under subpart H of this part by further 
review and assessment of the State agency pursuant to this subpart.



   Subpart H--Federal Application of Remedial Action to State Agencies

    Authority:  Wagner-Peyser Act of 1933, as amended, 29 U.S.C. 49 et 
seq.; 5 U.S.C. 301 et seq.



Sec. 658.700  Scope and purpose of subpart.

    This subpart sets forth the procedures which ETA shall follow upon 
either discovering independently or receiving from other(s) information 
indicating that State agencies may not be adhering to JS regulations.



Sec. 658.701  Statements of policy.

    (a) It is the policy of the Employment and Training Administration 
(ETA) to take all necessary action, including the imposition of the full 
range of sanctions set forth in this subpart, to ensure that State 
agencies comply with all requirements established by JS regulations.
    (b) It is the policy of ETA to initiate decertification procedures 
against State agencies in instances of serious or continual violations 
of JS regulations if less stringent remedial actions taken in accordance 
with this subpart fail to resolve noncompliance.
    (c) It is the policy of the ETA to act on information concerning 
alleged violations by State agencies of the JS regulations received from 
any person or organization.



Sec. 658.702  Initial action by the Regional Administrator.

    (a) The ETA Regional Administrator shall be responsible for ensuring 
that all State agencies in his/her region are in compliance with JS 
regulations.
    (b) Wherever a Regional Administrator discovers or is apprised of 
possible State agency violations of JS regulations by the review and 
assessment activities under subpart G of this part, or through required 
reports or written complaints from individuals, organizations or 
employers which are elevated to ETA after the exhaustion of State agency 
administrative remedies, the Regional Administrator shall conduct an 
investigation. Within 10 days after receipt of the report or other 
information, the Regional Administrator shall make a determination 
whether there is probable cause to believe that a State agency has 
violated JS regulations.
    (c) The Regional Administrator shall accept complaints regarding 
possible State agency violations of JS regulations from employee 
organizations, employers or other groups, without exhaustion of the 
complaint process described at subpart E, if the Regional Administrator 
determines that the nature and scope of the complaint are such that the 
time required to exhaust the administrative procedures at the State 
level would adversely affect a significant number of applicants. In such 
cases, the Regional Administrator shall investigate the matter within 10 
working days, may provide the State agency 10 working days for comment, 
and shall make a determination within an additional 10 working days 
whether there is probable cause to believe that the State agency has 
violated JS regulations.
    (d) If the Regional Administrator determines that there is no 
probable cause to believe that a State agency has violated JS 
regulations, he/she

[[Page 651]]

shall retain all reports and supporting information in ETA files. In all 
cases where the Regional Administrator has insufficient information to 
make a probable cause determination, he/she shall so notify the 
Administrator in writing and the time for the investigation shall be 
extended 20 additional working days.
    (e) If the Regional Administrator determines that there is probable 
cause to believe that a State agency has violated JS regulations, he/she 
shall issue a Notice of Initial Findings of Non-compliance by registered 
mail to the offending State agency. The Notice will specify the nature 
of the violation, cite the regulations involved, and indicate corrective 
action which may be imposed in accordance with paragraphs (g) and (h) of 
this section. If the non-compliance involves services to MSFWs or the JS 
complaint system, a copy of said notice shall be sent to the National 
MSFW Monitor Advocate.
    (f)(1) The State agency shall have 20 working days to comment on the 
findings, or a longer period, up to 20 additional days, if the Regional 
Administrator determines that such a longer period is appropriate. The 
State agency's comments shall include agreement or disagreement with the 
findings and suggested corrective actions, where appropriate.
    (2) After the period elapses, the Regional Administrator shall 
prepare within 20 working days, written final findings which specify 
whether or not the State agency has violated JS regulations. If in the 
final findings the Regional Administrator determines that the State 
agency has not violated JS regulations, the Regional Administrator shall 
notify the State Administrator of this finding and retain supporting 
documents in his/her files. If the final finding involves services to 
MSFWs or the JS complaint system, the Regional Administrator shall also 
notify the National Monitor Advocate. If the Regional Administrator 
determines that a State agency has violated JS regulations, the Regional 
Administrator shall prepare a Final Notice of Noncompliance which shall 
specify the violation(s) and cite the regulations involved. The Final 
Notice of Noncompliance shall be sent to the State agency by registered 
mail. If the noncompliance involves services to MSFWs or the JS 
complaint system, a copy of the Final Notice shall be sent to the 
National MSFW Monitor Advocate.
    (g) If the violation involves the misspending of grant funds, the 
Regional Administrator may order in the Final Notice of Noncompliance a 
disallowance of the expenditure and may either demand repayment or 
withhold future funds in the amount in question. If the Regional 
Administrator disallows costs, the Regional Administrator shall give the 
reasons for the disallowance, inform the State agency that the 
disallowance is effective immediately and that no more funds may be 
spent in the unallowed manner, and offer the State agency the 
opportunity to request a hearing pursuant to Sec. 658.707. The offer, or 
the acceptance of an offer of a hearing, however, shall not stay the 
effectiveness of the disallowance. The Regional Administrator shall keep 
complete records of the disallowance.
    (h) If the violation does not involve misspending of grant funds or 
the Regional Administrator determines that the circumstances warrant 
other action:
    (1) The Final Notice of Noncompliance shall direct the State agency 
to implement a specific corrective action plan to correct all 
violations. If the State agency's comment demonstrates with supporting 
evidence (except where inappropriate) that all violations have already 
been corrected, the Regional Administrator need not impose a corrective 
action plan and instead may cite the violations and accept their 
resolution, subject to follow-up review, if necessary. If the Regional 
Administrator determines that the violation(s) cited had been found 
previously and that the corrective action(s) taken had not corrected the 
violation(s) contrary to the findings of previous follow-up reviews, the 
Regional Administrator shall apply remedial actions to the State agency 
pursuant to Sec. 658.704.
    (2) The Final Notice of Noncompliance shall specify the time by 
which each corrective action must be taken. This period shall not exceed 
40 working

[[Page 652]]

days unless the Regional Administrator determines that exceptional 
circumstances necessitate corrective actions requiring a longer time 
period. In such cases, and if the violations involve services to MSFWs 
or the JS complaint system, the Regional Administrator shall notify the 
Administrator in writing of the exceptional circumstances which 
necessitate a longer time period, and shall specify that time period. 
The specified time period shall commence with the date of signature on 
the registered mail receipt.
    (3) When the time period provided for in paragraph (h)(2) of this 
section elapses, ETA staff shall review the State agency's efforts as 
documented by the State agency to determine if the corrective action(s) 
has been taken and if the State agency has achieved compliance with JS 
regulations. If necessary, ETA staff shall conduct a follow-up visit as 
part of this review.
    (4) If, as a result of this review, the Regional Administrator 
determines that the State agency has corrected the violation(s), the 
Regional Administrator shall record the basis for this determination, 
notify the State agency, send a copy to the Administrator, and retain a 
copy in ETA files.
    (5) If, as a result of this review, the Regional Administrator 
determines that the State has taken corrective action but is unable to 
determine if the violation has been corrected due to seasonality or 
other factors, the Regional Administrator shall notify in writing the 
State agency and the Administrator of his/her findings. The Regional 
Administrator shall conduct further follow-up at an appropriate time to 
make a final determination if the violation has been corrected. If the 
Regional Administrator's further follow-up reveals that violations have 
not been corrected, the Regional Administrator shall apply remedial 
actions to the State agency pursuant to Sec. 658.704.
    (6) If, as a result of the review the Regional Administrator 
determines that the State agency has not corrected the violations and 
has not made good faith efforts and adequate progress toward the 
correction of the violations, the Regional Administrator shall apply 
remedial actions to the State agency pursuant to Sec. 658.704.
    (7) If, as a result of the review, the Regional Administrator 
determines that the State agency has made good faith efforts and 
adequate progress toward the correction of the violation and it appears 
that the violation will be fully corrected within a reasonable time 
period, the State agency shall be advised by registered mail (with a 
copy sent to the Administrator) of this conclusion, of remaining 
differences, of further needed corrective action, and that all 
deficiencies must be corrected within a specified time period. This 
period shall not exceed 40 working days unless the Regional 
Administrator determines that exceptional circumstances necessitate 
corrective action requiring a longer time period. In such cases, the 
Regional Administrator shall notify the Administrator in writing of the 
exceptional circumstances which necessitate a longer time period, and 
shall specify that time period. The specified time period shall commence 
with the date of signature on the registered mail receipt.
    (8) (i) If the State agency has been given an additional time period 
pursuant to paragraph (b)(7) of this section, ETA staff shall review the 
State agency's efforts as documented by the State agency at the end of 
the time period. If necessary, ETA shall conduct a follow-up visit as 
part of this review.
    (ii) If the State agency has corrected the violation(s), the 
Regional Administrator shall document that finding, notify in writing 
the State agency and the Administrator, and retain supporting documents 
in ETA files. If the State agency has not corrected the violation(s), 
the Regional Administrator shall apply remedial actions pursuant to 
Sec. 658.704.



Sec. 658.703  Emergency corrective action.

    In critical situations as determined by the Regional Administrator, 
where it is necessary to protect the integrity of the funds, or insure 
the proper operation of the program, the Regional Administrator may 
impose immediate corrective action. Where immediate corrective action is 
imposed, the Regional Administrator shall notify the

[[Page 653]]

State agency of the reason for imposing the corrective action prior to 
providing the State agency an opportunity to comment.



Sec. 658.704  Remedial actions.

    (a) If a State agency fails to correct violations as determined 
pursuant to Sec. 658.702, the Regional Administrator shall apply one or 
more of the following remedial actions to the State agency:
    (1) Imposition of special reporting requirements for a specified 
period of time;
    (2) Restrictions of obligational authority within one or more 
expense classifications;
    (3) Implementation of specific operating systems or procedures for a 
specified time;
    (4) Requirement of special training for State agency personnel;
    (5) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, the elevation of specific decision-making functions 
from the State Administrator to the Regional Administrator;
    (6) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, the imposition of Federal staff in key State agency 
positions;
    (7) With the approval of the Assistant Secretary and after affording 
the State Administrator the opportunity to request a conference with the 
Assistant Secretary, funding of the State agency on a short-term basis 
or partial withholding of funds for a specific function or for a 
specific geographical area;
    (8) Holding of public hearings in the State on the State agency's 
deficiencies;
    (9) Disallowance of funds pursuant to Sec. 658.702(g); or
    (10) If the matter involves a serious or continual violation, the 
initiation of decertification procedures against the State agency, as 
set forth in paragraph (e) of this section.
    (b) The Regional Administrator shall send, by registered mail, a 
Notice of Remedial Action to the State agency. The Notice of Remedial 
Action shall set forth the reasons for the remedial action. When such a 
notice is the result of violations of regulations governing services to 
MSFWs (20 CFR 653.100 et seq.) or the JS complaint system (20 CFR 
658.400 et seq.), a copy of said notice shall be sent to the USES 
Administrator, who shall publish the notice promptly in the Federal 
Register.
    (c) If the remedial action is other than decertification, the notice 
shall state that the remedial action shall take effect immediately. The 
notice shall also state that the State agency may request a hearing 
pursuant to Sec. 658.707 by filing a request in writing with the 
Regional Administrator pursuant to Sec. 658.707 within 20 working days 
of the State agency's receipt of the notice. The offer of hearing, or 
the acceptance thereof, however, shall not stay the implementation of 
remedial action.
    (d) Within 60 working days after the initial application of remedial 
action, the Regional Administrator shall conduct a review of the State 
agency's compliance with JS regulations unless the Regional 
Administrator determines that a longer time period is necessary. In such 
cases, the Regional Administrator shall notify the USES Administrator in 
writing of the circumstances which necessitate a longer time period, and 
specify that time period. If necessary, ETA staff shall conduct a 
follow-up visit as part of this review. If the State agency is in 
compliance with the JS regulations, the Regional Administrator shall 
fully document these facts and shall terminate the remedial actions. The 
Regional Administrator shall notify the State agency of his/her 
findings. When the case involves violations of regulations governing 
services to MSFWs or the JS complaint system, a copy of said notice 
shall be sent to the USES Administrator, who shall promptly publish the 
notice in the Federal Register. The Regional Administrator shall 
conduct, within a reasonable time after terminating the remedial 
actions, a review of the State agency's compliance to determine whether 
any remedial actions should be reapplied.
    (e) If, upon conducting the on-site review referred to in paragraph 
(c) of this section, the Regional Administrator

[[Page 654]]

finds that the State agency remains in noncompliance, the Regional 
Administrator shall continue the remedial action and/or impose different 
additional remedial actions. The Regional Administrator shall fully 
document all such decisions and, when the case involves violations of 
regulations governing services to MSFWs or the JS complaint system, 
shall send copies to the USES Administrator, who shall promptly publish 
the notice in the Federal Register.
    (f) (1) If the State agency has not brought itself into compliance 
with JS regulations within 120 working days of the initial application 
of remedial action, the Regional Administrator shall initiate 
decertification unless the Regional Administrator determines that 
circumstances necessitate continuing remedial action for a longer period 
of time. In such cases, the Regional Administrator shall notify the USES 
Administrator in writing of the circumstances which necessitate the 
longer time period, and specify the time period.
    (2) The Regional Administrator shall notify the State agency by 
registered mail of the decertification proceedings, and shall state the 
reasons therefor. Whenever such a notice is sent to a State agency, the 
Regional Administrator shall prepare five indexed copies containing, in 
chronological order, all the documents pertinent to the case along with 
a request for decertification stating the grounds therefor. One copy 
shall be retained. Two shall be sent to the ETA national office, one 
shall be sent to the Solicitor of Labor, Attention: Associate Solicitor 
for Employment and Training, and, if the case involves violations of 
regulations governing services to MSFWs or the complaint system, one 
copy shall be sent to the National MSFW Monitor Advocate. The notice 
sent by the Regional Administrator shall be published promptly in the 
Federal Register.



Sec. 658.705  Decision to decertify.

    (a) Within 30 working days of receiving a request for 
decertification, the Assistant Secretary for ETA shall review the case 
and shall decide whether to proceed with decertification.
    (b) The Assistant Secretary shall grant the request for 
decertification unless he/she makes a finding that (1) the violations of 
JS regulations are neither serious nor continual; (2) the State agency 
is in compliance; or (3) the Assistant Secretary has reason to believe 
that the State agency will achieve compliance within 80 working days 
unless exceptional circumstances necessitate a longer time period, 
pursuant to the remedial action already applied or to be applied. (In 
the event the Assistant Secretary does not have sufficient information 
to act upon the request, he/she may postpone the determination for up to 
an additional 20 working days in order to obtain any available 
additional information.) In making a determination of whether violations 
are ``serious'' or ``continual,'' as required by this subsection, the 
Assistant Secretary shall consider:
    (i) Statewide or multiple deficiencies as shown by performance data 
and/or on-site reviews;
    (ii) Recurrent violations, even if they do not persist over 
consecutive reporting periods, and
    (iii) The good faith efforts of the State to achieve full compliance 
with JS regulations as shown by the record.
    (c) If the Assistant Secretary denies a request for decertification, 
he/she shall write a complete report documenting his/her findings and, 
if appropriate, instructing that an alternate remedial action or actions 
be applied. Copies of the report shall be sent to the Regional 
Administrator. Notice of the Assistant Secretary's decision shall be 
published promptly in the Federal Register, and the report of the 
Assistant Secretary shall be made available for public inspection and 
copying.
    (d) If the Assistant Secretary decides that decertification is 
appropriate, he/she shall submit the case to the Secretary providing 
written explanation for his/her recommendation of decertification.
    (e) Within 30 working days after receiving the report of the 
Assistant Secretary, the Secretary shall determine whether to decertify 
the State agency. The Secretary shall grant the request for 
decertification unless he/she makes one of the three findings set forth 
in Sec. 658.705(b). If the Secretary decides not

[[Page 655]]

to decertify, he/she shall then instruct that remedial action be 
continued or that alternate actions be applied. The Secretary shall 
write a report explaining his/her reasons for not decertifying the State 
agency and copies will be sent to the State agency. Notice of the 
Secretary's decision shall be published promptly in the Federal 
Register, and the report of the Secretary shall be made available for 
public inspection and copy.
    (f) Where either the Assistant Secretary or the Secretary denies a 
request for decertification and order further remedial action, the 
Regional Administrator shall continue to monitor the State agency's 
compliance. If the agency achieves compliance within the time period 
established pursuant to Sec. 658.705(b), the Regional Administrator 
shall terminate the remedial actions. If the State agency fails to 
achieve full compliance within that time period after the Secretary's 
decision not to decertify, the Regional Administrator shall submit a 
report of his/her findings to the Assistant Secretary who shall 
reconsider the request for decertification pursuant to the requirements 
of Sec. 658.705(b).



Sec. 658.706  Notice of decertification.

    If the Secretary decides to decertify a State agency, he/she shall 
send a Notice of Decertification to the State agency stating the reasons 
for this action and providing a 10 working day period during which the 
State agency may request an administrative hearing in writing to the 
Secretary. The notice shall be published promptly in the Federal 
Register.



Sec. 658.707  Requests for hearings.

    (a) Any State agency which received a Notice of Decertification 
under Sec. 658.706 or a notice of disallowance under Sec. 658.702 may 
request a hearing on the issue by filing a written request for hearing 
with the Secretary within 10 working days of receipt of the notice. This 
request shall state the reasons the State agency believes the basis of 
the decision to be wrong, and it must be signed by the State 
Administrator.
    (b) When the Secretary receives a request for a hearing from a State 
agency, he/she shall send copies of a file containing all materials and 
correspondence relevant to the case to the Assistant Secretary, the 
Regional Administrator, the Solicitor of Labor, and the Chief 
Administrative Law Judge of the DOL. When the case involves violations 
of regulations governing services to MSFWs or the ES complaint system, a 
copy shall be sent to the National MSFW Monitor Advocate.
    (c) The Secretary shall publish notice of hearing in the Federal 
Register. This notice shall invite all interested parties to attend and 
to present evidence at the hearing. All interested parties who make 
written request to participate shall thereafter receive copies of all 
documents filed in said proceedings.



Sec. 658.708  Hearings.

    (a) Upon receipt of a hearing file by the Chief Administrative Law 
Judge, the case shall be docketed and notice sent by registered mail, 
return receipt requested, to the Solicitor of Labor, Attention: 
Associate Solicitor for Employment and Training, the Administrator, the 
Regional Administrator and the State Administrator. The notice shall set 
a time, place, and date for a hearing on the matter and shall advise the 
parties that:
    (1) They may be represented at the hearing;
    (2) They may present oral and documentary evidence at the hearing;
    (3) They may cross-examine opposing witnesses at the hearing; and
    (4) They may request rescheduling of the hearing if the time, place, 
or date set are inconvenient.
    (b) The Solicitor of Labor or the Solicitor's designee shall 
represent the Department at the hearing.



Sec. 658.709  Conduct of hearings.

    (a) Hearings shall be conducted in accordance with sections 5-8 of 
the Administrative Procedure Act, 5 U.S.C. 553 et seq.
    (b) Technical rules of evidence shall not apply, but rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to test by cross-examination, shall 
be applied if necessary by

[[Page 656]]

the Administrative Law Judge conducting the hearing. The Administrative 
Law Judge may exclude irrelevant, immaterial or unduly repetitious 
evidence. All documents and other evidence offered or taken for the 
record shall be open to examination by the parties. Opportunity shall be 
given to refute facts and arguments advanced on either side of the 
issue. A transcript shall be made of the oral evidence except to the 
extent the substance thereof is stipulated for the record.
    (c) The general provisions governing discovery as provided in the 
Rules of Civil Procedure for the United States District Court, title V, 
28 U.S.C., rules 26 through 37, may be made applicable to the extent 
that the Administrative Law Judge concludes that their use would promote 
the proper advancement of the hearing.
    (d) When a public officer is a respondent in a hearing in an 
official capacity and during its pendency dies, resigns, or otherwise 
ceases to hold office, the proceeding does not abate and the officer's 
successor is automatically substituted as a party. Proceedings following 
the substitution shall be in the name of the substituted party, but any 
misnomer not affecting the substantive rights of the parties shall be 
disregarded. An order of substitution may be entered at any time, but 
the omission to enter such an order shall not affect the substitution.



Sec. 658.710  Decision of the Administrative Law Judge.

    (a) The Administrative Law Judge shall have jurisdiction to decide 
all issues of fact and related issues of law and to grant or deny 
appropriate motions, but shall not have jurisdiction to decide upon the 
validity of Federal statutes or regulations.
    (b) The decision of the Administrative Law Judge shall be based on 
the hearing record, shall be in writing and shall state the factual and 
legal basis of the decision. Notice of the decision shall be published 
in the Federal Register and the Administrative Law Judge's decision 
shall be available for public inspection and copying.
    (c) Except when the case involves the decertification of a State 
agency, the decision of the Administrative Law Judge shall be the final 
decision of the Secretary.
    (d) If the case involves the decertification of an appeal to the 
State agency, the decision of the Administrative Law Judge shall contain 
a notice stating that, within 30 calendar days of the decision, the 
State agency or the Administrator may appeal to the Administrative 
Review Board, United States Department of Labor, by sending by 
registered mail, return receipt requested, a written appeal to the 
Administrative Review Board, in care of the Administrative Law Judge who 
made the decision.
[45 FR 39468, June 10, 1980, as amended at 61 FR 19983, May 3, 1996]



Sec. 658.711  Decision of the Administrative Review Board.

    (a) Upon the receipt of an appeal to the Administrative Review 
Board, United States Department of Labor, the Administrative Law Judge 
shall certify the record in the case to the Administrative Review Board, 
which shall make a decision to decertify or not on the basis of the 
hearing record.
    (b) The decision of the Administrative Review Board shall be final, 
shall be in writing, and shall set forth the factual and legal basis for 
the decision. Notice of the Administrative Review Board's decision shall 
be published in the Federal Register, and copies shall be made available 
for public inspection and copying.
[61 FR 19983, May 3, 1996]

[[Page 657]]



 CHAPTER VI--EMPLOYMENT STANDARDS ADMINISTRATION, DEPARTMENT OF LABOR




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

SUBCHAPTER A--LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT AND RELATED STATUTES

Part                                                                Page
701             General; administering agency; definitions 
                    and use of terms........................         659
702             Administration and procedure................         662
703             Insurance regulations.......................         709
704             Special provisions for LHWCA extensions.....         719
   SUBCHAPTER B--FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, AS 
                                 AMENDED
718             Standards for determining coal miner's total 
                    disability or death due to 
                    pneumoconiosis..........................         723
722             Criteria for determining whether State 
                    workmen's compensation laws provide 
                    adequate coverage for pneumoconiosis and 
                    listing of approved State laws..........         750
725             Claims for benefits under Part C of Title IV 
                    of the Federal Mine Safety and Health 
                    Act, as amended.........................         762
726             Black lung benefits; requirements for coal 
                    mine operator's insurance...............         831
727             Review of pending and denied claims under 
                    the Black Lung Benefits Reform Act of 
                    1977....................................         842

[[Page 659]]



SUBCHAPTER A--LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT AND RELATED STATUTES





PART 701--GENERAL; ADMINISTERING AGENCY; DEFINITIONS AND USE OF TERMS--Table of Contents




                        Rules in this Subchapter

Sec.
701.101  Scope of this subchapter and subchapter B.
701.102  Organization of this subchapter.

                Office of Workmen's Compensation Programs

701.201  Establishment of Office of Workers' Compensation Programs.
701.202  Transfer of functions.
701.203  Historical background.

                      Terms Used in this Subchapter

701.301  Definitions and use of terms.

               Coverage Under State Compensation Programs

701.401  Coverage under State compensation programs.

    Authority:  5 U.S.C. 301; Reorg. Plan No. 6 of 1950, 15 FR 3174, 64 
Stat. 1263; 33 U.S.C. 939; 36 D.C. Code 501 et seq.; 42 U.S.C. 1651 et 
seq.; 43 U.S.C. 1331; 5 U.S.C. 6171 et seq.; Secretary's Order 1-89; 
Employment Standards Order No. 90-02.

    Source:  38 FR 26860, Sept. 26, 1973, unless otherwise noted.

                        Rules in This Subchapter



Sec. 701.101  Scope of this subchapter and subchapter B.

    (a) This subchapter contains the regulations governing the 
administration of the Longshore and Harbor Workers' Compensation Act 
(LHWCA) and its direct extensions, the Defense Base Act (DBA), the Outer 
Continental Shelf Lands Act (OCSLA), and the Nonappropriated Fund 
Instrumentalities Act (NFLA), and such other amendments and extensions 
as may hereinafter be enacted.
    (b) The regulations also apply to claims filed under the District of 
Columbia Workmen's Compensation Act (DCCA). That law applies to all 
claims for injuries or deaths based on employment events that occurred 
prior to July 26, 1982, the effective date of the District of Columbia 
Workers' Compensation Act.
    (c) The regulations governing administration of the Black Lung 
Benefits Program are in subchapter B of this chapter.
[50 FR 391, Jan. 3, 1985, as amended at 51 FR 4281, Feb. 3, 1986]



Sec. 701.102  Organization of this subchapter.

    This part 701 is intended to provide a general description of the 
regulations in this subchapter, information as to the persons and 
agencies within the Department of Labor authorized by the Secretary of 
Labor to administer the Longshoremen's and Harbor Workers' Compensation 
Act and its extensions and the regulations in this subchapter, and 
guidance as to the meaning and use of specific terms in the several 
parts of this subchapter. Part 702 of this subchapter contains the 
general administrative regulations governing claims filed under the 
LHWCA, and part 703 of this subchapter contains the regulations 
governing authorization of insurance carriers, authorization of self-
insurers, and issuance of certificates of compliance with said insurance 
regulations, as required by sections 32 and 37 of the LHWCA, 33 U.S.C. 
932, 937. Inasmuch as the extensions of the LHWCA (see Sec. 701.101) 
incorporate by reference nearly all of the provisions of the LHWCA, such 
that the regulations governing the latter apply to the extensions with 
very few exceptions, it has been determined that no useful purpose would 
be served by repeating the same provisions for each of the extensions. 
Accordingly, the regulations in parts 702 and 703 shall apply to the 
administration of the extensions (DBA, DCCA, OCSLA, and NFIA), unless 
otherwise noted. The exceptions to the general applicability of parts 
702 and 703 of this subchapter are set forth in succeeding parts in this 
subchapter. Part 704 of this subchapter contains the exceptions for the 
DBA, the DCCA, the OCSLA, and the NFIA.

[[Page 660]]

                Office of Workers' Compensation Programs



Sec. 701.201  Establishment of Office of Workers' Compensation Programs.

    The Assistant Secretary of Labor for Employment Standards, by 
authority vested in him or her by the Secretary of Labor in Secretary's 
Order No. 7-87 (52 FR 48466), established in the Employment Standards 
Administration (ESA) an Office of Workers' Compensation Programs (OWCP). 
The Assistant Secretary further designated as the head thereof a 
Director, who shall administer the programs assigned to that office by 
the Assistant Secretary.
[55 FR 28606, July 12, 1990]



Sec. 701.202  Transfer of functions.

    Pursuant to the authority vested in him or her by the Secretary of 
Labor, the Assistant Secretary for Employment Standards transferred from 
the Bureau of Employees' Compensation to the Office of Workers' 
Compensation Programs all functions of the Department of Labor with 
respect to the administration of benefits programs under the following 
statutes:
    (a) The Longshore and Harbor Workers' Compensation Act, as amended 
and extended, 33 U.S.C. 901 et seq.;
    (b) Defense Base Act, 42 U.S.C. 1651 et seq.;
    (c) District of Columbia Workmen's Compensation Act, 36 D.C. Code 
501 et seq.;
    (d) Outer Continental Shelf Lands Act, 43 U.S.C. 1331;
    (e) Nonappropriated Fund Instrumentalities Act, 5 U.S.C. 8171 et 
seq.;
    (f) Title IV of the Federal Mine Safety and Health Act of 1977, as 
amended, 30 U.S.C. 901 et seq.
[55 FR 28606, July 12, 1990]



Sec. 701.203  Historical background.

    Administration of the Longshoremen's and Harbor Workers' 
Compensation Act (and the Federal Employees' Compensation Act, formerly 
known as the U.S. Employees' Compensation Act), was initially vested in 
an independent establishment known as the U.S. Employees' Compensation 
Commission. By Reorganization Plan No. 2 of 1946 (3 CFR 1943-1949 Comp., 
p. 1064; 60 Stat. 1095, effective July 16, 1946), the Commission was 
abolished and its functions were transferred to the Federal Security 
Agency to be performed by a newly created Bureau of Employees' 
Compensation within such Agency. By Reorganization Plan No. 19 of 1950 
(15 FR 3178, 64 Stat. 1263) said Bureau was transferred to the 
Department of Labor, and the authority formerly vested in the 
Administrator, Federal Security Agency, was vested in the Secretary of 
Labor. By Reorganization Plan No. 6 of 1950 (15 FR 3174, 64 Stat. 1263), 
the Secretary of Labor was authorized to make from time to time such 
provisions as he shall deem appropriate, authorizing the performance of 
any of his functions by any other officer, agency or employee of the 
Department of Labor.

                      Terms Used in This Subchapter



Sec. 701.301  Definitions and use of terms.

    (a) As used in this subchapter, except where the context clearly 
indicates otherwise:
    (1) Act means the Longshoremen's and Harbor Workers' Compensation 
Act, as amended (33 U.S.C. 901 et seq.), also referred to in this 
subchapter as LHWCA, and includes the provisions of any statutory 
extension of such Act (see Sec. 701.101) pursuant to which compensation 
on account of an injury is sought.
    (2) Secretary means the Secretary of Labor, United States Department 
of Labor, or his authorized representative.
    (3) Employment Standards Administration means the Employment 
Standards Administration in the United States Department of Labor, 
headed by the Assistant Secretary of Labor for Employment Standards.
    (4) [Reserved]
    (5) Office of Workers' Compensation Programs or OWCP or the Office 
means the Office of Workers' Compensation Programs in the Department of 
Labor, described in Sec. 701.201 of this part. Whenever the term Office 
of Workmen's Compensation Programs appears in this part or in part 702, 
it shall have the same meaning as Office of Worker's Compensation 
Programs.

[[Page 661]]

    (6) Director means the Director, OWCP, or his authorized 
representative.
    (7) District Director means a person appointed as provided in 
sections 39 and 40 of the LHWCA or his or her designee, authorized by 
the Director to perform functions with respect to the processing and 
determination of claims for compensation under such Act and its 
extensions as provided therein and under this subchapter. These 
regulations substitute this term for the term ``Deputy Commissioner'' 
which is used in the statute. This substitution is for administrative 
purposes only and in no way affects the power or authority of the 
position as established in the statute.
    (8) Administrative Law Judge means an administrative law judge 
appointed as provided in 5 U.S.C. 3105 and subpart B of 5 CFR part 930 
(see 37 FR 16737), who is qualified to preside at hearings under 5 
U.S.C. 557 and is empowered by the Secretary to conduct formal hearings 
whenever necessary in respect of any claim for compensation arising 
under the LHWCA and its extensions.
    (9) Chief Administrative Law Judge means the Chief Judge of the 
Office of Administrative Law Judges, United States Department of Labor.
    (10) Board or Benefits Review Board means the Benefits Review Board 
established by section 21 of the LHWCA (33 U.S.C. 921) as amended and 
constituted and functioning pursuant to the provisions of chapter VII of 
this Title 20 and Secretary of Labor's Order No. 38-72 (38 FR 90).
    (11) Department means the United States Department of Labor.
    (12)(i) Employee means any person engaged in maritime employment, 
including:
    (A) Any longshore worker or other person engaged in longshoring 
operations;
    (B) Any harbor worker, including a ship repairer, shipbuilder and 
shipbreaker;
    (C) Any other individual to whom an injury may be the basis for a 
compensation claim under the LHWCA as amended, or any of its extensions;
    (ii) The term does not include:
    (A) A master or member of a crew of any vessel;
    (B) Any person engaged by a master to load or unload or repair any 
small vessel under eighteen tons net.
    (iii) Nor does this term include the following individuals (whether 
or not the injury occurs over the navigable waters of the United States) 
where it is first determined that they are covered by a state workers' 
compensation act:
    (A) Individuals employed exclusively to perform office clerical, 
secretarial, security, or data processing work (but not longshore cargo 
checkers and cargo clerks);
    (B) Individuals employed by a club (meaning a social or fraternal 
organization whether profit or nonprofit), camp, recreational operation 
(meaning any recreational activity, including but not limited to scuba 
diving, commercial rafting, canoeing or boating activities operated for 
pleasure of owners, members of a club or organization, or renting, 
leasing or chartering equipment to another for the latter's pleasure), 
restaurant, museum or retail outlet;
    (C) Individuals employed by a marina, provided they are not engaged 
in its construction, replacement or expansion, except for routine 
maintenance such as cleaning, painting, trash removal, housekeeping and 
small repairs;
    (D) Employees of suppliers, vendors and transporters temporarily 
doing business on the premises of a covered employer, provided they are 
not performing work normally performed by employees of the covered 
employer;
    (E) Aquaculture workers, meaning those employed by commercial 
enterprises involved in the controlled cultivation and harvest of 
aquatic plants and animals, including the cleaning, processing or 
canning of fish and fish products, the cultivation and harvesting of 
shellfish, and the controlled growing and harvesting of other aquatic 
species;
    (F) Individuals engaged in the building, repairing or dismantling of 
recreational vessels under 65 feet in length. For purposes of this 
subparagraph recreational vessel means a vessel manufactured or operated 
primarily for pleasure, or rented, leased or chartered by another for 
the latter's pleasure, and length means a straight line measurement of 
the overall length

[[Page 662]]

from the foremost part of the vessel to the aftmost part of the vessel, 
measured parallel to the center line. The measurement shall be from end 
to end over the deck, excluding sheer.
    (13) Employer includes any employer who may be obligated as an 
employer under the provisions of the LHWCA as amended or any of its 
extensions to pay and secure compensation as provided therein.
    (14) Carrier means an insurance carrier or self-insurer meeting the 
requirements of section 32 of the LHWCA as amended and of this 
subchapter with respect to authorization to provide insurance fulfilling 
the obligation of an employer to secure the payment of compensation due 
his employees under the LHWCA as amended or a statutory extension 
thereof.
    (15) The terms wages, national average weekly wage, injury, 
disability, death, and compensation shall have the meanings set forth in 
section 2 of the LHWCA.
    (16) Claimant includes any person claiming compensation or benefits 
under the provisions of the LHWCA as amended or a statutory extension 
thereof on account of the injury or death of an employee.
    (b) The definitions contained in paragraph (a) of this section shall 
not be considered to derogate from any definitions or delimitations of 
terms in the LHWCA as amended or any of its statutory extensions in any 
case where such statutory definitions or delimitations would be 
applicable.
    (c) As used in this subchapter, the singular includes plural and the 
masculine includes the feminine.
[38 FR 26860, Sept. 26, 1973, as amended at 42 FR 3848, Jan. 21, 1977; 
50 FR 391, Jan. 3, 1985; 51 FR 4281, Feb. 3, 1986; 55 FR 28606, July 12, 
1990]

               Coverage Under State Compensation Programs



Sec. 701.401  Coverage under state compensation programs.

    (a) Exclusions from the definition of ``employee'' under 
Sec. 701.301(a)(12), and the employees of small vessel facilities 
otherwise covered which are exempted from coverage under Sec. 702.171, 
are dependent upon coverage under a state workers' compensation program. 
For these purposes, a worker or dependent must first claim compensation 
under the appropriate state program and receive a final decision on the 
merits of the claim, denying coverage, before any claim may be filed 
under this Act.
    (b) The intent of the Act is that state law will apply to those 
categories of employees if it otherwise would. Accordingly, not 
withstanding any contrary state law, claims by any of the categories of 
workers excluded under Sec. 701.301 or 702.171 must be made to and 
processed by the state and a merit decision denying coverage on 
jurisdictional grounds must be made before coverage or benefits under 
the Act may be sought.
    (c) The time for filing notice and claim under the Act (see subpart 
B of part 702) does not begin to run for purposes of claims by those 
workers or dependents described in Sec. 701.301(a)(12) and Sec. 702.171, 
until a final adverse decision denying coverage under a state 
compensation act is received.
[50 FR 392, Jan. 3, 1985]



PART 702--ADMINISTRATION AND PROCEDURE--Table of Contents




                      Subpart A--General Provisions

                             Administration

Sec.
702.101  [Reserved]
702.102  Establishment and modification of compensation districts, 
          establishment of suboffices and jurisdictional areas.
702.103  Effect of establishment of suboffices and jurisdictional areas.
702.104  Transfer of individual case file.
702.105  Use of the title District Director in place of Deputy 
          Commissioner.

                                 Records

702.111  Employer's records.
702.112  Records of the OWCP.
702.113  Inspection of records of the OWCP.
702.114  Copying of records of OWCP.

                                  Forms

702.121  Forms.

                             Representation

702.131  Representation of parties in interest.
702.132  Fees for services.
702.133  Unapproved fees; solicitation of claimants; penalties.

[[Page 663]]

702.134  Payment of claimant's attorney's fees in disputed claims.
702.135  Payment of claimant's witness fees and mileage in disputed 
          claims.

                Information and Assistance for Claimants

702.136  Requests for information and assistance.

                Commutation of Payments and Special Fund

702.142  Commutation of payments; aliens not residents or about to 
          become nonresidents.
702.143  Establishment of special fund.
702.144  Purpose of the special fund.
702.145  Use of the special fund.
702.146  Source of the special fund.
702.147  Enforcement of special fund provisions.
702.148  Insurance carriers' and self-insured employers' responsibility.

                          Liens on Compensation

702.161  Liens against assets of insurance carriers and employers.
702.162  Liens on compensation authorized under special circumstances.

                       Certification of Exemption

702.171  Certification of exemption, general.
702.172  Certification; definitions.
702.173  Exemptions; requirements, limitations.
702.174  Exemptions; necessary information.
702.175  Effect of work on excluded vessels; reinstatement of 
          certification.

                      Subpart B--Claims Procedures

                           Employer's Reports

702.201  Reports from employers of employee's injury or death.
702.202  Employer's report; form and contents.
702.203  Employer's report; how given.
702.204  Employer's report; penalty for failure to furnish and or 
          falsifying.
702.205  Employer's report; effect of failure to report upon time 
          limitations.

                                 Notice

702.211  Notice of employee's injury or death; designation of 
          responsible official.
702.212  Notice; when given; when given for certain occupational 
          diseases.
702.213  Notice; by whom given.
702.214  Notice; form and content.
702.215  Notice; how given.
702.216  Effect of failure to give notice.
702.217  Penalty for false statement, misrepresentation.

                                 Claims

702.221  Claims for compensation; time limitations.
702.222  Claims; exceptions to time limitations.
702.223  Claims; time limitations; time to object.
702.224  Claims, notification of employer of filing by employee.
702.225  Withdrawal of a claim.

                         Noncontroverted Claims

702.231  Noncontroverted claims; payment of compensation without an 
          award.
702.232  Payments without an award; when; how paid.
702.233  Penalty for failure to pay without an award.
702.234  Report by employer of commencement and suspension of payments.
702.235  Report by employer of final payment of compensation.
702.236  Penalty for failure to report termination of payments.

                           Agreed Settlements

702.241  Definitions and supplementary information.
702.242  Information necessary for a complete settlement application.
702.243  Settlement application; how submitted, how approved, how 
          disapproved, criteria.

                           Controverted Claims

702.251  Employer's controversion of the right to compensation.
702.252  Action by district director upon receipt of notice of 
          controversion.

                            Contested Claims

702.261  Claimant's contest of actions taken by employer or carrier with 
          respect to the claim.
702.262  Action by district director upon receipt of notice of contest.

                             Discrimination

702.271  Discrimination; against employees who bring proceedings, 
          prohibition and penalty.
702.272  Informal recommendation by district director.
702.273  Adjudication by Office of the Chief Administrative Law Judge.
702.274  Employer's refusal to pay penalty.

                               Third Party

702.281  Third party action.

                           Report of Earnings

702.285  Report of earnings.
702.286  Report of earnings; forfeiture of compensation.

[[Page 664]]

                   Subpart C--Adjudication Procedures

                                 General

702.301  Scope of this subpart.

                      Action By District Directors

702.311  Handling of claims matters by district directors; informal 
          conferences.
702.312  Informal conferences; called by and held before whom.
702.313  Informal conferences; how called; when called.
702.314  Informal conferences; how conducted; where held.
702.315  Conclusion of conference agreement on all matters with respect 
          to the claim.
702.316  Conclusion of conference; no agreement on all matters with 
          respect to the claim.
702.317  Preparation and transfer of the case for hearing.
702.318  The record; what constitutes; nontransferability of the 
          administrative file.
702.319  Obtaining documents from the administrative file for 
          reintroduction at formal hearings.

                              Special Fund

702.321  Procedures for determining applicability of section 8(f) of the 
          Act.

                             Formal Hearings

702.331  Formal hearings; procedure initiating.
702.332  Formal hearings; how conducted.
702.333  Formal hearings; parties.
702.334  Formal hearings; representatives of parties.
702.335  Formal hearings; notice.
702.336  Formal hearings; new issues.
702.337  Formal hearings; change of time or place for hearings; 
          postponements.
702.338  Formal hearings; general procedures.
702.339  Formal hearings; evidence.
702.340  Formal hearings; witnesses.
702.341  Formal hearings; depositions; interrogatories.
702.342  Formal hearings; witness fees.
702.343  Formal hearings; oral argument and written allegations.
702.344  Formal hearings; record of hearing.
702.345  Formal hearings; consolidated issues; consolidated cases.
702.346  Formal hearings; waiver of right to appear.
702.347  Formal hearings; termination.
702.348  Formal hearings; preparation of final decision and order; 
          content.
702.349  Formal hearings; filing and mailing of compensation orders; 
          disposition of transcripts.
702.350  Finality of compensation orders.
702.351  Withdrawal of controversion of issues set for formal hearing; 
          effect.

     Interlocutory Matters, Supplementary Orders, and Modifications

702.371  Interlocutory matters.
702.372  Supplementary compensation orders.
702.373  Modification of awards.

                                 Appeals

702.391  Appeals; where.
702.392  Appeals; what may be appealed.
702.393  Appeals; time limitations.
702.394  Appeals; procedure.

                 Subpart D--Medical Care and Supervision

702.401  Medical care defined.
702.402  Employer's duty to furnish; duration.
702.403  Employee's right to choose physician; limitations.
702.404  Physician defined.
702.405  Selection of physician; emergencies.
702.406  Change of physicians; non-emergencies.
702.407  Supervision of medical care.
702.408  Evaluation of medical questions; impartial specialists.
702.409  Evaluation of medical questions; results disputed.
702.410  Duties of employees with respect to special examinations.
702.411  Special examinations; nature of impartially of specialists.
702.412  Special examinations; costs chargeable to employer or carrier.
702.413  Fees for medical services; prevailing community charges.
702.414  Fees for medical services; unresolved disputes on prevailing 
          charges.
702.415  Fees for medical services; unresolved disputes on charges; 
          procedure.
702.416  Fees for medical services; disputes; hearings; necessary 
          parties.
702.417  Fees for medical services; disputes; effect of adverse 
          decision.

                           Medical Procedures

702.418  Procedure for requesting medical care; employee's duty to 
          notify employer.
702.419  Action by employer upon acquiring knowledge or being given 
          notice of injury.
702.420  Issuance of authorization; binding effect upon insurance 
          carrier.
702.421  Effect of failure to obtain initial authorization.
702.422  Effect of failure to report on medical care after initial 
          authorization.

  Debarment of Physicians and Other Providers of Medical Services and 
                  Suppliers and Claims Representatives

702.431  Grounds for debarment.
702.432  Debarment process.
702.433  Requests for hearing.

[[Page 665]]

702.434  Judicial review.
702.435  Effects of debarment.
702.436  Reinstatement.

                           Hearing Loss Claims

702.441  Claims for loss of hearing.

                  Subpart E--Vocational Rehabilitation

702.501  Vocational rehabilitation; objective.
702.502  Vocational rehabilitation; action by district directors.
702.503  Vocational rehabilitation; action by adviser.
702.504  Vocational rehabilitation; referrals to State Employment 
          Agencies.
702.505  Vocational rehabilitation; referrals to other public and 
          private agencies.
702.506  Vocational rehabilitation; training.
702.507  Vocational rehabilitation; maintenance allowance.
702.508  Vocational rehabilitation; confidentiality of information.

  Subpart F--Occupational Disease Which Does Not Immediately Result in 
                           Death or Disability

702.601  Definitions.
702.602  Notice and claims.
702.603  Determining the payrate for compensating occupational disease 
          claims which become manifest after retirement.
702.604  Determining the amount of compensation for occupational disease 
          claims which become manifest after retirement.

    Authority:  5 U.S.C. 301, 8171 et seq., Reorganization Plan No. 6 of 
1950, 15 FR 3174, 3 CFR 1949-1953, Comp., p. 1004, 64 Stat. 1263; 28 
U.S.C. 2461, 33 U.S.C. 930, 36 D.C. Code 501 et seq., 42 U.S.C. 1651 et 
seq., 43 U.S.C. 1331; Secretary's Order 5-96, 62 FR 107.

    Source:  38 FR 26861, Sept. 26, 1973, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 702 appear at 55 FR 
28606, July 12, 1990.



                      Subpart A--General Provisions

                             Administration



Sec. 702.101  [Reserved]



Sec. 702.102  Establishment and modification of compensation districts, establishment of suboffices and jurisdictional areas.

    (a) The Director has, pursuant to section 39(b) of the Longshore and 
Harbor Workers' Compensation Act, 33 U.S.C. 939(b), established 
compensation districts as required for improved administration or as 
otherwise determined by the Director (see 51 FR 4282, Feb. 3, 1986). The 
boundaries of the compensation districts may be modified at any time, 
and the Director shall notify all interested parties directly by mail of 
the modifications.
    (b) As administrative exigencies from time to time may require, the 
Director may, by administrative order, establish special areas outside 
the continental United States, Alaska, and Hawaii, or change or modify 
any areas so established, notwithstanding their inclusion within an 
established compensation district. Such areas shall be designated 
``jurisdictional areas.'' The Director shall also designate which of his 
district directors shall be in charge thereof.
    (c) To further aid in the efficient administration of the OWCP, the 
Director may from time to time establish suboffices within compensation 
districts or jurisdictional areas, and shall designate a person to be in 
charge thereof.
[38 FR 26861, Sept. 26, 1973, as amended at 60 FR 51348, Oct. 2, 1995]



Sec. 702.103  Effect of establishment of suboffices and jurisdictional areas.

    Whenever the Director establishes a suboffice or jurisdictional 
area, those reports, records, or other documents with respect to 
processing of claims that are required to be filed with the district 
director of the compensation district in which the injury or death 
occurred, may instead be required to be filed at the suboffice, or 
office established for the jurisdictional area.



Sec. 702.104  Transfer of individual case file.

    (a) At any time after a claim is filed, the district director having 
jurisdiction thereof may, with the prior or subsequent approval of the 
Director, transfer such case to the district director in another 
compensation district for the purpose of making an investigation, 
ordering medical examinations, or taking such other action as may be 
necessary or appropriate to further develop the claim. If, after filing 
a claim, the claimant moves to another compensation district, the 
district director may, upon request by the claimant or the employer and 
with the approval of

[[Page 666]]

the Director, transfer the case to such other compensation district.
    (b) The district director making the transfer may by letter or 
memorandum to the district director to whom the case is transferred give 
advice, comments, suggestions, or directions if appropriate to the 
particular case. The transfer of cases shall be by registered or 
certified mail. All interested parties shall be advised of the transfer.
[42 FR 45301, Sept. 9, 1977]



Sec. 702.105  Use of the title District Director in place of Deputy Commissioner.

    Wherever the statute refers to Deputy Commissioner, these 
regulations have substituted the term District Director. The 
substitution is purely an administrative one, and in no way effects the 
authority of or the powers granted and responsibilities imposed by the 
statute on that position.
[55 FR 28606, July 12, 1990]

                                 Records



Sec. 702.111  Employer's records.

    Every employer shall maintain adequate records of injury sustained 
by employees while in his employ, and which shall also contain 
information of disease, other impairments or disabilities, or death 
relating to said injury. Such records shall be available for inspection 
by the OWCP or by any State authority. Records required by this section 
shall be retained by the employer for three years following the date of 
injury; this applies to records for lost-time and no-lost-time injuries.

(Approved by the Office of Management and Budget under control number 
1215-0160)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[38 FR 26861, Sept. 26, 1973, as amended at 47 FR 145, Jan. 5, 1982; 50 
FR 393, Jan. 3, 1985]



Sec. 702.112  Records of the OWCP.

    All reports, records, or other documents filed with the OWCP with 
respect to claims are the records of the OWCP. The Director shall be the 
official custodian of those records maintained by the OWCP at its 
national office, and the district director shall be the official 
custodian of those records maintained at the headquarters office in each 
compensation district.



Sec. 702.113  Inspection of records of the OWCP.

    Any party in interest may be permitted to examine the record of the 
case in which he is interested. The official custodian of the record 
sought to be inspected shall permit or deny inspection in accordance 
with the Department of Labor's regulations pertaining thereto (see 29 
CFR part 70). The original record in any such case shall not be removed 
from the office of the custodian for such inspection. The custodian may, 
in his discretion, deny inspection of any record or part thereof which 
is of a character specified in 5 U.S.C. 552(b) if in his opinion such 
inspection may result in damage, harm, or harassment to the beneficiary 
or to any other person. For special provisions concerning release of 
information regarding injured employees undergoing vocational 
rehabilitation, see Sec. 702.508.



Sec. 702.114  Copying of records of OWCP.

    Any party in interest may request copies of records he has been 
permitted to inspect. Such requests shall be addressed to the official 
custodian of the records sought to be copied. The official custodian 
shall provide the requested copies under the terms and conditions 
specified in the Department of Labor's regulations relating thereto (see 
29 CFR part 70).

                                  Forms



Sec. 702.121  Forms.

    The Director may from time to time prescribe, and require the use 
of, forms for the reporting of any information required to be reported 
by the regulations in this subchapter, or by the Act or any of its 
extensions.

                             Representation



Sec. 702.131  Representation of parties in interest.

    (a) Claimants, employers and insurance carriers may be represented 
in

[[Page 667]]

any proceeding under the Act by an attorney or other person previously 
authorized in writing by such claimant, employer or carrier to so act.
    (b) The Secretary shall annually publish a list of individuals who 
are disqualified from representing claimants under the Act. Individuals 
on this list are not authorized to represent claimants under the Act 
subject to the provision of section 31(b)(2)(C) of the Act, 33 U.S.C. 
931(b)(2)(C), and they shall not have their representation fee approved 
as provided in section 28(e), 33 U.S.C. 928(e).
    (c) Individuals shall be included on the list mentioned in (b) if 
the Secretary determines, after proceedings under Secs. 702.432(b) 
through 702.434, that such individual:
    (1) Has been convicted (without regard to pending appeal) of any 
crime in connection with the representation of a claimant under this Act 
or any workers' compensation statute;
    (2) Has engaged in fraud in connection with the presentation of a 
claim under this or any workers' compensation statute, including, but 
not limited to, knowingly making false representations, concealing or 
attempting to conceal material facts with respect to a claim, or 
soliciting or otherwise procuring false testimony;
    (3) Has been prohibited from representing claimants before any other 
workers' compensation agency for reasons of professional misconduct 
which are similar in nature to those which would be grounds for 
disqualification under this section; or
    (4) Has accepted fees for representing claimants under the Act which 
were not approved, or which were in excess of the amount approved 
pursuant to section 28 of the Act, 33 U.S.C. 928.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 394, Jan. 3, 1985]



Sec. 702.132  Fees for services.

    (a) Any person seeking a fee for services performed on behalf of a 
claimant with respect to claims filed under the Act shall make 
application therefor to the district director, administrative law judge, 
Board, or court, as the case may be, before whom the services were 
performed (See 33 U.S.C. 928(c)). The application shall be filed and 
serviced upon the other parties within the time limits specified by such 
district director, administrative law judge, Board, or court. The 
application shall be supported by a complete statement of the extent and 
character of the necessary work done, described with particularity as to 
the professional status (e.g., attorney, paralegal, law clerk, or other 
person assisting an attorney) of each person performing such work, the 
normal billing rate for each such person, and the hours devoted by each 
such person to each category of work. Any fee approved shall be 
reasonably commensurate with the necessary work done and shall take into 
account the quality of the representation, the complexity of the legal 
issues involved, and the amount of benefits awarded, and when the fee is 
to be assessed against the claimant, shall also take into account the 
financial circumstances of the claimant. No contract pertaining to the 
amount of a fee shall be recognized.
    (b) No fee shall be approved for a representative whose name appears 
on the Secretary's list of disqualified representatives under 
Sec. 702.131(b).
    (c) Where fees are included in a settlement agreement submitted 
under Sec. 702.241, et seq. approval of that agreement shall be deemed 
approval of attorney fees for purposes of this subsection for work 
performed before the Administrative Law Judge or district director 
approving the settlement.
[50 FR 394, Jan. 3, 1985]



Sec. 702.133  Unapproved fees; solicitation of claimants; penalties.

    Under the provisions of section 28(e) of the Act, 33 U.S.C. 928(e), 
any person who receives any fees, other consideration, or any gratuity 
on account of services rendered as a representative of a claimant, 
unless such consideration or gratuity is approved under Sec. 702.132, or 
who makes it a business to solicit employment for an attorney, or for 
himself in respect of any claim under the Act, shall upon conviction 
thereof, for each offense be punished by a fine of not more than $1,000 
or by imprisonment for not more than 1 year, or by both fine and 
imprisonment.

[[Page 668]]



Sec. 702.134  Payment of claimant's attorney's fees in disputed claims.

    (a) If the employer or carrier declines to pay any compensation on 
or before the 30th day after receiving written notice from the district 
director of a claim for compensation having been filed, on the ground 
that there is no liability for compensation within the provisions of 
this Act, and the person seeking benefits shall thereafter have utilized 
the services of an attorney at law in the successful prosecution of his 
claim, there shall be awarded, in addition to the award of compensation, 
in a compensation order, a reasonable attorney's fee against the 
employer or carrier in an amount approved by the person, administrative 
body or court before whom the service was performed, which shall be paid 
directly by the employer or carrier to the attorney for the claimant in 
a lump sum after the compensation order becomes final (Act, section 
28(a)).
    (b) If the employer or carrier pays or tenders payment of 
compensation without an award pursuant to Sec. 702.231 and section 14 
(a) and (b) of this Act, and thereafter a controversy develops over the 
amount of additional compensation, if any, to which the employee may be 
entitled, the district director, administrative law judge, or Board 
shall set the matter for an informal conference and following such 
conference the district director, administrative law judge, or Board 
shall recommend in writing a disposition of the controversy. If the 
employer or carrier refuses to accept such written recommendation, 
within 14 days after its receipt by them, they shall pay or tender to 
the employee in writing the additional compensation, if any, to which 
they believe the employee is entitled. If the employee refuses to accept 
such payment or tender of compensation, and thereafter utilizes the 
services of an attorney at law, and if the compensation thereafter 
awarded is greater than the amount paid or tendered by the employer or 
carrier, a reasonable attorney's fee based solely upon the difference 
between the amount awarded and the amount tendered or paid shall be 
awarded in addition to the amount of compensation. The foregoing 
sentence shall not apply if the controversy relates to degree or length 
of disability, and if the employer or carrier offers to submit the case 
for evaluation by physicians employed or selected by the district 
director, as authorized by section 7(e) of the Act and Sec. 702.408, and 
offers to tender an amount of compensation based upon the degree or 
length of disability found by the independent medical report at such 
time as an evaluation of disability can be made. If the claimant is 
successful in review proceedings before the Board or court in any such 
case an award may be made in favor of the claimant and against the 
employer or carrier for a reasonable attorney's fee for claimant's 
counsel in accord with the above provisions. In all other cases any 
claim for legal services shall not be assessed against the employer or 
carrier (see Act, section 28(b)).



Sec. 702.135  Payment of claimant's witness fees and mileage in disputed claims.

    In cases where an attorney's fee is awarded against an employer or 
carrier there may be further assessed against such employer or carrier 
as costs, fees and mileage for necessary witnesses attending the hearing 
at the instance of claimant. Both the necessity for the witness and the 
reasonableness of the fees of expert witnesses must be approved by the 
hearing officer, the Board, or the court, as the case may be. The 
amounts awarded against an employer or carrier as attorney's fees, 
costs, fees and mileage for witnesses shall not in any respect affect or 
diminish the compensation payable under this Act (see Act, section 28 
(d)).

                Information and Assistance for Claimants



Sec. 702.136  Requests for information and assistance.

    (a) General assistance. The Director shall, upon request, provide 
persons covered by the Act with information and assistance relating to 
the Act's coverage and compensation and the procedures for obtaining 
such compensation including assistance in processing a claim.
    (b) Legal assistance to claimants. The Secretary may, upon request, 
provide a

[[Page 669]]

claimant with legal assistance in processing a claim under the Act. Such 
assistance may be made available to a claimant in the discretion of the 
Solicitor of Labor or his designee at any time prior to or during which 
the claim is being processed and shall be furnished without charge to 
the claimant. Legal representation of the claimant in adjudicatory 
proceedings may be furnished in cases in which the Secretary's interest 
in the case is not adverse to that of the claimant.
    (c) Other assistance. The district directors and their staff, as 
designees of the Director, shall promptly and fully comply with the 
request of a claimant receiving compensation for information about, and 
assistance in obtaining, medical, manpower, and vocational 
rehabilitation services (see also subparts D and E of this part).

                Commutation of Payments and Special Fund



Sec. 702.142  Commutation of payments; aliens not residents or about to become nonresidents.

    (a) Pursuant to section 9(g) of the Act, 33 U.S.C. 909(g), 
compensation paid to aliens not residents, or about to become 
nonresidents, of the United States or Canada shall be in the same amount 
as provided for residents except that dependents in any foreign country 
shall be limited to surviving spouse and child or children, or if there 
be no surviving spouse or child or children, to surviving father or 
mother whom the employee has supported, either wholly or in part, for 
the period of 1 year prior to the date of injury, and except that the 
Director, OWCP, may, at his option, or upon the application of the 
insurance carrier he shall, commute all future installments of 
compensation to be paid to such aliens by paying or causing to be paid 
to them one-half of the commuted amount of such future installments of 
compensation as determined by the Director.
    (b) Applications for commutation under this section shall be made in 
writing to the district director having jurisdiction, and forwarded by 
the district director to the Director, for final action.
    (c) Applications for commutations shall be made effective, if 
approved by the Director, on the date received by the district director, 
or on a later date if shown to be appropriate on the application.
    (d) Commutations shall not be made with respect to a person 
journeying abroad for a visit who has previously declared an intention 
to return and has stated a time for returning, nor shall any commutation 
be made except upon the basis of a compensation order fixing the right 
of the beneficiary to compensation.
[50 FR 394, Jan. 3, 1985]



Sec. 702.143  Establishment of special fund.

    Congress, by section 44 of the Act, 33 U.S.C. 944, established in 
the U.S. Treasury a special fund, to be administered by the Secretary. 
The Treasurer of the United States is the custodian of such fund, and 
all monies and securities in such fund shall be held in trust by the 
Treasurer and shall not be money or property of the United States. The 
Treasurer shall make disbursements from such funds only upon the order 
of the Director, OWCP, as delegatee of the Secretary. The Act requires 
that the Treasurer give bond, in an amount to be fixed and with 
securities to be approved by the Secretary of the Treasury and the 
Comptroller General of the United States, conditioned upon the faithful 
performance of his duty as custodian of such fund.



Sec. 702.144  Purpose of the special fund.

    This special fund was established to give effect to a congressional 
policy determination that, under certain circumstances, the employer of 
a particular employee should not be required to bear the entire burden 
of paying for the compensation benefits due that employee under the Act. 
Instead, a substantial portion of such burden should be borne by the 
industry generally. Section 702.145 describes this special circumstance 
under which the particular employer is relieved of some of his burden. 
Section 702.146 describes the manner and circumstances of the input into 
the fund.

[[Page 670]]



Sec. 702.145  Use of the special fund.

    (a) Under section 10 of the Act. This section provides for initial 
and subsequent annual adjustments in compensation and continuing 
payments to beneficiaries in cases of permanent total disability or 
death which commenced or occurred prior to enactment of the 1972 
Amendments to this Act (Pub. L. 92-576, approved Oct. 27, 1972). At the 
discretion of the Director, such payments may be paid directly by him to 
eligible beneficiaries as the obligation accrues, one-half from the 
special fund and one-half from appropriations, or he may require 
insurance carriers or self-insured employers already making payments to 
such beneficiaries to pay such additional compensation as the amended 
Act requires. In the latter case such carriers and self-insurers shall 
be reimbursed by the Director for such additional amounts paid, in the 
proportion of one-half the amount from the special fund and one-half the 
amount from appropriations. To obtain reimbursement, the carriers and 
self-insurers shall submit claims for payments made by them during 
previous periods at intervals of not less than 6 months. A form has been 
prescribed for such purpose and shall be used. No administrative claims 
service expense incurred by the carrier or self-insurer shall be 
included in the claim and no such expense shall be allowed. The amounts 
reimbursed to such carrier or self-insurer shall be limited to amounts 
actually due and previously paid to beneficiaries.
    (b) Under section 8(f) of the Act (Second Injuries). In any case in 
which an employee having an existing permanent partial disability 
suffers injury, the employer shall provide compensation for such 
disability as is found to be attributable to that injury based upon the 
average weekly wages of the employee at the time of injury. If, 
following an injury falling within the provisions of section 8(c)(1)-
(20), the employee with the pre-existing permanent partial disability 
becomes permanently and totally disabled after the second injury, but 
such total disability is found not to be due solely to his second 
injury, the employer (or carrier) shall be liable for compensation as 
provided by the provisions of section 8(c)(1)-(20) of the Act, 33 U.S.C. 
908(c)(1)-(20) or for 104 weeks, whichever is greater. However, if the 
injury is a loss of hearing covered by section 8(c)(13), 33 U.S.C. 
908(c)(13), the liability shall be the lesser of these periods. In all 
other cases of a second injury causing permanent total disability (or 
death), wherein it is found that such disability (or death) is not due 
solely to the second injury, and wherein the employee had a pre-existing 
permanent partial disability, the employer (or carrier) shall first pay 
compensation under section 8(b) or (e) of the Act, 33 U.S.C. 908(b) or 
(e), if any is payable thereunder, and shall then pay 104 weeks 
compensation for such total disability or death, and none otherwise. If 
the second injury results in permanent partial disability, and if such 
disability is compensable under section 8(c)(1)-(20) of the Act, 33 
U.S.C. 908(c)(1)-(20), but the disability so compensable did not result 
solely from such second injury, and the disability so compensable is 
materially and substantially greater than that which would have resulted 
from the second injury alone, then the employer (or carrier) shall only 
be liable for the amount of compensation provided for in section 
8(c)(1)-(20) that is attributable to such second injury, or for 104 
weeks, whichever is greater. However, if the injury is a loss of hearing 
covered by section 8(c)(13), 33 U.S.C. 908(c)(13), the liability shall 
be the lesser of these periods. In all other cases wherein the employee 
is permanently and partially disabled following a second injury, and 
wherein such disability is not attributable solely to that second 
injury, and wherein such disability is materially and substantially 
greater than that which would have resulted from the second injury 
alone, and wherein such disability following the second injury is not 
compensable under section 8(c)(1)-(20) of the Act, then the employer (or 
carrier) shall be liable for such compensation as may be appropriate 
under section 8(b) or (e) of the Act, 33 U.S.C. 908(b) or (e), if any, 
to be followed by a payment of compensation for 104 weeks, and none 
other. The term ``compensation'' herein means money benefits only, and 
does not include medical benefits. The procedure

[[Page 671]]

for determining the extent of the employer's (or carrier's) liability 
under this paragraph shall be as provided for in the adjudication of 
claims in subpart C of this part 702. Thereafter, upon cessation of 
payments which the employer is required to make under this paragraph, if 
any additional compensation is payable in the case, the district 
director shall forward such case to the Director for consideration of an 
award to the person or persons entitled thereto out of the special fund. 
Any such award from the special fund shall be by order of the Director 
or Acting Director.
    (c) Under sections 8(g) and 39(c)(2) of the Act. These sections, 33 
U.S.C. 908(g) and 939(c)(2), respectively, provide for vocational 
rehabilitation of disabled employees, and authorize, under appropriate 
circumstances, a maintenance allowance for the employee (not to exceed 
$25 a week) in additional to other compensation benefits otherwise 
payable for his injury-related disability. Awards under these sections 
are made from the special fund upon order of the Director or his 
designee. The district directors may be required to make investigations 
with respect to any case and forward to the Director their 
recommendations as to the propriety and need for such maintenance.
    (d) Under section 39(c)(2) of the Act. In addition to the 
maintenance allowance for the employee discussed in paragraph (c) of 
this section, the Director is further authorized to use the fund in such 
amounts as may be necessary to procure the vocational training services.
    (e) Under section 7(e) of the Act. This provision, 33 U.S.C. 907(e), 
authorizes payment by the Director from the special fund for special 
medical examinations, i.e., those obtained from impartial specialists to 
resolve disputes, when such special examinations are deemed necessary 
under that statutory provision. The Director has the discretionary 
power, however, to charge the cost of such examination to the insurance 
carrier or self-insured employer.
    (f) Under section 18(b) of the Act. This section, 33 U.S.C. 918(b), 
provides a source for payment of compensation benefits in cases where 
the employer is insolvent, or other circumstances preclude the payment 
of benefits due in any case. In such situations, the district director 
shall forward the case to the Director for consideration of an award 
from the special fund, together with evidence with respect to the 
employer's insolvency or other reasons for nonpayment of benefits due. 
Benefits, as herein used, means medical care or supplies within the 
meaning of section 7 of the Act, 33 U.S.C. 907, and subpart D of this 
part 702, as well as monetary benefits. Upon receipt of the case, the 
Director shall promptly determine whether an award from the special fund 
is appropriate and advisable in the case, having due regard for all 
other current commitments from the special fund. If such an award is 
made, the employer shall be liable for the repayment into the fund of 
the amounts paid therefrom, as provided in 33 U.S.C. 918(b).

(The information collection requirements contained in paragraph (a) were 
approved by the Office of Management and Budget under control number 
1215-0065. The information collection requirements contained in 
paragraph (b) were approved by the Office of Management and Budget under 
control number 1215-0073)

(Pub. L. No. 96-511)
[38 FR 26861, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984; 
51 FR 4282, Feb. 3, 1986]



Sec. 702.146  Source of the special fund.

    (a) All amounts collected as fines and penalties under the several 
provisions of the Act shall be paid into the special fund (33 U.S.C. 
44(c)(3)).
    (b) Whenever an employee dies under circumstances creating a 
liability on an employer to pay death benefits to the employee's 
beneficiaries, and whenever there are no such beneficiaries entitled to 
such payments, the employer shall pay $5,000 into the special fund (Act, 
section 44(c)(1)). In such cases, the compensation order entered in the 
case shall specifically find that there is such liability and that there 
are no beneficiaries entitled to death benefits, and shall order payment 
by the employer into the fund. Compensation orders shall be made and 
filed in accordance with the regulations in subpart C of this part 702, 
except that for this purpose the district director settling

[[Page 672]]

the case under Sec. 702.315 shall formalize the memorandum of conference 
in a compensation order, and shall file such order as provided for in 
Sec. 702.349.
    (c) The Director annually shall assess an amount against insurance 
carriers and self-insured employers authorized under the Act and part 
703 of this subchapter to replenish the fund. That total amount to be 
charged all carriers and self-insurers to be assessed shall be based 
upon an estimate of the probable expenses of the fund during the 
calendar year. The assessment against each carrier and self-insurer 
shall be based upon (1) the ratio of the amount each paid during the 
prior calendar year for compensation in relation to the amount all such 
carriers of self-insurers paid during that period for compensation, and 
(2) the ratio of the amount of payments made by the special fund for all 
cases being paid under section 8(f) of the Act, 33 U.S.C. 908(f), during 
the preceding calendar year which are attributable to the carrier or 
self-insurer in relation to the total of such payments during such year 
attributable to all carriers and self-insurers. The resulting sum of the 
percentages from paragraphs (c) (1) and (2) of this section will be 
divided by two, and the resulting percentage multiplied by the probable 
expenses of the fund. The Director may, in his or her discretion, 
condition continuance or renewal of authorization under part 703 upon 
prompt payment of the assessment. However, no action suspending or 
revoking such authorization shall be taken without affording such 
carrier or self-insurer a hearing before the Director or his/her 
designee.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 395, Jan. 3, 1985; 51 
FR 4282, Feb. 3, 1986]



Sec. 702.147  Enforcement of special fund provisions.

    (a) As provided in section 44(d)(1) of the Act, 33 U.S.C. 944(d)(1), 
for the purpose of making rules, regulations, and determinations under 
the special fund provisions in section 44 and for providing enforcement 
thereof, the Director may investigate and gather appropriate data from 
each carrier and self-insured employer, and may enter and inspect such 
places and records (and make such transcriptions of records), question 
such employees, and investigate such facts, conditions, practices, or 
other matters as he may deem necessary or appropriate. The Director may 
require the employer to have audits performed of claims activity 
relating to this Act. The Director may also require detailed reports of 
payments made under the Act, and of estimated future liabilities under 
the Act, from any or all carriers of self-insurers. The Director may 
require that such reports be certified and verified in whatever manner 
is considered appropriate.
    (b) Pursuant to section 44(d)(3) of the Act, 33 U.S.C. 944(d)(3), 
for the purpose of any hearing or investigation related to 
determinations or the enforcement of the provisions of section 44 with 
respect to the special fund, the provisions of 15 U.S.C. 49 and 50 as 
amended (the Federal Trade Commission Act provisions relating to 
attendance of witnesses and the production of books, papers, and 
documents) are made applicable to the jurisdiction, powers, and duties 
of the Director, OWCP, as the Secretary's delegatee.
    (c) Civil penalties and unpaid assessments shall be collected by 
civil suits brought by and in the name of the Secretary.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 395, Jan. 3, 1985]



Sec. 702.148  Insurance carriers' and self-insured employers' responsibilities.

    (a) Each carrier and self-insured employer shall make, keep, and 
preserve such records, and make such reports and provide such additional 
information as the Director prescribes or orders, which he considers 
necessary or appropriate to effectively carry out his responsibilities.
    (b) Consistent with their greater direct liability stemming from the 
amended assessment formula, employers and insurance carriers are given 
the authority to monitor their claims in the special fund as outlined in 
paragraph (c) of this section. For purposes of monitoring these claims, 
employers and insurance carriers remain parties in interest to the claim 
and are allowed access to all records relating to the

[[Page 673]]

claim. Similarly, employers and insurance carriers can initiate 
proceeding to modify an award of compensation after the special fund has 
assumed the liability to pay benefits. It is intended that employers and 
insurance carriers have neither a greater nor a lesser responsibility in 
this new role that they not have with regard to cases that remain their 
sole liability. (See Sec. 702.373(d).)
    (c) An employer or insurance carrier may conduct any reasonable 
investigation regarding cases placed into the special fund by the 
employer or insurance carrier. Such investigation may include, but shall 
not be limited to, a semi-annual request for earnings information 
pursuant to section 8(j) of the Act, 33 U.S.C. 908(j) (See Sec. 702.285) 
periodic medical examinations, vocational rehabilitation evaluations, 
and requests for any additional information needed to effectively 
monitor such a case.

(Approved by the Office of Management and Budget under control number 
1215-0118)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[38 FR 26861, Sept. 26, 1973, as amended at 47 FR 145, Jan. 5, 1982; 50 
FR 395, Jan. 3, 1985]

                          Liens on Compensation



Sec. 702.161  Liens against assets of insurance carriers and employers.

    Where payments have been made from the special fund pursuant to 
section 18(b) of the Act, 33 U.S.C. 918(b) and Sec. 704.145(f) the 
Secretary of Labor shall, for the benefit of the fund, be subrogated to 
all the rights of the person receiving such payments. The Secretary may 
institute proceedings under either section 18 or 21(d) of the Act, 33 
U.S.C. 918 or 921(d), or both, to recover the amount expended by the 
fund or so much as in the judgement of the Secretary is possible, or the 
Secretary may settle or compromise any such claim.
[50 FR 395, Jan. 3, 1985]



Sec. 702.162  Liens on compensation authorized under special circumstances.

    (a) Pursuant to section 17 of the Act, 33 U.S.C. 917, when a trust 
fund which complies with section 302(c) of the Labor-Management 
Relations Act of 1947, 29 U.S.C. 186(c) [LMRA], established pursuant to 
a collective bargaining agreement in effect between an employer and an 
employee entitled to compensation under this Act, has paid disability 
benefits to an employee which the employee is legally obligated to repay 
by reason of his entitlement to compensation under this Act, a lien 
shall be authorized on such compensation in favor of the trust fund for 
the amount of such payments.
    (b) (1) An application for such a lien shall be filed on behalf of 
the trust fund with the district director for the compensation district 
where the claim for compensation has been filed, 20 CFR 702.101. Such 
application shall include a certified statement by an authorized 
official of the trust fund that:
    (i) The trust fund is entitled to a lien in its favor by reason of 
its payment of disability payments to a claimant-employee (including his 
name therein);
    (ii) The trust fund was created pursuant to a collective bargaining 
agreement covering the claimant-employee;
    (iii) The trust fund complies with section 302(c) of the Labor-
Management Relations Act of 1947, 29 U.S.C. 186(c);
    (iv) The trust agreement contains a subrogation provision entitling 
the fund to reimbursement for disability benefits paid to the claimant-
employee who is entitled to compensation under the Longshoremen's Act;
    (2) The statement shall also state the amount paid to the named 
claimant-employee and whether such disability benefit payments are 
continuing to be paid.
    (3) If the claimant has signed a statement acknowledging receipt of 
disability benefits from the trust fund and/or a statement recognizing 
the trust fund's entitlement to a lien against compensation payments 
which may be received under the Longshoremen's and Harbor Worker's 
Compensation Act as a result of his present claim and for which the fund 
is providing disability payments, such statement(s) shall also be 
included with or attached to the application.
    (c) Upon receipt of this application, the district director shall, 
within a reasonable time, notify the claimant, the

[[Page 674]]

employer and/or its compensation insurance carrier that the request for 
a lien has been filed and each shall be provided with a copy of the 
application. If the claimant disputes the right of the trust fund to the 
lien or the amount stated, if any, he shall, within 30 days after 
receipt of the application or such other longer period as the district 
director may set, notify the district director and he shall be given an 
opportunity to challenge the right of the trust fund to, or the amount 
of, the asserted lien; notice to either the employer or its compensation 
insurance carrier shall constitute notice to both of them.
    (d) If the claim for compensation benefits is resolved without a 
formal hearing and if there is no dispute over the amount of the lien or 
the right of the trust fund to the lien, the district director may order 
and impose the lien and he shall notify all parties of the amount of the 
lien and manner in which it is to be paid.
    (e) If the claimant's claim for compensation cannot be resolved 
informally, the district director shall transfer the case to the Office 
of the Chief Administrative Law Judge for a formal hearing, pursuant to 
section 19(d) of the Act, 33 U.S.C. 919(d), and 20 CFR 702.317. The 
district director shall also submit therewith the application for the 
lien and all documents relating thereto.
    (f) If the administrative law judge issues a compensation order in 
favor of the claimant, such order shall establish a lien in favor of the 
trust fund if it is determined that the trust fund has satisfied all of 
the requirements of the Act and regulations.
    (g) If the claim for compensation is not in dispute, but there is a 
dispute as to the right of the trust fund to a lien, or the amount of 
the lien, the district director shall transfer the matter together with 
all documents relating thereto to the Office of the Chief Administrative 
Law Judge for a formal hearing pursuant to section 19(d) of the Act, 33 
U.S.C. 919(d), and 20 CFR 702.317.
    (h) In the event that either the district director or the 
administrative law judge is not satisfied that the trust fund qualifies 
for a lien under section 17, the district director or administrative law 
judge may require further evidence including but not limited to the 
production of the collective bargaining agreement, trust agreement or 
portions thereof.
    (i) Before any such lien is approved, if the trust fund has provided 
continued disability payments after the application for a lien has been 
filed, the trust fund shall submit a further certified statement showing 
the total amount paid to the claimant as disability payments. The 
claimant shall likewise be given an opportunity to contest the amount 
alleged in this subsequent statement.
    (j) In approving a lien on compensation, the district director or 
administrative law judge shall not order an initial payment to the trust 
fund in excess of the amount of the past due compensation. The remaining 
amount to which the trust fund is entitled shall thereafter be deducted 
from the affected employee's subsequent compensation payments and paid 
to the trust fund, but any such payment to the trust fund shall not 
exceed 10 percent of the claimant-employee's bi-weekly compensation 
payments.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[42 FR 45301, Sept. 9, 1977, as amended at 50 FR 395, Jan. 3, 1985; 51 
FR 4282, Feb. 3, 1986]

                       Certification of Exemption



Sec. 702.171  Certification of exemption, general.

    An employer may apply to the Director or his/her designee to certify 
a particular facility as one engaged in the building, repairing or 
dismantling of exclusively small vessels, as defined. Once certified, 
injuries sustained at that facility would not be covered under the Act 
except for injuries which occur over the navigable waters of the United 
States including any adjoining pier, wharf, dock, facility over land for 
launching vessels or for hauling, lifting or drydocking vessels. A 
facility otherwise covered under the Act remains covered until 
certification of exemption is issued; a certification will be granted 
only upon submission of a complete application (described in

[[Page 675]]

Sec. 702.174), and only for as long as a facility meets the requirements 
detailed in section 3(d) of the Act, 33 U.S.C. 903(d). This exemption 
from coverage is not intended to be used by employers whose facilities 
from time to time may temporarily meet the criteria for qualification 
but only for facilities which work on exclusively small vessels, as 
defined.
[50 FR 396, Jan. 3, 1985]



Sec. 702.172  Certification; definitions.

    For purposes of Secs. 702.171 through 702.175 dealing with 
certification of small vessel facilities, the following definitions are 
applicable.
    (a)(1) ``Small vessel'' means only those vessels described in 
section 3(d)(3) of the Act, 33 U.S.C. 903(d)(3), that is:
    (i) A commercial barge which is under 900 lightship displacement 
tons (long); or
    (ii) A commercial tugboat, towboat, crewboat, supply boat, fishing 
vessel or other work vessel which is under 1,600 tons gross.
    (2) For these purposes: (i) One gross ton equals 100 cubic feet, as 
measured by the current formula contained in the Act of May 6, 1894 as 
amended through 1974 (46 U.S.C. 77); (ii) one long ton equals 2,240 lbs; 
and (iii) ``Commercial'' as it applies to ``vessel'' means any vessel 
engaged in commerce but does not include military vessels or Coast Guard 
vessels.
    (b) ``Federal Maritime Subsidy'' means the construction differential 
subsidy (CDS) or operating differential subsidy under the Merchant 
Marine Act of 1936 (46 U.S.C. 1101 et seq.).
    (c) facility means an operation of an employer at a particular 
contiguous geographic location.
[51 FR 4283, Feb. 3, 1986]



Sec. 702.173  Exemptions; requirements, limitations.

    (a) Injuries at a facility otherwise covered by the Act are exempted 
only upon certification that the facility is: (1) Engaged in the 
building, repairing or dismantling of exclusively small commercial 
vessels; and (2) does not receive a Federal maritime subsidy.
    (b) The exemption does not apply to: (1) Injuries at any facility 
which occur over the navigable waters of the United States or upon any 
adjoining pier, wharf, dock, facility over land for launching vessels or 
for hauling, lifting or drydocking vessels; or (2) where the employee at 
such facility is not subject to a State workers' compensation law.
[50 FR 396, Jan. 3, 1985]



Sec. 702.174  Exemptions; necessary information.

    (a) Application. Before any facility is exempt from coverage under 
the Act, the facility must apply for and receive a certificate of 
exemption from the Director or his/her designee. The application must be 
made by the owner of the facility; where the owner is a partnership it 
shall be made by a partner and where a corporation by an officer of the 
corporation or the manager in charge of the facility for which an 
exemption is sought. The information submitted shall include the 
following:
    (1) Name, location, physical description and a site plan or aerial 
photograph of the facility for which an exemption is sought.
    (2) Description of the nature of the business.
    (3) An affidavit (signed by a partner if the facility is owned by a 
partnership or an officer if owned by a corporation) vertifying and/or 
acknowledging that:
    (i) the facility is, as of the date of the application, engaged in 
the business of building, repairing or dismantling exclusively small 
commercial vessels and that it does not then nor foreseeably will it 
engage in the building, repairing or dismantling of other than small 
vessels.
    (ii) The facility does not receive any Federal maritime subsidy.
    (iii) The signator has the duty to immediately inform the district 
director of any change in these or other conditions likely to result in 
a termination of an exemption.
    (iv) the employer has secured appropriate compensation liability 
under a State workers' compensation law.
    (v) Any false, relevant statements relating to the application or 
the failure to notify the district director of any changes in 
circumstances likely to result in termination of the exemption

[[Page 676]]

will be grounds for revocation of the exemption certificate and will 
subject the employer to all provisions of the Act, including all duties, 
responsibilities and penalties, retroactive to the date of application 
or date of change in circumstances, as appropriate.
    (b) Action by the Director. The Director or his/her designee shall 
review the application within thirty (30) days of its receipt.
    (1) Where the application is complete and shows that all 
requirements under Sec. 702.173 are met, the Director shall promptly 
notify the employer by certified mail, return receipt requested, that 
certification has been approved and will be effective on the date 
specified. The employer is required to post notice of the exemption at a 
conspicuous location.
    (2) Where the application is incomplete or does not substantiate 
that all requirements of section 3(d) of the Act, 33 U.S.C. 903(d), have 
been met, or evidence shows the facility is not eligible for exemption, 
the Director shall issue a letter which details the reasons for the 
deficiency or the rejection. The employer/applicant may reapply for 
certification, correcting deficiencies and/or responding to the reasons 
for the Director's denial. The Director or his/her designee shall issue 
a new decision within a reasonable time of reapplication following 
denial. Such action will be the final administrative review and is not 
appealable to the Administrative Law Judge or the Benefits Review Board.
    (c) The Director or another designated individual at any time has 
the right to enter on and inspect any facility seeking exemption for 
purposes of verifying information provided on the application form.
    (d) Action by the employer. Immediately upon receipt of the 
certificate of exemption from coverage under the Act the employer shall 
post:
    (1) A general notice in a conspicuous place that the Act does not 
cover injuries sustained at the facility in question, the basis of the 
exemption, the effective date of the exemption and grounds for 
termination of the exemption.
    (2) A notice, where applicable, at the entrances to all areas to 
which the exemption does not apply.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 396, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



Sec. 702.175  Effect of work on excluded vessels; reinstatement of certification.

    (a) When a vessel other than a small commercial vessel, as defined 
in Sec. 702.172, enters a facility which has been certified as exempt 
from coverage, the exemption shall automatically terminate as of the 
date such a vessel enters the facility. The exemption shall also 
terminate on the date a contract for a Federal maritime subsidy is 
entered into, and, in the situation where the facility undertakes to 
build a vessel other than a small vessel, when the construction first 
takes on the characteristics of a vessel, i.e., when the keel is laid. 
All duties, obligations and requirements imposed by the Act, including 
the duty to secure compensation liability as required by sections 4 and 
32 of the Act, 33 U.S.C. 904 and 932, and to keep records and forward 
reports, are effective immediately. The employer shall notify the 
Director or his/her designee immediately where this occurs.
    (b) Where an exemption certification is terminated because of 
circumstances described in (a), the employer may apply for reinstatement 
of the exemption once the event resulting in termination of the 
exemption ends. The reapplication shall consist of a reaffirmation of 
the nature of the business, an explanation of the circumstances leading 
to the termination of exemption, and an affidavit by the appropriate 
person affirming that the circumstances prompting the termination no 
longer exists nor will they reoccur in the forseeable future and that 
the facility is engaged in building, repairing or dismantling 
exclusively small vessels. The Director or the Director's designee shall 
respond to the complete reapplication within ten working days of 
receipt.
[50 FR 397, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]

[[Page 677]]



                      Subpart B--Claims Procedures

                           Employer's Reports



Sec. 702.201  Reports from employers of employee's injury or death.

    (a) Within 10 days from the date of an employee's injury or death, 
or 10 days from the date an employer has knowledge of an employee's 
injury or death, including any disease or death proximately caused by 
the employment, the employer shall furnish a report thereof to the 
district director for the compensation district in which the injury or 
death occurred, and shall thereafter furnish such additional or 
supplemental reports as the district director may request.
    (b) No report shall be filed unless the injury causes the employee 
to lose one or more shifts from work. However, the employer shall keep a 
record containing the information specified in Sec. 702.202. Compliance 
with the current OSHA injury record keeping requirements at 29 CFR part 
1904 will satisfy the record keeping requirements of this section for no 
lost time injuries.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 397, Jan. 3, 1985; 51 
FR 4283, Feb. 3, 1986]



Sec. 702.202  Employer's report; form and contents.

    The employer's report of an employee's injury or death shall be in 
writing and on a form prescribed by the Director for this purpose, and 
shall contain:
    (a) The name, address and business of the employer;
    (b) The name, address, occupation and Social Security Number (SSN) 
of the employee;
    (c) The cause, nature, and other relevant circumstances of the 
injury or death;
    (d) The year, month, day, and hour when, and the particular locality 
where, the injury or death occurred;
    (e) Such other information as the Director may require.

(Approved by the Office of Management and Budget under control numbers 
1215-0031 and 1215-0063)

[58 FR 68032, Dec. 23, 1993]



Sec. 702.203  Employer's report; how given.

    The employer's report, an original and one copy, may be furnished by 
delivering it to the appropriate office of the district director, or by 
mailing it to said office.



Sec. 702.204   Employer's report; penalty for failure to furnish and or falsifying.

    Any employer, insurance carrier, or self-insured employer who 
knowingly and willfully fails or refuses to send any report required by 
Sec. 702.201, or who knowingly or willfully makes a false statement or 
misrepresentation in any report, shall be subject to a civil penalty not 
to exceed $10,000.00 for each such failure, refusal, false statement, or 
misrepresentation. Provided, however, that for any violations occurring 
on or after November 17, 1997 the maximum civil penalty may not exceed 
$11,000.00. The district director has the authority and responsibility 
for assessing a civil penalty under this section.
[62 FR 53956, Oct. 17, 1997]



Sec. 702.205  Employer's report; effect of failure to report upon time limitations.

    Where the employer, or agent in charge of the business, or carrier 
has been given notice or has knowledge of an employee's injury or death, 
and fails, neglects, or refuses to file a report thereof as required by 
Sec. 702.201, the time limitations provisions with respect to the filing 
of claims for compensation for disability or death (33 U.S.C. 913(a), 
and see Sec. 702.221) shall not begin to run until such report shall 
have been furnished as required herein.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 397, Jan. 3, 1985]

                                 Notice



Sec. 702.211  Notice of employee's injury or death; designation of responsible official.

    (a) In order to claim compensation under the Act, an employee or 
claimant must first give notice of the fact of an injury or death to the 
employer and also may give notice to the district director for the 
compensation district in

[[Page 678]]

which the injury or death occurred. Notice to the employer must be given 
to that individual whom the employer has designated to receive such 
notices. If no individual has been so designated notice may be given to: 
(1) The first line supervisor (including foreman, hatchboss or 
timekeeper), local plant manager or personnel office official; (2) to 
any partner if the employer is a partnership; or (3) if the employer is 
a corporation, to any authorized agent, to an officer or to the person 
in charge of the business at the place where the injury occurred. In the 
case of a retired employee, the employee/claimant may submit the notice 
to any of the above persons, whether or not the employer has designated 
an official to receive such notice.
    (b) In order to facilitate the filing of notices, each employer 
shall designate at least one individual responsible for receiving 
notices of injury or death; this requirement applies to all employers. 
The designation shall be by position and the employer shall provide the 
name and/or position, exact location and telephone number of the 
individual to all employees by the appropriate method described below.
    (1) Type of individual. Designees must be a first line supervisor 
(including a foreman, hatchboss or timekeeper), local plant manager, 
personnel office official, company nurse or other individual 
traditionally entrusted with this duty, who is located full-time on the 
premises of the covered facility. The employer must designate at least 
one individual at each place of employment or one individual for each 
work crew where there is no fixed place of employment (in that case, the 
designation should always be the same position for all work crews).
    (2) How designated. The name and/or title, the location and 
telephone number of the individual who is selected by the employer to 
receive all notices shall be given to the district director for the 
compensation district in which the facility is located; posting on the 
worksite in a conspicuous place shall fulfill this requirement. A 
redesignation shall be effected by a change in posting.
    (3) Publication. Every employer shall post the name and/or position, 
the exact location and telephone number of the designated official. The 
posting shall be part of the general posting requirement, done on a form 
prescribed by the Director, and placed in a conspicuous location. 
Posting must be done at each worksite.
    (4) Effect of failure to designate. Where an employer fails to 
properly designate and to properly publish the name and/or position of 
the individual authorized to receive notices of injury or death, such 
failure shall constitute satisfactory reasons for excusing the employee/
claimant's failure to give notice as authorized by section 12(d)(3)(ii) 
of the Act, 33 U.S.C. 912(d)(3)(ii).

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 397, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



Sec. 702.212  Notice; when given; when given for certain occupational diseases.

    (a) For other than occupational diseases described in (b), the 
employee must give notice within thirty (30) days of the date of the 
injury or death. For this purpose the date of injury or death is:
    (1) The day on which a traumatic injury occurs;
    (2) The date on which the employee or claimant is or by the exercise 
of reasonable diligence or by reason of medical advice, should have been 
aware of a relationship between the injury or death and the employment; 
or
    (3) In the case of claims for loss of hearing, the date the employee 
receives an audiogram, with the accompanying report which indicates the 
employee has suffered a loss of hearing that is related to his or her 
employment. (See Sec. 702.441).
    (b) In the case of an occupational disease which does not 
immediately result in disability or death, notice must be given within 
one year after the employee or claimant becomes aware, or in the 
exercise of reasonable diligence or by reason of medical advice, should 
have been aware, of the relationship between the employment, the disease 
and the death or disability. For purposes of these occupational 
diseases, therefore, the notice period does not

[[Page 679]]

begin to run until the employee is disabled, or in the case of a retired 
employee, until a permanent impairment exists.
    (c) For purposes of workers whose coverage under this Act is 
dependent on denial of coverage under a State compensation program, as 
described in Sec. 701.401, the time limitations set forth above do not 
begin to run until a final decision denying State coverage is issued 
under the State compensation act.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 397, Jan. 3, 1985, as amended at 51 FR 4283, Feb. 3, 1986]



Sec. 702.213  Notice; by whom given.

    Notice shall be given by the injured employee or someone on his 
behalf, or in the case of death, by the deceased employee's beneficiary 
or someone on his behalf.
[38 FR 26861, Sept. 26, 1973. Redesignated at 50 FR 397, Jan. 3, 1985]



Sec. 702.214  Notice; form and content.

    Notice shall be in writing on a form prescribed by the Director for 
this purpose; such form shall be made available to the employee or 
beneficiary by the employer. The notice shall be signed by the person 
authorized to give notice, and shall contain the name, address and 
Social Security Number (SSN) of the employee and, in death cases, also 
the SSN of the person seeking survivor benefits, and a statement of the 
time, place, nature and cause of the injury or death.
[58 FR 68032, Dec. 23, 1993]



Sec. 702.215  Notice; how given.

    Notice shall be effected by delivering it--by hand or by mail at the 
address posted by the employer--to the individual designated to receive 
such notices. Notice when given to the district director, may be by hand 
or by mail on a form supplied by the Secretary, or orally in person or 
by telephone.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 398, Jan. 3, 1985]



Sec. 702.216  Effect of failure to give notice.

    Failure to give timely notice to the employer's designated official 
shall not bar any claim for compensation if: (a) The employer, carrier, 
or designated official had actual knowledge of the injury or death; or 
(b) the district director or ALJ determines the employer or carrier has 
not been prejudiced: or (c) the district director excuses failure to 
file notice. For purposes of this subsection, actual knowledge shall be 
deemed to exist if the employee's immediate supervisor was aware of the 
injury and/or in the case of a hearing loss, where the employer has 
furnished to the employee an audiogram and report which indicates a loss 
of hearing. Failure to give notice shall be excused by the district 
director if: a) Notice, while not given to the designated official, was 
given to an official of the employer or carrier, and no prejudice 
resulted; or b) for some other satisfactory reason, notice could not be 
given. Failure to properly designate and post the individual so 
designated shall be considered a satisfactory reason. In any event, such 
defense to a claim must be raised by the employer/carrier at the first 
hearing on the claim.
[51 FR 4283, Feb. 3, 1986]



Sec. 702.217  Penalty for false statement, misrepresentation.

    (a) Any claimant or representative of a claimant who knowingly and 
willfully makes a false statement or representation for the purpose of 
obtaining a benefit or payment under this Act shall be guilty of a 
felony, and on conviction thereof shall be punished by a fine not to 
exceed $10,000, by imprisonment not to exceed five years, or by both.
    (b) Any person including, but not limited to, an employer, its duly 
authorized agent or an employee of an insurance carrier, who knowingly 
and willingly makes a false statement or representation for the purpose 
of reducing, denying or terminating benefits to an injured employee, or 
his dependents pursuant to section 9, 33 U.S.C. 909, if the injury 
results in death, shall be punished by a fine not

[[Page 680]]

to exceed $10,000, by imprisonment not to exceed five years, or both.
[50 FR 398, Jan. 3, 1985]

                                 Claims



Sec. 702.221  Claims for compensation; time limitations.

    (a) Claims for compensation for disability or death shall be in 
writing and filed with the district director for the compensation 
district in which the injury or death occurred. The Social Security 
Number (SSN) of the injured employee and, in cases of death, the SSN of 
the person seeking survivor benefits shall also be set forth on each 
claim. Claims may be filed anytime after the seventh day of disability 
or anytime following the death of the employee. Except as provided 
below, the right to compensation is barred unless a claim is filed 
within one year of the injury or death, or (where payment is made 
without an award) within one year of the date on which the last 
compensation payment was made.
    (b) In the case of a hearing loss claim, the time for filing a claim 
does not begin to run until the employee receives an audiogram with the 
accompanying report which indicates the employee has sustained a hearing 
loss that is related to his or her employment. (See Sec. 702.441).

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 398, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986; 58 FR 
68032, Dec. 23, 1993]



Sec. 702.222  Claims; exceptions to time limitations.

    (a) Where a person entitled to compensation under the Act is 
mentally incompetent or a minor, the time limitation provision of 
Sec. 702.221 shall not apply to a mentally incompetent person so long as 
such person has no guardian or other authorized representative, but 
Sec. 702.221 shall be applicable from the date of appointment of such 
guardian or other representative. In the case of minor who has no 
guardian before he or she becomes of age, time begins to run from the 
date he or she becomes of age.
    (b) Where a person brings a suit at law or in admiralty to recover 
damages in respect of an injury or death, or files a claim under a State 
workers' compensation act because such person is excluded from this 
Act's coverage by reason of section 2(3) or 3(d) of the Act (33 U.S.C. 
902(3) or 903(d)), and recovery is denied because the person was an 
employee and defendant was an employer within the meaning of the Act, 
and such employer had secured compensation to such employee under the 
Act, the time limitation in Sec. 702.221 shall not begin to run until 
the date of termination of such suit or proceeding.
    (c) Notwithstanding the provisions in paragraph (a) of this section, 
where the claim is one based on disability or death due to an 
occupational disease which does not immediately result in death or 
disability, it must be filed within two years after the employee or 
claimant becomes aware, or in the exercise of reasonable diligence or by 
reason of medical advice, should have been aware of the relationship 
between the employment, the disease and the death or disability, or 
within one year of the date of last payment of compensation, whichever 
is later. For purposes of occupational disease, therefore, the time 
limitation for filing a claim does not begin to run until the employee 
is disabled, or in the case of a retired employee, where a permanent 
impairment exists.
    (d) The time limitations set forth above do not apply to claims 
filed under section 49 of the Act, 33 U.S.C. 949.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 398, Jan. 3, 1985]



Sec. 702.223  Claims; time limitations; time to object.

    Notwithstanding the requirements of Sec. 702.221, failure to file a 
claim within the period prescribed in such section shall not be a bar to 
such right unless objection to such failure is made at the first hearing 
of such claim in which all parties in interest are given reasonable 
notice and opportunity to be heard.
[38 FR 26861, Sept. 26, 1973. Redesignated and amended at 50 FR 397, 
Jan. 3, 1985]

[[Page 681]]



Sec. 702.224  Claims; notification of employer of filing by employee.

    Within 10 days after the filing of a claim for compensation for 
injury or death under the Act, the district director shall give written 
notice thereof to the employer or carrier, served personally or by mail.
[38 FR 26861, Sept. 26, 1973. Redesignated at 50 FR 397, Jan. 3, 1985, 
as amended at 60 FR 51348, Oct. 2, 1995]



Sec. 702.225  Withdrawal of a claim.

    (a) Before adjudication of claim. A claimant (or an individual who 
is authorized to execute a claim on his behalf) may withdraw his 
previously filed claim: Provided, That:
    (1) He files with the district director with whom the claim was 
filed a written request stating the reasons for withdrawal;
    (2) The claimant is alive at the time his request for withdrawal is 
filed;
    (3) The district director approves the request for withdrawal as 
being for a proper purpose and in the claimant's best interest; and
    (4) The request for withdrawal is filed, on or before the date the 
OWCP makes a determination on the claim.
    (b) After adjudication of claim. A claim for benefits may be 
withdrawn by a written request filed after the date the OWCP makes a 
determination on the claim: Provided, That:
    (1) The conditions enumerated in paragraphs (a) (1) through (3) of 
this section are met; and
    (2) There is repayment of the amount of benefits previously paid 
because of the claim that is being withdrawn or it can be established to 
the satisfaction of the Office that repayment of any such amount is 
assured.
    (c) Effect of withdrawal of claim. Where a request for withdrawal of 
a claim is filed and such request for withdrawal is approved, such 
withdrawal shall be without prejudice to the filing of another claim, 
subject to the time limitation provisions of section 13 of the Act and 
of the regulations in this part.
[38 FR 26861, Sept. 26, 1973. Redesignated at 50 FR 397, Jan. 3, 1985]

                         Noncontroverted Claims



Sec. 702.231  Noncontroverted claims; payment of compensation without an award.

    Unless the employer controverts its liability to pay compensation 
under this Act, the employer or insurance carrier shall pay 
periodically, promptly and directly to the person entitled thereto 
benefits prescribed by the Act. For this purpose, where the employer 
furnishes to an employee a copy of an audiogram with a report thereon, 
which indicates the employee has sustained a hearing loss causally 
related to factors of that employment, the employer or insurance carrier 
shall pay appropriate compensation or at that time controvert the 
liability to pay compensation under this Act.
[50 FR 399, Jan. 3, 1985]



Sec. 702.232  Payments without an award; when; how paid.

    The first installment of compensation shall become due by the 
fourteenth (14th) day after the employer has been notified, through the 
designated official or by any other means described in Sec. 702.211 et 
seq., or has actual knowledge of the injury or death. All compensation 
due on that fourteenth (14th) day shall be paid then and appropriate 
compensation due thereafter must be paid in semi-monthly installments, 
unless the district director determines otherwise.
[50 FR 399, Jan. 3, 1985]



Sec. 702.233  Penalty for failure to pay without an award.

    If any installment of compensation payable without an award is not 
paid within 14 days after it becomes due, there shall be added to such 
unpaid installment an amount equal to 10 per centum thereof which shall 
be paid at the same time as, but in addition to, such installment unless 
the employer files notice of controversion in accordance with 
Sec. 702.261, or unless such nonpayment is excused by the district 
director after a showing by the employer that owing to conditions over 
which he had no control such installment could not be paid within the 
period prescribed for the payment.

[[Page 682]]



Sec. 702.234  Report by employer of commencement and suspension of payments.

    Immediately upon making the first payment of compensation, and upon 
the suspension of payments once begun, the employer shall notify the 
district director having jurisdiction over the place where the injury or 
death occurred of the commencement or suspension of payments, as the 
case may be.



Sec. 702.235  Report by employer of final payment of compensation.

    (a) Within 16 days after the final payment of compensation has been 
made, the employer, the insurance carrier, or where the employer is 
self-insured, the employer shall notify the district director on a form 
prescribed by the Secretary, stating that such final payment has been 
made, the total amount of compensation paid, the name and address of the 
person(s) to whom payments were made, the date of the injury or death 
and the name of the injured or deceased employee, and the inclusive 
dates during which compensation was paid.
    (b) A ``final payment of compensation'' for the purpose of applying 
the penalty provision of Sec. 702.236 shall be deemed any one of the 
following:
    (1) The last payment of compensation made in accordance with a 
compensation order awarding disability or death benefits, issued by 
either a district director or an administrative law judge;
    (2) The payment of an agreed settlement approved under section 8(i) 
(A) or (B), of the Act, 33 U.S.C. 908(i);
    (3) The last payment made pursuant to an agreement reached by the 
parties through informal proceedings;
    (4) Any other payment of compensation which anticipates no further 
payments under the Act.

(Approved by the Office of Management and Budget under control number 
1215-0024)


(Pub. L. No. 96-511)
[42 FR 45302, Sept. 9, 1977, as amended at 49 FR 18294, Apr. 30, 1984; 
50 FR 399, Jan. 3, 1985]



Sec. 702.236   Penalty for failure to report termination of payments.

    Any employer failing to notify the district director that the final 
payment of compensation has been made as required by Sec. 702.235 shall 
be assessed a civil penalty in the amount of $100.00. Provided, however, 
that for any violation occurring on or after November 17, 1997 the civil 
penalty will be $110.00. The district director has the authority and 
responsibility for assessing a civil penalty under this section.
[62 FR 53956, Oct. 17, 1997]

                           Agreed Settlements



Sec. 702.241  Definitions and supplementary information.

    (a) As used hereinafter, the term adjudicator shall mean district 
director or administrative law judge (ALJ).
    (b) If a settlement application is submitted to an adjudicator and 
the case is pending at the Office of Administrative Law Judges, the 
Benefits Review Board, or any Federal circuit court of appeals, the 
parties may request that the case be remanded to the adjudicator for 
consideration of the application. The thirty day period as described in 
paragraph (f) of this section begins when the remanded case is received 
by the adjudicator.
    (c) If a settlement application is first submitted to an ALJ, the 
thirty day period mentioned in paragraph (f) of this section does not 
begin until five days before the date the formal hearing is set. This 
rule does not preclude the parties from submitting the application at 
any other time such as (1) after the case is referred for hearing, (2) 
at the hearing, or (3) after the hearing but before the ALJ issues a 
decision and order. Where a case is pending before the ALJ but not set 
for a hearing, the parties may request the case be remanded to the 
district director for consideration of the settlement.
    (d) A settlement agreement between parties represented by counsel, 
which is deemed approved when not disapproved within thirty days, as 
described in paragraph (f) of this section, shall be considered to have 
been filed in the office of the district director on the thirtieth day 
for purposes of sections 14 and 21 of the Act, 33 U.S.C. 914 and 921.
    (e) A fee for representation which is included in an agreement that 
is approved in the manner described in

[[Page 683]]

paragraph (d) of this section, shall also be considered approved within 
the meaning of section 28(e) of the Act, 33 U.S.C. 928(e).
    (f) The thirty day period for consideration of a settlement 
agreement shall be calculated from the day after receipt unless the 
parties are advised otherwise by the adjudicator. (See Sec. 702.243(b)). 
If the last day of this period is a holiday or occurs during a weekend, 
the next business day shall be considered the thirtieth day.
    (g) An agreement among the parties to settle a claim is limited to 
the rights of the parties and to claims then in existence; settlement of 
disability compensation or medical benefits shall not be a settlement of 
survivor benefits nor shall the settlement affect, in any way, the right 
of survivors to file a claim for survivor's benefits.
    (h) For purposes of this section and Sec. 702.243 the term counsel 
means any attorney admitted to the bar of any State, territory or the 
District of Columbia.
[50 FR 399, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986]



Sec. 702.242  Information necessary for a complete settlement application.

    (a) The settlement application shall be a self-sufficient document 
which can be evaluated without further reference to the administrative 
file. The application shall be in the form of a stipulation signed by 
all parties and shall contain a brief summary of the facts of the case 
to include: a description of the incident, a description of the nature 
of the injury to include the degree of impairment and/or disability, a 
description of the medical care rendered to date of settlement, and a 
summary of compensation paid and the compensation rate or, where 
benefits have not been paid, the claimant's average weekly wage.
    (b) The settlement application shall contain the following:
    (1) A full description of the terms of the settlement which clearly 
indicates, where appropriate, the amounts to be paid for compensation, 
medical benefits, survivor benefits and representative's fees which 
shall be itemized as required by Sec. 702.132.
    (2) The reason for the settlement, and the issues which are in 
dispute, if any.
    (3) The claimant's date of birth and, in death claims, the names and 
birth dates of all dependents.
    (4) Information on whether or not the claimant is working or is 
capable of working. This should include, but not be limited to, a 
description of the claimant's educational background and work history, 
as well as other factors which could impact, either favorably or 
unfavorably, on future employability.
    (5) A current medical report which fully describes any injury 
related impairment as well as any unrelated conditions. This report 
shall indicate whether maximum medical improvement has been reached and 
whether further disability or medical treatment is anticipated. If the 
claimant has already reached maximum medical improvement, a medical 
report prepared at the time the employee's condition stabilized will 
satisfy the requirement for a current medical report. A medical report 
need not be submitted with agreements to settle survivor benefits unless 
the circumstances warrant it.
    (6) A statement explaining how the settlement amount is considered 
adequate.
    (7) If the settlement application covers medical benefits an 
itemization of the amount paid for medical expenses by year for the 
three years prior to the date of the application. An estimate of the 
claimant's need for future medical treatment as well as an estimate of 
the cost of such medical treatment shall also be submitted which 
indicates the inflation factor and/or the discount rate used, if any. 
The adjudicator may waive these requirements for good cause.
    (8) Information on any collateral source available for the payment 
of medical expenses.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 399, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986]

[[Page 684]]



Sec. 702.243  Settlement application; how submitted, how approved, how disapproved, criteria.

    (a) When the parties to a claim for compensation, including survivor 
benefits and medical benefits, agree to a settlement they shall submit a 
complete application to the adjudicator. The application shall contain 
all the information outlined in Sec. 702.242 and shall be sent by 
certified mail, return receipt requested or submitted in person, or by 
any other delivery service with proof of delivery to the adjudicator. 
Failure to submit a complete application shall toll the thirty day 
period mentioned in section 8(i) of the Act, 33 U.S.C. 908(i), until a 
complete application is received.
    (b) The adjudicator shall consider the settlement application within 
thirty days and either approve or disapprove the application. The 
liability of an employer/insurance carrier is not discharged until the 
settlement is specifically approved by a compensation order issued by 
the adjudicator. However, if the parties are represented by counsel, the 
settlement shall be deemed approved unless specifically disapproved 
within thirty days after receipt of a complete application. This thirty 
day period does not begin until all the information described in 
Sec. 702.242 has been submitted. The adjudicator shall examine the 
settlement application within thirty days and shall immediately serve on 
all parties notice of any deficiency. This notice shall also indicate 
that the thirty day period will not commence until the deficiency is 
corrected.
    (c) If the adjudicator disapproves a settlement application, the 
adjudicator shall serve on all parties a written statement or order 
containing the reasons for disapproval. This statement shall be served 
by certified mail within thirty days of receipt of a complete 
application (as described in Sec. 702.242.) if the parties are 
represented by counsel. If the disapproval was made by a district 
director, any party to the settlement may request a hearing before an 
ALJ as provided in sections 8 and 19 of the Act, 33 U.S.C. 908 and 919, 
or an amended application may be submitted to the district director. If, 
following the hearing, the ALJ disapproves the settlement, the parties 
may: (1) Submit a new application, (2) file an appeal with the Benefits 
Review Board as provided in section 21 of the Act, 33 U.S.C. 921, or (3) 
proceed with a hearing on the merits of the claim. If the application is 
initially disapproved by an ALJ, the parties may (1) submit a new 
application or (2) proceed with a hearing on the merits of the claim.
    (d) The parties may submit a settlement application solely for 
compensation, or solely for medical benefits or for compensation and 
medical benefits combined.
    (e) If either portion of a combined compensation and medical 
benefits settlement application is disapproved the entire application is 
disapproved unless the parties indicate on the face of the application 
that they agree to settle either portion independently.
    (f) When presented with a settlement, the adjudicator shall review 
the application and determine whether, considering all of the 
circumstances, including, where appropriate, the probability of success 
if the case were formally litigated, the amount is adequate. The 
criteria for determining the adequacy of the settlement application 
shall include, but not be limited to:
    (1) The claimant's age, education and work history;
    (2) The degree of the claimant's disability or impairment;
    (3) The availability of the type of work the claimant can do;
    (4) The cost and necessity of future medical treatment (where the 
settlement includes medical benefits).
    (g) In cases being paid pursuant to a final compensation order, 
where no substantive issues are in dispute, a settlement amount which 
does not equal the present value of future compensation payments 
commuted, computed at the discount rate specified below, shall be 
considered inadequate unless the parties to the settlement show that the 
amount is adequate. The probability of the death of the beneficiary 
before the expiration of the period during which he or she is entitled 
to compensation shall be determined according to the most current United 
States Life Table, as developed by the United States Department of 
Health and Human Services, which shall be updated from time

[[Page 685]]

to time. The discount rate shall be equal to the coupon issue yield 
equivalent (as determined by the Secretary of the Treasury) of the 
average accepted auction price for the last auction of 52 weeks U.S. 
Treasury Bills settled immediately prior to the date of the submission 
of the settlement application.
[50 FR 399, Jan. 3, 1985, as amended at 51 FR 4284, Feb. 3, 1986; 60 FR 
51348, Oct. 2, 1995]

                           Controverted Claims



Sec. 702.251  Employer's controversion of the right to compensation.

    Where the employer controverts the right to compensation after 
notice or knowledge of the injury or death, or after receipt of a 
written claim, he shall give notice thereof, stating the reasons for 
controverting the right to compensation, using the form prescribed by 
the Director. Such notice, or answer to the claim, shall be filed with 
the district director within 14 days from the date the employer receives 
notice or has knowledge of the injury or death. The original notice 
shall be sent to the district director having jurisdiction, and a copy 
thereof shall be given or mailed to the claimant.

(Approved by the Office of Management and Budget under control number 
1215-0023)


(Pub. L. No. 96-511)
[38 FR 26861, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 702.252  Action by district director upon receipt of notice of controversion.

    Upon receiving the employer's notice of controversion, the district 
director shall forthwith commence proceedings for the adjudication of 
the claim in accordance with the procedures set forth in subpart C of 
this part.

                            Contested Claims



Sec. 702.261  Claimant's contest of actions taken by employer or carrier with respect to the claim.

    Where the claimant contests an action by the employer or carrier 
reducing, suspending, or terminating benefits, including medical care, 
he should immediately notify the office of the district director having 
jurisdiction, in person or in writing, and set forth the facts pertinent 
to his complaint.



Sec. 702.262  Action by district director upon receipt of notice of contest.

    Upon receipt of the claimant's notice of contest, the district 
director shall forthwith commence proceedings for adjudication of the 
claim in accordance with the procedures set forth in subpart C of this 
part.

                             Discrimination



Sec. 702.271  Discrimination; against employees who bring proceedings, prohibition and penalty.

    (a)(1) No employer or its duly authorized agent may discharge or in 
any manner discriminate against an employee as to his/her employment 
because that employee: (i) Has claimed or attempted to claim 
compensation under this Act; or (ii) has testified or is about to 
testify in a proceeding under this Act. To discharge or refuse to employ 
a person who has been adjudicated to have filed a fraudulent claim for 
compensation or otherwise made a false statement or misrepresentation 
under section 31(a)(1) of the Act, 33 U.S.C. 931(a)(1), is not a 
violation of this section.
    (2) Any employer who violates this section shall be liable to a 
penalty of not less that $1,000.00 or more than $5,000.00 to be paid (by 
the employer alone, and not by a carrier) to the district director for 
deposit in the special fund described in section 44 of the Act, 33 
U.S.C. 944; and shall restore the employee to his or her employment 
along with all wages lost due to the discrimination unless the employee 
has ceased to be qualified to perform the duties of employment. Provided 
however, that for any violation occurring on or after November 17, 1997 
the employer shall be liable to a penalty of not less than $1,100.00 or 
more than $5,500.00.
    (b) When a district director receives a complaint from an employee 
alleging discrimination as defined under section 49, he or she shall 
notify the employer, and within five working days, initiate specific 
inquiry to determine all the facts and circumstances pertaining thereto. 
This may be accomplished by interviewing the employee, employer 
representatives and other parties who

[[Page 686]]

may have information about the matter. Interviews may be conducted by 
written correspondence, telephone or personal interview.
    (c) If circumstances warrant, the district director may also conduct 
an informal conference on the issue as described in Secs. 702.312 
through 702.314.
    (d) Any employee discriminated against is entitled to be restored to 
his employment and to be compensated by the employer for any loss of 
wages arising out of such discrimination provided that the employee is 
qualified to perform the duties of the employment. If it is determined 
that the employee has been discriminated against, the district director 
shall also determine whether the employee is qualified to perform the 
duties of the employment. The district director may use medical evidence 
submitted by the parties or he may arrange to have the employee examined 
by a physician selected by the district director. The cost of the 
medical examination arranged for by the district director may be charged 
to the special fund established by section 44, 33 U.S.C. 944.
[42 FR 45302, Sept. 9, 1977, as amended at 50 FR 400, Jan. 3, 1985; 62 
FR 53956, Oct. 17, 1997]



Sec. 702.272  Informal recommendation by district director.

    (a) If the district director determines that the employee has been 
discharged or suffered discrimination and is able to resume his or her 
duties, the district director will recommend that the employer reinstate 
the employee and/or make such restitution as is indicated by the 
circumstances of the case, including compensation for any wage loss 
suffered as the result of the discharge or discrimination. The district 
director may also assess the employer an appropriate penalty, as 
determined under authority vested in the district director by the Act. 
If the district director determines that no violation occurred he shall 
notify the partries of his findings and the reasons for recommending 
that the complaint be denied. If the employer and employee accept the 
district director's recommendation, it will be incorporated in an order 
and mailed to each party within 10 days.
    (b) If the parties do not agree to the recommendation, the district 
director shall, within 10 days after receipt of the rejection, prepare a 
memorandum summarizing the disagreement, mail a copy to all interested 
parties, and shall within 14 days thereafter refer the case to the 
Office of the Chief Administrative Law Judge for hearing pursuant to 
Sec. 702.317.
[42 FR 45302, Sept. 9, 1977]



Sec. 702.273  Adjudication by Office of the Chief Administrative Law Judge.

    The Office of Administrative Law Judges is responsible for final 
determinations of all disputed issues connected with the discrimination 
complaint, including the amount of penalty to be assessed, and shall 
proceed with a formal hearing as described in Secs. 702.331 to 702.394.
[42 FR 45302, Sept. 9, 1977]



Sec. 702.274  Employer's refusal to pay penalty.

    In the event the employer refuses to pay the penalty assessed, the 
district director shall refer the complete administrative file to the 
Associate Director, Division of Longshore and Harbor Workers' 
Compensation, for subsequent transmittal to the Associate Solicitor for 
Employee Benefits, with the request that appropriate legal action be 
taken to recover the penalty.
[42 FR 45302, Sept. 9, 1977]

                               Third Party



Sec. 702.281  Third party action.

    (a) Every person claiming benefits under this Act (or the 
representative) shall promptly notify the employer and the district 
director when:
    (1) A claim is made that someone other than the employer or person 
or persons in its employ, is liable in damages to the claimant because 
of the injury or death and identify such party by name and address.
    (2) Legal action is instituted by the claimant or the representative 
against some person or party other than the employer or a person or 
persons in his employ, on the ground that such other person is liable in 
damages to the claimant on account of the compensable injury and/or 
death; specify the

[[Page 687]]

amount of damages claimed and identify the person or party by name and 
address.
    (3) Any settlement, compromise or any adjudication of such claim has 
been effected and report the terms, conditions and amounts of such 
resolution of claim.
    (b) Where the claim or legal action instituted against a third party 
results in a settlement agreement which is for an amount less than the 
compensation to which a person would be entitled under this Act, the 
person (or the person's representative) must obtain the prior, written 
approval of the settlement from the employer and the employer's carrier 
before the settlement is executed. Failure to do so relieves the 
employer and/or carrier of liability for compensation described in 
section 33(f) of Act, 33 U.S.C. 933(f) and for medical benefits 
otherwise due under section 7 of the Act, 33 U.S.C. 907, regardless of 
whether the employer or carrier has made payments of acknowledged 
entitlement to benefits under the Act. The approval shall be on a form 
provided by the Director and filed, within thirty days after the 
settlement is entered into, with the district director who has 
jurisdiction in the district where the injury occurred.
[42 FR 45303, Sept. 9, 1977, as amended at 50 FR 400, Jan. 3, 1985; 51 
FR 4284, Feb. 3, 1986]

                           Report of Earnings



Sec. 702.285  Report of earnings.

    (a) An employer, carrier or the Director (for those cases being paid 
from the Special Fund) may require an employee to whom it is paying 
compensation to submit a report on earnings from employment or self-
employment. This report may not be required any more frequently than 
semi-annually. The report shall be made on a form prescribed by the 
Director and shall include all earnings from employment and self-
employment and the periods for which the earnings apply. The employee 
must return the complete report on earnings even where he or she has no 
earnings to report.
    (b) For these purposes the term ``earnings'' is defined as all 
monies received from any employment and includes but is not limited to 
wages, salaries, tips, sales commissions, fees for services provided, 
piecework and all revenue received from self-employment even if the 
business or enterprise operated at a loss of if the profits were 
reinvested.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 400, Jan. 3, 1985]



Sec. 702.286  Report of earnings; forfeiture of compensation.

    (a) Any employee who fails to submit the report on earnings from 
employment or self-employment under Sec. 702.285 or, who knowingly and 
willingly omits or understates any part of such earnings, shall upon a 
determination by the district director forfeit all right to compensation 
with respect to any period during which the employee was required to 
file such a report. The employee must return the completed report on 
earnings (even where he or she reports no earnings) within thirty (30) 
days of the date of receipt; this period may be extended for good cause, 
by the district director, in determining whether a violation of this 
requirement has occurred.
    (b) Any employer or carrier who believes that a violation of 
paragraph (a) of this section has occurred may file a charge with the 
district director. The allegation shall be accompanied by evidence which 
includes a copy of the report, with proof of service requesting the 
information from the employee and clearly stating the dates for which 
the employee was required to report income. Where the employer/carrier 
is alleging an omission or understatement of earnings, it shall, in 
addition, present evidence of earnings by the employee during that 
period, including copies of checks, affidavits from employers who paid 
the employee earnings, receipts of income from self-employment or any 
other evidence showing earnings not reported or underreported for the 
period in question. Where the district director finds the evidence 
sufficient to support the charge he or she shall convene an informal 
conference as described in subpart C and shall issue a compensation 
order affiming or denying the charge and setting forth the amount of 
compensation

[[Page 688]]

for the specified period. If there is a conflict over any issue relating 
to this matter any party may request a formal hearing before an 
Administrative Law Judge as described in subpart C.
    (c) Compensation forfeited under paragraph (b) of this section, if 
already paid, shall be recovered by a deduction from the compensation 
payable to the employee if any, on such schedule as determined by the 
district director. The district director's discretion in such cases 
extends only to rescheduling repayment by crediting future compensation 
and not to whether and in what amounts compensation is forfeited. For 
this purpose, the district director shall consider the employee's 
essential expenses for living, income from whatever source, and assets, 
including cash, savings and checking accounts, stocks, bonds, and other 
securities.
[50 FR 400, Jan. 3, 1985]



                   Subpart C--Adjudication Procedures

                                 General



Sec. 702.301  Scope of this subpart.

    The regulations in this subpart govern the adjudication of claims in 
which the employer has filed a notice of controversion under 
Sec. 702.251, or the employee has filed notice of contest under 
Sec. 702.261. In the vast majority of cases, the problem giving rise to 
the controversy results from misunderstandings, clerical or mechanical 
errors, or mistakes of fact or law. Such problems seldom require 
resolution through formal hearings, with the attendant production of 
expert witnesses. Accordingly, by Sec. 702.311 et seq., the district 
directors are empowered to amicably and promptly resolve such problems 
by informal procedures. Where there is a genuine dispute of fact or law 
which cannot be so disposed of informally, resort must be had to the 
formal hearing procedures as set forth beginning at Sec. 702.331. 
Supplementary compensation orders, modifications, and interlocutory 
matters are governed by regulations beginning with Sec. 702.371. 
Thereafter, appeals from compensation orders are discussed beginning 
with Sec. 702.391 (the regulations of the Benefits Review Board are set 
forth in full in part 802 of this title).

                      Action by District Directors



Sec. 702.311  Handling of claims matters by district directors; informal conferences.

    The district director is empowered to resolve disputes with respect 
to claims in a manner designed to protect the rights of the parties and 
also to resolve such disputes at the earliest practicable date. This 
will generally be accomplished by informal discussions by telephone or 
by conferences at the district director's office. Some cases will be 
handled by written correspondence. The regulations governing informal 
conferences at the district director's office with all parties present 
are set forth below. When handling claims by telephone, or at the office 
with only one of the parties, the district director and his staff shall 
make certain that a full written record be made of the matters discussed 
and that such record be placed in the administrative file. When claims 
are handled by correspondence, copies of all communications shall 
constitute the administrative file.



Sec. 702.312  Informal conferences; called by and held before whom.

    Informal conferences shall be called by the district director or his 
designee assigned or reassigned the case and held before that same 
person, unless such person is absent or unavailable. When so assigned, 
the designee shall perform the duties set forth below assigned to the 
district director, except that a compenstion order following an 
agreement shall be issued only by a person so designated by the Director 
to perform such duty.
[42 FR 45303, Sept. 9, 1977]



Sec. 702.313  Informal conferences; how called; when called.

    Informal conferences may be called upon not less than 10 days' 
notice to the parties, unless the parties agree to meet at an earlier 
date. The notice may be given by telephone, but shall be confirmed by 
use of a written notice on a form prescribed by the Director. The notice 
shall indicate the date, time and place of the conference, and shall 
also

[[Page 689]]

specify the matters to be discussed. For good cause shown conferences 
may be rescheduled. A copy of such notice shall be placed in the 
administrative file.



Sec. 702.314  Informal conferences; how conducted; where held.

    (a) No stenographic report shall be taken at informal conferences 
and no witnesses shall be called. The district director shall guide the 
discussion toward the achievement of the purpose of such conference, 
recommending courses of action where there are disputed issues, and 
giving the parties the benefit of his experience and specialized 
knowledge in the field of workmen's compensation.
    (b) Conferences generally shall be held at the district director's 
office. However, such conferences may be held at any place which, in the 
opinion of the district director, will be of greater convenience to the 
parties or to their representatives.



Sec. 702.315  Conclusion of conference; agreement on all matters with respect to the claim.

    (a) Following an informal conference at which agreement is reached 
on all issues, the district director shall (within 10 days after 
conclusion of the conference), embody the agreement in a memorandum or 
within 30 days issue a formal compensation order, to be filed and mailed 
in accordance with Sec. 702.349. If either party requests that a formal 
compensation order be issued the district director shall, within 30 days 
of such request, prepare, file, and serve such order in accordance with 
Sec. 702.349. Where the problem was of such nature that it was resolved 
by telephone discussion or by exchange of written correspondence, the 
parties shall be notified by the same means that agreement was reached 
and the district director shall prepare a memorandum or order setting 
forth the terms agreed upon. In either instance, when the employer or 
carrier has agreed to pay, reinstate or increase monetary compensation 
benefits, or to restore or appropriately change medical care benefits, 
such action shall be commenced immediately upon becoming aware of the 
agreement, and without awaiting receipt of the memorandum or the formal 
compensation order.
    (b) Where there are several conferences or discussions, the 
provisions of paragraph (a) of this section do not apply until the last 
conference. The district director shall, however, prepare and place in 
his administrative file a short, succinct memorandum of each preceding 
conference or discussion.
[38 FR 26861, Sept. 26, 1973, as amended at 42 FR 45303, Sept. 9, 1977]



Sec. 702.316  Conclusion of conference; no agreement on all matters with respect to the claim.

    When it becomes apparent during the course of the informal 
conference that agreement on all issues cannot be reached, the district 
director shall bring the conference to a close, shall evaluate all 
evidence available to him or her, and after such evaluation shall 
prepare a memorandum of conference setting forth all outstanding issues, 
such facts or allegations as appear material and his or her 
recommendations and rationale for resolution of such issues. Copies of 
this memorandum shall then be sent to each of the parties or their 
representatives, who shall then have 14 days within which to signify in 
writing to the district director whether they agree or disagree with his 
or her recommendations. If they agree, the district director shall 
proceed as in Sec. 702.315(a). If they disagree (Caution: See 
Sec. 702.134), then the district director may schedule such further 
conference or conferences as, in his or her opinion, may bring about 
agreement; if he or she is satisfied that any further conference would 
be unproductive, or if any party has requested a hearing, the district 
director shall prepare the case for transfer to the Office of the Chief 
Administrative Law Judge (See Sec. 702.317, Secs. 702.331-702.351).
[42 FR 42551, Aug. 23, 1977, as amended at 60 FR 51348, Oct. 2, 1995]



Sec. 702.317  Preparation and transfer of the case for hearing.

    A case is prepared for transfer in the following manner:

[[Page 690]]

    (a) The district director shall furnish each of the parties or their 
representatives with a copy of a prehearing statement form.
    (b) Each party shall, within 21 days after receipt of such form, 
complete it and return it to the district director and serve copies on 
all other parties. Extensions of time for good cause may be granted by 
the district director.
    (c) Upon receipt of the completed forms, the district director, 
after checking them for completeness and after any further conferences 
that, in his or her opinion, are warranted, shall transmit them to the 
Office of the Chief Administrative Law Judge by letter of transmittal 
together with all available evidence which the parties intend to submit 
at the hearing (exclusive of X-rays, slides and other materials not 
suitable for mailing which may be offered into evidence at the time of 
hearing); the materials transmitted shall not include any 
recommendations expressed or memoranda prepared by the district director 
pursuant to Sec. 702.316.
    (d) If the completed pre-hearing statement forms raise new or 
additional issues not previously considered by the district director or 
indicate that material evidence will be submitted that could reasonably 
have been made available to the district director before he or she 
prepared the last memorandum of conference, the district director shall 
transfer the case to the Office of the Chief Administrative Law Judge 
only after having considered such issues or evaluated such evidence or 
both and having issued an additional memorandum of conference in 
conformance with Sec. 702.316.
    (e) If a party fails to complete or return his or her pre-hearing 
statement form within the time allowed, the district director may, at 
his or her discretion, transmit the case without that party's form. 
However, such transmittal shall include a statement from the district 
director setting forth the circumstanes causing the failure to include 
the form, and such party's failure to submit a pre-hearing statement 
form may, subject to rebuttal at the formal hearing, be considered by 
the administrative law judge, to the extent intransigence is relevant, 
in subsequent rulings on motions which may be made in the course of the 
formal hearing.

(Approved by the Office of Management and Budget under control number 
1215-0085)


(Pub. L. No. 96-511)
[42 FR 42551, Aug. 23, 1977, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 702.318  The record; what constitutes; nontransferability of the administrative file.

    For the purpose of any further proceedings under the Act, the formal 
record of proceedings shall consist of the hearing record made before 
the administrative law judge (see Sec. 702.344). When transferring the 
case for hearing pursuant to Sec. 702.317, the district director shall 
not transfer the administrative file under any circumstances.



Sec. 702.319  Obtaining documents from the administrative file for reintroduction at formal hearings.

    Whenever any party considers any document in the administrative file 
essential to any further proceedings under the Act, it is the 
responsibility of such party to obtain such document from the district 
director and reintroduce it for the record before the administrative law 
judge. The type of document that may be obtained shall be limited to 
documents previously submitted to the district director, including 
documents or forms with respect to notices, claims, controversions, 
contests, progress reports, medical services or supplies, etc. The work 
products of the district director or his staff shall not be subject to 
retrieval. The procedure for obtaining documents shall be for the 
requesting party to inform the district director in writing of the 
documents he wishes to obtain, specifying them with particularity. Upon 
receipt, the district director shall cause copies of the requested 
documents to be made and then:
    (a) Place the copies in the file together with the letter of 
request, and (b) promptly forward the originals to the requesting party. 
The handling of multiple requests for the same document shall be within 
the discretion of the district director and with the cooperation of the 
requesting parties.

[[Page 691]]

                              Special Fund



Sec. 702.321  Procedures for determining applicability of section 8(f) of the Act.

    (a) Application: filing, service, contents. (1) An employer or 
insurance carrier which seeks to invoke the provisions of section 8(f) 
of the Act must request limitation of its liability and file, in 
duplicate, with the district director a fully documented application. A 
fully documented application shall contain the following information: 
(i) A specific description of the pre-existing condition relied upon as 
constituting an existing permanent partial disability; (ii) the reasons 
for believing that the claimant's permanent disability after the injury 
would be less were it not for the pre-existing permanent partial 
disability or that the death would not have ensued but for that 
disability. These reasons must be supported by medical evidence as 
specified in paragraph (a)(1)(iv) of this section; (iii) the basis for 
the assertion that the pre-existing condition relied upon was manifest 
in the employer; and (iv) documentary medical evidence relied upon in 
support of the request for section 8(f) relief. This medical evidence 
shall include, but not be limited to, a current medical report 
establishing the extent of all impairments and the date of maximum 
medical improvement. If the claimant has already reached maximum medical 
improvement, a report prepared at that time will satisfy the requirement 
for a current medical report. If the current disability is total, the 
medical report must explain why the disability is not due solely to the 
second injury. If the current disability is partial, the medical report 
must explain why the disability is not due solely to the second injury 
and why the resulting disability is materially and substantially greater 
than that which would have resulted from the subsequent injury alone. If 
the injury is loss of hearing, the pre-existing hearing loss must be 
documented by an audiogram which complies with the requirements of 
Sec. 702.441. If the claim is for survivor's benefits, the medical 
report must establish that the death was not due solely to the second 
injury. Any other evidence considered necessary for consideration of the 
request for section 8(f) relief must be submitted when requested by the 
district director or Director.
    (2) If claim is being paid by the special fund and the claimant 
dies, an employer need not reapply for section 8(f) relief. However, 
survivor benefits will not be paid until it has been established that 
the death was due to the accepted injury and the eligible survivors have 
been identified. The district director will issue a compensation order 
after a claim has been filed and entitlement of the survivors has been 
verified. Since the employer remains a party in interest to the claim, a 
compensation order will not be issued without the agreement of the 
employer.
    (b) Application: Time for filing. (1) A request for section 8(f) 
relief should be made as soon as the permanency of the claimant's 
condition becomes known or is an issue in dispute. This could be when 
benefits are first paid for permanent disability, or at an informal 
conference held to discuss the permanency of the claimant's condition. 
Where the claim is for death benefits, the request should be made as 
soon as possible after the date of death. Along with the request for 
section 8(f) relief, the applicant must also submit all the supporting 
documentation required by this section, described in paragraph (a), of 
this section. Where possible, this documentation should accompany the 
request, but may be submitted separately, in which case the district 
director shall, at the time of the request, fix a date for submission of 
the fully documented application. The date shall be fixed as follows:
    (i) Where notice is given to all parties that permanency shall be an 
issue at an informal conference, the fully documented application must 
be submitted at or before the conference. For these purposes, notice 
shall mean when the issues of permanency is noted on the form LS-141, 
Notice of Informal Conference. All parties are required to list issue 
reasonably anticipated to be discussed at the conference when the 
initial request for a conference is made and to notify all parties of 
additional issues which arise during the period before the conference is 
actually held.

[[Page 692]]

    (ii) Where the issue of permanency is first raised at the informal 
conference and could not have reasonably been anticipated by the parties 
prior to the conference, the district director shall adjourn the 
conference and establish the date by which the fully documented 
application must be submitted and so notify the employer/carrier. The 
date shall be set by the district director after reviewing the 
circumstances of the case.
    (2) At the request of the employer or insurance carrier, and for 
good cause, the district director, at his/her discretion, may grant an 
extension of the date for submission of the fully documented 
application. In fixing the date for submission of the application under 
circumstances other than described above or in considering any request 
for an extension of the date for submitting the application, the 
district director shall consider all the circumstances of the case, 
including but not limited to: Whether the claimant is being paid 
compensation and the hardship to the claimant of delaying referral of 
the case to the Office of Administrative Law Judges (OALJ); the 
complexity of the issues and the availability of medical and other 
evidence to the employer; the length of time the employer was or should 
have been aware that permanency is an issue; and, the reasons listed in 
support of the request. If the employer/carrier requested a specific 
date, the reasons for selection of that date will also be considered. 
Neither the date selected for submission of the fully documented 
application nor any extension therefrom can go beyond the date the case 
is referred to the OALJ for formal hearing.
    (3) Where the claimant's condition has not reached maximum medical 
improvement and no claim for permanency is raised by the date the case 
is referred to the OALJ, an application need not be submitted to the 
district director to preserve the employer's right to later seek relief 
under section 8(f) of the Act. In all other cases, failure to submit a 
fully documented application by the date established by the district 
director shall be an absolute defense to the liability of the special 
fund. This defense is an affirmative defense which must be raised and 
pleaded by the Director. The absolute defense will not be raised where 
permanency was not an issue before the district director. In all other 
cases, where permanency has been raised, the failure of an employer to 
submit a timely and fully documented application for section 8(f) relief 
shall not prevent the district director, at his/her discretion, from 
considering the claim for compensation and transmitting the case for 
formal hearing. The failure of an employer to present a timely and fully 
documented application for section 8(f) relief may be excused only where 
the employer could not have reasonably anticipated the liability of the 
special fund prior to the consideration of the claim by the district 
director. Relief under section 8(f) is not available to an employer who 
fails to comply with section 32(a) of the Act, 33 U.S.C. 932(a).
    (c) Application: Approval, disapproval. If all the evidence required 
by paragraph (a) was submitted with the application for section 8(f) 
relief and the facts warrant relief under this section, the district 
director shall award such relief after concurrence by the Associate 
Director, DLHWC, or his or her designee. If the district director or the 
Associate Director or his or her designee finds that the facts do not 
warrant relief under section 8(f) the district director shall advise the 
employer of the grounds for the denial. The application for section 8(f) 
relief may then be considered by an administrative law judge. When a 
case is transmitted to the Office of Administrative Law Judges the 
district director shall also attach a copy of the application for 
section 8(f) relief submitted by the employer, and notwithstanding 
Sec. 702.317(c), the district director's denial of the application.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[51 FR 4285, Feb. 3, 1986]

                             Formal Hearings



Sec. 702.331  Formal hearings; procedure initiating.

    Formal hearings are initiated by transmitting to the Office of the 
Chief Administrative Law Judge the pre-hearing statement forms, the 
available

[[Page 693]]

evidence which the parties intend to submit at the formal hearing, and 
the letter of transmittal from the district director as provided in 
Sec. 702.316 and Sec. 702.317.
[42 FR 42552, Aug. 23, 1977]



Sec. 702.332  Formal hearings; how conducted.

    Formal hearings shall be conducted by the administrative law judge 
assigned the case by the Office of the Chief Administrative Law Judge in 
accordance with the provisions of the Administrative Procedure Act, 5 
U.S.C. 554 et seq. All hearings shall be transcribed.



Sec. 702.333  Formal hearings; parties.

    (a) The necessary parties for a formal hearing are the claimant and 
the employer or insurance carrier, and the administrative law judge 
assigned the case.
    (b) The Solicitor of Labor or his designee may appear and 
participate in any formal hearing held pursuant to these regulations on 
behalf of the Director as an interested party.



Sec. 702.334  Formal hearings; representatives of parties.

    The claimant and the employer or carrier may be represented by 
persons of their choice.



Sec. 702.335  Formal hearings; notice.

    On a form prescribed for this purpose, the Office of the Chief 
Administrative Law Judge shall notify the parties (See Sec. 702.333) of 
the place and time of the formal hearing not less than 30 days in 
advance thereof.
[42 FR 42552, Aug. 23, 1977]



Sec. 702.336  Formal hearings; new issues.

    (a) If, during the course of the formal hearing, the evidence 
presented warrants consideration of an issue or issues not previously 
considered, the hearing may be expanded to include the new issue. If in 
the opinion of the administrative law judge the new issue requires 
additional time for preparation, the parties shall be given a reasonable 
time within which to prepare for it. If the new issue arises from 
evidence that has not been considered by the district director, and such 
evidence is likely to resolve the case without the need for a formal 
hearing, the administrative law judge may remand the case to the 
district director for his or her evaluation and recommendation pursuant 
to, Sec. 702.316.
    (b) At any time prior to the filing of the compensation order in the 
case, the administrative law judge may in his discretion, upon the 
application of a party or upon his own motion, give notice that he will 
consider any new issue. The parties shall be given not less than 10 
days' notice of the hearing on such new issue. The parties may stipulate 
that the issue may be heard at an earlier time and shall proceed to a 
hearing on the new issue in the same manner as on an issue initially 
considered.
[38 FR 26861, Sept. 26, 1973, as amended at 42 FR 42552, Aug. 23, 1977]



Sec. 702.337  Formal hearings; change of time or place for hearings; postponements.

    (a) Except for good cause shown, hearings shall be held at 
convenient locations not more than 75 miles from the claimant's 
residence.
    (b) Once a formal hearing has been scheduled, continuances shall not 
be granted except in cases of extreme hardship or where attendance of a 
party or his or her representative is mandated at a previously scheduled 
judicial proceeding. Unless the ground for the request arises 
thereafter, requests for continuances must be received by the Chief 
Administrative Law Judge at least 10 days before the scheduled hearing 
date, must be served upon the other parties and must specify the extreme 
hardship or previously scheduled judicial proceeding claimed.
    (c) The Chief Administrative Law Judge or the administrative law 
judge assigned to the case may change the time and place of the hearing, 
or temporarily adjourn a hearing, on his own motion or for good cause 
shown by a party. The parties shall be given not less than 10 days' 
notice of the new time and place of the hearing, unless they agree to 
such change without notice.
[42 FR 42552, Aug. 23, 1977]

[[Page 694]]



Sec. 702.338  Formal hearings; general procedures.

    All hearings shall be attended by the parties or their 
representatives and such other persons as the administrative law judge 
deems necessary and proper. The administrative law judge shall inquire 
fully into the matters at issue and shall receive in evidence the 
testimony of witnesses and any documents which are relevant and material 
to such matters. If the administrative law judge believes that there is 
relevant and material evidence available which has not been presented at 
the hearing, he may adjourn the hearing or, at any time, prior to the 
filing of the compensation order, reopen the hearing for the receipt of 
such evidence. The order in which evidence and allegations shall be 
presented and the procedures at the hearings generally, except as these 
regulations otherwise expressly provide, shall be in the discretion of 
the administrative law judge and of such nature as to afford the parties 
a reasonable opportunity for a fair hearing.



Sec. 702.339  Formal hearings; evidence.

    In making an investigation or inquiry or conducting a hearing, the 
administrative law judge shall not be bound by common law or statutory 
rules of evidence or by technical or formal rules of procedure, except 
as provided by 5 U.S.C. 554 and these regulations; but may make such 
investigation or inquiry or conduct such hearing in such a manner as to 
best ascertain the rights of the parties.



Sec. 702.340  Formal hearings; witnesses.

    (a) Witnesses at the hearing shall testify under oath or 
affirmation. The administrative law judge may examine the witnesses and 
shall allow the parties or their representatives to do so.
    (b) No person shall be required to attend as a witness in any 
proceeding before an administrative law judge at a place more than 100 
miles from his place of residence, unless his lawful mileage and fees 
for one day's attendance shall be paid or tendered to him in advance of 
the hearing date.



Sec. 702.341  Formal hearings; depositions; interrogatories.

    The testimony of any witness, including any party represented by 
counsel, may be taken by deposition or interrogatory according to the 
Federal Rules of Civil Procedure as supplemented by local rules of 
practice for the Federal district court for the judicial district in 
which the case is pending. However, such depositions or interrogatories 
must be completed within reasonable times to be fixed by the Chief 
Administrative Law Judge or the administrative law judge assigned to the 
case.
[42 FR 42552, Aug. 23, 1977]



Sec. 702.342  Formal hearings; witness fees.

    Witnesses summoned in a formal hearing before an administrative law 
judge or whose depositions are taken shall receive the same fees and 
mileage as witnesses in courts of the United States (33 U.S.C. 925).



Sec. 702.343  Formal hearings; oral argument and written allegations.

    Any party upon request shall be allowed a reasonable time for 
presentation of oral argument and shall be permitted to file a pre-
hearing brief or other written statement of fact or law. A copy of any 
such pre-hearing brief or other written statement shall be filed with 
the Chief Administrative Law Judge or the administrative law judge 
assigned to the case before or during the proceeding at which evidence 
is submitted to the administrative law judge and shall be served upon 
each other party. Post-hearing briefs will not be permitted except at 
the request of the administrative law judge or upon averment on the 
record of a party that the case presents a specific novel or difficult 
legal or factual issue (or issues) that cannot be adequately addressed 
in oral summation. When permitted, any such brief shall be limited to 
the issue or issues specified by the administrative law judge or by the 
party in his or her averment and shall be due from any party desiring to 
address such issue or issues within 15 days of the conclusion of the 
proceeding at which evidence is submitted to

[[Page 695]]

the administrative law judge. Enlargement of the time for filing such 
briefs shall be granted only if the administrative law judge is 
persuaded that the brief will be helpful to him or her and that the 
enlargement granted will not delay decision of the case.
[42 FR 42552, Aug. 23, 1977]



Sec. 702.344  Formal hearings; record of hearing.

    All formal hearings shall be open to the public and shall be 
stenographically reported. All evidence upon which the administrative 
law judge relies for his final decision shall be contained in the 
transcript of testimony either directly or by appropriate reference. All 
medical reports, exhibits, and any other pertinent document or record, 
in whole or in material part, shall be incorporated into the record 
either by reference or as an appendix.



Sec. 702.345  Formal hearings; consolidated issues; consolidated cases.

    (a) When one or more additional issues are raised by the 
administrative law judge pursuant to Sec. 702.336, such issues may, in 
the discretion of the administrative law judge, be consolidated for 
hearing and decision with other issues pending before him.
    (b) When two or more cases are transferred for formal hearings and 
have common questions of law or which arose out of a common accident, 
the Chief Administrative Law Judge may consolidate such cases for 
hearing.



Sec. 702.346  Formal hearings; waiver of right to appear.

    If all parties waive their right to appear before the administrative 
law judge or to present evidence or argument personally or by 
representative, it shall not be necessary for the administrative law 
judge to give notice of and conduct an oral hearing. A waiver of the 
right to appear and present evidence and allegations as to facts and law 
shall be made in writing and filed with the Chief Administrative Law 
Judge or the administrative law judge. Where such a waiver has been 
filed by all parties, and they do not appear before the administrative 
law judge personally or by representative, the administrative law judge 
shall make a record of the relevant written evidence submitted by the 
parties, together with any pleadings they may submit with respect to the 
issues in the case. Such documents shall be considered as all of the 
evidence in the case and the decision shall be based on them.



Sec. 702.347  Formal hearings; termination.

    (a) Formal hearings are normally terminated upon the conclusion of 
the proceeding at which evidence is submitted to the administrative law 
judge.
    (b) In exceptional cases the Chief Administrative Law Judge or the 
administrative law judge assigned to the case may, in his or her 
discretion, extend the time for official termination of the hearing.
[42 FR 42552, Aug. 23, 1977]



Sec. 702.348  Formal hearings; preparation of final decision and order; content.

    Within 20 days after the official termination of the hearing as 
defined by Sec. 702.347, the administrative law judge shall have 
prepared a final decision and order, in the form of a compensation 
order, with respect to the claim, making an award to the claimant or 
rejecting the claim. The compensation order shall contain appropriate 
findings of facts and conclusions of law with respect thereto, and shall 
be concluded with one or more paragraphs containing the order of the 
administrative law judge, his signature, and the date of issuance.



Sec. 702.349  Formal hearings; filing and mailing of compensation orders; disposition of transcripts.

    The administrative law judge shall, within 20 days after the 
official termination of the hearing, deliver by mail, or otherwise, to 
the office of the district director having original jurisdiction, the 
transcript of the hearing, other documents or pleadings filed with him 
with respect to the claim, together with his signed compensation order. 
Upon receipt thereof, the district director, being the official 
custodian of all records with respect to such claims within his 
jurisdiction, shall formally date and file the transcript, pleadings, 
and compensation order (original) in his office. Such filing shall

[[Page 696]]

be accomplished by the close of business on the next succeeding working 
day, and the district director shall, on the same day as the filing was 
accomplished, send by certified mail a copy of the compensation order to 
the parties and to representatives of the parties, if any. Appended to 
each such copy shall be a paragraph entitled ``proof of service'' 
containing the certification of the district director that the copies 
were mailed on the date stated, to each of the parties and their 
representatives, as shown in such paragraph.



Sec. 702.350  Finality of compensation orders.

    Compensation orders shall become effective when filed in the office 
of the district director, and unless proceedings for suspension or 
setting aside of such orders are instituted within 30 days of such 
filing, shall become final at the expiration of the 30th day after such 
filing, as provided in section 21 of the Act 33 U.S.C. 921. If any 
compensation payable under the terms of such order is not paid within 10 
days after it becomes due, section 14(f) of the Act requires that there 
be added to such unpaid compensation an amount equal to 20 percent 
thereof which shall be paid at the same time as, but in addition to, 
such compensation unless review of the compensation order is had as 
provided in such section 21 and an order staying payment has been issued 
by the Benefits Review Board or the reviewing court.



Sec. 702.351  Withdrawal of controversion of issues set for formal hearing; effect.

    Whenever a party withdraws his controversion of the issues set for a 
formal hearing, the administrative law judge shall halt the proceedings 
upon receipt from said party of a signed statement to that effect and 
forthwith notify the district director who shall then proceed to dispose 
of the case as provided for in Sec. 702.315.

     Interlocutory Matters, Supplementary Orders, and Modifications



Sec. 702.371  Interlocutory matters.

    Compensation orders shall not be made or filed with respect to 
interlocutory matters of a procedural nature arising during the pendency 
of a compensation case.



Sec. 702.372  Supplementary compensation orders.

    (a) In any case in which the employer or insurance carrier is in 
default in the payment of compensation due under any award of 
compensation, for a period of 30 days after the compensation is due and 
payable, the person to whom such compensation is payable may, within 1 
year after such default, apply in writing to the district director for a 
supplementary compensation order declaring the amount of the default. 
Upon receipt of such application, the district director shall institute 
proceedings with respect to such application as if such application were 
an original claim for compensation, and the matter shall be disposed of 
as provided for in Sec. 702.315, or if agreement on the issue is not 
reached, then as in Sec. 702.316 et seq.
    (b) If, after disposition of the application as provided for in 
paragraph (a) of this section, a supplementary compensation order is 
entered declaring the amount of the default, which amount may be the 
whole of the award notwithstanding that only one or more installments is 
in default, a copy of such supplementary order shall be forthwith sent 
by certified mail to each of the parties and their representatives. 
Thereafter, the applicant may obtain and file with the clerk of the 
Federal district court for the judicial district where the injury 
occurred or the district in which the employed has his principal place 
of business or maintains an office, a certified copy of said order and 
may seek enforcement thereof as provided for by section 18 of the Act, 
33 U.S.C. 918.

[[Page 697]]



Sec. 702.373  Modification of awards.

    (a) Upon his/her own initiative, or upon application of any party in 
interest (including an employer or carrier which has been granted relief 
under section 8(f) of the Act, 33 U.S.C. 908(f)), the district director 
may review any compensation case (including a case under which payments 
are made pursuant to section 44(i) of the Act, 33 U.S.C. 944(i)) in 
accordance with the procedure in subpart C of this part, and after such 
review of the case under Sec. 702.315, or review at formal hearings 
under the regulations governing formal hearings in subpart C of this 
part, file a new compensation order terminating, continuing, 
reinstating, increasing or decreasing such compensation, or awarding 
compensation. Such new order shall not affect any compensation 
previously paid, except that an award increasing the compensation rate 
may be made retroactive from the date of injury, and if any part of the 
compensation due or to become due is unpaid, an award decreasing the 
compensation rate may be made effective from the date of the injury, and 
any payment made prior thereto in excess of such decreased rate shall be 
deducted from any unpaid compensation, in such manner and by such method 
as may be determined by the district director or the administrative law 
judge. Settlements cannot be modified.
    (b) Review of a compensation case under this section may be made at 
any time prior to 1 year after the date of the last payment of 
compensation, whether or not a compensation order has been issued, or at 
any time prior to 1 year after the rejection of a claim.
    (c) Review of a compensation case may be had only for the reason 
that there is a change in conditions or that there was a mistake in the 
determination of facts.
    (d) If the investigation, described in Sec. 702.148(c), discloses a 
change in conditions and the employer or insurance carrier intends to 
pursue modification of the award of compensation the district director 
and claimant shall be notified through an informal conference. At the 
conclusion of the informal conference the district director shall issue 
a recommendation either for or against the modification. This 
recommendation shall also be sent to the Associate Director, Division of 
Longshoremen's and Harbor Workers' Compensation (DLHWC) for a 
determination on whether or not to participate in the modification 
proceeding on behalf of the special fund. Lack of concurrence of the 
Associate Director, DLHWC or lack of participation by a representative 
of the special fund shall not be a bar to the modification proceeding.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 401, Jan. 3, 1985]

                                 Appeals



Sec. 702.391  Appeals; where.

    Appeals may be taken to the Benefits Review Board, U.S. Department 
of Labor, Washington, D.C. 20210, by filing a notice of appeals with the 
office of the district director for the compensation district in which 
the decision or order appealed from was filed and by submitting to the 
Board a petition for review of such decision or order, in accordance 
with the provisions of part 802 of this title 20.



Sec. 702.392  Appeals; what may be appealed.

    An appeal raising a substantial question of law or fact may be taken 
from a decision with respect to a claim under the Act. Such appeals may 
be taken from compensation orders when they have been filed as provided 
for in Sec. 702.349.



Sec. 702.393  Appeals; time limitations.

    The notice of appeal (see Sec. 702.391) shall be filed with the 
district director within 30 days of the filing of the decision or order 
complained of, as defined and described in Secs. 802.205 and 802.206 of 
this title. A petition for review of the decision or order is required 
to be filed within 30 days after receipt of the Board's acknowledgment 
of the notice of appeal, as provided in Sec. 802.210 of this title.



Sec. 702.394  Appeals; procedure.

    The procedure for appeals to the Benefits Review Board shall be as 
provided by the Board in its Rules of Practice and Procedure, set forth 
in part 802 of this title.

[[Page 698]]



                 Subpart D--Medical Care and Supervision



Sec. 702.401  Medical care defined.

    (a) Medical care shall include medical, surgical, and other 
attendance or treatment, nursing and hospital services, laboratory, X-
ray and other technical services, medicines, crutches, or other 
apparatus and prosthetic devices, and any other medical service or 
supply, including the reasonable and necessary cost of travel incident 
thereto, which is recognized as appropriate by the medical profession 
for the care and treatment of the injury or disease.
    (b) An employee may rely on treatment by prayer or spiritual means 
alone, in accordance with the tenets and practice of a recognized church 
or religious denomination, by an accredited practitioner of such 
recognized church or religious denomination, and nursing services 
rendered in accordance with such tenets and practice without loss or 
diminution of compensation or benefits under the Act. For purposes of 
this section, a recognized church or religious denomination shall be any 
religious organization: (1) That is recognized by the Social Security 
Administration for purposes of reimbursements for treatment under 
Medicare and Medicaid or (2) that is recognized by the Internal Revenue 
Service for purposes of tax exempt status.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec. 702.402  Employer's duty to furnish; duration.

    It is the duty of the employer to furnish appropriate medical care 
(as defined in Sec. 702.401(a)) for the employee's injury, and for such 
period as the nature of the injury or the process of recovery may 
require.
[50 FR 402, Jan. 3, 1985]



Sec. 702.403  Employee's right to choose physician; limitations.

    The employee shall have the right to choose his/her attending 
physician from among those authorized by the Director, OWCP, to furnish 
such care and treatment, except those physicians included on the 
Secretary's list of debarred physicians. In determining the choice of a 
physician, consideration must be given to availability, the employee's 
condition and the method and means of transportation. Generally 25 miles 
from the place of injury, or the employee's home is a reasonable 
distance to travel, but other pertinent factors must also be taken into 
consideration.
[50 FR 402, Jan. 3, 1985]



Sec. 702.404  Physician defined.

    The term physician includes doctors of medicine (MD), surgeons, 
podiatrists, dentists, clinical psychologists, optometrists, 
chiropractors, and osteopathic practitioners within the scope of their 
practice as defined by State law. The term includes chiropractors only 
to the extent that their reimbursable services are limited to treatment 
consisting of manual manipulation of the spine to correct a subluxation 
shown by X-ray or clinical findings. Physicians defined in this part may 
interpret their own X-rays. All physicians in these categories are 
authorized by the Director to render medical care under the Act. 
Naturopaths, faith healers, and other practitioners of the healing arts 
which are not listed herein are not included within the term 
``physician'' as used in this part.
[42 FR 45303, Sept. 9, 1977]



Sec. 702.405  Selection of physician; emergencies.

    Whenever the nature of the injury is such that immediate medical 
care is required and the injured employee is unable to select a 
physician, the employer shall select a physician. Thereafter the 
employee may change physicians when he is able to make a selection. Such 
changes shall be made upon obtaining written authorization from the 
employer or, if consent is withheld, from the district director. The 
Director will direct reimbursement of medical claims for services 
rendered by physicians or health care providers who are on the list of 
those excluded from providing care under the Act, if such services were 
rendered in an emergency. (See Secs. 702.417 and 702.435(b)).
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]

[[Page 699]]



Sec. 702.406  Change of physicians; non-emergencies.

    (a) Whenever the employee has made his initial, free choice of an 
attending physician, he may not thereafter change physicians without the 
prior written consent of the employer (or carrier) or the district 
director. Such consent shall be given in cases where an employee's 
initial choice was not of a specialist whose services are necessary for, 
and appropriate to, the proper care and treatment of the compensable 
injury or disease. In all other cases, consent may be given upon a 
showing of good cause for change.
    (b) The district director for the appropriate compensation district 
may order a change of physicians or hospitals when such a change is 
found to be necessary or desirable or where the fees charged exceed 
those prevailing within the community for the same or similar services 
or exceed the provider's customary charges.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec. 702.407  Supervision of medical care.

    The Director, OWCP, through the district directors and their 
designees, shall actively supervise the medical care of an injured 
employee covered by the Act. Such supervision shall include:
    (a) The requirement that periodic reports on the medical care being 
rendered be filed in the office of the district director, the frequency 
thereof being determined by order of the district director or sound 
judgment of the attending physician as the nature of the injury may 
dictate;
    (b) The determination of the necessity, character and sufficiency of 
any medical care furnished or to be furnished the employee, including 
whether the charges made by any medical care provider exceed those 
permitted under the Act;
    (c) The determination of whether a change of physicians, hospitals 
or other persons or locales providing treatment should be made or is 
necessary;
    (d) The further evaluation of medical questions arising in any case 
under the Act, with respect to the nature and extent of the covered 
injury, and the medical care required therefor.
[38 FR 26861, Sept. 26, 1973, as amended at 50 FR 402, Jan. 3, 1985]



Sec. 702.408  Evaluation of medical questions; impartial specialists.

    In any case in which medical questions arise with respect to the 
appropriate diagnosis, extent, effect of, appropriate treatment, and the 
duration of any such care or treatment, for an injury covered by the 
Act, the Director, OWCP, through the district directors having 
jurisdiction, shall have the power to evaluate such questions by 
appointing one or more especially qualified physicians to examine the 
employee, or in the case of death to make such inquiry as may be 
appropriate to the facts and circumstances of the case. The physician or 
physicians, including appropriate consultants, should report their 
findings with respect to the questions raised as expeditiously as 
possible. Upon receipt of such report, action appropriate therewith 
shall be taken.



Sec. 702.409  Evaluation of medical questions; results disputed.

    Any party who is dissatisfied with such report may request a review 
or reexamination of the employee by one or more different physicians 
employed by or selected by the Director, and such review or 
reexamination shall be granted unless it is found that it is clearly 
unwarranted. Such review shall be completed within 2 weeks from the date 
ordered unless it is impossible to complete the review and render a 
report thereon within such time period. Upon receipt of the report of 
this additional review and reexamination, such action as may be 
appropriate shall forthwith be taken.



Sec. 702.410  Duties of employees with respect to special examinations.

    (a) For any special examination required of an employee by 
Secs. 702.408 and 702.409, the employee shall submit to such examination 
at such place as is designated in the order to report, but the place so 
selected shall be reasonably convenient for the employee.
    (b) Where an employee fails to submit to an examination required by

[[Page 700]]

Sec. Sec. 702.408 and 702.409, the district director or administrative 
law judge may order that no compensation otherwise payable shall be paid 
for any period during which the employee refuses to submit to such 
examination unless circumstances justified the refusal.
    (c) Where an employee unreasonably refuses to submit to medical or 
surgical treatment, or to an examination by a physician selected by the 
employer, the district director or administrative law judge may by order 
suspend the payment of further compensation during such time as the 
refusal continues. Except that refusal to submit to medical treatment 
because of adherence to the tenets of a recognized church or religious 
denomination as described in Sec. 702.401(b) shall not cause the 
suspension of compensation.
[42 FR 45303, Sept. 9, 1977, as amended at 50 FR 402, Jan. 3, 1985; 51 
FR 4286, Feb. 3, 1986]



Sec. 702.411  Special examinations; nature of impartiality of specialists.

    (a) The special examinations required by Sec. 702.408 shall be 
accomplished in a manner designed to preclude prejudgment by the 
impartial examiner. No physician previously connected with the case 
shall be present, nor may any other physician selected by the employer, 
carrier, or employee be present. The impartial examiner may be made 
aware, by any party or by the OWCP, of the opinions, reports, or 
conclusions of any prior examining physician with respect to the nature 
and extent of the impairment, its cause, or its effect upon the wage-
earning capacity of the injured employee, if the district director 
determines that, for good cause, such opinions, reports, or conclusions 
shall be made available. Upon request, any party shall be given a copy 
of all materials made available to the impartial examiner.
    (b) The impartiality of the specialists shall not be considered to 
have been compromised if the district director deems it advisable to, 
and does, apprise the specialist by memorandum of those undisputed facts 
pertaining to the nature of the employee's employment, of the nature of 
the injury, of the post-injury employment activity, if any, and of any 
other facts which are not disputed and are deemed pertinent to the type 
of injury and/or the type of examination being conducted.
    (c) No physician selected to perform impartial examinations shall 
be, or shall have been for a period of 2 years prior to the examination, 
an employee of an insurance carrier or self-insured employer, or who has 
accepted or participated in any fee from an insurance carrier or self-
insured employer, unless the parties in interest agree thereto.
[38 FR 26861, Sept. 26, 1973, as amended at 42 FR 45303, Sept. 9, 1977]



Sec. 702.412  Special examinations; costs chargeable to employer or carrier.

    (a) The Director or his designee ordering the special examination 
shall have the power, in the exercise of his discretion, to charge the 
cost of the examination or review to the employer, to the insurance 
carrier, or to the special fund established by section 44 of the Act, 33 
U.S.C. 944.
    (b) The Director or his designee may also order the employer or the 
insurance carrier to provide the employee with the services of an 
attendant, where the district director considers such services 
necessary, because the employee is totally blind, has lost the use of 
both hands, or both feet or is paralyzed and unable to walk, or because 
of other disability making the employee so helpless as to require 
constant attendance in the discretion of the district director. Fees 
payable for such services shall be in accord with the provisions of 
Sec. 702.413.
[42 FR 45303, Sept. 9, 1977]



Sec. 702.413  Fees for medical services; prevailing community charges.

    All fees charged by medical care providers for persons covered by 
this Act shall be limited to such charges for the same or similar care 
(including supplies) as prevails in the community in which the medical 
care provider is located and shall not exceed the customary charges of 
the medical care provider for the same or similar services. Where a 
dispute arises concerning the amount of a medical bill, the Director 
shall determine the prevailing community rate using the OWCP Medical Fee 
Schedule (as described in 20 CFR 10.411) to the extent appropriate,

[[Page 701]]

and where not appropriate, may use other state or federal fee schedules. 
The opinion of the Director that a charge by a medical care provider 
disputed under the provisions of section 702.414 exceeds the charge 
which prevails in the community in which said medical care provider is 
located shall constitute sufficient evidence to warrant further 
proceedings pursuant to section 702.414 and to permit the Director to 
direct the claimant to select another medical provider for care to the 
claimant.
[60 FR 51348, Oct. 2, 1995]



Sec. 702.414  Fees for medical services; unresolved disputes on prevailing charges.

    (a) The Director may, upon written complaint of an interested party, 
or upon the Director's own initiative, investigate any medical care 
provider or any fee for medical treatment, services, or supplies that 
appears to exceed prevailing community charges for similar treatment, 
services or supplies or the provider's customary charges. The OWCP 
medical fee schedule (see section 702.413) shall be used by the 
Director, where appropriate, to determine the prevailing community 
charges for a medical procedure by a physician or hospital (to the 
extent such procedure is covered by the OWCP fee schedule). The 
Director's investigation may initially be conducted informally through 
contact of the medical care provider by the district director. If this 
informal investigation is unsuccessful further proceedings may be 
undertaken. These proceedings may include, but not be limited to: an 
informal conference involving all interested parties; agency 
interrogatories to the pertinent medical care provider; and issuance of 
subpoenas duces tecum for documents having a bearing on the dispute.
    (1) A claim by the provider that the OWCP fee schedule does not 
represent the prevailing community rate will be considered only where 
the following circumstances are presented:
    (i) where the actual procedure performed was incorrectly identified 
by medical procedure code;
    (ii) that the presence of a severe or concomitant medical condition 
made treatment especially difficult;
    (iii) the provider possessed unusual qualifications (board 
certification in a specialty is not sufficient evidence in itself of 
unusual qualifications); or
    (iv) the provider or service is not one covered by the OWCP fee 
schedule as described by 20 CFR 10.411(d)(1).
    (2) The circumstances listed in paragraph (a)(1) of this section are 
the only ones which will justify reevaluation of the amount calculated 
under the OWCP fee schedule.
    (b) The failure of any medical care provider to present any evidence 
required by the Director pursuant to this section without good cause 
shall not prevent the Director from making findings of fact.
    (c) After any proceeding under this section the Director shall make 
specific findings on whether the fee exceeded the prevailing community 
charges (as established by the OWCP fee schedule, where appropriate) or 
the provider's customary charges and provide notice of these findings to 
the affected parties.
    (d) The Director may suspend any such proceedings if after receipt 
of the written complaint the affected parties agree to withdraw the 
controversy from agency consideration on the basis that such controversy 
has been resolved by the affected parties. Such suspension, however, 
shall be at the discretion of the Director.
[51 FR 4286, Feb. 3, 1986, as amended at 60 FR 51348, Oct. 2, 1995]



Sec. 702.415  Fees for medical services; unresolved disputes on charges; procedure.

    After issuance of specific findings of fact and proposed action by 
the Director as provided in Sec. 702.414 any affected provider employer 
or other interested party has the right to seek a hearing pursuant to 
section 556 of title 5, United States Code. Upon written request for 
such a hearing, the matter shall be referred by the District Director to 
the OALJ for formal hearing in accordance with the procedures in subpart 
C of this part. If no such request for a hearing is filed with the 
district director within thirty (30) days the findings issued pursuant 
to Sec. 702.414 shall be final.
[51 FR 4286, Feb. 3, 1986]

[[Page 702]]



Sec. 702.416  Fees for medical services; disputes; hearings; necessary parties.

    At formal hearings held pursuant to Sec. 702.415, the necessary 
parties shall be the person whose fee or cost charge is in question and 
the Director, or their representatives. The employer or carrier may also 
be represented, and other parties, or associations having an interest in 
the proceedings, may be heard, in the discretion of the administrative 
law judge.



Sec. 702.417  Fees for medical services; disputes; effect of adverse decision.

    If the final decision and order upholds the finding of the Director 
that the fee or charge in dispute was not in accordance with prevailing 
community charges or the provider's customary charges, the person 
claiming such fee or cost charge shall be given thirty (30) days after 
filing of such decision and order to make the necessary adjustment. If 
such person still refuses to make the required readjustment, such person 
shall not be authorized to conduct any further treatments or 
examinations (if a physician) or to provide any other services or 
supplies (if by other than a physician). Any fee or cost charge 
subsequently incurred for services performed or supplies furnished shall 
not be a reimbursable medical expense under this subpart. This 
prohibition shall apply notwithstanding the fact that the services 
performed or supplies furnished were in all other respects necessary and 
appropriate within the provision of these regulations. However, the 
Director may direct reimbursement of medical claims for services 
rendered if such services were rendered in an emergency (see 
Sec. 702.435(b)). At the termination of the proceedings provided for in 
this section the district director shall determine whether further 
proceedings under Sec. 702.432 should be initiated.
[50 FR 403, Jan. 3, 1985]

                           Medical Procedures



Sec. 702.418  Procedure for requesting medical care; employee's duty to notify employer.

    (a) As soon as practicable, but within 30 days after occurrence of 
an injury covered by the Act, or within 30 days after an employee 
becomes aware, or in the exercise of reasonable diligence should be 
aware, of the relationship between an injury or disease and his 
employment, the injured employee or someone on his behalf shall give 
written notice thereof to the district director having jurisdiction over 
the place where the injury occurred and to the employer. If a form has 
been prescribed for such purpose it shall be used, if available and 
practicable under the circumstances. Notices filed under subpart B of 
this part, if on the form prescribed by the Director for such purpose, 
satisfy the written notice requirements of this subpart.
    (b) In the case of an occupational disease which does not 
immediately result in a disability or death, such notice shall be given 
within one year after the employee becomes aware, or in the exercise of 
reasonable diligence or by reason of medical advice should have been 
aware, of the relationship between the employment, the disease, and the 
death or disability. Notice shall be given: (1) To the district director 
in the compensation district in which the injury or death occurred, and 
(2) to the employer.

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 403, Jan. 3, 1985]



Sec. 702.419  Action by employer upon acquiring knowledge or being given notice of injury.

    Whenever an employer acquires knowledge of an employee's injury, 
through receipt of a written notice or otherwise, said employer shall 
forthwith authorize, in writing, appropriate medical care. If a form is 
prescribed for this purpose it shall be used whenever practicable. 
Authorization shall also be given in cases where an employee's initial 
choice was not of a specialist whose services are necessary for and 
appropriate to the proper care and treatment of the compensable injury 
or disease. In all other cases, consent may be given upon a showing of 
good cause for change.
[50 FR 403, Jan. 3, 1985]

[[Page 703]]



Sec. 702.420  Issuance of authorization; binding effect upon insurance carrier.

    The issuance of an authorization for treatment by the employer shall 
bind his insurance carrier to furnish and pay for such care and 
services.



Sec. 702.421  Effect of failure to obtain initial authorization.

    An employee shall not be entitled to recover for medical services 
and supplies unless:
    (a) The employer shall have refused or neglected a request to 
furnish such services and the employee has complied with sections 7 (b) 
and (c) of the Act, 33 U.S.C. 907 (b) and (c) and these regulations; or
    (b) The nature of the injury required such treatment and services 
and the employer or his superintendent or foreman having knowledge of 
such injury shall have neglected to provide or authorize same.
[50 FR 403, Jan. 3, 1985]



Sec. 702.422  Effect of failure to report on medical care after initial authorization.

    (a) Notwithstanding that medical care is properly obtained in 
accordance with these regulations, a finding by the Director that a 
medical care provider has failed to comply with the reporting 
requirements of the Act shall operate as a mandatory revocation of 
authorization of such medical care provider. The effect of a final 
finding to this effect operates to release the employer/carrier from 
liability of the expenses of such care. In addition to this, when such a 
finding is made by the Director, the claimant receiving treatment will 
be directed by the district director to seek authorization for medical 
care from another source.
    (b) For good cause shown, the Director may excuse the failure to 
comply with the reporting requirements of the Act and further, may make 
an award for the reasonable value of such medical care.
[50 FR 403, Jan. 3, 1985]

  Debarment of Physicians and Other Providers of Medical Services and 
                  Suppliers and Claims Representatives



Sec. 702.431  Grounds for debarment.

    A physician or health care provider shall be debarred if it is 
found, after appropriate investigation as described in Sec. 702.414 and 
proceedings under Secs. 702.432 and 702.433, that such physician or 
health care provider has:
    (a) Knowingly and willfully made, or caused to be made, any false 
statement or misrepresentation of a material fact for use in a claim for 
compensation or claim for reimbursement of medical expenses under this 
Act;
    (b) Knowingly and willfully submitted, or caused to be submitted, a 
bill or request for payment under this Act containing a charge which the 
Director finds to be substantially in excess of the charge for the 
service, appliance, or supply prevailing within the community or in 
excess of the provider's customary charges, unless the Director finds 
there is good cause for the bill or request containing the charge;
    (c) Knowingly and willfully furnished a service, appliance, or 
supply which is determined by the Director to be substantially in excess 
of the need of the recipient thereof or to be of a quality which 
substantially fails to meet professionally recognized standards;
    (d) Been convicted under any criminal statute, without regard to 
pending appeal thereof, for fraudulent activities in connection with 
federal or state program for which payments are made to physicians or 
providers of similar services, appliances, or supplies; or has otherwise 
been excluded from participation in such program.
    (e) The fact that a physician or health care provider has been 
convicted of a crime previously described in (d), or excluded or 
suspended, or has resigned in lieu of exclusion or suspension, from 
participation in any program as described in (d), shall be a prima facie 
finding of fact for purposes of section 7(j)(2) of the Act, 33 U.S.C. 
907(j)(2).
[50 FR 404, Jan. 3, 1985]

[[Page 704]]



Sec. 702.432  Debarment process.

    (a) Pertaining to health care providers. Upon receipt of information 
indicating that a physician or health care provider has engaged in 
activities enumerated in subparagraphs (a) through (c) of Sec. 702.431, 
the Director, through the Director's designees, may evaluate the 
information (as described in Sec. 702.414) to ascertain whether 
proceedings should be initiated against the physician or health care 
provider to remove authorization to render medical care or service under 
the Longshore and Harbor Workers' Compensation Act.
    (b) Pertaining to health care providers and claims representatives. 
If after appropriate investigation the Director determines that 
proceedings should be initiated, written notice thereof sent certified 
mail, return receipt requested, shall be provided to the physician, 
health care provider or claims representative containing the following:
    (1) A concise statement of the grounds upon which debarment will be 
based;
    (2) A summary of the information upon which the director has relied 
in reaching an initial decision that debarment proceedings should be 
initiated;
    (3) An invitation to the physician, health care provider or claims 
representative to: (i) Resign voluntarily from participation in the 
program without admitting or denying the allegations presented in the 
written notice; or (ii) request a decision on debarment to be based upon 
the existing agency record and any other information the physician, 
health care provider or claims representative may wish to provide;
    (4) A notice of the physician's, health care provider's or claims 
representative's right, in the event of an adverse ruling by the 
Director, to request a formal hearing before an administrative law 
judge;
    (5) A notice that should the physician, health care provider or 
claims representative fail to provide written answer to the written 
notice described in this section within thirty (30) days of receipt, the 
Director may deem the allegations made therein to be true and may order 
exclusion of the physician, health care provider or claims 
representative without conducting any further proceedings; and
    (6) The name and address of the district director who shall be 
responsible for receiving the answer from the physician, health care 
provider or claims representative.
    (c) Should the physician, health care provider or claims 
representative fail to file a written answer to the notice described in 
this section within thirty (30) days of receipt thereof, the Director 
may deem the allegations made therein to be true and may order debarment 
of the physician, health care provider or claims representative.
    (d) The physician, health care provider or claims representative may 
inspect or request copies of information in the agency records at any 
time prior to the Director's decision.
    (e) The Director shall issue a decision in writing, and shall send a 
copy of the decision to the physician, health care provider or claims 
representative by certified mail, return receipt requested. The decision 
shall advise the physician, health care provider or claims 
representative of the right to request, within thirty (30) days of the 
date of an adverse decision, a formal hearing before an administrative 
law judge under the procedures set forth herein. The filing of such a 
request for hearing within the time specified shall operate to stay the 
effectiveness of the decision to debar.
[50 FR 404, Jan. 3, 1985]



Sec. 702.433  Requests for hearing.

    (a) A request for hearing shall be sent to the district director and 
contain a concise notice of the issues on which the physician, health 
care provider or claims representative desires to give evidence at the 
hearing with identification of witnesses and documents to be submitted 
at the hearing.
    (b) If a request for hearing is timely received by the district 
director, the matter shall be referred to the Chief Administrative Law 
Judge who shall assign it for hearing with the assigned administrative 
law judge issuing a notice of hearing for the conduct of the hearing. A 
copy of the hearing notice shall be served on the physician, health care 
provider or claims representative

[[Page 705]]

by certified mail, return receipt requested.
    (c) If a request for hearing contains identification of witnesses or 
documents not previously considered by the Director, the Director may 
make application to the assigned administrative law judge for an offer 
of proof from the physician, health care provider or claims 
representative for the purpose of discovery prior to hearing. If the 
offer of proof indicates injection of new issues or new material 
evidence not previously considered by the Director, the Director may 
request a remand order for purposes of reconsideration of the decision 
made pursuant to Sec. 702.432 of these regulations.
    (d) The parties may make application for the issuance of subpoenas 
upon a showing of good cause therefore to the administrative law judge.
    (e) The administrative law judge shall issue a recommended decision 
after the termination of the hearing. The recommended decision shall 
contain appropriate findings, conclusions and a recommended order and be 
forwarded, together with the record of the hearing, to the 
Administrative Review Board for a final decision. The recommended 
decision shall be served upon all parties to the proceeding.
    (f) Based upon a review of the record and the recommended decision 
of the administrative law judge, the Administrative Review Board shall 
issue a final decision.
[50 FR 404, Jan. 3, 1985, as amended at 55 FR 28606, July 12, 1990; 61 
FR 19984, May 3, 1996]



Sec. 702.434  Judicial review.

    (a) Any physician, health care provider or claims representative, 
after any final decision of the Administrative Review Board made after a 
hearing to which such person was a party, irrespective of the amount of 
controversy, may obtain a review of such decision by a civil action 
commenced within sixty (60) days after the mailing to him or her of 
notice of such decision, but the pendency of such review shall not 
operate as a stay upon the effect of such decision. Such action shall be 
brought in the Court of Appeals of the United States for the judicial 
circuit in which the plaintiff resides or has his or her principal place 
of business, or the Court of Appeals for the District of Columbia 
pursuant to section 7(j)(4) of the Act, 33 U.S.C. 907(j)(4).
    (b) As part of the Administrative Review Board answer, he or she 
shall file a certified copy of the transcript of the record of the 
hearing, including all evidence submitted in connection therewith.
    (c) The findings of fact of the Administrative Review Board, if 
based on substantial evidence in the record as a whole, shall be 
conclusive.
[50 FR 405, Jan. 3, 1985, as amended at 55 FR 28606, July 12, 1990; 61 
FR 19984, May 3, 1996]



Sec. 702.435  Effects of debarment.

    (a) The Director shall give notice of the debarment of a physician, 
hospital, or provider of medical support services or supplies to:
    (1) All OWCP district offices;
    (2) The Health Care Financing Administration;
    (3) The State or Local authority responsible for licensing or 
certifying the debarred party;
    (4) The employers and authorized insurers under the Act by means of 
an annual bulletin sent to them by the Director; and
    (5) The general public by posting in the district office in the 
jurisdiction where the debarred party maintains a place of business.

If a claims representative is debarred, the Director shall give notice 
to those groups listed in paragraphs (a) (1), (3), (4), and (5) of this 
section.
    (b) Notwithstanding any debarment under this subpart, the Director 
shall not refuse a claimant reimbursement for any otherwise reimbursable 
medical expense if the treatment, service or supply was rendered by 
debarred provider in an emergency situation. However, such claimant will 
be directed by the Director to select a duly qualified provider upon the 
earliest opportunity.
[50 FR 405, Jan. 3, 1985]



Sec. 702.436  Reinstatement.

    (a) If a physician or health care provider has been debarred or 
pursuant to Sec. 702.431(d) or if a claims representative has been 
debarred pursuant to Sec. 702.131(c) (1) or (3) the person debarred will 
be automatically reinstated upon

[[Page 706]]

notice to the Director that the conviction or exclusion has been 
reversed or withdrawn. However, such reinstatement will not preclude the 
Director from instituting debarment proceedings based upon the subject 
matter involved.
    (b) A physician, health care provider or claims representative 
otherwise debarred by the Director may apply for reinstatement to 
participate in the program by application to the Director after three 
years from the date of entry of the order of exclusion. Such application 
for reinstatement shall be addressed to the Associate Director for the 
Longshore program, and shall contain a statement of the basis of the 
application along with any supporting documentation.
    (c) The Director may further investigate the merits of the 
reinstatement application by requiring special reporting procedures from 
the applicant for a probationary period not to exceed six months to be 
monitored by the district office where the provider maintains a place of 
business.
    (d) At the end of aforesaid probationary period, the Director may 
order full reinstatement of the physician, health care provider or 
claims representative if such reinstatement is clearly consistent with 
the program goal to protect itself against fraud and abuse and, further, 
if the physician, health care provider or claims representative has 
given reasonable assurances that the basis for the debarment will not be 
repeated.
[50 FR 405, Jan. 3, 1985]

                           Hearing Loss Claims



Sec. 702.441  Claims for loss of hearing.

    (a) Claims for hearing loss pending on or filed after September 28, 
1984 (the date of enactment of Pub. L. 98-426) shall be adjudicated with 
respect to the determination of the degree of hearing impairment in 
accordance with these regulations.
    (b) An audiogram shall be presumptive evidence of the amount of 
hearing loss on the date administered if the following requirements are 
met:
    (1) The audiogram was administered by a licensed or certified 
audiologist, by a physician certified by the American Board of 
Otolaryngology, or by a technician, under an audiologist's or 
physician's supervision, certified by the Council of Accreditation on 
Occupational Hearing Conservation, or by any other person considered 
qualified by a hearing conservation program authorized pursuant to 29 
CFR 1910.95(g)(3) promulgated under the Occupational Safety and Health 
Act of 1970 (29 U.S.C. 667). Thus, either a professional or trained 
technician may conduct audiometric testing. However, to be acceptable 
under this subsection, a licensed or certified audiologist or 
otolaryngologist, as defined, must ultimately interpret and certify the 
results of the audiogram. The accompanying report must set forth the 
testing standards used and describe the method of evaluating the hearing 
loss as well as providing an evaluation of the reliability of the test 
results.
    (2) The employee was provided the audiogram and a report thereon at 
the time it was administered or within thirty (30) days thereafter.
    (3) No one produces a contrary audiogram of equal probative value 
(meaning one performed using the standards described herein) made at the 
same time. ``Same time'' means within thirty (30) days thereof where 
noise exposure continues or within six (6) months where exposure to 
excessive noise levels does not continue. Audiometric tests performed 
prior to the enactment of Public Law 98-426 will be considered 
presumptively valid if the employer complied with the procedures in this 
section for administering audiograms.
    (c) In determining the amount of pre-employment hearing loss, an 
audiogram must be submitted which was performed prior to employment or 
within thirty (30) days of the date of the first employment-related 
noise exposure. Audiograms performed after December 27, 1984 must comply 
with the standards described in paragraph (d) of this section.
    (d) In determining the loss of hearing under the Act, the evaluators 
shall use the criteria for measuring and calculating hearing impairment 
as published and modified from time-to-time by the American Medical 
Association

[[Page 707]]

in the Guides to the Evaluation of Permanent Impairment, using the most 
currently revised edition of this publication. In addition, the 
audiometer used for testing the individual's threshold of hearing must 
be calibrated according to current American National Standard 
Specifications for Audiometers. Audiometer testing procedures required 
by hearing conservation programs pursuant to the Occupational Safety and 
Health Act of 1970 should be followed (as described at 29 CFR 1910.95 
and appendices).

(Approved by the Office of Management and Budget under control number 
1215-0160)

[50 FR 405, Jan. 3, 1985]



                  Subpart E--Vocational Rehabilitation



Sec. 702.501  Vocational rehabilitation; objective.

    The objective of vocational rehabilitation is the return of 
permanently disabled persons to gainful employment commensurate with 
their physical or mental impairments, or both, through a program of 
reevaluation or redirection of their abilities, or retraining in another 
occupation, or selective job placement assistance.



Sec. 702.502  Vocational rehabilitation; action by district directors.

    All injury cases which are likely to result in, or have resulted in, 
permanent disability, and which are of a character likely to require 
review by a vocational rehabilitation adviser on the staff of the 
Director, shall promptly be referred to such adviser by the district 
director or his designee having charge of the case. A form has been 
prescribed for such purpose and shall be used. Medical data and other 
pertinent information shall accompany the referral.

(Approved by the Office of Management and Budget under control number 
1215-0051)


(Pub. L. No. 96-511)
[38 FR 26861, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 702.503  Vocational rehabilitation; action by adviser.

    The vocational rehabilitation adviser, upon receipt of the referral, 
shall promptly consider the feasibility of a vocational referral or 
request for cooperative services from available resources or facilities, 
to include counseling, vocational survey, selective job placement 
assistance, and retraining. Public or private agencies may be utilized 
in arranging necessary vocational rehabilitation services under the 
Federal Vocational Rehabilitation Act, 29 U.S.C. 31 et seq.



Sec. 702.504  Vocational rehabilitation; referrals to State Employment Agencies.

    Vocational rehabilitation advisers will arrange referral procedures 
with State Employment Service units within their assigned geographical 
districts for the purpose of securing employment counseling, job 
classification, and selective placement assistance. Referrals shall be 
made to State Employment Offices based upon the following:
    (a) Vocational rehabilitation advisers will screen cases so as to 
refer only those disabled employees who are considered to have 
employment potential;
    (b) Only employees will be referred who have permanent, compensable 
disabilities resulting in a significant vocational handicap and loss of 
wage earning capacity;
    (c) Disabled employees, whose initial referral to former private 
employers did not result in a job reassignment or in a job retention, 
shall be referred for employment counseling and/or selective placement 
unless retraining services consideration is requested;
    (d) The vocational rehabilitation advisers shall arrange for 
employees' referrals if it is ascertained that they may benefit from 
registering with the State Employment Service;
    (e) Referrals will be made to appropriate State Employment Offices 
by letter, including all necessary information and a request for a 
report on the services provided the employee when he registers;

[[Page 708]]

    (f) The injured employee shall be advised of available job 
counseling services and informed that he is being referred for 
employment and selective placement;
    (g) A followup shall be made within 60 days on all referrals to 
assure uniform reporting by State agencies on cases referred for a 
vocational survey.



Sec. 702.505  Vocational rehabilitation; referrals to other public and private agencies.

    Referrals to such other public and private agencies providing 
assistance to disabled persons such as public welfare agencies, Public 
Health Services facilities, social services units of the Veterans 
Administration, the Social Security Administration, and other such 
agencies, shall be made by the vocational rehabilitation adviser, where 
appropriate, on an individual basis when requested by disabled 
employees. Such referrals do not provide for a service cost 
reimbursement by the Department of Labor.



Sec. 702.506  Vocational rehabilitation; training.

    Vocational rehabilitation training shall be planned in anticipation 
of a short, realistic, attainable vocational objective terminating in 
remunerable employment, and in restoring wage-earning capacity or 
increasing it materially. The following procedures shall apply in 
arranging for or providing training:
    (a) The vocational rehabilitation adviser shall arrange for and 
develop all vocational training programs.
    (b) Training programs shall be developed to meet the varying needs 
of eligible beneficiaries, and may include courses at colleges, 
technical schools, training at rehabilitation centers, on-the-job 
training, or tutorial courses. The courses shall be pertinent to the 
occupation for which the employee is being trained.
    (c) Training may be terminated if the injured employee fails to 
cooperate with the Department of Labor or with the agency supervising 
his course of training. The employee shall be counseled before training 
is terminated.
    (d) Reports shall be required at periodic intervals on all persons 
in approved training programs.



Sec. 702.507  Vocational rehabilitation; maintenance allowance.

    (a) An injured employee who, as a result of injury, is or may be 
expected to be totally or partially incapacitated for a remunerative 
occupation and who, under the direction of the Director is being 
rendered fit to engage in a remunerative occupation, shall be paid 
additional compensation necessary for this maintenance, not exceeding 
$25 a week. The expense shall be paid out of the special fund 
established in section 44 of the Act, 33 U.S.C. 944. The maximum 
maintenance allowance shall not be provided on an automatic basis, but 
shall be based on the recommendation of a State agency that a claimant 
is unable to meet additional costs by reason of being in training.
    (b) When required by reason of personal illness or hardship, limited 
periods of absence from training may be allowed without terminating the 
maintenance allowance. A maintenance allowance shall be terminated when 
it is shown to the satisfaction of the Director that a trainee is not 
complying reasonably with the terms of the training plan or is absenting 
himself without good cause from training so as to materially interfere 
with the accomplishment of the training objective.



Sec. 702.508  Vocational rehabilitation; confidentiality of information.

    The following safeguards will be observed to protect the 
confidential character of information released regarding an individual 
undergoing rehabilitation:
    (a) Information will be released to other agencies from which an 
injured employee has requested services only if such agencies have 
established regulations assuring that such information will be 
considered confidential and will be used only for the purpose for which 
it is provided;
    (b) Interested persons and agencies have been advised that any 
information concerning rehabilitation program employees is to be held 
confidential;

[[Page 709]]

    (c) A rehabilitation employee's written consent is secured for 
release of information regarding disability to a person, agency, or 
establishment seeking the information for purposes other than the 
approved rehabilitation planning with such employee.



  Subpart F--Occupational Disease Which Does Not Immediately Result in 
                           Death or Disability

    Source:  50 FR 406, Jan. 3, 1985, unless otherwise noted.



Sec. 702.601  Definitions.

    (a) Time of injury. For purposes of this subpart and with respect to 
an occupational disease which does not immediately result in death or 
disability, the time of injury shall be deemed to be the date on which 
the employee or claimant becomes aware, or in the exercise of reasonable 
diligence or by reason of medical advice should have been aware, of the 
relationship between the employment, the disease, and the death or 
disability.
    (b) Disability. With regard to an occupational disease for which the 
time of injury, as defined in Sec. 702.601(a), occurs after the employee 
was retired, disability shall mean permanent impairment as determined 
according to the Guides to the Evaluation of Permanent Impairment which 
is prepared and modified from time-to-time by the American Medical 
Association, using the most currently revised edition of this 
publication. If this guide does not evaluate the impairment, other 
professionally recognized standards may be utilized. The disability 
described in this paragraph shall be limited to permanent partial 
disability. For that reason they are not subject to adjustments under 
section 10(f) of the Act, 33 U.S.C. 910(f).
    (c) Retirement. For purposes of this subpart, retirement shall mean 
that the claimant, or decedent in cases involving survivor's benefits, 
has voluntarily withdrawn from the workforce and that there is no 
realistic expectation that such person will return to the workforce.
[50 FR 406, Jan. 3, 1985, as amended at 51 FR 4286, Feb. 3, 1986]



Sec. 702.602  Notice and claims.

    (a) Time for giving notice of injury or death. Refer to 
Sec. 702.207.
    (b) Time for filing of claims. Refer to Sec. 702.212.



Sec. 702.603  Determining the payrate for compensating occupational disease claims which become manifest after retirement.

    (a) If the time of injury occurs within the first year after the 
employee has retired, the payrate for compensation purposes shall be one 
fifty-second part of the employee's average annual earnings during the 
fifty-two week period preceding retirement.
    (b) If the time of injury occurs more than one year after the 
employee has retired the payrate for compensation purposes shall be the 
national average weekly wage, determined according to section 6(b)(3) of 
the Act, 33 U.S.C. 906(b)(3), at the time of injury.



Sec. 702.604  Determining the amount of compensation for occupational disease claims which become manifest after retirement.

    (a) If the claim is for disability benefits and the time of injury 
occurs after the employee has retired, compensation shall be 66\2/3\ 
percent of the payrate, as determined under Sec. 702.603, times the 
disability, as determined according to Sec. 702.601(b).
    (b) If the claim is for death benefits and the time of injury occurs 
after the decedent has retired, compensation shall be the percent 
specified in section 9 of the Act, 33 U.S.C. 909, times the payrate 
determined according to Sec. 702.603. Total weekly death benefits shall 
not exceed one fifty-second part of the decedent's average annual 
earnings during the fifty-two week period preceding retirement, such 
benefits shall be subject to the limitation provided for in section 
6(b)(1) of the Act, 33 U.S.C. 906(b)(1).
[50 FR 406, Jan. 3, 1985, as amended at 51 FR 4286, Feb. 3, 1986]



PART 703--INSURANCE REGULATIONS--Table of Contents




Sec.
703.001  Scope of part.
703.002  Forms.

[[Page 710]]

703.003  Failure to secure coverage; penalties.

                   Authorization of Insurance Carriers

703.101  Types of companies which may be authorized by the OWCP.
703.102  Applications for authority to write insurance; how filed; 
          evidence to be submitted; other requirements.
703.103  Stock companies holding Treasury certificates of authority.
703.104  Applicants currently authorized to write insurance under the 
          extensions of the LHWCA.
703.105  Copies of forms of policies to be submitted with application.
703.106  Certificate of authority to write insurance.
703.108  Period of authority to write insurance.
703.109  Longshoremen's endorsement; see succeeding parts for 
          endorsements for extensions.
703.110  Other forms of endorsements and policies.
703.111  Submission of new forms of policies for approval; other 
          endorsements.
703.112  Terms of policies.
703.113  Marine insurance contracts.
703.114  Notice of cancellation.
703.115  Discharge by the carrier of obligations and duties of employer.
703.116  Report by carrier of issuance of policy or endorsement.
703.117  Report; by whom sent.
703.118  Agreement to be bound by report.
703.119  Report by employer operating temporarily in another 
          compensation district.
703.120  Name of one employer only shall be given in each report.

                     Authorization of Self-Insurers

703.301  Employers who may be authorized as self-insurers.
703.302  Application for authority to become a self-insurer; how filed; 
          information to be submitted; other requirements.
703.303  Decision upon application of employer; deposit of negotiable 
          securities or indemnity bond.
703.304  Filing of agreement and undertaking.
703.305  Decision upon application of employer; furnishing of indemnity 
          bond or deposit of negotiable securities required.
703.306  Kinds of negotiable securities which may be deposited; 
          conditions of deposit; acceptance of deposits.
703.307  Deposits of negotiable securities with Federal Reserve banks or 
          the Treasurer of the United States; authority to sell such 
          securities; interest thereon.
703.308  Substitution and withdrawal of negotiable securities.
703.309  Increase or reduction in the amount of indemnity bond or 
          negotiable securities.
703.310  Reports required of self-insurers; examination of accounts of 
          self-insurer.
703.311  Period of authorization as self-insurer.
703.312  Revocation of privilege of self-insurance.

                 Issuance of Certificates of Compliance

703.501  Issuance of certificates of compliance.
703.502  Same; employer operating temporarily in another compensation 
          district.
703.503  Return of certificates of compliance.

    Authority:  5 U.S.C. 301, 8171 et seq., Reorganization Plan No. 6 of 
1950, 15 FR 3174, 3 CFR. 1949-1953, Comp. p. 1004, 64 Stat. 1263; 33 
U.S.C. 939; 36 D.C. Code 501 et seq., 42 U.S.C. 1651 et seq., 43 U.S.C. 
1331. Secretary's Order 1-93, 58 FR 21190.

    Source:  38 FR 26873, Sept. 26, 1973, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 703 appear at 55 FR 
28606, July 12, 1990.



Sec. 703.001  Scope of part.

    This part 703 contains the regulations of the OWCP governing the 
authorization of insurance carriers, the authorization of self-insurers, 
and the issuance of certificates of compliance. Such provisions are 
required by the LHWCA, but in almost every instance apply, and hereby 
are applied, to the extensions of the LHWCA. In those few instances 
where a separate provision is required, tailored to meet the specific 
requirements of one of the extended acts, such separate provisions are 
placed in the succeeding parts of this subchapter.



Sec. 703.002  Forms.

    Any information required by the regulations in this part to be 
submitted to the OWCP shall be submitted on such forms as the Director 
may deem appropriate and may authorize from time to time for such 
purpose.



Sec. 703.003  Failure to secure coverage; penalties.

    (a) Each employer is required to secure coverage under this Act 
either through an authorized insurance carrier or by becoming an 
authoried self-insurer. An employer who fails to secure coverage by 
either manner described in section 32(a), (1) or (2) of the

[[Page 711]]

Act, 33 U.S.C. 932(a), is subject, upon conviction, to a fine of not 
more than $10,000, or by imprisonment for not more than one year, or 
both.
    (1) Where the employer is a corporation: the president, secretary 
and treasurer each will also be subject to this fine and/or 
imprisonment, in addition to the fine against the corporation and each 
is personally liable, jointly with the corporation, for all compensation 
or other benefits payable under the Act during the time failure to 
secure coverage continues.
    (b) Any employer who willingly and knowingly transfers, sells, 
encumbers, assigns or in any manner disposes of, conceals, secretes, or 
destroys any property belonging to the employer after an employee 
sustains an injury covered by this Act, with the intention to avoid 
payment to that employee or his/her dependents of compensation under 
this Act shall be guilty of a misdemeanor and punished upon conviction 
by a fine of not more than $10,000 and/or imprisonment for one year.
    (1) Where the employer is a corporation: the president, secretary 
and treasurer are also each liable to imprisonment and, along with the 
corporation, jointly liable for the fine.
[50 FR 406, Jan. 3, 1985]

                   Authorization of Insurance Carriers



Sec. 703.101  Types of companies which may be authorized by the OWCP.

    The OWCP will consider for the granting of authority to write 
insurance under the Longshoremen's and Harbor Workers' Compensation Act 
and its extensions the application of any stock company, mutual company 
or association, or any other person or fund, while authorized under the 
laws of the United States or for any State to insure workmen's 
compensation. The term ``carrier'' as used in this part means any person 
or fund duly authorized to insure workmen's compensation benefits under 
said Act, or its extensions.



Sec. 703.102  Applications for authority to write insurance; how filed; evidence to be submitted; other requirements.

    An application for authority to write insurance under this Act shall 
be made in writing, signed by an officer of the applicant duly 
authorized to make such application, and transmitted to the Office of 
Workmen's Compensation Programs, U.S. Department of Labor, Washington, 
DC 20210. Such application shall be accompanied by full and complete 
information regarding the history and experience of such applicant in 
the writing of workmen's compensation insurance, together with evidence 
that it has authority in its charter or form of organization to write 
such insurance, and evidence that the applicant is currently authorized 
to insure workmen's compensation liability under the laws of the United 
States or of any State. The statements of fact in each application and 
in the supporting evidence shall be verified by the oath of the officer 
of the applicant who signs such application. Each applicant shall state 
in its application the area or areas, in which it intends to do 
business. In connection with any such application the following shall be 
submitted, the Office reserving the right to call for such additional 
information as it may deem necessary in any particular case:
    (a) A copy of the last annual report made by the applicant to the 
insurance department or other authority of the State in which it is 
incorporated, or the State in which its principal business is done.
    (b) A certified copy from the proper State authorities of the paper 
purporting to show the action taken upon such report, or such other 
evidence as the applicant desires to submit in respect of such report, 
which may obviate delay caused by an inquiry of the OWCP of the State 
authorities relative to the standing and responsibility of the 
applicant.
    (c) A full and complete statement of its financial condition, if not 
otherwise shown, and, if a stock company, shall show specifically its 
capital stock and surplus.

[[Page 712]]

    (d) A copy of its charter or other formal outline of its 
organization, its rules, its bylaws, and other documents, writings, or 
agreements by and under which it does business, and such other evidence 
as it may deem proper to make a full exposition of its affairs and 
financial condition.
[38 FR 26873, Sept. 26, 1973; 50 FR 406, Jan. 3, 1985]



Sec. 703.103  Stock companies holding Treasury certificates of authority.

    A stock company furnishing evidence that it is authorized to write 
workmen's compensation insurance under the laws of the United States or 
of any State, which holds a certificate of authority from the Secretary 
of the Treasury as an acceptable surety on Federal bonds, unless 
requested to do so, need not transmit to the Office with its application 
copies of such financial reports as are on file in the Department of the 
Treasury. The acceptance by that Department of such a company will be 
considered by the Office in conjunction with the application of such 
company, provided there has been compliance with the other requirements 
of the regulations in this part.



Sec. 703.104  Applicants currently authorized to write insurance under the extensions of the LHWCA.

    Any applicant currently authorized by the Office to write insurance 
under any extension of the LHWCA need not support its application under 
the LHWCA or any other LHWCA extension with the evidence required by the 
regulations in this part, except the form of policy and endorsement 
which it proposes to use, unless specifically requested by the Office, 
but instead its application may refer to the fact that it has been so 
authorized.



Sec. 703.105  Copies of forms of policies to be submitted with application.

    With each application for authority to write insurance there shall 
be submitted for the approval of the Office copies of the forms of 
policies which the applicant proposes to issue in writing insurance 
under the LHWCA, or its extensions, to which shall be attached the 
appropriate endorsement to be used in connection therewith.



Sec. 703.106  Certificate of authority to write insurance.

    No corporation, company, association, person, or fund shall write 
insurance under this Act without first having received from the OWCP a 
certificate of authority to write such insurance. Any such certificate 
issued by the Office, after application therefor in accordance with 
these regulations, may authorize the applicant to write such insurance 
in a limited territory as determined by the Office. Any such certificate 
may be suspended or revoked by the Office prior to its expiration for 
good cause shown, but no suspension or revocation shall affect the 
liability of any carrier already incurred. Good cause shall include, 
without limitation, the failure to maintain in such limited territory a 
regular business office with full authority to act on all matters 
falling within the Act, and the failure to promptly and properly perform 
the carrier's responsibilities under the Act and these regulations, with 
special emphasis upon lack of promptness in making payments when due, 
upon failure to furnish appropriate medical care, and upon attempts to 
offer to, or urge upon, claimants inequitable settlements. A hearing may 
be requested by the aggrieved party and shall be held before the 
Director or his representative prior to the taking of any adverse action 
under this section.



Sec. 703.108  Period of authority to write insurance.

    Effective with the end of the authorization period July 1, 1983, 
through June 30, 1984, annual reauthorization of authority to write 
insurance coverage under the Act is no longer necessary. Beginning July 
1, 1984, and thereafter, newly issued Certificates of Authority will 
show no expiration date. Certificates of Authority will remain in force 
for so long as the carrier complies with the requirements of the OWCP.
[50 FR 406, Jan. 3, 1985]



Sec. 703.109  Longshoremen's endorsement; see succeeding parts for endorsements for extensions.

    (a) The following form of endorsement application to the standard 
workmen's compensation and employer's liability policy, shall be used, 
if required

[[Page 713]]

by the OWCP, with the form of policy approved by the Office for use by 
an authorized carrier:

    For attachment to Policy No. ------,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, 33 U.S.C. 901 et seq., and all laws 
amendatory thereof or supplementary thereto which may be or become 
effective while this policy is in force.
    The company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employe during the 
life of the policy.
    The company agrees to abide by all the provisions of this Act, and 
all lawful rules, regulations, orders, and decisions of the Office of 
Workmen's Compensation Programs, U.S. Department of Labor, unless and 
until set aside, modified, or reversed by appropriate appellate 
authority as provided for by said Act.
    This endorsement shall not be cancelled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to this employer.
    All terms, conditions, requirements, and obligations, expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.



Sec. 703.110  Other forms of endorsements and policies.

    Where the form of endorsement prescribed by Sec. 703.109 is not 
appropriate when used in conjunction with a form of policy approved for 
use by the Office no modification thereof shall be used unless 
specifically approved by the Office. Where the form of policy is 
designed to include therein the obligations of the insurer under said 
Act without the use of the appropriate endorsements, the policy shall 
contain the provisions required to be included in any of the 
endorsements. Such a policy, however, shall not be used until expressly 
approved by the Office.



Sec. 703.111  Submission of new forms of policies for approval; other endorsements.

    No new forms of policies or modification of existing forms of 
policies shall be used by an insurer authorized by the Office under the 
regulations in this part to write insurance under said Act except after 
submission to and approval by the Office. No endorsement altering any 
provisions of a policy approved by the Office shall be used except after 
submission to and approval by the Office.



Sec. 703.112  Terms of policies.

    A policy or contract of insurance shall be issued for the term of 
not less than 1 year from the date that it becomes effective, but if 
such insurance be not needed except for a particular contract or 
operation, the term of the policy may be limited to the period of such 
contract or operation.



Sec. 703.113  Marine insurance contracts.

    A longshoremen's policy, or the longshoremen's endorsement provided 
for by Sec. 703.109 for attachment to a marine policy, may specify the 
particular vessel or vessels in respect of which the policy applies and 
the address of the employer at the home port thereof. The report of the 
issuance of a policy or endorsement required by Sec. 703.116 to be made 
by the carrier shall be made to the district director for the 
compensation district in which the home port of such vessel or vessels 
is located, and such report shall show the name and address of the owner 
as well as the name or names of such vessel or vessels.



Sec. 703.114  Notice of cancellation.

    Cancellation of a contract or policy of insurance issued under 
authority of said Act shall not become effective otherwise than as 
provided by 33 U.S.C. 936(b); and notice of a proposed cancellation 
shall be given to the district director and to the employer in 
accordance with the provisions of 33 U.S.C. 912(c), 30 days before such 
cancellation is intended to be effective.



Sec. 703.115  Discharge by the carrier of obligations and duties of employer.

    Every obligation and duty in respect of payment of compensation, the 
providing of medical and other treatment and care, the payment or 
furnishing of any other benefit required by said Act and in respect of 
the carrying out of

[[Page 714]]

the administrative procedure required or imposed by said Act or the 
regulations in this part upon an employer shall be discharged and 
carried out by the carrier except that the prescribed report of injury 
or death shall be sent by the employer to the district director and to 
the insurance carrier as required by 33 U.S.C. 930. Such carrier shall 
be jointly responsible with the employer for the submission of all 
reports, notices, forms, and other administrative papers required by the 
district director or the Office in the administration of said Act to be 
submitted by the employer, but any form or paper so submitted where 
required therein shall contain in addition to the name and address of 
the carrier, the full name and address of the employer on whose behalf 
it is submitted. Notice to or knowledge of an employer of the occurrence 
of the injury or death shall be notice to or knowledge of such carrier. 
Jurisdiction of the employer by a district director, the Office, or 
appropriate appellate authority under said Act shall be jurisdiction of 
such carrier. Any requirement under any compensation order, finding, or 
decision shall be binding upon such carrier in the same manner and to 
the same extent as upon the employer.



Sec. 703.116  Report by carrier of issuance of policy or endorsement.

    Each carrier shall report to the district director assigned to a 
compensation district each policy and endorsement issued by it to an 
employer who carries on operations in such compensation district. The 
report shall be made in such manner and on such form as the district or 
the Office may require.



Sec. 703.117  Report; by whom sent.

    The report of issuance of a policy and endorsement provided for in 
Sec. 703.116 shall be sent by the home office of the carrier, except 
that any carrier may authorize its agency or agencies in any 
compensation district to make such reports to the district director, 
provided the carrier shall notify the district director in such district 
of the agencies so duly authorized.



Sec. 703.118  Agreement to be bound by report.

    Every applicant for authority to write insurance under the 
provisions of this Act, shall be deemed to have included in its 
application an agreement that the acceptance by the district director of 
a report of the issuance of a policy of insurance, as provided for by 
Sec. 703.116, shall bind the carrier to full liability for the 
obligations under this Act of the employer named in said report, and 
every certificate of authority to write insurance under this Act shall 
be deemed to have been issued by the Office upon consideration of the 
carrier's agreement to become so bound. It shall be no defense to this 
agreement that the carrier failed or delayed to issue the policy to the 
employer covered by this report.
[50 FR 406, Jan. 3, 1985]



Sec. 703.119  Report by employer operating temporarily in another compensation district.

    Where an employer having operations in one compensation district 
contemplates engaging in work subject to the Act in another compensation 
district, his carrier may submit to the district director of such latter 
district a report pursuant to Sec. 703.116 containing the address of the 
employer in the first mentioned district with the additional notation 
``No present address in -------- compensation district. Certificate 
requested when address given.''



Sec. 703.120  Name of one employer only shall be given in each report.

    A separate report of the issuance of a policy and endorsement, 
provided for by Sec. 703.116, shall be made for each employer covered by 
a policy. If a policy is issued insuring more than one employer, a 
separate report for each employer so covered shall be sent to the 
district director concerned, with the name of only one employer on each 
such report.

                     Authorization of Self-Insurers



Sec. 703.301  Employers who may be authorized as self-insurers.

    The Office will consider for the granting of authority to secure by 
self-

[[Page 715]]

insurance the payment of compensation under the Longshoremen's and 
Harbor Workers' Compensation Act, or its extensions, any employer who, 
pursuant to the regulations in this part, furnishes to the Office 
satisfactory proof of such employer's ability to pay compensation 
directly, and who agrees to immediately cancel any existing policy as of 
the time of the OWCP's approval of the employer to be self-insured, or 
who does not become otherwise insured under this Act. The succeeding 
regulations relating to self-insurers require the deposit of security in 
the form either of an indemnity bond or negotiable securities (at the 
option of the employer) of a kind and in an amount determined by the 
Office, and prescribe the conditions under which such deposit shall be 
made. The term ``self-insurer'' as used in these regulations means any 
employer securing compensation in accordance with the provisions of 33 
U.S.C. 932(a)(2) and with these regulations.
[39 FR 14922, Apr. 29, 1974]



Sec. 703.302  Application for authority to become a self-insurer; how filed; information to be submitted; other requirements.

    Application for authority to become a self-insurer may be made by 
any employer desiring such privilege and shall be addressed to the OWCP 
and be made on a form provided by the Office. Such application shall 
contain:
    (a) A statement of the employer's payroll report for the preceding 
12 months; (b) a statement of the average number of employees engaged in 
employment within the purview of the LHWCA or any of its extensions for 
the preceding 12 months; (c) a statement of the number of injuries to 
such employees resulting in disability of more than 7 days' duration, or 
in death, during each of 3 years next preceding the date of the 
application; (d) a certified financial report for each of the three 
years preceding the application; (e) a description of the facilities 
maintained or the arrangements made for the medical and hospital care of 
injured employees; and (f) a statement describing the provisions and 
maximum amount of any excess or catastrophic insurance. The Office may 
in its discretion require the applicant to submit such further 
information or such evidence as the Office may deem necessary to have in 
order to enable it to give adequate consideration to such application. 
Such application shall be signed by the applicant over his typewritten 
name and if the applicant is not an individual, by an officer of the 
applicant duly authorized to make such application over his typewritten 
name and official designation and shall be sworn to by him. If the 
applicant is a corporation, the corporate seal shall be affixed. The 
application shall be filed with the OWCP national office in Washington, 
DC. The regulations in this part shall be binding upon each applicant 
hereunder and the applicant's consent to be bound by all requirements of 
the said regulations shall be deemed to be included in and a part of the 
application, as fully as though written therein.

(Approved by the Office of Management and Budget under control number 
1215-0160)


(Pub. L. No. 96-511)
[38 FR 26873, Sept. 26, 1973, as amended at 50 FR 406, Jan. 3, 1985]



Sec. 703.303  Decision upon application of employer; deposit of negotiable securities or indemnity bond.

    The decision of the Office to grant an application of an employer 
for authority to pay compensation under said Act as a self-insurer will 
be transmitted to the applicant on a form prescribed by the Office. Such 
grant shall be conditioned upon a deposit of security in the form of an 
indemnity bond or of negotiable securities in an amount fixed by the 
Office, and the execution and filing of an agreement and undertaking in 
the form prescribed by the Office, as required by Sec. 703.304.



Sec. 703.304  Filing of agreement and undertaking.

    The applicant for the privilege of self-insurance shall as a 
condition subsequent to receiving authorization to act as a self-
insurer, execute and file with the Office and agreement and undertaking 
in a form prescribed and provided by the Office in whch the applicant 
shall agree: (a) To pay when due, as required by the provisions of said

[[Page 716]]

Act, all compensation payable on account of injury or death of any of 
its employees injured within the purview of said Act; (b) in such cases 
to furnish medical, surgical, hospital, and other attendence, treatment 
and care as required by the provisions of said Act; (c) to deposit with 
the Office an indemnity bond in the amount which the Office shall fix, 
or to deposit negotiable securities as provided for by the regulations 
in this part in the amount which the Office shall fix, accordingly as 
elected in the application; (d) to authorize the Office to sell such 
negotiable securities so deposited or any part thereof and from the 
proceeds thereof to pay such compensation, medical, and other expenses 
and any accrued penalties imposed by law as it may find to be due and 
payable; and (e) to obtain and maintain, if required by the Office, 
excess or catastrophic insurance, in amounts to be determined by the 
Office.
[50 FR 407, Jan. 3, 1985]



Sec. 703.305  Decision upon application of employer; furnishing of indemnity bond or deposit of negotiable securities required.

    The applicant for the privilege of self-insurance, as a condition 
subsequent to receiving authorization to act as self-insurer, shall give 
security for the payment of compensation and the discharge of all other 
obligations under the said Act, in the amount fixed by the Office, which 
may be in the form of an indemnity bond with sureties satisfactory to 
the Office, or of a deposit of negotiable securities as provided in the 
regulations in this part. The amount of such security so to be fixed and 
required by the Office shall be such as the Office shall deem to be 
necessary and sufficient to secure the performance by the applicant of 
all obligations imposed upon him as an employer by the Act. In fixing 
the amount of such security the Office will take into account the 
financial standing of the employer, the nature of the work in which he 
is engaged, the hazard of the work in which the employees are employed, 
the payroll exposure, and the accident experience as shown in the 
application and the Office's records, and any other facts which the 
Office may deem pertinent. Additional security may be required at any 
time in the discretion of the Office. The indemnity bond which is 
required by these regulations shall be in such form, and shall contain 
such provisions, as the Office may prescribe: Provided, That only surety 
companies approved by the United States Treasury Department under the 
laws of the United States and the rules and regulations governing 
bonding companies may act as sureties on such indemnity bonds.
[50 FR 407, Jan. 3, 1985]



Sec. 703.306  Kinds of negotiable securities which may be deposited; conditions of deposit; acceptance of deposits.

    An applicant for the privilege of self-insurance electing to deposit 
negotiable securities to secure his obligations under said Act in the 
amount fixed by the Office under the regulations in this part shall 
deposit any negotiable securities acceptable as security for the deposit 
of public monies of the United States under regulations issued by the 
Secretary of the Treasury. The approval, valuation, acceptance, and 
custody of such securities is hereby committed to the several Federal 
Reserve Banks and the Treasurer of the United States when authorized 
under the regulations in this part to receive deposits of such 
securities.
[50 FR 407, Jan. 3, 1985]



Sec. 703.307  Deposits of negotiable securities with Federal Reserve banks or the Treasurer of the United States; authority to sell such securities; interest 
          thereon.

    Deposits of securities provided for by the regulations in this part 
shall be made with any Federal Reserve bank or any branch of a Federal 
Reserve bank designated by the Office, or the Treasurer of the United 
States, and shall be held subject to the order of the Office with power 
in the Office, in its discretion in the event of default by the said 
self-insurer, to collect the interest and the principal as they may 
become due, to sell the securities or any of them as may be required to 
discharge the obligations of the self-insurer under said Act and to 
apply the proceeds to the payment of any compensation or medical expense 
for which

[[Page 717]]

the self-insurer may be liable. The Office may, however, whenever it 
deems it unnecessary to resort to such securities for the payment of 
compensation, authorize the self-insurer to collect interest on the 
securities deposited by him.



Sec. 703.308  Substitution and withdrawal of negotiable securities.

    No substitution or withdrawal of negotiable securities deposited by 
a self-insurer shall be made except upon authorization by the Office. A 
self-insurer discontinuing business, or discontinuing operations within 
the purview of said Act, or providing security for the payment of 
compensation by insurance under the provisions of said Act may apply to 
the Office for the withdrawal of securities deposited under the 
regulations in this part. With such application shall be filed a sworn 
statement setting forth:
    (a) A list of all outstanding cases in each compensation district in 
which compensation is being paid, with the names of the employees and 
other beneficiaries, giving a description of causes of injury or death, 
and a statement of the amount of compensation paid; (b) a similar list 
of all pending cases in which no compensation has as yet been paid; and 
(c) a similar list of all cases in which injury or death has occurred 
within 1 year prior to such application or in which the last payment of 
compensation was made within 1 year prior to such application. In such 
cases withdrawals may be authorized by the Office of such securities as 
in the opinion of the Office may not be necessary to provide adequate 
security for the payment of outstanding and potential liabilities of 
such self-insurer under said Act.



Sec. 703.309  Increase or reduction in the amount of indemnity bond or negotiable securities.

    Whenever in the opinion of the Office the principal sum of the 
indemnity bond filed or the amount of negotiable securities deposited by 
a self-insurer is insufficient to afford adequate security for the 
payment of compensation and medical expenses under said Act, the self-
insurer shall, upon demand by the Office, file such additional indemnity 
bond or deposit under the regulations in this part such additional 
amount of negotiable securities as the Office may require. At any time 
upon application of a self-insurer, or on the initiative of the Office, 
when in its opinion the facts warrant, the principal sum of an indemnity 
bond required to be given or the amount of negotiable securities 
required to be deposited may be reduced. A self-insurer seeking such 
reduction shall furnish such information as the Office may request 
relative to his current affairs, the nature and hazard of the work of 
his employees, the amount of the payroll of his employees engaged in 
maritime employment within the purview of the said Act, his financial 
condition, his accident experience, and such other evidence as may be 
deemed material, including a record of payments of compensation made by 
him.



Sec. 703.310  Reports required of self-insurers; examination of accounts of self-insurer.

    At such times as the Office may require or prescribe, each self-
insurer shall submit such of the following reports as may be requested:
    (a) A certified financial statement of the self-insurer's assets and 
liabilities, or a balance sheet.
    (b) A sworn statement showing by classifications the payroll of 
employees of the self-insurer who are engaged in employment within the 
purview of the LHWCA or any of its extensions.
    (c) A sworn statement covering the 6 months' period preceding the 
date of such report, listing by compensation districts all death and 
injury cases which have occurred during such period, together with a 
report of the status of all outstanding claims, showing the particulars 
of each case.

Whenever it deems it to be necessary, the Office may inspect or examine 
the books of account, records, and other papers of a self-insurer for 
the purpose of verifying any financial statement submitted to the Office 
by self-insurer or verifying any information furnished to the Office in 
any report required by this section, or any other section of the 
regulations in this part, and such self-insurer shall permit the Office 
or its duly authorized representative to make such an inspection or 
examination as

[[Page 718]]

the Office shall require. In lieu of this requirement the Office may in 
its discretion accept an adequate report of a certified public 
accountant.

(Approved by the Office of Management and Budget under control number 
1215-0033)


(Pub. L. No. 96-511)
[38 FR 26873, Sept. 26, 1973, as amended at 49 FR 18294, Apr. 30, 1984; 
50 FR 407, Jan. 3, 1985]



Sec. 703.311  Period of authorization as self-insurer.

    (a) Effective with the end of the authorization period July 1, 1983, 
through June 30, 1984, annual reauthorization of the self-insurance 
privilege is no longer necessary. Beginning July 1, 1984, and 
thereafter, newly approved and renewed self-insurance authorizations 
will remain in effect for so long as the self-insurer complies with the 
requirements of the OWCP.
    (b) A self-insurer who currently has on file an indemnity bond, will 
receive from the office, on or about May 10 of each year, a bond form 
for execution in contemplation of the continuance of the self-insurance 
authorization, and the submission of such bond duly executed in the 
amount indicated by the office will be deemed and treated as a condition 
of the continuing authorization.
[50 FR 407, Jan. 3, 1985]



Sec. 703.312  Revocation of privilege of self-insurance.

    The Office may for good cause shown suspend or revoke the 
authorization of any self-insurer. Failure by a self-insurer to comply 
with any provision or requirement of law or of the regulations in this 
part, or with any lawful order or communication of the Office, or the 
failure or insolvency of the surety on his indemnity bond, or impairment 
of financial responsibility of such self-insurer, shall be deemed good 
cause for such suspension or revocation.

                 Issuance of Certificates of Compliance



Sec. 703.501  Issuance of certificates of compliance.

    Every employer who has secured the payment of compensation as 
required by 33 U.S.C. 932 and by the regulations in this part may 
request a certificate from the district director in the compensation 
district in which he has operations, and for which a certificate is 
required by 33 U.S.C. 937, showing that such employer has secured the 
payment of compensation. Only one such certificate will be issued to an 
employer in a compensation district, and it will be valid only during 
the period for which such employer has secured such payment. An employer 
so desiring may have photocopies of such a certificate made for use in 
different places within the compensation district. Two forms of such 
certificates have been provided by the Office, one form for use where 
the employer has obtained insurance generally under these regulations, 
and one for use where the employer has been authorized as a self-
insurer.



Sec. 703.502  Same; employer operating temporarily in another compensation district.

    A district director receiving a report of the issuance of a policy 
of insurance with the notation authorized by Sec. 703.119, will file 
such report until he receives from the insured employer named therein a 
request for certificate of compliance, giving the address of the 
employer within the compensation district of such district director. 
Upon receipt of such a request the district director will send the 
proper certificate of compliance to such employer at such address.



Sec. 703.503  Return of certificates of compliance.

    Upon the termination by expiration, cancellation or otherwise, of a 
policy of insurance issued under the provisions of law and these 
regulations, or the revocation or termination of the privilege of self-
insurance granted by the Office, all certificates of compliance issued 
on the basis of such insurance or self-insurance shall be void and shall 
be returned by the employer to the district director issuing them with a 
statement of the reason for such return. An employer holding certificate 
of compliance under an insurance policy which has expired, pending 
renewal of such insurance need not return such

[[Page 719]]

certificate of compliance if such expired insurance is promptly 
replaced. An employer who has secured renewal of insurance upon the 
expiration of policy under said Act or whose self-insurance thereunder 
is reauthorized without a break in the continuity thereof need not 
return an expired certificate of compliance.



PART 704--SPECIAL PROVISIONS FOR LHWCA EXTENSIONS--Table of Contents




Sec.
704.001  Extensions covered by this part.
704.002  Scope of part.

                            Defense Base Act

704.101  Administration; compensation districts.
704.102  Commutation of payments to aliens and nonresidents.
704.103  Removal of certain minimums when computing or paying 
          compensation.
704.151  DBA endorsement.

             District of Columbia Workmen's Compensation Act

704.201  Administration; compensation districts.
704.251  DCCA endorsement.

                    Outer Continental Shelf Lands Act

704.301  Administration; compensation districts.
704.351  OCSLA endorsement.

               Nonappropriated Fund Instrumentalities Act

704.401  Administration; compensation districts.
704.451  NFIA endorsement.

    Authority:  5 U.S.C. 301; Reorg. Plan No. 6 of 1950, 15 FR 3174, 64 
Stat. 1263; 33 U.S.C. 939; 36 D.C. Code 501 et seq.; 42 U.S.C. 1651 et 
seq.; 43 U.S.C. 1331; 5 U.S.C. 6171 et seq.; Secretary's Order 1-89; 
Employment Standards Order No. 90-02.

    Source:  38 FR 26877, Sept. 26, 1973, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 704 appear at 55 FR 
28606, July 12, 1990.



Sec. 704.001  Extensions covered by this part.

    (a) Defense Base Act (DBA).
    (b) District of Columbia Workmen's Compensation Act (DCCA).
    (c) Outer Continental Shelf Lands Act (OCSLA).
    (d) Nonappropriated Fund Instrumentalities Act (NFIA).



Sec. 704.002  Scope of part.

    The regulations governing the administration of the LHWCA as set 
forth in parts 702 and 703 of this subchapter govern the administration 
of the LHWCA extensions (see Sec. 704.001) in nearly every respect, and 
are not repeated in this part 704. Such special provisions as are 
necessary to the proper administration of each of the extensions are set 
forth in this part. To the extent of any inconsistency between 
regulations in parts 702 and 703 of this subchapter and those in this 
part, the latter supersedes those in parts 702 and 703 of this 
subchapter.

                            Defense Base Act



Sec. 704.101  Administration; compensation districts.

    For the purpose of administration of this Act areas assigned to the 
compensation districts established for administration of the 
Longshoremen's and Harbor Workers' Compensation Act as set forth in part 
702 of this subchapter shall be extended in the following manner to 
include:
    (a) Canada, east of the 75th degree west longitude, Newfoundland, 
and Greenland are assigned to District No. 1.
    (b) Canada, west of the 75th degree and east of the 110th degree 
west longitude, is assigned to District No. 10.
    (c) Canada, west of the 110th degree west longitude, and all areas 
in the Pacific Ocean north of the 45th degree north latitude are 
assigned to District No. 14.
    (d) All areas west of the continents of North and South America 
(except coastal islands) to the 60th degree east longitude, except for 
Iran, are assigned to District No. 15.
    (e) Mexico, Central and South America (including coastal islands); 
areas east of the continents of North and South America to the 60th 
degree east longitude, including Iran, and any other areas or locations 
not covered under any other district office, are assigned to District 
No. 2.

[[Page 720]]



Sec. 704.102  Commutation of payments to aliens and nonresidents.

    Authority to commute payments to aliens and nonnationals who are not 
residents of the United States and Canada, section 2(b) of the Defense 
Base Act, 42 U.S.C. 1652(b), though separately stated in this Act, is 
identical in language to section 9(g) of the Longshoremen's Act. Thus, 
except for the different statutory citation, the LHWCA regulation at 
Sec. 702.142 of this subchapter shall apply.



Sec. 704.103  Removal of certain minimums when computing or paying compensation.

    The minimum limitation on weekly compensation for disability 
established by section 6 of the LHWCA, 33 U.S.C. 906, and the minimum 
limit on the average weekly wages on which death benefits are to be 
computed under section 9 of the LHWCA, 33 U.S.C. 909, shall not apply in 
computing compensation and death benefits under this Act; section 2(a), 
42 U.S.C. 1652(a).



Sec. 704.151  DBA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employers' liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ----,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, as extended by the provisions of the Defense 
Base Act, and all laws amendatory thereof or supplementary thereto which 
may be or become effective while this policy is in force.
    The Company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the Company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The Company agrees to abide by all the provisions of said Acts and 
all lawful rules, regulations, orders, and decisions of the Office of 
Workmen's Compensation Programs, Department of Labor, unless and until 
set aside, modified, or reversed by appropriate appellate authority as 
provided for by said Acts.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to this employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

             District of Columbia Workmen's Compensation Act



Sec. 704.201  Administration; compensation districts.

    For the purpose of administration of this Act, the District of 
Columbia shall be the compensation district and is designated as 
District No. 40.



Sec. 704.251  DCCA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employer's liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ----,
    The obligations of the policy include the District of Columbia 
Workmen's Compensation Act, and the applicable provisions of the 
Longshoremen's and Harbor Workers' Compensation Act, and all laws 
amendatory of either of said Acts or supplementary thereto which may be 
or become effective while this policy is in force.
    The company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of said District 
of Columbia Workmen's Compensation Act and all lawful rules, 
regulations, orders, and decisions of the Office of Workmen's 
Compensation Programs, Department of Labor, unless and until set aside, 
modified, or reversed by appropriate appellate authority as provided for 
by said Act.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
for the District of Columbia and to this employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which

[[Page 721]]

are not inconsistent with or inapplicable to the provisions of this 
endorsement are hereby made a part of this endorsement as fully and 
completely as if wholly written herein.

                    Outer Continental Shelf Lands Act



Sec. 704.301  Administration; compensation districts.

    For the purpose of administration of this Act, the compensation 
districts established under the Longshoremen's and Harbor Workers' 
Compensation Act as set forth in part 702 of this subchapter shall 
administer this Act, and their jurisdiction for this purpose is 
extended, where appropriate, to include those parts of the Outer 
Continental Shelf adjacent to the State or States in such districts 
having adjacent shelf areas.



Sec. 704.351  OCSLA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employer's liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ------,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, as extended by the Outer Continental Shelf 
Lands Act, and all the laws amendatory thereof or supplementary thereto 
which may be or become effective while this policy is in force.
    The company will be subject to the provisions of 33 U.S.C. 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of said laws and 
all the lawful rules, regulations, orders and decisions of the Office of 
Workmen's Compensation Programs, Department of Labor, until set aside, 
modified, or reversed by appropriate appellate authority as provided for 
by said Acts.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has been sent to the District Director 
and to his employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

               Nonappropriated Fund Instrumentalities Act



Sec. 704.401  Administration; compensation districts.

    For the purpose of administration of this Act within the continental 
United States, Hawaii, and Alaska, the compensation districts 
established for administration of the Longshoremen's and Harbor Workers' 
Compensation Act as set forth in part 702 of this subchapter are 
established as the administrative districts under this Act. For the 
purpose of administration of this Act outside the continental United 
States, Alaska, and Hawaii, the compensation districts established for 
such overseas administration of the Defense Base Act as set forth in 
Sec. 704.101 are established as the administrative districts under this 
Act.



Sec. 704.451  NFIA endorsement.

    The following form of endorsement applicable to the standard 
workmen's compensation and employer's liability policy shall be used, if 
required by the OWCP, with the form of policy approved by the Office for 
use by an authorized carrier:

    For attachment to Policy No. ------,
    The obligations of the policy include the Longshoremen's and Harbor 
Workers' Compensation Act, as extended by the Nonappropriated Fund 
Instrumentalities Act, and all of the laws amendatory thereof or 
supplementary thereto which may be or become effective while this policy 
is in force.
    The company will be subject to the provisions of 33 U.S.C 935. 
Insolvency or bankruptcy of the employer and/or discharge therein shall 
not relieve the company from payment of compensation and other benefits 
lawfully due for disability or death sustained by an employee during the 
life of the policy.
    The company agrees to abide by all the provisions of said Acts and 
all the lawful rules, regulations, orders, and decisions of the Office 
of Workmen's Compensation Programs, Department of Labor, unless and 
until set aside, modified, or reversed by appropriate appellate 
authority as provided for by said Acts.
    This endorsement shall not be canceled prior to the date specified 
in this policy for its expiration until at least 30 days have elapsed 
after a notice of cancellation has

[[Page 722]]

been sent to the District Director and to the within named employer.
    All terms, conditions, requirements, and obligations expressed in 
this policy or in any other endorsement attached thereto which are not 
inconsistent with or inapplicable to the provisions of this endorsement 
are hereby made a part of this endorsement as fully and completely as if 
wholly written herein.

[[Page 723]]



SUBCHAPTER B--FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, AS AMENDED





PART 718--STANDARDS FOR DETERMINING COAL MINERS' TOTAL DISABILITY OR DEATH DUE TO PNEUMOCONIOSIS--Table of Contents




                           Subpart A--General

Sec.
718.1  Statutory provisions.
718.2  Applicability of this part.
718.3  Scope and intent of this part.
718.4  Definitions and use of terms.

       Subpart B--Criteria for the Development of Medical Evidence

718.101  General.
718.102  Chest roentgenograms (X-rays).
718.103  Pulmonary function tests.
718.104  Report of physical examinations.
718.105  Arterial blood-gas studies.
718.106  Autopsy; biospy.
718.107  Other medical evidence.

             Subpart C--Determining Entitlement to Benefits

718.201  Definition of pneumoconiosis.
718.202  Determining the existence of pneumoconiosis.
718.203  Establishing relationship of pneumoconiosis to coal mine 
          employment.
718.204  Total disability defined; criteria for determining total 
          disability.
718.205  Death due to pneumoconiosis.
718.206  Effect of findings by persons or agencies.

    Subpart D--Presumptions Applicable to Eligibility Determinations

718.301  Establishing length of employment as a miner.
718.302  Relationship of pneumoconiosis to coal mine employment.
718.303  Death from a respirable disease.
718.304  Irrebuttable presumption of total disability or death due to 
          pneumoconiosis.
718.305  Presumption of pneumoconiosis.
718.306  Presumption of entitlement applicable to certain death claims.
718.307  Applicability of 33 U.S.C. 920(a).

                   Subpart E--Miscellaneous Provisions

718.401  Right to obtain evidence.
718.402  Failure to furnish required medical evidence.
718.403  Burden of proof.
718.404  Cessation of entitlement.

Appendix A to Part 718--Standards for Administration and Interpretation 
          of Chest Roentgenograms (X-rays)
Appendix B to Part 718--Standards for Administration and Interpretation 
          of Pulmonary Function Tests. Tables B1, B2, B3, B4, B5, B6
Appendix C to Part 718--Blood Gas Tables

    Authority:  5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 902(f), 925, 932, 934, 936, 945; 33 U.S.C. 
901 et seq., Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.

    Source:  45 FR 13678, Feb. 29, 1980, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 718 appear at 55 FR 
28606, July 12, 1990.



                           Subpart A--General



Sec. 718.1  Statutory Provisions.

    (a) Under title IV of the Federal Coal Mine Health and Safety Act of 
1969, as amended by the Black Lung Benefits Act of 1972, the Federal 
Mine Safety and Health Amendments Act of 1977, the Black Lung Benefits 
Reform Act of 1977, the Black Lung Benefits Revenue Act of 1977, the 
Black Lung Benefits Amendments of 1981, and the Black Lung Benefits 
Revenue Act of 1981, benefits are provided to miners who are totally 
disabled due to pneumoconiosis and to certain survivors of a miner who 
died due to or while totally or partially disabled by pneumoconiosis. 
However, unless the miner was found entitled to benefits as a result of 
a claim filed prior to January 1, 1982, benefits are payable on 
survivors' claims filed on or after January 1, 1982, only when the 
miner's death was due to pneumoconiosis, except where the survivor's 
entitlement is established pursuant to Sec. 718.306 of this part on a 
claim filed prior to June 30, 1982. Before the enactment of the Black 
Lung Benefits Reform Act of 1977, the authority for establishing 
standards of eligibility for miners and their survivors was placed with 
the Secretary of Health, Education, and Welfare. These standards were 
set forth by the Secretary of Health, Education, and Welfare in subpart 
D of part 410 of this title, and

[[Page 724]]

adopted by the Secretary of Labor for application to all claims filed 
with the Secretary of Labor (see 20 CFR 718.2, 1978). Amendments made to 
section 402(f) of the Act by the Black Lung Benefits Reform Act of 1977 
authorize the Secretary of Labor to establish criteria for determining 
total or partial disability or death due to pneumoconiosis to be applied 
in the processing and adjudication of claims filed under part C of title 
IV of the Act. Section 402(f) of the Act further authorizes the 
Secretary of Labor, in consultation with the National Institute for 
Occupational Safety and Health, to establish criteria for all 
appropriate medical tests administered in connection with a claim for 
benefits. Section 413(b) of the Act authorizes the Secretary of Labor to 
establish criteria for the techniques to be used to take chest 
roentgenograms (X-rays) in connection with a claim for benefits under 
the Act.
    (b) The Black Lung Benefits Reform Act of 1977 provided that with 
respect to a claim filed on or before the effective date of this part, 
that is filed prior to April 1, 1980, or reviewed under section 435 of 
the Act, the standards to be applied in the adjudication of such claim 
shall not be more restrictive than the criteria applicable to a claim 
filed on June 30, 1973, with the Social Security Administration, whether 
or not the final disposition of the claim occurs after March 31, 1980. 
All such claims shall be reviewed under the criteria set forth in part 
727 of this title.
[48 FR 24287, May 31, 1983]



Sec. 718.2  Applicability of this part.

    This part is applicable to the adjudication of all claims filed 
after March 31, 1980, and considered by the Secretary of Labor under 
section 422 of the Act and part 725 of this subchapter. If a claim 
subject to the provisions of section 435 of the Act and subpart C of 
part 727 of this subchapter cannot be approved under that subpart, such 
claim may be approved, if appropriate, under the provisions contained in 
this part. The provisions of this part shall, to the extent appropriate, 
be construed together in the adjudication of all claims.
[48 FR 24287, May 31, 1983]



Sec. 718.3  Scope and intent of this part.

    (a) This part sets forth the standards to be applied in determining 
whether a coal miner is or was totally, or in the case of a claim 
subject to Sec. 718.306 partially, disabled due to pneumoconiosis or 
died due to pneumoconiosis. It also specifies the procedures and 
requirements to be followed in conducting medical examinations and in 
administering various tests relevant to such determinations.
    (b) This part is designed to interpret the presumptions contained in 
section 411(c) of the Act, evidentiary standards and criteria contained 
in section 413(b) of the Act and definitional requirements and standards 
contained in section 402(f) of the Act within a coherent framework for 
the adjudication of claims. It is intended that these enumerated 
provisions of the Act be construed as provided in this part.
    (c) In enacting title IV of the Act, Congress intended that 
claimants be given the benefit of all reasonable doubt as to the 
existence of total or partial disability or death due to pneumoconiosis. 
This part shall be construed and applied in that spirit and is designed 
to reflect that intent. However, no claim shall be approved unless the 
record considered as a whole, in light of any applicable presumptions, 
provides a reasonable basis for determining that the criteria for 
eligibility under the Act and this part have been met.



Sec. 718.4  Definitions and use of terms.

    Except as is otherwise provided by this part, the definitions and 
usages of terms contained in Sec. 725.101 of subpart A of part 725 of 
this title, as amended from time to time, shall be applicable to this 
part.



       Subpart B--Criteria for the Development of Medical Evidence



Sec. 718.101  General.

    The Office of Workers' Compensation Programs (hereinafter OWCP or 
the Office) shall develop the medical evidence necessary for a 
determination with respect to each claimant's entitlement to benefits. 
Each miner who files a claim

[[Page 725]]

for benefits under the Act shall be provided an opportunity to 
substantiate his or her claim by means of a complete pulmonary 
evaluation including, but not limited to, a chest roentgenogram (X-ray), 
physical examination, pulmonary function tests and a blood-gas study.



Sec. 718.102  Chest roentgenograms (X-rays).

    (a) A chest roentgenogram (X-ray) shall be of suitable quality for 
proper classification of pneumoconiosis and shall conform to the 
standards for administration and interpretation of chest X-rays as 
described in Appendix A.
    (b) A chest X-ray to establish the existence of pneumoconiosis shall 
be classified as Category 1, 2, 3, A, B, or C, according to the 
International Labour Organization Union Internationale Contra Cancer/
Cincinnati (1971) International Classification of Radiographs of the 
Pneumoconioses (ILO-U/C 1971), or subsequent revisions thereof. A chest 
X-ray classified as Category Z under the ILO Classification (1958) or 
Short Form (1968) shall be reclassified as Category O or Category 1 as 
appropriate, and only the latter accepted as evidence of pneumoconiosis. 
A chest X-ray classified under any of the foregoing classifications as 
Category O, including sub-categories 0/-, 0/0, or 0/1 under the UICC/
Cincinnati (1968) Classification or the ILO-U/C 1971 Classification does 
not constitute evidence of pneumoconiosis.
    (c) A description and interpretation of the findings in terms of the 
classifications described in paragraph (b) of this section shall be 
submitted by the examining physician along with the film. The report 
shall specify the name and qualifications of the person who took the 
film and the name and qualifications of the physician interpreting the 
film. If the physician interpreting the film is a Board-certified or 
Board-eligible radiologist or a certified ``B'' reader (see 
Sec. 718.202), he or she shall so indicate. The report shall further 
specify that the film was interpreted in compliance with this paragraph.
    (d) The original film on which the X-ray report is based shall be 
supplied to the Office, unless prohibited by law, in which event the 
report shall be considered as evidence only if the original film is 
otherwise available to the Office and other parties. Where the chest X-
ray of a deceased miner has been lost, destroyed or is otherwise 
unavailable, a report of a chest X-ray submitted by any party shall be 
considered in connection with the claim.
    (e) No chest X-ray shall constitute evidence of the presence or 
absence of pneumoconiosis unless it is in substantial compliance with 
the requirements of this section and Appendix A, except that in the case 
of a deceased miner where the only available X-ray is of sufficient 
quality for determining the presence or absence of pneumoconiosis and 
such X-ray was interpreted by a Board-certified or Board-eligible 
radiologist or a certified ``B'' reader (see Sec. 718.208) such X-ray 
shall be considered and shall be accorded such weight and probative 
value as is appropriate in light of all of the evidence applicable to 
the individual case. It shall be presumed, in the absence of evidence to 
the contrary, that the requirements of Appendix A have been met.

(Approved by the Office of Management and Budget under control number 
1215-0090)


(Pub. L. No. 96-511)
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24287, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]



Sec. 718.103  Pulmonary function tests.

    (a) Any report of pulmonary function tests submitted in connection 
with a claim for benefits shall record the results of the forced 
expiratory volume in one second (FEV1) and either the forced 
vital capacity (FVC) or the maximum voluntary ventilation (MVV) or both. 
If the MVV is reported, the results of such test shall be obtained 
independently rather than calculated from the results of the 
FEV1. Such tests shall be administered and reported in 
accordance with the standards for the administration and interpretation 
of pulmonary function tests as described in Appendix B. It shall be 
presumed, in the absence of evidence to the contrary, that these 
requirements have been met.
    (b) All pulmonary function test results submitted in connection with 
a

[[Page 726]]

claim for benefits shall be accompained by three tracings of each test 
performed, unless the results of two tracings of the MVV are within 5% 
of each other, in which case two tracings for that test shall be 
sufficient. Pulmonary function test results submitted in connection with 
a claim for benefits shall also include a statement signed by the 
physician or technician conducting the test setting forth the following:
    (1) Date and time of test;
    (2) Name, DOL claim number, age, height, and weight of claimant at 
the time of the test;
    (3) Name of technician;
    (4) Name and signature of physician supervising the test;
    (5) Claimant's ability to understand the instructions, ability to 
follow directions and degree of cooperation in performing the tests. If 
the claimant is unable to complete the test, the person executing the 
report shall set forth the reasons for such failure;
    (6) Paper speed of the instrument used;
    (7) Name of the instrument used;
    (8) Whether a bronchodilator was administered. If a bronchodilator 
is administered, the physician's report must detail values obtained both 
before and after administration of the bronchodilator and explain the 
significance of the results obtained; and
    (9) That the requirements of paragraphs (b) and (c) of this section 
have been complied with.
    (c) No results of pulmonary function tests shall constitute evidence 
of a respiratory or pulmonary impairment unless such tests are conducted 
and reported in substantial compliance with this section and Appendix B. 
Special consideration shall be given in the case of a deceased miner 
where, in the opinion of the adjudication officer, the only available 
tests demonstrate technically valid results obtained with good 
cooperation of the miner.

(The information collection requirements contained in paragraph (b) were 
approved by the Office of Management and Budget under control number 
1215-0090)

(Pub. L. No. 96-511)
[45 FR 13678, Feb. 29, 1980, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 718.104  Report of physical examinations.

    A report of any physical examination conducted in connection with a 
claim shall include the miner's medical and employment history. A 
medical report form supplied by the Office or a report containing 
substantially the same information shall be completed for all findings. 
In addition to the chest X-ray and pulmonary function tests, the 
physician shall use his or her judgment in the selection of other 
procedures such as electrocardiogram, blood-gas studies, and other blood 
analyses in his or her evaluation of the miner. All manifestations of 
chronic respiratory disease shall be noted. Any pertinent findings not 
specifically listed on the form shall be added by the examining 
physician. If heart disease secondary to lung disease is found, all 
symptoms and significant findings shall be noted.

(Approved by the Office of Management and Budget under control number 
1215-0090)


(Pub. L. No. 96-511)
[45 FR 13678, Feb. 29, 1980, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 718.105  Arterial blood-gas studies.

    (a) Blood-gas studies are performed to detect an impairment in the 
process of alveolar gas exchange. This defect will manifest itself 
primarily as a fall in arterial oxygen tension either at rest or during 
exercise. No blood-gas study shall be performed if medically 
contraindicated.
    (b) A blood-gas study shall initially be administered at rest and in 
a sitting position. If the results of the blood-gas test at rest do not 
satisfy the requirements of Appendix C, an exercise blood-gas test shall 
be offered to the miner unless medically contraindicated. If an exercise 
blood-gas test is administered, blood shall be drawn during exercise.
    (c) Any report of a blood-gas study submitted in connection with a 
claim shall specify:
    (1) Date and time of test;
    (2) Altitude and barometric pressure at which the test was 
conducted;
    (3) Name and DOL claim number of the claimant;
    (4) Name of technician;

[[Page 727]]

    (5) Name and signature of physician supervising the study;
    (6) The recorded values for p CO2, p 
O2, and pH, which have been collected simultaneously (specify 
values at rest and, if performed, during exercise);
    (7) Duration and type of exercise;
    (8) Pulse rate at the time the blood sample was drawn;
    (9) Time between drawing of sample and analysis of sample; and
    (10) Whether equipment was calibrated before and after each test.

(Approved by the Office of Management and Budget under control number 
1215-0090)


(Pub. L. No. 96-511)
[45 FR 13678, Feb. 29, 1980, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 718.106  Autopsy; biopsy.

    (a) A report of an autopsy or biopsy submitted in connection with a 
claim shall include a detailed gross macroscopic and microscopic 
description of the lungs or visualized portion of a lung. If a surgical 
procedure has been performed to obtain a portion of a lung, the evidence 
shall include a copy of the surgical note and the pathology report of 
the gross and microscopic examination of the surgical specimen. If an 
autopsy has been performed, a complete copy of the autopsy report shall 
be submitted to the Office.
    (b) No report of an autopsy or biopsy submitted in connection with a 
claim shall be considered unless the report complies with the 
requirements of this section, except that in the case of a miner who 
died prior to March 31, 1980, such reports shall be considered even when 
the reports are not in substantial compliance with the requirements of 
this section. Such nonconforming reports concerning miners who died 
prior to March 31, 1980, shall be accorded such weight and probative 
value as is appropriate in light of all of the evidence applicable to 
the individual case.
    (c) A negative biopsy is not conclusive evidence that the miner does 
not have pneumoconiosis. However, where positive findings are obtained 
on biopsy, the results will constitute evidence of the presence of 
pneumoconiosis.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24288, May 31, 1983]



Sec. 718.107  Other medical evidence.

    The results of any medically acceptable test or procedure reported 
by a physician not addressed in this subpart which test or procedure 
tends to demonstrate the presence or absence of pneumoconiosis or the 
sequelae of pneumoconiosis or the presence or absence of a respiratory 
or pulmonary impairment, may be submitted in connection with a claim and 
shall be given appropriate consideration.



             Subpart C--Determining Entitlement to Benefits



Sec. 718.201  Definition of pneumoconiosis.

    For the purpose of the Act, pneumoconiosis means a chronic dust 
disease of the lung and its sequelae, including respiratory and 
pulmonary impairments, arising out of coal mine employment. This 
definition includes, but is not limited to, coal workers' 
pneumoconiosis, anthracosilicosis, anthracosis, anthrosilicosis, massive 
pulmonary fibrosis, progressive massive fibrosis, silicosis or 
silicotuberculosis, arising out of coal mine employment. For purposes of 
this definition, a disease ``arising out of coal mine employment'' 
includes any chronic pulmonary disease resulting in respiratory or 
pulmonary impairment significantly related to, or substantially 
aggravated by, dust exposure in coal mine employment.



Sec. 718.202  Determining the existence of pneumoconiosis.

    (a) A finding of the existence of pneumoconiosis may be made as 
follows:
    (1) A chest X-ray conducted and classified in accordance with 
Sec. 718.102 may form the basis for a finding of the existence of 
pneumoconiosis. Except as otherwise provided in this section, where two 
or more X-ray reports are in conflict, in evaluating such X-ray reports 
consideration shall be given to the radiological qualifications of the 
physicians interpreting such X-rays.

[[Page 728]]

    (i) In all claims filed before January 1, 1982, where there is other 
evidence of pulmonary or respiratory impairment, a Board-certified or 
Board-eligible radiologist's interpretation of a chest X-ray shall be 
accepted by the Office if the X-ray is in compliance with the 
requirements of Sec. 718.102 and if such X-ray has been taken by a 
radiologist or qualified radiologic technologist or technician and there 
is no evidence that the claim has been fraudulently represented. 
However, these limitations shall not apply to any claim filed on or 
after January 1, 1982.
    (ii) The following definitions shall apply when making a finding in 
accordance with this paragraph.
    (A) The term other evidence means medical tests such as blood-gas 
studies, pulmonary function studies or physicial examinations or medical 
histories which establish the presence of a chronic pulmonary, 
respiratory or cardio-pulmonary condition, and in the case of a deceased 
miner, in the absence of medical evidence to the contrary, affidavits of 
persons with knowledge of the miner's physical condition.
    (B) Pulmonary or respiratory impairment means inability of the human 
respiratory apparatus to perform in a normal manner one or more of the 
three components of respiration, namely, ventilation, perfusion and 
diffusion.
    (C) Board-certified means certification in radiology or diagnostic 
roentgenology by the American Board of Radiology, Inc. or the American 
Osteopathic Association.
    (D) Board-eligible means the successful completion of a formal 
accredited residency program in radiology or diagnostic roentgenology.
    (E) Certified `B' reader or `B' reader means a physician who has 
demonstrated proficiency in evaluating chest roentgenograms for 
roentgenographic quality and in the use of the ILO-U/C classification 
for interpreting chest roentgenograms for pneumoconiosis and other 
diseases by taking and passing a specially designed proficiency 
examination given on behalf of or by the Appalachian Laboratory for 
Occupational Safety and Health. See 42 CFR 37.51(b)(2).
    (F) Qualified radiologic technologist or technician means an 
individual who is either certified as a registered technologist by the 
American Registry of Radiologic Technologists or licensed as a 
radiologic technologist by a state licensing board.
    (2) A biopsy or autopsy conducted and reported in compliance with 
Sec. 718.106 may be the basis for a finding of the existence of 
pneumoconiosis. A finding in an autopsy of anthracotic pigmentation, 
however, shall not be sufficient, by itself, to establish the existence 
of pneumoconiosis. A report of autopsy shall be accepted unless there is 
evidence that the report is not accurate or that the claim has been 
fraudulently represented.
    (3) If the presumptions described in Secs. 718.304, 718.305 or 
Sec. 718.306 are applicable, it shall be presumed that the miner is or 
was suffering from pneumoconiosis.
    (4) A determination of the existence of pneumoconiosis may also be 
made if a physician, exercising sound medical judgment, notwithstanding 
a negative X-ray, finds that the miner suffers or suffered from 
pneumoconiosis as defined in Sec. 718.201. Any such finding shall be 
based on objective medical evidence such as blood-gas studies, 
electrocardiograms, pulmonary function studies, physical performance 
tests, physical examination, and medical and work histories. Such a 
finding shall be supported by a reasoned medical opinion.
    (b) No claim for benefits shall be denied solely on the basis of a 
negative chest X-ray.
    (c) A determination of the existence of pneumoconiosis shall not be 
made solely on the basis of a living miner's statements or testimony. 
Nor shall such a determination be made upon a claim involving a deceased 
miner filed on or after January 1, 1982, solely based upon the 
affidavit(s) (or equivalent sworn testimony) of the claimant and/or his 
or her dependents who would be eligible for augmentation of the 
claimant's benefits if the claim were approved.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24288, May 31, 1983]

[[Page 729]]



Sec. 718.203  Establishing relationship of pneumoconiosis to coal mine employment.

    (a) In order for a claimant to be found eligible for benefits under 
the Act, it must be determined that the miner's pneumoconiosis arose at 
least in part out of coal mine employment. The provisions in this 
section set forth the criteria to be applied in making such a 
determination.
    (b) If a miner who is suffering or suffered from pneumoconiosis was 
employed for ten years or more in one or more coal mines, there shall be 
a rebuttable presumption that the pneumoconiosis arose out of such 
employment.
    (c) If a miner who is suffering or suffered from pneumoconiosis was 
employed less than ten years in the nation's coal mines, it shall be 
determined that such pneumoconiosis arose out of that employment only if 
competent evidence establishes such a relationship.



Sec. 718.204  Total disability defined; criteria for determining total disability.

    (a) General. Benefits are provided under the Act for or on behalf of 
miners who are totally disabled due to pneumoconiosis, or who were 
totally disabled due to pneumoconiosis at the time of death. The 
standards of this section shall be applied to determine whether a miner 
is or was ``totally disabled'' for the purpose of the Act.
    (b) Total disability defined. A miner shall be considered totally 
disabled if the irrebuttable presumption in Sec. 718.304 applies. If the 
irrebuttable presumption described in Sec. 718.304 does not apply, a 
miner shall be considered totally disabled if pneumoconiosis as defined 
in Sec. 718.201 prevents or prevented the miner:
    (1) From performing his or her usual coal mine work; and
    (2) From engaging in gainful employment in the immediate area of his 
or her residence requiring the skills or abilities comparable to those 
of any employment in a mine or mines in which he or she previously 
engaged with some regularity over a substantial period of time.
    (c) Criteria. In the absence of contrary probative evidence, 
evidence which meets the standards of either paragraphs (c)(1), (2), 
(3), (4) or (5) of this section shall establish a miner's total 
disability:
    (1) Pulmonary function tests showing values equal to or less than 
those listed in Table B1 (Males) or Table B2 (Females) in appendix B to 
this part for an individual of the miner's age, sex, and height for the 
FEV1 test; if, in addition, such tests also reveal the values 
specified in either paragraph (c)(1) (i) or (ii) or (iii) of this 
section:
    (i) Values equal to or less than those listed in Table B3 (Males) or 
Table B4 (Females) in appendix B of this part, for an individual of the 
miner's age, sex, and height for the FVC test, or
    (ii) Values equal to or less than those listed in Table B5 (Males) 
or Table B6 (Females) in appendix B to this part, for an individual of 
the miner's age, sex, and height for the MVV test, or
    (iii) A percentage of 55 or less when the results of the FEV1 
test are divided by the results of the FVC test (FEV1/FVC 
equal to or less than 55%), or
    (2) Arterial blood-gas tests show the values listed in Appendix C to 
this part, or
    (3) The miner has pneumoconiosis and has been shown by the medical 
evidence to be suffering from cor pulmonale with right sided congestive 
heart failure, or
    (4) Where total disability cannot be established under paragraphs 
(c)(1), (c)(2) or (c)(3) of this section, or where pulmonary function 
tests and/or blood-gas studies are medically contraindicated, total 
disability may nevertheless be found if a physician exercising reasoned 
medical judgment, based on medically acceptable clinical and laboratory 
diagnostic techniques, concludes that a miner's respiratory or pulmonary 
condition prevents or prevented the miner from engaging in employment as 
described in paragraph (b) of this section, or
    (5) In a case involving a deceased miner in which the claim was 
filed prior to January 1, 1982, where there is no medical or other 
relevant evidence, affidavits (or equivalent sworn testimony) from 
persons knowledgeable of the miner's physical condition shall be 
sufficient to establish total (or under

[[Page 730]]

Sec. 718.306 partial) disability. On a survivor's claim filed on or 
after January 1, 1982, but prior to June 30, 1982, where entitlement is 
sought to be established in accordance with Sec. 718.306, where there is 
no medical or other relevant evidence, affidavits (or equivalent sworn 
testimony) from persons knowledgeable of the miner's physical condition 
shall be sufficient to establish total or partial disability; however, 
such a determination shall not be based solely upon the affidavits or 
testimony of the claimant and/or his or her dependents who would be 
eligible for augmentation of the claimant's benefits if the claim were 
approved. Except as provided in Sec. 718.305, proof that the miner 
suffers or suffered from a totally disabling respiratory or pulmonary 
impairment as defined in paragraphs (c)(1), (2), (4) and (5) of this 
section shall not, by itself, be sufficient to establish that the 
miner's impairment is or was due to pneumoconiosis.
    (d) In determining total disability, the following shall apply to 
statements made by miners about their condition:
    (1) Statements made before death by a deceased miner about his or 
her physical condition are relevant and shall be considered in making a 
determination as to whether the miner was totally disabled at the time 
of death.
    (2) In the case of a living miner's claim, a finding of total 
disability shall not be made solely on the miner's statements or 
testimony.
    (e) In determining total disability to perform usual coal mine work, 
the following shall apply in evaluating the miner's employment 
activities:
    (1) In the case of a deceased miner, employment in a mine at the 
time of death shall not be conclusive evidence that the miner was not 
totally disabled. To disprove total disability, it must be shown that at 
the time the miner died, there were no changed circumstances of 
employment indicative of his or her reduced ability to perform his or 
her usual coal mine work.
    (2) In the case of a living miner, proof of current employment in a 
coal mine shall not be conclusive evidence that the miner is not totally 
disabled unless it can be shown that there are no changed circumstances 
of employment indicative of his or her reduced ability to perform his or 
her usual coal mine work.
    (3) Changed circumstances of employment indicative of a miner's 
reduced ability to perform his or her usual coal mine work may include 
but are not limited to:
    (i) The miner's reduced ability to perform his or her customary 
duties without help; or
    (ii) The miner's reduced ability to perform his or her customary 
duties at his or her usual levels of rapidity, continuity or efficiency; 
or
    (iii) The miner's transfer by request or assignment to less vigorous 
duties or to duties in a less dusty part of the mine.
    (f) No miner who is engaged in coal mine employment shall (except as 
provided in Sec. 718.304) be entitled to any benefit under this part 
while so employed. Any miner who has been determined to be eligible for 
benefits shall be entitled to benefits only if the miner's employment 
terminates within one year after the date such determination becomes 
final.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24288, May 31, 1983]



Sec. 718.205  Death due to pneumoconiosis.

    (a) Benefits are provided to eligible survivors of a miner whose 
death was due to pneumoconiosis.
    (b) For the purpose of adjudicating survivors' claims filed prior to 
January 1, 1982, death will be considered due to pneumoconiosis if any 
of the following criteria is met:
    (1) Where competent medical evidence established that the miner's 
death was due to pneumoconiosis, or
    (2) Where death was due to multiple causes including pneumoconiosis 
and it is not medically feasible to distinguish which disease caused 
death or the extent to which pneumoconiosis contributed to the cause of 
death, or
    (3) Where the presumption set forth at Sec. 718.304 is applicable, 
or
    (4) Where either of the presumptions set forth at Sec. 718.303 or 
Sec. 718.305 is applicable and has not been rebutted.
    (5) Death shall be considered to be due to pneumoconiosis where the 
cause of death is significantly related to or aggravated by 
pneumoconiosis.

[[Page 731]]

    (c) For the purpose of adjudicating survivors' claims filed on or 
after January 1, 1982, death will be considered to be due to 
pneumoconiosis if any of the following criteria is met:
    (1) Where competent medical evidence established that the miner's 
death was due to pneumoconiosis, or
    (2) Where pneumoconiosis was a substantially contributing cause or 
factor leading to the miner's death or where the death was caused by 
complications of pneumoconiosis, or
    (3) Where the presumption set forth at Sec. 718.304 is applicable.
    (4) However, survivors are not eligible for benefits where the 
miner's death was caused by a traumatic injury or the principal cause of 
death was a medical condition not related to pneumoconiosis, unless the 
evidence establishes that pneumoconiosis was a substantially 
contributing cause of death.
    (d) To minimize the hardships to potentially entitled survivors due 
to the disruption of benefits upon the miner's death, survivors' claims 
filed on or after January 1, 1982, shall be adjudicated on an expedited 
basis in accordance with the following procedures. The initial burden is 
upon the claimant, with the assistance of the district director, to 
develop evidence which meets the requirements of paragraph (c) of this 
section. Where the initial medical evidence appears to establish that 
death was due to pneumoconiosis, the survivor will receive benefits 
unless the weight of the evidence as subsequently developed by the 
Department or the responsible operator establishes that the miner's 
death was not due to pneumoconiosis as defined above. However, no such 
benefits shall be found payable before the party responsible for the 
payment of such benefits shall have had a reasonable opportunity for the 
development of rebuttal evidence. See Secs. 725.412-725.415 concerning 
the operator's opportunity to develop evidence prior to an initial 
determination and Secs. 718.307 and 718.403 on the burden of proof.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24288, May 31, 1983]



Sec. 718.206  Effect of findings by persons or agencies.

    Decisions, statements, reports, opinions, or the like, of agencies, 
organizations, physicians or other individuals, about the existence, 
cause, and extent of a miner's disability, or the cause of a miner's 
death, are admissible. If properly submitted, such evidence shall be 
considered and given the weight to which it is entitled as evidence 
under all the facts before the adjudication officer in the claim.



    Subpart D--Presumptions Applicable to Eligibility Determinations



Sec. 718.301  Establishing length of employment as a miner.

    (a) The presumptions set forth in Secs. 718.302, 718.303, 718.305 
and 718.306 apply only if a miner has been employed in one or more coal 
mines for specified periods. Regular employment may be established on 
the basis of any evidence presented, including the testimony of a 
claimant or other witnesses, and shall not be contingent upon a finding 
of a specific number of days of employment within a given period.
    (b) For the purposes of the presumptions described in this subpart, 
a year of employment means a period of one year, or partial periods 
totalling one year, during which the miner was regularly employed in or 
around a coal mine by the operator or other employer. A ``working day'' 
means any day or part of a day for which a miner received pay for work 
as a miner. If an operator or other employer proves that the miner was 
not employed in or around a coal mine for a period of at least 125 
working days during a year, such operator or other employer shall be 
determined to have established that the miner was not regularly employed 
for a year for the purposes of this section. If a miner worked in or 
around one or more coal mines for fewer than 125 days in a calendar 
year, he or she shall be credited with a fractional year based on the 
ratio of the actual number of days worked to 125. No periods of coal 
mine employment occurring outside the United States shall be credited

[[Page 732]]

toward the use of any presumption contained in this part.



Sec. 718.302  Relationship of pneumoconiosis to coal mine employment.

    If a miner who is suffering or suffered from pneumoconiosis was 
employed for ten years or more in one or more coal mines, there shall be 
a rebuttable presumption that the pneumoconiosis arose out of such 
employment. (See Sec. 718.203.)



Sec. 718.303  Death from a respirable disease.

    (a) If a deceased miner was employed for ten or more years in one or 
more coal mines and died from a respirable disease, there shall be a 
rebuttable presumption that his or her death was due to pneumoconiosis.
    (1) Under this presumption, death shall be found due to a respirable 
disease in any case in which the evidence establishes that death was due 
to multiple causes, including a respirable disease, and it is not 
medically feasible to distinguish which disease caused death or the 
extent to which the respirable disease contributed to the cause of 
death.
    (b) The presumption of paragraph (a) of this section may be rebutted 
by a showing that the deceased miner did not have pneumoconiosis, that 
his or her death was not due to pneumoconiosis or that pneumoconiosis 
did not contribute to his or her death.
    (c) This section is not applicable to any claim filed on or after 
January 1, 1982.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24288, May 31, 1983]



Sec. 718.304  Irrebuttable presumption of total disability or death due to pneumoconiosis.

    There is an irrebuttable presumption that a miner is totally 
disabled due to pneumoconiosis, that a miner's death was due to 
pneumoconiosis or that a miner was totally disabled due to 
pneumoconiosis at the time of death, if such miner is suffering or 
suffered from a chronic dust disease of the lung which:
    (a) When diagnosed by chest X-ray (see Sec. 718.202 concerning the 
standards for X-rays and the effect of interpretations of X-rays by 
physicians) yields one or more large opacities (greater than 1 
centimeter in diameter) and would be classified in Category A, B, or C 
in:
    (1) The ILO-U/C International Classification of Radiographs of the 
Pneumoconioses, 1971, or subsequent revisions thereto; or
    (2) The International Classification of the Radiographs of the 
Pneumoconioses of the International Labour Office, Extended 
Classification (1968) (which may be referred to as the ``ILO 
Classification (1968)''); or
    (3) The Classification of the Pneumoconioses of the Union 
Internationale Contra Cancer/Cincinnati (1968) (which may be referred to 
as the ``UICC/Cincinnati (1968) Classification''); or
    (b) When diagnosed by biopsy or autopsy, yields massive lesions in 
the lung; or
    (c) When diagnosed by means other than those specified in paragraphs 
(a) and (b) of this section, would be a condition which could reasonably 
be expected to yield the results described in paragraph (a) or (b) of 
this section had diagnosis been made as therein described: Provided, 
however, That any diagnosis made under this paragraph shall accord with 
acceptable medical procedures.



Sec. 718.305  Presumption of pneumoconiosis.

    (a) If a miner was employed for fifteen years or more in one or more 
underground coal mines, and if there is a chest X-ray submitted in 
connection with such miner's or his or her survivor's claim and it is 
interpreted as negative with respect to the requirements of 
Sec. 718.304, and if other evidence demonstrates the existence of a 
totally disabling respiratory or pulmonary impairment, then there shall 
be a rebuttable presumption that such miner is totally disabled due to 
pneumoconiosis, that such miner's death was due to pneumoconiosis, or 
that at the time of death such miner was totally disabled by 
pneumoconiosis. In the case of a living miner's claim, a spouse's 
affidavit or testimony may not be used by itself to establish the 
applicability of the presumption. The

[[Page 733]]

Secretary shall not apply all or a portion of the requirement of this 
paragraph that the miner work in an underground mine where it is 
determined that conditions of the miner's employment in a coal mine were 
substantially similar to conditions in an underground mine. The 
presumption may be rebutted only by establishing that the miner does 
not, or did not have pneumoconiosis, or that his or her respiratory or 
pulmonary impairment did not arise out of, or in connection with, 
employment in a coal mine.
    (b) In the case of a deceased miner, where there is no medical or 
other relevant evidence, affidavits of persons having knowledge of the 
miner's condition shall be considered to be sufficient to establish the 
existence of a totally disabling respiratory or pulmonary impairment for 
purposes of this section.
    (c) The determination of the existence of a totally disabling 
respiratory or pulmonary impairment, for purposes of applying the 
presumption described in this section, shall be made in accordance with 
Sec. 718.204.
    (d) Where the cause of death or total disability did not arise in 
whole or in part out of dust exposure in the miner's coal mine 
employment or the evidence establishes that the miner does not or did 
not have pneumoconiosis, the presumption will be considered rebutted. 
However, in no case shall the presumption be considered rebutted on the 
basis of evidence demonstrating the existence of a totally disabling 
obstructive respiratory or pulmonary disease of unknown origin.
    (e) This section is not applicable to any claim filed on or after 
January 1, 1982.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24288, May 31, 1983]



Sec. 718.306  Presumption of entitlement applicable to certain death claims.

    (a) In the case of a miner who died on or before March 1, 1978, who 
was employed for 25 or more years in one or more coal mines prior to 
June 30, 1971, the eligible survivors of such miner who claims have been 
filed prior to June 30, 1982, shall be entitled to the payment of 
benefits, unless it is established that at the time of death such miner 
was not partially or totally disabled due to pneumoconiosis. Eligible 
survivors shall, upon request, furnish such evidence as is available 
with respect to the health of the miner at the time of death, and the 
nature and duration of the miner's coal mine employment.
    (b) For the purpose of this section, a miner will be considered to 
have been ``partially disabled'' if he or she had reduced ability to 
engage in work as defined in Sec. 718.204(b).
    (c) In order to rebut this presumption the evidence must demonstrate 
that the miner's ability to perform work as defined in Sec. 718.204(b) 
was not reduced at the time of his or her death or that the miner did 
not have pneumoconiosis.
    (d) None of the following items, by itself, shall be sufficient to 
rebut the presumption:
    (1) Evidence that a deceased miner was employed in a coal mine at 
the time of death;
    (2) Evidence pertaining to a deceased miner's level of earnings 
prior to death;
    (3) A chest X-ray interpreted as negative for the existence of 
pneumoconiosis;
    (4) A death certificate which makes no mention of pneumoconiosis.
[45 FR 13678, Feb. 29, 1980, as amended at 48 FR 24289, May 31, 1983]



Sec. 718.307  Applicability of 33 U.S.C. 920(a).

    (a) Section 20(a) of the Longshoremen's and Harbor Workers' 
Compensation Act, 33 U.S.C. 920(a), provides that in any claim for 
benefits under the Longshoremen's Act it shall be presumed, in the 
absence of substantial evidence to the contrary, that the claim comes 
within the provisions of the Act. Section 422(a) of the Act incorporates 
such provision except as the Secretary provides by regulation.
    (b) Where one or more of the presumptions contained in 
Secs. 718.302-718.305 is or may be applicable to a claim, the provisions 
of section 20(a) of the Longshoremen's Act shall not apply to relieve a 
claimant from the burden of proving the facts necessary to give rise to 
the presumption, nor do the provisions of section 20(a) relieve a 
claimant

[[Page 734]]

of the burden of proving any element of the claim. See Sec. 718.403.



                   Subpart E--Miscellaneous Provisions



Sec. 718.401  Right to obtain evidence.

    Each miner who files a claim for benefits under the Act shall be 
provided an opportunity to substantiate his or her claim by means of a 
complete pulmonary evaluation. Accordingly, the Office shall assist each 
claimant in obtaining the evidence, including medical evidence, 
necessary for a complete adjudication of a claim. In the case of a 
miner's claim, initial medical tests and examinations shall be arranged 
for the miner by the Office, at no cost to the miner (See Secs. 725.405 
and 725.406 of this subchapter). If a conflict in medical evidence is 
determined to exist by the district director or if a miner is 
dissatisfied with the results of medical evidence obtained by the 
district director, additional medical evidence may be obtained by the 
miner or the district director, as provided in Sec. 725.407 of this 
subchapter.



Sec. 718.402  Failure to furnish required medical evidence.

    An individual shall not be determined entitled to benefits unless he 
or she furnishes such medical evidence as is reasonably required to 
establish his or her claim. A miner who unreasonably refuses (a) to 
provide the Office or a coal mine operator with a complete statement of 
his or her medical history and/or to authorize access to his or her 
medical records, or (b) to submit to an examination or test requested by 
the district director or a coal mine operator which may be liable for 
the payment of a claim, shall not be found eligible for benefits under 
this subchapter (See Secs. 725.408 and 725.414 of this subchapter).



Sec. 718.403  Burden of proof.

    Except as provided in this subchapter, the burden of proving a fact 
alleged in connection with any provision of this part shall rest with 
the party making such allegation.



Sec. 718.404  Cessation of entitlement.

    (a) An individual who has been finally adjudged to be totally 
disabled due to pneumoconiosis and is receiving benefits under the Act 
shall promptly notify the Office and the responsible coal mine operator, 
if any, if he or she engages in any work as defined in Sec. 718.204(c).
    (b) An individual who has been finally adjudged to be totally 
disabled due to pneumoconiosis shall, if requested to do so upon 
reasonable notice, where there is an issue pertaining to the validity of 
the original adjudication of disability, present himself or herself for, 
and submit to, examinations or tests as provided in Sec. 718.101, and 
shall submit medical reports and other evidence necessary for the 
purpose of determining whether such individual continues to be under a 
disability. Benefits shall cease as of the month in which the miner is 
determined to be no longer eligible for benefits.

Appendix A to Part 718--Standards for Administration and Interpretation 
                    of Chest Roentgenograms (X-rays)

    The following standards are established in accordance with sections 
402(f) (1) (D) and 413(b) of the Act. They were developed in 
consultation with the National Institute for Occupational Safety and 
Health. These standards are promulgated for the guidance of physicians 
and medical technicians to insure that uniform procedures are used in 
administering and interpreting X-rays and that the best available 
medical evidence will be submitted in connection with a claim for black 
lung benefits. If it is established that one or more standards have not 
been met, the claims adjudicator may consider such fact in determining 
the evidentiary weight to be assigned to the physician's report of an X-
ray.
    (1) Every chest roentgenogram shall be a single posteroanterior 
projection at full inspiration on a 14 by 17 inch film. Additional chest 
films or views shall be obtained if they are necessary for clarification 
and classification. The film and cassette shall be capable of being 
positioned both vertically and horizontally so that the chest 
roentgenogram will include both apices and costophrenic angles. If a 
miner is too large to permit the above requirements, then a projection 
with minimum loss of costophrenic angle shall be made.

[[Page 735]]

    (2) Miners shall be disrobed from the waist up at the time the 
roentgenogram is given. The facility shall provide a dressing area and, 
for those miners who wish to use one, the facility shall provide a clean 
gown. Facilities shall be heated to a comfortable temperature.
    (3) Roentgenograms shall be made only with a diagnostic X-ray 
machine having a rotating anode tube with a maximum of a 2 mm source 
(focal spot).
    (4) Except as provided in paragraph (5), roentgenograms shall be 
made with units having generators which comply with the following: (a) 
the generators of existing roentgenographic units acquired by the 
examining facility prior to July 27, 1973, shall have a minimum rating 
of 200 mA at 100 kVp; (b) generators of units acquired subsequent to 
that date shall have a minimum rating of 300 mA at 125 kVp.

    Note: A generator with a rating of 150 kVp is recommended.

    (5) Roentgenograms made with battery-powered mobile or portable 
equipment shall be made with units having a minimum rating of 100 mA at 
110 kVp at 500 Hz, or 200 mA at 110 kVp at 60 Hz.
    (6) Capacitor discharge, and field emission units may be used.
    (7) Roentgenograms shall be given only with equipment having a beam-
limiting device which does not cause large unexposed boundaries. The use 
of such a device shall be discernible from an examination of the 
roentgenogram.
    (8) To insure high quality chest roentgenograms:
    (i) The maximum exposure time shall not exceed \1/20\ of a second 
except that with single phase units with a rating less than 300 mA at 
125 kVp and subjects with chest over 28 cm postero-anterior, the 
exposure may be increased to not more than \1/10\ of a second;
    (ii) The source or focal spot to film distance shall be at least 6 
feet;
    (iii) Only medium-speed film and medium-speed intensifying screens 
shall be used;
    (iv) Film-screen contact shall be maintained and verified at 6-month 
or shorter intervals;
    (v) Intensifying screens shall be inspected at least once a month 
and cleaned when necessary by the method recommended by the 
manufacturer;
    (vi) All intensifying screens in a cassette shall be of the same 
type and made by the same manufacturer;
    (vii) When using over 90 kV, a suitable grid or other means of 
reducing scattered radiation shall be used;
    (viii) The geometry of the radiographic system shall insure that the 
central axis (ray) of the primary beam is perpendicular to the plane of 
the film surface and impinges on the center of the film.
    (9) Radiographic processing:
    (i) Either automatic or manual film processing is acceptable. A 
constant time-temperature technique shall be meticulously employed for 
manual processing.
    (ii) If mineral or other impurities in the processing water 
introduce difficulty in obtaining a high-quality roentgenogram, a 
suitable filter or purification system shall be used.
    (10) Before the miner is advised that the examination is concluded, 
the roentgenogram shall be processed and inspected and accepted for 
quality by the physician, or if the physician is not available, 
acceptance may be made by the radiologic technologist. In a case of a 
substandard roentgenogram, another shall be made immediately.
    (11) An electric power supply shall be used which complies with the 
voltage, current, and regulation specified by the manufacturer of the 
machine.
    (12) A densitometric test object may be required on each 
roentgenogram for an objective evaluation of film quality at the 
discretion of the Department of Labor.
    (13) Each roentgenogram made hereunder shall be permanently and 
legibly marked with the name and address of the facility at which it is 
made, the miner's DOL claim number, the date of the roentgenogram, and 
left and right side of film. No other identifying markings shall be 
recorded on the roentgenogram.

Appendix B to Part 718--Standards for Administration and Interpretation 
       of Pulmonary Function Tests. Tables B1, B2, B3, B4,  B5, B6

    The following standards are established in accordance with section 
402(f)(1)(D) of the Act. They were developed in consultation with the 
National Institute for Occupational Safety and Health (NIOSH). These 
standards are promulgated for the guidance of physicians and medical 
technicians to insure that uniform procedures are used in administering 
and interpreting ventilatory function tests and that the best available 
medical evidence will be submitted in support of a claim for black lung 
benefits. If it is established that one or more standards have not been 
met, the claims adjudicator may consider such fact in determining the 
evidentiary weight to be given to the results of the ventilatory 
function tests.
    (1) Instruments to be used for the administration of pulmonary 
function tests shall be approved by NIOSH and shall conform to the 
following criteria:
    (i) The instrument shall be accurate within plus-minus50 
ml or within plus-minus3 percent of reading, whichever is 
greater.

[[Page 736]]

    (ii) The instrument shall be capable of measuring vital capacity 
from 0 to 7 liters BTPS.
    (iii) The instrument shall have a low inertia and offer low 
resistance to airflow such that the resistance to airflow at 12 liters 
per second must be less than 1.5 cm H2 O/liter/sec.
    (iv) The zero time point for the purpose of timing the FEV1 
shall be determined by extrapolating the steepest portion of the volume-
time curve back to the maximal inspiration volume or by an equivalent 
method.
    (v) Instruments incorporating measurements of airflow to determine 
volume shall conform to the same volume accuracy stated in subparagraph 
(1)(i) of this Appendix B when presented with flow rates from at least 0 
to 12 liters per second.
    (vi) The instrument or user of the instrument must have a means of 
correcting volumes to body temperature saturated with water vapor (BTPS) 
under conditions of varying ambient spirometer temperatures and 
barometric pressures.
    (vii) The instrument used shall provide a tracing of either flow 
versus volume or volume versus time during the entire forced expiration 
and volume versus time during the MVV maneuver. A tracing is necessary 
to determine whether the patient has performed the test properly. The 
tracing must be of sufficient size that hand measurements may be made 
within the requirement of subparagraph (1)(i) of this Appendix B. If a 
paper record is made it must have a paper speed of at least 2 cm/sec and 
a volume sensitivity of at least 10.0 mm of chart per liter of volume. 
The recorder tracing must display the entire FVC maneuver at a constant 
speed for at least 10 seconds after the onset of exhalation. This 
constant speed must be reached prior to the onset of exhalation.
    (viii) The instrument shall be capable of accumulating volume for a 
minimum of 10 seconds after the onset of exhalation.
    (ix) The forced expiratory volume in 1 sec (FEV1) 
measurement shall comply with the accuracy requirements stated in 
subparagraph (1)(i) of this Appendix B. That is, they shall be 
accurately measured to within plus-minus50 ml or with 
plus-minus3 percent of reading, whichever is greater.
    (x) The instrument must be capable of being calibrated in the field 
with respect to the FEV1. This calibration of the FEV1 
may be done either directly or indirectly through volume and time base 
measurements. The volume calibration source shall provide a volume 
displacement of at least 3 liters and shall be accurate to within 
plus-minus30 ml.
    (xi) For measuring maximum voluntary ventilation (MVV) the 
instrument shall have a response which is flat within 
plus-minus10 percent up to 4 Hz at flow rates up to 12 liters 
per second over the volume range. The time for exhaled volume 
integration or recording shall be no less than 12 sec. and no more than 
15 sec. The indicated time shall be accurate to within 
plus-minus3 percent.
    A recording of the spirometer tracing is required, and the volume 
sensitivity shall be such that 10 mm or more deflection corresponds to 1 
liter volume.
    (2) The administration of pulmonary function tests shall conform to 
the following criteria:
    (i) Tests shall not be performed during or soon after an acute 
respiratory illness.
    (ii) For the FEV1 and FVC, use of a nose clip is 
required. The procedures shall be explained in simple terms to the 
patient who shall be instructed to loosen any tight clothing and stand 
in front of the apparatus. The subject may sit, or stand, but care 
should be taken on repeat testing that the same position be used. 
Particular attention shall be given to insure that the chin is slightly 
elevated with the neck slightly extended. The patient shall be 
instructed to make a full inspiration, either from the spirometer or the 
open atmosphere, using a normal breathing pattern and then blow into the 
apparatus, without interruption, as hard, fast, and completely as 
possible. At least three forced expirations shall be carried out. During 
the maneuvers, the patient shall be observed for compliance with 
instructions. The expirations shall be checked visually for 
reproducibility from the flow-volume or volume-time tracings. The effort 
shall be judged unacceptable when the patient:
    (A) Has not reached full inspiration preceding the forced 
expiration; or
    (B) Has not used maximal effort during the entire forced expiration; 
or
    (C) Has not continued the expiration for least 5 sec. or until an 
obvious plateau in the volume-time curve has occurred; or
    (D) Has coughed or closed his glottis; or
    (E) Has an obstructed mouthpiece or a leak around the mouthpiece 
(obstruction due to tongue being placed in front of mouthpiece, false 
teeth falling in front of mouthpiece, etc.); or
    (F) Has an unsatisfactory start of expiration, one characterized by 
excessive hesitation (or false starts), and therefore not allowing back 
extrapolation of time 0 (extrapolated volume on the volume-time tracing 
must be less than 10 percent of the FVC); or
    (G) Has an excessive variability between the three acceptable 
curves. The variation between the two largest FEV1's of the 
three acceptable tracings should not exceed 5 percent of the largest 
FEV1 or 100 ml, whichever is greater.
    (iii) For the MVV, the subject shall be instructed before beginning 
the test that he or she will be asked to breathe as deeply and as 
rapidly as possible for approximately 15 seconds.
    The test shall be performed with the subject in the standing 
position, if possible.

[[Page 737]]

Care shall be taken on repeat testing that the same position be used. 
The subject shall breathe normally into the mouthpiece of the apparatus 
for 10 to 15 seconds to become accustomed to the system. The subject 
shall then be instructed to breathe as deeply and as rapidly as 
possible, and shall be continually encouraged during the remainder of 
the maneuver. Subject shall continue the maneuver for 15 seconds. At 
least 5 minutes of rest shall be allowed between maneuvers. At least 
three MVV's shall be carried out. (But see Sec. 718.103(b).) During the 
maneuvers the patient shall be observed for compliance with 
instructions. The effort shall be judged unacceptable when the patient:
    (A) Has not maintained consistent effort for at least 12 to 15 
seconds; or
    (B) Has coughed or closed his glottis; or
    (C) Has an obstructed mouthpiece or a leak around the mouthpiece 
(obstruction due to tongue being placed in front of mouthpiece, false 
teeth falling in front of mouthpiece, etc.); or
    (D) Has an excessive variability between the three acceptable 
curves. The variation between the two largest MVV's of the three 
satisfactory tracings shall not exceed 10 percent.
    (iv) A calibration check shall be performed on the instrument each 
day before use, using a volume source of at least three liters, accurate 
to within plus-minus1 percent of full scale. The room air in 
the syringe is introduced into the spirometer once with a flow rate of 
approximately 0.5 liters per second (six seconds emptying time with a 3-
liter syringe) and once with a higher flow rate of approximately 3.0 
liters per second (one second emptying time with a 3-liter syringe). The 
volume measured by the spirometer shall be between 2.90 and 3.10 liters 
for both trials. Accuracy of the time measurement used in determining 
the FEV1 shall be checked using the manufacturer's stated 
procedure and shall be within plus-minus3 percent of actual. 
The procedure described herein shall be performed as well as any other 
procedures suggested by the manufacturer of the spirometer being used.
    (v)(A) The first step in evaluating a spirogram for the FEV1 
shall be to determine whether or not the patient has performed the test 
properly or as described in (2)(ii) above. From the three satisfactory 
tracings, the forced expiratory volume in one second (FEV1) 
shall be measured and recorded. The largest observed FEV1 
shall be used in the analysis, corrected to BPTS.
    (B) Only MVV maneuvers which demonstrate consistent effort for at 
least 12 seconds shall be considered acceptable. The largest accumulated 
volume for a 12 second period corrected to BPTS and multiplied by five 
is to be reported as the MVV.

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                Appendix C to Part 718--Blood-Gas Tables

    The following tables set forth the values to be applied in 
determining whether total disability may be established in accordance 
with Secs. 718.204(c)(2) and 718.305 (a), (c). The values contained in 
the tables are indicative of impairment only. They do not establish a 
degree of disability except as provided in Secs. 718.204(c)(2) and 
718.305 (a), (c) of this subchapter, nor do they establish standards for 
determining normal alveolar gas exchange values for any particular 
individual.
    A miner who meets the following medical specifications shall be 
found to be totally disabled, in the absence of rebutting evidence, if 
the values specified in one of the following tables are met:
    (1) For arterial blood-gas studies performed at test sites up to 
2,999 feet above sea level:

[[Page 750]]



                                                                        
------------------------------------------------------------------------
                                                               Arterial 
                                                               pO2 equal
                    Arterial pCO2 (mm Hg)                     to or less
                                                               than (mm 
                                                                  Hg)   
------------------------------------------------------------------------
25 or below.................................................          75
26..........................................................          74
27..........................................................          73
28..........................................................          72
29..........................................................          71
30..........................................................          70
31..........................................................          69
32..........................................................          68
33..........................................................          67
34..........................................................          66
35..........................................................          65
36..........................................................          64
37..........................................................          63
38..........................................................          62
39..........................................................          61
40-49.......................................................          60
Above 50....................................................       (\1\)
------------------------------------------------------------------------
\1\ Any value.                                                          

    (2) For arterial blood-gas studies performed at test sites 3,000 to 
5,999 feet above sea level:

                                                                        
------------------------------------------------------------------------
                                                               Arterial 
                                                               pO2 equal
                    Arterial pCO2 (mm Hg)                     to or less
                                                               than (mm 
                                                                  Hg)   
------------------------------------------------------------------------
25 or below.................................................          70
26..........................................................          69
27..........................................................          68
28..........................................................          67
29..........................................................          66
30..........................................................          65
31..........................................................          64
32..........................................................          63
33..........................................................          62
34..........................................................          61
35..........................................................          60
36..........................................................          59
37..........................................................          58
38..........................................................          57
39..........................................................          56
40-49.......................................................          55
Above 50....................................................       (\2\)
------------------------------------------------------------------------
\2\ Any value.                                                          

    (3) For arterial blood-gas studies performed at test sites 6,000 
feet or more above sea level:

                                                                        
------------------------------------------------------------------------
                                                               Arterial 
                                                               pO2 equal
                    Arterial pCO2 (mm Hg)                     to or less
                                                               than (mm 
                                                                  Hg)   
------------------------------------------------------------------------
25 or below.................................................          65
26..........................................................          64
27..........................................................          63
28..........................................................          62
29..........................................................          61
30..........................................................          60
31..........................................................          59
32..........................................................          58
33..........................................................          57
34..........................................................          56
35..........................................................          55
36..........................................................          54
37..........................................................          53
38..........................................................          52
39..........................................................          51
40-49.......................................................          50
Above 50....................................................       (\3\)
------------------------------------------------------------------------
\3\ Any value.                                                          



PART 722--CRITERIA FOR DETERMINING WHETHER STATE WORKMEN'S COMPENSATION LAWS PROVIDE ADEQUATE COVERAGE FOR PNEUMOCONIOSIS AND LISTING OF APPROVED STATE LAWS--Table of Contents




                              Introductory

Sec.
722.101  Purpose and scope of this part.
722.102  Definitions and use of terms.

Procedure for Determining Whether a State Law Provides Adequate Coverage 
                           for Pneumoconiosis

722.103  Application to the Secretary.
722.104  Contents of application, supporting documents.
722.105  Initial action on the request.

              Criteria: Standards of Coverage, Eligibility

722.110  Coverage generally.
722.111  Miner.
722.112  Widow, surviving divorced wife.
722.113  Child.
722.114  Parents, brothers, or sisters.

                      Criteria: Claims for Benefits

722.115  Claims generally.
722.116  Time limitations on filing claims.

   Criteria: Medical Standards for Determining Whether Miner's Total 
              Disability or Death Was Due to Pneumoconiosis

722.117  Medical criteria--generally.
722.118  Medical evidence.
722.119  Medical presumptions.
722.120  Total disability determination.
722.121  Cause of death.

                   Criteria: Administrative Standards

722.122  Administrative standards--generally.
722.123  Cessation of payment of benefits.
722.124  Regulation of fees for legal services.

         Criteria: Guarantee of Benefits to Eligible Individuals

722.126  Guarantee of benefits--generally.

[[Page 751]]

722.127  Voluntary and elective compensation systems.
722.128  Responsible coal mine operators.
722.129  Insurance, self insurance.
722.130  State protections of benefits.
722.131  Contributions by miners.
722.132  Waiver of right to benefits.
722.133  Retroactive coverage required.
722.134  Residency requirements.

             Criteria: Amount of Benefits: Medical Benefits

722.135  Amount of benefits, computation.
722.136  Augmented benefits.
722.137  Minimum benefit amounts.
722.138  Offsets for Federal benefits prohibited.
722.139  Lump sum awards; settlement.
722.140  Protection of benefits.
722.141  Payment periods.
722.142  Prompt payment of benefits.
722.143  Medical benefits.
722.144  Medical examinations, reexaminations.
722.145  Vocational rehabilitation.

                         Action by the Secretary

722.146  Standards for review of a State workmen's compensation law.
722.147  Action subsequent to review.
722.148  Provisional approval.
722.149  Judicial review.
722.150  Reports.
722.151  Removal from the Secretary's list.
722.152  The Secretary's list.

    Authority:  5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 902(f), 925, 932, 934, 936, 945; 33 U.S.C. 
901 et seq., Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.

    Source:  38 FR 8328, Mar. 30, 1973, unless otherwise noted.

                              Introductory



Sec. 722.101  Purpose and scope of this part.

    Section 421 of part C of title IV of the Federal Coal Mine Health 
and Safety Act, as amended, provides that on and after January 1, 1974, 
any claim for benefits for death or total disability due to 
pneumoconiosis shall be filed pursuant to the applicable State workmen's 
compensation law, except that during any period when miners or their 
eligible surviving dependents are not covered by a State workmen's 
compensation law which provides adequate coverage for pneumoconiosis, 
such persons shall be entitled to claim benefits under section 422 and 
related provisions of part C of title IV of such Act. Section 421(b)(1) 
in part C of title IV of the Federal Coal Mine Health and Safety Act, as 
amended, provides that a State workmen's compensation law shall not be 
deemed to provide adequate coverage for pneumoconiosis during any period 
unless it is included in the list of State laws (see Sec. 722.152) found 
by the Secretary of Labor to provide adequate coverage for 
pneumoconiosis during such period. Section 421(b)(2) of such Act 
provides that no State workmen's compensation law shall be included on 
such list during any period unless such law is consistent with each of 
the criteria mandated by paragraphs A through E of section 421(b)(2) of 
the Act, as amended, and that there are certain other provisions, 
regulations, or interpretations which are consistent with the 
Longshoremen's and Harbor Workers' Compensation Act, as amended (44 
Stat. 1424, 86 Stat. 1251, 33 U.S.C. 901 et seq.), as described in this 
part. This part 722 is designed to assure that any State law which 
appears on the list herein described shall provide appropriate claimants 
with adequate benefits for total disability or death due to 
pneumoconiosis. The purpose of this part is to describe the procedures 
by which the Secretary shall determine whether any State workmen's 
compensation law does, in fact, provide adequate coverage for death or 
disability due to pneumoconiosis and further describes with 
particularity the standards and criteria to be applied by the Secretary 
in making such determination.



Sec. 722.102  Definitions and use of terms.

    (a) For purposes of this part except where the content clearly 
indicates otherwise, the following definitions apply:
    (1) Act means title IV of the Federal Coal Mine Health and Safety 
Act of 1969, 83 Stat. 795 (30 U.S.C. 901 et seq.), as amended by Pub. L. 
92-302, 86 Stat. 156, the Black Lung Benefits Act of 1972.
    (2) Longshoremen's Act means the Longshoremen's and Harbor Workers' 
Compensation Act (44 Stat. 1424, 86 Stat. 1251 (33 U.S.C. 901 et seq.)), 
as amended by Pub. L. 92-576, 86 Stat. 1251.

[[Page 752]]

    (3) Social Security Act means the Social Security Act (49 Stat. 620 
(42 U.S.C. 301 et seq.)), as amended from time to time.
    (4) Department means the Department of Labor.
    (5) Secretary means the Secretary of Labor or a person authorized by 
him to perform his functions under section 421 of the Act.
    (6) State includes a State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American 
Samoa, Guam, and the Trust Territory of the Pacific Islands.
    (7) Workmen's compensation law means the law or laws of a State 
providing for payment of compensation by employers to employees (and 
their dependents or survivors) for injury including occupational 
disease, or death suffered in connection with the employment.
    (8) State agency means, with respect to any State, the agency, 
department, or officer designated by the workmen's compensation law of 
the State to administer such law. In any case in which more than one 
agency participates in the administration of a State workmen's 
compensation law, the Governor may designate which of such agencies 
shall be the State agency for purposes of this part.
    (9) The Secretary's list means the list published by the Secretary 
of Labor in the Federal Register (see Sec. 722.152) containing the names 
of those States which have in effect a workmen's compensation law which 
provides adequate coverage for death or total disability due to 
pneumoconiosis.
    (10) Pneumoconiosis means coal workers' pneumoconiosis as defined in 
section 402(b) of the Act.
    (b) Masculine gender includes the feminine, and the singular 
includes the plural.
    (c) No definition contained in this part shall be deemed to derogate 
from the meaning of any term defined in the Act or any term elsewhere 
defined in this subchapter B with respect thereto.

Procedure for Determining Whether a State Law Provides Adequate Coverage 
                           for Pneumoconiosis



Sec. 722.103  Application to the Secretary.

    The Governor of any State or any duly authorized State agency may, 
at any time after the effective date of this revised part 722, request 
that the Secretary include such State's workmen's compensation law on 
his list of those State workmen's compensation laws providing adequate 
coverage for total disability and death due to pneumoconiosis.



Sec. 722.104  Contents of application, supporting documents.

    Each request that a State be included on the Secretary's list shall 
be in writing and shall be accompanied by the following documents and 
information:
    (a) A copy of the State workmen's compensation law and any other 
pertinent State laws;
    (b) A copy of any regulations either proposed or promulgated in 
final form with respect to the administration of the State law or laws 
submitted;
    (c) A copy of any administrative or court decision interpreting 
State laws or regulations so as to bring such laws or regulations in 
compliance with the standards set forth in this part. If such decisions 
are published and reported in official or privately published reporter 
systems or in some other readily available case reporter, it shall be 
permissible to refer to such decision by its appropriate citation in 
such case reporter; and
    (d) Each request shall be accompanied by a written analysis 
completed by a duly authorized State official describing by citation, 
explanation, or with reference to the decisional law of the State, the 
appropriate provision or provisions of such State's workmen's 
compensation law which bring it in compliance with each standard 
prescribed in this part 722.



Sec. 722.105  Initial action on the request.

    Upon receipt by the Secretary of a request that a State be included 
on the Secretary's list, action shall be taken

[[Page 753]]

to review such request. Each State law submitted shall be reviewed in 
light of the specific standards and criteria set forth below.

              Criteria: Standards of Coverage, Eligibility



Sec. 722.110  Coverage generally.

    The following Secs. 722.111-722.114 describe the individuals who are 
eligible to claim benefits for total disability or death due to 
pneumoconiosis under the Act. In order that a State workmen's 
compensation law be deemed by the Secretary to provide adequate coverage 
for total disability or death due to pneumoconiosis, such State law 
shall insure that such individuals shall be entitled to receive benefits 
under conditions in accordance with those described below.



Sec. 722.111  Miner.

    (a) An individual shall be entitled to receive benefits for total 
disability due to pneumoconiosis if he is a miner as defined in this 
section and if such individual is totally disabled due to pneumoconiosis 
(see Secs. 722.117-722.120).
    (b) Such individual shall be entitled to receive benefits until his 
death or until such disability ceases.
    (c) For purposes of this part an individual is a miner if he is or 
was employed in a coal mine.
    (d) For purposes of this part, ``Coal mine'' means an area of land 
and all structures, facilities, machinery, tools, equipment, shafts, 
slopes, tunnels, excavations, and other property, real or personal, 
placed upon, under, or above the surface of such land by any person, 
used in, or to be used in, or resulting from the work of extracting in 
such area bituminous coal, lignite, or anthracite, from its natural 
deposits in the earth by any means or method, and the work of preparing 
the coal so extracted, and includes custom coal preparation facilities.
    (e) Any State workmen's compensation law which does not separately 
define miner or coal miner shall be deemed adequate for purposes of this 
section if such law contains a definition or use of the terms employee, 
worker, or any other related term which is sufficiently broad to 
encompass all individuals contemplated by the term miner as defined in 
this section.



Sec. 722.112  Widow, surviving divorced wife.

    (a) An individual shall be entitled to claim for and receive 
benefits as the widow or surviving divorced wife of a deceased miner if:
    (1) Such individual is not married and is the ``widow'' of such 
miner as defined in section 402(e) of the Act; and
    (2) Such miner's death or total disability at time of death was due 
to pneumoconiosis (which, for purposes of the Act, includes any death of 
a miner who was totally disabled by pneumoconiosis or was receiving 
benefits for such disability at the time of his death).
    (b) A widow or surviving divorced wife shall be entitled to receive 
benefits until she remarries, or dies, or her entitlement otherwise 
ceases.



Sec. 722.113  Child.

    (a) An individual shall be entitled to claim for and receive 
benefits if:
    (1) Such individual is a child, as defined in section 402(g) of the 
Act (including a stepchild) of a deceased miner or of the widow of a 
miner; and if
    (2) Such individual was dependent upon the deceased miner or widow 
for his support; and if
    (3) Such deceased parent,
    (i) If a miner, was receiving pneumoconiosis benefits at the time of 
his death, or his death was due to pneumoconiosis, or at the time of his 
death was totally disabled by pneumoconiosis; or
    (ii) If a widow, was receiving pneumoconiosis benefits at the time 
of her death.
    (b) A child or stepchild shall be entitled to receive benefits until 
one of the following events first occurs:
    (1) The child dies;
    (2) The child marries;
    (3) The child attains age 18, unless
    (i) He is a ``full time'' student as defined in section 202(a)(7) of 
the Social Security Act, or a ``student'' as defined in section 8101(7) 
of title 5, United States Code, in which case such child's

[[Page 754]]

or stepchild's eligibility is extended until he reaches age 23; or 
unless
    (ii) He is under a disability as defined in section 223(d) of the 
Social Security Act and such disability began before he attained age 18 
(see 202(d)(1)(B)(ii) of the Social Security Act).
    (c) A child or stepchild is not entitled to claim benefits for any 
month for which a widow of a miner establishes entitlement to benefits.



Sec. 722.114  Parents, brothers, or sisters.

    (a) An individual shall be entitled to claim for and receive 
benefits if:
    (1) Such individual is the parent, brother, or sister of a deceased 
miner; and if
    (2) Such individual, for not less than 1 year prior to the miner's 
death, was living in the same household as the miner and was totally 
dependent on the miner for support; and if
    (3) The deceased miner was entitled to benefits at the time of his 
death, or his death is determined to have been due to pneumoconiosis, or 
at the time of his death was totally disabled by pneumoconiosis; and,
    (4) In the case of a parent, if the deceased miner was not survived 
by a widow or child at the time of his death; and,
    (5) In the case of a brother or sister, if the deceased miner was 
not survived by a widow, child or parent at the time of his death; and,
    (6) In the case of a brother, he also is under 18 years of age 
unless he is a full-time student or under a disability as described in 
Sec. 722.113(b)(3) in which case his eligibility shall be extended as is 
appropriate.
    (b) No benefits to a sister or brother shall be payable for any 
month beginning with the month in which he or she receives support from 
his or her spouse, or marries.
    (c) The individuals described in this section shall be eligible to 
claim for or receive benefits until such time as the requirements for 
eligibility cease.

                      Criteria: Claims for Benefits



Sec. 722.115  Claims generally.

    In order to assure that a State workmen's compensation law will 
provide adequate coverage for total disability or death due to 
pneumoconiosis, such law shall contain or shall be implemented by 
available rules and regulations which establish a comprehensive and 
viable scheme for the filing and processing of claims. If filing and 
processing procedures in any State are substantially informal, such 
State shall include in its application to be included on the Secretary's 
list, a full description of such State's filing and processing 
procedures, copies of any material disseminated to individuals to assist 
them in pursuing a claim, and a full description, including exemplary 
cases, of the time periods required by such State to fully process such 
claims. No State workmen's compensation law shall be included on the 
Secretary's list if it appears that any class of claimants shall be 
subject to inordinate delays, unnecessarily protracted proceedings, 
unnecessarily difficult requirements of proof, or other unwarranted 
difficulties in the pursuit of a claim.



Sec. 722.116  Time limitations on filing claims.

    (a) No State workmen's compensation law shall be deemed to provide 
adequate coverage for total disability or death due to pneumoconiosis 
unless the determination of claims filed pursuant to it shall be 
permitted:
    (1) In the case of claims for disability benefits, if filed within 3 
years of the date of the discovery of total disability due to 
pneumoconiosis; or
    (2) In the case of claims for death benefits, if filed within 3 
years of the date of such death;
    (3) And in the case of any claim for benefits predicated upon the 
presumption contained in section 411(c)(4) of part B of title IV of the 
Act (see Sec. 722.119);
    (i) If in the case of total disability due to pneumoconiosis it is 
filed within 3 years from the date of last exposed employment in a coal 
mine; or
    (ii) If in the case of death from a respiratory or pulmonary 
impairment for which benefits would be payable under section 411(c)(4) 
of the Act, incurred as a result of employment in a coal mine, it is 
filed within 15 years from the date of last exposed employment in a coal 
mine.

[[Page 755]]

    (b) Any State workmen's compensation law which provides longer 
periods for filing a claim subsequent to the events specified in this 
section shall be deemed to have met the requirements described herein. 
Any State workmen's compensation law which provides shorter time 
limitations on filing a claim, or which commences the period for filing 
a claim beginning with an event which is more restrictive than those 
specified in this section, shall be deemed not to have met the 
requirements of this section.

   Criteria: Medical Standards for Determining Whether Miner's Total 
              Disability or Death Was Due to Pneumoconiosis



Sec. 722.117  Medical criteria--generally.

    Section 402(f) of the Act authorizes the Secretary of Health, 
Education, and Welfare to establish and promulgate standards and medical 
criteria for determining whether a miner is totally disabled due to 
pneumoconiosis, whether a miner's death was due to pneumoconiosis, and 
whether a miner was totally disabled by pneumoconiosis at the time of 
his death. Section 421(b)(2)(C) of the Act requires that in order for a 
State to be included on the Secretary's list, such State must promulgate 
standards for determining death or total disability due to 
pneumoconiosis which are substantially equivalent to those promulgated 
by the Secretary of Health, Education, and Welfare (see 20 CFR part 410, 
subpart D) and adopted pursuant to sections 415(a) and 422(c) of the Act 
by the Secretary of Labor in respect of claims filed subsequent to June 
30, 1973 (see 20 CFR part 718). Therefore, no State shall be included on 
the Secretary's list if it does not by statute or published formal rules 
and regulations provide standards which are substantially equivalent to 
or less restrictive than those standards published by the Secretary of 
Health, Education, and Welfare in subpart D of 20 CFR part 410 as 
amended on September 30, 1972 (37 FR 20641-20645).



Sec. 722.118  Medical evidence.

    No State workmen's compensation law shall be included on the 
Secretary's list unless such law or regulations promulgated thereunder 
provide that no claim shall be denied solely on the basis of a chest 
roentgenogram and, that in determining the validity of claims all 
evidence shall be considered, including, where relevant, medical tests 
such as blood gas studies, X-ray examination, electrocardiogram, 
pulmonary function studies, or physical performance tests, and any 
medical history, evidence pertaining to future employability, evidence 
submitted by a miner's physician, or a miner's wife's affidavits, and in 
the case of a deceased miner, autopsy, biopsy, or other appropriate 
affidavits of persons with knowledge of the miner's physical condition, 
and any other supportive materials.



Sec. 722.119  Medical presumptions.

    Section 411(c) of part B of title IV of the Act establishes a series 
of presumptions which shall be available to claimants for purposes of 
determining whether a miner's death or total disability was due to 
pneumoconiosis. No State workmen's compensation law shall be included on 
the Secretary's list if it does not provide or if regulations 
promulgated pursuant to such State law do not make available to 
claimants presumptions which are equivalent to or less restrictive than 
those presumptions contained in section 411(c) of the Act as set forth 
below:
    (a) If a miner who is suffering or suffered from pneumoconiosis was 
employed for 10 years or more in one or more coal mines, there shall be 
a rebuttable presumption that his pneumoconiosis arose out of such 
employment;
    (b) If a deceased miner was employed for 10 years or more in one or 
more coal mines and died from a respirable disease, there shall be a 
rebuttable presumption that his death was due to pneumoconiosis;
    (c) If a miner is suffering or suffered from a chronic dust disease 
of the lung which (1) when diagnosed by chest roentgenogram, yields one 
or more large opacities (greater than one centimeter in diameter) and 
would be classified in category A, B, or C in the International 
Classification of Radiographs of the Pneumoconioses by the International 
Labor Organization, (2) when

[[Page 756]]

diagnosed by biopsy or autopsy, yields massive lesions in the lungs, or 
(3) when diagnosis is made by other means, would be a condition which 
could reasonably be expected to yield results described in paragraph (c) 
(1) or (2) of this section if diagnosis had been made in the manner 
prescribed in paragraph (c) (1) or (2) of this section, then there shall 
be an irrebuttable presumption that he is totally disabled due to 
pneumoconiosis or that his death was due to pneumoconiosis, or that at 
the time of his death he was totally disabled by pneumoconiosis, as the 
case may be; and
    (d) If a miner was employed for 15 years or more before July 1, 
1971, in one or more underground coal mines, and if there is a chest 
roentgenogram submitted in connection with such miner's, his widow's, 
his child's, his parent's, his brother's, his sister's, or his 
dependent's claim and it is interpreted as negative with respect to the 
requirements of paragraph (c) of this section, and if other evidence 
demonstrates the existence of a totally disabling respiratory or 
pulmonary impairment, then there shall be a rebuttable presumption that 
such miner is totally disabled due to pneumoconiosis, that his death was 
due to pneumoconiosis, or that at the time of his death he was totally 
disabled by pneumoconiosis. In the case of a living miner, a wife's 
affidavit may not be used by itself to establish the presumption. A 
State shall not apply all or a portion of the requirement of this 
paragraph that the miner work in an underground mine where it determines 
that conditions of a miner's employment in a coal mine other than an 
underground mine were substantially similar to conditions in an 
underground mine. Such presumption may be rebutted only by establishing 
that (1) such miner does not, or did not, have pneumoconiosis, or that 
(2) his respiratory or pulmonary impairment did not arise out of, or in 
connection with, employment in a coal mine.



Sec. 722.120  Total disability determination.

    The Act requires that benefits be paid for total disability of a 
miner if pneumoconiosis prevents him from engaging in gainful employment 
requiring the skills and abilities comparable to those of any employment 
in a mine or mines in which he previously engaged with some regularity 
and over a substantial period of time. No State workmen's compensation 
law shall be included on the Secretary's list if such law prohibits a 
finding that a miner is totally disabled solely on the basis of his 
ability to engage in gainful noncoal mine related employment, except 
that in cases where a miner engaged in noncoal mine related employment 
utilizes skills comparable to those required in his coal mine 
employment, it may be found that such miner is not entitled to benefits 
for total disability due to pneumoconiosis.



Sec. 722.121  Cause of death.

    Section 421 of the Act requires the Secretary to find, before 
including a State workmen's compensation law in his listing of laws 
which provide adequate coverage for pneumoconiosis, that such law 
assures payment of benefits for total disability or death of a miner, 
determined under standards substantially equivalent to those established 
under part B of title IV of the Act, in all cases where either such 
total disability or such death was due to pneumoconiosis. Accordingly, 
in the case of death benefits, such benefits must be paid whether the 
miner's death or his total disability at the time of death was due to 
pneumoconiosis. Thus, sections 401 and 430 of the Act require that 
benefits be paid (a) for death due to pneumoconiosis and (b) for death 
due to any cause if the miner was totally disabled by pneumoconiosis at 
the time of his death. No State workmen's compensation law shall be 
included on the Secretary's list unless it contains a provision or 
provisions equivalent to those described in this section.

                   Criteria: Administrative Standards



Sec. 722.122  Administrative standards--generally.

    In order to insure that each claimant for pneumoconiosis benefits 
under a State workmen's compensation law be afforded full due process of 
law, including notice and opportunity to be heard

[[Page 757]]

on all matters materially affecting such claimant's claim, no State 
workmen's compensation law shall be included on the Secretary's list 
unless it provides, or regulations promulgated pursuant to such law 
provide (a) that a claimant in a contested case shall have a right to a 
full adversary hearing to resolve contested issues of fact or law, (b) 
that a claimant shall be notified of and shall have a means of legal 
recourse by right in the event that any adverse action is taken in 
respect of his claim, and (c) that a claimant shall in appropriate cases 
be entitled to have his claim finally adjudicated by an appellate court 
of the State.



Sec. 722.123  Cessation of payment of benefits.

    No State workmen's compensation law shall be included on the 
Secretary's list unless such law provides, or regulations promulgated 
pursuant to such law provide, that in the event the payment of benefits 
to any beneficiary is terminated or suspended for any reason, such 
beneficiary shall be given prior notice thereof and shall have an 
opportunity to be heard in a formal proceeding before an appropriate 
adjudication officer of the State in respect of such suspension or 
termination, and that such investigations, including medical 
examination, shall be undertaken as will properly protect the rights of 
all parties.



Sec. 722.124  Regulation of fees for legal services.

    Unrestricted fees for legal services incurred by a claimant in the 
pursuit of a claim undermine the intent of Congress expressed in the 
enactment of title IV of the Act. Section 28 (33 U.S.C. 928) of the 
Longshoremen's Act, as incorporated by section 422(a) of the Act, 
requires the Secretary to exercise reasonable control over professional 
fees for services incurred by a claimant in the pursuit of a claim. 
Accordingly, no State workmen's compensation law shall be included on 
the Secretary's list if such law permits unrestricted or unreasonable 
fees for services rendered in the pursuit of a claim to be charged to a 
claimant.

         Criteria: Guarantee of Benefits to Eligible Individuals



Sec. 722.126  Guarantee of benefits--generally.

    It is the intent of the Act to insure that every eligible individual 
who has proven his entitlement to benefits for total disability or death 
due to pneumoconiosis shall be guaranteed such benefits whether or not 
there is in existence an employer, coal mine operator, or insurance 
carrier who is or may be adjudicated liable for the payment of such 
benefits. No State workmen's compensation law shall be included on the 
Secretary's list unless such law explicitly provides that every claimant 
who is, based upon the medical evidence and the evidence of such 
claimant's identity as a miner or eligible relation or dependent, 
entitled to receive benefits for total disability or death due to 
pneumoconiosis shall be paid such benefits either by a responsible coal 
mine operator or employer or such operator or employer's insurance 
carrier, or by the State from its general revenue or whatever funds are 
available for such purposes. A State must bear the ultimate liability 
for the payment of benefits to an entitled individual in all cases where 
no other source of benefits is available to such claimant.



Sec. 722.127  Voluntary and elective compensation systems.

    A State workmen's compensation law may be included on the 
Secretary's list, notwithstanding the fact that such law permits 
voluntary or elective participation by an employer or coal mine operator 
in any program to insure the payment of benefits for total disability or 
death due to pneumoconiosis: Provided, That there is in effect in such 
State an alternative system to guarantee that all benefits including 
medical benefits shall be paid.



Sec. 722.128  Responsible coal mine operators.

    Sections 421 and 422 of part C of title IV as well as the 
legislative history of the Act, indicate that Congress intended the coal 
mine operators in the several States to bear as fully as possible the 
liability for the payment of

[[Page 758]]

pneumoconiosis benefits. In accordance with this intent Congress in 
section 421(b)(2)(E) of the Act has required that no State workmen's 
compensation law shall be included on the Secretary's list, unless such 
law provides that a coal mine operator who acquired his or its mine or 
substantially all of the assets thereof from a person (hereinafter 
referred to in this section as a ``prior operator'') who was an operator 
of such mine on or after December 30, 1969, shall be liable for and 
shall secure the payment of all benefits which would have been payable 
by the prior operator with respect to miners previously employed in such 
mine if the acquisition had not occurred and the prior operator had 
continued to operate such mine, and further that such prior operator 
shall not be relieved of his or its liability for the payment of 
pneumoconiosis benefits in the event that his successor to such mine is 
for any reason unable to discharge his liability (see section 422(i) of 
the Act).



Sec. 722.129  Insurance, self insurance.

    (a) A State workmen's compensation law may, in appropriate 
circumstances, be excluded from the Secretary's list if such law permits 
coal mine operators or employers to obtain commercial contracts of 
insurance to guarantee the payment of pneumoconiosis benefits and such 
State law does not require (1) that such commercial insurer be 
authorized under the laws of the State to insure workmen's compensation, 
and (2) that each such commercial contract of insurance contain a 
provision that insolvency or bankruptcy of the insured or discharge 
therein (or both) shall not relieve the insurance carrier from liability 
for all current and future payments of benefits due an entitled 
individual.
    (b) A State workmen's compensation law may, in the discretion of the 
Secretary, be excluded from the Secretary's list if it is apparent that 
self-insurance arrangements permitted under such State law in general 
are not sufficient to insure the uninterrupted payment of benefits to an 
entitled individual.
    (c) Contribution or apportionment of liability among insurers and/or 
self-insurers, if so provided for by a State workmen's compensation law, 
shall not be a basis for exclusion of such law from the Secretary's 
list.
    (d) This section shall not be construed to require that a State 
workmen's compensation law guarantee the payment of pneumoconiosis 
benefits by means of commercial insurance or self-insurance programs.



Sec. 722.130  State protections of benefits.

    No State workmen's compensation law shall be included on the 
Secretary's list, unless such State law establishes and provides a means 
of obtaining revenues to insure that pneumoconiosis benefits shall be 
paid to entitled individuals for whom no other source of benefits is 
available.



Sec. 722.131  Contributions by miners.

    No State workmen's compensation law shall be included on the 
Secretary's list if such law permits or requires miners to provide funds 
for the payment of insurance premiums, the support for a self-insurance 
fund, or the support for any State fund established for the purpose of 
insuring the payment of pneumoconiosis benefits.



Sec. 722.132  Waiver of right to benefits.

    No State workmen's compensation shall be included on the Secretary's 
list if such law permits a miner or other prospective claimant to by any 
means waive, in whole or in part, such individual's rights to receive 
full benefits for total disability or death due to pneumoconiosis. 
However, under appropriate circumstances, a waiver may be permitted in 
respect of the liability of any individual coal mine operator or 
employer if such State workmen's compensation law contains a provision 
or provisions which otherwise insure that benefits shall be available to 
be paid to such claimant from some other approved source.



Sec. 722.133  Retroactive coverage required.

    No State workmen's compensation law shall be included on the 
Secretary's list if such law prohibits the filing of or does not provide 
for benefits in respect of an otherwise timely (see Sec. 722.116) and 
valid claim solely on the grounds that the miner on whose total

[[Page 759]]

disability or death the claim is predicated was not employed in a coal 
mine in such State on the effective date of such State's law.



Sec. 722.134  Residency requirements.

    No State workmen's compensation law shall be included on the 
Secretary's list if such law requires that the claimant be domiciled in 
or a resident of such State at the time the claim is filed. This section 
shall not be construed to prohibit a State from refusing to process a 
claim for benefits in any case in which the miner on whose total 
disability or death a claim is predicated, was not exposed for a 
reasonable period of time in such State.

             Criteria: Amount of Benefits: Medical Benefits



Sec. 722.135  Amount of benefits, computation.

    (a) Section 412(a) of the Act sets forth the amount of benefits for 
total disability or death due to pneumoconiosis to which an individual 
shall be entitled, the extent of such entitlement and persons so 
entitled. No State workmen's compensation law shall be included on the 
Secretary's list if it does not, in every case, provide benefit amounts 
which are substantially equivalent to or greater than those amounts to 
which an eligible individual would be entitled under section 412(a).
    (b) No State workmen's compensation law which arbitrarily limits the 
total amount of benefits to which an eligible individual may be entitled 
over such individual's lifetime shall be included on the Secretary's 
list.
    (c) No State workmen's compensation law which subsequent to the 
effective date of this part 722 is amended to reduce the amount of 
benefits to which an eligible individual is entitled for total 
disability or death due to pneumoconiosis shall be included on the 
Secretary's list.



Sec. 722.136  Augmented benefits.

    As set forth in section 412(a) of the Act the amount of benefits to 
which a beneficiary is entitled may be augmented by up to 100 percent 
based upon the number of persons (wife, children, parents, brothers, 
sisters) dependent upon such beneficiary for support. No State workmen's 
compensation law shall be excluded from the Secretary's list because it 
does not contain similar augmentation provisions if such law otherwise 
insures that beneficiaries and their dependents shall receive benefits 
substantially equivalent to or greater than the amounts such persons 
would receive under section 412(a) of the Act.



Sec. 722.137  Minimum benefit amounts.

    No State workmen's compensation law shall be included on the 
Secretary's list if it does not guarantee that the minimum amount of 
benefits payable to any beneficiary or dependent shall be substantially 
equivalent to or greater than the amount to which such beneficiary or 
dependent would be entitled if the claim were paid under section 412(a) 
of the Act, notwithstanding any provision contained in the State 
workmen's compensation law which requires the computation of benefit 
amounts based upon the miner's average weekly or monthly wage.



Sec. 722.138  Offsets for Federal benefits prohibited.

    No State's workmen's compensation law shall be included on the 
Secretary's list if such law requires that pneumoconiosis benefits 
payable to any individual shall be offset by any amount to which such 
individual is or may be entitled on account of total disability or death 
due to pneumoconiosis under any law of the United States.



Sec. 722.139  Lump sum awards; settlement.

    No State workmen's compensation law shall be excluded from the 
Secretary's list solely on the grounds that such law permits lump sum 
awards, or commutation or settlement of claims or awards: Provided, That 
(a) such lump sum award or commutation or settlement is approved by an 
appropriate State agency; (b) such lump sum award, commutation, or 
settlement is equal to the present value of future benefits payments 
commuted, computed at no less than 4 percent true discount compounded 
annually; (c) accepted and reliable tables of probabilities are used for 
the purpose of

[[Page 760]]

computing the present value of future benefits payments commuted and (d) 
no lump sum award, commutation, or settlement, shall be construed to 
deprive a miner of his right to future medical benefits or services 
under such State law.



Sec. 722.140  Protection of benefits.

    No State workmen's compensation law shall be included on the 
Secretary's list unless such State law contains a provision or 
provisions:
    (a) Which declare invalid any assignment or release of benefits or 
future benefits payable;
    (b) Which exempt all current and future benefits from all claims of 
creditors, and from levy, execution, attachment, garnishment, or any 
other remedy for recovery or collection of a debt, which exemption may 
not be waived; and
    (c) Which insure that any person entitled to benefits for total 
disability or death due to pneumoconiosis shall have a lien against the 
assets of the responsible insurance carrier or coal mine operator for 
such benefits without limit of amount, and shall, upon insolvency, 
bankruptcy, or reorganization in bankruptcy proceedings of the insurer 
or operator, or both, be entitled to preference and priority in the 
distribution of the assets of such insurer or operator, or both. This 
paragraph shall not be construed to require the creation of a statutory 
lien against the assets of any State fund.



Sec. 722.141  Payment periods.

    No State workmen's compensation law shall be included on the 
Secretary's list unless such law provides that compensation payable on 
account of total disability or death due to pneumoconiosis shall be paid 
not less frequently than once each month.



Sec. 722.142  Prompt payment of benefits.

    No State workmen's compensation law shall be included on the 
Secretary's list unless such law provides some means such as judicial 
enforcement whereby an eligible claimant shall have effective recourse 
to insure that benefits due such claimant are paid fully and promptly.



Sec. 722.143  Medical benefits.

    (a) Section 422(a) of the Act by incorporating section 7(a) of the 
Longshoremen's Act (33 U.S.C. 907(a)) requires that medical services and 
supplies be furnished to a miner totally disabled by pneumoconiosis. No 
State law shall be included on the Secretary's list unless such State 
law guarantees that every miner who is totally disabled due to 
pneumoconiosis shall be furnished, at no cost to the miner, with such 
medical, surgical, and other attendance or treatment, nurse and hospital 
service, medicine, crutches, and apparatus, for such period as the 
nature of the disability may require.
    (b) No State law shall be included on the Secretary's list if such 
law places arbitrary time or dollar limitations on a totally disabled 
miner's entitlement to the medical benefits described in this section.



Sec. 722.144  Medical examinations, reexaminations.

    No State workmen's compensation law shall be included on the 
Secretary's list unless such State law provides that medical 
examinations or re-examinations conducted in respect of a claim at the 
request or order of an insurance carrier, coal mine operator, employer, 
or State agency shall be conducted at the expense of the insurance 
carrier, coal mine operator, employer, or State agency as the case may 
be. In no event shall the cost of such examination or re-examination be 
chargeable to the claimant.



Sec. 722.145  Vocational rehabilitation.

    (a) Section 422(a) of the Act, by incorporating section 39 of the 
Longshoremen's and Harbor Workers' Compensation Act requires the 
Secretary to arrange for and direct the vocational rehabilitation of 
miners totally disabled for work in or around a coal mine. No State 
workmen's compensation law shall be included on the Secretary's list 
unless such State law makes available to miners totally disabled for 
such work such vocational rehabilitation facilities as are provided by 
the State under its workmen's compensation programs to disabled 
employees in general.

[[Page 761]]

    (b) No State workmen's compensation law shall be included on the 
Secretary's list if the use of vocational rehabilitation facilities in 
such State would result in a partial or total loss of benefits to such 
miner.

                         Action by the Secretary



Sec. 722.146  Standards for review of a State workmen's compensation law.

    (a) The standards for determining whether a State workmen's 
compensation law provides adequate coverage for total disability or 
death due to pneumoconiosis as set forth in this part are mandatory, in 
that compliance therewith is prerequisite to inclusion of any such law 
on the Secretary's list. Such standards have been determined to be the 
minimum requirements that a State workmen's compensation law must meet 
in order that the intent of section 421 of the Act be carried out. After 
review of the information submitted by a State pursuant to Sec. 722.104 
and any other information made available to the Department of Labor, the 
Secretary shall determine whether a State workmen's compensation law 
meets all of such requirements.
    (b) Notwithstanding any other provision of this part, if it is 
shown, despite the language contained in a State workmen's compensation 
law, that because of judicial or administrative decision, or duly 
promulgated rules and regulations, or common practice in the State, such 
law does not provide adequate coverage for total disability or death due 
to pneumoconiosis, such law shall be excluded from the Secretary's list.
    (c) Notwithstanding any other provision of this part, if it is found 
that any provision contained in a State's workmen's compensation laws or 
general laws serves or would be likely to serve to diminish the coverage 
available in such State for total disability or death due to 
pneumoconiosis, such State's workmen's compensation law may be excluded 
from the Secretary's list.



Sec. 722.147  Action subsequent to review.

    (a) If it is found that a State workmen's compensation law during 
any period provides adequate coverage for total disability or death due 
to pneumoconiosis, such law shall be included for such period on the 
Secretary's list to be published in the Federal Register and set forth 
in Sec. 722.152 pursuant to section 421(b)(1) of the Act. The 
appropriate State agency shall be notified of the Secretary's action.
    (b) If it is found that a State workmen's compensation law submitted 
for consideration pursuant to Sec. 722.103 does not provide adequate 
coverage for total disability or death due to pneumoconiosis during any 
period, the appropriate State agency shall be notified of such decision 
and, if such law has previously been on the Secretary's list, of the 
fact that the decision requires deletion of such law from the list 
during such period. Such notice shall contain a brief statement of 
reasons enumerating the provision or provisions of the State's law which 
are unacceptable.
    (c) In the event of a denial of a request that a State workmen's 
compensation law be included on the Secretary's list, or of a decision 
to delete a previously listed law from the list, the appropriate State 
agency shall have the right to request the Secretary to reconsider his 
action. Such request shall be accompanied by a brief or memorandum in 
support thereof.



Sec. 722.148  Provisional approval.

    The Secretary may, in his discretion, provisionally approve a 
State's request that its workmen's compensation law be included on the 
Secretary's list pending the final promulgation of rules and regulations 
or the effective date of certain amendments to the State's law. Notice 
of such provisional approval shall be given to the appropriate State 
agency, but such State's workmen's compensation law shall not be 
published on the Secretary's list in the Federal Register until such 
regulations or amendments are effective.



Sec. 722.149  Judicial review.

    The action by the Secretary in including or failing to include any 
State workmen's compensation law on the Secretary's list shall be 
subject to judicial review exclusively in the U.S. Court of Appeals for 
the circuit in which the State is located or in the U.S. Court of 
Appeals for the District

[[Page 762]]

of Columbia (see section 421(b)(2)(f) of the Act).



Sec. 722.150  Reports.

    The Secretary shall from time to time require that each State which 
has been included on the Secretary's list submit reports, data, or other 
information to the Secretary concerning the administration and operation 
of the State's workmen's compensation law with respect to total 
disability or death due to pneumoconiosis.



Sec. 722.151  Removal from the Secretary's list.

    At any time after a State's workmen's compensation law has been 
included on the Secretary's list such State's law may be removed from 
the list if it appears that under such law adequate coverage for total 
disability or death due to pneumoconiosis is not being provided. Such 
removal action shall be taken only after notice and an opportunity to be 
heard has been afforded such State. In the event a State's workmen's 
compensation law is removed from the Secretary's list the consequences 
of such removal on claims for pneumoconiosis benefits filed in that 
State shall be determined by the Secretary.



Sec. 722.152  The Secretary's list.

    (a) In order to provide a ready reference source for any person 
interested in knowing at any given time which, if any, States' laws met 
the currently applicable criteria for approval, it has been determined 
that provision should be made for listing such States in the Code of 
Federal Regulations. Accordingly, the Secretary's list of those States 
having in effect a workmen's compensation law which provides adequate 
coverage for total disability or death due to pneumoconiosis, as 
published in the Federal Register pursuant to section 421(b)(1) of the 
Act, appears in paragraph (b) of this section. When first published on 
September 7, 1972 (37 FR 18076; see also 37 FR 21429), as provided by 
the Act, the document listed no such State because there was no State 
workmen's compensation law which had been found to provide adequate 
coverage for total disability or death due to pneumoconiosis. The 
Secretary's list shall be republished in the Federal Register with 
amendments from time to time as is necessary.
    (b) The Secretary, upon examination of State workmen's compensation 
laws pursuant to the provisions of section 421 of the Federal Coal Mine 
Health and Safety Act of 1969, as amended, and Secs. 722.101--722.151, 
has found that the workmen's compensation law of each of the following 
listed States, for the period from the date shown in the list until such 
date as the Secretary may make a contrary determination, provides 
adequate coverage for pneumoconiosis:

State                Period commencing

 None___________________________________________________________________



PART 725--CLAIMS FOR BENEFITS UNDER PART C OF TITLE IV OF THE FEDERAL MINE SAFETY AND HEALTH ACT, AS AMENDED--Table of Contents




                           Subpart A--General

Sec.
725.1  Statutory provisions.
725.2  Purpose and applicability of this part.
725.3  Contents of this part.
725.4  Applicability of other parts in this title.
725.101  Definitions and use of terms.
725.102  Disclosure of program information.

  Subpart B--Persons Entitled to Benefits, Conditions, and Duration of 
                               Entitlement

725.201  Who is entitled to benefits; contents of this subpart.

                 Conditions and Duration of Entitlement

725.202  Miner defined; condition of entitlement, miner.
725.203  Duration of entitlement; miner.

      Benefits on Account of Living Dependents (Augmented Benefits)

725.204  Determination of relationship; spouse.
725.205  Determination of dependency; spouse.
725.206  Determination of relationship; divorced spouse.
725.207  Determination of dependency; divorced spouse.
725.208  Determination of relationship; child.
725.209  Determination of dependency; child.
725.210  Duration of augmented benefits.
725.211  Time of determination of relationship and dependency of spouse 
          or child for purposes of augmentation of benefits.

[[Page 763]]

                         Survivors' Entitlement

725.212  Conditions of entitlement; surviving spouse or surviving 
          divorced spouse.
725.213  Duration of entitlement; surviving spouse or surviving divorced 
          spouse.
725.214  Determination of relationship; surviving spouse.
725.215  Determination of dependency; surviving spouse.
725.216  Determination of a relationship; surviving divorced spouse.
725.217  Determination of dependency; surviving divorced spouse.
725.218  Conditions of entitlement; child.
725.219  Duration of entitlement; child.
725.220  Determination of relationship; child.
725.221  Determination of dependency; child.
725.222  Conditions of entitlement; parent, brother, or sister.
725.223  Duration of entitlement; parent, brother, or sister.
725.224  Determination of relationship; parent, brother, or sister.
725.225  Determination of dependency; parent, brother, or sister.
725.226  ``Good cause'' for delayed filing of proof of support.
725.227  Time of determination of relationship and dependency of 
          survivors.
725.228  Effect of conviction of felonious and intentional homicide on 
          entitlement to benefits.

                       Terms Used in This Subpart

725.229  Intestate personal property.
725.230  Legal impediment.
725.231  Domicile.
725.232  Member of the same household--``living with,'' ``living in the 
          same household,'' and ``living in the miner's household,'' 
          defined.
725.233  Support and contributions.

                       Subpart C--Filing of Claims

725.301  Who may file a claim.
725.302  Evidence of authority to file a claim on behalf of another.
725.303  Date and place of filing of claims.
725.304  Forms and initial processing.
725.305  When a written statement is considered a claim.
725.306  Withdrawal of a claim.
725.307  Cancellation of a request for withdrawal.
725.308  Time limits for filing claims.
725.309  Duplicate claims.
725.310  Modification of awards and denials.
725.311  Communications with respect to claims; time computations.

        Subpart D--Adjudication of Claims; Adjudication Officers

725.350  Who are the adjudication officers.
725.351  Powers of adjudication officers.
725.352  Disqualification of adjudication officer.

                       Parties and Representatives

725.360  Parties to proceedings.
725.361  Party amicus curiae.
725.362  Representation of parties.
725.363  Qualification of representative.
725.364  Authority of representative.
725.365  Approval of representative's fees; lien against benefits.
725.366  Fees for representatives.
725.367  Payment of a claimant's attorney's fee by responsible operator.
725.401  Claims development--general.
725.402  Approved State workers' compensation law.
725.403  Requirement to file under State workers' compensation law--
          section 415 claims.
725.404  Development of evidence--general.
725.405  Development of medical evidence; scheduling of medical 
          examinations and tests.
725.406  Medical examinations and tests.
725.407  Additional medical evidence.
725.408  Refusal to submit to medical examinations or tests.
725.409  Denial of a claim by reason of abandonment.

                 Adjudication by the Deputy Commissioner

725.410  Initial findings by the deputy commissioner.
725.411  Adjudication upon initial findings of eligibility and no 
          operator responsibility.
725.412  Identification and notification of responsible operator.
725.413  Operator's response to notification.
725.414  Development of operator's evidence, claimant's rebuttal 
          evidence.
725.415  Action by the deputy commissioner after development of 
          operator's evidence.
725.416  Conferences.
725.417  Action at the conclusion of conference.
725.418  Proposed decision and order.
725.419  Response to proposed decision and order.
725.420  Initial determinations.
725.421  Referral of a claim to the Office of Administrative Law Judges.
725.422  Legal assistance.

                           Subpart E--Hearings

725.450  Right to a hearing.
725.451  Request for hearing.
725.452  Type of hearing; parties.
725.453  Notice of hearing.
725.453A  Time and place of hearing.
725.454  Change of time and place for hearing; transfer of cases.
725.455  Hearing procedures; generally.
725.456  Introduction of documentary evidence.

[[Page 764]]

725.457  Witnesses.
725.458  Depositions; interrogatories.
725.459  Witness fees.
725.459A  Oral argument and written allegations.
725.460  Consolidated hearings.
725.461  Waiver of right to appear and present evidence.
725.462  Withdrawal of controversion of issues set for formal hearing; 
          effect.
725.463  Issues to be resolved at hearing; new issues.
725.464  Record of hearing.
725.465  Dismissals for cause.
725.466  Order of dismissal.
725.475  Termination of hearings.
725.476  Issuance of decision and order.
725.477  Form and contents of decision and order.
725.478  Filing and service of decision and order.
725.479  Finality of decisions and orders.
725.480  Modification of decisions and orders.
725.481  Right to appeal to the Benefits Review Board.
725.482  Judicial review.
725.483  Costs in proceedings brought without reasonable grounds.

               Subpart F--Responsible Coal Mine Operators

                           General Provisions

725.490  Statutory provisions and scope.
725.491  Operator defined.
725.492  Responsible operator defined.
725.493  Criteria for identifying a responsible operator.
725.494  Insurance coverage.
725.495  Penalty for failure to insure.
725.496  Special claims transferred to the Trust Fund.
725.497  Procedures in special claims transferred to the Trust Fund.

                     Subpart G--Payment of Benefits

725.501  Payment provisions generally.
725.502  Manner of payment; payment periods.
725.503  Date from which benefits are payable.
725.503A  Payments to a claimant employed as a miner.
725.504  Payees.
725.505  Payment on behalf of another; ``legal guardian'' defined.
725.506  Guardian for minor or incompetent.
725.510  Representative payee.
725.511  Use and benefit defined.
725.512  Support of legally dependent spouse, child, or parent.
725.513  Accountability; transfer.
725.514  Certification to dependent of augmentation portion of benefit.
725.515  Assignment and exemption from claims of creditors.

                              Benefit Rates

725.520  Computation of benefits.
725.521  Commutation of payments; lump sum awards.
725.522  Payments prior to final adjudication.

                Special Provisions for Operator Payments

725.530  Operator payments; generally.
725.531  Receipt for payment.
725.532  Suspension, reduction, or termination of payments.

                  Increases and Reductions of Benefits

725.533  Modification of benefits amounts; general.
725.534  Reduction of State benefits.
725.535  Reduction; receipt of State or Federal benefit.
725.536  Reductions; excess earnings.
725.537  Reductions; retroactive effect of an additional claim for 
          benefits.
725.538  Reductions; effect of augmentation of benefits based on 
          subsequent qualification of individual.
725.539  More than one reduction event.

                       Overpayments; Underpayments

725.540  Overpayments.
725.541  Notice of waiver of adjustment or recovery of overpayment.
725.542  When waiver of adjustment or recovery may be applied.
725.543  Standards for waiver of adjustment or recovery.
725.544  Collection and compromise of claims for overpayment.
725.545  Underpayments.
725.546  Relation to provisions for reductions or increases.
725.547  Applicability of overpayment and underpayment provisions to 
          operator or carrier.

              Subpart H--Enforcement of Liability; Reports

725.601  Enforcement generally.
725.602  Reimbursement of the fund.
725.603  Payments by the fund on behalf of an operator; liens.
725.604  Enforcement of final awards.
725.605  Defaults.
725.606  Security for the payment of benefits.
725.607  Payments in addition to compensation.
725.608  Interest.
725.620  Failure to secure benefits; other penalties.
725.621  Reports.

        Subpart I--Medical Benefits and Vocational Rehabilitation

725.701  Availability of medical benefits.

[[Page 765]]

725.701A  Claims for medical benefits only under section 11 of the 
          Reform Act.
725.702  Physician defined.
725.703  Notification of right to medical benefits; authorization of 
          treatment.
725.704  Arrangements for medical care.
725.705  Authorization to provide medical services.
725.706  Reports of physicians and supervision of medical care.
725.707  Disputes concerning medical benefits.
725.710  Objective of vocational rehabilitation.
725.711  Requests for referral to vocational rehabilitation assistance.

    Authority:  5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 902(f), 925, 932, 934, 936, 945; 33 U.S.C. 
901 et seq., Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.

    Source:  43 FR 36772, Aug. 18, 1978, unless otherwise noted.



                           Subpart A--General



Sec. 725.1  Statutory provisions.

    (a) General. Title IV of the Federal Mine Safety and Health Act of 
1977, as amended by the Black Lung Benefits Reform Act of 1977, the 
Black Lung Benefits Revenue Act of 1977, the Black Lung Benefits Revenue 
Act of 1981 and the Black Lung Benefits Amendments of 1981, provides for 
the payment of benefits to a coal miner who is totally disabled due to 
pneumoconiosis (black lung disease) and to certain survivors of a miner 
who dies due to pneumoconiosis. For claims filed prior to January 1, 
1982, certain survivors could receive benefits if the miner was totally 
(or for claims filed prior to June 30, 1982, in accordance with section 
411(c)(5) of the Act, partially) disabled due to pneumoconiosis, or if 
the miner died due to pneumoconiosis.
    (b) Part B. Part B of title IV of the Act provided that all claims 
filed between December 30, 1969, and June 30, 1973, are to be filed 
with, processed, and paid by the Secretary of Health, Education, and 
Welfare through the Social Security Administration; claims filed by the 
survivor of a miner before January 1, 1974, or within 6 months of the 
miner's death if death occurred before January 1, 1974, and claims filed 
by the survivor of a miner who was receiving benefits under part B of 
title IV of the Act at the time of death, if filed within 6 months of 
the miner's death, are also adjudicated and paid by the Social Security 
Administration.
    (c) Section 415. Claims filed by a miner between July 1 and December 
31, 1973, are adjudicated and paid under section 415. Section 415 
provides that a claim filed between the appropriate dates shall be filed 
with and adjudicated by the Secretary of Labor under certain 
incorporated provisions of the Longshoremen's and Harbor Workers' 
Compensation Act (33 U.S.C. 901 et seq.). A claim approved under section 
415 is paid under part B of title IV of the Act for periods of 
eligibility occurring between July 1 and December 31, 1973, by the 
Secretary of Labor and for periods of eligibility thereafter, is paid by 
a coal mine operator which is determined liable for the claim or the 
Black Lung Disability Trust Fund if no operator is identified or if the 
miner's last coal mine employment terminated prior to January 1, 1970. 
An operator which may be found liable for a section 415 claim is 
notified of the claim and allowed to participate fully in the 
adjudication of such claim. A claim filed under section 415 is for all 
purposes considered as if it were a part C claim (see paragraph (d) of 
this section) and the provisions of part C of title IV of the Act are 
fully applicable to a section 415 claim except as is otherwise provided 
in section 415.
    (d) Part C. Claims filed by a miner or survivor on or after January 
1, 1974, are filed, adjudicated, and paid under the provisions of part C 
of title IV of the Act. Part C requires that a claim filed on or after 
January 1, 1974, shall be filed under an applicable approved State 
workers' compensation law, or if no such law has been approved by the 
Secretary of Labor, the claim may be filed with the Secretary of Labor 
under section 422 of the Act. Claims filed with the Secretary of Labor 
under part C are processed and adjudicated by the Secretary and paid by 
a coal mine operator. If the miner's last coal mine employment 
terminated before January 1, 1970, or if no responsible operator can be 
identified, benefits are paid by the Black Lung Disability Trust Fund. 
Claims adjudicated under part C are

[[Page 766]]

subject to certain incorporated provisions of the Longshoremen's and 
Harbor Workers' Compensation Act.
    (e) Section 435. Section 435 of the Act affords each person who 
filed a claim for benefits under part B, section 415, or part C, and 
whose claim had been denied or was still pending as of March 1, 1978, 
the effective date of the Black Lung Benefits Reform Act of 1977, the 
right to have his or her claim reviewed on the basis of the 1977 
amendments to the Act, and under certain circumstances to submit new 
evidence in support of the claim.
    (f) Changes made by the Black Lung Benefits Reform Act of 1977. In 
addition to those changes which are reflected in paragraphs (a)-(e) of 
this section, the Black Lung Benefits Reform Act of 1977 contains a 
number of significant amendments to the Act's standards for determining 
eligibility for benefits. Among these are:
    (1) A provision which clarifies the definition of ``pneumoconiosis'' 
to include any ``chronic dust disease of the lung and its sequelae, 
including respiratory and pulmonary impairments, arising out of coal 
mine employment'';
    (2) A provision which defines ``miner'' to include any person who 
works or has worked in or around a coal mine or coal preparation 
facility, and in coal mine construction or coal transportation under 
certain circumstances;
    (3) A provision which limits the denial of a claim solely on the 
basis of employment in a coal mine;
    (4) A provision which authorizes the Secretary of Labor to establish 
standards and develop criteria for determining total disability or death 
due to pneumoconiosis with respect to a part C claim;
    (5) A new presumption which requires the payment of benefits to the 
survivors of a miner who was employed for 25 or more years in the mines 
under certain conditions;
    (6) Provisions relating to the treatment to be accorded a survivor's 
affidavit, certain X-ray interpretations, and certain autopsy reports in 
the development of a claim; and
    (7) Other clarifying, procedural, and technical amendments.
    (g) Changes made by the the Black Lung Benefits Revenue Act of 1977. 
The Black Lung Benefits Revenue Act of 1977 established the Black Lung 
Disability Trust Fund which is financed by a specified tax imposed upon 
each ton of coal (except lignite) produced and sold or used in the 
United States after March 31, 1978. The Secretary of the Treasury is the 
managing trustee of the fund and benefits are paid from the fund upon 
the direction of the Secretary of Labor. The fund was made liable for 
the payment of all claims approved under section 415, part C and section 
435 of the Act for all periods of eligibility occurring on or after 
January 1, 1974, with respect to claims where the miner's last coal mine 
employment terminated before January 1, 1970, or where individual 
liability can not be assessed against a coal mine operator due to 
bankruptcy, insolvency, or the like. The fund was also authorized to pay 
certain claims which a responsible operator has refused to pay within a 
reasonable time, and to seek reimbursement from such operator. The 
purpose of the Fund and the Black Lung Benefits Revenue Act of 1977 was 
to insure that coal mine operators, or the coal industry, will fully 
bear the cost of black lung disease for the present time and in the 
future. The Black Lung Benefits Revenue Act of 1977 also contained other 
provisions relating to the fund and authorized a coal mine operator to 
establish its own trust fund for the payment of certain claims.
    (h) Changes made by the Black Lung Benefits Amendments of 1981. In 
addition to the change reflected in paragraph (a) of this section, the 
Black Lung Benefits Amendments of 1981 made a number of significant 
changes in the Act's standards for determining eligibility for benefits 
and concerning the payment of such benefits. The following changes are 
all applicable to claims filed on or after January 1, 1982:
    (1) The Secretary of Labor may re-read any X-ray submitted in 
support of a claim and may rely upon a second opinion concerning such an 
X-ray as a means of auditing the validity of the claim;
    (2) The rebuttable presumption that the death of a miner with ten or 
more years employment in the coal mines, who died of a respirable 
disease, was

[[Page 767]]

due to pneumoconiosis is no longer applicable;
    (3) The rebuttable presumption that the total disability of a miner 
with fifteen or more years employment in the coal mines, who has 
demonstrated a totally disabling respiratory or pulmonary impairment, is 
due to pneumoconiosis is no longer applicable;
    (4) In the case of deceased miners, where no medical or other 
relevant evidence is available, only affidavits from persons not 
eligible to receive benefits as a result of the adjudication of the 
claim will be considered sufficient to establish entitlement to 
benefits;
    (5) Unless the miner was found entitled to benefits as a result of a 
claim filed prior to January 1, 1982, benefits are payable on survivors' 
claims filed on and after January 1, 1982, only when the miner's death 
was due to pneumoconiosis;
    (6) Benefits payable under this part are subject to an offset on 
account of excess earnings by the miner; and
    (7) Other technical amendments.
    (i) Changes made by the Black Lung Benefits Revenue Act of 1981. The 
Black Lung Benefits Revenue Act of 1981 temporarily doubles the amount 
of the tax upon coal until the Trust Fund shall have repaid all advances 
received from the United States Treasury and the interest on all such 
advances. The Fund is also made liable for the payment of certain claims 
previously denied under the 1972 version of the Act and subsequently 
approved under section 435 and for the reimbursement of operators and 
insurers for benefits previously paid by them on such claims. With 
respect to claims filed on or after January 1, 1982, the Fund's 
authorization for the payment of interim benefits is limited to the 
payment of prospective benefits only. These changes also define the 
rates of interest to be paid to and by the Fund.
    (j) Longshoremen's Act provisions. The adjudication of claims filed 
under sections 415, 422 and 435 of the Act is governed by various 
procedural and other provisions contained in the Longshoremen's and 
Harbor Workers' Compensation Act (LHWCA), as amended from time to time, 
which are incorporated within the Act by sections 415 and 422. The 
incorporated LHWCA provisions are applicable under the Act except as is 
otherwise provided by the Act or as provided by regulations of the 
Secretary. Although occupational disease benefits are also payable under 
the LHWCA, the primary focus of the procedures set forth in that Act is 
upon a time definite of traumatic injury or death. Because of this and 
other significant differences between a black lung and longshore claim, 
it is determined, in accordance with the authority set forth in section 
422 of the Act, that certain of the incorporated procedures prescribed 
by the LHWCA must be altered to fit the circumstances ordinarily 
confronted in the adjudication of a black lung claim. The changes made 
are based upon the Department's experience in processing black lung 
claims since July 1, 1973, and all such changes are specified in this 
part or part 727 of this subchapter. No other departure from the 
incorporated provisions of the LHWCA is intended.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24289, May 31, 1983]



Sec. 725.2  Purpose and applicability of this part.

    (a) It is the purpose of this part to set forth the procedures to be 
followed and standards to be applied in the filing, processing, 
adjudication, and payment of claims filed under part C of title IV of 
the Act.
    (b) This part is applicable to all claims filed under part C of 
title IV of the Act on or after the effective date of this part and 
shall also be applicable to claims pending on the effective date of this 
part as provided in part 727 of this subchapter. This part is applicable 
to claims considered under section 435 of the Act and part 727 of this 
subchapter.



Sec. 725.3  Contents of this part.

    (a) This subpart describes the statutory provisions which relate to 
claims considered under this part, the purpose and scope of this part, 
definitions and usages of terms applicable to this part, and matters 
relating to the availability of information collected by the Department 
of Labor in connection with the processing of claims.
    (b) Subpart B contains criteria for determining who may be found 
entitled to benefits under this part and other

[[Page 768]]

provisions relating to the conditions and duration of eligibility of a 
particular individual.
    (c) Subpart C describes the procedures to be followed and action to 
be taken in connection with the filing of a claim under this part.
    (d) Subpart D of this part sets forth the duties and powers of the 
persons designated by the Secretary of Labor to adjudicate claims, 
provisions relating to the rights of parties and representatives of 
parties, and the procedure to be followed in the informal processing and 
adjudication of a claim under this part.
    (e) Subpart E describes the procedures to be followed if a hearing 
is required with respect to a claim.
    (f) Subpart F contains provisions governing the identification of a 
coal mine operator which may be liable for the payment of a claim under 
this part.
    (g) Subpart G contains provisions governing the payment of benefits 
with respect to an approved claim.
    (h) Subpart H describes the statutory mechanisms provided for the 
enforcement of a coal mine operator's liability, sets forth the 
penalties which may be applied in the case of a defaulting coal mine 
operator, and describes the obligation of coal operators and their 
insurance carriers to file certain reports.
    (i) Subpart I describes the right of certain beneficiaries to 
receive medical treatment benefits and vocational rehabilitation under 
the Act.



Sec. 725.4  Applicability of other parts in this title.

    (a) Part 718. Part 718 of this subchapter, which contains the 
criteria and standards to be applied in determining whether a miner is 
or was totally disabled due to pneumoconiosis, or whether a miner died 
due to pneumoconiosis, shall be applicable to the determination of 
claims under this part. Claims filed after March 31, 1980, are subject 
to the revised part 718 as promulgated by the Secretary in accordance 
with section 402(f)(1) of the Act on February 29, 1980. The criteria 
contained in subpart C of part 727 of this subchapter are applicable in 
determining claims filed prior to April 1, 1980, under this part, and 
such criteria shall be applicable at all times with respect to claims 
filed under this part and under section 11 of the Black Lung Benefits 
Reform Act of 1977.
    (b) Parts 715, 717, and 720. Parts 715, 717, and 720 of this 
subchapter, which established the procedures for the filing, processing, 
and payment of claims filed under section 415 of the Act, are repealed 
and pertinent provisions of these parts which retain significance are 
incorporated within this part as appropriate.
    (c) Part 726. Part 726 of this subchapter, which sets forth the 
obligations imposed upon a coal operator to insure or self-insure its 
liability for the payment of benefits to certain eligible claimants, is 
applicable to this part as appropriate.
    (d) Part 727. Part 727 of this subchapter, which governs the review, 
adjudication and payment of pending and denied claims under section 435 
of the Act, is applicable to this part as provided in such part 727. The 
criteria contained in subpart C of part 727 for determining a claimant's 
eligibility for benefits shall be applicable under this part with 
respect to all claims filed before April 1, 1980, and to all claims 
filed under this part and under section 11 of the Black Lung Benefits 
Reform Act of 1977.
    (e) Part 410. Part 410 of this title, which sets forth provisions 
relating to a claim for black lung benefits under part B of title IV of 
the Act, is inapplicable to this part except as is provided in this 
part, or in part 718 of this subchapter.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983]



Sec. 725.101  Definitions and use of terms.

    (a) Definitions. For purposes of this subchapter, except where the 
content clearly indicates otherwise, the following definitions apply:
    (1) The Act means the Federal Coal Mine Health and Safety Act, Pub. 
L. 91-173, 83 Stat. 742, 30 U.S.C. 801-960, as amended by the Black Lung 
Benefits Act of 1972, the Mine Safety and Health Act of 1977, the Black 
Lung Benefits Reform Act of 1977, the Black Lung Benefits Revenue Act of 
1977, the Black Lung Benefits Revenue Act of 1981, and

[[Page 769]]

the Black Lung Benefits Amendments of 1981.
    (2) The Longshoremen's Act or LHWCA means the Longshoremen's and 
Harbor Workers' Compensation Act of March 4, 1927, c. 509, 44 Stat. 
1424, 33 U.S.C. 901-950, as amended from time to time.
    (3) The Social Security Act means the Social Security Act, Act of 
August 14, 1935, c. 531, 49 Stat. 620, 42 U.S.C. 301-431, as amended 
from time to time.
    (4) A workers' compensation law means a law providing for payment of 
benefits to employees, and their dependents and survivors, for 
disability on account of injury, including occupational disease, or 
death, suffered in connection with their employment.
    (5) State includes any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American 
Samoa, Guam, the Trust Territory of the Pacific Islands, and prior to 
January 3, 1959, and August 21, 1959, respectively, the territories of 
Alaska and Hawaii.
    (6) Department means the United States Department of Labor.
    (7) Secretary means the Secretary of Labor, United States Department 
of Labor, or a person, authorized by him or her to perform his or her 
functions under title IV of the Act.
    (8) Office or OWCP means the Office of Workers' Compensation 
Programs, United States Department of Labor.
    (9) Director means the Director, OWCP, or his or her designee.
    (10) Division or DCMWC means the Division of Coal Mine Workers' 
Compensation in the OWCP, United States Department of Labor.
    (11) District Director means a person appointed as provided in 
sections 39 and 40 of the LHWCA, or his or her designee, who is 
authorized to develop and adjudicate claims as provided in this 
subchapter (see Sec. 725.350). These regulations substitute this term 
for the term Deputy Commissioner which is used in the statute. This 
substitution is for administrative purposes only and in no way affects 
the power or authority of the position as established in the statute.
    (12) Office of Administrative Law Judges means the Office of 
Administrative Law Judges, U.S. Department of Labor.
    (13) Chief Administrative Law Judge means the Chief Administrative 
Law Judge of the Office of Administrative Law Judges, U.S. Department of 
Labor, 800 K Street, NW., suite 400, Washington, DC 20001-8002.
    (14) Administrative law judge means a person qualified under 5 
U.S.C. 3105 to conduct hearings and adjudicate claims for benefits filed 
pursuant to section 415 and part C of the Act. Until March 1, 1979, it 
shall also mean an individual appointed to conduct such hearings and 
adjudicate such claims under Pub. L. 94-504.
    (15) Benefits Review Board or Board means the Benefits Review Board, 
U.S. Department of Labor, an appellate tribunal appointed by the 
Secretary of Labor pursuant to the provisions of section 21(b)(1) of the 
LHWCA. See parts 801, 802 of this title.
    (16) Claim means a written assertion of entitlement to benefits 
under section 415 or part C of title IV of the Act, submitted in a form 
and manner authorized by the provisions of this subchapter.
    (17) Claimant means an individual who files a claim for benefits 
under this part.
    (18) Benefits means all money or other benefits paid or payable 
under section 415 or part C of title IV of the Act on account of 
disability or death due to pneumoconiosis.
    (19) Beneficiary means a miner or any surviving spouse, divorced 
spouse, child, parent, brother or sister, who is entitled to benefits 
under either section 415 or part C of title IV of the Act.
    (20) Pneumoconiosis means a chronic dust disease of the lung and its 
sequelae, including respiratory and pulmonary impairments, arising out 
of coal mine employment (see part 718 of this subchapter).
    (21) Total disability and partial disability, for purposes of this 
part, have the meaning given them as provided in part 718 of this 
subchapter.
    (22) The Nation's coal mines means all coal mines located in any 
State.
    (23) Coal mine means an area of land and all structures, facilities, 
machinery, tools, equipment, shafts, slopes, tunnels, excavations and 
other property, real or personal, placed upon, under or above the 
surface of such land

[[Page 770]]

by any person, used in, or to be used in, or resulting from, the work of 
extracting in such area bituminous coal, lignite or anthracite from its 
natural deposits in the earth by any means or method, and in the work of 
preparing the coal so extracted, and includes custom coal preparation 
facilities.
    (24) Underground coal mine means a coal mine in which the earth and 
other materials which lie above and around the natural deposit of coal 
(i.e., overburden) are not removed in mining; including all land, 
structures, facilities, machinery, tools, equipment, shafts, slopes, 
tunnels, excavations and other property, real or personal, appurtenant 
thereto.
    (25) Coal preparation means the breaking, crushing, sizing, 
cleaning, washing, drying, mixing, storing and loading of bituminous 
coal, lignite or anthracite, and such other work of preparing coal as is 
usually done by the operator of a coal mine.
    (26) Miner or coal miner means any individual who works or has 
worked in or around a coal mine or coal preparation facility in the 
extraction or preparation of coal. The term also includes an individual 
who works or has worked in coal mine construction or transportation in 
or around a coal mine, to the extent such individual was exposed to coal 
dust as a result of such employment (see Sec. 725.202(a)).
    (27) Operator means any owner, lessee, or other person who operates, 
controls or supervises a coal mine, including a prior or successor 
operator as defined in section 422 of the Act and certain transportation 
and construction employers (see subpart F of this part).
    (28) Responsible operator means an operator which has been 
determined to be liable for the payment of benefits to a claimant for 
periods of eligibility after December 31, 1973, with respect to a claim 
filed under section 415 or part C of title IV of the Act or reviewed 
under section 435 of the Act.
    (29) Person means an individual, partnership, association, 
corporation, firm, subsidiary or parent of a corporation, or other 
organization or business entity.
    (30) Insurer or carrier means any private company, corporation, 
mutual association, reciprocal or interinsurance exchange, or any other 
person or fund, including any State fund, authorized under the laws of a 
State to insure employers' liability under workers' compensation laws. 
The term also includes the Secretary of Labor in the exercise of his or 
her authority under section 433 of the Act.
    (31) Black Lung Disability Trust Fund or the Fund means the Black 
Lung Disability Trust Fund established by the Black Lung Benefits 
Revenue Act of 1977, as amended by the Black Lung Benefits Revenue Act 
of 1981, for the payment of certain claims adjudicated under this part 
(see subpart G of this part).
    (b) Statutory terms. The definitions contained in this section shall 
not be construed in derogation of terms of the Act.
    (c) Dependents and survivors. Dependents and survivors are those 
persons described in subpart B of this part.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983; 55 
FR 28606, July 12, 1990, 56 FR 54708, Oct. 22, 1991]



Sec. 725.102  Disclosure of program information.

    (a) All reports, records, or other documents filed with the OWCP 
with respect to claims are the records of the OWCP. The Director or his 
or her designee shall be the official custodian of those records 
maintained by the OWCP at its national office. The Deputy Commissioner 
shall be the official custodian of those records maintained at a 
district office.
    (b) The official custodian of any record sought to be inspected 
shall permit or deny inspection in accordance with the Department of 
Labor's regulations pertaining thereto (see 29 CFR part 70). The 
original record in any such case shall not be removed from the Office of 
the custodian for such inspection. The custodian may, in his or her 
discretion, deny inspection of any record or part thereof which is of a 
character specified in 5 U.S.C. 552(b) if in his or her opinion such 
inspection may result in damage, harm, or harassment to the beneficiary 
or to any other person. For special provisions concerning release of 
information regarding injured employees undergoing vocational

[[Page 771]]

rehabilitation, see Sec. 702.508, of this title.
    (c) Any person may request copies of records he or she has been 
permitted to inspect. Such requests shall be addressed to the official 
custodian of the records sought to be copied. The official custodian 
shall provide the requested copies under the terms and conditions 
specified in the Department of Labor's regulations relating thereto (see 
29 CFR part 70).
    (d) Any party to a claim (Sec. 725.360) or his or her duly 
authorized representative shall be permitted upon request to inspect the 
file which has been compiled in connection with such claim. Any party to 
a claim or representative of such party shall upon request be provided 
with a copy of any or all material contained in such claim file. A 
request for information by a party or representative made under this 
paragraph shall be answered within a reasonable time after receipt by 
the Office. Internal documents prepared by the deputy commissioner which 
do not constitute evidence of a fact which must be established in 
connection with a claim shall not be routinely provided or presented for 
inspection in accordance with a request made under this paragraph.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983]



  Subpart B--Persons Entitled to Benefits, Conditions, and Duration of 
                               Entitlement



Sec. 725.201  Who is entitled to benefits; contents of this subpart.

    (a) Section 415 and part C of the Act provide for the payment of 
periodic benefits in accordance with this part to:
    (1) A miner (see Sec. 725.202) who is determined to be totally 
disabled due to pneumoconiosis; or
    (2) The surviving spouse or surviving divorced spouse or, where 
neither exists, the child of a deceased miner, where the deceased miner;
    (i) Was receiving benefits under section 415 or part C of title IV 
of the Act as a result of a claim filed prior to January 1, 1982; or
    (ii) Is determined as a result of a claim filed prior to January 1, 
1982, to have been totally disabled due to pneumoconiosis at the time of 
death, or to have died due to pneumoconiosis. Survivors of miners whose 
claims are filed on or after January 1, 1982, must establish that the 
deceased miner's death was due to pneumoconiosis in order to establish 
their entitlement to benefits, except where entitlement is established 
under Sec. 718.306 of part 718 on a survivor's claim filed prior to June 
30, 1982, or;
    (3) The child of a miner's surviving spouse who was receiving 
benefits under section 415 or part C of title IV of the Act at the time 
of such spouse's death; or
    (4) The surviving dependent parents, where there is no surviving 
spouse or child, or the surviving dependent brothers or sisters, where 
there is no surviving spouse, child, or parent, of a miner, where the 
deceased miner;
    (i) Was receiving benefits under section 415 or part C of title IV 
of the Act as a result of a claim filed prior to January 1, 1982; or
    (ii) Is determined as a result of a claim filed prior to January 1, 
1982, to have been totally disabled due to pneumoconiosis at the time of 
death, or to have died due to pneumoconiosis. Survivors of miners whose 
claims are filed on or after January 1, 1982, must establish that the 
deceased miner's death was due to pneumoconiosis in order to establish 
their entitlement to benefits, except where entitlement is established 
under Sec. 718.306 of part 718 on a survivor's claim filed prior to June 
30, 1982.
    (b) Section 411(c)(5) of the Act provides for the payment of 
benefits to the eligible survivors of a miner employed for 25 or more 
years in the mines prior to June 30, 1971, if the miner's death occurred 
on or before March 1, 1978, and if the claim was filed prior to June 30, 
1982, unless it is established that at the time of death, the miner was 
not totally or partially disabled due to pneumoconiosis. For the 
purposes of this part the term ``total disability'' shall mean partial 
disability with respect to a claim for which eligibility is established 
under section 411(c)(5) of the Act. See Sec. 718.306 of part 718 which 
implements this provision of the Act.

[[Page 772]]

    (c) The provisions contained in this subpart describe the conditions 
of entitlement to benefits applicable to a miner, or a surviving spouse, 
child, parent, brother, or sister, and the events which establish or 
terminate entitlement to benefits.
    (d) In order for an entitled miner or surviving spouse to qualify 
for augmented benefits because of one or more dependents, such 
dependents must meet relationship and dependency requirements with 
respect to such beneficiary prescribed by or pursuant to the Act. Such 
requirements are also set forth in this subpart.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983]

                 Conditions and Duration of Entitlement



Sec. 725.202  Miner defined; condition of entitlement, miner.

    (a) Miner defined. A ``miner'' for the purposes of this part is any 
person who works or has worked in or around a coal mine or coal 
preparation facility in the extraction, preparation, or transportation 
of coal, and any person who works or has worked in coal mine 
construction or maintenance in or around a coal mine or coal preparation 
facility. A coal mine construction or transportation worker shall be 
considered a miner to the extent such individual is or was exposed to 
coal mine dust as a result of employment in or around a coal mine or 
coal preparation facility. In the case of an individual employed in coal 
transportation or coal mine construction, there shall be a rebuttable 
presumption that such individual was exposed to coal mine dust during 
all periods of such employment occurring in or around a coal mine or 
coal preparation facility for purposes of:
    (1) Determining whether such individual is or was a miner; (2) 
establishing the applicability of any of the presumptions described in 
section 411(c) of the Act and part 718 of this subchapter; and (3) 
determining the identity of a coal mine operator liable for the payment 
of benefits in accordance with Sec. 725.493. The presumption may be 
rebutted by evidence which demonstrates:
    (i) That the individual was not regularly exposed to coal mine dust 
during his or her employment in or around a coal mine or preparation 
facility; or (ii) that the individual was not regularly employed in or 
around a coal mine or coal preparation facility. An individual employed 
by a coal mine operator, regardless of the nature of such individual's 
employment, shall be considered a miner unless such individual was not 
employed in or around a coal mine or coal preparation facility.
    A person who is or was a self-employed miner or independent 
contractor, and who otherwise meets the requirements of this paragraph, 
shall be considered a miner for the purposes of this part (see 
Sec. 725.494).
    (b) Conditions of entitlement; miner. An individual is eligible for 
benefits under this subchapter if the individual:
    (1) Is a miner as defined in this section; and
    (2) Is totally disabled due to pneumoconiosis (see part 718 of this 
subchapter; see also Sec. 725.503A); and
    (3) Has filed a claim for benefits in accordance with the provisions 
of this part.



Sec. 725.203  Duration of entitlement; miner.

    (a) An individual is entitled to benefits as a miner for each month 
beginning with the first month in which all of the conditions for 
entitlement prescribed in Sec. 725.202 are satisfied.
    (b) The last month for which such individual is entitled to benefits 
is the month before the month during which either of the following 
events first occurs:
    (1) The miner dies; or
    (2) The miner's total disability ceases (see Sec. 725.503A).

      Benefits on Account of Living Dependents (Augmented Benefits)



Sec. 725.204  Determination of relationship; spouse.

    For the purpose of augmenting benefits, an individual will be 
considered to be the spouse of a miner if:
    (a) The courts of the State in which the miner is domiciled would 
find that such individual and the miner validly married; or

[[Page 773]]

    (b) The courts of the State in which the miner is domiciled would 
find, under the law they would apply in determining the devolution of 
the miner's intestate personal property, that the individual is the 
miner's spouse; or
    (c) Under State law, such individual would have the right of a 
spouse to share in the miner's intestate personal property; or
    (d)(1) Such individual went through a marriage ceremony with the 
miner resulting in a purported marriage between them and which, but for 
a legal impediment, would have been a valid marriage, unless the 
individual entered into the purported marriage with knowledge that it 
was not a valid marriage, or if such individual and the miner were not 
living in the same household in the month in which a request is filed 
that the miner's benefits be augmented because such individual qualifies 
as the miner's spouse. The provisions of this paragraph shall not apply, 
however, if the miner's benefits are or have been augmented under 
Sec. 725.520(c) because another person qualifies or has qualified as the 
miner's spouse and such other person is, or is considered to be, the 
spouse of such miner under paragraph (a), (b), or (c) of this section at 
the time such request is filed.
    (2) The qualification of an individual for augmentation purposes 
under this paragraph shall end with the month before the month in which:
    (i) The Office determines that the benefits of the miner should be 
augmented on account of another person, if such other person is (or is 
considered to be) the spouse of the miner under paragraph (a), (b), or 
(c) of this section, or
    (ii) If the individual who previously qualified as a spouse for 
purposes of Sec. 725.520(c), entered into a valid marriage without 
regard to this paragraph, with a person other than the miner.



Sec. 725.205  Determination of dependency; spouse.

    For the purposes of augmenting benefits, an individual who is the 
miner's spouse (see Sec. 725.204) will be determined to be dependent 
upon the miner if:
    (a) The individual is a member of the same household as the miner 
(see Sec. 725.232); or
    (b) The individual is receiving regular contributions from the miner 
for support (see Sec. 725.233(c)); or
    (c) The miner has been ordered by a court to contribute to such 
individual's support (see Sec. 725.233(e)); or
    (d) The individual is the natural parent of the son or daughter of 
the miner; or
    (e) The individual was married to the miner (see Sec. 725.204) for a 
period of not less than 1 year.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983]



Sec. 725.206  Determination of relationship; divorced spouse.

    For the purposes of augmenting benefits with respect to any claim 
considered or reviewed under this part or part 727 of this subchapter, 
an individual will be considered to be the divorced spouse of a miner if 
the individual's marriage to the miner has been terminated by a final 
divorce on or after the 10th anniversary of the marriage unless, if such 
individual was married to and divorced from the miner more than once, 
such individual was married to the miner in each calendar year of the 
period beginning 10 years immediately before the date on which any 
divorce became final.



Sec. 725.207  Determination of dependency; divorced spouse.

    For the purpose of augmenting benefits, an individual who is the 
miner's divorced spouse (Sec. 725.206) will be determined to be 
dependent upon the miner if:
    (a) The individual is receiving at least one-half of his or her 
support from the miner (see Sec. 725.233(g)); or
    (b) The individual is receiving substantial contributions from the 
miner pursuant to a written agreement (see Sec. 725.233 (c), (f)); or
    (c) A court order requires the miner to furnish substantial 
contributions to the individual's support (see Sec. 725.233 (c), (e)).
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983]

[[Page 774]]



Sec. 725.208  Determination of relationship; child.

    As used in this section, the term ``beneficiary'' means only a 
surviving spouse entitled to benefits at the time of death (see 
Sec. 725.212), or a miner. An individual will be considered to be the 
child of a beneficiary if:
    (a) The courts of the State in which the beneficiary is domiciled 
(see Sec. 725.231) would find, under the law they would apply, that the 
individual is the beneficiary's child; or
    (b) The individual is the legally adopted child of such beneficiary; 
or
    (c) The individual is the stepchild of such beneficiary by reason of 
a valid marriage of the individual's parent or adopting parent to such 
beneficiary; or
    (d) The individual does not bear the relationship of child to such 
beneficiary under paragraph (a), (b), or (c) of this section, but would, 
under State law, have the same right as a child to share in the 
beneficiary's intestate personal property; or
    (e) The individual is the natural son or daughter of a beneficiary 
but is not a child under paragraph (a), (b), or (c) of this section, and 
is not considered to be the child of the beneficiary under paragraph (d) 
of this section if the beneficiary and the mother or the father, as the 
case may be, of the individual went through a marriage ceremony 
resulting in a purported marriage between them which but for a legal 
impediment (see Sec. 725.230) would have been a valid marriage; or
    (f) The individual is the natural son or daughter of a beneficiary 
but is not a child under paragraph (a), (b), or (c) of this section, and 
is not considered to be the child of the beneficiary under paragraph (d) 
or (e) of this section, such individual shall nevertheless be considered 
to be the child of the beneficiary if:
    (1) The beneficiary, prior to his or her entitlement to benefits, 
has acknowledged in writing that the individual is his or her son or 
daughter, or has been decreed by a court to be the parent of the 
individual, or has been ordered by a court to contribute to the support 
of the individual (see Sec. 725.233(e)) because the individual is his or 
her son or daughter; or
    (2) Such beneficiary is shown by satisfactory evidence to be the 
father or mother of the individual and was living with or contributing 
to the support of the individual at the time the beneficiary became 
entitled to benefits.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24290, May 31, 1983]



Sec. 725.209  Determination of dependency; child.

    (a) For purposes of augmenting the benefits of a miner or surviving 
spouse, the term ``beneficiary'' as used in this section means only a 
miner or surviving spouse entitled to benefits (see Sec. 725.202 and 
Sec. 725.212). An individual who is the beneficiary's child 
(Sec. 725.208) will be determined to be, or to have been dependent on 
the beneficiary, if the child:
    (1) Is unmarried; and
    (2)(i) Is under 18 years of age; or
    (ii) Is 18 years of age or older and is under a disability as 
defined in section 223(d) of the Social Security Act, 42 U.S.C. 423(d); 
or
    (iii) Is 18 years of age or older and is a student.
    (b)(1) The term ``student'' means a ``full-time student'' as defined 
in section 202(d)(7) of the Social Security Act, 42 U.S.C. 402(d)(7) 
(see Sec. 404.320(c) of this title), or an individual under 23 years of 
age who has not completed 4 years of education beyond the high school 
level and who is regularly pursuing a full-time course of study or 
training at an institution which is:
    (i) A school, college, or university operated or directly supported 
by the United States, or by a State or local government or political 
subdivision thereof; or
    (ii) A school, college, or university which has been accredited by a 
State or by a State-recognized or nationally-recognized accrediting 
agency or body; or
    (iii) A school, college, or university not so accredited but whose 
credits are accepted, on transfer, by at least three institutions which 
are so accredited; or
    (iv) A technical, trade, vocational, business, or professional 
school accredited or licensed by the Federal or a State government or 
any political subdivision thereof, providing courses of not less than 3 
months' duration that

[[Page 775]]

prepare the student for a livelihood in a trade, industry, vocation, or 
profession.
    (2) A student will be considered to be ``pursuing a full-time course 
of study or training at an institution'' if the student is enrolled in a 
noncorrespondence course of at least 13 weeks duration and is carrying a 
subject load which is considered full-time for day students under the 
institution's standards and practices. A student beginning or ending a 
full-time course of study or training in part of any month will be 
considered to be pursuing such course for the entire month.
    (3) A child is considered not to have ceased to be a student:
    (i) During any interim between school years, if the interim does not 
exceed 4 months and the child shows to the satisfaction of the office 
that he or she has a bona fide intention of continuing to pursue a full-
time course of study or training; or
    (ii) During periods of reasonable duration in which, in the judgment 
of the office, the child is prevented by factors beyond the child's 
control from pursuing his or her education.
    (4) A student whose 23d birthday occurs during a semester or other 
enrollment period in which such student is pursuing a full-time course 
of study or training shall continue to be considered a student until the 
end of such period, unless eligibility is otherwise terminated.



Sec. 725.210  Duration of augmented benefits.

    Augmented benefits payable on behalf of a spouse or divorced spouse, 
or a child, shall begin with the first month in which the dependent 
satisfies the conditions of relationship and dependency set forth in 
this subpart. Augmentation of benefits on account of a dependent 
continues through the month before the month in which the dependent 
ceases to satisfy these conditions, except in the case of a child who 
qualifies as a dependent because such child is a student. In the latter 
case, benefits continue to be augmented through the month before the 
first month during no part of which such child qualifies as a student.



Sec. 725.211  Time of determination of relationship and dependency of spouse or child for purposes of augmentation of benefits.

    With respect to the spouse or child of a miner entitled to benefits, 
and with respect to the child of a surviving spouse entitled to 
benefits, the determination as to whether an individual purporting to be 
a spouse or child is related to or dependent upon such miner or 
surviving spouse shall be based on the facts and circumstances present 
in each case, at the appropriate time.

                         Survivors' Entitlement



Sec. 725.212  Condition of entitlement; surviving spouse or surviving divorced spouse.

    (a) An individual who is the surviving spouse or surviving divorced 
spouse of a miner is eligible for benefits if such individual:
    (1) Is not married;
    (2) Was dependent on the miner at the pertinent time; and
    (3) The deceased miner either:
    (i) Was receiving benefits under section 415 or part C of title IV 
of the Act at the time of death as a result of a claim filed prior to 
January 1, 1982; or
    (ii) Is determined as a result of a claim filed prior to January 1, 
1982, to have been totally disabled due to pneumoconiosis at the time of 
death or to have died due to pneumoconiosis. A surviving spouse or 
surviving divorced spouse of a miner whose claim is filed on or after 
January 1, 1982, must establish that the deceased miner's death was due 
to pneumoconiosis in order to establish entitlement to benefits, except 
where entitlement is established under Sec. 718.306 of part 718 on a 
claim filed prior to June 30, 1982.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[48 FR 24291, May 31, 1983, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 725.213  Duration of entitlement; surviving spouse or surviving divorced spouse.

    (a) An individual is entitled to benefits as a surviving spouse, or 
as a surviving divorced spouse, for each month

[[Page 776]]

beginning with the first month in which all of the conditions of 
entitlement prescribed in Sec. 725.212 are satisfied.
    (b) The last month for which such individual is entitled to such 
benefits is the month before the month in which either of the following 
events first occurs:
    (1) The surviving spouse or surviving divorced spouse marries; or
    (2) The surviving spouse or surviving divorced spouse dies; or
    (3) Where the individual qualifies as the surviving spouse of a 
miner under Sec. 725.204(d), such individual ceases to qualify as 
provided in that paragraph.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]



Sec. 725.214  Determination of relationship; surviving spouse.

    An individual shall be considered to be the surviving spouse of a 
miner if:
    (a) The courts of the State in which the miner was domiciled (see 
Sec. 725.231) at the time of his or her death would find that the 
individual and the miner were validly married; or
    (b) The courts of the State in which the miner was domiciled (see 
Sec. 725.231) at the time of the miner's death would find that the 
individual was the miner's surviving spouse; or
    (c) Under State law, such individual would have the right of the 
spouse to share in the miner's intestate personal property; or
    (d) Such individual went through a marriage ceremony with the miner 
resulting in a purported marriage between them and which but for a legal 
impediment (see Sec. 725.230) would have been a valid marriage, unless 
such individual entered into the purported marriage with knowledge that 
it was not a valid marriage, or if such individual and the miner were 
not living in the same household at the time of the miner's death. The 
provisions of this paragraph shall not apply if another person is or has 
been entitled to benefits as the surviving spouse of the miner and such 
other person is, or is considered to be, the surviving spouse of such 
miner under paragraph (a), (b), or (c) of this section at the time such 
individual files a claim for benefits.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]



Sec. 725.215  Determination of dependency; surviving spouse.

    An individual who is the miner's surviving spouse (see Sec. 725.214) 
shall be determined to have been dependent on the miner if, at the time 
of the miner's death:
    (a) The individual was living with the miner (see Sec. 725.232); or
    (b) The individual was dependent upon the miner for support or the 
miner has been ordered by a court to contribute to such individual's 
support (see Sec. 725.233); or
    (c) The individual was living apart from the miner because of the 
miner's desertion or other reasonable cause; or
    (d) The individual is the natural parent of the miner's son or 
daughter; or
    (e) The individual had legally adopted the miner's son or daughter 
while the individual was married to the miner and while such son or 
daughter was under the age of 18; or
    (f) The individual was married to the miner at the time both of them 
legally adopted a child under the age of 18; or
    (g) (1) The individual was married to the miner for a period of not 
less than 9 months immediately before the day on which the miner died, 
unless the miner's death:
    (i) Is accidental (as defined in paragraph (g)(2) of this section), 
or
    (ii) Occurs in line of duty while the miner is a member of a 
uniformed service serving on active duty (as defined in Sec. 404.1013(f) 
(2) and (3) of this title), and the surviving spouse was married to the 
miner for a period of not less than 3 months immediately prior to the 
day on which such miner died.
    (2) For purposes of paragraph (g) (l) (i) of this section, the death 
of a miner is accidental if such individual received bodily injuries 
solely through violent, external, and accidental means, and as

[[Page 777]]

a direct result of the bodily injuries and independently of all other 
causes, dies not later than 3 months after the day on which such miner 
receives such bodily injuries. The term ``accident'' means an event that 
was unpremeditated and unforeseen from the standpoint of the deceased 
individual. To determine whether the death of an individual did, in 
fact, result from an accident the adjudication officer will consider all 
the circumstances surrounding the casualty. An intentional and voluntary 
suicide will not be considered to be death by accident; however, suicide 
by an individual who is so incompetent as to be incapable of acting 
intentionally and voluntarily will be considered to be a death by 
accident. In no event will the death of an individual resulting from 
violent and external causes be considered a suicide unless there is 
direct proof that the fatal injury was self-inflicted.
    (3) The provisions of this section shall not apply if the 
adjudication officer determines that at the time of the marriage 
involved, the miner would not reasonably have been expected to live for 
9 months.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 725.216  Determination of a relationship; surviving divorced spouse.

    An individual will be considered to be the surviving divorced spouse 
of deceased miner in a claim considered under this part or reviewed 
under part 727 of this subchapter, if such individual's marriage to the 
miner had been terminated by a final divorce on or after the 10th 
anniversary of the marriage unless, if such individual was married to 
and divorced from the miner more than once, such individual was married 
to such miner in each calendar year of the period beginning 10 years 
immediately before the date on which any divorce became final and ending 
with the year in which the divorce became final.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 725.217  Determination of dependency; surviving divorced spouse.

    (a) An individual who is the miner's surviving divorced spouse (see 
Sec. 725.216) shall be determined to have been dependent on the miner 
if, for the month before the month in which the miner died:
    (1) The individual was receiving at least one-half of his or her 
support from the miner (see Sec. 725.233(g)); or
    (2) The individual was receiving substantial contributions from the 
miner pursuant to a written agreement (see Sec. 725.233 (e) and (f)); or
    (3) A court order required the miner to furnish substantial 
contributions to the individual's support (see Sec. 275.233 (c) and 
(e)).

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]



Sec. 725.218  Conditions of entitlement; child.

    (a) An individual is entitled to benefits where he or she meets the 
required standards of relationship and dependency under this subpart 
(see Sec. 725.220 and Sec. 725.221) and is the child of a deceased miner 
who:
    (1) Was receiving benefits under section 415 or part C of title IV 
of the Act as a result of a claim filed prior to January 1, 1982, or
    (2) Is determined as a result of a claim filed prior to January 1, 
1982, to have been totally disabled due to pneumoconiosis at the time of 
death, or to have died due to pneumoconiosis. A surviving dependent 
child of a miner whose claim is filed on or after January 1, 1982, must 
establish that the miner's death was due to pneumoconiosis in order to 
establish entitlement to benefits, except where entitlement is 
established under Sec. 718.306 of part 718 on a claim filed prior to 
June 30, 1982.
    (b) A child is not entitled to benefits for any month for which a 
miner, or

[[Page 778]]

the surviving spouse or surviving divorced spouse of a miner, 
establishes entitlement to benefits.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]



Sec. 725.219  Duration of entitlement; child.

    (a) An individual is entitled to benefits as a child for each month 
beginning with the first month in which all of the conditions of 
entitlement prescribed in Sec. 725.218 are satisfied.
    (b) The last month for which such individual is entitled to such 
benefits is the month before the month in which any one of the following 
events first occurs:
    (1) The child dies;
    (2) The child marries;
    (3) The child attains age 18; and
    (i) Is not under a disability at that time, and
    (ii) Is not a student (as defined in Sec. 725.209(b)) during any 
part of the month in which the child attains age 18;
    (4) If the child's entitlement is based on his or her status as a 
student, the earlier of:
    (i) The first month during no part of which the individual is a 
student; or
    (ii) The month in which the individual attains age 23 and is not 
under a disability at that time;
    (5) If a child's entitlement is based on disability, the first month 
in no part of which such individual is under a disability.
    (c) A child whose entitlement to benefits terminated with the month 
before the month in which the child attained age 18, or later, may 
thereafter (provided such individual is not married) again become 
entitled to such benefits upon filing application for such 
reentitlement, beginning with the first month after termination of 
benefits in which such individual is a student and has not attained the 
age of 23.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984



Sec. 725.220  Determination of relationship; child.

    For purposes of determining whether an individual may qualify for 
benefits as the child of a deceased miner, the provisions of 
Sec. 725.208 shall be applicable. As used in this section, the term 
``beneficiary'' means only a surviving spouse entitled to benefits at 
the time of such surviving spouse's death (see Sec. 725.212), or a 
miner. For purposes of a survivor's claim, an individual will be 
considered to be a child of a beneficiary if:
    (a) The courts of the State in which such beneficiary is domiciled 
(see Sec. 725.231) would find, under the law they would apply in 
determining the devolution of the beneficiary's intestate personal 
property, that the individual is the beneficiary's child; or
    (b) Such individual is the legally adopted child of such 
beneficiary; or
    (c) Such individual is the stepchild of such beneficiary by reason 
of a valid marriage of such individual's parent or adopting parent to 
such beneficiary; or
    (d) Such individual does not bear the relationship of child to such 
beneficiary under paragraph (a), (b), or (c) of this section, but would, 
under State law, have the same right as a child to share in the 
beneficiary's intestate personal property; or
    (e) Such individual is the natural son or daughter of a beneficiary 
but does not bear the relationship of child to such beneficiary under 
paragraph (a), (b), or (c) of this section, and is not considered to be 
the child of the beneficiary under paragraph (d) of this section, such 
individual shall nevertheless be considered to be the child of such 
beneficiary if the beneficiary and the mother or father, as the case may 
be, of such individual went through a marriage ceremony resulting in a 
purported marriage between them which but for a legal impediment (see 
Sec. 725.230) would have been a valid marriage; or
    (f) Such individual is the natural son or daughter of a beneficiary 
but does not have the relationship of child to

[[Page 779]]

such beneficiary under paragraph (a), (b), or (c) of this section, and 
is not considered to be the child of the beneficiary under paragraph (d) 
or (e) of this section, such individual shall nevertheless be considered 
to be the child of such beneficiary if:
    (1) Such beneficiary, prior to his or her entitlement to benefits, 
has acknowledged in writing that the individual is his or her son or 
daughter, or has been decreed by a court to be the father or mother of 
the individual, or has been ordered by a court to contribute to the 
support of the individual (see Sec. 725.233(a)) because the individual 
is a son or daughter; or
    (2) Such beneficiary is shown by satisfactory evidence to be the 
father or mother of the individual and was living with or contributing 
to the support of the individual at the time such beneficiary became 
entitled to benefits.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]



Sec. 725.221  Determination of dependency; child.

    For the purposes of determining whether a child was dependent upon a 
deceased miner, the provisions of Sec. 725.209 shall be applicable, 
except that for purposes of determining the eligibility of a child who 
is under a disability as defined in section 223(d) of the Social 
Security Act, such disability must have begun before the child attained 
age 18, or in the case of a student, before the child ceased to be a 
student.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 725.222  Conditions of entitlement; parent, brother, or sister.

    (a) An individual is eligible for benefits as a surviving parent, 
brother or sister if all of the following requirements are met:
    (1) The individual is the parent, brother, or sister of a deceased 
miner;
    (2) The individual was dependent on the miner at the pertinent time;
    (3) Proof of support is filed within 2 years after the miner's 
death, unless the time is extended for good cause (Sec. 725.226);
    (4) In the case of a brother or sister, such individual also:
    (i) Is under 18 years of age; or
    (ii) Is 18 years of age or older and is under a disability as 
defined in section 223(d) of the Social Security Act, 42 U.S.C. 423(d), 
which began before such individual attained age 18, or in the case of a 
student, before the student ceased to be a student; or
    (iii) Is a student (see Sec. 725.209(b)); or
    (iv) Is under a disability as defined in section 223(d) of the 
Social Security Act, 42 U.S.C. 423(d), at the time of the miner's death;
    (5) The deceased miner:
    (i) Was entitled to benefits under section 415 or part C of title IV 
of the Act as a result of a claim filed prior to January 1, 1982; or
    (ii) Is determined as a result of a claim filed prior to January 1, 
1982, to have been totally disabled due to pneumoconiosis at the time of 
death or to have died due to pneumoconiosis. A surviving dependent 
parent, brother or sister of a miner whose claim is filed on or after 
January 1, 1982, must establish that the miner's death was due to 
pneumoconiosis in order to establish entitlement to benefits, except 
where entitlement is established under Sec. 718.306 of part 718 on a 
claim filed prior to June 30, 1982.
    (b)(1) A parent is not entitled to benefits if the deceased miner 
was survived by a spouse or child at the time of such miner's death.
    (2) A brother or sister is not entitled to benefits if the deceased 
miner was survived by a spouse, child, or parent at the time of such 
miner's death.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983; 49 
FR 18295, Apr. 30, 1984]

[[Page 780]]



Sec. 725.223  Duration of entitlement; parent, brother, or sister.

    (a) A parent, sister, or brother is entitled to benefits beginning 
with the month all the conditions of entitlement described in 
Sec. 725.222 are met.
    (b) The last month for which such parent is entitled to benefits is 
the month in which the parent dies.
    (c) The last month for which such brother or sister is entitled to 
benefits is the month before the month in which any of the following 
events first occurs:
    (1) The individual dies;
    (2)(i) The individual marries or remarries; or
    (ii) If already married, the individual received support in any 
amount from his or her spouse;
    (3) The individual attains age 18, and
    (i) Is not under a disability at that time, and (ii) Is not a 
student (see Sec. 725.209(b)) during any part of the month in which such 
individual attains age 18;
    (4) If the individual's entitlement is based on his or her status as 
a student, the earlier of:
    (i) The first month during no part of which he or she is a student; 
or
    (ii) The month in which he or she attains age 23 and is not under a 
disability at that time;
    (5) If the individual's entitlement is based on disability, the 
first month in no part of which the individual is under a disability.

(Approved by the Office of Management and Budget under control number 
1215-0087)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 725.224  Determination of relationship; parent, brother, or sister.

    (a) An individual will be considered to be the parent, brother, or 
sister of a miner if the courts of the State in which the miner was 
domiciled (see Sec. 225.231) at the time of death would find, under the 
law they would apply, that the individual is the miner's parent, 
brother, or sister.
    (b) Where, under State law, the individual is not the miner's 
parent, brother, or sister, but would, under State law, have the same 
status (i.e., right to share in the miner's intestate personal property) 
as a parent, brother, or sister, the individual will be considered to be 
the parent, brother, or sister as appropriate.



Sec. 725.225  Determination of dependency; parent, brother, or sister.

    An individual who is the miner's parent, brother, or sister will be 
determined to have been dependent on the miner if, during the 1-year 
period immediately prior to the miner's death:
    (a) The individual and the miner were living in the same household 
(see Sec. 725.232); and
    (b) The individual was totally dependent on the miner for support 
(see Sec. 725.233(h)).
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24291, May 31, 1983]



Sec. 725.226  ``Good cause'' for delayed filing of proof of support.

    (a) What constitutes ``good cause.'' ``Good cause'' may be found for 
failure to file timely proof of support where the parent, brother, or 
sister establishes to the satisfaction of the Office that such failure 
to file was due to:
    (1) Circumstances beyond the individual's control, such as extended 
illness, mental, or physical incapacity, or communication difficulties; 
or
    (2) Incorrect or incomplete information furnished the individual by 
the Office; or
    (3) Efforts by the individual to secure supporting evidence without 
a realization that such evidence could be submitted after filing proof 
of support.
    (b) What does not constitute ``good cause.'' ``Good cause'' for 
failure to file timely proof of support (see Sec. 725.222(a)(3)) does 
not exist when there is evidence of record in the Office that the 
individual was informed that he or she should file within the prescribed 
period and he or she failed to do so deliberately or through negligence.



Sec. 725.227  Time of determination of relationship and dependency of survivors.

    The determination as to whether an individual purporting to be an 
entitled survivor of a miner or beneficiary was related to, or dependent 
upon, the miner is made after such individual

[[Page 781]]

files a claim for benefits as a survivor. Such determination is based on 
the facts and circumstances with respect to a reasonable period of time 
ending with the miner's death. A prior determination that such 
individual was, or was not, a dependent for the purposes of augmenting 
the miner's benefits for a certain period, is not determinative of the 
issue of whether the individual is a dependent survivor of such miner.



Sec. 725.228  Effect of conviction of felonious and intentional homicide on entitlement to benefits.

    An individual who has been convicted of the felonious and 
intentional homicide of a miner of other beneficiary shall not be 
entitled to receive any benefits payable because of the death of such 
miner or other beneficiary, and such person shall be considered 
nonexistent in determining the entitlement to benefits of other 
individuals.

                       Terms Used in This Subpart



Sec. 725.229  Intestate personal property.

    References in this subpart to the ``same right to share in the 
intestate personal property'' of a deceased miner (or surviving spouse) 
refer to the right of an individual to share in such distribution in the 
individual's own right and not the right of representation.



Sec. 725.230  Legal impediment.

    For purposes of this subpart, ``legal impediment'' means an 
impediment resulting from the lack of dissolution of a previous marriage 
or otherwise arising out of such previous marriage or its dissolution or 
resulting from a defect in the procedure followed in connection with the 
purported marriage ceremony--for example, the solemnization of a 
marriage only through a religious ceremony in a country which requires a 
civil ceremony for a valid marriage.



Sec. 725.231  Domicile.

    (a) For purposes of this subpart, the term ``domicile'' means the 
place of an individual's true, fixed, and permanent home.
    (b) The domicile of a deceased miner or surviving spouse is 
determined as of the time of death.
    (c) If an individual was not domiciled in any State at the pertinent 
time, the law of the District of Columbia is applied.



Sec. 725.232  Member of the same household--``living with,'' ``living in the same household,'' and ``living in the miner's household,'' defined.

    (a) Defined. (1) The term ``member of the same household'' as used 
in section 402(a)(2) of the Act (with respect to a spouse); the term 
``living with'' as used in section 402(e) of the Act (with respect to a 
surviving spouse); and the term ``living in the same household'' as used 
in this subpart, means that a husband and wife were customarily living 
together as husband and wife in the same place.
    (2) The term ``living in the miner's household'' as used in section 
412(a)(5) of the Act (with respect to a parent, brother, or sister) 
means that the miner and such parent, brother, or sister were sharing 
the same residence.
    (b) Temporary absence. The temporary absence from the same residence 
of either the miner, or the miner's spouse, parent, brother, or sister 
(as the case may be), does not preclude a finding that one was ``living 
with'' the other, or that they were ``members of the same household.'' 
The absence of one such individual from the residence in which both had 
customarily lived shall, in the absence of evidence to the contrary, be 
considered temporary:
    (1) If such absence was due to service in the Armed Forces of the 
United States; or
    (2) If the period of absence from his or her residence did not 
exceed 6 months and the absence was due to business or employment 
reasons, or because of confinement in a penal institution or in a 
hospital, nursing home, or other curative institution; or
    (3) In any other case, if the evidence establishes that despite such 
absence they nevertheless reasonably expected to resume physically 
living together.
    (c) Relevant period of time. (1) The determination as to whether a 
surviving spouse had been ``living with'' the miner shall be based upon 
the facts and circumstances as of the time of the death of the miner.

[[Page 782]]

    (2) The determination as to whether a spouse is a ``member of the 
same household'' as the miner shall be based upon the facts and 
circumstances with respect to the period or periods of time as to which 
the issue of membership in the same household is material.
    (3) The determination as to whether a parent, brother, or sister was 
``living in the miner's household'' shall take account of the 1-year 
period immediately prior to the miner's death.



Sec. 725.233  Support and contributions.

    (a) Support defined. The term ``support'' includes food, shelter, 
clothing, ordinary medical expenses, and other ordinary and customary 
items for the maintenance of the person supported.
    (b) Contributions defined. The term ``contributions'' refers to 
contributions actually provided by the contributor from such 
individual's property, or the use thereof, or by the use of such 
individual's own credit.
    (c) Regular contributions and substantial contributions defined. The 
terms ``regular contributions'' and ``substantial contributions'' mean 
contributions that are customary and sufficient to constitute a material 
factor in the cost of the individual's support.
    (d) Contributions and community property. When a spouse receives and 
uses for his or her support income from services or property, and such 
income, under applicable State law, is the community property of the 
wife and her husband, no part of such income is a ``contribution'' by 
one spouse to the other's support regardless of the legal interest of 
the donor. However, when a spouse receives and uses for support, income 
from the services and the property of the other spouse and, under 
applicable State law, such income is community property, all of such 
income is considered to be a contribution by the donor to the spouse's 
support.
    (e) Court order for support defined. References to a support order 
in this subpart means any court order, judgement, or decree of a court 
of competent jurisdiction which requires regular contributions that are 
a material factor in the cost of the individual's support and which is 
in effect at the applicable time. If such contributions are required by 
a court order, this condition is met whether or not the contributions 
were actually made.
    (f) Written agreement defined. The term ``written agreement'' in the 
phrase ``substantial contributions pursuant to a written agreement'', as 
used in this subpart means an agreement signed by the miner providing 
for substantial contributions by the miner for the individual's support. 
It must be in effect at the applicable time but it need not be legally 
enforceable.
    (g) One-half support defined. The term ``one-half support'' means 
that the miner made regular contributions, in cash or in kind, to the 
support of a divorced spouse at the specified time or for the specified 
period, and that the amount of such contributions equalled or exceeded 
one-half the total cost of such individual's support at such time or 
during such period.
    (h) Totally dependent for support defined. The term ``totally 
dependent for support'' as used in Sec. 725.225(b) means that the miner 
made regular contributions to the support of the miner's parents, 
brother, or sister, as the case may be, and that the amount of such 
contributions at least equalled the total cost of such individual's 
support.



                       Subpart C--Filing of Claims



Sec. 725.301  Who may file a claim.

    (a) Any person who believes he or she may be entitled to benefits 
under the Act may file a claim in accordance with this subpart.
    (b) A claimant who has attained the age of 18, is mentally competent 
and physically able, may file a claim on his or her own behalf.
    (c) If a claimant is unable to file a claim on his or her behalf 
because of a legal or physical impairment, the following rules shall 
apply:
    (1) A claimant between the ages of 16 and 18 years who is mentally 
competent and not under the legal custody or care of another person, or 
a committee or institution, may upon filing a statement to the effect, 
file a claim on his or her own behalf. In any other case where the 
claimant is under 18 years of age, only a person, or the manager or

[[Page 783]]

principal officer of an institution having legal custody or care of the 
claimant may file a claim on his or her behalf.
    (2) If a claimant over 18 years of age has a legally appointed 
guardian or committee, only the guardian or committee may file a claim 
on his or her behalf.
    (3) If a claimant over 18 years of age is mentally incompetent or 
physically unable to file a claim and is under the care of another 
person, or an institution, only the person, or the manager or principal 
officer of the institution responsible for the care of the claimant, may 
file a claim on his or her behalf.
    (4) For good cause shown, the Office may accept a claim executed by 
a person other than one described in paragraphs (2) or (3) of this 
section.
    (d) Except as provided in Sec. 725.305 of this part, in order for a 
claim to be considered, the claimant must be alive at the time the claim 
is filed.



Sec. 725.302  Evidence of authority to file a claim on behalf of another.

    (a) A person filing a claim on behalf of a claimant shall submit 
evidence of his or her authority to so act at the time of filing or at a 
reasonable time thereafter in accordance with the following:
    (1) A legally appointed guardian or committee shall provide the 
Office with certification of appointment by a proper official of the 
court.
    (2) Any other person shall provide a statement describing his or her 
relationship to the claimant, the extent to which he or she has care of 
the claimant, or his or her position as an officer of the institution of 
which the claimant is an inmate. The Office may, at any time, require 
additional evidence to establish the authority of any such person.



Sec. 725.303  Date and place of filing of claims.

    (a) (1) Claims for benefits shall be delivered, mailed to, or 
presented at, any of the various district offices of the Social Security 
Administration, or any of the various offices of the Department of Labor 
authorized to accept claims, or, in the case of a claim filed by or on 
behalf of a claimant residing outside the United States, mailed or 
presented to any office maintained by the Foreign Service of the United 
States. A claim shall be considered filed on the day it is received by 
the office in which it is first filed.
    (2) A claim submitted to a Foreign Service Office or any other 
agency or subdivision of the U.S. Government shall be forwarded to the 
Office and considered filed as of the date it was received at the 
Foreign Service Office or other governmental agency or unit.
    (b) A claim submitted by mail shall be considered filed as of the 
date of delivery unless a loss or impairment of benefit rights would 
result, in which case a claim shall be considered filed as of the date 
of its postmark. In the absence of a legible postmark, other evidence 
may be used to establish the mailing date.



Sec. 725.304  Forms and initial processing.

    (a) Claims shall be filed on forms prescribed and approved by the 
Office. The district office at which the claim is filed will assist 
claimants in completing their forms.
    (b) If the place at which a claim is filed is an office of the 
Social Security Administration, such office shall forward the completed 
claim form to an office of the DCMWC, which is authorized to process the 
claim.



Sec. 725.305  When a written statement is considered a claim.

    (a) The filing of a statement signed by an individual indicating an 
intention to claim benefits shall be considered to be the filing of a 
claim for the purposes of this part under the following circumstances:
    (1) The claimant or a proper person on his or her behalf (see Sec.  
725.301) executes and files a prescribed claim form with the Office 
during the claimant's lifetime within the period specified in paragraph 
(b) of this section.
    (2) Where the claimant dies within the period specified in paragraph 
(b) of this section without filing a prescribed claim form, and a person 
acting on behalf of the deceased claimant's estate executes and files a 
prescribed claim form within the period specified in paragraph (c) of 
this section.

[[Page 784]]

    (b) Upon receipt of a written statement indicating an intention to 
claim benefits, the Office shall notify the signer in writing that to be 
considered the claim must be executed by the claimant or a proper party 
on his or her behalf on the prescribed form and filed with the Office 
within six months from the date of mailing of the notice.
    (c) If before the notice specified in paragraph (b) of this section 
is sent, or within six months after such notice is sent, the claimant 
dies without having executed and filed a prescribed form, or without 
having had one executed and filed in his or her behalf, the Office shall 
upon receipt of notice of the claimant's death advise his or her estate, 
or those living at his or her last known address, in writing that for 
the claim to be considered, a prescribed claim form must be executed and 
filed by a person authorized to do so on behalf of the claimant's estate 
within six months of the date of the later notice.
    (d) Claims based upon written statements indicating an intention to 
claim benefits not perfected in accordance with this section shall not 
be processed.



Sec. 725.306  Withdrawal of a claim.

    (a) A claimant or an individual authorized to execute a claim on a 
claimant's behalf or on behalf of claimant's estate under Sec. 725.305, 
may withdraw a previously filed claim provided that:
    (1) He or she files a written request with the appropriate 
adjudication officer indicating the reasons for seeking withdrawal of 
the claim;
    (2) The appropriate adjudication officer approves the request for 
withdrawal on the grounds that it is in the best interests of the 
claimant or his or her estate, and;
    (3) Any benefits previously paid with respect to the claim are 
reimbursed.
    (b) When a claim had been withdrawn under paragraph (a) of this 
section, the claim will be considered not to have been filed.



Sec. 725.307  Cancellation of a request for withdrawal.

    At any time prior to approval, a request for withdrawal may be 
canceled by a written request of the claimant or a person authorized to 
act on the claimant's behalf or on behalf of the claimant's estate.



Sec. 725.308  Time limits for filing claims.

    (a) A claim for benefits filed under this part by, or on behalf of, 
a miner shall be filed within three years after a medical determination 
of total disability due to pneumoconiosis which has been communicated to 
the miner or a person responsible for the care of the miner, or within 
three years after the date of enactment of the Black Lung Benefits 
Reform Act of 1977, whichever is later. There is no time limit on the 
filing of a claim by the survivor of a miner.
    (b) A miner who is receiving benefits under part B of title IV of 
the Act and who is notified by HEW of the right to seek medical benefits 
may file a claim for medical benefits under part C of title IV of the 
Act and this part. The Secretary of Health, Education, and Welfare is 
required to notify each miner receiving benefits under part B of this 
right. Notwithstanding the provisions of paragraph (a) of this section, 
a miner notified of his or her rights under this paragraph may file a 
claim under this part on or before December 31, 1980. Any claim filed 
after that date shall be untimely unless the time for filing has been 
enlarged for good cause shown.
    (c) There shall be a rebuttable presumption that every claim for 
benefits is timely filed. However, except as provided in paragraph (b) 
of this section, the time limits in this section are mandatory and may 
not be waived or tolled except upon a showing of extraordinary 
circumstances.
[43 FR 36772, Aug. 18, 1978, as amended at 45 FR 44264, July 1, 1980]



Sec. 725.309  Duplicate claims.

    (a) A claimant whose claim for benefits was previously approved 
under part B of title IV of the Act may file a claim for benefits under 
this part as provided in Secs. 725.308(b) and 725.701A.
    (b) A claimant who has filed a claim for benefits under both parts B 
and C of title IV of the Act or who has filed more than one claim for 
benefits under part C of title IV of the Act before March 1, 1978, and 
whose claims are pending or have been denied (Sec. 727.102 of

[[Page 785]]

this subchapter) shall have his or her claims considered in accordance 
with Sec. 727.103 of this subchapter.
    (c) A claimant who filed a claim for benefits under part B of title 
IV of the Act or part C of title IV of the Act before March 1, 1978, and 
whose previous claim(s) are pending or have been finally denied, who 
files an additional claim under this part, shall have the later claim 
merged with any earlier claim subject to review under part 727 of this 
subchapter. If an earlier claim subject to review under part 727 of this 
subchapter has been denied after review, a new claim filed under this 
part shall also be denied, on the grounds of the prior denial, unless 
the deputy commissioner determines that there has been a material change 
in conditions or the later claim is a request for modification and the 
requirements of Sec. 725.310 are met. If an earlier survivor's claim 
subject to review under part 727 of this subchapter has been denied, the 
new claim filed under this part shall also be denied unless the deputy 
commissioner determines that the later claim is a request for 
modification and the requirements of Sec. 725.310 are met.
    (d) In the case of a claimant who files more than one claim for 
benefits under this part, the later claim shall be merged with the 
earlier claim for all purposes if the earlier claim is still pending. If 
the earlier miner's claim has been finally denied, the later claim shall 
also be denied, on the grounds of the prior denial, unless the deputy 
commissioner determines that there has been a material change in 
conditions or the later claim is a request for modification and the 
requirements of Sec. 725.310 are met. If an earlier survivor's claim 
filed under this part has been finally denied, the new claim filed under 
this part shall also be denied unless the deputy commissioner determines 
that the later claim is a request for modification and the requirements 
of Sec. 725.310 are met.
    (e) Notwithstanding any other provision of this part or part 727 of 
this subchapter, a person may exercise the right of review provided in 
paragraph (c) of Sec. 727.103 at the same time such person is pursuing 
an appeal of a previously denied part B claim under the law as it 
existed prior to March 1, 1978. If the part B claim is ultimately 
approved as a result of the appeal, the claimant must immediately notify 
the Secretary of Labor and, where appropriate, the coal mine operator, 
and all duplicate payments made under part C shall be considered an 
overpayment and arrangements shall be made to insure the repayment of 
such overpayments to the fund or an operator, as appropriate.
    (f) In a case involving duplicate claims, under no circumstances are 
duplicate benefits payable for concurrent periods of eligibility. Any 
duplicate benefits paid shall be subject to collection or offset under 
subpart G of this part.



Sec. 725.310  Modification of awards and denials.

    (a) Upon his or her own initiative, or upon the request of any party 
on grounds of a change in conditions or because of a mistake in a 
determination of fact, the deputy commissioner may, at any time before 
one year from the date of the last payment of benefits, or at any time 
before one year after the denial of a claim, reconsider the terms of an 
award or denial of benefits.
    (b) Modification proceedings shall be conducted in accordance with 
the provisions of this part as appropriate. Additional evidence may be 
submitted by any party or requested by the deputy commissioner. 
Modification proceedings shall not be initiated before an administrative 
law judge or the Benefits Review Board.
    (c) At the conclusion of modification proceedings the deputy 
commissioner may issue a proposed decision and order (Sec. 725.418), 
forward the claim for a hearing (Sec. 725.421) or, if appropriate, deny 
the claim by reason of abandonment (Sec. 725.409).
    (d) An order issued following the conclusion of modification 
proceedings may terminate, continue, reinstate, increase or decrease 
benefit payments or award benefits. Such order shall not affect any 
benefits previously paid, except that an order increasing or decreasing 
the amount of benefits payable may be made effective on the date from 
which benefits were determined payable by the terms of an earlier

[[Page 786]]

award. In the case of an award which is decreased, any payment made in 
excess of the decreased rate shall be subject to collection or offset 
under subpart G of this part.



Sec. 725.311  Communications with respect to claims; time computations.

    (a) Unless otherwise specified by this part, all requests, 
responses, notices, decisions, orders, or other communications required 
or permitted by this part shall be in writing.
    (b) If required by this part, any document, brief, or other 
statement submitted in connection with the adjudication of a claim under 
this part shall be sent to each party to the claim by the submitting 
party. If proof of service is required with respect to any 
communication, such proof of service shall be submitted to the 
appropriate adjudication officer and filed as part of the claim record.
    (c) Whenever any notice, document, brief or other statement is 
served by mail, 7 days shall be added to the time within which a reply 
or response is required to be submitted.
    (d) In computing any period of time described in this part, by any 
applicable statute, or by the order of any adjudication officer, the day 
of the act or event from which the designated period of time begins to 
run shall not be included. The last day of the period shall be included 
unless it is a Saturday, Sunday, or legal holiday, in which event the 
period extends until the next day which is not a Saturday, Sunday, or 
legal holiday. ``Legal holiday'' includes New Year's Day, Washington's 
Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, 
Veterans Day, Thanksgiving Day, Christmas Day and any other day 
appointed as a holiday by the President or the Congress of the United 
States.



        Subpart D--Adjudication of Claims; Adjudication Officers



Sec. 725.350  Who are the adjudication officers.

    (a) General. The persons authorized by the Secretary of Labor to 
accept evidence and decide claims on the basis of such evidence are 
called ``adjudication officers.'' This section describes the status of 
black lung claims adjudication officers.
    (b) Deputy commissioner. The deputy commissioner is that official of 
the DCMWC or his designee who is authorized to perform functions with 
respect to the development, processing, and adjudication of claims in 
accordance with this part.
    (c) Administrative law judge. An administrative law judge is that 
official appointed pursuant to 5 U.S.C. 3105 (or Pub. L. 94-504) who is 
qualified to preside at hearings under 5 U.S.C. 557 and is empowered by 
the Secretary to conduct formal hearings with respect to, and 
adjudicate, claims in accordance with this part. A person appointed 
under Public Law 94-504 shall not be considered an administrative law 
judge for purposes of this part for any period after March 1, 1979.



Sec. 725.351  Powers of adjudication officers.

    (a) Deputy commissioner. The deputy commissioner is authorized to: 
(1) Make determinations with respect to claims as is provided in this 
part; (2) conduct conferences and informal discovery proceedings as 
provided in this part; (3) compel the production of documents by the 
issuance of a subpoena, with the written approval of the Director; (4) 
prepare documents for the signature of parties; (5) issue appropriate 
orders as provided in this part; (6) do all other things necessary to 
enable him or her to discharge the duties of the office.
    (b) Administrative Law Judge. An administrative law judge is 
authorized to: (1) conduct formal hearings in accordance with the 
provisions of this part; (2) administer oaths and examine witnesses; (3) 
compel the production of documents and appearance of witnesses by the 
issuance of subpoenas; (4) issue decisions and orders with respect to 
claims as provided in this part; and (5) do all other things necessary 
to enable him or her to discharge the duties of the office.
    (c) If any person in proceedings before an adjudication officer 
disobeys or resists any lawful order or process, or misbehaves during a 
hearing or so near the place thereof as to obstruct the

[[Page 787]]

same, or neglects to produce, after having been ordered to do so, any 
pertinent book, paper or document, or refuses to appear after having 
been subpoenaed, or upon appearing refuses to take the oath as a 
witness, or after having taken the oath refuses to be examined according 
to law, the deputy commissioner with the approval of the Director, or 
the administrative law judge responsible for the adjudication of the 
claim, shall certify the facts to the Federal district court having 
jurisdiction in the place in which he or she is sitting (or to the U.S. 
District Court for the District of Columbia if he or she is sitting in 
the District) which shall thereupon in a summary manner hear the 
evidence as to the acts complained of, and, if the evidence so warrants, 
punish such person in the same manner and to the same extent as for a 
contempt committed before the court, or commit such person upon the same 
condition as if the doing of the forbidden act had occurred with 
reference to the process or in the presence of the court.



Sec. 725.352  Disqualification of adjudication officer.

    (a) No adjudication officer shall conduct any proceedings in a claim 
in which he or she is prejudiced or partial, or where he or she has any 
interest in the matter pending for decision. A decision to withdraw from 
the consideration of a claim shall be within the discretion of the 
adjudication officer. If that adjudication officer withdraws, another 
officer shall be designated by the Director or the Chief Administrative 
Law Judge, as the case may be, to complete the adjudication of the 
claim.
    (b) No adjudication officer shall be permitted to appear or act as a 
representative of a party under this part while such individual is 
employed as an adjudication officer. No adjudication officer shall be 
permitted at any time to appear or act as a representative in connection 
with any case or claim in which he or she was personally involved. No 
fee or reimbursement shall be awarded under this part to an individual 
who acts in violation of this paragraph.
    (c) No adjudication officer shall act in any claim involving a party 
which employed such adjudication officer within one year before the 
adjudication of such claim.
    (d) Notwithstanding paragraph (a) of this section, no adjudication 
officer shall be permitted to act in any claim involving a party who is 
related to the adjudication officer by consanguinity or affinity within 
the third degree as determined by the law of the place where such party 
is domiciled. Any action taken by an adjudication officer in knowing 
violation of this paragraph shall be void.

                       Parties and Representatives



Sec. 725.360  Parties to proceedings.

    (a) Except as provided in Sec. 725.361, no person other than the 
Secretary of Labor and authorized personnel of the Department of Labor 
shall participate at any stage in the adjudication of a claim for 
benefits under this part, unless such person is determined by the 
appropriate adjudication officer to qualify under the provisions of this 
section as a party to the claim. The following persons shall be parties:
    (1) The claimant;
    (2) A person other than a claimant, authorized to execute a claim on 
such claimant's behalf under Sec. 725.301;
    (3) Any coal mine operator notified under Sec. 725.412 of its 
possible liability for the claim;
    (4) Any insurance carrier of such operator; and
    (5) The Director in all proceedings relating to a claim for benefits 
under this part.
    (b) A widow, child, parent, brother, or sister, or the 
representative of a decedent's estate, who makes a showing in writing 
that his or her rights with respect to benefits may be prejudiced by a 
decision of an adjudication officer, may be made a party.
    (c) Any coal mine operator or prior operator or insurance carrier 
which has not been notified under Sec. 725.412 and which makes a showing 
in writing that its rights may be prejudiced by a decision of an 
adjudication officer may be made a party.
    (d) Any other individual may be made a party if that individual's 
rights with respect to benefits may be prejudiced by a decision to be 
made.

[[Page 788]]



Sec. 725.361  Party amicus curiae.

    At the discretion of the Chief Administrative Law Judge or the 
administrative law judge assigned to the case, a person or entity which 
is not a party may be allowed to participate amicus curiae in a formal 
hearing only as to an issue of law. A person may participate amicus 
curiae in a formal hearing upon written request submitted with 
supporting arguments prior to the hearing. If the request is granted, 
the administrative law judge hearing the case will inform the party of 
the extent to which participation will be permitted. The request may, 
however, be denied summarily and without explanation.



Sec. 725.362  Representation of parties.

    (a) Except for the Secretary of Labor, whose interests shall be 
represented by the Solicitor of Labor or his or her designee, each of 
the parties may appoint an individual to represent his or her interest 
in any proceeding for determination of a claim under this part. Such 
appointment shall be made in writing or on the record at the hearing. A 
written notice appointing a representative shall be signed by the party 
or his or her legal guardian and shall be sent to the Office or, for 
representation at a formal hearing, to the Chief Administrative Law 
Judge. In any case, such representative must be qualified under 
Sec. 725.363. No authorization for representation or agreement between a 
claimant and representative as to the amount of a fee, filed with the 
Social Security Administration in connection with a claim under part B 
of title IV of the Act, shall be valid under this part. A claimant who 
has previously authorized a person to represent him or her in connection 
with a claim originally filed under part B of title IV may renew such 
authorization by filing a statement to such effect with the Office or 
appropriate adjudication officer.
    (b) Any party may waive his or her right to be represented in the 
adjudication of a claim. If an adjudication officer determines, after an 
appropriate inquiry has been made, that a claimant who has been informed 
of his or her right to representation does not wish to obtain the 
services of a representative, such adjudication officer shall proceed to 
consider the claim in accordance with this part, unless it is apparent 
that the claimant is, for any reason, unable to continue without the 
help of a representative. However, it shall not be necessary for an 
adjudication officer to inquire as to the ability of a claimant to 
proceed without representation in any adjudication taking place without 
a hearing. The failure of a claimant to obtain representation in an 
adjudication taking place without a hearing shall be considered a waiver 
of the claimant's right to representation. However, at any time during 
the processing or adjudication of a claim, any claimant may revoke such 
waiver and obtain a representative.



Sec. 725.363  Qualification of representative.

    (a) Attorney. Any attorney in good standing who is admitted to 
practice before a court of a State, territory, district, or insular 
possession, or before the Supreme Court of the United States or other 
Federal court and is not, pursuant to any provision of law, prohibited 
from acting as a representative, may be appointed as a representative.
    (b) Other person. With the approval of the adjudication officer, any 
other person may be appointed as a representative so long as that person 
is not, pursuant to any provision of law, prohibited from acting as a 
representative.



Sec. 725.364  Authority of representative.

    A representative, appointed and qualified as provided in 
Secs. 725.362 and 725.363, may make or give on behalf of the party he or 
she represents, any request or notice relative to any proceeding before 
an adjudication officer, including formal hearing and review, except 
that such representative may not execute a claim for benefits, unless he 
or she is a person designated in Sec. 725.301 as authorized to execute a 
claim. A representative shall be entitled to present or elicit evidence 
and make allegations as to facts and law in any proceeding affecting the 
party represented and to obtain information with respect to the claim of 
such party

[[Page 789]]

to the same extent as such party. Notice given to any party of any 
administrative action, determination, or decision, or request to any 
party for the production of evidence shall be sent to the representative 
of such party and such notice or request shall have the same force and 
effect as if it had been sent to the party represented.



Sec. 725.365  Approval of representative's fees; lien against benefits.

    No fee charged for representation services rendered to a claimant 
with respect to any claim under this part shall be valid unless approved 
under this subpart. No contract or prior agreement for a fee shall be 
valid. In cases where the obligation to pay the attorney's fee is upon 
the claimant, the amount of the fee awarded may be made a lien upon the 
benefits due under an award and the adjudication officer shall fix, in 
the award approving the fee, such lien and the manner of payment of the 
fee. Any representative who is not an attorney may be awarded a fee for 
services under this subpart, except that no lien may be imposed with 
respect to such representative's fee.



Sec. 725.366  Fees for representatives.

    (a) A representative seeking a fee for services performed on behalf 
of a claimant shall make application therefor to the deputy 
commissioner, administrative law judge, or appropriate appellate 
tribunal, as the case may be, before whom the services were performed. 
The application shall be filed and served upon the claimant and all 
other parties within the time limits allowed by the deputy commissioner, 
administrative law judge, or appropriate appellate tribunal. The 
application shall be supported by a complete statement of the extent and 
character of the necessary work done, and shall indicate the 
professional status (e.g., attorney, paralegal, law clerk, lay 
representative or clerical) of the person performing such work, and the 
customary billing rate for each such person. The application shall also 
include a listing of reasonable unreimbursed expenses, including those 
for travel, incurred by the representative or an employee of a 
representative in establishing the claimant's case. Any fee requested 
under this paragraph shall also contain a description of any fee 
requested, charged, or received for services rendered to the claimant 
before any State or Federal court or agency in connection with a related 
matter.
    (b) Any fee approved under paragraph (a) of this section shall be 
reasonably commensurate with the necessary work done and shall take into 
account the quality of the representation, the qualifications of the 
representative, the complexity of the legal issues involved, the level 
of proceedings to which the claim was raised, the level at which the 
representative entered the proceedings, and any other information which 
may be relevant to the amount of fee requested. No fee approved shall 
include payment for time spent in preparation of a fee application. No 
fee shall be approved for work done on claims filed between December 30, 
1969, and June 30, 1973, under part B of title IV of the Act, except for 
services rendered on behalf of the claimant in regard to the review of 
the claim under section 435 of the Act and part 727 of this subchapter.
    (c) In awarding a fee, the appropriate adjudication officer shall 
consider, and shall add to the fee, the amount of reasonable and 
unreimbursed expenses incurred in establishing the claimant's case. 
Reimbursement for travel expenses incurred by an attorney shall be 
determined in accordance with the provisions of Sec. 725.459(a). No 
reimbursement shall be permitted for expenses incurred in obtaining 
medical or other evidence which has previously been submitted to the 
Office in connection with the claim.
    (d) Upon receipt of a request for approval of a fee, such request 
shall be reviewed and evaluated by the appropriate adjudication officer 
and a fee award issued. Any party may request reconsideration of a fee 
awarded by the adjudication officer. A revised or modified fee award may 
then be issued, if appropriate.
    (e) Each request for reconsideration or review of a fee award shall 
be in writing and shall contain supporting statements or information 
pertinent to any increase or decrease requested. If a fee awarded by a 
deputy commissioner

[[Page 790]]

is disputed, such award shall be appealable directly to the Benefits 
Review Board. In such a fee dispute case, the record before the Board 
shall consist of the order of the deputy commissioner awarding or 
denying the fee, the application for a fee, any written statement in 
opposition to the fee and the documentary evidence contained in the file 
which verifies or refutes any item claimed in the fee application.

(Approved by the Office of Management and Budget under control number 
1215-0115)

[43 FR 36772, Aug. 18, 1978, as amended at 47 FR 14696, Apr. 6, 1982]



Sec. 725.367  Payment of a claimant's attorney's fee by responsible operator.

    (a) If an operator declines to pay any benefits on or before the 
30th day after receiving written notice of its liability for a claim on 
the ground that there is no liability for benefits within the provisions 
of the Act, and the person seeking benefits shall thereafter have 
utilized the services of an attorney in the successful prosecution of 
the claim, there shall be awarded, in addition to the award of benefits, 
in an order, a reasonable attorney's fee against the operator or carrier 
in an amount approved by the deputy commissioner, administrative law 
judge, Board, or court as the case may be, which shall be paid promptly 
and directly by the operator or carrier to the claimant's attorney in a 
lump sum after the order becomes final.
    (b) Section 205(a) of the Black Lung Benefits Amendments of 1981, 
Pub. L. 97-119, amended section 422 of the Act and relieved operators 
and carriers from liability for the payment of benefits on certain 
claims. Payment of benefits on those claims was made the responsibility 
of the Trust Fund. The claims subject to this transfer of liability are 
described in Sec. 725.496 of this part. On claims subject to the 
transfer of liability described above the Trust Fund will pay all fees 
and costs which have been or will be awarded to claimant's attorneys 
which were or would have become the liability of an operator or carrier 
but for the enactment of the 1981 Amendments and which have not already 
been paid by such operator or carrier. Section 9501(d)(7) of the 
Internal Revenue Code, which was also enacted as a part of the 1981 
Amendments to the Act, expressly prohibits the Trust Fund from 
reimbursing an operator or carrier for any attorney fees or costs which 
it has paid on cases subject to the transfer of liability provisions.
[48 FR 24291, May 31, 1983]



Sec. 725.401  Claims development--general.

    After a claim has been received by the deputy commissioner, the 
deputy commissioner shall take such action as is necessary to develop, 
process, and make determinations with respect to the claim as provided 
in this subpart.



Sec. 725.402  Approved State workers' compensation law.

    If a deputy commissioner determines that any claim filed under this 
part is one subject to adjudication under a workers' compensation law 
approved under part 722 of this subchapter, he or she shall advise the 
claimant of this determination and of the Act's requirement that the 
claim must be filed under the applicable State workers' compensation 
law. The deputy commissioner shall then prepare a proposed decision and 
order dismissing the claim for lack of jurisdiction pursuant to 
Sec. 725.418 and proceed as appropriate.



Sec. 725.403  Requirement to file under State workers' compensation law--Section 415 claims.

    (a) No benefits shall be payable to or on behalf of a claimant who 
has filed a claim under section 415 of part B of title IV of the Act, 
for any period of eligibility occurring between July 1, and December 31, 
1973, unless the claimant has filed and diligently pursued a claim for 
benefits under an applicable State workers' compensation law. A State 
workers' compensation claim need not be filed where filing would be 
futile. It shall be determined that the filing of a State claim would be 
futile when:
    (1) The period within which the claim may be filed under such law 
has expired; or

[[Page 791]]

    (2) Pneumoconiosis as defined in part 718 of this subchapter is not 
compensable under such law; or
    (3) The maximum amount of compensation or the maximum number of 
compensation payments allowable under such law has already been paid; or
    (4) The claimant does not meet one or more conditions of eligibility 
for workers' compensation payments under applicable State law; or
    (5) The claimant otherwise establishes to the satisfaction of the 
Office that the filing of a claim under State law would be futile.
    (b) Where the Office determines that a claimant is required to file 
a State claim under this section, the Office shall so notify the 
claimant. Such notice shall instruct the claimant to file a State claim 
within 30 days of such notice. If no such State claim is filed within 
the 30-day period, no benefits shall be payable under this part to the 
claimant for any period between July 1, and December 31, 1973.
    (c) The failure of a claimant to comply with paragraph (a) of this 
section shall not absolve any operator of its liability for the payment 
of benefits to a claimant for periods of eligibility occurring on or 
after January 1, 1974.
    (d) The deputy commissioner may determine that a claimant is 
ineligible for benefits under section 415 of part B of title IV of the 
Act without requiring the claimant to file a claim under a State 
workers' compensation law.



Sec. 725.404  Development of evidence--general.

    (a) Employment history. Each claimant shall furnish the deputy 
commissioner with a complete and detailed history of the coal miner's 
employment and, upon request, supporting documentation.
    (b) Matters of record. Where it is necessary to obtain proof of age, 
marriage or termination of marriage, death, family relationship, 
dependency (see subpart B of this part), or any other fact which may be 
proven as a matter of public record, the claimant shall furnish such 
proof to the deputy commissioner upon request.
    (c) Documentary evidence. If a claimant is required to submit 
documents to the deputy commissioner, the claimant shall submit either 
the original, a certified copy or a clear readable copy thereof. The 
Deputy commissioner or administrative law judge may require the 
submission of an original document or certified copy thereof, if 
necessary.
    (d) Submission of insufficient evidence. In the event a claimant 
submits insufficient evidence regarding any matter, the deputy 
commissioner shall inform the claimant of what further evidence is 
necessary and request that such evidence be submitted within a specified 
reasonable time which may, upon request, be extended for good cause.



Sec. 725.405  Development of medical evidence; scheduling of medical examinations and tests.

    (a) Upon receipt of a claim, the deputy commissioner shall ascertain 
whether the claim was filed by or on account of a miner as defined in 
Sec. 725.202(a), and in the case of a claim filed on account of a 
deceased miner, whether the claim was filed by an eligible survivor of 
such miner as defined in subpart B of this part.
    (b) In the case of a claim filed by or on behalf of a miner, the 
deputy commissioner shall, where necessary, schedule the claimant for a 
medical examination and testing under Sec. 725.406.
    (c) In the case of a claim filed by or on behalf of a survivor of a 
miner, the deputy commissioner shall obtain whatever medical evidence is 
necessary and available for the development and evaluation of the claim.
    (d) The deputy commissioner shall, where appropriate, collect other 
evidence necessary to establish:
    (1) The nature and duration of the miner's employment; and
    (2) All other matters relevant to the determination of the claim.
    (e) If at any time during the processing of the claim by the deputy 
commissioner, the evidence establishes that the claimant is not entitled 
to benefits under the Act, the deputy commissioner may terminate 
evidentiary development of the claim and proceed as appropriate.



Sec. 725.406  Medical examinations and tests.

    (a) Medical examinations and tests authorized by the deputy 
commissioner

[[Page 792]]

shall be conducted, if possible, in the vicinity of the miner's 
residence by physicians or in medical facilities selected from a list 
compiled by the Secretary, or by a physician or medical facility 
approved by the deputy commissioner at the miner's request.
    (b) If any medical examination or test conducted under paragraph (a) 
of this section is not administered or reported in compliance with the 
provisions of part 718 of this subchapter, the deputy commissioner shall 
schedule the miner for further examination and testing where necessary 
and appropriate.
    (c) The cost of any medical examination or test authorized under 
this section, including the cost of travel to and from the examination, 
shall be paid by the fund. No reimbursement for overnight accommodations 
shall be authorized unless the deputy commissioner determines that an 
adequate testing facility is unavailable within one day's round trip 
travel by automobile from the miner's residence. The fund shall be 
reimbursed for such payments by an operator, if any, found liable for 
the payment of benefits to the claimant.



Sec. 725.407  Additional medical evidence.

    (a) If, at any time after the completion of initial medical 
examinations and tests, unresolved medical questions remain, the deputy 
commissioner may cause the claimant to be examined by a physician 
selected by the deputy commissioner.
    (b) Any miner dissatisfied with the results of the medical 
examinations or tests conducted under Sec. 725.406 may obtain further 
medical examinations or tests and submit them to the deputy 
commissioner. Such further examinations or tests shall be reimbursable 
by the fund, or by a responsible coal operator where appropriate, if the 
claimant is finally adjudicated entitled to benefits and if such further 
examinations or tests were relevant to the determination of the claim.
    (c) If additional medical evidence is obtained in accordance with 
paragraph (a) of this section, the deputy commissioner may order the 
physician selected to retest or reexamine the miner to do so without the 
presence or participation of any other physician who previously examined 
the miner, and without benefit of the conclusions of any other physician 
who has examined the miner.



Sec. 725.408  Refusal to submit to medical examinations or tests.

    If an adjudication officer determines that a miner has unreasonably 
refused to submit to medical examinations or tests scheduled under 
Secs. 725.406 or 725.407(a), all evidentiary development of the claim 
shall be suspended and the adjudication officer shall proceed to deny 
the claim by reason of abandonment (Sec. 725.409) or by dismissal 
(Sec. 725.465) as is appropriate.



Sec. 725.409  Denial of a claim by reason of abandonment.

    (a) A claim may be denied at any time by the deputy commissioner by 
reason of abandonment where the claimant fails:
    (1) To undergo a required medical examination without good cause; 
or,
    (2) To submit evidence sufficient to make a determination of the 
claim; or,
    (3) To pursue the claim with reasonable diligence.
    (b) If the deputy commissioner determines that a denial by reason of 
abandonment is appropriate, he or she shall notify the claimant of the 
reasons for such denial and of the action which must be taken to avoid a 
denial by reason of abandonment. If there is no response to the notice 
within 30 days after such notice is sent, the claim shall be considered 
denied by reason of abandonment. If the claimant responds in a timely 
fashion, indicating a desire to pursue the claim, by requesting a 
hearing or indicating the intent to submit additional evidence, the 
deputy commissioner shall, if a hearing is requested, proceed in 
accordance with Sec. 725.412 or allow a reasonable time of not less than 
60 days for the claimant to take the specified remedial action. If the 
claimant completes the action requested within the time allowed, the 
claim shall be developed, processed and adjudicated as specified in this 
part. If the claimant does not fully comply with the action requested by 
the deputy commissioner, the deputy commissioner shall so notify the 
claimant. If

[[Page 793]]

the claimant does not request a hearing or fully comply with the action 
requested by the deputy commissioner within 30 days of such 
notification, the claim shall be considered denied by reason of 
abandonment, except that a new claim may be filed at any time and new 
evidence submitted where the requirements of Sec. 725.310 are not met.

                 Adjudication by the Deputy Commissioner



Sec. 725.410  Initial findings by the deputy commissioner.

    (a) Based upon the evidence developed, the deputy commissioner may 
make an initial finding with respect to the claim.
    (b) If the evidence supports an initial finding of eligibility, and 
it has been determined that a coal mine operator may be liable for the 
claim, the deputy commissioner shall proceed in accordance with 
Sec. 725.412. If no operator can be identified, the deputy commissioner 
shall proceed in accordance with Sec. 725.411.
    (c) If the evidence submitted does not support an initial finding of 
eligibility, the deputy commissioner shall so notify the claimant in 
writing. This notification shall specify the reasons why the claim 
cannot be approved, the additional evidence necessary to establish 
entitlement, the right of the claimant to submit additional evidence, 
and the right to request a hearing. Within 60 days from the mailing of 
such notice, unless such period is extended by the deputy commissioner 
for good cause shown, the claimant may submit new evidence or request a 
hearing. If the claimant:
    (1) Takes no action within the specified 60 day period, the claim 
shall be considered denied by reason of abandonment (see Sec. 725.409).
    (2) Submits new evidence within the specified 60 day period, the 
deputy commissioner shall reconsider the initial finding, taking into 
account the additional evidence submitted. If the new evidence supports 
a finding of entitlement the deputy commissioner shall proceed in 
accordance with paragraph (b) of this section. If the new evidence does 
not support a finding of entitlement, the deputy commissioner shall 
notify the claimant in writing of this fact and the reasons therefor, 
and that he or she may request a hearing within 60 days after receipt of 
such notice unless the period is extended by the deputy commissioner for 
good cause shown. If no hearing is requested, the claim shall be deemed 
denied by reason of abandonment (see Sec. 725.409).
    (d) Unless an earlier operator identification has been made, if a 
hearing is requested under paragraph (c) of this section, the deputy 
commissioner shall identify the coal mine operator, if any, which may be 
liable for the payment of benefits to the claimant and proceed in 
accordance with Sec. 725.412. If no such operator can be identified, the 
deputy commissioner may schedule a conference (see Sec. 725.416) or 
refer the claim to the Office of Administrative Law Judges for 
appropriate proceedings.



Sec. 725.411  Adjudication upon initial findings of eligibility and no operator responsibility.

    Where the deputy commissioner has found that the claimant is 
eligible and that there is no operator responsible for the payment of 
benefits, the deputy commissioner shall issue a proposed decision and 
order including findings of fact and conclusions of law as required by 
Sec. 725.418 and authorize the payment of benefits. The claimant shall 
have 30 days after the date of issuance of the proposed decision and 
order within which to reject any or all of its terms. If the claimant 
does not reject the proposed decision and order, either in whole or in 
part, within this 30-day period, it will become final and effective. If 
for any reason the claimant rejects a proposed decision and order, the 
deputy commissioner may take such action as is appropriate including 
adjustment of the benefits to the level authorized by the uncontested 
portion of the proposed decision and order, if appropriate.



Sec. 725.412  Identification and notification of responsible operator.

    (a) At any time during the processing of a claim under this part, 
after sufficient evidence has been made available to the deputy 
commissioner, the deputy commissioner may identify a coal miner operator 
(see Sec. 725.491) which

[[Page 794]]

may be liable for the payment of the claim in accordance with the 
criteria contained in subpart F of this part. Such identification shall 
be made as soon after the filing of the claim as the evidence obtained 
permits. If the claim is subject to review under part 727 of this 
subchapter, the deputy commissioner may proceed to make initial findings 
(Sec. 725.410) with respect to a claim before identifying a potentially 
liable coal mine operator. In the case of a claim subject to review 
under part 727 of the subchapter which is denied by reason of 
abandonment (see Sec. 725.409), the deputy commissioner may decline to 
identify and notify an operator, unless a timely request for a hearing 
is made by the claimant.
    (b) After the deputy commissioner identifies an operator which may 
be liable for payment of benefits, the deputy commissioner shall notify 
such operator in writing. Such notification shall include a copy of the 
claimant's claim form and a copy of all documentary evidence pertaining 
to the claim obtained by the deputy commissioner, if any, and the 
initial findings of the deputy commissioner, if any. All documents sent 
to an operator in accordance with this paragraph shall also be provided 
by the deputy commissioner to the claimant or his or her authorized 
representative.
    (c) If within one year after the final adjudication of a claim, the 
adjudication officer determines that an operator which may be liable for 
the payment of benefits has not been notified under this section, such 
adjudication officer shall give notice of possible liability and an 
opportunity to respond to such operator. The adjudication officer shall 
then take such further action on the claim as may be appropriate. There 
shall be no time limit applicable to a later identification of an 
operator under this paragraph if the operator fraudulently concealed its 
identity as an employer of the miner.
    (d) If, in any case, there is a dispute between two or more 
operators as to which may be liable for the payment of benefits to the 
claimant, all such operators shall be notified under this section and 
the issue of which operator is liable shall be determined by the 
appropriate adjudication officer.



Sec. 725.413  Operator's response to notification.

    (a) Within 30 days after receipt of notification issued under 
Sec. 725.412, unless such period is extended by the deputy commissioner 
for good cause shown, or in the interest of justice, a notified operator 
shall indicate an intent to accept or contest liability. If notice is 
given to the operator after initial findings have been made, the 
operator shall indicate its agreement or disagreement with each such 
finding. If notice is given to the operator before initial findings have 
been made, the operator shall indicate agreement or disagreement with 
the operator's identification as a potentially liable coal mine 
operator. An operator's response to notification shall be in writing and 
shall be sent to the deputy commissioner, the claimant, and all other 
parties to the claim.
    (b)(1) If the operator accepts liability for the claim after initial 
findings have been made, the deputy commissioner shall issue a proposed 
decision and order under Sec. 725.418.
    (2) If the operator contests its liability or any of the initial 
findings of the deputy commissioner, if any, or if the deputy 
commissioner has determined the claimant to be ineligible for benefits, 
the deputy commissioner shall proceed to adjudicate the claim in 
accordance with this subpart.
    (3) If the operator fails to respond within the specified period, 
such operator shall be deemed to have accepted the initial findings of 
the deputy commissioner when made and shall not, except as provided in 
Sec. 725.463, be permitted to raise issues or present evidence with 
respect to issues inconsistent with the initial findings in any further 
proceeding conducted with respect to the claim. In a case where an 
operator has failed to respond to notification, such failure shall be 
considered a waiver of such operator's right to contest the claim, 
unless the operator's failure to respond to notice is excused for good 
cause shown, and the deputy commissioner may proceed to issue a proposed 
decision and order pursuant to Sec. 725.418, undertake further 
development, hold a conference, or refer the claim for a hearing.

[[Page 795]]

    (c) Any operator or carrier may in writing designate an office or 
person authorized to receive notice of a claim on behalf of such 
operator or carrier. All such notices to the operator or carrier shall 
thereafter be sent to the designated office or person.



Sec. 725.414  Development of operator's evidence, claimant's rebuttal evidence.

    (a) If an operator notified of its possible liability for a claim 
after the deputy commissioner has made initial findings (Sec. 725.410) 
with respect to the claim contests the claim, such operator shall be 
allowed a reasonable time, to be determined by the deputy commissioner 
from the date on which the notice of contest is sent, within which to 
submit to the deputy commissioner and exchange with all other parties 
all available evidence relevant to any contested issue in the claim. 
During this period, a notified operator may have the miner examined by a 
physician selected by such operator, except that no miner shall be 
required to travel more than 100 miles from his or her place of 
residence for the purpose of submitting to a medical examination 
requested by an operator, unless a trip of greater distance is 
authorized in writing by the deputy commissioner.
    (b) If an operator is notified of its possible liability for a claim 
before the deputy commissioner has made initial findings with respect to 
the claim or if no initial findings are made, and such operator 
indicates its intent to contest the claim, such operator shall promptly 
undertake the development of its evidence, including any medical 
evidence which may be obtained, if the operator seeks to have the miner 
examined by a physician which it selects. Any evidence obtained by an 
operator shall be sent to the deputy commissioner and all other parties 
to the claim. On the basis of the operator's evidence and all other 
evidence submitted to the deputy commissioner, the deputy commissioner 
may make initial findings with respect to the claim or may take such 
other action as is appropriate. If the deputy commissioner makes an 
initial finding that the claimant is ineligible for benefits, the deputy 
commissioner shall proceed to consider the claim as provided in 
Sec. 725.410(c). If the deputy commissioner makes an initial finding 
that the claimant is eligible for benefits and that the notified 
operator is liable for such benefits, the parties shall be so notified. 
Within 30 days from the date on which notice of the deputy 
commissioner's initial findings of eligibility and liability is sent to 
the parties, each party shall either accept or contest any or all of 
such initial findings and shall, except as provided in paragraph (d) of 
this section, submit any available evidence not previously submitted, to 
the deputy commissioner. The deputy commissioner shall then proceed to 
adjudicate the claim under Sec. 725.415. The failure by an operator to 
respond to initial findings of eligibility made under this paragraph 
shall have the same consequences as an operator's failure to respond to 
notice of a claim (see Sec. 725.413(b)(3)).
    (c) The report of any medical examination or test conducted under 
this section, or any other evidence submitted, shall be submitted to the 
deputy commissioner and sent to the other parties to the claim within 
the applicable period set forth in this section, unless the deputy 
commissioner enlarges such period for good cause shown or in the 
interest of justice.
    (d) Upon receipt of a medical report obtained by an operator under 
this section, a claimant shall, upon request, be allowed a reasonable 
time, as determined by the deputy commissioner from the date on which 
the operator's report is received, to obtain additional evidence in 
support of the claim. Such evidence shall be obtained, submitted to the 
deputy commissioner, and exchanged with the other parties within the 
period allowed, unless the period is enlarged by the deputy commissioner 
for good cause shown.
    (e) (1) Any documentary evidence obtained by a party during the time 
a claim is pending before a deputy commissioner, which is withheld from 
the deputy commissioner or any other party to the claim, shall not be 
admitted in any later proceedings held with respect to the claim in the 
absence of extraordinary circumstances, unless

[[Page 796]]

the admission of such evidence is requested by the Director or such 
other party.
    (2) If an operator notified of a claim does not undertake a good 
faith effort to develop its evidence while the claim is pending before 
the deputy commissioner, the deputy commissioner shall proceed to 
adjudicate the claim in accordance with Sec. 725.415. A notified 
operator which does not undertake a good faith effort to develop its 
evidence before the deputy commissioner shall be considered to have 
waived its right to either have the claimant examined by a physician of 
its choosing or have the claimant's evidence submitted for review by a 
physician of its choosing.



Sec. 725.415  Action by the deputy commissioner after development of operator's evidence.

    (a) At the end of the period permitted under Sec. 725.414 for the 
submission of evidence, the deputy commissioner shall review the claim 
on the basis of all evidence submitted.
    (b) After review of all evidence submitted, the deputy commissioner 
may schedule a conference in accordance with Sec. 725.416, issue a 
proposed decision and order in accordance with Sec. 725.418, forward the 
claim to the Office of Administrative Law Judges in accordance with 
Sec. 725.421, or take such other action as the deputy commissioner 
considers appropriate.



Sec. 725.416  Conferences.

    (a) At the conclusion of the period permitted by Sec. 725.414 for 
the submission of evidence, the deputy commissioner may conduct an 
informal conference in any claim where it appears that such conference 
will assist in the voluntary resolution of any issue raised with respect 
to the claim. The conference proceedings shall not be stenographically 
reported and sworn testimony shall not be taken.
    (b) The deputy commissioner shall notify the parties of a definite 
time and place for the conference and may in his or her discretion, or 
on the motion of any party, cancel or reschedule a conference.
    (c) Any representative of an operator, of an operator's insurance 
carrier, or of a claimant must have sufficient authority to stipulate 
facts or issues or agree to a final dispositon of the claim.
    (d) Procedures to be followed at a conference shall be within the 
discretion of the deputy commissioner. In the case of a conference 
involving an unrepresented claimant the deputy commissioner shall fully 
inform the claimant of the consequences of any agreement the claimant is 
asked to sign. If it is apparent that the unrepresented claimant does 
not understand the nature or effect of the proceedings, the deputy 
commissioner shall not permit the execution of any stipulation or 
agreement in the claim unless it is clear that the best interests of the 
claimant are served thereby.



Sec. 725.417  Action at the conclusion of conference.

    (a) At the conclusion of a conference, the deputy commissioner shall 
prepare a stipulation of contested and uncontested issues which shall be 
signed by the parties and the deputy commissioner. If a hearing is 
conducted with respect to the claim, this stipulation shall be submitted 
to the Office of Administrative Law Judges and placed in claim record.
    (b) In any case, where appropriate, the deputy commissioner may 
permit a reasonable time for the submission of additional evidence 
following a conference.
    (c) Within 20 days after the termination of all conference 
proceedings, the deputy commissioner shall prepare and send to the 
parties a memorandum of conference, on a form prescribed by the Office, 
summarizing the conference and including the following:
    (1) Date, time and place of conference;
    (2) Names, addresses, telephone numbers, and status (i.e., claimant, 
attorney, operator, carrier's representative, etc.);
    (3) Issues discussed at conference;
    (4) Additional material presented (i.e., medical reports, employment 
reports, marriage certificates, birth certificates, etc.);
    (5) Issues resolved at conference; and
    (6) Deputy commissioner's recommendation.
    (d) Each party shall, in writing, either accept or reject, in whole 
or in

[[Page 797]]

part, the deputy commissioner's recommendation, stating the reasons for 
such rejection. If no reply is received within 30 days from the date on 
which the recommendation was sent to parties, the recommendation shall 
be deemed accepted.



Sec. 725.418  Proposed decision and order.

    (a) A proposed decision and order is a document, issued by the 
deputy commissioner after the evidentiary development of the claim is 
completed and all contested issues, if any, are joined, which purports 
to resolve a claim on the basis of the evidence submitted to or obtained 
by the deputy commissioner. A proposed decision and order shall be 
considered a final adjudication of a claim only as provided in 
Sec. 725.419. A proposed decision and order may be issued by the deputy 
commissioner in any claim and at any time during the adjudication of a 
claim if:
    (1) Issuance is authorized or required by this part; or,
    (2) The deputy commissioner determines that its issuance will 
expedite the adjudication of the claim.
    (b) A proposed decision and order shall contain findings of fact and 
conclusions of law and an appropriate order shall be served on all 
parties to the claim.



Sec. 725.419  Response to proposed decision and order.

    (a) Within 30 days after the date of issuance of a proposed decision 
and order, any party may, in writing, request a revision of the proposed 
decision and order or a hearing. If a hearing is requested, the deputy 
commissioner shall refer the claim to the Office of Administrative Law 
Judges (see Sec. 725.421).
    (b) Any response made by a party to a proposed decision and order 
shall specify the findings and conclusions with which the responding 
party disagrees, and shall be served on the deputy commissioner and all 
other parties to the claim.
    (c) If a timely request for revision of a proposed decision and 
order is made, the deputy commissioner may amend the proposed decision 
and order, as circumstances require, and serve the revised proposed 
decision and order on all parties or take such other action as is 
appropriate. If a revised proposed decision and order is issued, each 
party to the claim shall have 30 days from the date of issuance of that 
revised proposed decision and order within which to request a hearing.
    (d) If no response to a proposed decision and order is sent to the 
deputy commissioner within the period described in paragraph (a) of this 
section, or if no response to a revised proposed decision and order is 
sent to the deputy commissioner within the period described in paragraph 
(c) of this section, the proposed decision and order shall become a 
final decision and order, which is effective upon the expiration of the 
applicable 30-day period. Once a proposed decision and order or revised 
proposed decision and order becomes final and effective, all rights to 
further proceedings with respect to the claim shall be considered 
waived, except as provided in Sec. 725.310.



Sec. 725.420  Initial determinations.

    (a) Section 9501(d)(1)(A)(1) of the Internal Revenue Code provides 
that the Black Lung Disability Trust Fund shall begin the payment of 
benefits on behalf of an operator in any case in which the operator 
liable for such payments ``has not commenced payment of such benefits 
within 30 days after the date of an initial determination of eligibility 
by the Secretary * * *.'' For claims filed on or after January 1, 1982, 
the payment of such interim benefits from the Fund is limited to 
``benefits accruing after the date of such initial determination * * 
*.''
    (b) Except as provided in Sec. 725.415 of this subpart, after the 
deputy commissioner has determined that a claimant is eligible for 
benefits, on the basis of all evidence submitted by a claimant and 
operator, and has determined that a hearing will be necessary to resolve 
the claim, the deputy commissioner shall in writing so inform the 
parties and direct the operator to begin the payment of benefits to the 
claimant in accordance with Sec. 725.522. The date on which this writing 
is sent to the parties shall be considered the date of initial 
determination of the claim.
    (c) If a notified operator refuses to commence payment of a claim 
within

[[Page 798]]

30 days from the date on which an initial determination is made under 
this section, benefits shall be paid by the fund to the claimant in 
accordance with Sec. 725.522, and the operator shall be liable to the 
fund, if such operator is determined liable for the claim, for all 
benefits paid by the fund on behalf of such operator, and, in addition, 
such penalties and interest as are appropriate.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24292, May 31, 1983]



Sec. 725.421  Referral of a claim to the Office of Administrative Law Judges.

    (a) In any claim for which a formal hearing is requested or ordered, 
and with respect to which the deputy commissioner has completed 
development and adjudication without having resolved all contested 
issues in the claim, the deputy commissioner shall refer the claim to 
the Office of Administrative Law Judges for a hearing. If the deputy 
commissioner with jurisdiction over the claim is located at any place 
outside Washington, DC, such deputy commissioner shall forward a claim 
with respect to which a hearing is required by this part to the DCMWC in 
Washington, DC, which shall refer the claim to the Office of 
Administrative Law Judges for appropriate proceedings.
    (b) In any case referred to the Office of Administrative Law Judges 
under this section, the deputy commissioner shall transmit to that 
office the following documents, which shall be placed in the record at 
the hearing subject to the objection of any party:
    (1) Copies of the claim form or forms; (2) any statement, document, 
or pleading submitted by a party to the claim; (3) a copy of the 
notification to an operator of its possible liability for the claim; (4) 
all evidence submitted to the deputy commissioner under this part; (5) 
any written stipulation of law or fact or stipulation of contested and 
uncontested issues entered into by the parties; (6) any pertinent forms 
submitted to the deputy commissioner; (7) the statement by the deputy 
commissioner of contested and uncontested issues in the claim; and (8) 
the deputy commissioner's initial determination of eligibility or other 
documents necessary to establish the right of the fund to reimbursement, 
if appropriate. Copies of the transmittal notice shall also be sent to 
all parties to the claim.
    (c) A party may at any time request and obtain from the deputy 
commissioner copies of documents transmitted to the Office of 
Administrative Law Judges under paragraph (b) of this section. If the 
party has previously been provided with such documents, additional 
copies may be sent to the party upon the payment of a copying fee to be 
determined by the deputy commissioner.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24292, May 31, 1983]



Sec. 725.422  Legal assistance.

    The Secretary or his or her designee may, upon request, provide a 
claimant with legal assistance in processing a claim under the Act. Such 
assistance may be made available to a claimant in the discretion of the 
Solicitor of Labor or his or her designee at any time prior to or during 
the time in which the claim is being adjudicated and shall be furnished 
without charge to the claimant. Representation of a claimant in 
adjudicatory proceedings shall not be provided by the Department of 
Labor unless it is determined by the Solicitor of Labor that such 
representation is in the best interests of the black lung benefits 
program. In no event shall representation be provided to a claimant in a 
claim with respect to which the claimant's interests are adverse to 
those of the Secretary of Labor or the fund.



                           Subpart E--Hearings



Sec. 725.450  Right to a hearing.

    Any party to a claim (see Sec. 725.360) shall have a right to a 
hearing concerning any contested issue of fact or law unresolved by the 
deputy commissioner. There shall be no right to a hearing until the 
processing and adjudication of the claim by the deputy commissioner has 
been completed. There shall be no right to a hearing in a claim with 
respect to which a determination of the claim made by the deputy 
commissioner has become final and effective in accordance with this 
part.

[[Page 799]]



Sec. 725.451  Request for hearing.

    After the completion of proceedings before the deputy commissioner, 
or as is otherwise indicated in this part, any party may in writing 
request a hearing on any contested issue of fact or law. A deputy 
commissioner may on his or her own initiative refer a case for hearing. 
If a hearing is requested, or if a deputy commissioner determines that a 
hearing is necessary to the resolution of any issue, the claim shall be 
referred to the Chief Administrative Law Judge for a hearing under 
Sec. 725.421.



Sec. 725.452  Type of hearing; parties.

    (a) A hearing held under this part shall be conducted by an 
administrative law judge designated by the Chief Administrative Law 
Judge. Except as otherwise provided by this part, all hearings shall be 
conducted in accordance with the provisions of 5 U.S.C. 554 et seq.
    (b) All parties to a claim shall be permitted to participate fully 
at a hearing held in connection with such claim.
    (c) A full evidentiary hearing need not be conducted if a party 
moves for summary judgment and the administrative law judge determines 
that there is no genuine issue as to any material fact and that the 
moving party is entitled to the relief requested as a matter of law. All 
parties shall be entitled to respond to the motion for summary judgment 
prior to decision thereon.



Sec. 725.453  Notice of hearing.

    All parties shall be given at least 30 days written notice of the 
date and place of a hearing and the issues to be resolved at the 
hearing. Such notice shall be sent to each party or representative by 
certified mail.



Sec. 725.453A  Time and place of hearing.

    (a) The Chief Administrative Law Judge shall assign a definite time 
and place for a formal hearing, and shall, where possible, schedule the 
hearing to be held at a place within 75 miles of the claimant's 
residence unless an alternate location is requested by the claimant.
    (b) If the claimant's residence is not in any State, the Chief 
Administrative Law Judge may, in his or her discretion, schedule the 
hearing in the country of the claimant's residence.
    (c) The Chief Administrative Law Judge or the administrative law 
judge assigned the case may in his or her discretion direct that a 
hearing with respect to a claim shall begin at one location and then 
later be reconvened at another date and place.



Sec. 725.454  Change of time and place for hearing; transfer of cases.

    (a) The Chief Administrative Law Judge or administrative law judge 
assigned the case may change the time and place for a hearing, either on 
his or her own motion or for good cause shown by a party. The 
administrative law judge may adjourn or postpone the hearing, or reopen 
the hearing for the receipt of additional evidence, for good cause 
shown, at any time prior to the mailing to the parties of the decision 
in the case. Unless otherwise agreed, at least 10 days notice shall be 
given to the parties of any change in the time or place of hearing.
    (b) The Chief Administrative Law Judge may for good cause shown 
transfer a case from one administrative law judge to another.



Sec. 725.455  Hearing procedures; generally.

    (a) General. The purpose of any hearing conducted under this subpart 
shall be to resolve contested issues of fact or law. Except as provided 
in Sec. 725.421(b)(8), any findings or determinations made with respect 
to a claim by a deputy commissioner shall not be considered by the 
administrative law judge.
    (b) Evidence. The administrative law judge shall at the hearing 
inquire fully into all matters at issue, and shall not be bound by 
common law or statutory rules of evidence, or by technical or formal 
rules of procedure, except as provided by 5 U.S.C. 554 and this subpart. 
The administrative law judge shall receive into evidence the testimony 
of the witnesses and parties, the evidence submitted to the Office of 
Administrative Law Judges by the deputy commissioner under Sec. 725.421, 
and such additional evidence as may be submitted in accordance with the 
provisions of this subpart. The administrative law

[[Page 800]]

judge may entertain the objections of any party to the evidence 
submitted under this section.
    (c) Procedure. The conduct of the hearing and the order in which 
allegations and evidence shall be presented shall be within the 
discretion of the administrative law judge and shall afford the parties 
an opportunity for a fair hearing.



Sec. 725.456  Introduction of documentary evidence.

    (a) All documents transmitted to the Office of Administrative Law 
Judges under Sec. 725.421 shall be placed into evidence by the 
administrative law judge as exhibits of the Director, subject to 
objection by any party.
    (b)(1) Any other documentary material, including medical reports, 
which was not submitted to the deputy commissioner, may be received in 
evidence subject to the objection of any party, if such evidence is sent 
to all other parties at least 20 days before a hearing is held in 
connection with the claim.
    (2) Documentary evidence, which is not exchanged with the parties in 
accordance with this paragraph, may be admitted at the hearing with the 
written consent of the parties or on the record at the hearing, or upon 
a showing of good cause why such evidence was not exchanged in 
accordance with this paragraph. If documentary evidence is not exchanged 
in accordance with paragraph (b)(1) of this section and the parties do 
not waive the 20-day requirement or good cause is not shown, the 
administrative law judge shall either exclude the late evidence from the 
record or remand the claim to the deputy commissioner for consideration 
of such evidence.
    (3) A medical report which is not made available to the parties in 
accordance with paragraph (b)(1) of this section shall not be admitted 
into evidence in any case unless the hearing record is kept open for at 
least 30 days after the hearing to permit the parties to take such 
action as each considers appropriate in response to such evidence. If, 
in the opinion of the administrative law judge, evidence is withheld 
from the parties for the purpose of delaying the adjudication of the 
claim, the administrative law judge may exclude such evidence from the 
hearing record and close the record at the conclusion of the hearing.
    (4) Notwithstanding any other provision of this paragraph, 
documentary evidence other than medical reports which is presented or 
discovered in connection with the testimony of a witness at the hearing 
may be admitted into the hearing record, subject to the objection of any 
party.
    (c) All medical records and reports submitted by any party shall be 
considered by the administrative law judge in accordance with the 
quality standards contained in part 718 of this subchapter as amended 
from time to time.
    (d) Documentary evidence which is obtained by any party during the 
time a claim is pending before the deputy commissioner, and which is 
withheld by such party until the claim is forwarded to the Office of 
Administrative Law Judges shall, notwithstanding paragraph (b) of this 
section, not be admitted into the hearing record in the absence of 
extraordinary circumstances, unless such admission is requested by any 
other party to the claim (see Sec. 725.414(e)).
    (e) If, during the course of a hearing, it is determined by the 
administrative law judge that the documentary evidence submitted in 
accordance with this section is incomplete as to any issue which must be 
adjudicated, the administrative law judge may, in his or her discretion, 
remand the claim to the deputy commissioner with instructions to develop 
only such additional evidence as is required, or allow the parties a 
reasonable time to obtain and submit such evidence, before the 
termination of the hearing.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24292, May 31, 1983]



Sec. 725.457  Witnesses.

    (a) Witnesses at the hearing shall testify under oath or 
affirmation. The administrative law judge and the parties may question 
witnesses with respect to any matters relevant and material to any 
contested issue. Any party who intends to present the testimony of an 
expert witness at a hearing shall so notify all other parties to the 
claim at least 10 days before the hearing. The failure to give notice of 
the appearance

[[Page 801]]

of an expert witness in accordance with this paragraph, unless notice is 
waived by all parties, shall preclude the presentation of testimony by 
such expert witness.
    (b) No person shall be required to appear as a witness in any 
proceeding before an administrative law judge at a place more than 100 
miles from his or her place of residence, unless the lawful mileage and 
witness fee for 1 day's attendance is paid in advance of the hearing 
date.



Sec. 725.458  Deposition; interrogatories.

    The testimony of any witness or party may be taken by deposition or 
interrogatory according to the rules of practice of the Federal district 
court for the judicial district in which the case is pending (or of the 
U.S. District Court for the District of Columbia if the case is pending 
in the District or outside the United States), except that at least 30 
days prior notice of any deposition shall be given to all parties unless 
such notice is waived. No post-hearing deposition or interrogatory shall 
be permitted unless authorized by the administrative law judge upon the 
motion of a party to the claim.



Sec. 725.459  Witness fees.

    (a) A witness summoned to hearing before an administrative law 
judge, or whose deposition is taken, shall receive the same fees and 
mileage as witnesses in courts of the United States. Except as provided 
in paragraph (c) of this section, such fees shall be paid by the party 
summoning the witness.
    (b) No claimant shall be required to bear the financial 
responsibility for producing an expert witness for cross-examination if 
such expert witness, regardless of his or her availability to attend the 
hearing, has previously submitted depositions, interrogatories, or 
medical reports. Such expert witness, if he or she is required to attend 
the hearing, respond to interrogatories or give a deposition, shall be 
summoned and shall have his or her expert witness fee paid by the party 
who summons such witness.
    (c) If a claimant is determined entitled to benefits, there may be 
assessed as costs against a responsible operator, if any, fees and 
mileage for necessary witnesses attending the hearing at the request of 
the claimant. Both the necessity for the witness and the reasonableness 
of the fees of any expert witness shall be approved by the 
administrative law judge. The amounts awarded against a responsible 
operator as attorney's fees, or costs, fees and mileage for witnesses, 
shall not in any respect affect or diminish benefits payable under the 
Act.



Sec. 725.459A  Oral argument and written allegations.

    The parties, upon request, may be allowed a reasonable time for the 
presentation of oral argument at the hearing. Briefs or other written 
statements or allegations as to facts or law may be filed by any party 
with the permission of the administrative law judge. Copies of any brief 
or other written statement shall be filed with the administrative law 
judge and served on all parties by the submitting party.



Sec. 725.460  Consolidated hearings.

    When two or more hearings are to be held, and the same or 
substantially similar evidence is relevant and material to the matters 
at issue at each such hearing, the Chief Administrative Law Judge may, 
upon motion by any party or on his or her own motion, order that a 
consolidated hearing be conducted. Where consolidated hearings are held, 
a single record of the proceedings shall be made and the evidence 
introduced in one claim may be considered as introduced in the others, 
and a separate or joint decision shall be made, as appropriate.



Sec. 725.461  Waiver of right to appear and present evidence.

    (a) If all parties waive their right to appear before the 
administrative law judge, it shall not be necessary for the 
administrative law judge to give notice of, or conduct, an oral hearing. 
A waiver of the right to appear shall be made in writing and filed with 
the Chief Administrative Law Judge or the administrative law judge 
assigned to hear the case. Such waiver may be withdrawn by a party for 
good cause shown at any time prior to the mailing of the decision in the 
claim. Even though all of the parties have filed a waiver of the

[[Page 802]]

right to appear, the administrative law judge may, nevertheless, after 
giving notice of the time and place, conduct a hearing if he or she 
believes that the personal appearance and testimony of the party or 
parties would assist in ascertaining the facts in issue in the claim. 
Where a waiver has been filed by all parties, and they do not appear 
before the administrative law judge personally or by representative, the 
administrative law judge shall make a record of the relevant documentary 
evidence submitted in accordance with this part and any further written 
stipulations of the parties. Such documents and stipulations shall be 
considered the evidence of record in the case and the decision shall be 
based upon such evidence.
    (b) Except as provided in Sec. 725.456(a), the unexcused failure of 
any party to attend a hearing shall constitute a waiver of such party's 
right to present evidence at the hearing, and may result in a dismissal 
of the claim (see Sec. 725.465).



Sec. 725.462  Withdrawal of controversion of issues set for formal hearing; effect.

    A party may, on the record, withdraw his or her controversion of any 
or all issues set for hearing. If a party withdraws his or her 
controversion of all issues, the administrative law judge shall remand 
the case to the deputy commissioner for the issuance of an appropriate 
order.



Sec. 725.463  Issues to be resolved at hearing; new issues.

    (a) Except as otherwise provided in this section, the hearing shall 
be confined to those contested issues which have been identified by the 
deputy commissioner (see Sec. 725.421) or any other issue raised in 
writing before the deputy commissioner.
    (b) An administrative law judge may consider a new issue only if 
such issue was not reasonably ascertainable by the parties at the time 
the claim was before the deputy commissioner. Such new issue may be 
raised upon application of any party, or upon an administrative law 
judge's own motion, with notice to all parties, at any time after a 
claim has been transmitted by the deputy commissioner to the Office of 
Administrative Law Judges and prior to decision by an administrative law 
judge. If a new issue is raised, the administrative law judge may, in 
his or her discretion, either remand the case to the deputy commissioner 
with instructions for further proceedings, hear and resolve the new 
issue, or refuse to consider such new issue.
    (c) If a new issue is to be considered by the administrative law 
judge, a party may, upon request, be granted an appropriate continuance.



Sec. 725.464  Record of hearing.

    All hearings shall be open to the public and shall be mechanically 
or stenographically reported. All evidence upon which the administrative 
law judge relies for decision shall be contained in the transcript of 
testimony, either directly or by appropriate reference. All medical 
reports, exhibits, and any other pertinent document or record, either in 
whole or in material part, introduced as evidence, shall be marked for 
identification and incorporated into the record.



Sec. 725.465  Dismissals for cause.

    (a) The administrative law judge may, at the request of any party, 
or on his or her own motion, dismiss a claim:
    (1) Upon the failure of the claimant or his or her representative to 
attend a hearing without good cause;
    (2) Upon the failure of the claimant to comply with a lawful order 
of the administrative law judge; or
    (3) Where there has been a prior final adjudication of the claim or 
defense to the claim under the provisions of this subchapter and no new 
evidence is submitted (except as provided in part 727 of this 
subchapter).
    (b) A party who is not a proper party to the claim (see 
Sec. 725.360) shall be dismissed by the administrative law judge.
    (c) In any case where a dismissal of a claim, defense, or party is 
sought, the administrative law judge shall issue an order to show cause 
why the dismissal should not be granted and afford all parties a 
reasonable time to respond to such order. After the time for response 
has expired, the administrative law

[[Page 803]]

judge shall take such action as is appropriate to rule on the dismissal, 
which may include an order dismissing the claim, defense or party.
    (d) No claim shall be dismissed in a case with respect to which 
payments prior to final adjudication have been made to the claimant in 
accordance with Sec. 725.522, except upon the motion or written 
agreement of the Director.



Sec. 725.466  Order of dismissal.

    (a) An order dismissing a claim shall be served on the parties in 
accordance with Sec. 725.477. The dismissal of a claim shall have the 
same effect as a decision and order disposing of the claim on its 
merits, except as provided in paragraph (b) of this section. Such order 
shall advise the parties of their right to request review by the 
Benefits Review Board.
    (b) Where the Chief Administrative Law Judge or the presiding 
administrative law judge issues a decision and order dismissing the 
claim after a show cause proceeding, the deputy commissioner shall 
terminate any payments being made to the claimant under Sec. 725.522, 
and the order of dismissal shall, if appropriate, order the claimant to 
reimburse the Fund for all benefits paid to the claimant.



Sec. 725.475  Termination of hearings.

    Hearings are officially terminated when all the evidence has been 
received, witnesses heard, pleadings and briefs submitted to the 
administrative law judge, and the transcript of the proceedings has been 
printed and delivered to the administrative law judge.



Sec. 725.476  Issuance of decision and order.

    Within 20 days after the official termination of the hearing (see 
Sec. 725.475), the administrative law judge shall issue a decision and 
order with respect to the claim making an award to the claimant, 
rejecting the claim, or taking such other action as is appropriate.



Sec. 725.477  Form and contents of decision and order.

    (a) Orders adjudicating claims for benefits shall be designated by 
the term ``decision and order'' or ``supplemental decision and order'' 
as appropriate, followed by a descriptive phrase designating the 
particular type of order, such as ``award of benefits,'' ``rejection of 
claim,'' ``suspension of benefits,'' ``modification of award.''
    (b) A decision and order shall contain a statement of the basis of 
the order, the names of the parties, findings of fact, conclusions of 
law, and an award, rejection or other appropriate paragraph containing 
the action of the administrative law judge, his or her signature and the 
date of issuance. A decision and order shall be based upon the record 
made before the administrative law judge.



Sec. 725.478  Filing and service of decision and order.

    On the date of issuance of a decision and order under Sec. 725.477, 
the administrative law judge shall serve the decision and order on all 
parties to the claim by certified mail. On the same date, the original 
record of the claim shall be returned to the DCMWC in Washington, DC, 
and the decision and order shall be considered to be filed in the office 
of the deputy commissioner. Immediately upon receipt of a decision and 
order awarding benefits, the deputy commissioner shall compute the 
amount of benefits due, including any interest or penalties, and the 
amount of reimbursement owed the Fund, if any, and so notify the 
parties. Any computation made by the deputy commissioner under this 
paragraph shall strictly observe the terms of the award made by the 
administrative judge.



Sec. 725.479  Finality of decisions and orders.

    (a) A decision and order shall become effective when filed in the 
office of the deputy commissioner (see Sec. 725.478), and unless 
proceedings for suspension or setting aside of such order are instituted 
within 30 days of such filing, the order shall become final at the 
expiration of the 30th day after such filing (see Sec. 725.481).
    (b) Any party may, within 30 days after the filing of a decision and 
order under Sec. 725.478, request a reconsideration of such decision and 
order by the administrative law judge. The procedures to be followed in 
the reconsideration of a decision and order shall be

[[Page 804]]

determined by the administrative law judge.
    (c) The time for appeal to the Benefits Review Board shall be 
suspended during the consideration of a request for reconsideration. 
After the administrative law judge has issued and filed a denial of the 
request for reconsideration, or a revised decision and order in 
accordance with this part, any dissatisfied party shall have 30 days 
within which to institute proceedings to set aside the new decision and 
order or affirmance of the original decision and order.



Sec. 725.480  Modification of decisions and orders.

    (a) A party who is dissatisfied with a decision and order which has 
become final in accordance with Sec. 725.479 may request a modification 
of the decision and order if the conditions set forth in Sec. 725.310 
are met.



Sec. 725.481  Right to appeal to the Benefits Review Board.

    Any party dissatisfied with a decision and order issued by an 
administrative law judge may, before the decision and order becomes 
final (see Sec. 725.479), appeal the decision and order to the Benefits 
Review Board. A notice of appeal shall be filed with the Board. 
Proceedings before the Board shall be conducted in accordance with part 
802 of this title.



Sec. 725.482  Judicial review.

    (a) Any person adversely affected or aggrieved by a final order of 
the Benefits Review Board may obtain a review of that order in the U.S. 
court of appeals for the circuit in which the injury occurred by filing 
in such court within 60 days following the issuance of such Board order 
a written petition praying that the order be modified or set aside. The 
payment of the amounts required by an award shall not be stayed pending 
final decision in any such proceeding unless ordered by the court. No 
stay shall be issued unless the court finds that irreparable injury 
would otherwise ensue to an operator or carrier.
    (b) The Director, Office of Workers' Compensation Program, as 
designee of the Secretary of Labor responsible for the administration 
and enforcement of the Act, shall be considered the proper party to 
appear and present argument on behalf of the Secretary of Labor in all 
review proceedings conducted pursuant to this part and the Act, either 
as petitioner or respondent.



Sec. 725.483  Costs in proceedings brought without reasonable grounds.

    If a United States court having jurisdiction of proceedings 
regarding any claim or final decision and order, determines that the 
proceedings have been instituted or continued before such court without 
reasonable ground, the costs of such proceedings shall be assessed 
against the party who has so instituted or continued such proceedings.



               Subpart F--Responsible Coal Mine Operators

                           General Provisions



Sec. 725.490  Statutory provisions and scope.

    (a) One of the major purposes of the black lung benefits amendments 
of 1977 was to provide a more effective means of transferring the 
responsibility for the payment of benefits from the Federal government 
to the coal industry with respect to claims filed under this part. In 
furtherance of this goal, a Black Lung Disability Trust Fund financed by 
the coal industry was established by the Black Lung Benefits Revenue Act 
of 1977. The primary purpose of the Fund is to pay benefits with respect 
to all claims in which the last coal mine employment of the miner on 
whose account the claim was filed occurred before January 1, 1970. With 
respect to most claims in which the miner's last coal mine employment 
occurred after January 1, 1970, individual coal mine operators will be 
liable for the payment of benefits. The 1981 amendments to the Act 
relieved individual coal mine operators from the liability for payment 
of certain special claims involving coal mine employment on or after 
January 1, 1970, where the claim was previously denied and subsequently 
approved under section 435 of the Act. See Sec. 725.496 for a detailed 
description of these special

[[Page 805]]

claims. Where no such operator exists or the operator determined to be 
liable is in default in any case, the Fund shall pay the benefits due 
and seek reimbursement as is appropriate. See also Sec. 725.420 for the 
Fund's role in the payment of interim benefits in certain contested 
cases. In addition, the Black Lung Benefits Reform Act of 1977 amended 
certain provisions affecting the scope of coverage under the Act and 
describing the effects of particular corporate transactions on the 
liability of operators.
    (b) The provisions of this subpart define the term ``operator,'' 
prescribe the manner in which the identity of an operator which may be 
liable for the payment of benefits--referred to herein as a 
``responsible operator''--will be determined, and briefly describe the 
obligations of operators to secure the payment of benefits. (See also 
part 726 of this subchapter.)
[43 FR 36772, Aug. 18,1978, as amended at 48 FR 24292, May 31,1983]



Sec. 725.491  Operator defined.

    (a) In accordance with section 3(d) of the Act, an operator for 
purposes of this part is ``any owner, lessee or other person who 
operates, controls, or supervises a coal mine or any independent 
contractor performing services or construction at such mine.'' In 
accordance with sections 402(d) and 422(b) of the Act, certain other 
employers, including those engaged in coal mine construction, 
maintenance, and transportation, shall also be considered to be 
operators for purposes of this part. An independent contractor or self-
employed miner, construction worker, coal preparation worker, or 
transportation worker may also be considered a coal mine operator for 
purpose of this part. It is Congress' intent that any employer of a 
miner as defined in Sec. 725.202(a) shall, to the extent appropriate, be 
considered an operator for for the purposes of this part, and the 
provisions of this part shall be construed in accordance with this 
intent.
    (b)(1) In determining which operator or other employer is the 
employer of a particular miner, primary consideration shall be given to 
the identity of the employer which is directly responsible for the 
supervision, operation and control of the mine or mines or other 
facilities where the miner was employed. However, Congress has made it 
clear that such supervision or control may be directly or indirectly 
exercised. Therefore, in appropriate cases where, for example, the 
individual or business entity most directly connected with the mine site 
is not capable of assuming liability for the payment of benefits 
(Sec. 725.492(d)) or is no longer in business and such individual or 
business entity is a subsidiary of a parent company, a member of a joint 
venture, a partner in a partnership, or is substantially owned or 
controlled by another business entity, such parent entity or other 
member of a joint venture or partner or controlling business entity may 
be considered an operator for purposes of this part, regardless of the 
nature of its business activities.
    (2) Where a coal mine is leased, and the lease empowers the lessor 
to make decisions with respect to the terms and conditions under which 
coal is to be extracted or prepared, such as, but not limited to, the 
manner of extraction or preparation or the amount of coal to be 
produced, the lessor may be considered an operator with respect to 
employees of the lessee. An individual land owner or others who lease 
coal lands or mineral rights, who have never been coal mine operators or 
are not in the regular business of leasing coal mines, shall not be 
considered a coal mine operator in accordance with the terms of this 
section. Where a lessor previously operated a coal mine, it may be 
considered an operator with respect to employees of any lessee of such 
mine, particularly where the leasing arrangement was executed or renewed 
after the effective date of this part and does not require the lessee to 
secure benefits provided by the Act.
    (3) In any claim in which the liability of a lessor for claims 
arising out of employment with a lessee is brought into question, the 
lessee shall be considered primarily liable for the claim, and the 
liability of the lessor may be established only after it has been 
determined that the lessee is unable to provide for the payment of 
benefits to a successful claimant. In any case involving the liability 
of a lessor for a claim arising out of employment with

[[Page 806]]

a lessee, any determination of lessor liability shall be made on the 
basis of the facts present in the case in consideration of the terms and 
intent of the act and this part.
    (4) A former coal mine operator which has become a lessor of coal 
miner shall be liable for approved claims arising out of coal mine 
employment with such lessor during the time the lessor was a coal mine 
operator, if such employment terminated on or after January 1, 1970, and 
the conditions for liability contained in Sec. 725.492 are met.
    (c) (1) An independent contractor which performs or performed 
services or engages or engaged in construction at a mine or preparation 
or transportation facility may be held liable for the payment of 
benefits under this part as a coal mine operator with respect to its 
employees who work or have worked in or around a coal mine or coal 
preparation or transportation facility in the extraction, preparation, 
or transportation of coal or in coal mine construction in any period 
during which such employees were exposed to coal dust during their 
employment with such contractor. Such contractor's status as an operator 
shall not be contingent upon the amount or percentage of its work or 
business related to activities in or around a mine, nor upon the number 
or percentage of its employees engaged in such activities.
    (2) (i) Any individual who works or has worked as a sole proprietor, 
a partner in a partnership, a member of a family business or who is 
otherwise self-employed in or around a coal mine or coal preparation or 
transportation facility in the extraction, preparation, or 
transportation of coal or in coal mine construction during any period 
such individual was exposed to coal dust may be considered an operator 
under this part.
    (ii) A self-employed operator, depending upon the facts of the case, 
may be considered an employee of any other operator, person, or business 
entity which substantially controls, supervises, or is financially 
responsible for the activities of the self-employed operator.
    (iii) For the purposes of this part, a lessor of a coal mine which 
leases such mine to a self-employed operator shall be considered the 
employer of such self-employed operator and its employees if the lease 
or agreement is executed or renewed after the effective date of this 
part and such lease or agreement does not require the lessee to 
guarantee the payment of benefits which may be required under this part.



Sec. 725.492  Responsible operator defined.

    (a) A ``responsible operator'' is the operator which is determined 
liable for the payment of benefits under this part for any period after 
December 31, 1973. In order for an employer to be considered a 
responsible operator in any case, the following shall be established:
    (1) The miner's disability or death shall have arisen at least in 
part out of employment in or around a mine or other facility during a 
period when the mine or facility was operated by such operator, except 
as provided in Sec. 725.493(a)(2);
    (2) The operator shall have been an operator of a coal mine or other 
facility for any period after June 30, 1973;
    (3) The miner's employment with the operator or other employer shall 
have included at least 1 working day (Sec. 725.493(b)) after December 
31, 1969; and
    (4) The operator or the employer shall be capable of assuming its 
liability for the payment of continuing benefits under this part, 
through any of the following means:
    (i) By obtaining a policy or contract of insurance under section 423 
of the Act and part 726 of this subchapter; or
    (ii) By qualifying as a self-insurer under section 423 of the Act 
and part 726 of this subchapter; or
    (iii) By possessing any assets that may be available for the payment 
of benefits under this part or through an action under subpart H of this 
part.
    (b) In the absence of evidence to the contrary, a showing that a 
business or corporate entity exists shall be deemed sufficient evidence 
of an operator's capability of assuming liability under this part.
    (c) For the purposes of determining whether an employer is or was an 
operator or other employer covered by the Act which may be found liable 
for the

[[Page 807]]

payment of benefits to an employee of such employer under this part, 
there shall be a rebuttable presumption that during the course of an 
individual's employment such individual was regularly and continuously 
exposed to coal dust during the course of employment. The presumption 
may be rebutted by a showing that the employee was not exposed to coal 
dust for significant periods during such employment.

For purposes of Sec. 725.493(a), a year of coal mine employment may be 
established by accumulating intermittent periods of coal mine 
employment.



Sec. 725.493  Criteria for identifying a responsible operator.

    (a)(1) Subject to the provisions of paragraphs (a)(2) and (3) of 
this section, and provided that the conditions of Sec. 725.492(a)(2) 
through (a)(4) are met, the operator or other employer with which the 
miner had the most recent periods of cumulative employment of not less 
than 1 year, as determined in accordance with paragraph (b) of this 
section, shall be the responsible operator.
    (2)(i) Except as otherwise provided in this paragraph, if the 
operator described in paragraph (a)(1) of this section was an operator 
of a mine or mines or the owner of the assets thereof on or after 
January 1, 1970, (a ``prior operator'') and on or after January 1, 1970, 
transferred such mine or mines or substantially all of the assets 
thereof to another operator (a ``successor operator''), such successor 
operator shall be liable for and shall secure the payment of all 
benefits which would have been payable by the prior operator with 
respect to miners previously employed by such prior operator as if the 
acquisition had not occurred and the prior operator had continued to be 
a coal mine operator. A lessor of a coal mine may be considered a prior 
or successor operator in accordance with this subpart.
    (ii) The stated congressional objective supporting section 422(i) of 
the Act is to prevent a coal operator from circumventing liability under 
this part by entering into corporate or other business transactions 
which make the assessment of liability against that operator a financial 
or legal impossibility. Accordingly, a prior operator under paragraph 
(a)(2)(i) of this section, which transfers a mine or mines or 
substantially all the assets thereof, shall remain primarily liable for 
the payment of benefits under this part predicated on employment with 
the prior operator if such prior operator meets the conditions of 
Sec. 725.492(a)(2) and (a)(4). If the conditions in Sec. 725.492(a)(2) 
and (a)(4) are not met, the successor operator shall, if appropriate, be 
liable for the payment of such benefits.
    (iii) Except as is provided in paragraph (a)(2)(ii) of this section, 
if the operator described in paragraph (a)(1) of this section is a prior 
operator which, on or after January 1, 1970, transferred its coal mining 
business or substantially all the assets thereof to a successor 
operator, or if such business or assets was subsequently transferred to 
a successsor of such successor operator, such successor operator which 
has most recently acquired the coal mining operations in question or 
substantially all of the assets thereof shall be deemed the responsible 
operator if it meets the conditions of Sec. 725.492(a)(2) and (a)(4). If 
such successor operator fails to meet such conditions, any prior 
operator or any operator in the chain of succession, beginning with the 
most recent operator, which acquired the coal mining business in 
question or substantially all of the assets thereof on or after January 
1, 1970, and which meets the conditions of Sec. 725.492(a)(2) and 
(a)(4), may be determined to be the responsible operator. Wherever 
possible the employer of the miner shall be considered the responsible 
operator. However, any successor operator may be determined to be the 
responsible operator with respect to a claim whether or not the miner on 
whose total disability or death the claim is predicated was employed by 
such successor operator for any period of time.
    (3) For purposes of paragraph (a)(2) of this section, the following 
shall apply to corporate reorganizations, liquidations, and such other 
transactions as are enumerated in this section, occurring on or after 
January 1, 1970:
    (i) If an operator ceases to exist by reason of a reorganization 
which involves a change in identity, form, or place of business or 
organization, however effected, the resulting entity shall

[[Page 808]]

be treated as the operator to which this section applies;
    (ii) If an operator ceases to exist by reason of a liquidation into 
a parent or successor corporation, the parent or successor corporation 
shall be treated as the operator to which this section applies;
    (iii) If an operator ceases to exist by reason of a sale of 
substantially all its assets, merger, consolidation, or division, the 
successor operator or corporation, or business entity shall be treated 
as the operator to which this section applies.
    (4) If there is no operator which meets the conditions of paragraphs 
(a) (1) or (2) of this section, the responsible operator shall be 
considered to be the operator with which the miner had the latest 
periods of cumulative employment of not less than 1 year, subject to the 
provisions of paragraph (a)(2) of this section and provided that the 
conditions of Sec. 725.492(a)(2)-(a)(4) are met.
    (5) No determination of responsibility made under paragraphs (a)(1)-
(b)(4) of this section shall be construed to limit the authority of the 
Secretary to determine that any individual or business entity is an 
operator under the Act.
    (6) In the event an operator or other employer is determined to be a 
responsible operator under the provisions of paragraphs (a)(1)-(b)(4) of 
this section, there shall be a rebuttable presumption that the miner's 
pneumoconiosis arose in whole or in part out of his or her employment 
with such operator. Unless this presumption is rebutted, the responsible 
operator shall be liable to pay benefits to the claimant on account of 
the disability or death of the miner in accordance with this part. A 
miner's pneumoconiosis, or disability therefrom, shall be considered to 
have arisen in whole or in part out of work in or around a mine if such 
work contributed to or aggravated the progression or advancement of a 
miner's loss of ability to perform his or her regular coal mine 
employment or comparable employment.
    (b) From the evidence presented, the identity of the operator or 
other employer with which the miner had the most recent periods of 
cumulative employment of not less than 1 year and, to the extent the 
evidence permits, the beginning and ending dates of such periods, shall 
be ascertained. For purposes of this section, a year of employment means 
a period of 1 year, or partial periods totalling 1 year, during which 
the miner was regularly employed in or around a coal mine by the 
operator or other employer. Regular employment may be established on the 
basis of any evidence presented, including the testimony of a claimant 
or other witnesses, and shall not be contingent upon a finding of a 
specific number of days of employment within a given period. However, if 
an operator or other employer proves that the miner was not employed by 
it for a period of at least 125 working days, such operator or other 
employer shall be determined to have established that the miner was not 
regularly employed for a cumulative year by such operator or employer 
for the purposes of paragraph (a) of this section. A ``working day'' 
means any day or part of a day for which a miner received pay for work 
as a miner (see Sec. 725.202(a)).



Sec. 725.494  Insurance coverage.

    (a) Any operator which may be liable for the payment of benefits 
under this part shall secure such liability pursuant to section 423 of 
the act by:
    (1) Qualifying as a self-insurer or establishing a qualified self-
insurance trust as provided in part 726 of this chapter; or
    (2) Insuring and keeping insured the payment of such benefits with 
an authorized insurance carrier or fund in accordance with the 
provisions of part 726 of this subchapter.
    (b) A coal mine construction or transportation employer which is not 
also a coal mine operator shall not be required to purchase insurance or 
qualify as a self-insurer in accordance with this part and part 726 of 
this subchapter. However, such employer shall be liable for the payment 
of benefits to any of its employees who are exposed to coal dust in the 
course of their employment, if eligibility is established under this 
part or part 727 of this subchapter and it is determined that such 
employer is a responsible operator within the meaning of this part. An

[[Page 809]]

employer other than a coal mine operator which may be liable for the 
payment of benefits under this part or part 727 of this subchapter shall 
take such action as may be appropriate to guarantee the discharge of 
such liability. In connection with the liability of an employer 
described in this paragraph, the deputy commissioner or other 
adjudication officer may require a deposit of security in accordance 
with Sec. 725.606. A coal mine construction or transportation employer 
which also operates a coal mine or coal preparation facility shall not 
be excused from its obligation to purchase insurance or self-insure its 
potential liability under the act with respect to all covered employees, 
as described in paragraph (a) of this section. Any attempt by a coal 
mine operator to alter its corporate structure or reassign employees 
within such structure for the purpose of avoiding the insurance 
obligations of the act shall be considered void for the purpose of 
determining whether such operator is in compliance with the insurance 
requirements of the act, or is the employer of such employees.



Sec. 725.495  Penalty for failure to insure.

    (a) Any employer required to secure the payment of benefits under 
the act and Sec. 725.494 which fails to secure such benefits shall be 
subject to a civil penalty to be assessed by the Secretary of Labor of 
not more than $1,000 for each day during which such failure occurs; and 
in any case where such employer is a corporation, the president, 
secretary, and treasurer thereof shall be also severally liable for such 
civil penalty as herein provided for the failure of such corporation to 
secure the payment of benefits; and such president, secretary, and 
treasurer shall be severally personally liable, jointly with such 
corporation, for any payments or other benefit which may accrue under 
the act in respect to any injury which may occur to any employee of such 
corporation while it shall so fail to secure the payment of benefits as 
required by the act.
    (b) If the Director determines that an operator has not fully 
discharged its insurance obligations imposed by the act, the Director 
shall notify the operator of its violation, and if corrective action is 
not taken within a reasonable time specified by the Director, the 
Director shall forward the case to the Chief Administrative Law Judge 
for appropriate proceedings. The administrative law judge assigned the 
case shall schedule and conduct a hearing with respect to the liability 
of the operator for the penalty described in this section. A penalty 
hearing conducted in accordance with this paragraph shall be subject to 
the provisions of 5 U.S.C. 554 and proceedings shall be determined in 
the discretion of the administrative law judge.
    (c) An action may be commenced under this section at any time after 
information supporting such action becomes known to the Director.
    (d) In determining the amount of any penalty assessed under this 
section, the administrative law judge shall consider the circumstances 
of the failure of an operator to comply with paragraph (a) of this 
section and shall, in the absence of mitigating circumstances, assess 
the maximum penalty allowed.
    (e) Any penalty owed under this section shall be paid to the fund 
and may be enforced by the Secretary on behalf of the fund as 
appropriate.
    (f) An appeal from a decision issued by an administrative law judge 
under this section shall be taken in accordance with the provisions of 
the Administrative Procedure Act, 5 U.S.C. 553 et seq. The Board shall 
not have jurisdiction to consider an appeal of a case adjudicated under 
this part.



Sec. 725.496  Special claims transferred to the Trust Fund.

    (a) The 1981 amendments to the Act amended section 422 of the Act 
and transferred liability for payment of certain special claims from 
operators and carriers to the Trust Fund. These provisions apply to 
claims which were denied before March 1, 1978, and which have been or 
will be approved in accordance with section 435 of the Act.
    (b) Section 402(i) of the Act defines three classes of denied claims 
subject to the transfer provisions:
    (1) Claims filed with and denied by the Social Security 
Administration before March 1, 1978:

[[Page 810]]

    (2) Claims filed with the Department of Labor in which the claimant 
was notified by the Department of an administrative or informal denial 
before March 1, 1977, and in which the claimant did not within one year 
of such notification either:
    (i) Request a hearing; or
    (ii) Present additional evidence; or
    (iii) Indicate an intention to present additional evidence; or
    (iv) Request a modification or reconsideration of the denial on the 
ground of a change in conditions or because of a mistake in a 
determination of fact;
    (3) Claims filed with the Department of Labor and denied under the 
law in effect prior to the enactment of the Black Lung Benefits Reform 
Act of 1977, that is, before March 1, 1978, following a formal hearing 
before an administrative law judge or administrative review before the 
Benefits Review Board or review before a United States Court of Appeals.
    (c) Where more than one claim was filed with the Social Security 
Administration and/or the Department of Labor prior to March 1, 1978, by 
or on behalf of a miner or a surviving dependent of a miner, unless such 
claims were required to be merged by the agency's regulations, the 
procedural history of each such claim must be considered separately to 
determine whether the claim is subject to the transfer of liability 
provisions.
    (d) For a claim filed with and denied by the Social Security 
Administration prior to March 1, 1978, to come within the transfer 
provisions, such claim must have been or must be approved under the 
provisions of section 435 of the Act. No claim filed with and denied by 
the Social Security Administration is subject to the transfer of 
liability provisions unless a request was made by or on behalf of the 
claimant for review of such denied claim under section 435. Such review 
must have been requested by the filing of a valid election card or other 
equivalent document with the Social Security Administration in 
accordance with section 435(a) and its implementing regulations at 20 
CFR 410.700-410.707.
    (e) Where a claim filed with the Department of Labor prior to March 
1, 1977, was subjected to repeated administrative or informal denials, 
the last such denial issued during the pendency of the claim determines 
whether the claim is subject to the transfer of liability provisions.
    (f) Where a miner's claim comes within the transfer of liability 
provisions of the 1981 amendments the Trust Fund is also liable for the 
payment of any benefits to which the miner's dependent survivors are 
entitled after the miner's death. However, if the survivor's entitlement 
was established on a separate claim not subject to the transfer of 
liability provisions prior to approval of the miner's claim under 
section 435, the party responsible for the payment of such survivors' 
benefits shall not be relieved of that responsibility because the 
miner's claim was ultimately approved and found subject to the transfer 
of liability provisions.
[48 FR 24292, May 31, 1983]



Sec. 725.497  Procedures in special claims transferred to the Trust Fund.

    (a) General. It is the purpose of this section to define procedures 
to expedite the handling and disposition of claims affected by the 
benefit liability transfer provisions of section 205 of the Black Lung 
Benefits Amendments of 1981.
    (b) Action by the Department. The OWCP shall, in accordance with the 
criteria contained in Sec. 725.496, review each claim which is or may be 
affected by the provisions of section 205 of the Black Lung Benefits 
Amendments of 1981. Any party to a claim, adjudication officer, or 
adjudicative body may request that such a review be conducted and that 
the record be supplemented with any additional documentation necessary 
for an informed consideration of the transferability of the claim. Where 
the issue of the transferability of the claim can not be resolved by 
agreement of the parties and the evidence of record is not sufficient 
for a resolution of the issue, the hearing record may be reopened or the 
case remanded for the development of the additional evidence concerning 
the procedural history of the claim necessary to such resolution. Such 
determinations shall be made on an expedited basis.

[[Page 811]]

    (c) Dismissal of operators. If it is determined that a coal mine 
operator or insurance carrier which previously participated in the 
consideration or adjudication of any claim, may no longer be found 
liable for the payment of benefits to the claimant by reason of section 
205 of the Black Lung Benefits Amendments of 1981, such operator or 
carrier shall be promptly dismissed as a party to the claim. The 
dismissal of an operator or carrier shall be concluded at the earliest 
possible time and in no event shall an operator or carrier participate 
as a necessary party in any claim for which only the Trust Fund may be 
liable.
    (d) Procedure following dismissal of an operator. After it has been 
determined that an operator or carrier must be dismissed as a party in 
any claim in accordance with this section, the Director shall take such 
action as is authorized by the Act to bring about the proper and 
expeditious resolution of the claim in light of all relevant medical and 
other evidence. Action to be taken in this regard by the Director may 
include, but is not limited to, the assignment of the claim to the Black 
Lung Disability Trust Fund for the payment of benefits, the 
reimbursement of benefits previously paid by an operator or carrier if 
appropriate, the defense of the claim on behalf of the Trust Fund, or 
proceedings authorized by Sec. 725.310.
    (e) Any claimant whose claim has been subsequently denied in a 
modification proceeding will be entitled to expedited review of the 
modification decision. Where a formal hearing was previously held, the 
claimant may waive his right to a further hearing and ask that a 
decision be made on the record of the prior hearing, as supplemented by 
any additional documentary evidence which the parties wish to introduce 
and briefs of the parties, if desired. In any case in which the claimant 
waives his right to a second hearing, a decision and order must be 
issued within 30 days of the date upon which the parties agree the 
record has been completed.
[48 FR 24293, May 31, 1983]



                     Subpart G--Payment of Benefits



Sec. 725.501  Payment provisions generally.

    The provisions of this subpart govern the payment of benefits to 
claimants whose claims are approved for payment under section 415 and 
part C of title IV of the act or approved after review under section 435 
of the act and part 727 of this subchapter.



Sec. 725.502  Manner of payment, payment periods.

    (a) Benefits under the act shall be paid periodically, promptly, and 
directly to the person entitled thereto or his or her representative 
payee (see Sec. 725.510).
    (b) Benefits are payable for monthly periods and shall be paid to an 
eligible claimant beginning with the month during which eligibility 
begins and shall terminate with the month before the month during which 
eligibility terminates. If a claimant dies in the first month during 
which all requirments for eligibility are met, benefits shall be paid 
for that month.
    (c) Except as is otherwise provided in this part, all past due 
benefits shall be paid during the month in which the first benefit 
payment is made.



Sec. 725.503  Date from which benefits are payable.

    (a) In accordance with the provisions of section 6(a) of the 
Longshoremen's Act as incorporated by section 422(a) of the act, and 
except as provided in Sec. 725.503A, the provisions of this section 
shall be applicable in determining the date from which benefits are 
payable to an eligible claimant.
    (b) In the case of a miner who is totally disabled due to 
pneumoconiosis, benefits are payable to such miner beginning with the 
month of onset of total disability. Where the evidence does not 
establish the month of onset, benefits shall be payable to such miner 
beginning with the month during which the claim was filed, or the month 
during which the claimant elected review under part 727 of this 
subchapter.
    (c) Except as is provided in part 727 of this subchapter, in the 
case of a survivor of a miner who died due to or

[[Page 812]]

while totally disabled by pneumoconiosis, benefits shall be payable 
beginning with the month of the miner's death, or January 1, 1974, 
whichever is later.
    (d) No benefits shall be payable with respect to a claim filed 
between July 1 and December 31, 1973 (a section 415 claim), for any 
period of eligibility prior to July 1, 1973 (or January 1, 1974 if the 
claim is approved under part 727 of this subpart), nor shall any 
benefits be payable with respect to such claim pursuant to the 
provisions of section 415 of part B of title IV of the act for any 
period of eligibility after December 31, 1973. Where in the case of a 
section 415 claim, eligibility continues beyond December 31, 1973, 
benefits for periods of eligibility occurring after such date shall be 
payable under part C of title IV of the act.
    (e) No benefits shall be payable with respect to a claim filed after 
December 31, 1973 (a part C claim), for any period of eligibility 
occurring before January 1, 1974.
    (f) Each decision and order awarding benefits shall indicate the 
month from which benefits are payable to the eligible claimant.



Sec. 725.503A  Payments to a claimant employed as a miner.

    (a) In the case of a claimant who is employed as a miner (see 
Sec. 725.202(a)) at the time of a final determination of such miner's 
eligibility for benefits, no benefits shall be payable unless:
    (1) The miner's eligibility is established under section 411(c)(3) 
of the act; or (2) the miner terminates his or her coal mine employment 
within 1 year from the date of the final determination of the claim.
    (b) If the eligibility of a working miner is established under 
section 411(c)(3) of the act, benefits shall be payable as is otherwise 
provided in this part. If eligibility cannot be established under 
section 411(c)(3), and the miner continues to be employed as a miner in 
any capacity for a period of less than 1 year after a final 
determination of the claim, benefits shall be payable beginning with the 
month during which the miner ends his or her coal mine employment. If 
the miner's employment continues for more than 1 year after a final 
determination of eligibility, such determination shall be considered a 
denial of benefits on the basis of the miner's continued employment, and 
the miner may seek benefits only as provided in Sec. 725.310, if 
applicable, or by filing a new claim under this part. The provisions of 
subparts D and E of this part shall be applicable to claims considered 
under this section as is appropriate.
    (c) In any case where the miner returns to coal mine or comparable 
and gainful work, the payments to such miner shall be suspended and no 
benefits shall be payable (except as provided in section 411(c)(3) of 
the act) for the period during which the miner continues to work. If the 
miner again terminates employment, the deputy commissioner may require 
the miner to submit to further medical examination before authorizing 
the payment of benefits.



Sec. 725.504  Payees.

    Benefits may be paid, as appropriate, to a beneficiary, to a 
qualified dependent, or to a representative authorized under this 
subpart to receive payments on behalf of such beneficiary or dependent.



Sec. 725.505  Payment on behalf of another; ``legal guardian'' defined.

    Benefits are paid only to the beneficiary, his or her representative 
payee (see Sec. 725.510) or his or her legal guardian. As used in this 
section, ``legal guardian'' means an individual who has been appointed 
by a court of competent jurisdiction or otherwise appointed pursuant to 
law to assume control of and responsibility for the care of the 
beneficiary, the management of his or her estate, or both.



Sec. 725.506  Guardian for minor or incompetent.

    An adjudication officer may require that a legal guardian or 
representative be appointed to receive benefit payments payable to any 
person who is mentally incompetent or a minor and to exercise the powers 
granted to, or to perform the duties otherwise required of such person 
under the act.

[[Page 813]]



Sec. 725.510  Representative payee.

    (a) If the deputy commissioner determines that the best interests of 
a beneficiary are served thereby, the deputy commissioner may certify 
the payment of such beneficiary's benefits to a representative payee.
    (b) Before any amount shall be certified for payment to any 
representative payee for or on behalf of a beneficiary, such 
representative payee shall submit to the deputy commissioner such 
evidence as may be required of his or her relationship to, or his or her 
responsibility for the care of, the beneficiary on whose behalf payment 
is to be made, or of his or her authority to receive such a payment. The 
deputy commissioner may, at any time thereafter, require evidence of the 
continued existence of such relationship, responsibility, or authority. 
If a person requesting representative payee status fails to submit the 
required evidence within a reasonable period of time after it is 
requested, no further payments shall be certified to him or her on 
behalf of the beneficiary unless the required evidence is thereafter 
submitted.
    (c) All benefit payments made to a representative payee shall be 
available only for the use and benefit of the beneficiary, as defined in 
Sec. 725.511.



Sec. 725.511  Use and benefit defined.

    (a) Payments certified to a representative payee shall be considered 
as having been applied for the use and benefit of the beneficiary when 
they are used for the beneficiary's current maintenance--i.e., to 
replace current income lost because of the disability of the 
beneficiary. Where a beneficiary is receiving care in an institution, 
current maintenance shall include the customary charges made by the 
institution and charges made for the current and foreseeable needs of 
the beneficiary which are not met by the institution.
    (b) Payments certified to a representative payee which are not 
needed for the current maintenance of the beneficiary, except as they 
may be used under Sec. 725.512, shall be conserved or invested on the 
beneficiary's behalf. Preferred investments are U.S. savings bonds which 
shall be purchased in accordance with applicable regulations of the U.S. 
Treasury Department (31 CFR part 315). Surplus funds may also be 
invested in accordance with the rules applicable to investment of trust 
estates by trustees. For example, surplus funds may be deposited in an 
interest or dividend bearing account in a bank or trust company or in a 
savings and loan association if the account is either federally insured 
or is otherwise insured in accordance with State law requirements. 
Surplus funds deposited in an interest or dividend bearing account in a 
bank or trust company or in a savings and loan association must be in a 
form of account which clearly shows that the representative payee has 
only a fiduciary, and not a personal, interest in the funds. The 
preferred forms of such accounts are as follows:

 Name of beneficiary____________________________________________________
by (Name of representative payee) representative payee,
or (Name of beneficiary)
by (Name of representative payee) trustee.
    U.S. savings bonds purchased with surplus funds by a representative 
payee for an incapacitated adult beneficiary should be registered as 
follows: (Name of beneficiary) (Social Security No.), for whom (Name of 
payee) is representative payee for black lung benefits.



Sec. 725.512  Support of legally dependent spouse, child, or parent.

    If current maintenance needs of a beneficiary are being reasonably 
met, a relative or other person to whom payments are certified as 
representative payee on behalf of the beneficiary may use part of the 
payments so certified for the support of the legally dependent spouse, a 
legally dependent child, or a legally dependent parent of the 
beneficiary.



Sec. 725.513  Accountability; transfer.

    (a) The deputy commissioner may require a representative payee to 
submit periodic reports including a full accounting of the use of all 
benefit payments certified to a representative payee. If a requested 
report or accounting is not submitted within the time allowed, the 
deputy commissioner shall terminate the certification of the 
representative payee and thereafter payments shall be made directly to 
the beneficiary. A certification which is

[[Page 814]]

terminated under this section may be reinstated for good cause, provided 
that all required reports are supplied to the deputy commissioner.
    (b) A representative payee who has conserved or invested funds from 
payments under this part shall, upon the direction of the deputy 
commissioner, transfer any such funds (including interest) to a 
successor payee appointed by the deputy commissioner or, at the option 
of the deputy commissioner, shall transfer such funds to the Office for 
recertification to a successor payee or the beneficiary.



Sec. 725.514  Certification to dependent of augmentation portion of benefit.

    (a) If the basic benefit of a miner or of a surviving spouse is 
augmented because of one or more dependents, and it appears to the 
deputy commissioner that the best interests of such dependent would be 
served thereby, or that the augmented benefit is not being used for the 
use and benefit (as defined in this subpart) of the augmentee, the 
deputy commissioner may certify payment of the amount of such 
augmentation (to the extent attributable to such dependent) to such 
dependent directly, or to a legal guardian or a representative payee for 
the use and benefit of such dependent.
    (b) Any request to the deputy commissioner to certify separate 
payment of the amount of an augmentation in accordance with paragraph 
(a) of this section shall be in writing on such form and in accordance 
with such instructions as are prescribed by the Office.
    (c) The deputy commissioner shall specify the terms and conditions 
of any certification authorized under this section and may terminate any 
such certification where appropriate.
    (d) Any payment made under this section, if otherwise valid under 
the Act, is a complete settlement and satisfaction of all claims, 
rights, and interests in and to such payment, except that such payment 
shall not be construed to abridge the rights of any party to recoup any 
overpayment made.



Sec. 725.515  Assignment and exemption from claims of creditors.

    Except as provided by the act and this part, no assignment, release, 
or commutation of benefits due or payable under this part shall be 
valid, and all benefits shall be exempt from claims of creditors and 
from levy, execution, and attachment or other remedy or recovery or 
collection of a debt, which exemption may not be waived.

                              Benefit Rates



Sec. 725.520  Computation of benefits.

    (a) Basic rate. The amount of benefits payable to a beneficiary for 
a month is determined, in the first instance, by computing the ``basic 
rate.'' The basic rate is equal to 37\1/2\ percent of the monthly pay 
rate for Federal employees in GS-2, step 1. That rate for a month is 
determined by:
    (1) Ascertaining the lowest annual rate of pay (step 1) for Grade 
GS-2 of the General Schedule applicable to such month (see 5 U.S.C. 
5332);
    (2) Ascertaining the monthly rate thereof by dividing the amount 
determined in paragraph (a)(1) of this section by 12; and
    (3) Ascertaining the basic rate under the Act by multiplying the 
amount determined in paragraph (a)(2) of this section by 0.375 (that is, 
by 37\1/2\ percent).
    (b) Basic benefit. When a miner or surviving spouse is entitled to 
benefits for a month for which he or she has no dependents who qualify 
under this part and when a surviving child of a miner or spouse, or a 
parent, brother, or sister of a miner, is entitled to benefits for a 
month for which he or she is the only beneficiary entitled to benefits, 
the amount of benefits to which such beneficiary is entitled is equal to 
the basic rate as computed in accordance with this section (raised, if 
not a multiple of 10 cents, to the next high multiple of 10 cents). This 
amount is referred to as the ``basic benefit.''
    (c) Augmented benefit. (1) When a miner or surviving spouse is 
entitled to benefits for a month for which he or she has one or more 
dependents who qualify under this part, the amount of benefits to which 
such miner or surviving spouse is entitled is increased. This

[[Page 815]]

increase is referred to as an ``augmentation.''
    (2) The benefits of a miner or surviving spouse are augmented to 
take account of a particular dependent beginning with the first month in 
which such dependent satisfies the conditions set forth in this part, 
and continues to be augmented through the month before the month in 
which such dependent ceases to satisfy the conditions set forth in this 
part, except in the case of a child who qualifies as a dependent because 
he or she is a student. In the latter case, such benefits continue to be 
augmented through the month before the first month during no part of 
which he or she qualifies as a student.
    (3) The basic rate is augmented by 50 percent for one such 
dependent, 75 percent for two such dependents, and 100 percent for three 
or more such dependents.
    (d) Survivor benefits. As used in this section, ``survivor'' means a 
surviving child of a miner or surviving spouse, or a surviving parent, 
brother, or sister of a miner, who establishes entitlement to benefits 
under this part.
    (e) Computation and rounding. (1) Any computation prescribed by this 
section is made to the third decimal place.
    (2) Monthly benefits are payable in multiples of 10 cents. 
Therefore, a monthly payment of amounts derived under paragraph (c)(3) 
of this section which is not a multiple of 10 cents is increased to the 
next higher multiple of 10 cents.
    (3) Since a fraction of a cent is not a multiple of 10 cents, such 
an amount which contains a fraction in the third decimal place is raised 
to the next higher multiple of 10 cents.
    (f) Eligibility based on the coal mine employment of more than one 
miner. Where an individual, for any month, is entitled (and/or qualifies 
as a dependent for purposes of augmentation of benefits) based on the 
disability or death due to pneumoconiosis arising out of the coal mine 
employment of more than one miner, the benefit payable to or on behalf 
of such individual shall be at a rate equal to the highest rate of 
benefits for which entitlement is established by reason of eligibility 
as a beneficiary, or by reason of his or her qualification as a 
dependent for augmentation of benefit purposes.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24293, May 31, 1983]



Sec. 725.521  Commutation of payments; lump sum awards.

    (a) Whenever the deputy commissioner determines that it is in the 
interest of justice, the liability for benefits or any part thereof as 
determined by a final adjudication, may, with the approval of the 
Director, be discharged by the payment of a lump sum equal to the 
present value of future benefit payments commuted, computed at 4 percent 
true discount compounded annually.
    (b) Applications for commutation of future payments of benefits 
shall be made to the deputy commissioner in the manner prescribed by the 
deputy commissioner. If the deputy commissioner determines that an award 
of a lump sum payment of such benefits would be in the interest of 
justice, he or she shall refer such application, together with the 
reasons in support of such determination, to the Director for 
consideration.
    (c) The Director shall, in his or her discretion, grant or deny the 
application for commutation of payments. Such decision may be appealed 
to the Benefits Review Board.
    (d) The computation of all commutations of such benefits shall be 
made by the OWCP. For this purpose the file shall contain the date of 
birth of the person on whose behalf commutation is sought, as well as 
the date upon which such commutation shall be effective.
    (e) For purposes of determining the amount of any lump sum award, 
the probability of the death of the disabled miner and/or other persons 
entitled to benefits before the expiration of the period during which he 
or she is entitled to benefits, shall be determined in accordance with 
the most current United States Life Tables, as developed by the 
Department of Health, Education, and Welfare, and the probability of the 
remarriage of a surviving spouse shall be determined in accordance with 
the remarriage tables of the Dutch Royal Insurance Institution. The 
probability of

[[Page 816]]

the happening of any other contingency affecting the amount or duration 
of the compensation shall be disregarded.
    (f) In the event that an operator or carrier is adjudicated liable 
for the payment of benefits, such operator or carrier shall be notified 
of and given an opportunity to participate in the proceedings to 
determine whether a lump sum award shall be made. Such operator or 
carrier shall, in the event a lump sum award is made, tender full and 
prompt payment of such award to the claimant as though such award were a 
final payment of monthly benefits. Except as provided in paragraph (g) 
of this section, such lump sum award shall forever discharge such 
operator or carrier from its responsibility to make monthly benefit 
payments under the act to the person who has requested such lump-sum 
award. In the event that an operator or carrier is adjudicated liable 
for the payment of benefits, such operator or carrier shall not be 
liable for any portion of a commuted or lump sum award predicated upon 
benefits due any claimant prior to January 1, 1974.
    (g) In the event a lump-sum award is approved under this section, 
such award shall not operate to discharge an operator carrier, or the 
Fund from any responsibility imposed by the act for the payment of 
medical benefits to an eligible miner.



Sec. 725.522  Payments prior to final adjudication.

    (a) Unless a stay of payments is ordered by the Board or appropriate 
court under section 21 of the LHWCA, the payment of benefits to a 
claimant who has been determined eligible therefor by a deputy 
commissioner, administrative law judge, the Board, or a court shall 
commence within no more than 30 days following an initial determination 
of eligibility by such deputy commissioner, or the filing of an award of 
benefits by such administrative law judge, Board, or court, 
notwithstanding the pendency of further proceedings before an 
admininstrative law judge or an appeal to the Board or court.
    (b) If an operator or carrier has been initially determined liable 
for the payment of benefits to an eligible claimant by the deputy 
commissioner (see Sec. 725.420), or ordered to pay benefits by an 
administrative law judge, the Board, or an appropriate court, and such 
operator or carrier fails or refuses to commence the payment of benefits 
(including all past due benefits and medical expenses) within the 30-day 
period specified in paragraph (a) of this section, the fund shall 
commence the payments due and owing and shall continue such payments as 
appropriate. In the event that the fund undertakes the payment of 
benefits on behalf of an operator or carrier, the provisions of 
Secs. 725.601-725.608 shall be applicable to such operator or carrier.
    (c) If benefit payments are commenced prior to the final 
adjudication of the claim and it is later determined by an 
administrative law judge, the Board, or court that the claimant was 
ineligible to receive such payments, such payments shall be considered 
overpayments pursuant to Sec. 725.540 of this subpart which may be 
recovered in accordance with the provisions of this subpart.

                Special Provisions for Operator Payments



Sec. 725.530  Operator payments; generally.

    (a) An operator or carrier which has been determined liable for the 
payment of benefits to a claimant by the deputy commissioner, or ordered 
to pay such benefits by an administrative law judge, the Board, or a 
court, or an operator who has agreed that it is liable for the payment 
of benefits to a claimant, shall commence the payment of benefits 
(including past due benefits, medical costs, penalties and interest, if 
any) within 30 days of such determination, order, or agreement. 
Thereafter, monthly benefit payments shall be made for the duration of 
the claimant's eligibility. Arrangements for the payment of medical 
costs shall be made by such operator or carrier in accordance with the 
provisions of subpart I of this part.
    (b) Benefit payments made by an operator or carrier shall be made 
directly to the person entitled thereto or a representative payee if 
authorized by the deputy commissioner. The payment of

[[Page 817]]

a claimant's attorney's fee, if any is awarded, shall be made directly 
to such attorney. Reimbursement of the fund, including interest, shall 
be paid directly to the Secretary on behalf of the fund.



Sec. 725.531  Receipt for payment.

    Any individual receiving benefits under the act in his or her own 
right, or as a representative payee, or as the duly appointed agent for 
the estate of a deceased beneficiary, shall execute receipts for 
benefits paid by any operator which shall be produced by such operator 
for inspection whenever the deputy commissioner requires. A canceled 
check shall be considered adequate receipt of payment for purposes of 
this section. No operator or carrier shall be required to retain 
receipts for payments made for more than 5 years after the date on which 
such receipt was executed.

(Approved by the Office of Management and Budget under control number 
1215-0124)


(Pub. L. No. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))
[43 FR 36772, Aug. 18, 1978, as amended at 47 FR 145, Jan. 5, 1982]



Sec. 725.532  Suspension, reduction, or termination of payments.

    (a) No suspension, reduction, or termination in the payment of 
benefits is permitted unless authorized by the deputy commissioner, 
administrative law judge, Board, or court. No suspension, reduction, or 
termination shall be authorized except upon the occurrence of an event 
which terminates a claimant's eligibility for benefits (see subpart B of 
this part) or as is otherwise provided in subpart C of this part, 
Secs. 725.306 and 725.310, or this subpart see also Secs. 725.533-
725.546).
    (b) Any unauthorized suspension in the payment of benefits by an 
operator or carrier shall be treated as provided in subpart H.
    (c) Unless suspension, reduction, or termination of benefits 
payments is required by an administrative law judge, the Benefits Review 
Board or a court, the deputy commissioner, after receiving notification 
of the occurrence of an event that would require the suspension, 
reduction, or termination of benefits, shall follow the procedures for 
the determination of claims set forth in subparts D and E.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24293, May 31, 1983]

                  Increases and Reductions of Benefits



Sec. 725.533  Modification of benefits amounts; general.

    (a) Under certain circumstances the amount of monthly benefits as 
computed in Sec. 725.520 or lump-sum award (Sec. 725.521) shall be 
modified to determine the amount actually to be paid to a beneficiary. 
With respect to any benefits payable for all periods of eligibility 
after January 1, 1974, a reduction of the amount of benefits payable 
shall be required on account of:
    (1) Any compensation or benefits received under any State workers' 
compensation law because of death or partial or total disability due to 
pneumoconiosis; or
    (2) Any compensation or benefits received under or pursuant to any 
Federal law including part B of title IV of the act because of death or 
partial or total disability due to pneumoconiosis; or
    (3) In the case of benefits to a parent, brother, or sister as a 
result of a claim filed at any time or benefits payable on a miner's 
claim which was filed on or after January 1, 1982, the excess earnings 
from wages and from net earnings from self-employment (see Sec. 410.530 
of this title) of such parent, brother, sister, or miner, respectively; 
or
    (4) The fact that a claim for benefits from an additional 
beneficiary is filed, or that such claim is effective for a payment 
during the month of filing, or a dependent qualifies under this part for 
an augmentation portion of a benefit of a miner or widow for a period in 
which another dependent has previously qualified for an augmentation.
    (b) With respect to periods of eligibility occurring after June 30, 
1973, but before January 1, 1974, benefits shall be reduced in months of 
eligibility occurring during such period only:
    (1) By an amount equal to any payment received under the workers' 
compensation, unemployment compensation, or disability insurance laws of

[[Page 818]]

any State on account of the disability or death of the miner due to 
pneumoconiosis; and
    (2) On account of excess earnings under section 203 (b) through (l) 
of the Social Security Act; and
    (3) For failure to report earnings from work in employment and self-
employment within the prescribed period of time; and
    (4) By reason of the fact that a claim for benefits from an 
additional beneficiary is filed, or that such a claim is effective for a 
month prior to the month of filing, or a dependent qualifies under this 
part or this chapter for an augmentation portion of a benefit of a miner 
or surviving spouse for a month for which another dependent has 
previously qualified for an augmentation.
    (c) With respect to claims filed between July 1 and December 31, 
1973, and paid for periods of eligibility occurring during such period, 
there shall be no retroactive adjustment of benefits paid in light of 
the amendments enacted by the Black Lung Benefits Reform Act of 1977 
insofar as such amendments affect events which cause a reduction in 
benefits.
    (d) An adjustment in a beneficiary's monthly benefit may be required 
because an overpayment or underpayment has been made to such beneficiary 
(see Secs. 725.540-725.546).
    (e) A suspension of a beneficiary's monthly benefits may be required 
when the Office has information indicating that reductions on account of 
excess earnings may reasonably be expected.
    (f) Monthly benefit rates are payable in multiples of 10 cents. Any 
monthly benefit rate which, after the applicable computations, 
augmentations, and reductions is not a multiple of 10 cents, is 
increased to the next higher multiple of 10 cents. Since a fraction of a 
cent is not a multiple of 10 cents, a benefit rate which contains such a 
fraction in the third decimal is raised to the next higher multiple of 
10 cents.
    (g) Any individual entitled to a benefit, who is aware of any 
circumstances which could affect entitlement to benefits, eligibility 
for payment, or the amount of benefits, or result in the termination, 
suspension, or reduction of benefits, shall promptly report these 
circumstances to the Office. The Office may at any time require an 
individual receiving, or claiming entitlement to, benefits, either on 
his or her own behalf or on behalf of another, to submit a written 
statement giving pertinent information bearing upon the issue of whether 
or not an event has occurred which would cause such benefit to be 
terminated, or which would subject such benefit to reductions or 
suspension under the provisions of the Act. The failure of an individual 
to submit any such report or statement, properly executed, to the Office 
shall subject such benefit to reductions, suspension, or termination as 
the case may be.
[43 FR 36772, Aug. 18, 1978, as amended at 48 FR 24293, May 31, 1983]

    Editorial Note: Section 725.533(a)(3) revised at 48 FR 24293, May 
31, 1983, contains information collection requirements which are not 
effective until approved by the Office of Management and Budget. Notice 
of approval will be published in the Federal Register.



Sec. 725.534  Reduction of State benefits.

    No benefits under section 415 of part B of title IV of the Act shall 
be payable to the residents of a State which, after December 31, 1969, 
reduces the benefits payable to persons eligible to receive benefits 
under section 415 of the Act under State laws applicable to its general 
work force with regard to workers' compensation (including compensation 
for occupational disease), unemployment compensation, or disability 
insurance benefits which are funded in whole or in part out of employer 
contributions.



Sec. 725.535  Reduction; receipt of State or Federal benefit.

    (a) As used in this section the term ``State or Federal benefit'' 
means a payment to an individual on account of total or partial 
disability or death due to pneumoconiosis only under State or Federal 
laws relating to workers' compensation. With respect to a claim for 
which benefits are payable for any month between July 1 and December 31, 
1973, ``State benefit'' means a payment to a beneficiary made on account 
of disability or death due to pneumoconiosis under State laws relating 
to

[[Page 819]]

workers' compensation (including compensation for occupational disease), 
unemployment compensation, or disability insurance.
    (b) Benefit payments to a beneficiary for any month are reduced (but 
not below zero) by an amount equal to any payments of State or Federal 
benefits received by such beneficiary for such month.
    (c) Where a State or Federal benefit is paid periodically but not 
monthly, or in a lump sum as a commutation of or a substitution for 
periodic benefits, the reduction under this section is made at such time 
or times and in such amounts as the Office determines will approximate 
as nearly as practicable the reduction required under paragraph (b) of 
this section. In making such a determination, a weekly State or Federal 
benefit is multiplied by 4\1/3\ and a biweekly benefit is multiplied by 
2\1/6\ to ascertain the monthly equivalent for reduction purposes.
    (d) Amounts paid or incurred or to be incurred by the individual for 
medical, legal, or related expenses in connection with this claim for 
State or Federal benefits (defined in paragraph (a) of this section) are 
excluded in computing the reduction under paragraph (b) of this section, 
to the extent that they are consistent with State or Federal Law. Such 
medical, legal, or related expenses may be evidenced by the State or 
Federal benefit awards, compromise agreement, or court order in the 
State or Federal benefit proceedings, or by such other evidence as the 
Office may require. Such other evidence may consist of:
    (1) A detailed statement by the individual's attorney, physician, or 
the employer's insurance carrier; or:
    (2) Bills, receipts, or canceled checks; or
    (3) Other evidence indicating the amount of such expenses; or
    (4) Any combination of the foregoing evidence from which the amount 
of such expenses may be determinable. Such expenses shall not be 
excluded unless established by evidence as required by the Office.



Sec. 725.536  Reductions; excess earnings.

    In the case of a surviving parent, brother, or sister, whose claim 
was filed at any time, or of a miner whose claim was filed on or after 
January 1, 1982, benefit payments are reduced as appropriate by an 
amount equal to the deduction which would be made with respect to excess 
earnings under the provisions of sections 203 (b), (f), (g), (h), (j), 
and (l) of the Social Security Act (42 U.S.C. 403 (b), (f), (g), (h), 
(j), and (l)), as if such benefit payments were benefits payable under 
section 202 of the Social Security Act (42 U.S.C. 402) (see 
Secs. 404.428-404.456 of this title).
[48 FR 24293, May 31, 1983]

    Editorial Note: Section 725.536 revised at 48 FR 24293, May 31, 
1983, contains information collection requirements which are not 
effective until approved by the Office of Management and Budget. Notice 
of approval will be published in the Federal Register.



Sec. 725.537  Reductions; retroactive effect of an additional claim for benefits.

    Beginning with the month in which a person other than a miner files 
a claim and becomes entitled to benefits, the benefits of other persons 
entitled to benefits with respect to the same miner, are adjusted 
downward, if necessary, so that no more than the permissible amount of 
benefits (the maximum amount for the number of beneficiaries involved) 
will be paid.



Sec. 725.538  Reductions; effect of augmentation of benefits based on subsequent qualification of individual.

    (a) Ordinarily, a written request that the benefits of a miner or 
surviving spouse be augmented on account of a qualified dependent is 
made as part of the claim for benefits. However, it may also be made 
thereafter.
    (b) In the latter case, beginning with the month in which such a 
request is filed on account of a particular dependent and in which such 
dependent qualifies for augmentation purposes under this part, the 
augmented benefits attributable to other qualified dependents (with 
respect to the same miner or surviving spouse), if any, are adjusted 
downward, if necessary, so that the permissible amount of augmented 
benefits (the maximum amount for the number of dependents involved) will 
not be exceeded.
    (c) Where, based on the entitlement to benefits of a miner or 
surviving

[[Page 820]]

spouse, a dependent would have qualified for augmentation purposes for a 
prior month of such miner's or surviving spouse's entitlement had such 
request been filed in such prior month, such request is effective for 
such prior month. For any month before the month of filing such request, 
however, otherwise correct benefits previously certified by the Office 
may not be changed. Rather the amount of the augmented benefit 
attributable to the dependent filing such request in the later month is 
reduced for each month of the retroactive period to the extent that may 
be necessary. This means that for each month of the retroactive period, 
the amount payable to the dependent filing the later augmentation 
request is the difference, if any, between:
    (1) The total amount of augmented benefits certified for payment for 
other dependents for that month, and
    (2) The permissible amount of augmented benefits (the maximum amount 
for the number of dependents involved) payable for the month for all 
dependents, including the dependent filing later.



Sec. 725.539  More than one reduction event.

    If a reduction for receipt of State or Federal benefits and a 
reduction on account of excess earnings are chargeable to the same 
month, the benefit for such month is first reduced (but not below zero) 
by the amount of the State or Federal benefits, and the remainder of the 
benefit for such month, if any, is then reduced (but not below zero) by 
the amount of excess earnings chargeable to such month.

                       Overpayments; Underpayments



Sec. 725.540  Overpayments.

    (a) General. As used in this subpart, the term ``overpayment'' 
includes:
    (1) Payment where no amount is payable under this part;
    (2) Payment in excess of the amount payable under this part;
    (3) A payment under this part which has not been reduced by the 
amounts required by the Act (see Sec. 725.533);
    (4) A payment under this part made to a resident of a State whose 
residents are not entitled to benefits (see Secs. 725.402 and 725.403);
    (5) Payment resulting from failure to terminate benefits to an 
individual no longer entitled thereto;
    (6) Duplicate benefits paid to a claimant on account of concurrent 
eligibility under this part and part 410 or 727 of this title or as 
provided in Sec. 725.309.
    (b) Overpaid beneficiary is living. If the beneficiary to whom an 
overpayment was made is living at the time of a determination of such 
overpayment, is entitled to benefits at the time of the overpayment, or 
at any time thereafter becomes so entitled, no benefit for any month is 
payable to such individual, except as provided in paragraph (c) of this 
section, until an amount equal to the amount of the overpayment has been 
withheld or refunded.
    (c) Adjustment by withholding part of a monthly benefit. Adjustment 
under paragraph (b) of this section may be effected by withholding a 
part of the monthly benefit payable to a beneficiary where it is 
determined that:
    (1) Withholding the full amount each month would deprive the 
beneficiary of income required for ordinary and necessary living 
expenses;
    (2) The overpayment was not caused by the beneficiary's 
intentionally false statement or representation, or willful concealment 
of, or deliberate failure to furnish, material information; and
    (3) Recoupment can be effected in an amount of not less than $10 a 
month and at a rate which would not unreasonably extend the period of 
adjustment.
    (d) Overpaid beneficiary dies before adjustment. If an overpaid 
beneficiary dies before adjustment is completed under the provisions of 
paragraph (b) of this section, recovery of the overpayment shall be 
effected through repayment by the estate of the deceased overpaid 
beneficiary, or by withholding of amounts due the estate of such 
deceased beneficiary, or both.



Sec. 725.541  Notice of waiver of adjustment or recovery of overpayment.

    Whenever a determination is made that more than the correct amount 
of payment has been made, notice of the

[[Page 821]]

provisions of section 204(b) of the Social Security Act regarding waiver 
of adjustment or recovery shall be sent to the overpaid individual, to 
any other individual against whom adjustment or recovery of the 
overpayment is to be effected, and to any operator or carrier which may 
be liable to such overpaid individual.



Sec. 725.542  When waiver of adjustment or recovery may be applied.

    There shall be no adjustment or recovery of an overpayment in any 
case where an incorrect payment has been made with respect to an 
individual:
    (a) Who is without fault, and where
    (b) Adjustment or recovery would either:
    (1) Defeat the purpose of title IV of the Act, or
    (2) Be against equity and good conscience.



Sec. 725.543  Standards for waiver of adjustment or recovery.

    The standards for determining the applicability of the criteria 
listed in Sec. 725.542 shall be the same as those applied by the Social 
Security Administration under Secs. 410.561-410.561h of this title.



Sec. 725.544  Collection and compromise of claims for overpayment.

    (a) General effect of the Federal Claims Collection Act of 1966. In 
accordance with the Federal Claims Collection Act of 1966 and applicable 
regulations, claims by the Office against an individual for recovery of 
an overpayment under this part not exceeding the sum of $20,000, 
exclusive of interest, may be compromised, or collection suspended or 
terminated, where such individual or his or her estate does not have the 
present or prospective ability to pay the full amount of the claim 
within a reasonable time (see paragraph (c) of this section), or the 
cost of collection is likely to exceed the amount of recovery (see 
paragraph (d) of this section), except as provided under paragraph (b) 
of this section.
    (b) When there will be no compromise, suspension, or termination of 
collection of a claim for overpayment. (1) In any case where the 
overpaid individual is alive, a claim for overpayment will not be 
compromised, nor will there be suspension or termination of collection 
of the claim by the Office, if there is an indication of fraud, the 
filing of a false claim, or misrepresentation on the part of such 
individual or on the part of any other party having any interest in the 
claim.
    (2) In any case where the overpaid individual is deceased:
    (i) A claim for overpayment in excess of $5,000 will not be 
compromised, nor will there be suspension or termination of collection 
of the claim by the Office if there is an indication of fraud, the 
filing of a false claim, or misrepresentation on the part of such 
deceased individual; and
    (ii) A claim for overpayment, regardless of the amount, will not be 
compromised, nor will there be suspension or termination of collection 
of the claim by the Office if there is an indication that any person 
other than the deceased overpaid individual had a part in the fraudulent 
action which resulted in the overpayment.
    (c) Inability to pay claim for recovery of overpayment. In 
determining whether the overpaid individual is unable to pay a claim for 
recovery of an overpayment under this part, the Office shall consider 
the individual's age, health, present and potential income (including 
inheritance prospects), assets (e.g., real property, savings account), 
possible concealment or improper transfer of assets, and assets or 
income of such individual which may be available in enforced collection 
proceedings. The Office will also consider exemptions available to such 
individual under the pertinent State or Federal law in such proceedings. 
In the event the overpaid individual is deceased, the Office shall 
consider the available assets of the estate, taking into account any 
liens or superior claims against the estate.
    (d) Cost of collection or litigative probabilities. Where the 
probable costs of recovering an overpayment under this part would not 
justify enforced collection proceedings for the full amount of the 
claim, or where there is doubt concerning the Office's ability to 
establish its claim as well as the time which it will take to effect 
such collection, a compromise or settlement for less than the full 
amount may be considered.

[[Page 822]]

    (e) Amount of compromise. The amount to be accepted in compromise of 
a claim for overpayment under this part shall bear a reasonable 
relationship to the amount which can be recovered by enforced collection 
proceedings, giving due consideration to the exemption available to the 
overpaid individual under State or Federal law and the time which 
collection will take.
    (f) Payment. Payment of the amount the Office has agreed to accept 
as a compromise in full settlement of a claim for recovery of an 
overpayment under this part shall be made within the time and in the 
manner set by the Office. A claim for the overpayment shall not be 
considered compromised or settled until the full payment of the 
compromised amount has been made within the time and manner set by the 
Office. Failure of the overpaid individual or his or her estate to make 
such payment as provided shall result in reinstatement of the full 
amount of the overpayment less any amounts paid prior to such default.

(Approved by the Office of Management and Budget under control number 
1215-0144)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec. 725.545  Underpayments.

    (a) General. As used in this subpart, the term ``underpayment'' 
includes a payment in an amount less than the amount of the benefit due 
for such month, and nonpayment where some amount of such benefits is 
payable.
    (b) Underpaid individual is living. If an individual to whom an 
underpayment was made is living, the deficit represented by such 
underpayment shall be paid to such individual either in a single payment 
(if he or she is not entitled to a monthly benefit or if a single 
payment is requested by the claimant in writing) or by increasing one or 
more monthly benefit payments to which such individual becomes entitled.
    (c) Underpaid individual dies before adjustment of underpayment. If 
an individual to whom an underpayment was made dies before receiving 
payment of the deficit or negotiating the check or checks representing 
payment of the deficit, such payment shall be distributed to the living 
person (or persons) in the highest order of priority as follows:
    (1) The deceased individual's surviving spouse who was either:
    (i) Living in the same household with the deceased individual at the 
time of such individual's death; or
    (ii) In the case of a deceased miner, entitled for the month of 
death to black lung benefits as his or her surviving spouse or surviving 
divorced spouse.
    (2) In the case of a deceased miner or spouse his or her child 
entitled to benefits as the surviving child of such miner or surviving 
spouse for the month in which such miner or spouse died (if more than 
one such child, in equal shares to each such child).
    (3) In the case of a deceased miner, his parent entitled to benefits 
as the surviving parent of such miner for the month in which such miner 
died (if more than one such parent, in equal shares to each such 
parent).
    (4) The surviving spouse of the deceased individual who does not 
qualify under paragraph (c)(1) of this section.
    (5) The child or children of the deceased individual who do not 
qualify under paragraph (c)(2) of this section (if more than one such 
child, in equal shares to each such child).
    (6) The parent or parents of the deceased individual who do not 
qualify under paragraph (c)(3) of this section (if more than one such 
parent, in equal shares to each such parent).
    (7) The legal representative of the estate of the deceased 
individual as defined in paragraph (e) of this section.
    (d) Deceased beneficiary. In the event that a person, who is 
otherwise qualified to receive payments as the result of a deficit 
caused by an underpayment under the provisions of paragraph (c) of this 
section, dies before receiving payment or before negotiating the check 
or checks representing such payment, his or her share of the 
underpayment shall be divided among the remaining living person(s) in 
the same order or priority. In the event that there is (are) no other 
such person(s), the underpayment shall be paid to the living person(s) 
in the next lower order of priority under paragraph (c) of this section.

[[Page 823]]

    (e) Definition of legal representative. The term ``legal 
representative,'' for the purpose of qualifying for receipt of an 
underpayment, generally means the executor or the administrator of the 
estate of the deceased beneficiary. However, it may also include an 
individual, institution or organization acting on behalf of an 
unadministered estate, provided the person can give the Office good 
acquittance (as defined in paragraph (f) of this section). The following 
persons may qualify as legal representative for purposes of this 
section, provided they can give the Office good acquittance:
    (1) A person who qualifies under a State's ``small estate'' statute; 
or
    (2) A person resident in a foreign country who under the laws and 
customs of that country, has the right to receive assets of the estate; 
or
    (3) A public administrator; or
    (4) A person who has the authority under applicable law to collect 
the assets of the estate of the deceased beneficiary.
    (f) Definition of ``good acquittance.'' A person is considered to 
give the Office ``good acquittance'' when payment to that person will 
release the Office from further liability for such payment.



Sec. 725.546  Relation to provisions for reductions or increases.

    The amount of an overpayment or an underpayment is the difference 
between the amount to which the beneficiary was actually entitled and 
the amount paid. Overpayment and underpayment simultaneously outstanding 
against the same beneficiary shall first be adjusted against one another 
before adjustment pursuant to the other provisions of this subpart.



Sec. 725.547  Applicability of overpayment and underpayment provisions to operator or carrier.

    (a) The provisions of this subpart relating to overpayments and 
underpayments shall be applicable to overpayments and underpayments made 
by responsible operators or their insurance carriers, as appropriate. 
However, if an overpayment has been made by an operator, the provisions 
of Secs. 725.541-725.544 shall not be applicable.
    (b) No operator or carrier may make an adjustment of an overpayment 
without prior application to, and approval by, the Office which shall 
exercise full supervisory authority over the adjustment of all 
overpayments.
    (c) In any case involving either overpayments or underpayments, the 
Office may take any necessary action, and deputy commissioners may issue 
appropriate orders to protect the rights of the parties.
    (d) Disputes arising out of orders so issued shall be resolved by 
the procedures set out in subpart E of this part.



              Subpart H--Enforcement of Liability; Reports



Sec. 725.601  Enforcement generally.

    (a) The Act, together with certain incorporated provisions from the 
Longshoremen's and Harbor Workers' Compensation Act, contains a number 
of provisions which subject an operator or other employer, claimants and 
others to penalties for failure to comply with certain provisions of the 
Act, or failure to commence and continue prompt periodic payments to a 
beneficiary.
    (b) It is the policy and intent of the Department to vigorously 
enforce the provisions of this part through the use of the remedies 
provided by the Act. Accordingly, if an operator refuses to pay benefits 
with respect to a claim for which the operator has been adjudicated 
liable, the Director shall invoke and execute the lien on the property 
of the operator as described in Sec. 725.603. Enforcement of this lien 
shall be pursued in an appropriate U.S. district court. If the Director 
determines that the remedy provided by Sec. 725.603 may not be 
sufficient to guarantee the continued compliance with the terms of an 
award or awards against the operator, the Director shall in addition 
seek an injunction in the U.S. district court to prohibit future 
noncompliance by the operator and such other relief as the court 
considers appropriate (see Sec. 725.604). If an operator unlawfully 
suspends or terminates the payment of benefits to a claimant, the deputy 
commissioner shall declare the award in default and proceed in 
accordance with Sec. 725.605. In all cases payments in addition to 
compensation (see Sec. 725.607) and

[[Page 824]]

interest (see Sec. 725.608) shall be sought by the Director or awarded 
by the deputy commissioner.
    (c) In certain instances the remedies provided by the Act are 
concurrent; that is, more than one remedy might be appropriate in any 
given case. In such a case, the Director shall select the remedy or 
remedies appropriate for the enforcement action. In making this 
selection, the Director shall consider the best interests of the 
claimant as well as those of the Fund.



Sec. 725.602  Reimbursement of the fund.

    (a) In any case in which the fund has paid benefits, including 
medical benefits, on behalf of an operator or other employer which is 
determined liable therefore, or liable for a part thereof, such operator 
or other employer shall simultaneously with the first payment of 
benefits made to the beneficiary, reimburse the fund (with interest) for 
the full amount of all benefit payments made by the fund with respect to 
the claim.
    (b) In any case where benefit payments have been made by the fund, 
the fund shall be subrogated to the rights of the beneficiary. The 
Secretary of Labor may, as appropriate, exercise such subrogation 
rights.



Sec. 725.603  Payments by the fund on behalf of an operator; liens.

    (a) If an amount is paid out of the fund to an individual entitled 
to benefits under this part or part 727 of this subchapter on behalf of 
an operator or other employer which is or was required to pay or secure 
the payment of all or a portion of such amount (see Sec. 725.522), the 
operator or other employer shall be liable to the United States for 
repayment to the fund of the amount of benefits properly attributable to 
such operator or other employer.
    (b) If an operator or other employer liable to the fund refuses to 
pay, after demand, the amount of such liability, there shall be a lien 
in favor of the United States upon all property and rights to property, 
whether real or personal, belonging to such operator or other employer. 
The lien arises on the date on which such liability is finally 
determined, and continues until it is satisfied or becomes unenforceable 
by reason of lapse of time.
    (c) (1) Except as otherwise provided under this section, the 
priority of the lien shall be determined in the same manner as under 
section 6323 of the Internal Revenue Code of 1954.
    (2) In the case of a bankruptcy or insolvency proceeding, the lien 
imposed under this section shall be treated in the same manner as a lien 
for taxes due and owing to the United States for purposes of the 
Bankruptcy Act or section 3466 of the Revised Statutes (31 U.S.C. 191).
    (3) For purposes of applying section 6323(a) of the Internal Revenue 
Code of 1954 to determine the priority between the lien imposed under 
this section and the Federal tax lien, each lien shall be treated as a 
judgment lien arising as of the time notice of such lien is filed.
    (4) For purposes of the section, notice of the lien imposed 
hereunder shall be filed in the same manner as under section 6323(f) 
(disregarding paragraph (4) thereof) and (g) of the Internal Revenue 
Code of 1954.
    (5) In any case where there has been a refusal or neglect to pay the 
liability imposed under this section, the Secretary of Labor may bring a 
civil action in a district court of the United States to enforce the 
lien of the United States under this section with respect to such 
liability or to subject any property, of whatever nature, of the 
operator, or in which it has any right, title, or interest, to the 
payment of such liability.
    (6) The liability imposed by this paragraph may be collected at a 
proceeding in court if the proceeding is commenced within 6 years after 
the date upon which the liability was finally determined, or prior to 
the expiration of any period for collection agreed upon in writing by 
the operator and the United States before the expiration of such 6-year 
period. This period of limitation shall be suspended for any period 
during which the assets of the operator are in the custody or control of 
any court of the United States, or of any State, or the District of 
Columbia, and for 6 months thereafter, and for any period during which 
the operator is outside the United

[[Page 825]]

States if such period of absence is for a continuous period of at least 
6 months.



Sec. 725.604  Enforcement of final awards.

    Notwithstanding the provisions of Sec. 725.603, if an operator or 
other employer or its officers or agents fails to comply with an order 
awarding benefits that has become final, any beneficiary of such award 
or the deputy commissioner may apply for the enforcement of the order to 
the Federal district court for the judicial district in which the injury 
occurred (or to the U.S. District Court for the District of Columbia if 
the injury occurred in the District). If the court determines that the 
order was made and served in accordance with law, and that such operator 
or other employer or its officers or agents have failed to comply 
therewith, the court shall enforce obedience to the order by writ of 
injunction or by other proper process, mandatory or otherwise, to enjoin 
upon such operator or other employer and its officers or agents 
compliance with the order.



Sec. 725.605  Defaults.

    (a) Except as is otherwise provided in this part, no suspension, 
termination or other failure to pay benefits awarded to a claimant is 
permitted. If an employer found liable for the payment of such benefits 
fails to make such payments within 30 days after any date on which such 
benefits are due and payable, the person to whom such benefits are 
payable may, within one year after such default, make application to the 
deputy commissioner for a supplementary order declaring the amount of 
the default.
    (b) If after investigation, notice and hearing as provided in 
subparts D and E of this part, a default is found, the deputy 
commissioner or the administrative law judge, if a hearing is requested, 
shall issue a supplementary order declaring the amount of the default, 
if any. In cases where a lump-sum award has been made, if the payment in 
default is an installment, the deputy commissioner or administrative law 
judge, may, in his or her discretion, declare the whole of the award as 
the amount in default. The applicant may file a certified copy of such 
supplementary order with the clerk of the Federal district court for the 
judicial district in which the operator has its principal place of 
business or maintains an office or for the judicial district in which 
the injury occurred. In case such principal place of business or office 
is in the District of Columbia, a copy of such supplementary order may 
be filed with the clerk of the U.S. District Court for the District of 
Columbia. Such supplementary order shall be final and the court shall, 
upon the filing of the copy, enter judgment for the amount declared in 
default by the supplementary order if such supplementary order is in 
accordance with law. Review of the judgment may be had as in civil suits 
for damages at common law. Final proceedings to execute the judgment may 
be had by writ of execution in the form used by the court in suits at 
common law in actions of assumpsit. No fee shall be required for filing 
the supplementary order nor for entry of judgment thereon, and the 
applicant shall not be liable for costs in a proceeding for review of 
the judgment unless the court shall otherwise direct. The court shall 
modify such judgment to conform to any later benefits order upon 
presentation of a certified copy thereof to the court.
    (c) In cases where judgment cannot be satisfied by reason of the 
employer's insolvency or other circumstances precluding payment, the 
deputy commissioner shall make payment from the fund, and in addition, 
provide any necessary medical, surgical, and other treatment required by 
subpart I of this part. A defaulting employer shall be liable to the 
Fund for payment of the amounts paid by the fund under this section; and 
for the purpose of enforcing this liability, the fund shall be 
subrogated to all the rights of the person receiving such payments or 
benefits.



Sec. 725.606  Security for the payment of benefits.

    Whenever an adjudication officer deems it advisable, he or she may 
require any operator or other employer to make a deposit with the 
Treasurer of the United States to secure the prompt and convenient 
payment of benefits to eligible claimants. Payments may be made from 
such deposit, or such deposit may be returned to an

[[Page 826]]

operator or other employer, only upon the order of such adjudication 
officer. The adjudication officer shall require the deposit of security 
pursuant to this section in any case where an operator or other liable 
employer is uninsured or has failed to secure the payment of benefits.



Sec. 725.607  Payments in addition to compensation.

    (a) If any benefits payable under the terms of (1) an award by a 
deputy commissioner (Sec. 725.419(d)), (2) a decision and order filed 
and served by an administrative law judge (Sec. 725.478), or (3) a 
decision filed by the Board or a U.S. court of appeals, are not paid by 
an operator or other employer ordered to make such payments within 10 
days after such payments become due, there shall be added to such unpaid 
benefits an amount equal to 20 percent thereof, which shall be paid to 
the claimant at the same time as, but in addition to, such benefits, 
unless review of the order making such award is sought as provided in 
section 21 of the LHWCA and an order staying payments has been issued.
    (b) If, on account of an operator's or other employer's failure to 
pay benefits as provided in paragraph (a) of this section, benefit 
payments are made by the fund, the eligible claimant shall nevertheless 
be entitled to receive such additional compensation to which he or she 
may be eligible under paragraph (a) of this section, with respect to all 
amounts paid by the fund on behalf of such operator or other employer.
    (c) The fund shall not be liable for payments in addition to 
compensation under any circumstances.



Sec. 725.608  Interest.

    (a) If an operator or other employer fails or refuses to pay any or 
all benefits due under the terms of an initial determination by a deputy 
commissioner (Sec. 725.420), a decision and order filed and served by an 
administrative law judge (Sec. 725.478) or a decision filed by the Board 
or a United States court of appeals, including any penalty awarded in 
addition to benefits in accordance with Sec. 725.607, such operator 
shall be liable for simple annual interest on all past due benefits 
computed from the date on which such benefits were due and payable, in 
addition to such operator's or other employer's liability as is 
otherwise provided in this part. On claims filed on or after January 1, 
1982, in which the payment of retroactive benefits has been withheld 
pending final adjudication of liability in accordance with section 
422(d) of the Act as amended, interest on such withheld retroactive 
benefit payments shall begin to accumulate 30 days after the date of the 
first determination that such an award should be made. The first 
determination that such an award should be made may be a deputy 
commissioner's initial determination of entitlement, an award made by an 
administrative law judge or a decision by the Board or a court, 
whichever is the first such determination of entitlement made upon the 
claim. Except as provided in paragraph (b) of this section, interest 
payments owed under this paragraph shall be made directly to the 
beneficiary. However, an operator or other employer shall have no 
obligation to pay interest except with respect to benefits which it has 
either agreed to pay or it has been directed to pay by an order which 
has become final.
    (b) If an operator or other employer fails or refuses to pay any or 
all benefits due pursuant to an award of benefits or an initial 
determination of eligibility made by the deputy commissioner and the 
Fund undertakes such payments, such operator or other employer shall be 
liable to the Fund for simple annual interest on all payments made by 
the Fund for which such operator is determined liable, computed from the 
first date on which such benefits are paid by the Fund, in addition to 
such operator's liability to the Fund, as is otherwise provided in this 
part. Interest payments owed pursuant to this paragraph shall be paid 
directly to the Fund.
    (c) The rates of interest applicable to paragraphs (a) and (b) of 
this section shall be computed as follows:
    (1) For all amounts outstanding prior to January 1, 1982, the rate 
shall be 6% simple annual interest;
    (2) For all amounts outstanding for any period during calendar year 
1982 the rate shall be 15% simple annual interest; and

[[Page 827]]

    (3) For all amounts outstanding during any period after calendar 
year 1982 the rate shall be simple annual interest at the rate 
established by section 6621 of the Internal Revenue Code of 1954 which 
is in effect for such period.
    (d) The Fund shall not be liable for the payment of interest under 
any circumstances, other than the payment of interest on advances from 
the United States Treasury as provided by section 9501(c) of the 
Internal Revene Code of 1954.
[48 FR 24294, May 31, 1983]



Sec. 725.620  Failure to secure benefits; other penalties.

    (a) If an operator fails to discharge its insurance obligations 
under the Act, the provisions of Sec. 725.495 shall apply.
    (b) Any employer who knowingly transfers, sells, encumbers, assigns, 
or in any manner disposes of, conceals, secrets, or destroys any 
property belonging to such employer, after one of its employees has been 
injured within the purview of the Act, and with intent to avoid the 
payment of benefits under the Act to such miner or his or her 
dependents, shall be guilty of a misdemeanor and, upon conviction 
thereof, shall be punished by a fine of not more than $1,000, or by 
imprisonment for not more than one year, or by both. In any case where 
such employer is a corporation, the president, secretary, and treasurer 
thereof shall be also severally liable for such penalty or imprisonment 
as well as jointly liable with such corporation for such fine.
    (c) No agreement by a miner to pay any portion of a premium paid to 
a carrier by such miner's employer or to contribute to a benefit fund or 
department maintained by such employer for the purpose of providing 
benefits or medical services and supplies as required by this part shall 
be valid; and any employer who makes a deduction for such purpose from 
the pay of a miner entitled to benefits under the Act shall be guilty of 
a misdemeanor and upon conviction thereof shall be punished by a fine of 
not more than $1,000.
    (d) No agreement by a miner to waive his or her right to benefits 
under the Act and the provisions of this part shall be valid.
    (e) This section shall not affect any other liability of the 
employer under this part.



Sec. 725.621  Reports.

    (a) Upon making the first payment of benefits and upon suspension, 
reduction, or increase of payments, the operator or other employer 
responsible for making payments shall immediately notify the deputy 
commissioner of the action taken, in accordance with a form prescribed 
by the Office.
    (b) Within 16 days after final payment of benefits has been made by 
an employer, such employer shall so notify the deputy commissioner, in 
accordance with a form prescribed by the Office, stating that such final 
payment, has been made, the total amount of benefits paid, the name of 
the beneficiary, and such other information as the Office deems 
pertinent.
    (c) The Director may from time to time prescribe such additional 
reports to be made by operators, other employers, or carriers as the 
Director may consider necessary for the efficient administration of the 
Act.
    (d) Any employer who fails or refuses to file any report required of 
such employer under this section shall be subject to a civil penalty not 
to exceed $500 for each failure or refusal, which penalty shall be 
determined in accordance with the procedures set forth in Sec. 725.495, 
as appropriate.
    (e) No request for information or response to such request shall be 
considered a report for purposes of this section or the Act, unless it 
is so designated by the Director or by this section.

(Approved by the Office of Management and Budget under control number 
1215-0064)


(Pub. L. No. 96-511)
[43 FR 36772, Aug. 18, 1978, as amended at 49 FR 18295, Apr. 30, 1984]

[[Page 828]]



        Subpart I--Medical Benefits and Vocational Rehabilitation



Sec. 725.701  Availability of medical benefits.

    (a) A miner who is determined to be eligible for benefits under this 
part or part 727 of this subchapter is entitled to medical benefits as 
set forth in this subpart as of the date of his or her claim, but in no 
event before January 1, 1974. No medical benefits shall be provided to 
the survivor or dependent of a miner under this part.
    (b) A responsible operator, other employer, or where there is 
neither, the Fund, shall furnish a miner entitled to benefits under this 
part with such medical, surgical, and other attendance and treatment, 
nursing and hospital services, medicine and apparatus, and any other 
medical service or supply, for such periods as the nature of the miner's 
pneumoconiosis and ancillary pulmonary conditions and disability 
require.
    (c) The medical benefits referred to in paragraphs (a) and (b) of 
this section shall include palliative measures useful only to prevent 
pain or discomfort associated with the miner's pneumoconiosis or 
attendant disability.
    (d) The costs recoverable under this subpart shall include the 
reasonable cost of travel necessary for medical treatment (to be 
determined in accordance with prevailing United States government 
mileage rates) and the reasonable documented cost to the miner or 
medical provider incurred in communicating with the employer, carrier, 
or district director on matters connected with medical benefits.



Sec. 725.701A  Claims for medical benefits only under section 11 of the Reform Act.

    (a) Section 11 of the Reform Act directs the Secretary of Health, 
Education and Welfare to notify each miner receiving benefits under part 
B of title IV of the Act that he or she may file a claim for medical 
treatment benefits described in this subpart. Section 725.308(b) of this 
subpart provides that a claim for medical treatment benefits shall be 
filed on or before December 31, 1980, unless the period is enlarged for 
good cause shown. This section sets forth the rules governing the 
processing adjudication, and payment of claims filed under section 11.
    (b) (1) A claim filed pursuant to the notice described in paragraph 
(a) of this section shall be considered a claim for medical benefits 
only, and shall be filed, processed, and adjudicated in accordance with 
the provisions of this part, except as provided in this section. While a 
claim for medical benefits must be treated as any other claim filed 
under part C of title IV of the Act, the Department shall accept the 
Social Security Administration's finding of entitlement as its initial 
determination.
    (2) In the case of a part B beneficiary whose coal mine employment 
terminated before January 1, 1970, the Secretary shall make an immediate 
award of medical benefits. Where the part B beneficiary's coal mine 
employment terminated on or after January 1, 1970, the Secretary shall 
immediately authorize the payment of medical benefits and thereafter 
inform the responsible operator, if any, of the operator's right to 
contest the claimant's entitlement for medical benefits.
    (c) A miner on whose behalf a claim is filed under this section (see 
Sec. 725.301) must have been alive on March 1, 1978, in order for the 
claim to be considered.
    (d) The criteria contained in subpart C of part 727 of this 
subchapter are applicable to claims for medical benefits filed under 
this section.
    (e) No determination made with respect to a claim filed under this 
section shall affect any determination previously made by the Social 
Security Administration. The Social Security Administration may, 
however, reopen a previously approved claim if the conditions set forth 
in Sec. 410.672(c) of this chapter are present. These conditions are 
generally limited to fraud or concealment.
    (f) If medical benefits are awarded under this section, such 
benefits shall be payable by a responsible coal mine operator (see 
Secs. 725.491-725.493), if the miner's last employment occurred on or 
after January 1, 1970, and in all other cases by the fund. An operator 
which may be required to provide medical treatment benefits to a miner 
under this section shall have the right

[[Page 829]]

to participate in the adjudication of the claim as is otherwise provided 
in this part.
    (g) Any miner whose coal mine employment terminated after January 1, 
1970, may be required to submit to a medical examination requested by an 
identified operator. The unreasonable refusal to submit to such an 
examination shall have the same consequences as are provided under 
Sec. 725.408.
    (h) If a miner is determined eligible for medical benefits in 
accordance with this section, such benefits shall be provided from the 
date of filing, except that such benefits may also include payments for 
any unreimbursed medical treatment costs incurred personally by such 
miner during the period from January 1, 1974, to the date of filing 
which are attributable to medical care required as a result of the 
miner's total disability due to pneumoconiosis. No reimbursement for 
health insurance premiums, taxes attributable to any public health 
insurance coverage, or other deduction or payments made for the purpose 
of securing third party liability for medical care costs is authorized 
by this section. If a miner seeks reimbursement for medical care costs 
personally incurred before the filing of a claim under this section, the 
deputy commissioner shall require documented proof of the nature of the 
medical service provided, the identity of the medical provider, the cost 
of the service, and the fact that the cost was paid by the miner, before 
reimbursement before such cost may be awarded.
[43 FR 36772, Aug. 18, 1978, as amended at 45 FR 44264, July 1, 1980]



Sec. 725.702  Physician defined.

    The term ``physician'' includes only doctors of medicine (MD) and 
osteopathic practitioners within the scope of their practices as defined 
by State law. No treatment or medical services performed by any other 
practitioner of the healing arts is authorized by this part, unless such 
treatment or service is authorized and supervised both by a physician as 
defined in this section and the district director.



Sec. 725.703  Notification of right to medical benefits; authorization of treatment.

    (a) Upon notification to a miner of such miner's entitlement to 
benefits, the Office shall provide the miner with a list of authorized 
treating physicians and medical facilities in the area of the miner's 
residence. The miner may select a physician from this list or may select 
another physician with approval of the Office. Where emergency services 
are necessary and appropriate, authorization by the Office shall not be 
required.
    (b) The Office may, on its own initiative, or at the request of a 
responsible operator, order a change of physicians or facilities, but 
only where it has been determined that the change is desirable or 
necessary in the best interest of the miner. The miner may change 
physicians or facilities subject to the approval of the Office.
    (c) If adequate treatment cannot be obtained in the area of the 
claimant's residence, the Office may authorize the use of physicians or 
medical facilities outside such area as well as reimbursement for travel 
expenses and overnight accommodations.



Sec. 725.704  Arrangements for medical care.

    (a) Operator liability. If an operator has been determined liable 
for the payment of benefits to a miner, the Office shall notify such 
operator or insurer of the names, addresses, and telephone numbers of 
the authorized providers of medical benefits chosen by an entitled 
miner, and shall require the operator or insurer to:
    (1) Notify the miner and the providers chosen that such operator 
will be responsible for the cost of medical services provided to the 
miner on account of the miner's total disability due to pneumoconiosis;
    (2) Designate a person or persons with decisionmaking authority with 
whom the Office, the miner and authorized providers may communicate on 
matters involving medical benefits provided under this subpart and 
notify the Office, miner and providers of such designation;

[[Page 830]]

    (3) Make arrangements for the direct reimbursement of providers for 
their services.
    (b) Fund liability. If there is no operator found liable for the 
payment of benefits, the Office shall make necessary arrangements to 
provide medical care to the miner, notify the miner and medical care 
facility selected of the liability of the fund, designate a person or 
persons with whom the miner or provider may communicate on matters 
relating to medical care, and make arrangements for the direct 
reimbursement of the medical provider.



Sec. 725.705  Authorization to provide medical services.

    (a) Except as provided in paragraph (b) of this section, medical 
services from an authorized provider which are payable under 
Sec. 725.701 shall not require prior approval of the Office or the 
responsible operator.
    (b) Except where emergency treatment is required, prior approval of 
the Office or the responsible operator shall be obtained before any 
hospitalization or surgery, or before ordering an apparatus for 
treatment where the purchase price exceeds $100. A request for approval 
of non-emergency hospitalization or surgery shall be acted upon 
expeditiously, and approval or disapproval will be given by telephone if 
a written response cannot be given within 7 days following the request. 
No employee of the Department of Labor, other than a district director 
or the Chief, Branch of Medical Analysis and Services, DCMWC, is 
authorized to approve a request for hospitalization or surgery by 
telephone.
    (c) Payment for medical services, treatment, or an apparatus shall 
be made at no more than the rate prevailing in the community in which 
the providing physician, medical facility or supplier is located.



Sec. 725.706  Reports of physicians and supervison of medical care.

    (a) Within 30 days following the first medical or surgical treatment 
provided under Sec. 725.701, the treating physician or facility shall 
furnish to the Office and the responsible operator, if any, a report of 
such treatment.
    (b) In order to permit continuing supervision of the medical care 
provided to the miner with respect to the necessity, character and 
sufficiency of any medical care furnished or to be furnished, the 
treating physician, facility, employer or carrier shall provide such 
reports in addition to those required by paragraph (a) of this section 
as the Office may from time to time require. Within the discretion of 
the district director, payment may be refused to any medical provider 
who fails to submit any report required by this section.



Sec. 725.707  Disputes concerning medical benefits.

    (a) Whenever a dispute develops concerning medical services under 
this part, the district director shall attempt to informally resolve 
such dispute. In this regard the district director may, on his or her 
own initiative or at the request of the responsible operator order the 
claimant to submit to an examination by a physician selected by the 
district director.
    (b) If no informal resolution is accomplished, the district director 
shall refer the case to the Office of Administrative Law Judges for 
hearing in accordance with this part. Any such hearing shall be 
scheduled at the earliest possible time and shall take precedence over 
all other requests for hearing except for prior requests for hearing 
arising under this section and as provided by Sec. 727.405 of this 
subchapter. During the pendency of such adjudication, the Director may 
order the payment of medical benefits prior to final adjudication under 
the same conditions applicable to benefits awarded under Sec. 725.522.
    (c) In the development or adjudication of a dispute over medical 
benefits, the adjudication officer is authorized to take whatever action 
may be necessary to protect the health of a totally disabled miner.
    (d) Any interested medical provider may, if appropriate, be made a 
party to a dispute over medical benefits.



Sec. 725.710  Objective of vocational rehabilitation.

    The objective of vocational rehabilitation is the return of a miner 
who is totally disabled for work in or around

[[Page 831]]

a coal mine and who is unable to utilize those skills which were 
employed in the miner's coal mine employment to gainful employment 
commensurate with such miner's physical impairment. This objective may 
be achieved through a program of re-evaluation and redirection of the 
miner's abilities, or retraining in another occupation, and selective 
job placement assistance.



Sec. 725.711  Requests for referral to vocational rehabilitation assistance.

    Each miner who has been determined entitled to receive benefits 
under part C of title IV of the Act shall be informed by the OWCP of the 
availability and advisability of vocational rehabilitation services. If 
such miner chooses to avail himself or herself of vocational 
rehabilitation, his or her request shall be processed and referred by 
OWCP vocational rehabilitation advisors pursuant to the provisions of 
Secs. 702.501-702.508 of this chapter as is appropriate.



PART 726--BLACK LUNG BENEFITS; REQUIREMENTS FOR COAL MINE OPERATOR'S INSURANCE--Table of Contents




                           Subpart A--General

Sec.
726.1  Statutory insurance requirements for coal mine operators.
726.2  Purpose and scope of this part.
726.3  Relationship of this part to other parts in this subchapter.
726.4  Who must obtain insurance coverage.
726.5  Effective date of insurance coverage.
726.6  The Office of Workmen's Compensation programs.
726.7  Forms, submission of information.

                Subpart B--Authorization of Self-Insurers

726.101  Who may be authorized to self-insure.
726.102  Application for authority to become a self-insurer; how filed; 
          information to be submitted.
726.103  Application for authority to self-insure; effect of regulations 
          contained in this part.
726.104  Action by the Office upon application of operator.
726.105  Fixing the amount of security.
726.106  Type of security.
726.107  Deposits of negotiable securities with Federal Reserve banks or 
          the Treasurer of the United States; authority to sell such 
          securities; interest thereon.
726.108  Withdrawal of negotiable securities.
726.109  Increase or reduction in the amount of indemnity bond or 
          negotiable securities.
726.110  Filing of agreement and undertaking.
726.111  Notice of authorization to self-insure.
726.112  Reports required of self-insurer; examination of accounts of 
          self-insurer.
726.113  Disclosure of confidential information.
726.114  Period of authorization as self-insurer; reauthorization.
726.115  Revocation of authorization to self-insure.

                     Subpart C--Insurance Contracts

726.201  Insurance contracts--generally.
726.202  Who may underwrite an operator's liability.
726.203  Federal Coal Mine Health and Safety Act endorsement.
726.204  Statutory policy provisions.
726.205  Other forms of endorsement and policies.
726.206  Terms of policies.
726.207  Discharge by the carrier of obligations and duties of operator.

                           Reports by Carrier

726.208  Report by carrier of issuance of policy or endorsement.
726.209  Report; by whom sent.
726.210  Agreement to be bound by report.
726.211  Name of one employer only shall be given in each report.
726.212  Notice of cancellation.
726.213  Reports by carriers concerning the payment of benefits.

    Authority:  5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 902(f), 925, 932, 934, 936, 945; 33 U.S.C. 
901 et seq., Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.

    Source:  38 FR 12494, May 11, 1973, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 726 appear at 55 FR 
28607, July 12, 1990.



                           Subpart A--General



Sec. 726.1  Statutory insurance requirements for coal mine operators.

    Section 423 of title IV of the Federal Coal Mine Health and Safety 
Act as amended (hereinafter the Act) requires each coal mine operator 
who is operating or has operated a coal mine in a State which is not 
included in the list published by the Secretary (see part 722 of this 
chapter) to secure the payment of benefits for which he may be found

[[Page 832]]

liable under section 422 of the Act and the provisions of this 
subchapter by either (a) qualifying as a self-insurer, or (b) by 
subscribing to and maintaining in force a commercial insurance contract 
(including a policy or contract procured from a State agency).



Sec. 726.2  Purpose and scope of this part.

    (a) This part provides rules directing and controlling the 
circumstances under which a coal mine operator shall fulfill his 
insurance obligations under the Act.
    (b) This subpart A sets forth the scope and purpose of this part and 
generally describes the statutory framework within which this part is 
operative.
    (c) Subpart B of this part sets forth the criteria a coal mine 
operator must meet in order to qualify as a self-insurer.
    (d) Subpart C of this part sets forth the rules and regulations of 
the Secretary governing contracts of insurance entered into by coal 
operators and commercial insurance sources for the payment of black lung 
benefits under part C of the Act.



Sec. 726.3  Relationship of this part to other parts in this subchapter.

    (a) This part 726 implements and effectuates responsibilities for 
the payment of black lung benefits placed upon coal operators by 
sections 415 and 422 of the Act and the regulations of the Secretary in 
this subchapter, particularly those set forth in part 725 of this 
subchapter. All definitions, usages, procedures, and other rules 
affecting the responsibilities of coal operators prescribed in parts 
715, 720, and 725 of this subchapter are hereby made applicable, as 
appropriate, to this part 726.
    (b) In the event that an apparent conflict arises between the 
interpretation of any provision in this part 726 and the interpretation 
of some provision appearing in a different incorporated part of this 
chapter, the conflicting provisions shall be read harmoniously to the 
fullest extent possible. In the event that a harmonious interpretation 
of the provisions is impossible, the provision or provisions of this 
part shall govern insofar as the question is one which arises out of a 
dispute over the responsibilities and obligations of coal mine operators 
to secure the payment of black lung benefits as prescribed by the Act. 
No provision of this part shall be operative as to matters falling 
outside the purview of this part.



Sec. 726.4  Who must obtain insurance coverage.

    (a) Section 423 of part C of title IV of the Act requires each 
operator of a coal mine or former operator in any State which does meet 
the requirements prescribed by the Secretary pursuant to section 411 of 
part C of title IV of the Act to self-insure or obtain a policy or 
contract of insurance to guarantee the payment of benefits for which 
such operator may be adjudicated liable under section 422 of the Act. In 
enacting sections 422 and 423 of the Act Congress has unambiguously 
expressed its intent that coal mine operators bear the cost of providing 
the benefits established by part C of title IV of the Act. Section 3 of 
the Act defines an ``operator'' as any owner, lessee, or other person 
who operates, controls, or supervises a coal mine.
    (b) Section 422(i) of the Act clearly recognizes that any individual 
or business entity who is or was a coal mine operator may be found 
liable for the payment of pneumoconiosis benefits after December 31, 
1973. Within this framework it is clear that the Secretary has wide 
latitude for determining which operator shall be liable for the payment 
of part C benefits. Comprehensive standards have been promulgated in 
subpart D or part 725 of this chapter for the purpose of guiding the 
Secretary in making such determination. It must be noted that pursuant 
to these standards any parent or subsidiary corporation, any individual 
or corporate partner, or partnership, any lessee or lessor of a coal 
mine, any joint venture or participant in a joint venture, any 
transferee or transferor of a corporation or other business entity, any 
former, current, or future operator or any other form of business entity 
which has had or will have a substantial and reasonably direct interest 
in the operation of a coal mine may be determined liable for the payment 
of pneumoconiosis benefits after December 31, 1973. The failure of any 
such

[[Page 833]]

business entity to self-insure or obtain a policy or contract of 
insurance shall in no way relieve such business entity of its obligation 
to pay pneumoconiosis benefits in respect of any case in which such 
business entity's responsibility for such payments has been properly 
adjudicated. Any business entity described in this section shall take 
appropriate steps to insure that any liability imposed by part C of the 
Act on such business entity shall be dischargeable.



Sec. 726.5  Effective date of insurance coverage.

    Pursuant to section 422(c) of part C of title IV of the Act, no coal 
mine operator shall be responsible for the payment of any benefits 
whatsoever for any period prior to January 1, 1974. However, coal mine 
operators shall be liable as of January 1, 1974, for the payment of 
benefits in respect of claims which were filed under section 415 of part 
B of title IV of the Act after July 1, 1973. Section 415(a)(3) requires 
the Secretary to notify any operator who may be liable for the payment 
of benefits under part C of title IV beginning on January 1, 1974, of 
the pendency of a section 415 claim. Section 415(a)(5) declares that any 
operator who has been notified of the pendency of a section 415 claim 
shall be bound by the determination of the Secretary as to such 
operator's liability and as to the claimant's entitlement to benefits as 
if the claim were filed under part C of title IV of the Act and section 
422 thereof had been applicable to such operator. Therefore, even though 
no benefit payments shall be required of an operator prior to January 1, 
1974, the liability for these payments may be finally adjudicated at any 
time after July 1, 1973. Neither the failure of an operator to exercise 
his right to participate in the adjudication of such a claim nor the 
failure of an operator to obtain insurance coverage in respect of claims 
filed after June 30, 1973, but before January 1, 1974, shall excuse such 
operator from his liability for the payment of benefits to such 
claimants under part C of title IV of the Act.



Sec. 726.6  The Office of Workmen's Compensation Programs.

    The Office of Workmen's Compensation Programs (hereinafter the 
Office or OWCP) is that subdivision of the Employment Standards 
Administration of the U.S. Department of Labor which has been empowered 
by the Secretary of Labor to carry out his functions under section 415 
and part C of title IV of the Act. As noted throughout this part 726 the 
Office shall perform a number of functions with respect to the 
regulation of both the self-insurance and commercial insurance programs. 
All correspondence with or submissions to the Office should be addressed 
as follows:

Division of Coal Mine Workers' Compensation, Office of Workmen's 
Compensation Programs, Employment Standards Administration, U.S. 
Department of Labor, Washington, D.C. 20210



Sec. 726.7  Forms, submission of information.

    Any information required by this part 726 to be submitted to the 
Office of Workmen's Compensation Programs or any other office or 
official of the Department of Labor, shall be submitted on such forms or 
in such manner as the Secretary deems appropriate and has authorized 
from time to time for such purposes.



                Subpart B--Authorization of Self-Insurers



Sec. 726.101  Who may be authorized to self-insure.

    (a) Pursuant to section 423 of part C of title IV of the Act, 
authorization to self-insure against liability incurred by coal mine 
operators on account of the total disability or death of miners due to 
pneumoconiosis may be granted or denied in the discretion of the 
Secretary. The provisions of this subpart describe the minimum 
requirements established by the Secretary for determining whether any 
particular coal mine operator shall be authorized as a self-insurer. Any 
operator who meets the standards and qualifications contained in this 
subpart prescribed for

[[Page 834]]

self-insurers shall be required to deposit security in the form of 
either an indemnity bond or negotiable securities (at the option of the 
Office) of a kind and in an amount determined by the Office.
    (b) The minimum requirements which must be met by any operator 
seeking authorization to self-insure are as follows:
    (1) Such operator must, at the time of application, have been in the 
business of mining coal for at least the 3 consecutive years prior to 
such application; and,
    (2) Such operator must demonstrate the administrative capacity to 
fully service such claims as may be filed against him; and,
    (3) Such operator's average current assets over the preceding 3 
years (in computing average current assets such operator shall not 
include the amount of any negotiable securities which he may be required 
to deposit to secure his obligations under the Act) must exceed current 
liabilities by the sum of--
    (i) The estimated aggregate amount of black lung benefits (including 
medical benefits) which such operator may expect to be required to pay 
during the ensuing year; and,
    (ii) The annual premium cost for any indemnity bond purchased; and
    (4) Such operator must obtain an indemnity bond the face amount of 
which, or deposit negotiable securities the current value of which, 
shall be determined as follows:
    (i) An operator with between 5 and 19 employee-miners shall be 
required to post security in an amount equal to $3,000 times the average 
number of employee-miners plus $75,000.
    (ii) An operator with between 20 and 100 employee-miners shall be 
required to post security in the amount of $135,000;
    (iii) Thereafter, there shall be an increase in the amount of 
security which shall be required to be posted of approximately $75,000 
per 100 employee-miners in excess of the first 100 employee-miners;
    (iv) The amounts of security required in this paragraph are the 
minimum security requirements the Office shall prescribe in respect of 
any application for authorization to self-insure. Any factors bearing on 
a particular application which the Office deems pertinent shall be 
considered in fixing the amount of security which shall be required, and 
may result in higher security requirements than those enumerated in this 
paragraph.
    (v) For purposes of this paragraph the number of employee-miners 
shall be established by determining the maximum quarterly average number 
of full-time employee-miners employed by the applicant during the 
preceding 4 calendar quarters; and
    (5) No operator with fewer than 5 full-time employee-miners shall be 
permitted to self-insure.
    (c) No operator who is unable to meet the requirements of this 
section should apply for authorization to self-insure and no application 
for self-insurance shall be approved by the Office until such time as 
the amount prescribed by the Office has been secured either by indemnity 
bond or the deposit of negotiable securities as prescribed in this 
subpart.



Sec. 726.102  Application for authority to become a self-insurer; how filed; information to be submitted.

    (a) How filed. Application for authority to become a self-insurer 
shall be addressed to the Office and be made on a form provided by the 
Office. Such application shall be signed by the applicant over his 
typewritten name and if the applicant is not an individual, by the 
principal officer of the applicant duly authorized to make such 
application over his typewritten name and official designation and shall 
be sworn to by him. If the applicant is a corporation, the corporate 
seal shall be affixed. The application shall be filed with the Office in 
Washington, DC.
    (b) Information to be submitted. Each application for authority to 
self-insure shall contain:
    (1) A statement of the employer's payroll report for each of the 
preceding 3 years;
    (2) A statement of the average number of employees engaged in 
employment within the purview of the Act for each of the preceding 3 
years;
    (3) A list of the mine or mines to be covered by any particular 
self-insurance agreement. Each such mine or

[[Page 835]]

mines listed shall be described by name and reference shall be made to 
the Federal Identification Number assigned such mine by the Bureau of 
Mines, U.S. Department of the Interior;
    (4) A certified itemized statement of the gross and net assets and 
liabilities of the operator for each of the 3 preceding years in such 
manner as prescribed by the Office;
    (5) A statement demonstrating the applicant's administrative 
capacity to provide or procure adequate servicing for a claim including 
both medical and dollar claims; and
    (6) In addition to the aforementioned, the Office may in its 
discretion, require the applicant to submit such further information or 
such evidence as the Office may deem necessary to have in order to 
enable it to give adequate consideration to such application.
    (c) Who may file. An application for authorization to self-insure 
may be filed by any parent or subsidiary corporation, partner or 
partnership, party to a joint venture or joint venture, individual, or 
other business entity which may be determined liable for the payment of 
black lung benefits under part C of title IV of the Act, regardless of 
whether such applicant is directly engaged in the business of mining 
coal. However, in each case for which authorization to self-insure is 
granted, the agreement and undertaking filed pursuant to Sec. 726.110 
and the security deposit shall be respectively filed by and deposited in 
the name of the applicant only.



Sec. 726.103  Application for authority to self-insure; effect of regulations contained in this part.

    As appropriate, each of the regulations, interpretations and 
requirements contained in this part 726 including those described in 
subpart C of this part shall be binding upon each applicant hereunder 
and the applicant's consent to be bound by all requirements of the said 
regulations shall be deemed to be included in and a part of the 
application, as fully as though written therein.



Sec. 726.104  Action by the Office upon application of operator.

    (a) Upon receipt of a completed application for authorization to 
self-insure, the Office shall, after examination of the information 
contained in the application deny the applicant's request for 
authorization to self-insure or, determine the amount of security which 
must be given by the applicant to guarantee the payment of benefits and 
the discharge of all other obligations which may be required of such 
applicant under the Act.
    (b) The applicant shall thereafter be notified that he may give 
security in the amount fixed by the Office (see Sec. 726.105):
    (1) In the form of an indemnity bond with sureties satisfactory to 
the Office; or,
    (2) By a deposit of negotiable securities with a Federal Reserve 
Bank as provided by the regulations in this part.
    (c) Any applicant who cannot meet the security deposit requirements 
imposed by the Office should proceed to obtain a commercial policy or 
contract of insurance. Any applicant for authorization to self-insure 
whose application has been rejected or who believes that the security 
deposit requirements imposed by the Office are excessive may, in 
writing, request that the Office review its determination. A request for 
review should contain such information as may be necessary to support 
the request that the amount of security required be reduced.
    (d) Upon receipt of any such request the Office shall review its 
previous determination in light of any new or additional information 
submitted and inform the applicant whether or not a reduction in the 
amount of security initially required is warranted.



Sec. 726.105  Fixing the amount of security.

    The amount of security to be fixed and required by the Office shall 
be such as the Office shall deem to be necessary and sufficient to 
secure the performance by the applicant of all obligations imposed upon 
him as an operator by the Act. The formula described in

[[Page 836]]

Sec. 726.101 for determining the amount of security which shall be 
required is prescribed for the initial year of the black lung benefits 
program only. In addition, the formula is not the exclusive criterion to 
be used by the Office in determining whether or not to authorize an 
applicant to self-insure. Other factors such as the Office may deem 
relevant to any particular case shall be considered. The amount of 
security which shall be required as computed pursuant to paragraph 
(b)(3) of Sec. 726.101 may be increased or decreased in ensuing years 
when experience or changed conditions so warrant.



Sec. 726.106  Type of security.

    (a) The Office shall determine the type or types of security which 
an applicant shall or may procure. (See Sec. 726.104(b).)
    (b) In the event the indemnity bond option is selected such 
indemnity bond shall be in such form and contain such provisions as the 
Office may prescribe: Provided, That only corporations may act as 
sureties on such indemnity bonds. In each case in which the surety on 
any such bond is a surety company, such company must be one approved by 
the U.S. Treasury Department under the laws of the United States and the 
applicable rules and regulations governing bonding companies (see 
Department of Treasury's Circular-570).
    (c) An applicant for authorization to self-insure authorized to 
deposit negotiable securities to secure his obligations under the Act in 
the amount fixed by the Office shall deposit any negotiable securities 
acceptable as security for the deposit of public moneys of the United 
States under regulations issued by the Secretary of the Treasury. (See 
31 CFR 203.7 and 203.8.) The approval, valuation, acceptance, and 
custody of such securities is hereby committed to the several Federal 
Reserve Banks and the Treasurer of the United States.



Sec. 726.107  Deposits of negotiable securities with Federal Reserve banks or the Treasurer of the United States; authority to sell such securities; interest 
          thereon.

    Deposits of securities provided for by the regulations in this part 
shall be made with any Federal Reserve bank or any branch of a Federal 
Reserve bank designated by the Office, or the Treasurer of the United 
States, and shall be held subject to the order of the Office with power 
in the Office, in its discretion in the event of default by the said 
self-insurer, to collect the interest as it may become due, to sell the 
securities or any of them as may be required to discharge the 
obligations of the self-insurer under the Act and to apply the proceeds 
to the payment of any benefits or medical expenses for which the self-
insurer may be liable. The Office may, however, whenever it deems it 
unnecessary to resort to such securities for the payment of benefits, 
authorize the self-insurer to collect interest on the securities 
deposited by him.



Sec. 726.108  Withdrawal of negotiable securities.

    No withdrawal of negotiable securities deposited by a self-insurer, 
shall be made except upon authorization by the Office. A self-insurer 
discontinuing business, or discontinuing operations within the purview 
of the Act, or providing security for the payment of benefits by 
commercial insurance under the provisions of the Act may apply to the 
Office for the withdrawal of securities deposited under the regulations 
in this part. With such application shall be filed a sworn statement 
setting forth:
    (a) A list of all outstanding cases in which benefits are being 
paid, with the names of the miners and other beneficiaries, giving a 
statement of the amounts of benefits paid and the periods for which such 
benefits have been paid; and (b) a similar list of all pending cases in 
which no benefits have as yet been paid. In such cases withdrawals may 
be authorized by the Office of such securities as in the opinion of the 
Office may not be necessary to provide adequate security for the payment 
of outstanding and potential liabilities of such self-insurer under the 
Act.



Sec. 726.109  Increase or reduction in the amount of indemnity bond or negotiable securities.

    Whenever in the opinion of the Office the principal sum of the 
indemnity

[[Page 837]]

bond filed or the amount of negotiable securities deposited, by a self-
insurer is insufficient to afford adequate security for the payment of 
benefits and medical expenses under the Act, the self-insurer shall, 
upon demand by the Office, file such additional indemnity bond or 
deposit such additional amount of negotiable securities as the Office 
may require. At any time upon application of a self-insurer, or on the 
initiative of the Office, when in its opinion the facts warrant, the 
principal sum of an indemnity bond required to be given or the amount of 
negotiable securities required to be deposited may be reduced. A self-
insurer seeking such reduction shall furnish such information as the 
Office may request relative to his current affairs, the nature and 
hazard of the work of his employees, the amount of the payroll of his 
employees engaged in coal mine employment within the purview of the Act, 
his financial condition, and such other evidence as may be deemed 
material, including a record of payment of benefits made by him.



Sec. 726.110  Filing of agreement and undertaking.

    (a) In addition to the requirement that adequate security be 
procured as set forth in this subpart, the applicant for the 
authorization to self-insure shall as a condition precedent to receiving 
authorization to act as a self-insurer, execute and file with the Office 
an agreement and undertaking in a form prescribed and provided by the 
Office in which the applicant shall agree:
    (1) To pay when due, as required by the provisions of said Act, all 
benefits payable on account of total disability or death of any of its 
employee-miners within the purview of the Act; (2) in such cases to 
furnish medical, surgical, hospital, and other attendance, treatment, 
and care as required by the provisions of the Act; (3) to deposit with 
the Office an indemnity bond in the amount which the Office shall fix, 
or to deposit negotiable securities as provided for by the regulations 
in this part in the amount which the Office shall fix, accordingly as 
elected in the application; (4) to authorize the Office to sell such 
negotiable securities so deposited or any part thereof and from the 
proceeds thereof to pay such benefits, medical, and other expenses and 
any accrued penalties imposed by law as it may find to be due and 
payable.
    (b) At such time when an applicant has deposited the requisite 
amount of negotiable securities or obtained an indemnity bond pursuant 
to Sec. 726.106, such applicant shall send a completed agreement and 
undertaking together with satisfactory proof that his obligations and 
liabilities under the Act have been secured to the Office in Washington, 
D.C.



Sec. 726.111  Notice of authorization to self-insure.

    Upon receipt of a completed agreement and undertaking and 
satisfactory proof that negotiable securities have been deposited or 
that an adequate indemnity bond has been procured an applicant for 
authorization to self-insure shall be notified by the Office in writing, 
that he is authorized to self-insure to meet the obligations imposed 
upon such applicant by section 415 and part C of title IV of the Act.



Sec. 726.112  Reports required of self-insurer; examination of accounts of self-insurer.

    (a) Each operator who has been authorized to self-insure under this 
part shall submit to the Office reports containing such information as 
the Office may from time to time require or prescribe.
    (b) Whenever it deems it to be necessary, the Office may inspect or 
examine the books of account, records, and other papers of a self-
insurer for the purpose of verifying any financial statement submitted 
to the Office by the self-insurer or verifying any information furnished 
to the Office in any report required by this section, or any other 
section of the regulations in this part, and such self-insurer shall 
permit the Office or its duly authorized representative to make such an 
inspection or examination as the Office shall require. In lieu of this 
requirement the Office may in its discretion accept an adequate report 
of a certified public accountant.

[[Page 838]]

    (c) Failure to submit or make available any report or information 
requested by the Office from an authorized self-insurer pursuant to this 
section may, in appropriate circumstances result in a revocation of the 
authorization to self-insure.



Sec. 726.113  Disclosure of confidential information.

    Any financial information or records, or other information relating 
to the business of an authorized self-insurer or applicant for the 
authorization of self-insurance obtained by the Office shall be exempt 
from public disclosure to the extent provided in 5 U.S.C. 552(b) and the 
applicable regulations of the Department of Labor promulgated 
thereunder. (See 29 CFR part 70.)



Sec. 726.114  Period of authorization as self-insurer; reauthorization.

    (a) No initial authorization as a self-insurer shall be granted for 
a period in excess of 18 months. A self-insurer who has made an adequate 
deposit of negotiable securities as required by the Office under the 
regulations in this part will be reauthorized for the ensuing fiscal 
year without additional security if the Office finds that his experience 
as a self-insurer warrants such action. If it is determined that such 
self-insurer's experience indicates a need for the deposit of additional 
security, no reauthorization shall be issued for the ensuing fiscal year 
until such time as the Office receives satisfactory proof that the 
requisite amount of additional securities have been deposited. A self-
insurer who currently has on file an indemnity bond, will receive from 
the Office each year a bond form for execution in contemplation of 
reauthorization, and the submission of such bond duly executed in the 
amount indicated by the Office will be deemed and treated as such self-
insurer's application for reauthorization for the ensuing Federal fiscal 
year.
    (b) In each case for which there is an approved change in the amount 
of negotiable securities required or the face amount of an indemnity 
bond obtained, a new agreement and undertaking shall be executed.



Sec. 726.115  Revocation of authorization to self-insure.

    The Office may for good cause shown suspend or revoke the 
authorization of any self-insurer. Failure by a self-insurer to comply 
with any provision or requirement of law or of the regulations in this 
part, or with any lawful order or communication of the Office, or the 
failure or insolvency of the surety on his indemnity bond, or impairment 
of financial responsibility of such self-insurer, may be deemed good 
cause for such suspension or revocation.



                     Subpart C--Insurance Contracts



Sec. 726.201  Insurance contracts--generally.

    Each operator of a coal mine who has not obtained authorization as a 
self-insurer shall purchase a policy or enter into a contract with a 
commercial insurance carrier or State agency. Pursuant to authority 
contained in sections 422(a) and 423 (b) and (c) of part C of title IV 
of the Act, this subpart describes a number of provisions which are 
required to be incorporated in a policy or contract of insurance 
obtained by a coal mine operator for the purpose of meeting the 
responsibility imposed upon such operator by the Act in respect of the 
total disability or death of miners due to pneumoconiosis.



Sec. 726.202  Who may underwrite an operator's liability.

    Each coal mine operator who is not authorized to self-insure shall 
insure and keep insured the payment of benefits as required by the Act 
with any stock company or mutual company or association, or with any 
other person, or fund, including any State fund while such company, 
association, person, or fund is authorized under the law of any State to 
insure workmen's compensation.



Sec. 726.203  Federal Coal Mine Health and Safety Act endorsement.

    (a) The following form of endorsement shall be attached and 
applicable to the standard workmen's compensation and employer's 
liability policy prepared by the National Council on Compensation 
Insurance affording coverage under the Federal Coal Mine

[[Page 839]]

Health and Safety Act of 1969, as amended:

    It is agreed that: (1) With respect to operations in a State 
designated in item 3 of the declarations, the unqualified term 
``workmen's compensation law'' includes part C of title IV of the 
Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. section 931-
936, and any laws amendatory thereto, or supplementary thereto, which 
may be or become effective while this policy is in force, and definition 
(a) of Insuring Agreement III is amended accordingly; (2) with respect 
to such insurance as is afforded by this endorsement, (a) the States, if 
any, named below, shall be deemed to be designated in item 3 of the 
declaration; (b) Insuring Agreement IV(2) is amended to read ``by 
disease caused or aggravated by exposure of which the last day of the 
last exposure, in the employment of the insured, to conditions causing 
the disease occurs during the policy period, or occurred prior to 
(effective date) and claim based on such disease is first filed against 
the insured during the policy period.''

    (b) The term ``effective date'' as used in paragraph (a) of this 
section shall be construed to mean the effective date of the first 
policy or contract of insurance procured by an operator for purposes of 
meeting the obligations imposed on such operator by section 423 of part 
C of title IV of the Act.
    (c) The Act contains a number of provisions and imposes a number of 
requirements on operators which differ in varying degrees from 
traditional workmen's compensation concepts. To avoid unnecessary 
administrative delays and expense which might be occasioned by the 
drafting of an entirely new standard workmen's compensation policy 
specially tailored to the Act, the Office has determined that the 
existing standard workmen's compensation policy subject to the 
endorsement provisions contained in paragraph (a) of this section shall 
be acceptable for purposes of writing commercial insurance coverage 
under the Act. However, to avoid undue disputes over the meaning of 
certain policy provisions and in accordance with the authority contained 
in section 423(b)(3) of the Act, the Office has determined that the 
following requirements shall be applicable to all commercial insurance 
policies obtained by an operator for the purpose of insuring any 
liability incurred pursuant to the Act:
    (1) Operator liability. (i) Section 415 and part C of title IV of 
the Act provide coverage for total disability or death due to 
pneumoconiosis to all claimants who meet the eligibility requirements 
imposed by the Act. Section 422 of the Act and the regulations duly 
promulgated thereunder (part 725 of this chapter) set forth the 
conditions under which a coal mine operator may be adjudicated liable 
for the payment of benefits to an eligible claimant for any period 
subsequent to December 31, 1973.
    (ii) Section 422(c) of the Act prescribes that except as provided in 
422(i) (see paragraph (c)(2) of this section) an operator may be 
adjudicated liable for the payment of benefits in any case if the total 
disability or death due to pneumoconiosis upon which the claim is 
predicated arose at least in part out of employment in a mine in any 
period during which it was operated by such operator. The Act does not 
require that such employment which contributed to or caused the total 
disability or death due to pneumoconiosis occur subsequent to any 
particular date in time. The Secretary in establishing a formula for 
determining the operator liable for the payment of benefits (see subpart 
D of part 725 of this chapter) in respect of any particular claim, must 
therefore, within the framework and intent of title IV of the Act find 
in appropriate cases that an operator is liable for the payment of 
benefits for some period after December 31, 1973, even though the 
employment upon which an operator's liability is based occurred prior to 
July 1, 1973, or prior to the effective date of the Act or the effective 
date of any amendments thereto, or prior to the effective date of any 
policy or contract of insurance obtained by such operator. Paragraph (a) 
of this section shall be construed to incorporate these requirements in 
any policy or contract of insurance obtained by an operator to meet the 
obligations imposed on such operator by section 423 of the Act.
    (2) Successor liability. Section 422(i) of part C of title IV of the 
Act requires that a coal mine operator who after December 30, 1969, 
acquired his mine or substantially all of the assets thereof from a 
person who was an operator of

[[Page 840]]

such mine on or after December 30, 1969, shall be liable for and shall 
secure the payment of benefits which would have been payable by the 
prior operator with respect to miners previously employed in such mine 
if the acquisition had not occurred and the prior operator had continued 
to operate such mine. In the case of an operator who is determined 
liable for the payment of benefits under section 422(i) of the Act and 
part 725 of this subchapter, such liability shall accrue to such 
operator regardless of the fact that the miner on whose total disability 
or death the claim is predicated was never employed by such operator in 
any capacity. Paragraph (a) of this section shall be construed to 
incorporate this requirement in any policy or contract of insurance 
obtained by an operator to meet the obligations imposed on such operator 
by section 423 of the Act.
    (3) Medical eligibility. Pursuant to section 422(h) of part C of 
title IV of the Act and the regulations described therein (see subpart D 
of part 410 of this title) benefits shall be paid to eligible claimants 
on account of total disability or death due to pneumoconiosis and in 
cases where the miner on whose death a claim is predicated was totally 
disabled by pneumoconiosis at the time of his death regardless of the 
cause of such death. Paragraph (a) of this section shall be construed to 
incorporate these requirements in any policy or contract of insurance 
obtained by an operator to meet the obligations imposed on such operator 
by section 423 of the Act.
    (4) Payment of benefits, rates. Section 422(c) of the Act by 
incorporating section 412(a) of the Act requires the payment of benefits 
at a rate equal to 50 per centum of the minimum monthly payment to which 
a Federal employee in grade GS-2, who is totally disabled is entitled at 
the time of payment under chapter 81 of title 5, United States Code. 
These benefits are augmented on account of eligible dependents as 
appropriate (see section 412(a) of part B of title IV of the Act). Since 
the dollar amount of benefits payable to any beneficiary is required to 
be computed at the time of payment such amounts may be expected to 
increase from time to time as changes in the GS-2 grade are enacted into 
law. Paragraph (a) of this section shall be construed to incorporate in 
any policy or contract of insurance obtained by an operator to meet the 
obligations imposed on such operator by section 423 of the Act, the 
requirement that the payment of benefits to eligible beneficiaries shall 
be made in such dollar amounts as are prescribed by section 412(a) of 
the Act computed at the time of payment.
    (5) Compromise and waiver of benefits. Section 422(a) of part C of 
title IV of the Act by incorporating sections 15(b) and 16 of the 
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 915(b) 
and 916) prohibits the compromise and/or waiver of claims for benefits 
filed or benefits payable under section 415 and part C of title IV of 
the Act. Paragraph (a) of this section shall be construed to incorporate 
these prohibitions in any policy or contract of insurance obtained by an 
operator to meet the obligations imposed on such operator by section 423 
of the Act.
    (6) Additional requirements. In addition to the highlighted 
requirements described in paragraph (c)(1) through (5) of this section, 
paragraph (a) of this section shall, to the fullest extent possible, be 
construed to bring any policy or contract of insurance entered into by 
an operator for the purpose of insuring such operator's liability under 
part C of title IV of the Act into conformity with the legal 
requirements placed upon such operator by section 415 and part C of 
title IV of the Act and parts 720 and 725 of this subchapter.
    (d) Nothing in this section shall relieve any operator or carrier of 
the duty to comply with any State workmen's compensation law, except 
insofar as such State law is in conflict with the provisions of this 
section.



Sec. 726.204  Statutory policy provisions.

    Pursuant to section 423(b) of part C of title IV of the Act each 
policy or contract of insurance obtained to comply with the requirements 
of section 423(a) of the Act must contain or shall be construed to 
contain--
    (a) A provision to pay benefits required under section 422 of the 
Act, notwithstanding the provisions of the State workmen's compensation 
law

[[Page 841]]

which may provide for lesser payments; and,
    (b) A provision that insolvency or bankruptcy of the operator or 
discharge therein (or both) shall not relieve the carrier from liability 
for such payments.



Sec. 726.205  Other forms of endorsement and policies.

    Forms of endorsement or policies other than that described in 
Sec. 726.203 may be entered into by operators to insure their liability 
under the Act. However, any form of endorsement or policy which 
materially alters or attempts to materially alter an operator's 
liability for the payment of any benefits under the Act shall be deemed 
insufficient to discharge such operator's duties and responsibilities as 
prescribed in part C of title IV of the Act. In any event, the failure 
of an operator to obtain an adequate policy or contract of insurance 
shall not affect such operator's liability for the payment of any 
benefits for which he is determined liable.



Sec. 726.206  Terms of policies.

    A policy or contract of insurance shall be issued for the term of 1 
year from the date that it becomes effective, but if such insurance be 
not needed except for a particular contract or operation, the term of 
the policy may be limited to the period of such contract or operation.



Sec. 726.207  Discharge by the carrier of obligations and duties of operator.

    Every obligation and duty in respect of payment of benefits, the 
providing of medical and other treatment and care, the payment or 
furnishing of any other benefit required by the Act and in respect of 
the carrying out of the administrative procedure required or imposed by 
the Act or the regulations in this part or 20 CFR part 725 upon an 
operator shall be discharged and carried out by the carrier as 
appropriate. Notice to or knowledge of an operator of the occurrence of 
total disability or death due to pneumoconiosis shall be notice to or 
knowledge of such carrier. Jurisdiction of the operator by a district 
director, administrative law judge, the Office, or appropriate appellate 
authority under the Act shall be jurisdiction of such carrier. Any 
requirement under any benefits order, finding, or decision shall be 
binding upon such carrier in the same manner and to the same extent as 
upon the operator.

                           Reports by Carrier



Sec. 726.208  Report by carrier of issuance of policy or endorsement.

    Each carrier shall report to the Office each policy and endorsement 
issued, cancelled, or renewed by it to an operator. The report shall be 
made in such manner and on such form as the Office may require.

(Approved by the Office of Management and Budget under control number 
1215-0059)


(Pub. L. No. 96-511)
[38 FR 12494, May 11, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 726.209  Report; by whom sent.

    The report of issuance, cancellation, or renewal of a policy and 
endorsement provided for in Sec. 726.208 shall be sent by the home 
office of the carrier, except that any carrier may authorize its agency 
or agencies to make such reports to the Office.

(Approved by the Office of Management and Budget under control number 
1215-0059)


(Pub. L. No. 96-511)
[38 FR 12494, May 11, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 726.210  Agreement to be bound by report.

    Every carrier seeking to write insurance under the provisions of 
this Act shall be deemed to have agreed that the acceptance by the 
Office of a report of the issuance or renewal of a policy of insurance, 
as provided for by Sec. 726.208 shall bind the carrier to full liability 
for the obligations under this Act of the operator named in said report. 
It shall be no defense to this agreement that the carrier failed or 
delayed to issue, cancel, or renew the policy to the operator covered by 
this report.

(Approved by the Office of Management and Budget under control number 
1215-0059)



[[Page 842]]


(Pub. L. No. 96-511)
[38 FR 12494, May 11, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 726.211  Name of one employer only shall be given in each report.

    A separate report of the issuance or renewal of a policy and 
endorsement, provided for by Sec. 726.208, shall be made for each 
operator covered by a policy. If a policy is issued or renewed insuring 
more than one operator, a separate report for each operator so covered 
shall be sent to the Office with the name of only one operator on each 
such report.

(Approved by the Office of Management and Budget under control number 
1215-0059)


(Pub. L. No. 96-511)
[38 FR 12494, May 11, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 726.212  Notice of cancellation.

    Cancellation of a contract or policy of insurance issued under 
authority of the Act shall not become effective otherwise than as 
provided by 33 U.S.C. 936(b); and notice of a proposed cancellation 
shall be given to the Office and to the operator in accordance with the 
provisions of 33 U.S.C. 912(c), 30 days before such cancellation is 
intended to be effective (see sec. 422(a) of part C of title IV of the 
Act).

(Approved by the Office of Management and Budget under control number 
1215-0059)


(Pub. L. No. 96-511)
[38 FR 12494, May 11, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



Sec. 726.213  Reports by carriers concerning the payment of benefits.

    Pursuant to 33 U.S.C. 914(c) as incorporated by section 422(a) of 
part C of title IV of the Act and Sec. 726.207 each carrier issuing a 
policy or contract of insurance under the Act shall upon making the 
first payment of benefits and upon the suspension of any payment in any 
case, immediately notify the Office in accordance with a form prescribed 
by the Office that payment of benefit has begun or has been suspended as 
the case may be. In addition, each such carrier shall at the request of 
the Office submit to the Office such additional information concerning 
policies or contracts of insurance issued to guarantee the payment of 
benefits under the Act and any benefits paid thereunder, as the Office 
may from time to time require to carry out its responsibilities under 
the Act.

(Approved by the Office of Management and Budget under control number 
1215-0059)


(Pub. L. No. 96-511)
[38 FR 12494, May 11, 1973, as amended at 49 FR 18294, Apr. 30, 1984]



PART 727--REVIEW OF PENDING AND DENIED CLAIMS UNDER THE BLACK LUNG BENEFITS REFORM ACT OF 1977--Table of Contents




                           Subpart A--General

Sec.
727.1  Statutory provisions, purpose of this part.
727.2  Applicability and content of this part.
727.3  Definitions, use of terms.
727.4  Applicability of other parts in this subchapter.

         Subpart B--Initial Review of Pending and Denied Claims

727.101  Who is entitled to review.
727.102  ``Pending'' and ``denied'' claim defined.
727.103  Duplicate claims.
727.104  Review by the Social Security Administration.
727.105  Action by the Office, Social Security approval.
727.106  Action by the Office, insufficient evidence for Social Security 
          approval.
727.107  Action by the Office, Social Security referral without prior 
          review.
727.108  Action by the Office, Department of Labor pending or denied 
          claim.
727.109  Hearings and appeals, parties.

      Subpart C--Criteria for Determining Eligibility for Benefits

727.200  Basis for criteria.
727.201  Persons entitled to benefits, dependents.
727.202  Definition of pneumoconiosis.
727.203  Interim presumption.
727.204  Presumption of entitlement applicable to certain death claims.
727.205  Effect of current coal mine employment or coal mine employment 
          at the time of death.
727.206  Quality standards applicable to evidence.

[[Page 843]]

                Subpart D--Payment of Benefits/Liability

727.300  Conditions and duration of eligibility.
727.301  Amounts payable, other payment provisions.
727.302  Date from which benefits are payable after review and approval.
727.303  Claims filed under section 415 of the act.
727.304  Liability for benefit payments.

 Subpart E--Special Review Provisions Relating to Claims Pending Before 
        an Administrative Law Judge or the Benefits Review Board

727.401  General.
727.402  Claims pending in the Office of Administrative Law Judges.
727.403  Claims pending before the Benefits Review Board.
727.404  Claims pending in a U.S. Court of Appeals.
727.405  Expedited review of claims.

    Authority:  5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 
3174, 30 U.S.C. 901 et seq., 902(f), 925, 932, 934, 936, 945; 33 U.S.C. 
901 et seq., Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.

    Source:  43 FR 36819, Aug. 18, 1978, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 727 appear at 55 FR 
28607, July 12, 1990.



                           Subpart A--General



Sec. 727.1  Statutory provisions, purpose of this part.

    (a) Under title IV of the Federal Coal Mine Health and Safety Act of 
1969, as amended by the Black Lung Benefits Act of 1972, benefits were 
provided to coal miners and certain survivors of coal miners on account 
of the miners' total disability or death due to pneumoconiosis. Part B 
of title IV of the act as amended provided that all claims for benefits 
filed between December 30, 1969, and June 30, 1973, would be filed with, 
processed by, and paid from Federal funds by the Secretary of Health, 
Education, and Welfare, through the Social Security Administration. The 
survivor of a miner was permitted to file a claim with the Secretary of 
Health, Education, and Welfare under part B until January 1, 1974, or 
within 6 months of the miner's death, if death occurred before January 
1, 1974, or in the case of a part B beneficiary, within 6 months of the 
beneficiary's death. Section 415 of part B of title IV of the act 
provides that a claim filed by a miner between July 1 and December 31, 
1973, would be filed with and processed by the Secretary of Labor and 
paid, if appropriate, by the Secretary of Labor from Federal funds for 
all periods of eligibility between July 1 and December 31, 1973. For 
periods of eligibility after December 31, 1973, an approved section 415 
claim was to be paid by a coal mine operator found liable pursuant to 
the act or the Secretary of Labor as appropriate. A claim filed after 
December 31, 1973, was to be filed under an approved State workers' 
compensation law or, if no such law was available in an appropriate 
State, the claim was to be filed with the Secretary of Labor under part 
C of title IV of the Act. Claims were to be adjudicated under certain 
provisions of the Longshoremen's and Harbor Workers' Compensation Act, 
as amended, 33 U.S.C. 901 et seq., and paid by a coal mine operator 
found liable pursuant to the act. If no such operator could be 
identified benefits were to be paid by the Secretary of Labor from 
Federal funds.
    (b) The Black Lung Benefits Revenue Act of 1977 and the Black Lung 
Benefits Reform Act of 1977 significantly amend the provisions of title 
IV of the act to, among other things, establish the black lung 
disability trust fund (the fund) for the payment of all claims 
predicated upon coal mine employment which terminate prior to January 1, 
1970, and for other claims for which no operator liability can be 
established. The fund is financed by individual coal mine operators. 
Other provisions of the act as amended modify the evidentiary 
requirements necessary to establish entitlement to benefits, eliminate 
certain restrictions on the filing of claims, establish penalties to be 
applied if a coal operator fails to meet its obligations under the act, 
and make technical, correcting, and other administrative or procedural 
and substantive changes.
    (c) Section 435 of the act as amended directs the Secretary of 
Health, Education, and Welfare and the Secretary of Labor to undertake a 
review of all previously denied and pending claims in light of the 
amendments made by

[[Page 844]]

such act. The Secretary of Health, Education, and Welfare is directed to 
perform this review at the request of the claimant on all denied and 
pending claims filed under part B of title IV of the Act, exclusive of 
those claims filed under section 415. The Secretary of Labor is directed 
to perform this review automatically on all claims filed under section 
415 and part C of title IV of the Act, which were denied or pending as 
of the effective date of the Black Lung Benefits Reform Act of 1977, and 
in addition is required to review certain claims originally filed with 
the Secretary of Health, Education, and Welfare.
    (d) The new section 435 contains provisions setting forth the scope 
of the claims review, the procedures to be followed and the consequences 
which accrue depending upon the results of any particular review. It is 
the purpose of this part to set forth and implement the provisions of 
section 435 as those provisions apply to the Secretary of Labor, and 
inform all interested parties of the manner in which a right to review 
will be extended with respect to all denied and pending claims for black 
lung benefits under the act by the Secretary of Labor.



Sec. 727.2  Applicability and content of this part.

    (a) This part is designed to apply to, and set forth the role of, 
the Secretary of Labor in carrying out the provisions of section 435 of 
the act. The action to be taken and the procedure to be followed by the 
Secretary of Health, Education, and Welfare and the Social Security 
Administration under section 435 is detailed elsewhere. This part will, 
however, describe what will be done by the Secretary of Health, 
Education, and Welfare and the Social Security Administration in general 
terms and will detail the responsibilities assigned to the Secretary of 
Labor with respect to a claim reviewed by the Secretary of Health, 
Education, and Welfare.
    (b) This subpart A describes generally the statutory framework 
established to facilitate the review of all pending and denied black 
lung claims, the applicability and content of this part and other 
relevant parts contained in this title 20 of the Code of Federal 
Regulations, and sets forth applicable definitions and usages.
    (c) Subpart B of this part sets forth the procedures to be followed 
in the review of various types of claims subject to review under this 
part.
    (d) Subpart C of this part contains the criteria to be applied in 
determining a claimant's eligibility for benefits under this part. Such 
criteria shall also be applicable to all claims for medical services 
filed under section 11 of the Black Lung Benefits Reform Act of 1977 
(see Sec. 725.308(b) of this subchapter), and shall also be applicable 
to all other claims filed under part 725 of this subpart until such time 
as the Secretary promulgates new criteria for determining total 
disability or death due to pneumoconiosis in accordance with section 
402(f)(1) of the act.
    (e) Subpart D of this part contains provisions relating to the 
liability for, and conditions governing, the payment of benefits under 
this part.
    (f) Subpart E of this part sets forth special provisions relating to 
the processing of claims subject to review under this part which are 
within the jurisdiction of an admininstrative law judge or the Benefits 
Review Board.



Sec. 727.3  Definitions, use of terms.

    Except as is otherwise provided by this part, the definitions and 
usages of terms contained in subpart A of part 725 of this title, as 
amended from time to time, shall be applicable to this part.



Sec. 727.4  Applicability of other parts in this subchapter.

    (a) Part 725. Part 725 of this subchapter, which sets forth: (1) The 
procedure for filing a claim for black lung benefits under part C of 
title IV of the act, (2) the procedure to be followed in the 
adjudication of claims so filed, (3) standards for determining whether a 
particular individual is a miner, or a qualified dependent or survivor 
of a miner, (4) the criteria to be applied in determining the liability 
of a coal operator or the fund for the payment of approved claims so 
filed, and (5) the manner in which the payment of benefits shall be made 
with respect to part C claims, shall not be applicable to the

[[Page 845]]

processing, adjudication, or payment of claims under this part unless 
applicability is specifically provided by part 725 or this part.
    (b) Part 718. Part 718 of this subchapter, which contains the 
criteria and standards to be applied in determining whether a miner is 
totally disabled due to pneumoconiosis or whether a miner died due to or 
while totally or partially disabled by pneumoconiosis, shall not be 
applicable to the determination of claims under this part unless 
applicability is provided by part 718 or this part. Until such time as 
part 718 of this subchapter is revised in accordance with the 1977 
amendments to the act, the provisions of subpart D of part 410 of this 
title which are not inconsistent with the 1977 amendments to the act, 
shall be applicable to the adjudication of claims under this part, 
unless otherwise provided by this part (see subpart C of this part).
    (c) Parts 715, 717, and 720. Parts 715, 717, and 720 of this 
subchapter, which parts established the procedures for the filing, 
processing, and payment of claims filed under section 415 of the act, 
are repealed and pertinent provisions of those parts which retain 
vitality are incorporated within part 725 of this subchapter as amended.
    (d) Part 726. Part 726 of this subchapter, which contains provisions 
setting forth a coal operator's obligations to insure or self-insure its 
liability for the payment of benefits to certain eligible claimants, is 
applicable to this part insofar as it bears upon the responsibility of a 
coal operator to secure the payment of benefits to certain claimants who 
may be determined eligible for benefits under this part.



         Subpart B--Initial Review of Pending and Denied Claims



Sec. 727.101  Who is entitled to review.

    (a) By the Secretary of HEW. Any person who filed a claim for 
benefits under part B of title IV of the Act, excluding miners who filed 
under section 415 of the act between July 1 and December 31, 1973, and 
whose claim was either pending or had been denied as of March 1, 1978 
(see Sec. 727.102), may upon notification by the Secretary of Health, 
Education, and Welfare, elect to have the claim reviewed by the 
Secretary of Health, Education, and Welfare.
    (b) By the Secretary of Labor. (1) Any person who elects review by 
the Social Security Administration under paragraph (a) of this section 
and whose claim cannot be approved after such review shall have the 
claim reviewed by the Secretary of Labor.
    (2) Any person who is eligible to have his or her claim reviewed 
under paragraph (a) of this section may elect to have the claim referred 
directly to the Secretary of Labor for review.
    (3) Any person who has filed a claim for benefits under section 415 
or part C of title IV of the Act and whose claim was pending or had been 
denied (see Sec. 727.102) on or before March 1, 1978, shall have the 
claim automatically reviewed by the Secretary of Labor. (But see 
Sec. 727.103.)
    (4) Any claimant whose claim is subject to review by the Secretary 
of Labor under this paragraph shall have the right to submit additional 
evidence to the Secretary of Labor in support of such claim.



Sec. 727.102  ``Pending'' and ``denied'' claim defined.

    (a) Applicability. This section defines the terms ``pending'' and 
``denied'' claims for purposes of this part only, and the following 
definitions shall be applicable only to claims filed with the Secretary 
of Labor under section 415 and part C of title IV of the Act.
    (b) Denied claim defined. For the purposes of this part, a claim 
filed with the Secretary of Labor shall be considered a denied claim if:
    (1) The claim was filed before March 1, 1978; and
    (2) The claimant's entitlement to benefits has been denied for any 
reason by a district director in the Office of Workers' Compensation 
Programs, U.S. Department of Labor, an administrative law judge assigned 
to determine black lung claims by the Secretary of Labor, the Benefits 
Review Board in the U.S. Department of Labor, or an appropriate U.S. 
court of appeals; and
    (3) No further proceedings before a district director, 
administrative law judge, the Benefits Review Board, or a U.S. court of 
appeals are pending; and

[[Page 846]]

    (4) The time has expired to seek further consideration of such 
denial; or
    (5) The claim has been declared abandoned by a district director or 
administrative law judge (see Sec. 725.409 of this subchapter which 
replaces 38 FR 26059).
    (c) Pending claim defined. For the purposes of this part and except 
as provided in Secs. 727.402 and 727.403, a claim filed with the 
Secretary of Labor shall be considered a pending claim if:
    (1) The claim was filed before March 1, 1978; and
    (2) The claim is before a district director, administrative law 
judge, the Board, or a U.S. court of appeals for consideration; or
    (3) The time permitted to seek further consideration of the claim 
has not expired.
    (d) Withdrawn claims. A claim for benefits which has been previously 
withdrawn at the request of the claimant (see Sec. 725.306 of this 
subchapter) shall not be considered a pending or denied claim for 
purposes of this part. Any person who has voluntarily withdrawn his or 
her claim from consideration may file a new claim for benefits under 
part 725 of this subchapter.



Sec. 727.103  Duplicate claims.

    (a) A person who filed a claim for benefits with the Social Security 
Administration and whose claim has been approved by that agency and who 
has also filed a claim with the Secretary of Labor which was pending or 
had been denied as of March 1, 1978, shall be entitled to a review of 
such claim under this part.
    (b) A person who has filed a claim with the Social Security 
Administration which was pending or had been denied by that agency as of 
March 1, 1978, and who has also filed a claim with the Secretary of 
Labor that has been approved, shall be entitled to elect review of the 
pending or denied claim by the Social Security Administration or by the 
Department of Labor subject to the limitation contained in paragraph (e) 
of this section.
    (c) A person who has filed a claim both with the Social Security 
Administration and the Department of Labor and whose claims were either 
pending with or denied by both agencies as of March 1, 1978, shall have 
the claim reviewed by the Social Security Administration if such review 
is requested by the claimant. If the claim is not approved by the Social 
Security Administration it shall be forwarded to the Secretary of Labor 
for further review as provided in Sec. 727.106. During the pendency of 
review proceedings by the Social Security Administration, if any, no 
action shall be taken by the Secretary of Labor with respect to the 
claim which is pending or had been denied by the Secretary of Labor. If 
the claimant does not respond to notification of his or her right to 
review by the Social Security Administration within 6 months of such 
notice (see Sec. 727.104), unless the period is enlarged for good cause 
shown, the Secretary of Labor shall proceed under this part to complete 
processing of the claim originally filed with the Secretary of Labor. If 
the claimant, upon notification of his or her right to review by the 
Social Security Administration (see Sec. 727.104) requests that the 
claim originally filed with the Administration be forwarded to the 
Department of Labor for review, or if more than one claim has been filed 
with the Secretary of Labor by the same claimant, such claims shall be 
merged and processed with the first claim filed with the Department of 
Labor.
    (d) A person may exercise the right of review provided in paragraph 
(c) of this section at the same time such person is pursuing an appeal 
of a previously denied part B claim under the law as it existed prior to 
March 1, 1978. If the part B claim is ultimately approved as a result of 
the appeal, the claimant must immediately notify the Secretary of Labor 
and, where appropriate, the coal mine operator, and all duplicate 
payments made under part C shall be considered an overpayment and 
arrangements shall be made to insure the repayment of such overpayments 
to the fund or an operator as appropriate.
    (e) In the case of a claimant who has filed one or more claims with 
both the Social Security Administration and the Department of Labor, 
under no circumstances are duplicate benefits payable for concurrent 
periods of eligibility.

[[Page 847]]



Sec. 727.104  Review by the Social Security Administration.

    (a) Notification. The Social Security Administration will notify 
each claimant who has filed a claim for benefits under part B of title 
IV of the Act, excluding miners who filed under section 415 of the Act, 
and whose claim was either pending or had been denied on or before March 
1, 1978, that upon the request of the claimant such claim shall be 
either:
    (1) Reviewed by the Social Security Administration on the basis of 
the evidence contained in the claimant's file, in accordance with the 
amendments made by the Black Lung Benefits Reform Act of 1977; or,
    (2) Referred by the Social Security Administration to the Office of 
Workers' Compensation Programs in the Department of Labor for review 
based on the evidence contained in the claimant's file and any 
additional evidence the claimant seeks to submit, in accordance with the 
amendments made by the Black Lung Benefits Reform Act of 1977.
    (b) Response to notification. Upon receipt of a claimant's response 
or a response on behalf of a claimant to the notice required by 
paragraph (a) of this section the Social Security Administration will 
undertake to review the claim or refer the claimant's file to the Office 
for processing under Sec. 727.107. If there is no response to 
notification sent in accordance with paragraph (a) of this section 
within 6 months from the date on which notice is sent, unless the period 
is enlarged for good cause shown, the claimant shall be considered to 
have waived the right to review by the Social Security Administration. 
The date on which notice is sent and the date on which a claimant's 
response is received shall be noted on an appropriate form by the Social 
Security Administration.
    (c) Change of election. A Part B claimant who has elected review by 
the Secretary of Labor may in writing revoke such election and elect 
review by the Social Security Administration at any time before being 
notified of the district director's initial findings on the claim 
(Sec. 725.410 of this subchapter). If such a revocation is made, the 
district director shall return the claimant's file to the Social 
Security Administration for appropriate processing. All documents 
received by the district director, except the documents changing the 
claimant's election, shall be deleted from the claimant's file before it 
is returned to the Social Security Administration.
    (d) Social Security Administration review procedures. Where the 
Social Security Administration determines that the claimant is eligible, 
the Administration will forward the claim file together with a copy of 
such determination to the Office for processing and payment in 
accordance with Sec. 727.105 and shall so notify the claimant. Where it 
is determined that the claim cannot be approved, the Social Security 
Administration will transfer the claimant's file to the Office for 
further review in accordance with Sec. 727.106, and shall so notify the 
claimant.



Sec. 727.105  Action by the Office, Social Security approval.

    (a)(1) Where the Social Security Administration determines that the 
claimant is eligible for benefits upon review under Sec. 727.104(c), the 
claimant's file and certification of approval for payment of benefits 
will be forwarded to the Department of Labor. Upon receipt of the file 
and certification, the Office shall immediately authorize the payment of 
all benefits due to the claimant from the fund, in accordance with 
Sec. 725.522 of this subchapter. Such payments shall commence within not 
more than 30 days. Payments shall include all past due benefits, 
augmentation for dependents and medical expenses to the extent supported 
by information in the file.
    (2) After authorizing payment, the district director shall commence 
verification of the information in the file on which authorization of 
benefit payments was based. The district director shall request current 
information from the claimant pertaining to any matter affecting the 
amount of benefits payable or any additional information which may be 
necessary to establish a more detailed and complete history of the 
miner's employment. After receipt of such information, the district 
director shall determine the amount of benefits actually payable to the 
claimant

[[Page 848]]

and shall, if necessary, increase, decrease or terminate benefit 
payments as appropriate in accordance with subpart G of part 725 of this 
subchapter. The district director shall then issue a proposed decision 
and order in accordance with the procedure set forth in Secs. 725.418 
and 725.419 of this subchapter, except as provided in paragraph (b)(1) 
of this section. If the information received establishes that there has 
been an underpayment or overpayment, benefit payments shall be corrected 
retroactive to January 1, 1974.
    (3) If the information requested is not supplied to the district 
director within 60 days following such request, unless the period is 
enlarged for good cause shown, the district director shall issue an 
order to show cause why benefit payments should not be suspended and all 
benefits previously paid should not be declared an overpayment (see 
Sec. 725.540 of this subchapter). If the claimant submits a satisfactory 
response to such order, and within a reasonable time submits sufficient 
evidence to allow the district director to determine the actual amount 
of benefits payable, the district director shall issue a proposed 
decision and order awarding benefits in accordance with Secs. 725.418 
and 725.419 of this subchapter except as provided in paragraph (b)(1) of 
this section. If there is no satisfactory response to the district 
director's order to show cause in the time allotted, the district 
director may issue a proposed decision and order in accordance with 
Secs. 725.418 and 725.419 of this subchapter or proceed in accordance 
with Sec. 725.409 of this subchapter. Benefit payments shall not be 
terminated and no overpayment shall be declared on account of an 
unrepresented claimant's failure to respond to a show cause order until 
the district director has attempted to contact the claimant personally 
or by telephone. In the case of an unrepresented claimant, a response to 
a show cause order may be given orally, in person or by telephone, 
except that such a response shall not excuse the claimant from 
submitting necessary information in writing.
    (b) (1) If the district director determines that there is a coal 
mine employer which may be liable for the payment of benefits to the 
claimant, the district director shall identify and notify such operator 
of its possible liability as provided in Sec. 725.412 of this 
subchapter, and shall proceed to adjudicate the claim in accordance with 
the appropriate provisions of subparts D and E of part 725 of this 
subchapter. The identification and notification of an operator shall be 
made as soon as possible after receipt of the claimant's file
    (2) An employer notified under this section shall have the right to 
have the claimant examined by a physician selected by such operator (see 
Sec. 725.414 of this subchapter). If an employer contests the claim, the 
claimant may obtain and submit additional medical evidence to the 
district director within the time permitted by Sec. 725.414 of this 
subchapter for the submission of the employer's evidence. Evidence 
submitted by a claimant under this paragraph shall be paid for by the 
fund, if authorized by the district director, and shall be reimbursable 
to the fund by the employer, if the employer is found liable for the 
claim (see Sec. 725.407 of this subchapter).
    (c) Except as is otherwise provided in this section, a determination 
of entitlement made by the Social Security Administration under this 
section is binding on the district director.
    (d) If it is determined by an administrative law judge, the Benefits 
Review Board, or a U.S. court that the determination of entitlement made 
by the Social Security Administration was incorrect, the payment of 
benefits shall terminate and any benefits paid shall be considered an 
overpayment subject to collection in accordance with Sec. 725.540 of 
this subchapter.



Sec. 727.106  Action by the Office, insufficient evidence for Social Security approval.

    (a) In the case of a claim which has not been approved for benefits 
by the Social Security Administration under Sec. 727.105, the claim 
shall be transferred by the Administration to the Office and the Office 
shall follow the procedures set forth in this section. There shall be no 
further consideration of a claim described in this paragraph except as 
provided in this part.

[[Page 849]]

    (b) Upon receipt of the claimant's file from the Social Security 
Administration, the Office shall assign the claim to a district director 
who may:
    (1) Assist the claimant in obtaining additional medical evidence or 
request that such evidence be submitted (see Secs. 725.405-725.408 of 
this subchapter); or
    (2) Request such additional documents or information as may be 
necessary to establish the amount of benefits which may be payable, or 
to establish a more detailed and complete history of the nature and 
duration of the miner's employment.
    (c) Based upon the evidence developed under this section, if any, 
and the information contained in the claimant's original file, the 
district director may make an initial finding with respect to the 
eligibility of the claimant and shall proceed to adjudicate the claim 
under Secs. 725.409-725.421 of this subchapter, which action may include 
the notification and participation of a coal mine employer and the 
submission of additional evidence as is appropriate.



Sec. 727.107  Action by the Office, Social Security referral without prior review.

    (a) In the case of a claim which is referred at the claimant's 
request by the Social Security Administration to the Office under 
Sec. 727.104(a)(2) without prior review by the Social Security 
Administration, the Office shall follow the procedures set forth in this 
section.
    (b) Upon receipt of a claimant's file the claim shall be assigned to 
a district director who shall examine the evidence contained in the file 
to determine whether the claim may be approved in light of the 
amendments made by the Black Lung Benefits Reform Act of 1977.
    (c) If it is determined by the district director that the evidence 
in the file supports a finding of entitlement to benefits the district 
director may:
    (1) Request up-to-date information from the claimant pertaining to 
any matter affecting the amount of benefits payable (see subpart G of 
part 725 of this subchapter); and (2) request any additional information 
or verification which may be necessary to establish a more detailed and 
complete history of the miner's employment, for the purpose of 
determining the identity of any coal mine employer which may be liable 
for the payment of the claim, and for such other purposes as may be 
appropriate. Upon receipt of any additional information requested under 
this paragraph, or if the claimant fails to supply such information, the 
district director may make an initial finding with respect to the 
eligibility of the claimant, notify a coal mine employer, if any, of its 
possible liability for the claim and proceed to adjudicate the claim 
under Secs. 725.409-725.421 of this subchapter.
    (d) If it is determined by the district director that the evidence 
on file is insufficient to support a finding of entitlement with respect 
to a claim reviewed under this section, the district director may:
    (1) Assist the claimant in obtaining additonal medical evidence or 
request that such evidence be submitted (see Secs. 725.405-725.408 of 
this subchapter); or (2) request such additional documents or 
information as may be necessary to establish the amount of benefits 
which may be payable, or to establish a more detailed and complete 
history of the nature and duration of the miner's employment. Based upon 
evidence developed under this paragraph, if any, and the information 
contained in the claimant's original file, the district director may 
make an initial finding with respect to the eligibility of the claimant 
and shall proceed to adjudicate the claim under Secs. 725.409-725.421 of 
this subchapter.



Sec. 727.108  Action by the Office, Department of Labor pending or denied claim.

    (a) In the case of a claim filed with the Office under section 415 
or part C of title IV of the act which is pending or has been denied as 
of March 1, 1978, the Office shall follow the procedures set forth in 
this section.
    (b) The district director shall examine the evidence contained in 
the file to determine whether the claim may be approved in light of the 
amendments made by the Black Lung Benefits Reform Act of 1977.
    (c) The district director may: (1) Request up-to-date information 
from the

[[Page 850]]

claimant pertaining to any matter affecting the amount of benefits 
payable (see subpart G of part 725 of this subchapter); and (2) request 
any additional information or verification which may be necessary to 
establish a more detailed and complete history of the miner's 
employment, for the purpose of determining the identity of any coal mine 
employer which may be liable for the payment of the claim, and for such 
other purposes as may be appropriate. Upon receipt of any additional 
information requested under this paragraph, or if the claimant fails to 
supply such information, the district director may notify a coal mine 
employer, if any, of its possible liability for the claim and proceed to 
adjudicate the claim under Secs. 725.409-725.421 of this subchapter.
    (d) If it is determined by the district director that the evidence 
on file is insufficient to support a finding of entitlement with respect 
to a claim reviewed under this section, the district director may:
    (1) Assist the claimant in obtaining additional medical evidence or 
request that such evidence be submitted (see Secs. 725.405-725.408 of 
this subchapter); or (2) request such additional documents or 
information as may be necessary to establish the amount of benefits 
which may be payable, or to establish a more detailed and complete 
history of the nature and duration of the miner's employment. Based upon 
the evidence developed under this paragraph, if any, and the information 
contained in the claimant's original file, the district director may 
make an initial finding with respect to the eligibility of the claimant 
and shall proceed to adjudicate the claim under Secs. 725.409-725.421 of 
this subchapter.
    (e) Notwithstanding the provisions of paragraphs (a) through (d) of 
this section, in the case of a claim filed by a part B beneficiary under 
part C of the act prior to March 1, 1978, for such additional benefits 
as may be available, the Department shall accept the Social Security 
Administration's documented finding of entitlement as its initial 
determination of eligibility.



Sec. 727.109  Hearings and appeals, parties.

    (a) If a hearing before an administrative law judge is necessary in 
connection with a claim reviewed under this part, the hearing shall be 
conducted in accordance with the procedures set forth in subpart E of 
part 725 of this subchapter. An appeal from a decision of an 
administrative law judge shall be considered by the Benefits Review 
Board in accordance with the procedures set forth in parts 801 and 802 
of this title.
    (b) parties to proceedings conducted in connection with a claim 
reviewed under this section, matters relating to the representation of 
parties and the right of such representative to obtain a fee for 
services rendered, the powers of adjudication officers and the service 
of papers or documents shall be governed by the appropriate provisions 
contained in subparts C, D, and E of part 725 of this subchapter.



      Subpart C--Criteria for Determining Eligibility for Benefits



Sec. 727.200  Basis for criteria.

    In enacting the Black Lung Benefits Reform Act of 1977, Congress 
provided that the criteria for determining whether a miner is or was 
totally disabled or died due to pneumoconiosis shall be no more 
restrictive than the criteria applicable to a claim filed with the 
Social Security Administration on or before June 30, 1973, under part B 
of title IV of the Act (the interim adjudicatory rules). These criteria 
are to be applied to claims reviewed under section 435 of the Act, to 
all filed reviewed under section 11 of the Black Lung Benefits Reform 
Act of 1977 and to new claims filed prior to the effective date of 
regulations to be promulgated in part 718 of this subchapter which will 
establish permament criteria, regardless of the date on which the claim 
is finally adjudicated. The rules promulgated in this section take into 
account the amendments made by the Black Lung Benefits Reform Act of 
1977 and the expectations of the Congress. Accordingly, these rules 
provide additional standards, not available in the

[[Page 851]]

interim adjudicatory rules, by which a claimant can take advantage of a 
presumption of total disability or death due to pneumoconiosis arising 
out of coal mine employment.



Sec. 727.201  Persons entitled to benefits, dependents.

    Benefits are provided under the Act to a miner who is totally 
disabled due to pneumoconiosis and to certain survivors of a miner who 
died due to or while totally (or in certain cases, partially) disabled 
by pneumoconiosis. The amount of benefits payable to a miner or survivor 
may be increased on account of certain dependents. For the purpose of 
determining whether a claimant is a miner or qualified survivor of a 
miner or a qualified dependent of a miner or survivor under this part, 
the provisions of part 725 of this subchapter shall be applicable as 
appropriate.



Sec. 727.202  Definition of pneumoconiosis.

    For the purposes of the act, pneumoconiosis means a chronic dust 
disease of the lung and its sequelae, including respiratory and 
pulmonary impairments, arising out of coal mine employment. This 
definition includes, but is not limited to, coal workers' 
pneumoconiosis, anthracosilicosis, anthracosisanthro-silicosis, massive 
pulmonary fibrosis, progressive massive fibrosis silicosis, or 
silicotuberculosis arising out of coal mine employment. For purposes of 
this definition, a disease ``arising out of coal mine employment'' 
includes any chronic pulmonary disease resulting in respiratory or 
pulmonary impairment significantly related to, or aggravated by, dust 
exposure in coal mine employment.



Sec. 727.203  Interim presumption.

    (a) Establishing interim presumption. A miner who engaged in coal 
mine employment for at least 10 years will be presumed to be totally 
disabled due to pneumoconiosis, or to have been totally disabled due to 
pneumoconiosis at the time of death, or death will be presumed to be due 
to pneumoconiosis, arising out of that employment, if one of the 
following medical requirements is met:
    (1) A chest roentgenogram (X-ray), biopsy, or autopsy establishes 
the existence of pneumoconiosis (see Sec. 410.428 of this title);
    (2) Ventilatory studies establish the presence of a chronic 
respiratory or pulmonary disease (which meets the requirements for 
duration in Sec. 410.412(a)(2) of this title) as demonstrated by values 
which are equal to or less than the values specified in the following 
table:

                                                                        
------------------------------------------------------------------------
                                                       Equal to or less 
                                                            than--      
                                                     -------------------
                                                        FEV1       MVV  
------------------------------------------------------------------------
67" or less.........................................       2.3        92
68".................................................       2.4        96
69".................................................       2.4        96
70".................................................       2.5       100
71".................................................       2.6       104
72".................................................       2.6       104
73" or more.........................................       2.7       108
------------------------------------------------------------------------

    (3) Blood gas studies which demonstrate the presence of an 
impairment in the transfer of oxygen from the lung alveoli to the blood 
as indicated by values which are equal to or less than the values 
specified in the following table:

                                                                        
------------------------------------------------------------------------
                                                                Arterial
                                                                  pCO2  
                                                                equal to
                         Arterial pO2                            or less
                                                                  than  
                                                                  (mm.  
                                                                  Hg.)  
------------------------------------------------------------------------
30 or below...................................................       70.
31............................................................       69.
32............................................................       68.
33............................................................       67.
34............................................................       66.
35............................................................       65.
36............................................................       64.
37............................................................       63.
38............................................................       62.
39............................................................       61.
40-45.........................................................       60.
Above 45......................................................       Any
                                                                  value.
------------------------------------------------------------------------

    (4) Other medical evidence, including the documented opinion of a 
physician exercising reasoned medical judgment, establishes the presence 
of a totally disabling respiratory or pulmonary impairment;
    (5) In the case of a deceased miner where no medical evidence is 
available, the affidavit of the survivor of such miner or other persons 
with knowledge

[[Page 852]]

of the miner's physical condition, demonstrates the presence of a 
totally disabling respiratory or pulmonary impairment.
    (b) Rebuttal of interim presumption. In adjudicating a claim under 
this subpart, all relevant medical evidence shall be considered. The 
presumption in paragraph (a) of this section shall be rebutted if:
    (1) The evidence establishes that the individual is, in fact, doing 
his usual coal mine work or comparable and gainful work (see 
Sec. 410.412(a)(1) of this title); or
    (2) In light of all relevant evidence it is established that the 
individual is able to do his usual coal mine work or comparable and 
gainful work (see Sec. 410.412(a)(1) of this title); or
    (3) The evidence establishes that the total disability or death of 
the miner did not arise in whole or in part out of coal mine employment; 
or
    (4) The evidence establishes that the miner does not, or did not, 
have pneumoconiosis.
    (c) Applicability of part 718. Except as is otherwise provided in 
this section, the provisions of part 718 of this subchapter as amended 
from time to time, shall also be applicable to the adjudication of 
claims under this section.
    (d) Failure of miner to qualify under the presumption in paragraph 
(a) of this section. Where eligibility is not established under this 
section, such eligibility may be established under part 718 of this 
subchapter as amended from time to time.



Sec. 727.204  Presumption of entitlement applicable to certain death claims.

    (a) In the case of a miner who died on or before March 1, 1978, who 
was employed for 25 or more years in one or more coal mines prior to 
June 30, 1971, the eligible survivors of such miner shall be entitled to 
the payment of benefits, unless it is established that at the time of 
death such miner was not partially or totally disabled due to 
pneumoconiosis. Eligible survivors shall, upon request by the Office, 
furnish such evidence as is available with respect to the health of the 
miner at the time of death, and the length of the miner's coal mine 
employment.
    (b) For the purpose of this section a miner will be considered to 
have been ``partially disabled'' if he or she had reduced ability to 
engage in his or her usual coal mine work or ``comparable and gainful 
work'' (see part 718 of this subchapter as amended from time to time).
    (c) In order to rebut this presumption the evidence must demonstrate 
that the miner's ability to perform his or her usual and customary work 
or ``comparable and gainful work'' was not reduced at the time of his or 
her death or that the miner did not have pneumoconiosis.
    (d) The following evidence alone shall not be sufficient to rebut 
the presumption:
    (1) Evidence that a deceased miner was employed in a coal mine at 
the time of death;
    (2) Evidence pertaining to a deceased miner's level of earnings 
prior to death;
    (3) A chest X-ray interpreted as negative for the existence of 
pneumoconiosis;
    (4) A death certificate which makes no mention of pneumoconiosis.



Sec. 727.205  Effect of current coal mine employment or coal mine employment at the time of death.

    In the case of a miner who is working in coal mine employment or was 
employed in coal mine employment at the time of death, the following 
shall apply:
    (a) A deceased miner's employment in a mine at the time of death 
shall not be used as conclusive evidence that the miner was not totally 
disabled. In the case of a deceased miner who was employed in a coal 
mine at the time of death, all relevant evidence, including the 
circumstances of such employment and the statements of the miner's 
spouse, shall be considered in determining whether the miner was totally 
disabled due to pneumoconiosis at the time of death. In the case of a 
living miner, if there are changed circumstances of employment 
indicative of reduced ability to perform his or her coal mine work, the 
miner's employment in a mine shall not be used as conclusive evidence 
that the miner is not totally disabled.

[[Page 853]]

    (b) Notwithstanding any other provision of this section, and except 
as provided in section 411(c)(3) of the act, no miner shall be found to 
be totally disabled if the miner is found to be doing his or her 
customary coal mine work or ``comparable and gainful work'' (see 
Sec. 410.412(a)(1) of this title) and there are no changed circumstances 
of employment indicative of reduced ability to perform coal mine work.
    (c) No miner who is engaged in coal mine employment shall (except as 
provided in section 411(c)(3) of the act) be entitled to any benefits 
under this part while so employed. Any miner who has been determined to 
be eligible for benefits for any period during which such miner is 
engaged in coal mine employment shall be entitled to benefits if the 
miner's employment terminates within 1 year after the date such 
determination becomes final (see Sec. 725.503A of this subchapter).



Sec. 727.206  Quality standards applicable to evidence.

    (a) No chest X-ray or X-ray report, ventilatory study or blood gas 
study which does not or did not meet the quality standards applicable at 
the time the evidence was submitted shall be considered sufficient to 
invoke the interim presumption provided in Sec. 727.203(a) of this part. 
With respect to evidence submitted prior to the effective date of part 
718 of this title, the standards to be applied in the evaluation of 
evidence are contained in subpart D of part 410 of this title. Evidence 
submitted after the effective date of the revised part 718 shall be 
evaluated as provided in that part.
    (b)(1) In all claims where there is other evidence of a pulmonary or 
respiratory impairment, a board-certified or board-eligible 
radiologist's interpretation of a chest X-ray shall be accepted by the 
Office if the X-ray is in compliance with the requirements of 
Sec. 410.428(b) of this title and if such X-ray has been taken by a 
radiologist or qualified radiologic technologist or technician and there 
is no evidence that the claim has been fraudulently represented.
    (2) The following definitions shall apply when making a finding in 
accordance with this paragraph:
    (i) The term ``other evidence'' means medical tests such as blood-
gas studies, pulmonary function studies or physical performance tests, 
physical examinations or medical histories which establish the presence 
of a chronic respiratory or cardio-pulmonary condition and the spouse's 
affidavit except that the spouse's affidavit alone shall not be 
sufficient in the case of a living miner to establish the existence of a 
respiratory or pulmonary impairment. In the case of a deceased miner, in 
the absence of medical evidence to the contrary, affidavits of persons 
with knowledge of the miner's physical condition may be sufficient to 
establish the presence of a respiratory or pulmonary impairment.
    (ii) ``Pulmonary or respiratory impairment'' means an inability of 
the human respiratory apparatus to perform satisfactorily one or more of 
the three components of respiration, viz., ventilation, perfusion, and 
diffusion.
    (iii) ``Board-certified'' means certification in radiology or 
diagnostic roentgenology by the American Board of Radiology, Inc. or the 
American Osteopathic Association.
    (iv) ``Board-eligible'' means the successful completion of a formal 
accredited residency program in radiology or diagnostic roentgenology.
    (v) ``Qualified radiologic technologist or technician'' means an 
individual who is either certified as a registered technologist by the 
American Registry of Radiologic Technologists or licensed as a 
radiologic technologist by a State licensing board.



                Subpart D--Payment of Benefits/Liability



Sec. 727.300  Conditions and duration of eligibility.

    The provisions of subpart B of part 725 of this subchapter shall be 
applicable in determining the conditions and duration of eligibility 
applicable with respect to a claim approved under this part.

[[Page 854]]



Sec. 727.301  Amounts payable, other payment provisions.

    Except as is otherwise provided in this part (see Sec. 727.302), 
provisions relating to the amount of benefits payable, the manner of 
payment and all other provisions contained in subpart G of part 725 and 
Sec. 725.309 of this subchapter, shall be applicable to a claim approved 
under this part. A miner whose claim is approved under this part shall 
be entitled to medical benefits to be determined and administered in 
accordance with the provisions of subpart I of part 725 of this 
subchapter.



Sec. 727.302  Date from which benefits are payable after review and approval.

    (a) Section 435(c) of the act provides that any individual whose 
claim is approved after review shall be awarded benefits on a 
retroactive basis for a period which begins no earlier than January 1, 
1974. This section implements section 435(c) of the act and sets forth 
provisions governing the date from which benefits shall be payable with 
respect to a claim reviewed under this part. (See also section 6(a) of 
the Longshoremen's Act as incorporated by section 422(a) of the act.)
    (b) In the case of a claim reviewed and finally approved under 
Sec. 727.105, benefits shall be payable for all periods of eligibility 
occurring on or after January 1, 1974.
    (c)(1) In the case of a miner whose claim is reviewed and finally 
approved under Sec. 727.106, benefits shall be payable for all periods 
of eligibility beginning with the month of onset of total disability due 
to pneumoconiosis or January 1, 1974, whichever is later. Where the 
evidence does not establish the month of onset, benefits shall be 
payable from the month during which the miner elected review under 
Sec. 727.104.
    (2) In the case of a survivor whose claim is reviewed and finally 
approved under Sec. 727.106, benefits shall be payable for all periods 
of eligibility occurring on or after the month of the miner's death or 
January 1, 1974, whichever is later.
    (d)(1) In the case of a miner's claim which is reviewed and finally 
approved under Sec. 727.107, benefits shall be payable for all periods 
of eligibility beginning with the month of onset of total disability due 
to pneumoconiosis or January 1, 1974, whichever is later. Where the 
evidence does not establish the month of onset, benefits shall be 
payable from the month during which the miner elected review under 
Sec. 727.104.
    (2) In the case of a survivor whose claim is reviewed and finally 
approved under Sec. 727.107, benefits shall be payable for all periods 
of eligibility occurring on or after the month of the miner's death or 
January 1, 1974, whichever is later.
    (e) In the case of a claim reviewed and finally approved under 
Sec. 727.108, benefits shall be payable as provided in Sec. 725.503 of 
this subchapter.
    (f) For the purposes of this section, the term ``finally approved'' 
means that an award of benefits has been made or affirmed by a district 
director, administrative law judge, the Benefits Review Board, or a U.S. 
court of appeals, that no further hearing, appeal, or reconsideration is 
pending, and the time to request such hearing, appeal, or 
reconsideration has expired. (See part 725 of this subchapter 
generally.) Benefit payments shall be initiated prior to final approval 
in accordance with the provisions of Sec. 725.522 of this subchapter.



Sec. 727.303  Claims filed under section 415 of the act.

    (a) A claim filed by a miner between July 1 and December 31, 1973, 
with the Secretary of Labor under section 415 of the act is subject to 
review under this section if it was pending or had been denied on or 
before March 1, 1978. Prior to the enactment of the Black Lung Benefits 
Reform Act of 1977, benefits with respect to a section 415 claim may 
have been payable by the Secretary of Labor from Federal funds for 
periods of eligibility between July 1 and December 31, 1973. However, 
under section 435 of the act, no benefits may be paid with respect to a 
claim reviewed under that section, including a section 415 claim, for 
any period of eligibility prior to January 1, 1974. Accordingly, in the 
case of any claim filed under section 415 of the act with respect to 
which no benefits have been awarded prior to March 1, 1978, for any 
period of eligibility between July 1 and December 31, 1973, no benefits 
which might have been

[[Page 855]]

awarded for this period shall be awarded in any adjudication of the 
claim taking place after the effective date of this part.
    (b) A claim filed under section 415 of the act which is reviewed 
under this part shall for all purposes be considered as if it was filed 
on January 1, 1974, under part C of title IV of the Act.



Sec. 727.304  Liability for benefit payments.

    A claim approved under this part shall be payable either by a coal 
mine employer (see subpart F of part 725 of this subchapter) or the 
black lung disability trust fund. Benefits shall be payable by a 
responsible coal mine employer if the miner's last date of coal mine 
employment occurred on or after January 1, 1970, and if the miner's last 
coal mine employer or a successor to such employer is found liable under 
the provisions of subpart F of part 725 of this subchapter. Where it is 
determined that the employer liable for the payment of such benefits has 
not commenced payment of benefits within 30 days after the date the 
claimant is initially determined eligible or within 30 days after a 
payment is due, the fund will make the required payments. The employer 
is required by section 424 of the act to reimburse the fund where its 
liability is finally determined. For the purposes of determining the 
liability of a coal mine employer or the fund for the payment of an 
approved claim, the provisions of subparts F and H of part 725 of this 
subchapter shall be applicable to a claim considered under this part, 
including any claim originally filed under part B of title IV of the Act 
with the Social Security Administration. In all other cases, benefits 
shall be payable by the fund. Nothing in this part shall be construed in 
derogation of the terms of part 725 of this subchapter insofar as part 
725 affects the liability of a coal mine employer.



 Subpart E--Special Review Provisions Relating to Claims Pending Before 
        an Administrative Law Judge or the Benefits Review Board



Sec. 727.401  General.

    Section 435 of the act requires the Secretary of Labor to establish 
a consistent and effective procedure for the review of pending and 
denied claims in light of the amendments made by the Black Lung Benefits 
Reform Act of 1977. A number of the claims encompassed by section 435 
are pending in the Office of Administrative Law Judges or before the 
Benefits Review Board. In order to insure a fair, orderly, and uniform 
disposition of claims pending before an administrative law judge or the 
Board which are subject to review under section 435 of the act, it has 
been determined that a return of many of these claims to the Office for 
expedited review is essential. This subpart sets forth the procedures to 
be followed with respect to claims which are within the jurisdiction of 
the Office of Administrative Law Judges or the Benefits Review Board for 
which review under section 435 of the act is required. In order to carry 
out the purposes of section 435, certain of the procedures ordinarily 
applicable in the adjudication of a claim are changed in certain 
specified instances. These changes are intended exclusively to 
facilitate a uniform administrative review of all pending and denied 
claims where such review is appropriate. Once the administrative review 
of these claims has been completed, the hearing and appeal procedures 
set forth in subpart D of part 725 of this subchapter shall be available 
to all parties to a claim. Additional evidence may be submitted in 
connection with a reviewed claim by any party as is considered 
appropriate by the district director or administrative law judge, and as 
is permitted by the act and this part.

[[Page 856]]



Sec. 727.402  Claims pending in the Office of Administrative Law Judges.

    (a) A claim which is pending in the Office of Administrative Law 
Judges may be subject to review by a district director under this part. 
This section sets forth criteria to be applied by the Chief 
Administrative Law Judge or an administrative law judge for determining 
whether a claim should be remanded to the district director for review 
under Sec. 727.108 or whether jurisdiction over the claim should be 
retained and sets forth a procedure to be followed if remand is 
required.
    (b) A claim pending in the Office of Administrative Law Judges, 
which has been administratively denied by the district director and with 
respect to which no decision has been issued, may be remanded to the 
district director for consideration under Sec. 727.108, upon the request 
of the Director or the claimant, or by the administrative law judge on 
his or her own motion.
    (c) A claim pending in the Office of Administrative Law Judges, 
which has been administratively approved by the district director and 
was forwarded for hearing at the request of a coal mine operator, shall 
be remanded to the district director for payment if the miner on whose 
total disability or death the claim is predicated was last engaged in 
coal mine employment before January 1, 1970. If the miner's last coal 
mine employment occurred on or after January 1, 1970, the Office of 
Administrative Law Judges shall retain jurisdiction over the claim and 
proceed to adjudicate the claimant's eligibility and the liability of 
the named coal mine employer in accordance with the provisions of this 
part. If jurisdiction over a claim is retained under this paragraph, the 
administrative law judge may, on his or her own motion or at the request 
of the claimant, remand the claim to the district director for 
consideration under Sec. 727.108 if further evidentiary development of 
the claim is necessary. The right to review provided by Sec. 727.108 is 
not available to a coal mine employer.
    (d) A claim which has been denied by an administrative law judge and 
with respect to which no reconsideration or appeal is pending shall be 
automatically reviewed under Sec. 727.108.
    (e) In the case of a claim with respect to which a decision has been 
issued by an administrative law judge but not filed with the district 
director, or if the decision has been filed and the time for appeal to 
the Benefits Review Board has not expired, the provisions of this 
paragraph shall apply. If appropriate, such decision shall be 
immediately filed with the district director. If the decision denied the 
claimant's entitlement to benefits, the claim shall be considered a 
pending claim subject to review by the district director under 
Sec. 727.108, or subject to an appeal to the Benefits Review Board. If 
the decision awards benefits to the claimant, the claim shall be paid as 
provided in part 725 of this subchapter and an appeal to the Benefits 
Review Board may be taken. If such an appeal is taken, the Board shall 
consider the appeal under the applicable provisions of this part, and 
may take such other action as is appropriate.
    (f) Except as provided in paragraph (b) of this section, the remand 
of a claim authorized by this section shall be made by order of the 
Chief Administrative Law Judge or an administrative law judge on his or 
her own motion, or on the motion of any party to the claim as is 
appropriate.



Sec. 727.403  Claims pending before the Benefits Review Board.

    (a) A claim pending before the Benefits Review Board which may be 
subject to review under this part shall be considered by the Board as 
the Board deems appropriate, in accordance with the authority given the 
Board by the act.
    (b) If a claim subject to review under this part is pending before 
the Board, the Board may, on its own motion or at the request of the 
Director, remand such case to the district director for review under 
Sec. 727.108. The consent of the parties shall not be a prerequisite to 
a remand by the Board under this paragraph.
    (c) A claimant whose claim is pending before the Board may request 
that his or her claim be remanded to the district director for 
consideration under Sec. 727.108.

[[Page 857]]



Sec. 727.404  Claims pending in a U.S. Court of Appeals.

    A claim pending in a U.S. court of appeals which may be subject to 
review under this part shall be considered by the court as the court 
deems appropriate.



Sec. 727.405  Expedited review of claims.

    (a) A claim which is remanded to the district director by an 
administrative law judge, the Benefits Review Board, or a court, under 
this subpart shall be reviewed under Sec. 727.108 and in accordance with 
the provisions of this part on a priority basis. Such claim shall be 
reviewed by the district director before any other claim, except for a 
claim remanded at an earlier date under this subpart. If no additional 
evidence is submitted or required with respect to a claim remanded under 
this subpart, the district director shall make initial findings (see 
Sec. 725.410 of this subchapter) on the claim within no more than 60 
days from the date on which the claim was remanded.
    (b) If, after appropriate notice has been given to the claimant of 
his opportunity to elect review by the district director in accordance 
with this subpart, or to proceed through the administrative appeals 
process, the claimant chooses not to elect review by the district 
director, the claimant's right to review provided by this part shall be 
considered fully satisfied, and no further review of the claim beyond 
that afforded by the appeals process shall be required under section 435 
of the act.

[[Page 859]]



     CHAPTER VII--BENEFITS REVIEW BOARD, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
801             Establishment and operation of the Board....         861
802             Rules of practice and procedure.............         864

[[Page 861]]



PART 801--ESTABLISHMENT AND OPERATION OF THE BOARD--Table of Contents




                              Introductory

Sec.
801.1  Purpose and scope of this part.
801.2  Definitions and use of terms.
801.3  Applicability of this part to 20 CFR part 802.

                Establishment and Authority of the Board

801.101  Establishment.
801.102  Review authority.
801.103  Organizational placement.
801.104  Operational rules.

                          Members of the Board

801.201  Composition of the Board.
801.202  Interim appointments.
801.203  Disqualification of Board members.

                           Action by the Board

801.301  Quorum and votes of the permanent Board; panels within the 
          Board.
801.302  Procedural rules.
801.303  Location of Board's proceedings.
801.304  Business hours.

                             Representation

801.401  Representation before the Board.
801.402  Representation of Board in court proceedings.

    Authority:  5 U.S.C. 301; 30 U.S.C. 901 et seq.; 33 U.S.C. 901 et 
seq.; Reorganization Plan No. 6 of 1950, 15 FR 3174; Secretary of 
Labor's Order 38-72, 38 FR 90, January 3, 1973.

    Source:  52 FR 27290, July 20, 1987, unless otherwise noted.

                              Introductory



Sec. 801.1  Purpose and scope of this part.

    This part 801 describes the establishment and the organizational 
structure of the Benefits Review Board of the Department of Labor, sets 
forth the general rules applicable to operation of the Board, and 
defines terms used in this chapter.



Sec. 801.2  Definitions and use of terms.

    (a) For purposes of this chapter, except where the content clearly 
indicates otherwise, the following definitions apply:
    (1) Acts means the several Acts listed in Secs. 801.102 and 802.101 
of this chapter, as amended and extended, unless otherwise specified.
    (2) Board means the Benefits Review Board established by section 21 
of the LHWCA (33 U.S.C. 921) as described in Sec. 801.101, and as 
provided in this part and Secretary of Labor's Order No. 38-72 (38 FR 
90). Mention in these regulations of the ``permanent Board'' refers to 
the five permanent Board members only.
    (3) Chairman or Chairman of the Board means Chairman of the Benefits 
Review Board. The Chairman of the Board is officially entitled Chief 
Administrative Appeals Judge.
    (4) Secretary means the Secretary of Labor.
    (5) Department means the Department of Labor.
    (6) Judge means an administrative law judge appointed as provided in 
5 U.S.C. 3105 and subpart B of 5 CFR part 930, who is qualified to 
preside at hearings under 5 U.S.C. 557 and is empowered by the Secretary 
to conduct formal hearings whenever necessary in respect of any claim 
for benefits or compensation arising under the Acts.
    (7) Chief Administrative Law Judge means the Chief Administrative 
Law Judge of the Department of Labor.
    (8) Director means the Director of the Office of Workers' 
Compensation Programs of the Department of Labor (hereinafter OWCP).
    (9) Deputy commissioner means a person appointed as provided in 
sections 39 and 40 of the LHWCA or his designee, authorized by the 
Director to make decisions and orders in respect to claims arising under 
the Acts.
    (10) Party or Party in Interest means the Secretary or his designee 
and any person or business entity directly affected by the decision or 
order from which an appeal to the Board is taken.
    (11) Day means calendar day.
    (12) Member means a member of the Benefits Review Board. Unless 
specifically stated otherwise, the word ``member'' shall apply to 
permanent, temporary and interim members. Permanent Board members are 
officially entitled Administrative Appeals Judges. Temporary and interim 
Board members are designated as Acting Administrative Appeals Judges.

[[Page 862]]

    (b) The definitions contained in this part shall not be considered 
to derogate from the definitions of terms in the respective Acts.
    (c) The definitions pertaining to the Acts contained in the several 
parts of chapter VI of this title 20 shall be applicable to this chapter 
as is appropriate.
[52 FR 27290, July 20, 1987, as amended at 52 FR 28640, July 31, 1987]



Sec. 801.3  Applicability of this part to 20 CFR part 802.

    Part 802 of title 20, Code of Federal Regulations, contains the 
rules of practice and procedure of the Board. This part 801, including 
the definitions and usages contained in Sec. 801.2, is applicable to 
part 802 of this chapter as appropriate.

                Establishment and Authority of the Board



Sec. 801.101  Establishment.

    By Pub. L. 92-576, 82 Stat. 1251, in an amendment made to section 21 
of the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 921), 
there was established effective November 26, 1972, a Benefits Review 
Board, which is composed of members appointed by the Secretary of Labor.



Sec. 801.102  Review authority.

    (a) The Board is authorized, as provided in 33 U.S.C. 921(b), as 
amended, to hear and determine appeals raising a substantial question of 
law or fact taken by any party in interest from decisions or orders with 
respect to claims for compensation or benefits arising under the 
following Acts, as amended and extended:
    (1) The Longshore and Harbor Workers' Compensation Act (LHWCA), 33 
U.S.C. 901 et seq.;
    (2) The Defense Base Act (DBA), 42 U.S.C. 1651 et seq.;
    (3) The District of Columbia Workmen's Compensation Act (DCWCA), 36 
D.C. Code 501 et seq. (1973);
    (4) The Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et 
seq.;
    (5) The Nonappropriated Fund Instrumentalities Act (NFIA), 5 U.S.C. 
8171 et seq.;
    (6) Title IV, section 415 and part C of the Federal Mine Safety and 
Health Act of 1977, Public Law 95-164, 91 Stat. 1290 (formerly the 
Federal Coal Mine Health and Safety Act, hereinafter, FCMHSA, of 1969) 
as amended by the Black Lung Benefits Reform Act of 1977, Public Law 92-
239, 92 Stat. 95, the Black Lung Benefits Revenue Act of 1977, Public 
Law 95-227, 92 Stat. 11, and the Black Lung Benefits Amendments of 1981, 
Public Law 97-119, 95 Stat. 1643 (30 U.S.C. 901 et seq.).



Sec. 801.103  Organizational placement.

    As prescribed by the statute, the functions of the Benefits Review 
Board are quasi-judicial in nature and involve review of decisions made 
in the course of the administration of the above statutes by the 
Employment Standards Administration in the Department of Labor. It is 
accordingly found appropriate for organizational purposes to place the 
Board in the Office of the Deputy Secretary and it is hereby established 
in that Office, which shall be responsible for providing necessary 
funds, personnel, supplies, equipment, and records services for the 
Board.



Sec. 801.104  Operational rules.

    The Deputy Secretary of Labor may promulgate such rules and 
regulations as may be necessary or appropriate for effective operation 
of the Benefits Review Board as an independent quasi-judicial body in 
accordance with the provisions of the statute.

                          Members of the Board



Sec. 801.201  Composition of the Board.

    (a) The Board shall be composed of five permanent members appointed 
by the Secretary from among individuals who are especially qualified to 
serve thereon. Each permanent member shall serve an indefinite term 
subject to the discretion of the Secretary.
    (b) The member designated by the Secretary as Chairman of the Board 
shall serve as chief administrative officer of the Board and shall have 
the authority, as delegated by the Secretary, to exercise all 
administrative functions necessary to operate the Board.
    (c) The four remaining members shall be the associate members of the 
Board.

[[Page 863]]

    (d) Upon application of the Chairman of the Board, the Secretary may 
designate up to four Department of Labor administrative law judges to 
serve as temporary Board members in addition to the five permanent Board 
members. Up to four such temporary members may serve at any one time. 
The term of any temporary Board member shall not exceed 1 year from date 
of appointment.



Sec. 801.202  Interim appointments.

    (a) Acting Chairman. In the event that the Chairman of the Board is 
temporarily disabled or unavailable to perform his or her duties as 
prescribed in this chapter VII, he or she shall designate a permanent 
member to serve as Acting Chairman until such time as the Secretary 
designates an Acting Chairman. In the event that the Chairman is 
physically unable to make such designation, the next senior permanent 
member shall serve as Acting Chairman until such time as the Secretary 
of Labor designates an Acting Chairman.
    (b) Interim members. In the event that a permanent member of the 
Board is temporarily unable to carry out his or her responsibilities 
because of disqualification, illness, or for any other reason, the 
Secretary of Labor may, in his or her discretion, appoint a qualified 
individual to serve in the place of such permanent member for the 
duration of that permanent member's inability to serve.



Sec. 801.203  Disqualification of Board Members.

    (a) During the period in which the Chairman or the other members 
serve on the Board, they shall be subject to the Department's 
regulations governing ethics and conduct set forth at 20 CFR part 0.
    (b) Notice of any objection which a party may have to any Board 
member who will participate in the proceeding shall be made by such 
party at the earliest opportunity. The Board member shall consider such 
objection and shall, in his or her discretion, either proceed with the 
case or withdraw.

                           Action by the Board



Sec. 801.301  Quorum and votes of the permanent Board; panels within the Board.

    (a) For the purpose of carrying out its functions under the Acts, 
whenever action is taken by the entire permanent Board sitting en banc, 
three permanent members of the Board shall constitute a quorum, and 
official action of the permanent Board can be taken only on the 
concurring vote of at least three permanent members.
    (b) The Board may delegate any or all of its powers except en banc 
review to panels of three members. Each panel shall consist of at least 
two permanent members. Two members of the panel shall constitute a 
quorum and official panel action can be taken only on the concurring 
vote of two members of the panel.
    (c) A panel decision shall stand unless vacated or modified by the 
concurring vote of at least three permanent members sitting en banc.
    (d) En banc action is not available in cases arising under the 
District of Columbia Workmen's Compensation Act.



Sec. 801.302  Procedural rules.

    Procedural rules for performance by the Board of its review 
functions and for insuring an adequate record for any judicial review of 
its orders, and such amendments to the rules as may be necessary from 
time to time, shall be promulgated by the Deputy Secretary. Such rules 
shall incorporate and implement the procedural requirements of section 
21(b) of the Longshore and Harbor Workers' Compensation Act.



Sec. 801.303  Location of Board's proceedings.

    The Board shall hold its proceedings at 200 Constitution Avenue, 
NW., Room N-5101, Washington, DC 20210, unless for good cause the Board 
orders that proceedings in a particular matter be held in another 
location.
[62 FR 10666, Mar. 7, 1997]



Sec. 801.304  Business hours.

    The office of the Clerk of the Board at Washington, DC shall be open 
from 8:30 a.m.--5:00 p.m. on all days, except

[[Page 864]]

Saturdays, Sundays, and legal holidays, for the purpose of receiving 
notices of appeal, petitions for review, other pleadings, motions, and 
other papers.

                             Representation



Sec. 801.401  Representation before the Board.

    On any issues requiring representation of the Secretary, the 
Director, Office of Workers' Compensation Programs, a deputy 
commissioner, or an administrative law judge before the Board, such 
representation shall be provided by attorneys designated by the 
Solicitor of Labor. Representation of all other persons before the Board 
shall be as provided by the rules of practice and procedure promulgated 
under Sec. 801.302 (see part 802 of this chapter).



Sec. 801.402  Representation of Board in court proceedings.

    Except in proceedings in the Supreme Court of the United States, any 
representation of the Benefits Review Board in court proceedings shall 
be by attorneys designated by the Solicitor of Labor.



PART 802--RULES OF PRACTICE AND PROCEDURE--Table of Contents




                      Subpart A--General Provisions

                              Introductory

Sec.
802.101  Purpose and scope of this part.
802.102  Applicability of part 801 of this chapter.
802.103  Powers of the Board.
802.104  Consolidation; severance.
802.105  Stay of payment pending appeal.

                     Subpart B--Prereview Procedures

                       Commencing Appeal: Parties

802.201  Who may file an appeal.
802.202  Appearances by attorneys and other authorized persons; denial 
          or authority to appear.
802.203  Fees for services.

                            Notice of Appeal

802.204  Place for filing notice of appeal.
802.205  Time for filing.
802.206  Effect of motion for reconsideration on time for appeal.
802.207  When a notice of appeal is considered to have been filed in the 
          office of the Clerk of the Board.
802.208  Contents of notice of appeal.
802.209  Transmittal of record to the Board.

                           Initial Processing

802.210  Acknowledgment of notice of appeal.
802.211  Petition for review.
802.212  Response to petition for review.
802.213  Reply briefs.
802.214  Intervention.
802.215  Additional briefs.
802.216  Service and form of papers.
802.217  Waiver of time limitations for filing.
802.218  Failure to file papers; order to show cause.
802.219  Motions to the Board; orders.
802.220  Party not represented by an attorney; informal procedure.
802.221  Computation of time.

                     Subpart C--Procedure for Review

                           Action by the Board

802.301  Scope of review.
802.302  Docketing of appeals.

                     Oral Argument Before the Board

802.303  Decision; no oral argument.
802.304  Purpose of oral argument.
802.305  Request for oral argument.
802.306  Action on request for oral argument.
802.307  Notice of oral argument.
802.308  Conduct of oral argument.
802.309  Absence of parties.

                  Subpart D--Completion of Board Review

                               Dismissals

802.401  Dismissal by application of party.
802.402  Dismissal by abandonment.

                          Decision of the Board

802.403  Issuance of decisions; service.
802.404  Scope and content of Board decisions.
802.405  Remand.
802.406  Finality of Board decisions.

                             Reconsideration

802.407  Reconsideration of Board decisions.
802.408  Notice of request for reconsideration.
802.409  Grant or denial of request.

                             Judicial Review

802.410  Judicial review of Board decisions.
802.411  Certification of record for judicial review.

    Authority:  5 U.S.C. 301; 30 U.S.C. 901 et seq.; 33 U.S.C. 901 et 
seq.; Reorganization Plan No. 6 of 1950, 15 FR 3174; Secretary of 
Labor's Order 38-72, 38 FR 90, January 3, 1973.

[[Page 865]]


    Source:  52 FR 27292, July 20, 1987, unless otherwise noted.



                      Subpart A--General Provisions

                              Introductory



Sec. 802.101  Purpose and scope of this part.

    (a) The purpose of part 802 is to establish the rules of practice 
and procedure governing the operation of the Benefits Review Board.
    (b) Except as otherwise provided, the rules promulgated in this part 
apply to all appeals taken by any party from decisions or orders with 
respect to claims for compensation or benefits under the following Acts:
    (1) The Longshore and Harbor Workers' Compensation Act (LHWCA), 33 
U.S.C. 901 et seq.;
    (2) The Defense Base Act (DBA), 42 U.S.C. 1651 et seq.;
    (3) The District of Columbia Workmen's Compensation Act (DCWCA), 36 
D.C. Code 501 et seq. (1973);
    (4) The Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et 
seq.;
    (5) The Nonappropriated Fund Instrumentalities Act (NFIA), 5 U.S.C. 
8171 et seq.;
    (6) Title IV, section 415 and part C of the Federal Mine Safety and 
Health Act of 1977, Public Law 95-164, 91 Stat. 1290 (formerly the 
FCMHSA of 1969), as amended by the Black Lung Benefits Reform Act of 
1977, Public Law 95-239, 92 Stat. 95, the Black Lung Benefits Revenue 
Act of 1977, Public Law 95-229, 92 Stat. 11, and the Black Lung Benefits 
Amendments of 1981, Public Law 97-119, 95 Stat. 1643 (30 U.S.C. 901 et 
seq.).



Sec. 802.102  Applicability of part 801 of this chapter.

    Part 801 of this chapter VII sets forth rules of general 
applicability covering the composition, authority, and operation of the 
Benefits Review Board and definitions applicable to this chapter. The 
provisions of part 801 of this chapter are fully applicable to this part 
802.



Sec. 802.103  Powers of the Board.

    (a) Conduct of proceedings. Pursuant to section 27(a) of the LHWCA, 
the Board shall have power to preserve and enforce order during any 
proceedings for determination or adjudication of entitlement to 
compensation or benefits or for liability for payment thereof, and to do 
all things in accordance with law which may be necessary to enable the 
Board to effectively discharge its duties.
    (b) Contumacy. Pursuant to section 27(b) of the LHWCA, if any person 
in proceedings before the Board disobeys or resists any lawful order or 
process, or misbehaves during a hearing or so near the place thereof as 
to obstruct the same, the Board shall certify the facts to the Federal 
district court having jurisdiction in the place in which it is sitting 
(or to the U.S. District Court for the District of Columbia if it is 
sitting in the District) which shall thereupon in a summary manner hear 
the evidence as to the acts complained of, and if the evidence so 
warrants, punish such person in the same manner and to the same extent 
as for a contempt committed before the court, or commit such person upon 
the same conditions as if the doing of the forbidden act had occurred 
with reference to the process or in the presence of the court.



Sec. 802.104  Consolidation; severance.

    (a) Cases may, in the sole discretion of the Board, be consolidated 
for purposes of an appeal upon the motion of any party or upon the 
Board's own motion where there exist common parties, common questions of 
law or fact or both, or in such other circumstances as justice and the 
administration of the Acts require.
    (b) Upon its own motion, or upon motion of any party, the Board may, 
for good cause, order any proceeding severed with respect to some or all 
issues or parties.



Sec. 802.105  Stay of payment pending appeal.

    (a) As provided in section 14(f) of the LHWCA and sections 415 and 
422 of the Black Lung Benefits Act, the payment of the amounts required 
by an award of compensation or benefits shall not be stayed or in any 
way delayed beyond ten days after it becomes due pending final decision 
in any proceeding before the Board unless so ordered by the

[[Page 866]]

Board. No stay shall be issued unless irreparable injury would otherwise 
ensue to the employer, coal mine operator or insurance carrier. Any 
order of the Board permitting any stay shall contain a specific finding, 
based upon evidence submitted to the Board and identified by reference 
thereto, that irreparable injury would result to such employer, operator 
or insurance carrier, and specify the nature and extent of the injury.
    (b) When circumstances require, the Board, in its discretion, may 
issue a temporary order not to exceed 30 days granting a motion for stay 
of payment prior to the expiration of the ten-day period allowed for 
filing responses to motions pursuant to Sec. 802.219(e). Following 
receipt of a response to the motion or expiration of the response time 
provided in Sec. 802.219(e), the Board will issue a subsequent order 
ruling on the motion for stay of payment.
[52 FR 27292, July 20, 1987, as amended at 53 FR 16519, May 9, 1988]



                     Subpart B--Prereview Procedures

                       Commencing Appeal: Parties



Sec. 802.201  Who may file an appeal.

    (a) A party. (1) Any party or party-in-interest adversely affected 
or aggrieved by a decision or order issued pursuant to one of the Acts 
over which the Board has appellate jurisdiction may appeal a decision or 
order of an administrative law judge or deputy commissioner to the Board 
by filing a notice of appeal pursuant to this subpart. (See 
Sec. 802.205(b) and (c) for exceptions to this general rule.) A party 
who files a notice of appeal shall be deemed the petitioner. The 
Director, OWCP, when acting as a representative of the Special Fund 
established under the Longshore and Harbor Workers' Compensation Act or 
the Black Lung Disability Trust Fund established by the Black Lung 
Benefits Act, or, when appealing a decision or order which affects the 
administration of one of the Acts, shall be considered a party adversely 
affected.
    (2) When a decision or order is favorable to a party (i.e., the 
prevailing party), the prevailing party may file a cross-appeal pursuant 
to Sec. 802.205(b) to challenge any adverse findings of fact or 
conclusions of law in the same proceeding.
    (b) Representative parties. In the event that a party has not 
attained the age of 18, is not mentally competent, or is physically 
unable to file and pursue or defend an appeal, the Board may permit any 
legally appointed guardian, committee, or other appropriate 
representative to file and pursue or defend the appeal, or it may in its 
discretion appoint such representative for purposes of the appeal. The 
Board may require any legally appointed representative to submit 
evidence of that person's authority.



Sec. 802.202  Appearances by attorneys and other authorized persons; denial or authority to appear.

    (a) Appearances. Any party or intervenor or any representative duly 
authorized pursuant to Sec. 802.201(b) may appear before and/or submit 
written argument to the Board by attorney or any other person, including 
any representative of an employee organization, duly authorized pursuant 
to paragraph (d)(2) of this section.
    (b) Any individual petitioner or respondent or his duly authorized 
representative pursuant to Sec. 802.201(b) or an officer of any 
corporate party or a member of any partnership or joint venture which is 
a party may participate in the appeal on his or her own behalf, or on 
behalf of such business entity.
    (c) For each instance in which appearance before the Board is made 
by an attorney or duly authorized person other than the party or his 
legal guardian, committee, or representative, there shall be filed with 
the Board a notice of appearance. Any attorney or other duly authorized 
person of record who intends to withdraw from representation shall file 
prior written notice of intent to withdraw from representation of a 
party or of substitution of counsel or other representative.
    (d) Qualifications--(1) Attorneys. An attorney at law who is 
admitted to practice before the Federal courts or before the highest 
court of any State, the District of Columbia, or any territory or 
commonwealth of the United States, may practice before the Board

[[Page 867]]

unless he or she has been disqualified from representing claimants under 
the Act pursuant to 33 U.S.C. 931(b)(2)(C), or unless authority to 
appear has been denied pursuant to Sec. 802.202(e)(1) and (3). An 
attorney's own representation that he or she is in good standing before 
any of such courts shall be sufficient proof thereof, unless otherwise 
ordered by the Board.
    (2) Persons not attorneys. Any person who is not an attorney at law 
may be admitted to appear in a representative capacity unless he or she 
has been disqualified from representing claimants under the Act pursuant 
to 33 U.S.C. 931(b)(2)(C). An application by a person not an attorney at 
law for admission to appear in a proceeding shall be submitted in 
writing to the Board at the time such person's appearance is entered. 
The application shall state such person's name, address, telephone 
number, general education, any special training or experience in claims 
representation, and such person's relationship, if any, to the party 
being represented. The Board may, at any time, make further inquiry as 
to the qualification or ability of such person to render assistance. In 
the event of a failure to make application for admission to appear, the 
Board shall issue an order to show cause why admission to appear should 
not be denied. Admission to appear in a particular case shall not be 
deemed a blanket authorization to appear in other cases.
    (e) Denial of authority to appear--(1) Attorneys. The Board may deny 
the privilege of appearing to any attorney, within applicable statutory 
constraints, e.g., 5 U.S.C. 555, who has been disbarred or suspended 
from the practice of law; who has surrendered his or her license while 
under investigation or under threat of disciplinary action; or who, 
after notice of an opportunity for hearing in the matter is found by the 
Board to have engaged in any conduct which would result in the loss of 
his or her license. No provision hereof shall apply to any attorney who 
appears on his or her own behalf.
    (2) Persons not attorneys. The Board may deny the privilege of 
appearing to any person who, in the Board's judgment, lacks sufficient 
qualification or ability to render assistance. No provision hereof shall 
apply to any person who appears on his or her own behalf.
    (3) Denial of authority to appear may be considered, after notice of 
and opportunity for a hearing, by the panel (constituted pursuant to 
Sec. 801.301) which is assigned to decide the appeal in which the 
attorney or other person has entered an appearance. If such proceeding 
reveals facts suggesting that one of the circumstances described in 33 
U.S.C. 931(b)(2)(C) exists, the Board shall refer that information to 
the Director, OWCP, for further proceedings pursuant to 33 U.S.C. 
931(b)(2)(C) and 907(j). An attorney or other person may appeal a 
panel's decision to deny authority to appear to the entire permanent 
Board sitting en banc.
[52 FR 27292, July 20, 1987, as amended at 53 FR 16519, May 9, 1988]



Sec. 802.203  Fees for services.

    (a) No fee for services rendered on behalf of a claimant in the 
successful pursuit or successful defense of an appeal shall be valid 
unless approved pursuant to 33 U.S.C. 928, as amended.
    (b) All fees for services rendered in the successful pursuit or 
successful defense of an appeal on behalf of a claimant shall be subject 
to the provisions and prohibitions contained in 33 U.S.C. 928, as 
amended.
    (c) Within 60 days of the issuance of a decision or non-
interlocutory order by the Board, counsel or, where appropriate, 
representative for any claimant who has prevailed on appeal before the 
Board may file an application with the Board for a fee. Where the Board 
remands the case and the administrative law judge on remand issues an 
award, a fee petition may be filed within 60 days of the decision on 
remand. In the event that a claimant who was unsuccessful before the 
Board prevails on appeal to the court of appeals, his or her 
representative may within 60 days of issuance of the court's judgment 
file a fee application with the Board for services performed before the 
Board.
    (d) A fee application shall include only time spent on services 
performed while the appeal was pending before the Board and shall be 
complete in all respects, containing all of the following specific 
information:

[[Page 868]]

    (1) A complete statement of the extent and character of the 
necessary work done;
    (2) The professional status of each person for whom a fee is claimed 
who performed services on behalf of the claimant (if such professional 
status is other than attorney, a definition of the professional status 
of such individual must be included in the fee petition, including a 
statment of that individual's professional training, education and 
experience) and a statement that the attorney was a member in good 
standing of a state bar at the time the services were performed;
    (3) The number of hours, in \1/4\ hour increments, devoted by each 
person who performed services on behalf of the claimant and the dates on 
which such services were performed in each category of work;
    (4) The normal billing rate for each person who performed services 
on behalf of the claimant. The rate awarded by the Board shall be based 
on what is reasonable and customary in the area where the services were 
rendered for a person of that particular professional status.
    (e) Any fee approved shall be reasonably commensurate with the 
necessary work done and shall take into account the quality of the 
representation, the complexity of the legal issues involved, the amount 
of benefits awarded, and, when the fee is to be assessed against the 
claimant, shall also take into account the financial circumstances of 
the claimant. A fee shall not necessarily be computed by multiplying 
time devoted to work by an hourly rate.
    (f) No contract pertaining to the amount of a fee shall be 
recognized.
    (g) A fee application shall be served on all other parties and 
accompanied by a certificate of service. The Board will not take action 
on the fee application until such service is effected. Any party may 
respond to the application within 10 days of receipt of the application. 
The response shall be filed with the Board and served on all other 
parties.

                            Notice of Appeal



Sec. 802.204  Place for filing notice of appeal.

    Any notice of appeal shall be sent by mail to the U.S. Department of 
Labor, Benefits Review Board, P.O. Box 37601, Washington, DC 20013-7601, 
or otherwise presented to the Clerk of the Board at 200 Constitution 
Avenue, NW., Room S-5220, Washington, DC 20210. A copy shall be served 
on the deputy commissioner who filed the decision or order being 
appealed and on all other parties by the party who files a notice of 
appeal. Proof of service of the notice of appeal on the deputy 
commissioner and other parties shall be included with the notice of 
appeal.
[52 FR 27292, July 20, 1987, as amended at 56 FR 54538, Oct. 22, 1991; 
62 FR 10666, Mar. 7, 1997]



Sec. 802.205  Time for filing.

    (a) A notice of appeal, other than a cross-appeal, must be filed 
within 30 days from the date upon which a decision or order has been 
filed in the Office of the Deputy Commissioner pursuant to section 19(e) 
of the LHWCA or in such other office as may be established in the future 
(see Secs. 702.349 and 725.478 of this title).
    (b) If a timely notice of appeal is filed by a party, any other 
party may initiate a cross-appeal by filing a notice of appeal within 14 
days of the date on which the first notice of appeal was filed, or 
within the time prescribed by paragraph (a) of this section, whichever 
period last expires. In the event that such other party was not properly 
served with the first notice of appeal, such party may initiate a cross-
appeal by filing a notice of appeal within 14 days of the date that 
service is effected.
    (c) Failure to file within the period specified in paragraph (a) or 
(b) of this section (whichever is applicable) shall foreclose all rights 
to review by the Board with respect to the case or matter in question. 
Any untimely appeal will be summarily dismissed by the Board for lack of 
jurisdiction.

[[Page 869]]



Sec. 802.206  Effect of motion for reconsideration on time for appeal.

    (a) A timely motion for reconsideration of a decision or order of an 
administrative law judge or deputy commissioner shall suspend the 
running of the time for filing a notice of appeal.
    (b)(1) In a case involving a claim filed under the Longshore and 
Harbor Workers' Compensation Act or its extensions (see 
Sec. 802.101(b)(1)-(5)), a timely motion for reconsideration for 
purposes of paragraph (a) of this section is one which is filed not 
later than 10 days from the date the decision or order was filed in the 
Office of the Deputy Commissioner.
    (2) In a case involving a claim filed under title IV of the Federal 
Mine Safety and Health Act, as amended (see Sec. 802.101(b)(6)), a 
timely motion for reconsideration for purposes of paragraph (a) of this 
section is one which is filed not later than 30 days from the date the 
decision or order was served on all parties by the administrative law 
judge and considered filed in the Office of the Deputy Commissioner (see 
Secs. 725.478 and 725.479(b), (c) of this title).
    (c) If the motion for reconsideration is sent by mail and the fixing 
of the date of delivery as the date of filing would result in a loss or 
impairment of reconsideration rights, it will be considered to have been 
filed as of the date of mailing. The date appearing on the U.S. Postal 
Service postmark (when available and legible) shall be prima facie 
evidence of the date of mailing. If there is no such postmark or it is 
not legible, other evidence such as, but not limited to, certified mail 
receipts, certificates of service and affidavits may also be used to 
establish the mailing date.
    (d) If a motion for reconsideration is granted, the full time for 
filing an appeal commences on the date the subsequent decision or order 
on reconsideration is filed as provided in Sec. 802.205.
    (e) If a motion for reconsideration is denied, the full time for 
filing an appeal commences on the date the order denying reconsideration 
is filed as provided in Sec. 802.205.
    (f) If a timely motion for reconsideration of a decision or order of 
an administrative law judge or deputy commissioner is filed, any appeal 
to the Board, whether filed prior to or subsequent to the filing of the 
timely motion for reconsideration, shall be dismissed without prejudice 
as premature. Following decision by the administrative law judge or 
deputy commissioner pursuant to either paragraph (d) or (e) of this 
section, a new notice of appeal shall be filed with the Clerk of the 
Board by any party who wishes to appeal. During the pendency of an 
appeal to the Board, any party having knowledge that a motion for 
reconsideration of a decision or order of an administrative law judge or 
deputy commissioner has been filed shall notify the Board of such 
filing.



Sec. 802.207  When a notice of appeal is considered to have been filed in the office of the Clerk of the Board.

    (a) Date of receipt. (1) Except as otherwise provided in this 
section, a notice of appeal is considered to have been filed only as of 
the date it is received in the office of the Clerk of the Board.
    (2) Notices of appeal submitted to any other agency or subdivision 
of the Department of Labor or of the U.S. Government or any State 
government shall be promptly forwarded to the office of the Clerk of the 
Board. The notice shall be considered filed with the Clerk of the Board 
as of the date it was received by the other governmental unit if the 
Board finds that it is in the interest of justice to do so.
    (b) Date of mailing. If the notice of appeal is sent by mail and the 
fixing of the date of delivery as the date of filing would result in a 
loss or impairment of appeal rights, it will be considered to have been 
filed as of the date of mailing. The date appearing on the U.S. Postal 
Service postmark (when available and legible) shall be prima facie 
evidence of the date of mailing. If there is no such postmark or it is 
not legible, other evidence, such as, but not limited to, certified mail 
receipts, certificate of service and affidavits, may be used to 
establish the mailing date.



Sec. 802.208  Contents of notice of appeal.

    (a) A notice of appeal shall contain the following information:
    (1) The full name and address of the pettioner;

[[Page 870]]

    (2) The full name of the injured, disabled, or deceased employee;
    (3) The full names and addresses of all other parties, including, 
among others, beneficiaries, employers, coal mine operators, and 
insurance carriers where appropriate;
    (4) The case file number which appears on the decision or order of 
the administrative law judge;
    (5) The claimant's OWCP file number;
    (6) The date of filing of the decision or order being appealed;
    (7) Whether a motion for reconsideration of the decision or order of 
the administrative law judge has been filed by any party, the date such 
motion was filed, and whether the administrative law judge has acted on 
such motion for reconsideration (see Sec. 802.206);
    (8) The name and address of the attorney or other person, if any, 
who is representing the petitioner.
    (b) Paragraph (a) of this section notwithstanding, any written 
communication which reasonably permits identification of the decision 
from which an appeal is sought and the parties affected or aggrieved 
thereby, shall be sufficient notice for purposes of Sec. 802.205.
    (c) In the event that identification of the case is not possible 
from the information submitted, the Clerk of the Board shall so notify 
the petitioner and shall give the petitioner a reasonable time to 
produce sufficient information to permit identification of the case. For 
purposes of Sec. 802.205, the notice shall be deemed to have been filed 
as of the date the insufficient information was received.



Sec. 802.209  Transmittal of record to the Board.

    Upon receipt of a copy of the notice of appeal or upon request of 
the Board, the deputy commissioner or other office having custody of 
such record shall immediately forward to the Clerk of the Board the 
official record of the case, which record includes the transcript or 
transcripts of all formal proceedings with exhibits, all decisions and 
orders rendered in the case.

                           Initial Processing



Sec. 802.210  Acknowledgment of notice of appeal.

    Upon receipt by the Board of a notice of appeal, the Clerk of the 
Board shall as expeditiously as possible notify the petitioner and all 
other parties and the Solicitor of Labor, in writing, that a notice of 
appeal has been filed.



Sec. 802.211  Petition for review.

    (a) Within 30 days after the receipt of an acknowledgment of a 
notice of appeal issued pursuant to Sec. 802.210, the petitioner shall 
submit a petition for review to the Board which petition lists the 
specific issues to be considered on appeal.
    (b) Each petition for review shall be accompanied by a supporting 
brief, memorandum of law or other statement which: Specifically states 
the issues to be considered by the Board; presents, with appropriate 
headings, an argument with respect to each issue presented with 
references to transcripts, pieces of evidence and other parts of the 
record to which the petitioner wishes the Board to refer; a short 
conclusion stating the precise result the petitioner seeks on each issue 
and any authorities upon which the petition relies to support such 
proposed result. The Longshore Desk Book and Black Lung Desk Book are 
not intended as final legal authorities and should not be cited or 
relied upon as such.
    (c) Copies of the petition for review and accompanying documents 
must be served upon all parties and the Solicitor of Labor.
    (d) Failure to submit a petition for review and brief within the 30-
day period or to comply with any part of this section may, in the 
discretion of the Board, cause the appeal to be deemed abandoned (see 
Sec. 802.402).
    (e) When a party appears pro se the Board may, in its discretion, 
waive formal compliance with the requirements of this section and may, 
depending upon the particular circumstances, prescribe an alternate 
method of furnishing such information as may be necessary for the Board 
to decide the merits of any such appeal.

[[Page 871]]



Sec. 802.212  Response to petition for review.

    (a) Within 30 days after the receipt of a petition for review, each 
party upon whom it was served may submit to the Board a brief, 
memorandum, or other statement in response to it.
    (b) Arguments in response briefs shall be limited to those which 
respond to arguments raised in petitioner's brief and to those in 
support of the decision below. Other arguments will not be considered by 
the Board (see Sec. 802.205(b)).



Sec. 802.213  Reply briefs.

    (a) Within 20 days after the receipt of a brief, memorandum, or 
statement submitted in response to the petition for review pursuant to 
Sec. 802.212, any party upon whom it was served may file a brief, 
memorandum, or other statement in reply to it.
    (b) Arguments in reply briefs shall be limited to those which reply 
to arguments made in the response brief. Any other arguments in a reply 
brief will not be considered by the Board.



Sec. 802.214  Intervention.

    (a) If a person or legal entity shows in a written petition to 
intervene that his, her, or its rights are affected by any proceeding 
before the Board, the Board may permit that person or legal entity to 
intervene in the proceeding and to participate within limits prescribed 
by the Board.
    (b) The petition to intervene shall state precisely:
    (1) The rights affected, and
    (2) The nature of any argument the person or legal entity intends to 
make.



Sec. 802.215  Additional briefs.

    Additional briefs may be filed or ordered in the discretion of the 
Board and shall be submitted within time limits specified by the Board.



Sec. 802.216  Service and form of papers.

    (a) All papers filed with the Board, including notices of appeal, 
petitions for review, briefs and motions, shall be secured at the top 
and shall have a caption, title, signature of the party (or his attorney 
or other representative), date of signature, and certificate of service.
    (b) For each paper filed with the Board, the original and two 
legible copies shall be submitted.
    (c) A copy of any paper filed with the Board shall be served on each 
party and the Solicitor of Labor, by the party submitting the paper.
    (d) Any paper required to be given or served to or by the Board or 
any party shall be served by mail or otherwise presented. All such 
papers served shall be accompanied by a certificate of service.
    (e) All papers (exclusive of documentary evidence) submitted to the 
Benefits Review Board shall conform to standard letter dimensions 
(8.5x11 inches).



Sec. 802.217  Waiver of time limitations for filing.

    (a) The time periods specified for submitting papers described in 
this part, except that for submitting a notice of appeal, may be 
enlarged for a reasonable period when in the judgment of the Board an 
enlargement is warranted.
    (b) Any request for an enlargement of time pursuant to this section 
shall be directed to the Clerk of the Board and must be received by the 
Clerk on or prior to the date on which the paper is due.
    (c) Any request for an enlargement of time pursuant to this section 
shall be submitted in writing in the form of a motion, shall specify the 
reasons for the request, and shall specify the date to which an 
enlargement of time is requested.
    (d) Absent exceptional circumstances, no more than one enlargement 
of time shall be granted to each party.
    (e) Absent a timely request for an enlargement of time pursuant to 
this section and the Board's granting that request, any paper submitted 
to the Board outside the applicable time period specified in this part 
shall be accompanied by a separate motion stating the reasons therefor 
and requesting that the Board accept the paper although filed out of 
time.

[[Page 872]]

    (f) When a paper filed out of time is accepted by the Board, the 
time for filing a response shall begin to run from the date of a party's 
receipt of the Board's order disposing of the motion referred to in 
paragraph (e) of this section.



Sec. 802.218  Failure to file papers; order to show cause.

    (a) Failure to file any paper when due pursuant to this part, may, 
in the discretion of the Board, constitute a waiver of the right to 
further participation in the proceedings.
    (b) When a petition for review and brief has not been submitted to 
the Board within the time limitation prescribed by Sec. 802.211, or 
within an enlarged time limitation granted pursuant to Sec. 802.217, the 
petitioner shall be ordered to show cause to the Board why his or her 
appeal should not be dismissed pursuant to Sec. 802.402.



Sec. 802.219  Motions to the Board; orders.

    (a) An application to the Board for an order shall be by motion in 
writing. A motion shall state with particularity the grounds therefor 
and shall set forth the relief or order sought.
    (b) A motion shall be a separate document and shall not be 
incorporated in the text of any other paper filed with the Board, except 
for a statement in support of the motion. If this paragraph is not 
complied with, the Board will not consider and dispose of the motion.
    (c) If there is no objection to a motion in whole or in part by 
another party to the case, the absence of an objection shall be stated 
on the motion.
    (d) The rules applicable to service and form of papers, 
Sec. 802.216, shall apply to all motions.
    (e) Within 10 days of the receipt of a copy of a motion, a party may 
file a written response with the Board.
    (f) As expeditiously as possible following receipt of a response to 
a motion or expiration of the response time provided in paragraph (e) of 
this section, the Board shall issue a dispositive order.
    (g) Orders granted by Clerk. The Clerk of the Board may enter orders 
on behalf of the Board in procedural matters, including but not limited 
to:
    (1) First motions for extensions of time for filing briefs and any 
papers other than notices of appeal or cross-appeal;
    (2) Motions for voluntary dismissals of appeals;
    (3) Orders to show cause why appeals should not be dismissed for 
failure to timely file a petition for review and brief (see 
Sec. 802.218(b)); and
    (4) Unopposed motions which are ordinarily granted as of course, 
except that the Clerk may, in his or her discretion, refer such motions 
for disposition to a motions panel as provided by paragraph (h) of this 
section.
    (h) All other motions. All other motions will be referred for 
disposition to a panel of three members constituted pursuant to 
Sec. 801.301. Any member may request that any motion be considered by 
the entire permanent Board en banc except as provided in 
Sec. 801.301(d).
    (i) Reconsideration of orders. Any party adversely effected by any 
interlocutory order issued under paragraph (g) or (h) may file a motion 
to reconsider, vacate or modify the order within 10 days from its 
filing, stating the grounds for such request. Any motion for 
reconsideration, vacation or modification of an interlocutory order 
shall be referred to a three-member panel that may include any member 
who previously acted on the matter. Suggestions for en banc 
reconsideration of interlocutory orders shall not be accepted. 
Reconsideration of all other orders will be treated under Sec. 802.407 
of this part.



Sec. 802.220  Party not represented by an attorney; informal procedure.

    A party to an appeal who is not represented by an attorney shall 
comply with the procedural requirements contained in this part, except 
as otherwise specifically provided in Sec. 802.211(e). In its 
discretion, the Board may prescribe additional informal procedures to be 
followed by such party.



Sec. 802.221  Computation of time.

    (a) In computing any period of time prescribed or allowed by these 
rules, by direction of the Board, or by any applicable statute which 
does not provide otherwise, the day from which the designated period of 
time begins to run

[[Page 873]]

shall not be included. The last day of the period so computed shall be 
included, unless it is a Saturday, Sunday, or legal holiday, in which 
event the period runs until the end of the next day which is not a 
Saturday, Sunday, or legal holiday.
    (b) Whenever a paper is served on the Board or on any party by mail, 
paragraph (a) of this section will be deemed complied with if the 
envelope containing the paper is postmarked by the U.S. Postal Service 
within the time period allowed, computed as in paragraph (a) of this 
section. If there is no such postmark, or it is not legible, other 
evidence, such as, but not limited to, certified mail receipts, 
certificate of service and affidavits, may be used to establish the 
mailing date.
    (c) A waiver of the time limitations for filing a paper, other than 
a notice of appeal, may be requested by proper motion filed in 
accordance with Secs. 802.217 and 802.219.



                     Subpart C--Procedure for Review

                           Action by the Board



Sec. 802.301  Scope of review.

    (a) The Benefits Review Board is not empowered to engage in a de 
novo proceeding or unrestricted review of a case brought before it. The 
Board is authorized to review the findings of fact and conclusions of 
law on which the decision or order appealed from was based. Such 
findings of fact and conclusions of law may be set aside only if they 
are not, in the judgment of the Board, supported by substantial evidence 
in the record considered as a whole or in accordance with law.
    (b) Parties shall not submit new evidence to the Board. Any evidence 
submitted by a party which is not part of the record developed at the 
hearing before the administrative law judge will be returned without 
being considered by the Board.
    (c) Any party who considers new evidence necessary to the 
adjudication of the claim may apply for modification pursuant to section 
22 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 922. 
A party who files a petition for modification shall promptly notify the 
Board of such filing. Upon receipt of such notification, the Board shall 
dismiss the case without prejudice. Should the petition for modification 
be declined, the petitioner may file a request for reinstatement of his 
or her appeal with the Board within 30 days of the date the petition is 
declined. Should the petition for modification be accepted, any party 
adversely affected by the decision or order granting or denying 
modification may file a new appeal with the Board within 30 days of the 
date the decision or order on modification is filed.
[52 FR 27292, July 20, 1987, as amended at 53 FR 16519, May 9, 1988]



Sec. 802.302  Docketing of appeals.

    (a) Maintenance of dockets. A docket of all proceedings shall be 
maintained by the Board. Each proceeding shall be assigned a number in 
chronological order upon the date on which a notice of appeal is 
received. Correspondence or further applications in connection with any 
pending case shall refer to the docket number of that case.
    (b) Inspection of docket; publication of decision. The docket of the 
Board shall be open to public inspection. The Board shall publish its 
decisions in a form which is readily available for inspection, and shall 
allow the public to inspect its decisions at the permanent location of 
the Board.

                     Oral Argument Before the Board



Sec. 802.303  Decision; no oral argument.

    (a) In the event that no oral argument is ordered pursuant to 
Sec. 802.306, the Board shall proceed to review the record of the case 
as expeditiously as possible after all briefs, supporting statements, 
and other pertinent documents have been received.
    (b) Each case shall be considered in the order in which it becomes 
ready for decision, regardless of docket number, although for good cause 
shown, upon the filing of a motion to expedite by a party, the Board may 
advance the order in which a particular case is to be considered.
    (c) The Board may advance an appeal on the docket on its own motion 
if the interests of justice would be served by so doing.

[[Page 874]]



Sec. 802.304  Purpose of oral argument.

    Oral argument may be held by the Board in any case:
    (a) When there is a novel issue not previously considered by the 
Board; or
    (b) When in the interests of justice oral argument will serve to 
assist the Board in carrying out the intent of any of the Acts; or
    (c) To resolve conflicting decisions by administrative law judges on 
a substantial question of law.



Sec. 802.305  Request for oral argument.

    (a) During the pendency of an appeal, but not later than the 
expiration of 20 days from the date of receipt of the response brief 
provided by Sec. 802.212, any party may request oral argument. The Board 
on its own motion may order oral argument at any time.
    (b) A request for oral argument shall be submitted in the form of a 
motion, specifying the issues to be argued and justifying the need for 
oral argument (see Sec. 802.219).
    (c) The party requesting oral argument shall set forth in the motion 
suggested dates and alternate cities convenient to the parties when and 
where they would be available for oral argument.



Sec. 802.306  Action on request for oral argument.

    As expeditiously as possible after the date upon which a request for 
oral argument is received, the Board shall determine whether the request 
shall be granted or denied.



Sec. 802.307  Notice of oral argument.

    (a) In cases where a request for oral argument has been approved or 
where oral argument has been ordered, the Board shall give all parties a 
minimum of 30 days' notice, in writing, by mail, of the scope of 
argument and of the time when, and place where, oral argument will be 
held.
    (b) Once oral argument has been scheduled by the Board, continuances 
shall not be granted except for good cause shown by a party, such as in 
cases of extreme hardship or where attendance of a party or his or her 
representative is mandated at a previously scheduled judicial 
proceeding. Unless the ground for the request arises thereafter, 
requests for continuances must be received by the Board at least 15 days 
before the scheduled date of oral argument, must be served upon the 
other parties and must specify good cause why the requesting party 
cannot be available for oral argument.
    (c) The Board may cancel or reschedule oral argument on its own 
motion at any time.



Sec. 802.308  Conduct of oral argument.

    (a) Oral argument shall be held in Washington, DC, unless the Board 
orders otherwise, and shall be conducted at a time reasonably convenient 
to the parties. For good cause shown, the presiding judge of the panel 
may, in his or her discretion, postpone an oral argument to a more 
convenient time.
    (b) The proceedings shall be conducted under the supervision of the 
Chairman or, if the Chairman is not on the panel, the senior judge, who 
shall regulate all procedural matters arising during the course of the 
argument.
    (c) Within the discretion of the Board, oral argument shall be open 
to the public and may be presented by any party, representative, or duly 
authorized attorney. Presentation of oral argument may be denied by the 
Board to a party who has not significantly participated in the appeal 
prior to oral argument.
    (d) The Board shall determine the scope of any oral argument 
presented and shall so inform the parties in its notice scheduling oral 
argument pursuant to Sec. 802.307.
    (e) The Board in its discretion shall determine the amount of time 
allotted to each party for argument and rebuttal.



Sec. 802.309  Absence of parties.

    The unexcused absence of a party or his or her authorized 
representative at the time and place set for argument shall not be the 
occasion for delay of the proceeding. In such event, argument on behalf 
of other parties may be heard and the case shall be regarded as 
submitted on the record by the absent party. The presiding judge may, 
with the consent of the parties present, cancel the oral argument and 
treat the appeal as submitted on the written record.

[[Page 875]]



                  Subpart D--Completion of Board Review

                               Dismissals



Sec. 802.401  Dismissal by application of party.

    (a) At any time prior to the issuance of a decision by the Board, 
the petitioner may move that the appeal be dismissed. If granted, such 
motion for dismissal shall be granted with prejudice to the petitioner.
    (b) At any time prior to the issuance of a decision by the Board, 
any party or representative may move that the appeal be dismissed.



Sec. 802.402  Dismissal by abandonment.

    (a) Upon motion by any party or representative or upon the Board's 
own motion, an appeal may be dismissed upon its abandonment by the party 
or parties who filed the appeal. Within the discretion of the Board, a 
party may be deemed to have abandoned an appeal if neither the party nor 
his representative participates significantly in the review proceedings.
    (b) An appeal may be dismissed on the death of a party only if the 
record affirmatively shows that there is no person who wishes to 
continue the action and whose rights may be prejudiced by dismissal.

                          Decision of the Board



Sec. 802.403  Issuance of decisions; service.

    (a) The Board shall issue written decisions as expeditiously as 
possible after the completion of review proceedings before the Board. 
The transmittal of the decision of the Board shall indicate the 
availability of judicial review of the decision under section 21(c) of 
the LHWCA when appropriate.
    (b) The original of the decision shall be filed with the Clerk of 
the Board. A copy of the Board's decision shall be sent by certified 
mail or otherwise presented to all parties to the appeal and the 
Director. The record on appeal, together with a transcript of any oral 
proceedings, any briefs or other papers filed with the Board, and a copy 
of the decision shall be returned to the appropriate deputy commissioner 
for filing.
    (c) Proof of service of Board decisions shall be certified by the 
Clerk of the Board or by another employee in the office of the Clerk of 
the Board who is authorized to certify proof of service.



Sec. 802.404  Scope and content of Board decisions.

    (a) In its decision the Board shall affirm, modify, vacate or 
reverse the decision or order appealed from, and may remand the case for 
action or proceedings consistent with the decision of the Board. The 
consent of the parties shall not be a prerequisite to a remand ordered 
by the Board.
    (b) In appropriate cases, such as where the issues raised on appeal 
have been thoroughly discussed and disposed of in prior cases by the 
Board or the courts, or where the findings of fact and conclusions of 
law are both correct and adequately discussed, the Board in its 
discretion may issue a brief, summary decision in writing, disposing of 
the appeal.
    (c) In cases which cannot be disposed of as in paragraph (b) of this 
section, a full, written decision discussing the issues and applicable 
law shall be issued.



Sec. 802.405  Remand.

    (a) By the Board. Where a case is remanded, such additional 
proceedings shall be initiated and such other action shall be taken as 
is directed by the Board.
    (b) By a court. Where a case has been remanded by a court, the Board 
may proceed in accordance with the court's mandate to issue a decision 
or it may in turn remand the case to an administrative law judge or 
deputy commissioner with instructions to take such action as is ordered 
by the court and any additional necessary action.



Sec. 802.406  Finality of Board decisions.

    A decision rendered by the Board pursuant to this subpart shall 
become final 60 days after the issuance of such decision unless a 
written petition for review praying that the order be modified or set 
aside, pursuant to section 21(c) of the LHWCA, is filed in the 
appropriate U.S. court of appeals prior to the expiration of the 60-day 
period

[[Page 876]]

herein described, or unless a timely request for reconsideration by the 
Board has been filed as provided in Sec. 802.407. If a timely request 
for reconsideration has been filed, the 60-day period for filing such 
petition for review will run from the issuance of the Board's decision 
on reconsideration.

                             Reconsideration



Sec. 802.407  Reconsideration of Board decisions.

    (a) Any party-in-interest may, within 30 days from the filing of a 
decision or non-interlocutory order by a panel or the Board pursuant to 
Sec. 802.403(b), request reconsideration of such decision by those 
members who rendered the decision. The panel of members who heard and 
decided the appeal will rule on the motion for reconsideration. If any 
member of the original panel is unavailable, the Chariman shall 
designate a new panel member.
    (b) Except as provided in Sec. 801.301(d), a party may, within 30 
days from the filing of a decision or non-interlocutory order by a panel 
of the Board pursuant to Sec. 802.403(b), suggest the appropriateness of 
reconsideration by the permanent members sitting en banc. Such 
suggestion, however, must accompany a motion for reconsideration 
directed to the panel which rendered the decision. The suggestion for 
reconsideration en banc must be clearly marked as such.
    (c) Except as provided in Sec. 801.301(d), even where no party has 
suggested reconsideration en banc, any permanent member may petition the 
permanent Board for reconsideration en banc of a panel decision.
    (d) Reconsideration en banc shall be granted upon the affirmative 
vote of the majority of permanent members of the Board. A panel decision 
shall stand unless vacated or modified by the concurring vote of at 
least three permanent members.



Sec. 802.408  Notice of request for reconsideration.

    (a) In the event that a party requests reconsideration of a decision 
or order, he or she shall do so in writing, in the form of a motion, 
stating the supporting rationale for the request, and include any 
material pertinent to the request.
    (b) The request shall be sent by mail, or otherwise presented, to 
the Clerk of the Board. Copies shall be served on all other parties.



Sec. 802.409  Grant or denial of request.

    All requests for reconsideration shall be reviewed by the Board and 
shall be granted or denied in the discretion of the Board.

                             Judicial Review



Sec. 802.410  Judicial review of Board decisions.

    (a) Within 60 days after a decision by the Board has been filed 
pursuant to Sec. 802.403(b), any party adversely affected or aggrieved 
by such decision may file a petition for review with the appropriate 
U.S. Court of Appeals pursuant to section 21(c) of the LHWCA.
    (b) The Director, OWCP, as designee of the Secretary of Labor 
responsible for the administration and enforcement of the statutes 
listed in Sec. 802.101, shall be deemed to be the proper party on behalf 
of the Secretary of Labor in all review proceedings conducted pursuant 
to section 21(c) of the LHWCA.



Sec. 802.411  Certification of record for judicial review.

    The record of a case including the record of proceedings before the 
Board shall be transmitted to the appropriate court pursuant to the 
rules of such court.

[[Page 877]]



   CHAPTER VIII--JOINT BOARD FOR THE ENROLLMENT OF ACTUARIES




  --------------------------------------------------------------------
Part                                                                Page
900             Statement of organization...................         879
901             Regulations governing the performance of 
                    actuarial services under the Employee 
                    Retirement Income Security Act of 1974..         879
902             Rules regarding availability of information.         897
903             Access to records...........................         899

[[Page 879]]



PART 900--STATEMENT OF ORGANIZATION--Table of Contents




Sec.
900.1  Basis.
900.2  Establishment.
900.3  Composition.
900.4  Meetings.
900.5  Staff.
900.6  Offices.
900.7  Delegations of authority.

    Authority:  Sec. 3041-2, Pub. L. 93-406, 88 Stat. 829, 1002 (29 
U.S.C. 1241-2).

    Source:  40 FR 18776, Apr. 30, 1975, unless otherwise noted.



Sec. 900.1  Basis.

    This statement is issued by the Joint Board for the Enrollment of 
Actuaries (the Joint Board) pursuant to the requirement of section 552 
of title 5 of the United States Code that every agency shall publish in 
the Federal Register a description of its central and field 
organization.



Sec. 900.2  Establishment.

    The Joint Board has been established by the Secretary of Labor and 
the Secretary of the Treasury pursuant to section 3041 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1241). Bylaws of the 
Board have been issued by the two Secretaries.\1\
---------------------------------------------------------------------------


    \1\ Copy filed with the Office of the Federal Register. Copies may 
also be obtained from the Executive Director of the Board.
---------------------------------------------------------------------------



Sec. 900.3  Composition.

    Pursuant to the Bylaws, the Joint Board consists of three members 
appointed by the Secretary of the Treasury and two appointed by the 
Secretary of Labor. The Board elects a Chairman from among the Treasury 
Representatives and a Secretary from among the Department of Labor 
Representatives. The Pension Benefit Guaranty Corporation may designate 
a non-voting representative to sit with, and participate in, the 
discussions of the Board. All decisions of the Board are made by simple 
majority vote.



Sec. 900.4  Meetings.

    The Joint Board meets on the call of the Chairman at such times as 
are necessary in order to consider matters requiring action. Minutes are 
kept of each meeting by the Secretary.



Sec. 900.5  Staff.

    (a) The Executive Director advises and assists the Joint Board 
directly in carrying out its responsibilities under the Act and performs 
such other functions as the Board may delegate to him.
    (b) Members of the staffs of the Departments of the Treasury and of 
Labor, by arrangement with the Joint Board, perform such services as may 
be appropriate in assisting the Board in the discharge of its 
responsibilities.



Sec. 900.6  Offices.

    The Joint Board does not maintain offices separate from those of the 
Departments of the Treasury and Labor. Its post office address is Joint 
Board for the Enrollment of Actuaries, c/o Department of the Treasury, 
Washington, D.C. 20220.



Sec. 900.7  Delegations of authority.

    As occasion warrants, the Joint Board may delegate functions to the 
Chairman or the Executive Director, including the authority to receive 
applications and to give notice of actions. Any such delegation of 
authority is conferred by resolution of the Board.



PART 901--REGULATIONS GOVERNING THE PERFORMANCE OF ACTUARIAL SERVICES UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974--Table of Contents




Sec.
901.0  Scope.

  Subpart A--Definitions and Eligibility To Perform Actuarial Services

901.1  Definitions.
901.2  Eligibility to perform actuarial services.

                   Subpart B--Enrollment of Actuaries

901.10  Application for enrollment.
901.11  Enrollment procedures.
901.12  Eligibility for enrollment of individuals applying for 
          enrollment before January 1, 1976.
901.13  Eligibility for enrollment of individuals applying for 
          enrollment on or after January 1, 1976.

[[Page 880]]

       Subpart C--Standards of Performance for Enrolled Actuaries

901.20  Standards of performance of actuarial services.

           Subpart D--Suspension or Termination of Enrollment

901.30  Authority to suspend or terminate enrollment.
901.31  Grounds for suspension or termination of enrollment.
901.32  Receipt of information concerning enrolled actuaries.
901.33  Initiation of proceeding.
901.34  Conferences.
901.35  Contents of complaint.
901.36  Service of complaint and other papers.
901.37  Answer.
901.38  Supplemental charges.
901.39  Reply to answer.
901.40  Proof; variance; amendment of pleadings.
901.41  Motions and requests.
901.42  Representation.
901.43  Administrative Law Judge.
901.44  Hearings.
901.45  Evidence.
901.46  Depositions.
901.47  Transcript.
901.48  Proposed findings and conclusions.
901.49  Decision of the Administrative Law Judge.
901.50  Appeal to the Joint Board.
901.51  Decision of the Joint Board.
901.52  Effect of suspension, termination or resignation of enrollment; 
          surrender of enrollment certificate.
901.53  Notice of suspension, termination or resignation of enrollment.
901.54  Petition for reinstatement.

                      Subpart E--General Provisions

901.70  Records.
901.71  Special orders.

    Authority:  Sec. 3042, subtitle C, title 3, Employee Retirement 
Income Security Act of 1974. (88 Stat. 1002, 29 U.S.C. 1241, 1242), 
unless otherwise noted.

    Source:  42 FR 39200, Aug. 3, 1977, unless otherwise noted.



Sec. 901.0  Scope.

    This part contains rules governing the performance of actuarial 
services under the Employee Retirement Income Security Act of 1974, 
hereinafter also referred to as ERISA. Subpart A of this part sets forth 
definitions and eligibility to perform actuarial services; subpart B of 
this part sets forth rules governing the enrollment of actuaries; 
subpart C of this part sets forth standards of performance to which 
enrolled actuaries must adhere; subpart D of this part is reserved and 
will set forth rules applicable to suspension and termination of 
enrollment; and subpart E of this part sets forth general provisions.



  Subpart A--Definitions and Eligibility To Perform Actuarial Services



Sec. 901.1  Definitions.

    As used in this part, the term:
    (a) Actuarial experience means the performance of, or the direct 
supervision of, services involving the application of principles of 
probability and compound interest to determine the present value of 
payments to be made upon the fulfillment of certain specified conditions 
or the occurrence of certain specified events.
    (b) Responsible actuarial experience means actuarial experience:
    (1) Involving participation in making determinations that the 
methods and assumptions adopted in the procedures followed in actuarial 
services are appropriate in the light of all pertinent circumstances, 
and
    (2) Demonstrating a thorough understanding of the principles and 
alternatives involved in such actuarial services.
    (c) Month of responsible actuarial experience means a month during 
which the actuary spent a substantial amount of time in responsible 
actuarial experience.
    (d) Responsible pension actuarial experience means responsible 
actuarial experience involving valuations of the liabilities of pension 
plans, wherein the performance of such valuations requires the 
application of principles of life contingencies and compound interest in 
the determination, under one or more standard actuarial cost methods, of 
such of the following as may be appropriate in the particular case:
    (1) Normal cost.
    (2) Accrued liability.
    (3) Payment required to amortize a liability or other amount over a 
period of time.
    (4) Actuarial gain or loss.

[[Page 881]]

    (e) Month of responsible pension actuarial experience means a month 
during which the actuary spent a substantial amount of time in 
responsible pension actuarial experience.
    (f) Applicant means an individual who has filed an application to 
become an enrolled actuary.
    (g) Enrolled actuary means an individual who has satisfied the 
standards and qualifications as set forth in this part and who has been 
approved by the Joint Board (or its designee) to perform actuarial 
services required under ERISA or regulations thereunder.
    (h) Actuarial services means performance of actuarial valuations and 
preparation of any actuarial reports.



Sec. 901.2  Eligibility to perform actuarial services.

    (a) Enrolled actuary. Subject to the standards of performance set 
forth in subpart C of this part, any individual who is an enrolled 
actuary as defined in Sec. 901.1(g) may perform actuarial services 
required under ERISA or regulations thereunder. Where a corporation, 
partnership, or other entity is engaged to provide actuarial services, 
such services may be provided on its behalf only by an enrolled actuary 
who is an employee, partner or consultant.
    (b) Government officers and employees. No officer or employee of the 
United States in the executive, legislative, or judicial branch of the 
Government, or in any agency of the United States, including the 
District of Columbia, may perform actuarial services required under 
ERISA or regulations thereunder if such services would be in violation 
of 18 U.S.C. 205. No Member of Congress or Resident Commissioner (elect 
or serving) may perform such actuarial services if such services would 
be in violation of 18 U.S.C. 203 or 205.
    (c) Former government officers and employees--(1) Personal and 
substantial participation in the performance of actuarial services. No 
former officer or employee of the executive branch of the United States 
Government, of any independent agency of the United States, or of the 
District of Columbia, shall perform actuarial services required under 
ERISA or regulations thereunder or aid or assist in the performance of 
such actuarial services, in regard to particular matters, involving a 
specific party or parties, in which the individual participated 
personally and substantially as such officer or employee.
    (2) Official responsibility. No former officer or employee of the 
executive branch of the United States Government, of any independent 
agency of the United States, or of the District of Columbia, shall, 
within 1 year after his employment has ceased, perform actuarial 
services required under ERISA or regulations thereunder in regard to any 
particular matter involving a specific party or parties which was under 
the individual's official responsibility as an officer or employee of 
the Government at any time within a period of 1 year prior to the 
termination of such responsibility.



                   Subpart B--Enrollment of Actuaries



Sec. 901.10  Application for enrollment.

    (a) Form. As a requirement for enrollment, an applicant shall file 
with the Executive Director of the Joint Board a properly executed 
application on a form or forms specified by the Joint Board, and shall 
agree to comply with the regulations of the Joint Board.
    (b) Additional information. The Joint Board or Executive Director, 
as a condition to consideration of an application for enrollment, may 
require the applicant to file additional information and to submit to 
written or oral examination under oath or otherwise.
    (c) Denial of application. If the Joint Board proposes to deny an 
application for enrollment, the Executive Director shall notify the 
applicant in writing of the proposed denial and the reasons therefor, of 
his rights to request reconsideration, of the address to which such 
request should be made and the date by which such request must be made. 
The applicant may, within 30 days from the date of the written proposed 
denial, file a written request for reconsideration therefrom, together 
with his reasons in support thereof, to the Joint Board. The Joint Board 
may afford an applicant the opportunity to make a personal appearance 
before the Joint Board. A decision on the request for reconsideration 
shall be rendered by the Joint Board as soon as practicable. In

[[Page 882]]

the absence of a request for reconsideration within the aforesaid 30 
days, the proposed denial shall, without further proceeding, constitute 
a final decision of denial by the Joint Board.



Sec. 901.11  Enrollment procedures.

    (a) Enrollment. The Joint Board shall enroll each applicant it 
determines has met the requirements of these regulations and shall so 
notify the applicant. Subject to the provisions of subpart D of this 
part, an individual must renew his or her enrollment in the manner 
described in paragraph (d) of this section.
    (b) Enrollment certificate. The Joint Board (or its designee) shall 
issue a certificate of enrollment to each actuary who is duly enrolled 
under this part.
    (c) Rosters. The Executive Director shall maintain rosters of all 
actuaries who are duly enrolled under this part and of all individuals 
whose enrollment has been suspended or terminated.
    (d) Renewal of enrollment. To maintain active enrollment to perform 
actuarial services under the Employee Retirement Income Security Act of 
1974, each enrolled actuary is required to have his/her enrollment 
renewed as set forth herein. Failure by an individual to receive 
notification of the renewal requirement from the Joint Board will not be 
justification for circumvention of such requirement.
    (1) All individuals enrolled before January 1, 1990, shall apply for 
renewal of enrollment on the prescribed form before March 1, 1990. The 
effective date of renewal for such individuals is April 1, 1990.
    (2) Thereafter, applications for renewal will be required of all 
enrolled actuaries between October 1, 1992, and March 1, 1993, and 
between October 1 and March 1 of every third year period subsequent 
thereto.
    (3) The Executive Director of the Joint Board will notify each 
enrolled actuary of the renewal of enrollment requirement at his/her 
address of record with the Joint Board.
    (4) A reasonable non-refundable fee may be charged for each 
application for renewal of enrollment filed.
    (5) Forms required for renewal may be obtained from the Executive 
Director, Joint Board for the Enrollment of Actuaries, c/o Department of 
the Treasury, Washington, DC 20220.
    (e) Condition for renewal: Continuing professional education. To 
qualify for renewal of enrollment, an enrolled actuary must certify, on 
the form prescribed by the Executive Director, that he/she has satisfied 
the following continuing professional education requirements.
    (1) For renewed enrollment effective April 1, 1990. (i) A minimum of 
10 hours of continuing education credit must be completed between (the 
effective date of these regulations) and December 31, 1989. Of the 10 
hours, at least 6 hours must be comprised of core subject matter; the 
remainder may be comprised of non-core subject matter.
    (ii) An individual who receives initial enrollment between October 
1, 1988 and December 31, 1989 is exempt from the continuing education 
requirement for the enrollment cycle ending December 31, 1989, but is 
required to file a timely application for renewal of enrollment 
effective April 1, 1990.
    (2) For renewed enrollment effective April 1, 1993 and every third 
year thereafter. (i) A minimum of 36 hours of continuing education 
credit must be completed between January 1, 1990, and December 31, 1992, 
and between January 1 and December 31 for each three year period 
subsequent thereto. Each such three year period is known as an 
enrollment cycle. Of the 36 hours, at least 18 must be comprised of core 
subject matter; the remainder may be of a non-core nature.
    (ii) An individual who receives initial enrollment during the first 
or second year of an enrollment cycle must satisfy the following 
requirements by the end of the enrollment cycle: Those enrolled during 
the first year of an enrollment cycle must complete 24 hours of 
continuing education; those enrolled during the second year of an 
enrollment cycle must complete 12 hours of continuing education. At 
least one-half of the applicable hours must be comprised of core subject 
matter; the remainder may be comprised of non-core subject matter. For 
purposes of this paragraph, credit will be awarded for continuing 
education completed after January 1 of the year in which initial 
enrollment was received.

[[Page 883]]

    (iii) An individual who receives initial enrollment during the third 
year of an enrollment cycle is exempt from the continuing education 
requirements until the next enrollment cycle, but must file a timely 
application for renewal.
    (3) Enrolled actuaries whose enrollment status would have expired 
under previous regulations during the five year period from October 1, 
1988, are not subject to compliance with such previous regulations 
addressing renewal of enrollment. Their enrollment status will not be 
adversely affected provided they comply with requirements on this part.
    (f) Qualifying continuing education--(1) In general. To qualify for 
continuing education credit consistent with the requirements of the 
above subsections, a course of learning must be a qualifying program 
comprised of core and/or non-core subject matter conducted by a 
qualifying sponsor.
    (i) Core subject matter is program content designed to enhance the 
knowledge of an enrolled actuary with respect to matters directly 
related to the performance of pension actuarial services under ERISA or 
the Internal Revenue Code. Such core subject matter includes the 
characteristics of actuarial cost methods under ERISA, actuarial 
assumptions, minimum funding standards, title IV of ERISA, requirements 
with respect to the valuation of plan assets, requirements for 
qualification of pension plans, maximum deductible contributions, tax 
treatments of distributions from qualified pension plans, excise taxes 
related to the funding of qualified pension plans and standards of 
performance for actuarial services.
    (ii) Non-core subject matter is program content designed to enhance 
the knowledge of an enrolled actuary in matters related to the 
performance of pension actuarial services. Examples include economics, 
computer programs, pension accounting, investment and finance, risk 
theory, communication skills and business and general tax law.
    (iii) The Joint Board may publish other topics or approve other 
topics which may be included in a qualifying program as core or non-core 
subject matter.
    (iv) Repeated taking of the same course of study cannot be used to 
satisfy the continuing education requirements of the regulations. If the 
major content of a program or session differs substantively from a 
previous one bearing the same or similar title, it may be used to 
satisfy such requirements.
    (2) Qualifying Programs--(i) Formal programs. Formal programs 
qualify as continuing education programs if they:
    (A) Require attendance by at least three individuals engaged in 
substantive pension service in addition to the instructor, discussion 
leader or speaker;
    (B) Require that the program be conducted by a qualified instructor, 
discussion leader or speaker, i.e. a person whose background, training, 
education and/or experience is appropriate for instructing or leading a 
discussion on the subject matter of the particular program; and
    (C) Require a written outline and/or textbook and certificate of 
attendance provided by the sponsor, all of which must be retained by the 
enrolled actuary for a three year period following the end of the 
enrollment cycle.
    (ii) Correspondence or individual study programs (including audio 
and/or video taped programs). Qualifying continuing education programs 
include correspondence or individual study programs completed on an 
individual basis by the enrolled actuary and conducted by qualifying 
sponsors. The allowable credit hours for such programs will be measured 
on a basis comparable to the measurement of a seminar or course for 
credit in an accredited educational institution. Such programs qualify 
as continuing education programs if they:
    (A) Require registration of the participants by the sponsor;
    (B) Provide a means for measuring completion by the participants 
(e.g., written examination); and
    (C) Require a written outline and/or textbook and certificate of 
completion provided by the sponsor. Such certificate must be retained by 
the participant for a three year period following the end of an 
enrollment cycle.

[[Page 884]]

    (iii) Teleconferencing. Programs utilizing teleconferencing or other 
communications technologies qualify for continuing education purposes if 
they either:
    (A) Meet all the requirements of formal programs, except that they 
may include a sign-on/sign-off capacity or similar technique in lieu of 
the physical attendance of participants; or
    (B) Meet all the requirements of correspondence or individual study 
programs.
    (iv) Serving as an instructor, discussion leader or speaker. (A) 
Four hours of continuing education credit will be awarded for each 
contact hour completed as an instructor, discussion leader or speaker at 
an educational program which meets the continuing education requirements 
of this section, in recognition of both presentation and preparation 
time.
    (B) The credit for instruction and preparation may not exceed 50% of 
the continuing education requirement for an enrollment cycle.
    (C) Presentation of the same material as an instructor, discussion 
leader or speaker more than one time in any 36 month period will not 
qualify for continuing education credit. A program will not be 
considered to consist of the same material if a substantial portion of 
the content has been revised to reflect changes in the law or in the 
state of the art relative to the performance of pension actuarial 
service.
    (D) Credit as an instructor, discussion leader or speaker will not 
be awarded to panelists, moderators or others whose contribution does 
not constitute a substantial portion of the program. However, such 
individuals may be awarded credit for attendance, provided the other 
provisions of this section are met.
    (E) The nature of the subject matter will determine if credit will 
be of a core or non-core nature.
    (v) Credit for published articles, books, films, audio and video 
tapes, etc. (A) Continuing education credit will be awarded for the 
creation of materials for publication or distribution with respect to 
matters directly related to the continuing professional education 
requirements of this section.
    (B) The credit allowed will be on the basis of one hour credit for 
each hour of preparation time of the material. It will be the 
responsibility of the person claiming the credit to maintain records to 
verify preparation time.
    (C) Publication or distribution may utilize any available technology 
for the dissemination of written, visual or auditory materials.
    (D) The materials must be available on reasonable terms for 
acquisition and use by all enrolled actuaries.
    (E) The credit for the creation of materials may not exceed 25% of 
the continuing education requirement of any enrollment cycle.
    (F) The nature of the subject matter will determine if credit will 
be of a core or non-core nature.
    (G) Publication of the same material more than one time will not 
qualify for continuing education credit. A publication will not be 
considered to consist of the same material if a substantial portion has 
been revised to reflect changes in the law or in the state of the art 
relating to the performance of pension actuarial service.
    (vi) Service on Joint Board advisory committee(s). Continuing 
education credit may be awarded by the Joint Board for service on (any 
of) its advisory committee(s), to the extent that the Board considers 
warranted by the service rendered.
    (vii) Preparation of Joint Board examinations. Continuing 
educational credit may be awarded by the Joint Board for participation 
in drafting questions for use on Joint Board examinations or in 
pretesting its examinations, to the extent the Board determines 
suitable. Such credit may not exceed 50% of the continuing professional 
education requirement for the applicable enrollment cycle.
    (viii) Society examinations. Individuals may earn continuing 
professional education credit for achieving a passing grade on proctored 
examinations sponsored by a professional organization or society 
recognized by the Joint Board. Such credit is limited to the number of 
hours scheduled for each examination and may be applied only as non-core 
credit provided the content of the examination is non-core.

[[Page 885]]

    (ix) Pension law examination. Individuals may establish eligibility 
for renewal of enrollment for any enrollment cycle by:
    (A) Achieving a passing score on the pension law actuarial 
examination offered by the Joint Board and administered under this part 
during the applicable enrollment cycle; and
    (B) Completing a minimum of 12 hours of qualifying continuing 
education in core subject matter during the same applicable enrollment 
cycle.
    (C) This option of satisfying the continuing professional education 
requirements is not available to those who receive initial enrollment 
during the enrollment cycle.
    (g) Sponsors. (1) Sponsors are those responsible for presenting 
programs.
    (2) To qualify as a sponsor, a program presenter must:
    (i) Be an accredited educational institution;
    (ii) Be recognized for continuing education purposes by the 
licensing body of any State, possession, territory, Commonwealth, or the 
District of Columbia responsible for the issuance of a license in the 
field of actuarial science, insurance, accounting or law;
    (iii) Be recognized by the Executive Director of the Joint Board as 
a professional organization or society whose programs include offering 
continuing professional education opportunities in subject matter within 
the scope of this section; or
    (iv) File a sponsor agreement with the Executive Director of the 
Joint Board to obtain approval of the program as a qualifying continuing 
education program.
    (3) Professional organizations or societies and others wishing to be 
considered as qualifying sponsors shall request such status of the 
Executive Director of the Joint Board and furnish information in support 
of the request together with any further information deemed necessary by 
the Executive Director.
    (4) A qualifying sponsor must ensure the program complies with the 
following requirements:
    (i) Programs must be developed by individual(s) qualified in the 
subject matter.
    (ii) Program subject matter must be current.
    (iii) Instructors, discussion leaders, and speakers must be 
qualified with respect to program content.
    (iv) Programs must include some means for evaluation of technical 
content and presentation.
    (v) Certificates of completion must be provided those who have 
successfully completed the program.
    (vi) Records must be maintained by the sponsor to verify 
satisfaction of the requirements of this section. Such records must be 
retained for a period of three years following the end of the enrollment 
cycle in which the program is held. In the case of programs of more than 
one session, records must be maintained to verify completion of the 
program and attendance by each participant at each session of the 
program.
    (5) Sponsor agreements and qualified professional organization or 
society sponsors approved by the Executive Director will remain in 
effect for one enrollment cycle. The names of such sponsors will be 
published on a periodic basis.
    (h) Measurement of continuing education course work. (1) All 
continuing education programs will be measured in terms of credit hours. 
The shortest recognized program will be one credit hour.
    (2) A credit hour is 50 minutes of continuous participation in a 
program. Each session in a program must be at least one full credit 
hour, i.e. 50 minutes. For example, a single-session program lasting 100 
minutes will count as two credit hours, and a program comprised of three 
75 minute sessions (225 minutes) constitutes four credit hours. However, 
at the end of an enrollment cycle, an individual may total the number of 
minutes of sessions of at least one credit hour in duration attended 
during the cycle and divide by fifty. For example, attending three 75 
minute segments at two separate programs will accord an individual nine 
credit hours (450 minutes divided by 50) toward fulfilling the minimum 
number of continuing professional education hours. It will not be 
permissible to merge non-core hours with core hours. For university or 
college courses, each

[[Page 886]]

``semester'' hour credit will equal 15 credit hours and each ``quarter'' 
hour credit will equal 10 credit hours. Measurements of other formats of 
university or college courses will be handled on a comparable basis.
    (i) Record keeping requirements. (1) Each individual applying for 
renewal shall retain for a period of three years following the end of an 
enrollment cycle the information required with regard to qualifying 
continuing professional education credit hours. Such information shall 
include:
    (i) The name of the sponsoring organization;
    (ii) The location of the program;
    (iii) The title of the program and description of its content, e.g., 
course syllabus and/or textbook;
    (iv) The dates attended;
    (v) The credit hours claimed and whether core or non-core subject 
matter;
    (vi) The name(s) of the instructor(s), discussion leader(s), or 
speaker(s), if appropriate;
    (vii) The certificate of completion and/or signed statement of the 
hours of attendance obtained from the sponsor; and
    (viii) The total core and non-core credit.
    (2) To receive continuing education credit for service completed as 
an instructor, discussion leader, or speaker, the following information 
must be maintained for a period of three years following the end of the 
applicable enrollment cycle.
    (i) The name of the sponsoring organization;
    (ii) The location of the program;
    (iii) The title of the program and description of its content;
    (iv) The dates of the program; and
    (v) The credit hours claimed and whether core or non-core subject 
matter.
    (3) To receive continuing education credit for a publication, the 
following information must be maintained for a period of three years 
following the end of the applicable enrollment cycle.
    (i) The publisher;
    (ii) The title of the publication;
    (iii) A copy of the publication;
    (iv) The date of publication;
    (v) The credit hours claimed;
    (vi) Whether core or non-core subject matter; and
    (vii) The availability and distribution of the publications to 
enrolled actuaries.
    (j) Waivers. (1) Waiver from the continuing education requirements 
for a given period may be granted by the Executive Director of the Joint 
Board for the following reasons:
    (i) Physical incapacity, which prevented compliance with the 
continuing education requirements;
    (ii) Extended active military duty;
    (iii) Absence from the individual's country of residence for an 
extended period of time due to employment or other reasons, provided the 
individual does not perform services as an enrolled actuary during such 
absence; and
    (iv) Other compelling reasons, which will be considered on a case-
by-case basis.
    (2) A request for waiver must be accompanied by appropriate 
documentation. The individual will be required to furnish any additional 
documentation or explanation deemed necessary by the Executive Director 
of the Joint Board. Examples of appropriate documentation could be a 
medical certificate, military orders, etc.
    (3) A request for waiver must be filed no later than the last day of 
the renewal application period.
    (4) If a request for waiver is not approved, the individual will be 
so notified by the Executive Director of the Joint Board and placed on a 
roster of inactive enrolled individuals.
    (5) If a request for waiver is approved, the individual will be so 
notified.
    (6) Those who are granted waivers are required to file timely 
applications for renewal of enrollment.
    (k) Failure to comply. (1) Compliance by an individual with the 
requirements of this part shall be determined by the Executive Director 
of the Joint Board. An individual who applies for renewal of enrollment 
but who fails to meet the requirements of eligibility for renewal will 
be notified by the Executive Director at his/her last known address by 
first class mail. The notice will state the basis for the non-compliance 
and will provide the individual an opportunity to furnish in writing, 
within 60

[[Page 887]]

days of the date of the notice, information relating to the matter. Such 
information will be considered by the Executive Director in making a 
final determination as to eligibility for renewal of enrollment.
    (2) The Executive Director of the Joint Board may require any 
individual, by first class mail sent to his/her mailing address of 
record with the Joint Board, to provide copies of any records required 
to be maintained under this section. The Executive Director may disallow 
any continuing professional education hours claimed if the individual 
concerned fails to comply with such requirements.
    (3) An individual whose application for renewal is not approved may 
seek review of the matter by the Joint Board. A request for review and 
the reasons in support of the request must be filed with the Joint board 
within 30 days of the date of the non-approved notice.
    (4) An individual who has not filed a timely application for renewal 
of enrollment, who has not made a timely response to the notice of non-
compliance with the renewal requirements, or who has not satisfied the 
requirements of eligibility for renewal will be placed on a roster of 
inactive enrolled actuaries for a period of three years from the date 
renewal would have been effective. During this time, the individual will 
be ineligible to perform services as an enrolled actuary and to practice 
before the Internal Revenue Service.
    (5) During inactive enrollment status or at any other time an 
individual is ineligible to perform services as an enrolled actuary and 
to practice before the Internal Revenue Service, the individual shall 
not in any manner, directly or indirectly, indicate he or she is so 
enrolled, or use the term ``enrolled actuary,'' the designation 
``E.A.,'' or other form of reference to eligibility to perform services 
as an enrolled actuary.
    (6) An individual placed in an inactive status must file an 
application for renewal of enrollment and satisfy the requirements for 
renewal as set forth in this section within three years from the date 
renewal would have been effective. The name of such individual otherwise 
will be removed from the inactive enrollment roster and his/her 
enrollment will terminate. Eligibility for enrollment must then be 
reestablished by the individual as provided in this part.
    (7) An individual placed in an inactive status may satisfy the 
requirements for renewal of enrollment at any time during his/her period 
of inactive enrollment. If such satisfaction includes completing the 
continuing education requirement, the application for renewal may be 
filed immediately upon such completion. Continuing education credit 
under this subsection may not be used to satisfy the requirements of the 
enrollment cycle in which the individual has been placed back on the 
active roster.
    (8) An individual in inactive status remains subject to the 
jurisdiction of the Joint Board and/or the Department of the Treasury 
with respect to disciplinary matters.
    (9) An individual who is in good faith has certified that he/she has 
satisfied the continuing professional education requirements of this 
section will not be considered to be in non-compliance with such 
requirements on the basis of a program he/she has attended being found 
inadequate or not in compliance with the requirements for renewal. Such 
individual will be granted renewal, but the Executive Director may 
require such individual to remedy the resulting shortfall by earning 
replacement credit during the cycle in which renewal was granted or 
within a reasonable time period as determined by the Executive Director. 
For example, if six of the credit hours claimed were disallowed, the 
individual may be required to present 42 credit hours instead of the 
minimum 36 credit hours to qualify for renewal related to the next 
cycle.
    (l) Inactive retirement status. An individual who no longer performs 
services as an enrolled actuary may request placement in an inactive 
retirement status at any time and such individual will be placed in such 
status. The individual will be ineligible to perform services as an 
enrolled actuary. Such individual must file a timely application for 
renewal of enrollment at each applicable renewal cycle as provided in 
this part. An individual who is placed

[[Page 888]]

in an inactive retirement status may be reinstated to active enrollment 
status upon filing an application for renewal of enrollment and 
providing evidence of the completion of the required continuing 
professional education hours for the applicable enrollment cycle. An 
individual in inactive retirement status remains subject to the 
jurisdiction of the Joint Board and/or the Department of the Treasury 
with respect to disciplinary matters.
    (m) Renewal while under suspension or disbarment. An individual who 
is ineligible to perform actuarial services and/or to practice before 
the Internal Revenue Service by virtue of disciplinary action is 
required to meet the requirements for renewal of enrollment during the 
period of such ineligibility.
    (n) Verification. The Executive Director of the Joint Board or his/
her designee may review the continuing education records of an enrolled 
actuary and/or qualified sponsor, including attending programs, in a 
manner deemed appropriate to determine compliance with the requirements 
and standards for the renewal of enrollment as provided in this section.
[42 FR 39200, Aug. 3, 1977, as amended at 53 FR 34484, Sept. 7, 1988]



Sec. 901.12  Eligibility for enrollment of individuals applying for enrollment before January 1, 1976.

    (a) In general. An individual applying before January 1, 1976, to be 
an enrolled actuary must fulfill the experience requirements of 
paragraph (b) of this section and either the examination requirements of 
paragraph (c) of this section or the educational requirements of 
paragraph (d) of this section.
    (b) Qualifying experience. Within a 15 year period immediately 
preceding the date of application, the applicant shall have completed 
either:
    (1) A minimum of 36 months of responsible pension actuarial 
experience, or
    (2) A minimum of 60 months of responsible actuarial experience, 
including at least 18 months of responsible pension actuarial 
experience.
    (c) Examination requirement. The applicant shall satisfactorily 
complete the Joint Board examination requirement of paragraph (c)(1) of 
this section or the organization examination requirement of paragraph 
(c)(2) of this section.
    (1) Joint Board examination. To satisfy the Joint Board examination 
requirement, the applicant shall have completed, to the satisfaction of 
the Joint Board, an examination prescribed by the Joint Board in 
actuarial mathematics and methodology related to pension plans, 
including the funding requirements of ERISA.
    (2) Organization examination. (i) To satisfy the organization 
examination requirement, the applicant shall, before March 1, 1975, have 
attained by proctored examination one of the following classes of 
qualification in one of the following organizations:
    (A) Member of the American Academy of Actuaries,
    (B) Fellow or Member of the American Society of Pension Actuaries,
    (C) Fellow or Associate of the Casualty Actuarial Society,
    (D) Fellow or Member of the Conference of Actuaries in Public 
Practice,
    (E) Fellow or Associate of the Society of Actuaries, or
    (F) A class attained by proctored examination in any other actuarial 
organization in the United States or elsewhere if the Joint Board 
determines that the subject matter included in such examination, 
complexity of questions, and the minimum acceptable qualifying score are 
at least comparable to proctored examinations administered by any of the 
above organizations before March 1, 1975; or
    (ii) On or after March 1, 1975, the applicant shall have attained 
one of the classes of qualification specified in paragraph (c)(2)(i) of 
this section, the attainment of such qualification having been by 
proctored examination under requirements determined by the Joint Board 
to be of not lower standards than the requirements for qualification 
during the 12 months immediately preceding March 1, 1975.
    (d) Qualifying formal education. Prior to filing an application, the 
applicant shall have satisfied one of the following educational 
requirements:
    (1) Received a bachelor's or higher degree from an accredited 
college or university, such degree having been

[[Page 889]]

granted after the satisfactory completion of a course of study in which 
the major area of concentration was actuarial science, or
    (2) Received a bachelor's or higher degree from an accredited 
college or university, such degree having been granted after the 
satisfactory completion of a course of study in which the major area of 
concentration was mathematics, statistics, or computer science, and 
shall have successfully completed at least 6 semester hours or 9 quarter 
hours of courses in life contingencies at an accredited college or 
university.
    (e) Disreputable conduct. The applicant may be denied enrollment if 
it is found that he/she, after his/her eighteenth birthday, has:
    (1) Engaged in any conduct evidencing fraud, dishonesty or breach of 
trust; or
    (2) Been convicted of any of the offenses referred to in section 411 
of ERISA; or
    (3) Submitted false or misleading information on an application for 
enrollment to perform actuarial services or in any oral or written 
information submitted in connection therewith or in any report 
presenting actuarial information to any person, knowing the same to be 
false or misleading.



Sec. 901.13  Eligibility for enrollment of individuals applying for enrollment on or after January 1, 1976.

    (a) In general. An individual applying on or after January 1, 1976, 
to be an enrolled actuary, must fulfill the experience requirement of 
paragraph (b) of this section, the basic actuarial knowledge requirement 
of paragraph (c) of this section, and the pension actuarial knowledge 
requirement of paragraph (d) of this section.
    (b) Qualifying experience. Within a 10 year period immediately 
preceding the date of application, the applicant shall have completed 
either:
    (1) A minimum of 36 months of responsible pension actuarial 
experience, or
    (2) A minimum of 60 months of responsible actuarial experience, 
including at least 18 months of responsible pension actuarial 
experience.
    (c) Basic actuarial knowledge. The applicant shall demonstrate 
knowledge of basic actuarial mathematics and methodology by one of the 
following:
    (1) Joint Board basic examination. Successful completion, to a score 
satisfactory to the Joint Board, of an examination, prescribed by the 
Joint Board, in basic actuarial mathematics and methodology including 
compound interest, principles of life contingencies, commutation 
functions, multiple-decrement functions, and joint life annuities.
    (2) Organization basic examinations. Successful completion, to a 
score satisfactory to the Joint Board, of one or more proctored 
examinations which are given by an actuarial organization and which the 
Joint Board has determined cover substantially the same subject areas, 
have at least a comparable level of difficulty, and require at least the 
same competence as the Joint Board basic examination referred to in 
paragraph (c)(1) of this section.
    (3) Qualifying formal education. Receipt of a bachelor's or higher 
degree from an accredited college or university after the satisfactory 
completion of a course of study:
    (i) In which the major area of concentration was actuarial 
mathematics, or
    (ii) Which included at least as many semester hours or quarter hours 
each in mathematics, statistics, actuarial mathematics and other 
subjects as the Board determines represent equivalence to paragraph 
(c)(3)(i) of this section.
    (d) Pension actuarial knowledge. The applicant shall demonstrate 
pension actuarial knowledge by one of the following:
    (1) Joint Board pension examination. Successful completion, to a 
score satisfactory to the Joint Board, of an examination, prescribed by 
the Joint Board, in actuarial mathematics and methodology relating to 
pension plans, including the provisions of ERISA relating to the 
minimium funding requirements and allocation of assets on plan 
termination.
    (2) Organization pension examinations. Successful completion, to a 
score satisfactory to the Joint Board, of one or more proctored 
examinations which

[[Page 890]]

are given by an actuarial organization and which the Joint Board has 
determined cover substantially the same subject areas, have at least a 
comparable level of difficulty, and require at least the same competence 
as the Joint Board pension examination referred to in paragraph (d)(1) 
of this section.
    (e) Form; fee. An applicant who wishes to take an examination 
administered by the Joint Board under paragraph (c)(1) or (d)(1) of this 
section shall file an application on a form prescribed by the Joint 
Board. Such application shall be accompanied by a check or money order 
in the amount set forth on the application form, payable to the Treasury 
of the United States. The amount represents a fee charged to each 
applicant for examination and is designed to cover the costs assessed 
the Joint Board for the administration of the examination. The fee shall 
be retained by the United States whether or not the applicant 
successfully completes the examination or is enrolled.
    (f) Denial of enrollment. An applicant may be denied enrollment if:
    (1) The Joint Board finds that the applicant, during the 15-year 
period immediately preceding the date of application and on or after the 
applicant's eighteenth birthday has engaged in disreputable conduct. The 
term disreputable conduct includes, but is not limited to:
    (i) An adjudication, decision, or determination by a court of law, a 
duly constituted licensing or accreditation authority (other than the 
Joint Board), or by any federal or state agency, board, commission, 
hearing examiner, administrative law judge, or other official 
administrative authority, that the applicant has engaged in conduct 
evidencing fraud, dishonesty or breach of trust.
    (ii) Giving false or misleading information, or participating in any 
way in the giving of false or misleading information, to the Department 
of the Treasury or the Department of Labor or the Pension Benefit 
Guaranty Corporation or any officer or employee thereof in connection 
with any matter pending or likely to be pending before them, knowing 
such information to be false or misleading.
    (iii) Willfully failing to make a Federal tax return in violation of 
the revenue laws of the United States, or evading, attempting to evade, 
or participating in any way in evading or attempting to evade any 
federal tax or payment thereof, knowingly counseling or suggesting to a 
client or prospective client an illegal plan to evade federal taxes or 
payment thereof, or concealing assets of himself or another to evade 
federal taxes or payment thereof.
    (iv) Directly or indirectly attempting to influence, or offering or 
agreeing to attempt to influence, the official action of any officer or 
employee of the Department of the Treasury or the Department of Labor or 
the Pension Benefit Guaranty Corporation by the use of threats, false 
accusations, duress or coercion, by the offer of any special inducement 
or promise of advantage or by the bestowing of any gift, favor, or thing 
of value.
    (v) Disbarment or suspension from practice as an actuary, attorney, 
certified public accountant, public accountant, or an enrolled agent by 
any duly constituted authority of any state, possession, territory, 
Commonwealth, the District of Columbia, by any Federal Court of record, 
or by the Department of the Treasury.
    (vi) Contemptuous conduct in connection with matters before the 
Department of the Treasury, or the Department of Labor, or the Pension 
Benefit Guaranty Corporation including the use of abusive language, 
making false accusations and statements knowing them to be false, or 
circulating or publishing malicious or libelous matter.
    (2) The applicant has been convicted of any of the offenses referred 
to in section 411 of ERISA.
    (3) The applicant has submitted false or misleading information on 
an application for enrollment to perform actuarial services or in any 
oral or written information submitted in connection therewith or in any 
report presenting actuarial information to any person, knowing the same 
to be false or misleading.

(Sec. 3042, subtitle C, title 3, Employee Retirement Income Security Act 
of 1974 (88 Stat. 1002, 29 U.S.C. 1241, 1242), and the Act of

[[Page 891]]

August 31, 1951, ch. 376, title V, section 501, 65 Stat. 290, 31 U.S.C. 
483a)
[44 FR 11751, Mar. 2, 1979, as amended at 44 FR 68458, Nov. 29, 1979]



       Subpart C--Standards of Performance for Enrolled Actuaries



Sec. 901.20  Standards of performance of actuarial services.

    In the discharge of duties required by ERISA of enrolled actuaries 
with respect to any plan to which the Act applies:
    (a) In general. An enrolled actuary shall undertake an actuarial 
assignment only when qualified to do so.
    (b) Professional duty. An enrolled actuary shall not perform 
actuarial services for any person or organization which he/she believes 
or has reasonable grounds for believing may utilize his/her services in 
a fraudulent manner or in a manner inconsistent with law.
    (c) Advice or explanations. An enrolled actuary shall provide to the 
plan administrator upon appropriate request, supplemental advice or 
explanation relative to any report signed or certified by such enrolled 
actuary.
    (d) Conflicts of interest. In any situation in which the enrolled 
actuary has a conflict of interest with respect to the performance of 
actuarial services, of which the enrolled actuary has knowledge, he/she 
shall not perform such actuarial services except after full disclosure 
has been made to the plan trustees, any named fiduciary of the plan, the 
plan administrator, and, if the plan is subject to a collective 
bargaining agreement, the collective bargaining representative.
    (e) Assumptions, calculations and recommendations. The enrolled 
actuary shall exercise due care, skill, prudence and diligence to ensure 
that:
    (1) The actuarial assumptions are reasonable in the aggregate, and 
the actuarial cost method and the actuarial method of valuation of 
assets are appropriate,
    (2) The calculations are accurately carried out, and
    (3) The report, any recommendations to the plan administrator and 
any supplemental advice or explanation relative to the report reflect 
the results of the calculations.
    (f) Report or certificate. An enrolled actuary shall include in any 
report or certificate stating actuarial costs or liabilities, a 
statement or reference describing or clearly identifying the data, any 
material inadequacies therein and the implications thereof, and the 
actuarial methods and assumptions employed.
    (g) Utilization of enrolled actuary designation. An enrolled actuary 
shall not advertise his/her status as an enrolled actuary in any 
solicitation related to the performance of actuarial services, and shall 
not employ, accept employment in partnership, corporate, or any other 
form, or share fees with, any individual or entity who so solicits. 
However, the use of the term ``enrolled actuary'' to identify an 
individual who is named on the stationery, letterhead or business card 
of an enrolled actuary, or of a partnership, association, or corporation 
shall not be considered in violation of this section. In addition, the 
term ``enrolled actuary'' may appear after the general listing of an 
enrolled actuary's name in a telephone directory provided such listing 
is not of a distinctive nature.
    (h) Notification. An enrolled actuary shall provide written 
notification of the non-filing of any actuarial document he/she has 
signed upon discovery of the non-filing. Such notification shall be made 
to the office of the Internal Revenue Service, the Department of Labor, 
or the Pension Benefit Guaranty Corporation where such document should 
have been filed.
[40 FR 18776, Apr. 30, 1975, as amended at 43 FR 39757, Sept. 7, 1978]



           Subpart D--Suspension or Termination of Enrollment

    Authority:  Sec. 3042(b), ERISA, 29 U.S.C. 1242(b).

    Source:  43 FR 39757, Sept. 7, 1978, unless otherwise noted.



Sec. 901.30  Authority to suspend or terminate enrollment.

    Under section 3042(b) of ERISA the Joint Board may, after notice and 
opportunity for a hearing, suspend or terminate the enrollment of an 
enrolled

[[Page 892]]

actuary if the Joint Board finds that such enrolled actuary
    (a) Has failed to discharge his/her duties under ERISA, or
    (b) Does not satisfy the requirements for enrollment in effect at 
the time of his/her enrollment.



Sec. 901.31  Grounds for suspension or termination of enrollment.

    (a) Failure to satisfy requirements for enrollment. The enrollment 
of an actuary may be terminated if it is found that the actuary did not 
satisfy the eligibility requirements set forth in Secs. 901.12 or 
901.13, whichever is applicable.
    (b) Failure to discharge duties. The enrollment of an actuary may be 
suspended or terminated if it is found that the actuary, following 
enrollment, failed to discharge his/her duties under ERISA. Such duties 
include those set forth in Sec. 901.20.
    (c) Disreputable conduct. The enrollment of an actuary may be 
suspended or terminated if it is found that the actuary has, at any time 
after he/she applied for enrollment, engaged in any conduct set forth in 
Sec. 901.13(e)(1)(i)-(vi) or other conduct evidencing fraud, dishonesty, 
or breach of trust. Such other conduct includes, but is not limited to, 
the following:
    (1) Conviction of any criminal offense under the laws of the United 
States (including section 411 of ERISA, 29 U.S.C. 1111), any State 
thereof, the District of Columbia, or any territory or possession of the 
United States, which evidences fraud, dishonesty, or breach of trust.
    (2) Knowingly filing false or altered documents, affidavits, 
financial statements or other papers on matters relating to employee 
benefit plans or actuarial services.
    (3) Knowingly making false or misleading representations, either 
orally or in writing, on matters relating to employee benefit plans or 
actuarial services, or knowingly failing to disclose information 
relative to such matters.
    (4) The use of false or misleading representations with intent to 
deceive a client or prospective client, or of intimations that the 
actuary is able to obtain special consideration or action from an 
officer or employee of any agency or court authorized to determine the 
validity of pension plans under ERISA.
    (5) Willful violation of any of the regulations contained in this 
part.



Sec. 901.32  Receipt of information concerning enrolled actuaries.

    If an officer or employee of the Department of the Treasury, the 
Department of Labor, the Pension Benefit Guaranty Corporation, or a 
member of the Joint Board has reason to believe that an enrolled actuary 
has violated any provision of this part, or if any such officer, 
employee or member receives information to that effect, he/she may make 
a written report thereof, which report or a copy thereof shall be 
forwarded to the Executive Director. If any other person has information 
of any such violation, he/she may make a report thereof to the Executive 
Director or to any officer or employee of the Department of the 
Treasury, the Department of Labor, or to the Pension Benefit Guaranty 
Corporation.



Sec. 901.33  Initiation of proceeding.

    Whenever the Executive Director has reason to believe that an 
enrolled actuary has violated any provision of the laws or regulations 
governing enrollment, such individual may be reprimanded or a proceeding 
may be initiated for the suspension or termination of such individual's 
enrollment. A reprimand as used in this paragraph is a statement 
informing the enrolled actuary that, in the opinion of the Executive 
Director, his/her conduct is in violation of the regulations and 
admonishing the enrolled actuary that repetition of the conduct 
occasioning the reprimand may result in the institution of a proceeding 
for the suspension or termination of the actuary's enrollment. A 
proceeding for suspension or termination of enrollment shall be 
initiated by a complaint naming the respondent actuary, signed by the 
Executive Director and filed in the Executive Director's office. Except 
in cases where the nature of the proceeding or the public interest does 
not permit, a proceeding will not be initiated under this section until 
the facts which may warrant such a proceeding have been called

[[Page 893]]

to the attention of the actuary in writing and he/she has been given an 
opportunity to respond to the allegations of misconduct.



Sec. 901.34  Conferences.

    (a) In general. The Executive Director may confer with an enrolled 
actuary concerning allegations of his/her misconduct whether or not a 
proceeding for suspension or termination has been initiated against him/
her. If the conference results in agreement as to certain facts or other 
matters in connection with such a proceeding, such agreement may be 
entered in the record at the request of the actuary or the Executive 
Director.
    (b) Voluntary suspension or termination of enrollment. An enrolled 
actuary, in order to avoid the initiation or conclusion of a suspension 
or termination proceeding, may offer his/her consent to suspension or 
termination of enrollment or may offer his/her resignation. The 
Executive Director may accept the offered resignation or may suspend or 
terminate enrollment in accordance with the consent offered.



Sec. 901.35  Contents of complaint.

    (a) Charges. A complaint initiating a suspension or termination 
proceeding shall describe the allegations which are the basis for the 
proceeding, and fairly inform the respondent of the charges against him/
her.
    (b) Answer. In the complaint, or in a separate paper attached to the 
complaint, notice shall be given of the place at, and time within which 
the respondent shall file an answer, which time shall not be less than 
15 days from the date of service of the complaint. Notice shall be given 
that a decision by default may be rendered against the respondent if an 
answer is not filed as required.



Sec. 901.36  Service of complaint and other papers.

    (a) Complaint. The complaint or a copy thereof may be served upon 
the respondent by certified mail, or first-class mail as hereinafter 
provided, by delivering it to the respondent, or the respondent's 
attorney or agent of record either in person or by leaving it at the 
office or place of business of the respondent, the attorney or agent, or 
in any other manner which may have been agreed to in writing by the 
respondent. Where the service is by certified mail, the return post 
office receipt signed by or on behalf of the respondent shall be proof 
of service. If the certified matter is not claimed or accepted by the 
respondent and is returned undelivered, complete service may be made 
upon the respondent by mailing the complaint to him/her by first-class 
mail, addressed to the respondent at the last address known to the 
Executive Director. If service is made upon the respondent or his/her 
attorney or agent in person or by leaving the complaint at the office or 
place of business of the respondent, attorney, or agent, the verified 
return by the person making service, setting forth the manner of 
service, shall be proof of such service.
    (b) Service of papers other than complaint. Any paper other than the 
complaint may be served upon the respondent as provided in paragraph (a) 
of this section or by mailing the paper by first-class mail to the 
respondent at the last address known to the Executive Director or by 
mailing the paper by first-class mail to the respondent's attorney or 
agent. Such mailing shall constitute complete service. Notices may also 
be served upon the respond- ent or his/her attorney or agent by 
telegraph.
    (c) Filing of papers. Whenever the filing of a paper is required or 
permitted in connection with a suspension or termination proceeding, and 
the place of filing is not specified by this subpart or by rule or order 
of the Administrative Law Judge, the paper shall be filed with the 
Executive Director of the Joint Board for the Enrollment of Actuaries, 
Treasury Department, Washington, D.C. 20220. All papers shall be filed 
in duplicate.



Sec. 901.37  Answer.

    (a) Filing. The respondent's answer shall be filed in writing within 
the time specified in the complaint or notice of initiation of the 
proceeding, unless, on application, the time is extended by the 
Executive Director or

[[Page 894]]

the Administrative Law Judge. The answer shall be filed in duplicate 
with the Executive Director.
    (b) Contents. The answer shall contain a statement of facts which 
constitute the grounds of defense and it shall specifically admit or 
deny each allegation set forth in the complaint, except that the 
respondent shall not deny a material allegation in the complaint which 
he/she knows to be true, or state that he/she is without sufficient 
information to form a belief when in fact the respondent possesses such 
information. The respondent may also state affirmatively special matters 
of defense.
    (c) Failure to deny or answer allegations in the complaint. Every 
allegation in the complaint which is not denied in the answer shall be 
deemed to be admitted and may be considered as proven, and no further 
evidence in respect of such allegation need be adduced at a hearing. 
Failure to file an answer within the time prescribed in the notice to 
the respondent, except as the time for answer is extended by the 
Executive Director or the Administrative Law Judge, shall constitute an 
admission of the allegations of the complaint and a waiver of hearing, 
and the Administrative Law Judge may make a decision by default, without 
a hearing or further procedure.



Sec. 901.38  Supplemental charges.

    If it appears to the Executive Director that the respondent in his/
her answer falsely and in bad faith denies a material allegation of fact 
in the complaint or states that the respondent has no knowledge 
sufficient to form a belief when he/she in fact possesses such 
knowledge, or if it appears that the respondent has knowingly introduced 
false testimony during proceedings for suspension or termination of his/
her enrollment, the Executive Director may file supplemental charges 
against the respondent. Such supplemental charges may be tried with 
other charges in the case, provided the respondent is given due notice 
thereof and is afforded an opportunity to prepare a defense thereto.



Sec. 901.39  Reply to answer.

    No reply to the respondent's answer shall be required, but the 
Executive Director may file a reply at his/her discretion or at the 
request of the Administrative Law Judge.



Sec. 901.40  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading and 
the evidence adduced in support of the pleading, the Administrative Law 
Judge may order or authorize amendment of the pleading to conform to the 
evidence, provided that the party who would otherwise be prejudiced by 
the amendment is given reasonable opportunity to meet the allegations of 
the pleading as amended. The Administrative Law Judge shall make 
findings on any issue presented by the pleadings as so amended.



Sec. 901.41  Motions and requests.

    Motions and requests may be filed with the Executive Director or 
with the Administrative Law Judge.



Sec. 901.42  Representation.

    A respondent or proposed respondent may appear at conference or 
hearing in person or may be represented by counsel or other 
representative. The Executive Director may be represented by an attorney 
or other employee of the Treasury Department.



Sec. 901.43  Administrative Law Judge.

    (a) Appointment. An administrative law judge, appointed as provided 
by section 11 of the Administrative Procedure Act, 60 Stat. 244 (5 
U.S.C. 3105), shall conduct proceedings upon complaints for the 
suspension or termination of enrolled actuaries.
    (b) Powers of Administrative Law Judge. Among other powers, the 
Administrative Law Judge shall have authority, in connection with any 
suspension or termination proceeding of an enrolled actuary, to do the 
following:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and requests, which may not be 
appealed before the close of a hearing except at

[[Page 895]]

the discretion of the Administrative Law Judge;
    (3) Determine the time and place of hearing and regulate its course 
of conduct;
    (4) Adopt rules of procedure and modify the same as required for the 
orderly disposition of proceedings;
    (5) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (6) Take or authorize the taking of depositions;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the 
settlement or simplification of the issues by consent of the parties;
    (9) Perform such acts and take such measures as are necessary or 
appropriate to the efficient conduct of any proceeding; and
    (10) Make initial decisions.



Sec. 901.44  Hearings.

    (a) In general. The Administrative Law Judge shall preside at the 
hearing on a complaint for the suspension or termination of an enrolled 
actuary. Hearings shall be stenographically recorded and transcribed and 
the testimony of witnesses shall be taken under oath or affirmation. 
Hearings will be conducted pursuant to section 7 of the Administrative 
Procedure Act, 60 Stat. 241 (5 U.S.C. 556).
    (b) Failure to appear. If either party to the proceeding fails to 
appear at the hearing, after due notice thereof has been sent to the 
parties, the Administrative Law Judge may make a decision against the 
absent party by default.



Sec. 901.45  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law 
and equity are not controlling in hearings on complaints for the 
suspension or the termination of the enrollment of enrolled actuaries. 
However, the Administrative Law Judge shall exclude evidence which is 
irrelevant, immaterial, or unduly repetitious.
    (b) Depositions. The deposition of any witness taken pursuant to 
Sec. 901.46 may be admitted.
    (c) Proof of documents. Official documents, records, and papers of 
the Department of the Treasury, the Department of Labor, the Pension 
Benefit Guaranty Corporation, the Joint Board for the Enrollment of 
Actuaries or the Office of the Executive Director of the Joint Board for 
the Enrollment of Actuaries shall be admissible into evidence without 
the production of an officer or employee to authenticate them. Any such 
documents, records, and papers may be evidenced by a copy attested to or 
identified by an officer or employee of the Department of the Treasury, 
the Department of Labor, the Pension Benefit Guaranty Corporation, the 
Joint Board for the Enrollment of Actuaries, or the Office of the 
Executive Director of the Joint Board for the Enrollment of Actuaries, 
as the case may be.
    (d) Exhibits. If any document, record, or other paper is introduced 
into evidence as an exhibit, the Administrative Law Judge may authorize 
the withdrawal of the exhibit subject to any conditions which he/she 
deems proper.
    (e) Objections. Objections to evidence shall state the grounds 
relied upon, and the record shall not include argument thereon, except 
as ordered by the Administrative Law Judge. Rulings on such objections 
shall be part of the record. No exception to the ruling is necessary to 
preserve the rights of the parties.



Sec. 901.46  Depositions.

    Depositions for use at a hearing may, with the written approval of 
the Administrative Law Judge, be taken by either the Executive Director 
or the respondent or their duly authorized representatives. Depositions 
may be taken upon oral or written interrogatories, upon not less than 10 
days written notice to the other party, before any officer duly 
authorized to administer an oath for general purposes or before an 
officer or employee of the Department of the Treasury, the Department of 
Labor, the Pension Benefit Guaranty Corporation, or the Joint Board who 
is authorized to administer an oath. Such notice shall state the names 
of the witnesses and the time and place where the depositions are to be 
taken. The requirement of 10 days notice may be

[[Page 896]]

waived by the parties in writing, and depositions may then be taken from 
the persons and at the times and places mutually agreed upon by the 
parties. When a deposition is taken upon written interrogatories, any 
cross-examination shall be upon written interrogatories. Copies of such 
written interrogatories shall be served upon the other party with the 
notice, and the copies of any written cross-interrogatories shall be 
mailed or delivered to the opposing party at least five days before the 
date of taking the depositions, unless the parties mutually agree 
otherwise. A party upon whose behalf a deposition is taken must file it 
with the Administrative Law Judge and serve one copy upon the opposing 
party. Expenses in the reporting of depositions shall be borne by the 
party at whose instance the deposition is taken.



Sec. 901.47  Transcript.

    In cases where the hearing is stenographically reported by a 
Government contract reporter, copies of the transcript may be obtained 
from the reporter at rates not to exceed the maximum rates fixed by 
contract between the Government and the reporter. Where the hearing is 
stenographically reported by a regular employee of the Department of the 
Treasury, the Department of Labor, the Pension Benefit Guaranty 
Corporation, or the Joint Board, a copy thereof will be supplied to the 
respondent either without charge or upon the payment of a reasonable 
fee. Copies of exhibits introduced at the hearing or at the taking of 
depositions will be supplied to parties upon the payment of a reasonable 
fee (31 U.S.C. 483a).



Sec. 901.48  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the 
complaint or where a party has failed to appear at the hearing, the 
Administrative Law Judge, before making his/her decision, shall give the 
parties a reasonable opportunity to submit proposed findings and 
conclusions and supporting reasons therefor.



Sec. 901.49  Decision of the Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the 
receipt of any proposed findings and conclusions timely submitted by the 
parties, the Administrative Law Judge shall make the initial decision in 
the case. The decision should be based solely upon the pleading, the 
testimony and exhibits received in evidence at the hearing or 
specifically authorized to be subsequently submitted under the 
applicable laws and regulations. The decision shall include (a) a 
statement of findings and conclusions, as well as the reasons or basis 
therefor, upon all the material issues of fact or law presented on the 
record, and (b) an order of suspension, termination or reprimand or an 
order of dismissal of the complaint. The Administrative Law Judge shall 
file the decision with the Executive Director and shall transmit a copy 
thereof to the respondent or his/her attorney or agent of record. In the 
absence of an appeal to the Joint Board or review of the decision upon 
motion of the Joint Board, the decision of the Administrative Law Judge 
shall without further proceedings become the decision of the Joint Board 
30 days from the date of the Administrative Law Judge's decision.



Sec. 901.50  Appeal to the Joint Board.

    Within 30 days from the date of the Administrative Law Judge's 
decision, either party may appeal to the Joint Board for the Enrollment 
of Actuaries. The appeal shall be filed with the Executive Director in 
duplicate and shall include exceptions to the decision of the 
Administrative Law Judge and supporting reasons for such exceptions. If 
an appeal is filed by the Executive Director, a copy thereof shall be 
transmitted to the respondent. Within 30 days after receipt of an appeal 
or copy thereof, the other party may file a reply brief in duplicate 
with the Executive Director. If the reply brief is filed by the 
Executive Director, a copy of it shall be transmitted to the respondent. 
Upon the filing of an appeal and a reply brief, if any, the Executive 
Director shall transmit the entire record to the joint board.

[[Page 897]]



Sec. 901.51  Decision of the Joint Board.

    On appeal from or review of the initial decision of the 
Administrative Law Judge, the Joint Board for the Enrollment of 
Actuaries will make the final decision. In making its decision the Joint 
Board will review the record of such portions thereof as may be cited by 
the parties to permit limiting of the issues. A copy of the Joint 
Board's decision shall be transmitted to the respondent by the Executive 
Director.



Sec. 901.52  Effect of suspension, termination or resignation of enrollment; surrender of enrollment certificate.

    If the respondent's enrollment is suspended, the respondent shall 
not thereafter be permitted to perform actuarial services under ERISA 
during the period of suspension. If the respondent's enrollment is 
terminated, the respondent shall not thereafter be permitted to perform 
actuarial serv- ices under ERISA unless and until authorized to do so by 
the Executive Director pursuant to Sec. 901.54. The respondent shall 
surrender his/her enrollment certificate to the Executive Director for 
cancellation in the case of a termination or resignation of enrollment 
or for retention during a period of suspension.



Sec. 901.53  Notice of suspension, termination or resignation of enrollment.

    Upon the resignation or the issuance of a final order suspending or 
terminating the enrollment of an actuary, the Executive Director shall 
give notice thereof to appropriate officers and employees of the 
Department of the Treasury, the Department of Labor, the Pension Benefit 
Guaranty Corporation, and to other interested departments and agencies 
of the Federal Government.



Sec. 901.54  Petition for reinstatement.

    Any individual whose enrollment has been terminated may petition the 
Executive Director for reinstatement after the expiration of five years 
following such termination. Reinstatement may not be granted unless the 
Executive Director, with the approval of the Joint Board, is satisfied 
that the petitioner is not likely to conduct himself/herself thereafter 
contrary to the regulations in this part, and that granting such 
reinstatement would not be contrary to the public interest.



                      Subpart E--General Provisions

    Authority:  Sec. 3042(b), ERISA, 29 U.S.C. 1242(b).

    Source:  43 FR 39761, Sept. 7, 1978, unless otherwise noted.



Sec. 901.70  Records.

    (a) Availability. There are made available for public inspection at 
the Office of the Executive Director of the Joint Board for the 
Enrollment of Actuaries a roster of all persons enrolled to perform 
actuarial services under ERISA and a roster of all persons whose 
enrollments to perform such services have been suspended or terminated. 
Other records may be disclosed upon specific request, in accordance with 
the applicable disclosure and privacy statutes.
    (b) Disciplinary procedures. A request by an enrolled actuary that a 
hearing in a disciplinary proceeding concerning him/her be public, and 
that the record thereof be made available for inspection by interested 
persons may be granted if written agreement is reached in advance to 
protect from disclosure tax information which is confidential, in 
accordance with applicable statutes and regulations.



Sec. 901.71  Special orders.

    The Joint Board reserves the power to issue such special orders as 
it may deem proper in any case within the purview of this part.



PART 902--RULES REGARDING AVAILABILITY OF INFORMATION--Table of Contents




Sec.
902.1  Scope.
902.2  Definitions.
902.3  Published information.
902.4  Access to records.
902.5  Appeal.

    Authority:  Sec. 3042, subtitle C, title 3, Employee Retirement 
Income Security Act of 1974 (88 Stat. 1002, 29 U.S.C. 1241, 1242).

    Source:  42 FR 39204, Aug. 3, 1977, unless otherwise noted.

[[Page 898]]



Sec. 902.1  Scope.

    This part is issued by the Joint Board for the Enrollment of 
Actuaries (the ``Joint Board'') pursuant to the requirements of section 
552 of title 5 of the United States Code, including the requirements 
that every Federal agency shall publish in the Federal Register, for the 
guidance of the public, descriptions of the established places at which, 
the officers from whom, and the methods whereby, the public may obtain 
information, make submittals or requests, or obtain decisions.



Sec. 902.2  Definitions.

    (a) Records of the Joint Board. For purposes of this part, the term 
``records of the Joint Board'' means rules, statements, opinions, 
orders, memoranda, letters, reports, accounts, and other papers 
containing information in the possession of the Joint Board that 
constitute part of the Joint Board's official files.
    (b) Unusual Circumstances. For purposes of this part, ``unusual 
circumstances'' means, but only to the extent reasonably necessary for 
the proper processing of the particular request:
    (1) The need to search for and collect the requested records from 
other establishments that are separate from the Joint Board's office 
processing the request;
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (3) The need for consultation, which shall be conducted with all 
practicable speed, with another agency having a substantial interest in 
the determination of the request.



Sec. 902.3  Published information.

    (a) Federal Register. Pursuant to sections 552 and 553 of title 5 of 
the United States Code, and subject to the provisions of Sec. 902.5, the 
Joint Board publishes in the Federal Register for the guidance of the 
public, in addition to this part, descriptions of its organization and 
procedures, substantive rules of general applicability, and, as may from 
time to time be appropriate, statements of general policy, and 
interpretations of general applicability.
    (b) Other published information. From time to time, the Joint Board 
issues statements to the press relating to its operations.
    (c) Obtaining printed information. If not available through the 
Government Printing Office, printed information released by the Joint 
Board may be obtained without cost from the Executive Director of the 
Joint Board (``Executive Director'').



Sec. 902.4  Access to records.

    (a) General rule. All records of the Joint Board, including 
information set forth in section 552(a)(2) of title 5 of the United 
States Code, are made available to any person, upon request, for 
inspection and copying in accordance with the provisions of this section 
and subject to the limitations stated in section 552(b) of title 5 of 
the United States Code. Records falling within such limitations may 
nevertheless be made available in accordance with this section to the 
extent consistent, in the judgment of the Chairman of the Joint Board 
(``Chairman''), with the effective performance of the Joint Board's 
statutory responsibilities and with the avoidance of injury to a public 
or private interest intended to be protected by such limitations.
    (b) Obtaining access to records. Records of the Joint Board subject 
to this section are available by appointment for public inspection or 
copying during regular business hours on regular business days at the 
office of the Executive Director. Every request for access to such 
records, other than published records described in Sec. 902.3, shall be 
signed and submitted in writing to the Executive Director, Joint Board 
for the Enrollment of Actuaries, c/o Department of the Treasury, 
Washington, DC 20220, shall state the name and address of the person 
requesting such access, and shall describe such records in a manner 
reasonably sufficient to permit their identification without undue 
difficulty.
    (c) Fees. A fee at the rate of $5.00 per hour or fraction thereof or 
the time required to locate such records, plus ten cents per standard 
page for any copying thereof, shall be paid by any person

[[Page 899]]

requesting records other than published records described in Sec. 902.3. 
In addition, the cost of postage and any packaging and special handling 
shall be paid by the requester. Documents shall be provided without 
charge or at a reduced charge where the Chairman determines that waiver 
or reduction of the fee is in the public interest because furnishing the 
information can be considered as primarily benefiting the general 
public.
    (d) Actions on requests. The Executive Director shall, within ten 
days (excepting Saturdays, Sundays and legal public holidays) from 
receipt of request, determine whether to comply with such request for 
records and shall immediately notify in writing the person making such 
request of such determination and the reason therefor, and of the right 
of such person to appeal any adverse determination, as provided in 
Sec. 902.5. In unusual circumstances, the time limit for the 
determination may be extended by written notice to the person making 
such request setting forth the reasons for such extension and the date 
on which the determination is expected to be dispatched. No such notice 
shall specify a date that will result in an extension of more than ten 
working days.



Sec. 902.5  Appeal.

    (a) Any person denied access to records requested under Sec. 902.4, 
may within thirty days after notification of such denial, file a signed 
written appeal to the Joint Board. The appeal shall provide the name and 
address of the appellant, the identification of the records denied, and 
the dates of the original request and its denial.
    (b) The Joint Board shall act upon any such appeal within twenty 
days (excepting Saturdays, Sundays and legal public holidays) of its 
receipt, unless for unusual circumstances the time for such action is 
deferred, subject to Sec. 902.4(b), for not more than ten days. If 
action upon any such appeal is so deferred, the Joint Board shall notify 
the requester of the reasons for such deferral and the date on which the 
final reply is expected to be dispatched. If it is determined that the 
appeal from the initial denial shall be denied (in whole or in part), 
the requester shall be notified in writing of the denial, of the reasons 
therefor, of the fact the Joint Board is responsible for the denial, and 
of the provisions of section 552(a)(4) of title 5 of the United States 
Code for judicial review of the determination.
    (c) Any extension or extensions of time under Secs. 902.4(d) and 
902.5(b) shall not cumulatively total more than ten days (excepting 
Saturdays, Sundays and legal public holidays). If an extension is 
invoked in connection with an initial determination under Sec. 902.4(d), 
any unused days of such extension may be invoked in connection with the 
determination on appeal under Sec. 902.5(a), by written notice from the 
Joint Board.



PART 903--ACCESS TO RECORDS--Table of Contents




              Subpart A--Records Pertaining to Individuals

Sec.
903.1  Purpose and scope of regulations.
903.2  Definitions.
903.3  Procedures for notification with respect to records regarding 
          individuals.
903.4  Procedures for access to records and accountings of disclosures 
          from records, regarding individuals.
903.5  Procedures for amendment of records regarding individual--format, 
          agency review and appeal from initial adverse agency 
          determination.
903.6  Fees.
903.7  Guardianship.
903.8  Exemptions.

    Authority:  5 U.S.C. 552a.

    Source:  41 FR 1493, Jan. 8, 1976, unless otherwise noted.



              Subpart A--Records Pertaining to Individuals



Sec. 903.1  Purpose and scope of regulations.

    The regulations in this subpart are issued to implement the 
provisions of the Privacy Act of 1974 (5 U.S.C. 552a). The regulations 
relate to all records maintained by the Joint Board for the Enrollment 
of Actuaries (Joint Board) which are identifiable by individual name or 
identifier and all systems of such records which are retrievable by name 
or other identifier. They do not relate to personnel records of 
Government employees, which are under the

[[Page 900]]

jurisdiction of the Civil Service Commission, and, thus, subject to 
regulations issued by such Commission. The regulations set forth the 
procedures by which individuals may request notification of whether the 
Joint Board maintains or has disclosed a record pertaining to them or 
may seek access to such records maintained in any non-exempt system of 
records, request amendment of such records, and appeal any initial 
adverse determination with respect to any such request.



Sec. 903.2  Definitions.

    (a) The term agency includes any executive department, military 
department, Government corporation, Government controlled corporation, 
or other establishment in the executive branch of the Government 
(including the Executive Office of the President), or any independent 
regulatory agency (see 5 U.S.C. 552(e));
    (b) The term individual means a citizen of the United States or an 
alien lawfully admitted for permanent residence;
    (c) The term maintain includes maintain, use, collect or 
disseminate;
    (d) The term record means any item, collection, or grouping of 
information about an individual that is maintained by the Joint Board, 
including, but not limited to, his education, financial transactions, 
medical history, and criminal or employment history and that contains 
his name, or the identifying number, symbol, or other identifying 
particular assigned to the individual such as a finger or voice print or 
a photograph;
    (e) The term system of records means a group of any records under 
the control of the Joint Board from which information is retrieved by 
the name of the individual or by some identifying number, symbol, or 
other identifying particular assigned to the individual;
    (f) The term routine use means, with respect to the disclosure of a 
record, the use of such record for a purpose which is compatible with 
the purpose for which it was collected.



Sec. 903.3  Procedures for notification with respect to records regarding individuals.

    (a) Procedures for notification. The systems of records maintained 
by the Joint Board are listed annually as required by the Privacy Act of 
1974. Any individual, who wishes to know whether a system of records 
contains a record regarding him, may write to the Executive Director, 
Joint Board for the Enrollment of Actuaries, c/o U.S. Department of the 
Treasury, Washington, DC 20220. Requests may also be delivered 
personally to the Executive Director, Joint Board for the Enrollment of 
Actuaries, 2401 E Street, NW., suite 1537, Washington, D.C. between the 
hours of 9 a.m. and 5 p.m. on workdays. Any such inquiry will be 
acknowledged in writing within 10 days (excluding Saturdays, Sundays and 
legal public holidays) of receipt of the request.
    (b) Requests. A request for notification of whether a record exists 
shall:
    (1) Be made in writing and signed by the person making the request, 
who must be the individual about whom the record is maintained, or his 
duly authorized representative (see Sec. 903.7);
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 
552a, or the regulations contained in this part;
    (3) Furnish the name of the system of records with respect to which 
notification is sought, as specified in the systems notices published in 
the Federal Register, Volume 40, No. 167;
    (4) Mark ``Privacy Act Request'' on the request and on the envelope 
in which the request is contained;
    (5) Be addressed as specified in paragraph (a) of this section, 
unless personally delivered; and
    (6) Meet the requirements set forth in paragraph (c) of this 
section.
    (c) Verification of identity. Notification of the existence of 
records in certain systems maintained by the Joint Board will not be 
made unless the individual requester's identity is verified. Where 
applicable, requirements for verification of identity are specified in 
the notices of systems published in the Federal Register, Volume 40, No. 
167.
    (d) Date of receipt of request. A request for notification with 
respect to records

[[Page 901]]

shall be considered to have been received on the date on which the 
requirements of paragraphs (a), (b) and (c) of this section have been 
satisfied. Requests for notification shall be stamped with the date of 
receipt by the Office of the Executive Director.
    (e) Exemptions. The procedures prescribed under paragraphs (a), (b) 
and (c) of this section shall not apply to: (1) Systems of records 
exempted pursuant to 5 U.S.C. 552a(k); (2) information compiled in 
reasonable anticipation of a civil action or proceeding (see 5 U.S.C. 
552a(d) (5); or (3) information regarding an individual which is 
contained in, and inseparable from, another individual's record.
    (f) Notification of determination--(1) In general. The Executive 
Director shall, except as otherwise provided in this paragraph, notify 
an individual requester as to whether or not a system of records 
contains a record regarding such individual. Such notification shall be 
made within 30 days (excluding Saturdays, Sundays and legal public 
holidays) after the date of receipt of the request, as determined in 
accordance with paragraph (d) of this section. If it is not possible to 
respond within 30 days, the Executive Director will inform the 
requester, stating the reasons for the delay (e.g., volume of records 
involved, need to consult other agencies, or the difficulty of the legal 
issues involved) and when a response will be dispatched.
    (2) Denial of request. When it is determined that a request for 
notification with respect to records will be denied (whether in whole or 
in part or subject to conditions or exceptions), the person making the 
request shall be so notified by mail in accordance with paragraph (f)(1) 
of this section. The letter of notification shall set forth the name and 
title or position of the responsible official.
    (3) Records exempt in whole or in part. (i) When an individual 
requests notification with respect to records concerning himself which 
have been compiled in reasonable anticipation of a civil action or 
proceeding either in a court or before an administrative tribunal, the 
Executive Director will neither confirm nor deny the existence of the 
record but shall advise the individual only that no record with respect 
to the existence of which he is entitled to be notified pursuant to the 
Privacy Act of 1974 has been identified.
    (ii) Requests for records which have been exempted from the 
requirement of notification pursuant to 5 U.S.C. 552a(k)(2) shall be 
responded to in the manner provided in paragraph (f)(3)(i) of this 
section.



Sec. 903.4  Procedures for access to records and accountings of disclosures from records, regarding individuals.

    (a) Access. The Executive Director of the Joint Board shall, upon 
request by any individual to gain access to a record regarding him which 
is contained in a system of records maintained by the Joint Board, or to 
an accounting of a disclosure from such record made pursuant to 5 U.S.C. 
552a(c)(1), permit that individual, and, upon his/her request, a person 
he/she chooses to accompany him/her, to review the record or any such 
accounting and have a copy made of all or any portion thereof in a form 
comprehensible to the individual, except that the Executive Director may 
require the individual to furnish a written statement authorizing 
discussion of that individual's record in the accompanying person's 
presence. Such request may be addressed to the Executive Director, Joint 
Board for the Enrollment of Actuaries, c/o U.S. Department of the 
Treasury, Washington, DC 20220. Requests may also be delivered 
personally to the Executive Director, Joint Board for the Enrollment of 
Actuaries, 2401 E Street, NW., suite 1537, Washington, DC, between the 
hours of 9 a.m. and 5 p.m. on workdays. Any such inquiry will be 
acknowledged in writing within 10 days (excluding Saturdays, Sundays and 
legal public holidays) of receipt of the request (see paragraph (e) of 
this section).
    (b) Requests. A request for access to records or accountings of 
disclosure from records, shall:
    (1) Be signed in writing by the person making the request, who must 
be the individual about whom the record is maintained, or his duly 
authorized representative (see Sec. 903.7);

[[Page 902]]

    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 
552a, or the regulations contained in this part;
    (3) Furnish the name of the system of records to which access is 
sought, or the name of the system for a disclosure from which an 
accounting is sought, as specified in the systems notices published in 
the Federal Register, Volume 40, No. 167;
    (4) Mark ``Privacy Act Request'' on the request and on the envelope 
in which the request is contained;
    (5) Be addressed as specified in paragraph (a) of this section, 
unless personally delivered;
    (6) State whether the requester wishes to inspect the records and/or 
accountings of disclosures therefrom, or desires to have a copy made and 
furnished without inspecting them;
    (7) State, if the requester desires to have a copy made, the 
requester's agreement to pay the fees for duplication as ultimately 
determined in accordance with Sec. 903.6; and
    (8) Meet the requirements set forth in paragraph (c) of this 
section.
    (c) Verification of identity. Access to records contained in certain 
systems maintained by the Joint Board and/or accountings of disclosures 
from such records, will not be granted unless the individual requester's 
identity is verified. Where applicable, requirements for verification of 
identity are specified in the notices of systems published in the 
Federal Register, Volume 40, No. 167.
    (d) Exemptions. The procedures specified in paragraphs (a), (b) and 
(c) of this section shall not apply to: (1) Systems of records exempted 
pursuant to 5 U.S.C. 552a(k); (2) information compiled in reasonable 
anticipation of a civil action or proceeding (see 5 U.S.C. 552a(d)(5)); 
or (3) information regarding an individual which is contained in, and 
inseparable from, another individual's record.
    (e) Date of receipt of request. A request for access to records and/
or accountings shall be considered to have been received on the date on 
which the requirements of paragraphs (a), (b) and (c) of this section 
have been satisfied. Requests for access, and any separate agreement to 
pay, shall be stamped with the date of receipt by the Office of the 
Executive Director. The latest of such stamped dates will be deemed to 
be the date of receipt of the request.
    (f) Notification of determination--(1) In general. Notification of 
determinations as to whether to grant access to records and/or 
accountings requested will be made by the Executive Director of the 
Joint Board. The notification of the determination shall be made within 
30 days (excluding Saturdays, Sundays and legal public holidays) after 
the date of receipt of the request, as determined in accordance with 
paragraph (g) of this section. If it is not possible to respond within 
30 days, the Executive Director will inform the requester, stating the 
reason(s) for the delay (e.g., volume of records requested, need to 
consult other agencies, or the difficulty of the legal issues involved) 
and when a response will be dispatched (See 5 U.S.C. 552a (d) and (f)).
    (2) Granting of access. (i) When it has been determined that the 
request for access will be granted--(A) and a copy requested; such copy 
in a form comprehensible to him shall be furnished promptly, together 
with a statement of the applicable fees for duplication as set forth 
elsewhere in these regulations (See Sec. 903.6); and (B) and the right 
to inspect has been requested, the requester shall be promptly notified 
in writing of the determination, and when and where the requested 
records and/or accountings may be inspected.
    (ii) An individual seeking to inspect records concerning himself 
and/or accountings of disclosure from such records may be accompanied by 
another individual of his own choosing. The individual seeking access 
shall be required to sign the required form indicating that the Joint 
Board is authorized to discuss the contents of the subject record in the 
accompanying person's presence. If, after making the inspection, the 
individual making the request desires a copy of all or portion of the 
requested records, such copy in a form comprehensible to him shall be 
furnished upon payment of the applicable fees for duplication as 
prescribed by Sec. 903.6. Fees shall not be charged where they would 
amount, in the aggregate, to less than $53.00. (See 5 U.S.C. 552a (d) 
and (f):

[[Page 903]]

    (3) Denial of request. (i) When it is determined that the request 
for access to records will be denied (whether in whole or in part or 
subject to conditions or exceptions), the person making the request 
shall be so notified by mail in accordance with paragraph (f)(1) of this 
section. The letter of notification shall contain a statement of the 
reasons for not granting the request as made, set forth the name and 
title or position of the responsible official and advise the individual 
making the request of the right to file suit in accordance with 5 U.S.C. 
552a(g)(1)(B).
    (ii) When it is determined that a request for access to accountings 
will be denied, the person making the request shall be so notified by 
mail in accordance with paragraph (f)(1)(4)(iii) of this section.
    (4) Records exempt in whole or in part. (i) When an individual 
requests records concerning himself which have been compiled in 
reasonable anticipation of a civil action or proceeding either in a 
court or before an administrative tribunal, the Executive Director will 
neither confirm nor deny the existence of the record but shall advise 
the individual only that no record available to him pursuant to the 
Privacy Act of 1974 has been identified.
    (ii) Requests for records which have been exempted from disclosure 
pursuant to 5 U.S.C. 552a(k)(2) shall be responded to in the manner 
provided in paragraph (f)(4)(i) of this section unless a review of the 
information indicates that the information has been used or is being 
used to deny the individual any right, privilege or benefit for which he 
is eligible or to which he would otherwise be entitled under Federal 
law. In that event, the individual shall be advised of the existence of 
the information but such information as would identify a confidential 
source shall be extracted or summarized in a manner which protects the 
source to the maximum degree possible and the summary extract shall be 
provided to the requesting individual.
    (iii) When an individual requests access to accountings of 
disclosure from records concerning himself which have been compiled in 
reasonable anticipation of a civil action or proceeding, either in a 
court or before an administrative tribunal, or which have been exempted 
from disclosure pursuant to 5 U.S.C. 552a(k)(2), the Executive Director 
will neither confirm nor deny the existence of the record or accountings 
of disclosure therefrom, but shall advise the individual that no 
accounting available to him pursuant to the Privacy Act of 1974 has been 
identified.



Sec. 903.5  Procedures for amendment of records regarding individual--format, agency review and appeal from initial adverse agency determination.

    (a) In general. Subject to the application of exemptions promulgated 
by the Joint Board, in accordance with 5 U.S.C. 552a(k), the Executive 
Director shall, in conformance with 5 U.S.C. 552a(d)(2), permit an 
individual to request amendment of a record pertaining to him. Any such 
request shall be addressed to the Executive Director, Joint Board for 
the Enrollment of Actuaries, U.S. Department of the Treasury, 
Washington, DC 20220 or delivered personally to the Executive Director, 
Joint Board for the Enrollment of Actuaries, 2401 E Street, NW., suite 
1537, Washington, DC. Any request for amendment of records or any appeal 
from the initial denial of a request which does not fully comply with 
the requirements of this section will not be deemed subject to the time 
constraints of paragraph (e) of this section, unless and until amended 
so as to comply. However, the Executive Director shall forthwith advise 
the requester in what respect the request or appeal is deficient so that 
it may be resubmitted or amended. (See 5 U.S.C. 552a (d) and (f)).
    (b) Form of request to amend records. In order to be subject to the 
provisions of this section, a request to amend records shall:
    (1) Be made in writing and signed by the person making the request, 
who must be the individual about whom the record is maintained, or his 
duly authorized representative. (See Sec. 903.7);
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 552a 
or these regulations;
    (3) Mark ``Privacy Act Amendment Request'' on the request and on the 
envelope; and
    (4) Reasonably describe the records which the individual desires to 
have

[[Page 904]]

amended, including, to the best of the requester's knowledge, dates of 
letters requesting access to such records previously and dates of 
letters in which notification concerning access was made, if any, and 
the individual's documentation justifying the correction. (See 5 U.S.C. 
552a (d) and (f)).
    (c) Date of receipt of request. A request for amendment of records 
pertaining to an individual shall be deemed to have been received for 
purposes of this subpart when the requirements of paragraphs (a) and (b) 
of this section have been satisfied. The Office of the Executive 
Director shall stamp the date of receipt of the request thereon. (See 5 
U.S.C. 552a (d) and (f)).
    (d) Review of requests to amend records. The Executive Director 
shall:
    (1) Not later than 10 days (excluding Saturdays, Sundays, and legal 
public holidays) after the date of receipt of such request, acknowledge 
in writing such receipt; and
    (2) Promptly, either--(i) make any correction of any portion of a 
record which the individual believes and the Executive Director agrees 
is not accurate, relevant, timely, or complete; or (ii) inform the 
individual of the refusal to amend the record in accordance with his 
request, the reason for the refusal, and that he may request that the 
Joint Board review such refusal. (See 5 U.S.C. 552a (d) and (f)).
    (e) Administrative appeal--(1) Ingeneral. The Joint Board shall 
permit individuals to request a review of initial decisions made under 
paragraph (d) of this section when an individual disagrees with a 
refusal to amend his record. (See 5 U.S.C. 552a(d), and (g)(1)).
    (2) Form of request for administrative review of refusal to amend 
record. At any time within 35 days after the date of the notification of 
the initial decision described in paragraph (d)(2)(ii) of this section, 
the requester may submit a request for review of such refusal to the 
official specified in the notification of the initial decision. The 
appeal shall:
    (i) Be made in writing stating any arguments in support thereof and 
be signed by the person to whom the record pertains, or his duly 
authorized representative (See Sec. 903.7);
    (ii) Within 35 days of the date of the initial decision: (A) Be 
addressed and mailed to the Joint Board for the Enrollment of Actuaries, 
c/o U.S. Department of the Treasury, Washington, DC 20220; or (B) be 
personally delivered to the Executive Director, Joint Board for the 
Enrollment of Actuaries, 2401 E Street NW., suite 1537, Washington, DC 
on workdays between the hours of 9 a.m. and 5 p.m.;
    (iii) Have clearly marked on the appeal and on the envelope, 
``Privacy Act Amendment Appeal'';
    (iv) Reasonably describe the records requested to be amended; and
    (v) Specify the date of the initial request to amend records, and 
the date of the letter giving notification that the request was denied. 
(See 5 U.S.C. 552a (d) and (f)).
    (3) Date of Receipt. Appeals shall be promptly stamped with the date 
of their receipt by the Office of the Executive Director and such 
stamped date will be deemed to be the date of receipt for all purposes 
of this section. The receipt of the appeal shall be acknowledged within 
10 days from the date of receipt (unless the determination on appeal is 
dispatched in 10 days, in which case, no acknowledgment is required) by 
the Joint Board and the requester is advised of the date of receipt 
established by the foregoing and when a response is due in accordance 
with this paragraph. (See 5 U.S.C. 552a (d) and (f)).
    (4) Review of administrative appeals from denial of requests to 
amend records. The Joint Board shall complete the review and notify the 
requester of the final agency decision within 30 days (exclusive of 
Saturdays, Sundays and legal public holidays) after the date of receipt 
of such appeal, unless it extends the time for good cause shown. If such 
final agency decision is to refuse to amend the record, in whole or in 
part, the requester shall also be advised of his right; (i) to file a 
concise ``Statement of Disagreement'' setting forth the reasons for his 
disagreement with the decision which shall be filed within 35 days of 
the date of the notification of the final agency decision and (ii) to 
seek judicial review of the final agency decision under 5 U.S.C. 
552a(g)(1)(A). (See 5 U.S.C. 552a (d), (f) and (g)(1)).

[[Page 905]]

    (5) Notation on record and distribution of statements of 
disagreement. (i) The Executive Director is responsible, in any 
disclosure containing information about which an individual has filed a 
``Statement of Disagreement,'' occurring after the filing of the 
statement under paragraph (e)(4) of this section, for clearly noting any 
portion of the record which is disputed and providing copies of the 
statement and, if deemed appropriate, a concise statement of the Joint 
Board's reasons for not making the amendments requested, to persons or 
other agencies to whom the disputed record has been disclosed. (See 5 
U.S.C. 552a(d)(4)).
    (ii) In addition, when a ``Statement of Disagreement'' is filed 
regarding information previously disclosed to a person or other agency 
and when, for such disclosure, an accounting was made pursuant to 5 
U.S.C. 552(c)(1). then the Executive Director shall provide such person 
or other agency with the following:
    (A) Copy of the ``Statement of Disagreement'';
    (B) Copy of the portion of the previously disclosed in dispute 
clearly noted as disputed and;
    (C) If deemed approprirate, a concise statement of the Joint Board's 
reasons for not making requested amendments.
    (f) Records not subject to correction. The following records are not 
subject to correction or amendment by individuals:
    (1) Transcripts or written statements made under oath;
    (2) Transcripts of Grand Jury proceedings, judicial or quasi-
judicial proceedings which form the official record of those 
proceedings;
    (3) Pre-sentence reports comprising the property of the courts but 
maintained in agency files;
    (4) Records pertaining to the determination, the collection and the 
payment of federal taxes; and
    (5) Records duly exempted from correction by notice published in the 
Federal Register.
[41 FR 1493, Jan. 8, 1976, as amended at 45 FR 84994, Dec. 24, 1980]



Sec. 903.6  Fees.

    Charges for copies of records made pursuant to part 903 of this 
chapter will be at the rate of $0.10 per copy. For records not 
susceptible to photocopying, e.g., over-size materials, photographs, 
etc., the amount charged will be the actual cost of copying. Only one 
copy of each record requested will be provided. No charge will be made 
unless the charge as computed above would exceed $3 for each request or 
related series of requests. If a fee in excess of $25 is required, the 
requester will be notified that the fee must be tendered before the 
records will be copied.



Sec. 903.7  Guardianship.

    The guardian of a person judicially determined to be incompetent 
shall, in additon to establishing the identity of the person he 
represents, establish his own guardianship by furnishing a copy of a 
court order establishing the guardianship and may thereafter act on 
behalf of such individual. (See 5 U.S.C. 552a(h)).



Sec. 903.8  Exemptions.

    (a) Names of systems: (1) JBEA--Enrollment Files.
    (2) JBEA--Application Files.
    (3) JBEA--General Information.
    (4) JBEA--Charge Case Inventory Files.
    (5) JBEA--Suspension and Termination Files.
    (b) Provisions from which exempted: These systems contain records 
described in 5 U.S.C. 552a(k), the Privacy Act of 1974. Exemption will 
be claimed for such records only where appropriate from the following 
provisions: subsections (c)(3), (d)(1), (2), (3) and (4), (e)(1), 
(c)(4)(G), (H) and (I), and (f)(1), (2), (3), (4) and (5) of 5 U.S.C. 
552a.
    (c) Reasons for claimed exemptions: (1) The Privacy Act of 1974 
creates several methods by which individuals may learn of and obtain 
records containing information on such individuals and consisting of 
investigatory material compiled for law enforcement purposes. These 
methods are as follows: Subsection (c)(3) allows individuals to discover 
if other agencies are investigating such individuals; subsections 
(d)(1), (e)(4)(H) and (f)(2), (3) and (5) establish the ability of 
individuals to gain access to investigatory material compiled on such 
individuals; subsections (d)(2), (3)

[[Page 906]]

and (4), (e)(4)(H) and (f)(4) presuppose access and enable individuals 
to contest the contents of investigatory material compiled on these 
individuals; and subsections (e)(4)(G) and (f)(1) allow individuals to 
determine whether or not they are under investigation. Because these 
subsections are variations upon the individual's ability to ascertain 
whether his civil or criminal misconduct has been discovered, these 
subsections have been grouped together for purposes of this notice.
    (2)(i) The Joint Board believes that imposition of the requirements 
of subsection (c)(3), which requires that accountings of disclosures be 
made available to individuals, would impair the ability of the Joint 
Board and other investigative entities to conduct investigations of 
alleged or suspected violations of the regulations governing the 
performance of actuarial services with respect to plans to which the 
Employee Retirement Income Security Act (ERISA) applies, and of civil or 
criminal laws. Making the accountings of disclosures available to 
individuals enables such individuals to identify entities investigating 
them and thereby to determine the nature of the violations of which they 
are suspected. With such knowledge, individuals would be able to alter 
their illegal activities, destroy or alter evidence of such activities 
and seriously impair the successful completion of investigations. For 
these reasons, the Joint Board seeks exemption from the requirements of 
subsection (c)(3).
    (ii) With respect to subsections (d)(1), (e)(4)(H), and (f)(2), (3) 
and (5), the Joint Board believes that access to investigatory material 
would prevent the successful completion of investigations. Individuals 
who gain access to investigatory material involving them discover the 
nature and extent of the violations of regulations, and of civil and 
criminal laws, of which they are suspected. By gaining access, such 
individuals also learn the facts developed during investigations. 
Knowledge of these matters enables these individuals to destroy or alter 
evidence which would otherwise have been used against them. In addition, 
knowledge of the facts and suspected violations gives individuals, who 
are committing ongoing violations, or who are about to commit violations 
of regulations, or of civil or criminal laws, the opportunity to 
temporarily postpone the commission of the violations or to effectively 
disguise the commission of these violations. Material compiled on 
investigated individuals reveals investigative techniques and 
procedures, disclosure of which enables such individuals to structure 
their illegal activities so as to escape detection. Further, such 
material may contain, or by its very nature reveal, the identity of 
confidential sources. When the identities of confidential sources are 
revealed, they may be subjected to various forms of reprisal. If 
confidential sources of information are subjected to actual reprisals or 
fear thereof, they may become reluctant to provide information necessary 
to identify or prove the guilt of persons who violate regulations, or 
civil or criminal laws. Further, the protections afforded by the above-
referenced subsections are unnecessary because the Joint Board may not 
deny enrollment or suspend or terminate the enrollment of an individual 
to perform actuarial services until it has provided such individual with 
due process safeguards. For the reasons stated in this subparagraph, the 
Joint Board seeks exemptions from the requirements of subsections 
(d)(1), (e)(4)(H), and (f)(2), (3) and (5).
    (iii) With respect to subsections (d) (2), (3) and (4), (e)(4)(H), 
and (f)(4), the Joint Board believes that the imposition of these 
requirements, which presuppose access and provide for amending records, 
would impair the ability to conduct investigations and would be 
unnecessary for the same reasons stated in the preceding subparagraph 
(2)(B). These reasons herein are incorporated by reference. Therefore, 
the Joint Board seeks exemption from the requirements of subsections (d) 
(2), (3) and (4), (e)(4)(H), and (f)(4).
    (iv) With respect to subsections (e)(4)(G) and (f)(1), the Joint 
Board believes that informing individuals that they are the subjects of 
a particular system or systems of records would impair the ability of 
the Joint Board and its agents to successfully complete investigations 
of suspected or alleged violators of the regulations governing

[[Page 907]]

the performance of actuarial services with respect to plans to which 
ERISA applies. Individuals who learn that they are suspected of 
violating said regulations are given the opportunity to destroy or alter 
evidence needed to prove the alleged violations. Such individuals may 
also be able to impair investigations by temporarily suspending or 
restructuring the activities which place them in violation of said 
regulations. Further, as noted in preceding subparagraph (2)(B) and 
incorporated by reference herein, the procedural requirements imposed on 
the Joint Board by ERISA make the protections afforded by subsections 
(c)(4)(G) and (f)(1) unnecessary. For these reasons, the Joint Board 
seeks exemptions from the requirements of subsections (c)(4)(G) and 
(f)(1).
    (v) Subsection (e)(1) of the Privacy Act of 1974 requires that the 
Joint Board maintain in its records only information that is relevant 
and necessary to accomplish a purpose of the Office required to be 
accomplished by statute or by executive order of the President. The 
Joint Board believes that imposition of said requirement would seriously 
impair its ability, and the abilities of its agents and other 
investigative entities to effectively investigate suspected or alleged 
violations of regulations and of civil or criminal laws. The Joint Board 
does not initiate inquires into individuals' conduct unless it receives 
information evidencing violation by such individuals of the regulations 
governing performance of actuarial services with respect to plans to 
which ERISA applies. Sources of such information may be unfamiliar with 
the Joint Board's interpretations of said regulations and, therefore, 
may not always provide only relevant and necessary information. 
Therefore, it may often be impossible to determine whether or not 
information is relevant and necessary. For these reasons, the Joint 
Board seeks exemptions from the requirement of subsection (e)(1).
    (vi) Subsection (e)(4)(I) of the Privacy Act of 1974 requires the 
publication of the categories of sources of records in each system of 
records. The Joint Board believes that imposition of said requirement 
would seriously impair its ability to obtain information from such 
sources for the following reasons. Revealing such categories of sources 
could disclose investigative techniques and procedures and could cause 
sources to decline to provide information because of fear of reprisal, 
or fear of breaches of promises of confidentiality. For these reasons, 
the Joint Board seeks exemptions from the requirement of subsection 
(e)(4)(I).

[[Page 909]]



CHAPTER IX--OFFICE OF THE ASSISTANT SECRETARY FOR VETERANS' EMPLOYMENT AND TRAINING, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
1001            Services for veterans.......................         911

[[Page 911]]



PART 1001--SERVICES FOR VETERANS--Table of Contents




                   Subpart A--Purpose and Definitions

1001.100  Purpose and scope of subpart.
1001.101  Definitions of terms used in subpart.

                   Subpart B--Federal Responsibilities

1001.110  Role of the Assistant Secretary for Veterans' Employment and 
          Training (ASVET).

 Subpart C--Standards of Performance Governing State Agency Services to 
                      Veterans and Eligible Persons

1001.120  Standards of performance governing State agency services.
1001.121  Performance standard on facilities and support for Veterans' 
          Employment and Training Service (VETS) staff.
1001.122  Reporting and budget requirements.
1001.123  Performance standards governing the assignment and role of 
          Local Veterans' Employment Representatives (LVERs).
1001.124  Standards of performance governing State agency cooperation 
          and coordination with other agencies and organizations.
1001.125  Standards of performance governing complaints of veterans and 
          eligible persons.

          Subpart D--State Employment Service Agency Compliance

1001.130  Determination of compliance.
1001.131  Secretary's annual report to Congress.

  Subpart E--Standards of Performance Governing the Disabled Veterans 
                         Outreach Program (DVOP)

1001.140  Administration of DVOP.
1001.141  Functions of DVOP staff.
1001.142  Stationing of DVOP staff.

    Authority:  29 U.S.C. 49k; 38 U.S.C. chapters 41 and 42.



                   Subpart A--Purpose and Definitions



Sec. 1001.100  Purpose and scope of subpart.

    (a) This subpart contains the Department of Labor's regulations for 
implementing 38 U.S.C. 2001-2012, chapters 41 and 42, which require the 
Secretary of Labor to provide eligible veterans and eligible persons the 
maximum of employment and training opportunities, with priority given to 
the needs of disabled veterans and veterans of the Vietnam era, through 
the public employment service system established pursuant to the Wagner-
Peyser Act, as amended.
    (b) This subpart describes the roles and responsibilities of the 
Assistant Secretary for Veterans' Employment and Training (ASVET) and 
the staff of the Veterans' Employment and Training Service (VETS).
    (c) This subpart describes the performance standards for determining 
compliance of State agencies in carrying out the provisions of 38 
U.S.C., chapters 41 and 42 with respect to:
    (1) Providing services to eligible veterans and eligible persons to 
enhance their employment prospects,
    (2) Priority referral of special disabled veterans and veterans of 
the Vietnam era to job openings listed by Federal contractors pursuant 
to 38 U.S.C. 2012(a), and
    (3) Reporting of services provided to eligible veterans and eligible 
persons pursuant to 38 U.S.C. 2007(c) and 2012(c).
    (d) Performance standards are contained in this part at 
Secs. 1001.140-1001.142 on the conduct of the Disabled Veterans Outreach 
Program (DVOP) in accordance with 38 U.S.C. 2003A.
[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



Sec. 1001.101  Definitions of terms used in subpart.

    Assistant Secretary for Veterans' Employment and Training (ASVET) 
shall mean the official of the Department of Labor as described in 
Sec. 1001.110 of this part.
    Assistant State Director for Veterans' Employment and Training 
Service (ASDVETS) shall mean a Federal employee who is designated as an 
assistant to a State Director for Veterans' Employment and Training 
Service (SDVETS).
    Disabled Veteran shall mean a veteran who is entitled to 
compensation (or who but for the receipt of military retired pay would 
be entitled to compensation) under laws administered by the Veterans 
Administration and whos

[[Page 912]]

not classified as a Special Disabled Veteran.
    Eligible person shall mean:
    (1) The spouse of any person who died of a service-connected 
disability; or
    (2) The spouse of any member of the armed forces serving on active 
duty who at the time of application for assistance under this subpart, 
is listed, pursuant to 37 U.S.C. 556 and the regulations issued 
thereunder, by the Secretary concerned, in one or more of the following 
categories and has been so listed for a total of more than 90 days: (i) 
Missing in action, (ii) captured in line of duty by a hostile force, or 
(iii) forcibly detained or interned in line of duty by a foreign 
government or power; or
    (3) The spouse of any person who has a total disability permanent in 
nature resulting from a service-connected disability or the spouse of a 
veteran who died while a disability so evaluated was in existence.
    Eligible veteran shall mean a person who (1) served on active duty 
for a period of more than 180 days and was discharged or released 
therefrom with other than a dishonorable discharge, or (2) was 
discharged or released from active duty because of a service-connected 
disability.
    Local Veterans' Employment Representative (LVER) shall mean a member 
of the State agency staff designated and assigned by the State agency 
administrator to serve veterans and eligible persons pursuant to this 
subpart.
    Regional Director for Veterans' Employment and Training Service 
(RDVETS) is the representative of the ASVET on the staff of the 
Veterans' Employment and Training Service (VETS) at the regional level; 
supervises all other VETS staff within the region to which assigned; and 
shall report to, be responsible to, and be under the administrative 
direction of the ASVET.
    Service Delivery Point (SDP) shall mean a designated local 
employment service office which serves an area that may also contain 
extended service locations.
    Special disabled veteran shall mean (1) a veteran who is entitled to 
compensation (or who but for the receipt of military retired pay would 
be entitled to compensation) under laws administered by the Veterans 
Administration for a disability rated at 30 percent or more, or (2) a 
person who was discharged or released from active duty because of a 
service-connected disability.
    State agency means the State governmental unit designated pursuant 
to section 4 of the Wagner-Peyser Act, as amended, to cooperate with the 
United States Employment Service in the operation of the public 
employment service system.
    State Director for Veterans' Employment and Training Service 
(SDVETS) is the representative of ASVET on the staff of the Veterans' 
Employment and Training Service (VETS) at the State level.
    United States Employment Service (USES) shall mean the component of 
the Employment and Training Administration of the Department of Labor, 
established under the Wagner-Peyser Act, as amended, to maintain and 
coordinate a national system of public employment service agencies.
    Veteran of the Vietnam era shall mean an eligible veteran who (1) 
served on active duty for a period of more than 180 days, any part of 
which occurred during the Vietnam era (August 5, 1964, through May 7, 
1975) and was discharged or released therefrom with other than a 
dishonorable discharge; or (2) was discharged or released from active 
duty for a service-connected disability if any part of such active duty 
was performed during the Vietnam era.
    Veterans' Employment and Training Service (VETS) shall mean the 
organizational component of the Department of Labor administered by the 
Assistant Secretary of Labor for Veterans' Employment and Training 
established to promulgate and administer policies and regulations to 
provide eligible veterans and eligible persons the maximum of employment 
and training opportunities according to 38 U.S.C. 2002.
[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]

[[Page 913]]



                   Subpart B--Federal Responsibilities



Sec. 1001.110  Role of the Assistant Secretary for Veterans' Employment and Training (ASVET).

    (a) As the principal veterans' advisor to the Secretary of Labor, 
the ASVET shall formulate, promulgate, and administer policies, 
regulations, grant procedures, grant agreements and administrative 
guidelines and administer them through the Veterans' Employment and 
Training Service (VETS) so as to provide eligible veterans and eligible 
persons the maximum of employment and training opportunities, with 
priority given to the needs of disabled veterans and veterans of the 
Vietnam era, through existing programs, coordination, and merger of 
programs and implementation of new programs.
    (b) ASVET shall oversee activities carried out by State agencies 
pursuant to 38 U.S.C., chapters 41 and 42.
    (c) ASVET shall ensure that appropriate records and reports are 
maintained by State agencies within their management information systems 
to fulfill their obligations under this subpart.
[49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, Sept. 26, 
1989]



 Subpart C--Standards of Performance Governing State Agency Services to 
                      Veterans and Eligible Persons

    Source:  49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, 
Sept. 26, 1989.



Sec. 1001.120  Standards of performance governing State agency services.

    (a) To the extent required by 38 U.S.C. 2002 and other applicable 
law, each State agency shall assure that all of its SDPs, using LVERs 
and other staff, shall provide maximum employment and training 
opportunities to eligible veterans and eligible persons with priority 
given to disabled veterans and veterans of the Vietnam-era, by giving 
them preference over non-veterans in the provision of employment and 
training services available at the SDP involved. Services are those 
activities or efforts including but not limited to registration, 
counseling, referral to supportive services, job development, etc., 
which are directed to help applicants find jobs or training. When making 
referrals from the group of applicants meeting the specific eligibility 
criteria for a particular program, State agencies shall observe the 
priority order to referral in paragraph (b).
    (b) In making referrals of qualified applicants to job openings and 
training opportunities, to provide maximum employment and training 
opportunities under 38 U.S.C., SDPs shall observe the following order of 
priority:
    (1) Special disabled veterans;
    (2) Veterans of the Vietnam era;
    (3) Disabled veterans other than special disabled veterans;
    (4) All other veterans and eligible persons; and
    (5) Nonveterans.



Sec. 1001.121  Performance standard on facilities and support for Veterans' Employment and Training Service (VETS) staff.

    Each State agency shall provide adequate and appropriate facilities 
and administrative support such as office space, furniture, telephone, 
equipment, and supplies to VETS staff.



Sec. 1001.122  Reporting and budget requirements.

    (a) State agencies shall provide RDVETS, SDVETS, and ASDVETS with 
access to regular and special internal State agency reports which relate 
in whole or in part with services to veterans and/or eligible persons.
    (b) Each State agency shall make reports and prepare budgets 
pursuant to instructions issued by the ASVET and in such format as the 
ASVET shall prescribe.



Sec. 1001.123  Performance standards governing the assignment and role of Local Veterans' Employment Representatives (LVERs).

    (a) To carry out the requirements of 38 U.S.C. 2004, at least one 
member of each State agency staff, preferably an eligible veteran, shall 
be designated and assigned by each State agency administrator as a full-
time or part-time LVER in each SDP in accordance with terms/requirements 
of a grant agreement approved by the ASVET. The

[[Page 914]]

ASVET intends to use the following criteria in establishing the terms 
and requirements of grant agreements:
    (1) At least one full-time LVER shall be assigned in each SDP which 
has had 1,000 new or renewed applications from veterans and eligible 
persons during the most recent twelve-month report period unless a 
waiver based on demonstrated lack of need is granted by the ASVET, and
    (2) At least one part-time LVER whose time shall be devoted to 
veterans' services in proportion to the full-time criteria shall be 
assigned to each SDP not meeting the criteria for full-time LVERs in 
paragraph (a)(1) of this section.
    (b) Additional full-time or part-time LVERs may be assigned based on 
a determination of need by the State agency administrator and in 
accordance with terms/requirements of a grant agreement approved by the 
ASVET.
    (c) Each LVER shall perform, at the SDP level, the duties prescribed 
at 38 U.S.C. 2003(c) required by 38 U.S.C. 2004.
[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



Sec. 1001.124  Standards of performance governing State agency cooperation and coordination with other agencies and organizations.

    (a) Each State agency shall establish cooperative working 
relationships through written agreements with the Veterans 
Administration (VA) offices serving the State to maximize the use of VA 
employment and training programs for veterans and eligible persons.
    (b) All programs and activities governed by this subpart will be 
coordinated to the maximum extent feasible with other programs and 
activities under 38 U.S.C., the Wagner-Peyser Act, the Job Training 
Partnership Act, and other employment and training programs at the State 
and local level.
    (c) Such relationships or agreements may be described in the 
Governor's Coordination and Special Services Plan prepared according to 
section 121(b) of the Job Training Partnership Act (Pub. L. 97-300).



Sec. 1001.125  Standards of performance governing complaints of veterans and eligible persons.

    Each SDP shall display information on the various complaint systems 
to advise veterans and eligible persons about procedures for filing 
employment service, Federal contractor, equal opportunity, and other 
complaints.



          Subpart D--State Employment Service Agency Compliance



Sec. 1001.130  Determination of compliance.

    (a) The ASVET shall have authority for applying the requirements and 
remedial actions necessary to implement 20 CFR part 658, subpart H. In 
the event of such application, references in 20 CFR part 658, subpart H, 
to ``ETA'' shall read instead ``OASVET''; references to ``Regional 
Administrator'' shall read instead ``RDVETS''; and references to ``JS 
regulations'' shall include this part.
    (b) The ASVET shall establish appropriate program and management 
measurement and appraisal mechanisms to ensure that the standards of 
performance set forth in Secs. 1001.120-1001.125 of this part are met. 
Specific performance standards designed to measure State agency services 
provided to veterans and eligible persons required by Sec. 1001.120(a) 
of this part will be developed administratively through negotiations 
between State agency administrators and SDVETS and numerical values of 
the standards will be published as public notices in the Federal 
Register. A full report of those State agencies in noncompliance with 
the standards of performance and their corrective action plans shall be 
incorporated into the Secretary's annual report to the Congress cited at 
Sec. 1001.131 of this part.
    (c) Every effort should be made by the State agency administrator 
and the SDVETS to resolve all issues informally before proceeding with 
the formal process.
    (d) If it is determined by the ASVET that certain State agencies are 
not complying with the performance standards at Secs. 1001.120-1001.125 
of this part, such State agencies shall be required to provide 
documentary evidence to

[[Page 915]]

the ASVET that their failure is based on good cause. If good cause is 
not shown, the ASVET, pursuant to subpart H of 20 CFR part 658, shall 
formally designate the State agency as out of compliance, shall require 
it to submit a corrective action plan for the following program year, 
and may take other action against the State agency pursuant to subpart H 
of 20 CFR part 658.
[49 FR 12919, Mar. 30, 1984. Redesignated and amended at 54 FR 39353, 
Sept. 26, 1989]



Sec. 1001.131  Secretary's annual report to Congress.

    The Secretary shall report, after the end of each program year, on 
the success of the Department and State agencies in carrying out the 
provisions of this part.
[49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, Sept. 26, 
1989, and amended at 54 FR 39354, Sept. 26, 1989]



  Subpart E--Standards of Performance Governing the Disabled Veterans 
                         Outreach Program (DVOP)

    Source:  49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, 
Sept. 26, 1989.



Sec. 1001.140  Administration of DVOP.

    (a) The ASVET shall negotiate and enter into grant agreements within 
each State to carry out the requirements of 38 U.S.C. 2003A for support 
of a Disabled Veterans Outreach Program (DVOP) to meet the employment 
needs of veterans, especially disabled veterans of the Vietnam era.
    (b) The ASVET shall be responsible forthe supervision and monitoring 
of the DVOP program, including monitoring of the appointment of DVOP 
specialists.
    (c) DVOP specialists shall be in addition to and shall not supplant 
local veterans' employment representatives assigned under Sec. 1001.123 
of this part.
[49 FR 12919, Mar. 30, 1984. Redesignated at 54 FR 39353, Sept. 26, 
1989, and amended at 54 FR 39354, Sept. 26, 1989]



Sec. 1001.141  Functions of DVOP staff.

    Each DVOP specialist shall carry out the duties and functions for 
providing services to eligible veterans according to provisions of 38 
U.S.C. 2003A (b) and (c).



Sec. 1001.142  Stationing of DVOP staff.

    DVOP specialists shall be stationed at various locations in 
accordance with 38 U.S.C. 2003A(b)(2).
[[Page 917]]


                              FINDING AIDS




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

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.
  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected



[[Page 919]]



                    Table of CFR Titles and Chapters




                     (Revised as of March 31, 1998)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                          Title 2--[Reserved]

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  General Accounting Office (Parts 1--99)
        II  Federal Claims Collection Standards (General 
                Accounting Office--Department of Justice) (Parts 
                100--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
        IV  Advisory Committee on Federal Pay (Parts 1400--1499)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
       VII  Advisory Commission on Intergovernmental Relations 
                (Parts 1700--1799)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)

[[Page 920]]

      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)

                          Title 6--[Reserved]

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)

[[Page 921]]

        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
      XIII  Northeast Dairy Compact Commission (Parts 1300--1399)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy, Department of Agriculture (Parts 
                2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  [Reserved]
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)

[[Page 922]]

      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Immigration and Naturalization Service, Department of 
                Justice (Parts 1--499)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Meat and Poultry 
                Inspection, Department of Agriculture (Parts 300--
                599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
        XI  United States Enrichment Corporation (Parts 1100--
                1199)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)

[[Page 923]]

      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Thrift Depositor Protection Oversight Board (Parts 
                1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700-1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Export Administration, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)

[[Page 924]]

            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  United States Customs Service, Department of the 
                Treasury (Parts 1--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)

[[Page 925]]

        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development, International 
                Development Cooperation Agency (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  United States Information Agency (Parts 500--599)
        VI  United States Arms Control and Disarmament Agency 
                (Parts 600--699)
       VII  Overseas Private Investment Corporation, International 
                Development Cooperation Agency (Parts 700--799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Board for International Broadcasting (Parts 1300--
                1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

[[Page 926]]

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs and Section 202 Direct Loan Program) 
                (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--999)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Part 1001)

[[Page 927]]

       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--799)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Bureau of Alcohol, Tobacco and Firearms, Department of 
                the Treasury (Parts 1--299)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--199)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Pension and Welfare Benefits Administration, 
                Department of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

[[Page 928]]

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
        VI  Bureau of Mines, Department of the Interior (Parts 
                600--699)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)
      XXIX  Presidential Commission on the Assignment of Women in 
                the Armed Forces (Part 2900)

[[Page 929]]

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)
        XI  National Institute for Literacy (Parts 1100-1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                        Title 35--Panama Canal

         I  Panama Canal Regulations (Parts 1--299)

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
       XIV  Assassination Records Review Board (Parts 1400-1499)

[[Page 930]]

             Title 37--Patents, Trademarks, and Copyrights

         I  Patent and Trademark Office, Department of Commerce 
                (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--799)
         V  Council on Environmental Quality (Parts 1500--1599)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans 
                Employment and Training, Department of Labor 
                (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       301  Travel Allowances (Parts 301-1--301-99)
       302  Relocation Allowances (Parts 302-1--302-99)

[[Page 931]]

       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Parts 303-1--303-2)
       304  Payment from a Non-Federal Source for Travel Expenses 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Health Care Financing Administration, Department of 
                Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10005)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)

[[Page 932]]

         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
      XXII  Christopher Columbus Quincentenary Jubilee Commission 
                (Parts 2200--2299)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Department of Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)

[[Page 933]]

        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  United States Information Agency (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  Panama Canal Commission (Parts 3500--3599)
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Part 
                5452)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Research and Special Programs Administration, 
                Department of Transportation (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)

[[Page 934]]

       III  Federal Highway Administration, Department of 
                Transportation (Parts 300--399)
        IV  Coast Guard, Department of Transportation (Parts 400--
                499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR



[[Page 935]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of March 31, 1998)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

ACTION                                            45, XII
Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Commission on Intergovernmental          5, VII
     Relations
Advisory Committee on Federal Pay                 5, IV
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Consumer Service                       7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Alaska Natural Gas Transportation System, Office  10, XV
     of the Federal Inspector
Alcohol, Tobacco and Firearms, Bureau of          27, I
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII

[[Page 936]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Arms Control and Disarmament Agency, United       22, VI
     States
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Assassination Records Review Board                36, XIV
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Board for International Broadcasting              22, XIII
Census Bureau                                     15, I
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Christopher Columbus Quincentenary Jubilee        45, XXII
     Commission
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Commerce Department                               44, IV
  Census Bureau                                   15, I`
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Export Administration, Bureau of                15, VII
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office                     37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Customs Service, United States                    19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII

[[Page 937]]

  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 2
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Enrichment Corporation, United States             10, XI
Environmental Protection Agency                   5, LIV; 40, I
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                25, III, LXXVII; 48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export Administration, Bureau of                  15, VII
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII

[[Page 938]]

Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               4, II
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II; 49, III
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Inspector for the Alaska Natural Gas      10, XV
     Transportation System, Office of
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Pay, Advisory Committee on                5, IV
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Property Management Regulations System    41, Subtitle C
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Consumer Service                         7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Accounting Office                         4, I, II
General Services Administration                   5, LVII
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Property Management Regulations System  41, 101, 105
  Federal Travel Regulation System                41, Subtitle F
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
     of Certain Employees
[[Page 939]]

  Relocation Allowances                           41, 302
  Travel Allowances                               41, 301
Geological Survey                                 30, IV
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Great Lakes Pilotage                              46, III
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Health Care Financing Administration            42, IV
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Health Care Financing Administration              42, IV
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Human Development Services, Office of             45, XIII
Immigration and Naturalization Service            8, I
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Information Agency, United States                 22, V
  Federal Acquisition Regulation                  48, 19
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Intergovernmental Relations, Advisory Commission  5, VII
     on
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II

[[Page 940]]

  Mines, Bureau of                                30, VI
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
  International Development, United States        22, II; 48, 7
       Agency for
  Overseas Private Investment Corporation         5, XXXIII; 22, VII
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             4, II
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration and Naturalization Service          8, I
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Pension and Welfare Benefits Administration     29, XXV
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training, Office of    41, 61; 20, IX
       the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
Management and Budget, Office of                  5, III, LXXVII; 48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II

[[Page 941]]

Mines, Bureau of                                  30, VI
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National and Community Service, Corporation for   45, XXV
National Council on Disability                    34, XII
National Credit Union Administration              12, VII
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Dairy Compact Commission                7, XIII
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Panama Canal Commission                           48, 35
Panama Canal Regulations                          35, I
Patent and Trademark Office                       37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension and Welfare Benefits Administration       29, XXV
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
     Acquisition Regulation
[[Page 942]]

  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Commission on the Assignment of      32, XXIX
     Women in the Armed Forces
Presidential Documents                            3
Prisons, Bureau of                                28, V
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Special Programs Administration      49, I
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Depositor Protection Oversight Board       12, XV
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Coast Guard                                     33, I; 46, I; 49, IV
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II; 49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Research and Special Programs Administration    49, I
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X

[[Page 943]]

Transportation, Office of                         7, XXXIII
Travel Allowances                                 41, 301
Treasury Department                               5, XXI; 17, IV
  Alcohol, Tobacco and Firearms, Bureau of        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs Service, United States                  19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
United States Enrichment Corporation              10, XI
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training, Office of the  41, 61; 20, IX
     Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 945]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations which were 
made by documents published in the Federal Register since January 1, 
1986, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 1986, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, and 1973-1985,'' published in seven 
separate volumes.

                                  1986

20 CFR
                                                                   51 FR
                                                                    Page
Chapter V
603  Added; eff. 5-29-86............................................7207
617  Redesignated from 29 CFR Part 91 and revised..................45848
617.15  (b) and (c) revised........................................45869
    Effective date corrected.......................................46746
617.34  (b) revised................................................45869
    Effective date corrected.......................................46746
617.45  (a) introductory text republished; (a)(3) revised..........45869
    Effective date corrected.......................................46746
617.65  Added......................................................45870
    Effective date corrected.......................................46746
629.36  Revised....................................................30857
655  Authority citation revised; section authority citations 
        removed.............................................24141, 30351
655.202  (b)(4) revised............................................30351
655.207  (b)(1) and (3) revised....................................24141
655.211  (a) revised...............................................30351
Chapter VI
701  Amendments at 50 FR 391 confirmed..............................4281
701.101  (b) revised................................................4281
701.301  (a)(12)(iii) revised.......................................4281
702  Amendments at 50 FR 393 confirmed..............................4281
702.101  Amended....................................................4282
702.145  (b) revised................................................4282
702.146  (c) revised................................................4282
702.162  (a) and (h) revised........................................4282
702.172  Revised....................................................4283
702.174  (a)(1) and (d)(2) revised..................................4283
702.175  (a) revised................................................4283
702.201  (b) revised................................................4283
702.211  (b) introductory text, (1) and (4) revised.................4283
702.212  (a)(3) revised.............................................4283
702.216  Revised....................................................4283
702.221  (b) revised................................................4284
702.241  (c) revised................................................4284
702.242  (b)(5) and (7) revised.....................................4284
702.243  (a), (c), (f), and (g) revised.............................4284
702.281  (b) revised................................................4284
702.321  Revised....................................................4285
702.410  (c) revised................................................4286
702.413  Revised....................................................4286
702.414  Revised....................................................4286
702.415  Revised....................................................4286
702.601  (c) revised................................................4286
702.604  (b) revised................................................4286
703  Amendments at 50 FR 406 confirmed..............................4281

                                  1987

20 CFR
                                                                   52 FR
                                                                    Page
Chapter V
602  Added.........................................................33528
602.41  Corrected..................................................34343
654.400--654.417 (Subpart E)  Authority citation revised...........20506
654.403  Revised; interim..........................................20506
655  Authority citation revised; subpart and section authority 
        citations removed..........................................20507

[[Page 946]]

655.0  (a) amended; (b) and (c) removed; (d) and (e) redesignated 
        as (b) and (c); interim....................................20507
655.00  Amended; interim...........................................20507
655.000  (a) amended; interim......................................20507
655.1  (a) designation and (b) removed; interim....................20507
655.90--655.113 (Subpart B)  Revised; interim......................20507
655.200--655.212 (Subpart C)  Heading revised; interim.............20524
655.200  (a) and (b) redesignated as (b) and (c); new (a) added; 
        interim....................................................20524
655.202  (b)(9)(ii) revised........................................11466
655.207  (c) and (d) removed; (e) redesignated as (c)..............11466
656  Authority citation revised; section authority citations 
        removed.............................................11218, 20596
656.10  Schedule A amended.........................................20596
656.22  (c)(2) removed; (c)(3) redesignated as new (c)(2)..........20596
656.26  (c) amended; (d) through (h) removed; heading and (a) 
        introductory text revised..................................11218
656.27  Revised....................................................11218
656.27a  Removed...................................................11219
656.50  Amended.............................................11219, 20596
656.61  Removed....................................................20596
Chapter VII
801  Revised.......................................................27290
801.2  (a)(2) corrected............................................28640
802  Revised.......................................................27292

                                  1988

20 CFR
                                                                   53 FR
                                                                    Page
Chapter IV
501.3  (d)(3) revised..............................................49491
501.10  Heading revised; (d) added.................................49491
Chapter V
606  Added.........................................................37429
614  Authority citation revised....................................40553
614.1  (a) and (d)(4)(ii) revised; (d)(2) redesignated as 
        (d)(2)(i); (d)(2)(ii) added; OMB number....................40553
    (d)(2)(ii) corrected...........................................43799
614.2  (g) revised.................................................40554
    (g)(1) introductory text corrected.............................43799
614.3  (c) and (d) amended; (e) added..............................40554
614.4  (c) and (d) revised.........................................40554
614.5  (c) revised.................................................40554
614.6  Heading, (a), (d), (e), and (g) revised.....................40554
614.11  (i) revised................................................40555
614.21  Revised....................................................40555
614.23  Removed; new 614.23 redesignated from 614.25 and revised 
                                                                   40555
614.24  Removed; new 614.24 redesignated from 614.26 and (a) 
        revised....................................................40555
614.25  Redesignated as 614.23 and revised; new 614.25 added.......40555
614.26  Redesignated as 614.24 and (a) revised.....................40555
614  Appendixes A, B, and C added..................................40555
    Appendixes A and B corrected...................................43799
615  Revised.......................................................27937
617.3  (w) and (x) redesignated as (z) and (aa) and (y) through 
        (nn) redesignated as (cc) through (rr); (b), (m), and new 
        (ii) revised; new (w), (x), (y), and (bb) added............32348
617.11  (a) introductory text, (3) (i) and (ii), and (6)(ii) 
        revised; (a)(7) added......................................32349
617.13  (c)(2) amended.............................................32349
617.14  (a)(2) revised.............................................32349
617.15  (a) and (c) revised........................................32349
617.17  Revised....................................................32350
617.18  (c) added..................................................32350
617.20  (a) revised................................................32350
    (b) (1) through (12) redesignated as (b) (2) through (13); new 
(b)(1) added.......................................................32350
617.22  (a) introductory text and (3) revised; new (i) added.......32350
617.25  Revised....................................................32350
617.34  (a)(1) introductory text revised...........................32351
617.46  (a)(1) introductory text revised...........................32351
617.50--617.65 (Subpart F)  Redesignated as (Subpart G)............32351
617.49 (Subpart F)  Added..........................................32351
617.50--617.65 (Subpart G)  Redesignated from (Subpart F)..........32351
617.59  (a) and (b) revised; (f) amended...........................32351

[[Page 947]]

617.62  (c) revised................................................32352
617.66  Added......................................................32352
626  Revised........................................................4265
    Revised; interim...............................................41576
627  Revised........................................................4268
    Revised; interim...............................................41579
628  Revised........................................................4268
    Revised; interim...............................................41580
629  Revised........................................................4269
    Revised; interim...............................................41581
630  Revised........................................................4276
    Revised; interim...............................................41588
631  Revised........................................................4276
    Revised; interim...............................................41589
639  Added; interim................................................48890
654  Authority citation removed....................................23347
654.1--654.10 (Subpart A)  Authority citation added; section 
        authority citations removed................................23347
654.4  (b) (1) and (2) amended.....................................23347
654.5  (b) revised.................................................23347
654.11--654.14 (Subpart B)  Authority citation added; section 
        authority citations removed................................23348
Chapter VII
802.105  (b) added.................................................16519
802.202  Heading revised; (d) and (e) added........................16519
802.301  (c) added.................................................16519
Chapter VIII
901.11  (a) amended; (d) through (n) added.........................34484

                                  1989

20 CFR
                                                                   54 FR
                                                                    Page
Chapter V
617.14  (a)(2) amended.............................................22277
617.49  (a)(3) amended.............................................22277
617.55  (a)(2)(ii)(C)(3) and (4)(i) redesignated as (a)(3) and 
        (4)(i).....................................................22277
626  Revised.......................................................39126
626.2  (a) revised.................................................39354
626.3  Amended.....................................................39354
627  Revised.......................................................39129
628  Revised.......................................................39130
629  Revised.......................................................39131
630  Revised.......................................................39138
631  Revised.......................................................39139
635  Redesignated as Part 1005 and authority citation revised......39354
639  Revised.......................................................16064
    Technical correction...........................................18073
639.11  Amended; interim.....................................13167,15405
652  Authority citation revised....................................39354
652.100  Redesignated as 1001.100 and (d) amended..................39353
    Added..........................................................39354
652.101  Redesignated as 1001.101 and amended......................39353
652.110  Redesignated as 1001.110..................................39353
652.120  Redesignated as 1001.120..................................39353
652.121  Redesignated as 1001.121..................................39353
652.122  Redesignated as 1001.122..................................39353
652.123  Redesignated as 1001.123 and (a)(2) amended...............39353
652.124  Redesignated as 1001.124..................................39353
652.125  Redesignated as 1001.125..................................39353
652.130  Redesignated as 1001.130 and (a) revised; (b) and (d) 
        amended....................................................39353
652.131  Redesignated as 1001.131 and amended......................39353
652.140  Redesignated as 1001.140 and (c) amended..................39353
652.141  Redesignated as 1001.141..................................39353
652.142  Redesignated as 1001.142..................................39353
653 (Subpart C)  Heading removed...................................39355
655  Authority citation revised....................................28046
655.107  (a) republished...........................................28046
Chapter IX
Chapter IX  Chapter established....................................39353
1001  Heading and authority citation added.........................39353
1001.100--1001.101 (Subpart A)  Heading added......................39353
1001.100  Redesignated from 652.100 and (d) amended................39353
1001.101  Redesignated from 652.101 and amended....................39353
1001.110 (Subpart B)  Heading added................................39353
1001.110  Redesignated from 652.110................................39353

[[Page 948]]

1001.120--1001.125 (Subpart C)  Heading added......................39353
1001.120  Redesignated from 652.120................................39353
1001.121  Redesignated from 652.121................................39353
1001.122  Redesignated from 652.122................................39353
1001.123  Redesignated from 652.123 and (a)(2) amended.............39353
1001.124  Redesignated from 652.124................................39353
1001.125  Redesignated from 652.125................................39353
1001.130--1001.131 (Subpart D)  Heading added......................39353
1001.130  Redesignated from 652.130 and (a) revised; (b) and (d) 
        amended....................................................39353
1001.131  Redesignated from 652.131 and amended....................39353
1001.140--1001.142 (Subpart E)  Heading added......................39353
1001.140  Redesignated from 652.140 and (c) amended................39353
1001.141  Redesignated from 652.141................................39353
1001.142  Redesignated from 652.142................................39353
1005  Redesignated from Part 635 and authority citation revised....39354
1005.1  Amended....................................................39354
1005.2  (a) amended................................................39354
1005.12  (b) and (c) amended.......................................39354
1005.13  (a) introductory text and (c) amended.....................39354
1005.14  Amended...................................................39354
1005.15  (c) amended...............................................39354
1005.21  Revised...................................................39354
1005.25  (b) and (c) amended.......................................39354

                                  1990

20 CFR
                                                                   55 FR
                                                                    Page
Chapter V
621  Removed; interim..............................................50510
621.1  Redesignated as 655.1; interim..............................50510
621.2  Redesignated as 655.2; interim..............................50510
621.3  Redesignated as 655.3; interim..............................50510
625  Authority citation revised......................................553
625.1  (a) through (c) revised; interim..............................554
625.2  (d) (1) through (6) redesignated as (d) introductory text 
        through (5); (a), (e), new (d) introductory text, (4), 
        (5), (e), (f), (h), (k), (l), (p), (q) and (r)(1) revised; 
        interim......................................................554
625.3  Revised; interim..............................................554
625.4  (g) and (h) amended; (i) added; interim.......................555
625.5  (a)(1) and (b)(1) revised; interim............................555
625.6  (a) (1), (4), (b) and (c) revised; interim....................555
625.8  (f)(1) revised; interim.......................................555
625.9  (f) revised; interim..........................................555
625.10  (b) removed; (c) through (f) redesignated as (b) through 
        (e); and (a), new (b)(1), new (c) (1) and (3) through (5), 
        new (d) (1), (2), (4), (6), and new (e)(1) are revised; 
        interim......................................................555
625.12  (b) introductory text revised; interim.......................556
625.13  (a)(1) removed; (a) (2) through (7) redesignated as (a) 
        (1) through (6); new (a)(1) revised; interim.................556
625.14  (b) and (h) revised; interim.................................556
625.20  Amended; interim.............................................557
625.30  Added; interim...............................................557
625  Appendix A added; interim.......................................558
    Appendix B added; interim........................................559
    Appendix C added; interim........................................562
626  Authority citation revised....................................53251
626.2  (a) amended.................................................12996
    (a) corrected..................................................26682
626.3  Amended..............................................12996, 53251
    Corrected......................................................23634
626.4  Amended.....................................................53252
627  Authority citation revised....................................53252
627.4  (b) amended.................................................53252
629  Authority citation and heading revised........................53252
629.1  (a), (b) and (e) amended; (f) added.........................53252
636  Authority citation revised....................................13007
636.1  (a) amended.................................................13007
    Technical correction...........................................23634

[[Page 949]]

637  Added.........................................................53252
638  Redesignated from Part 684 and revised........................12996
638.403  Heading corrected.........................................23634
638.538  Correctly designated......................................23634
655  Authority citation revised....................................29358
    Authority citation and heading revised; interim................50510
655.0  (a) introductory text, (1), (2) and (b) redesignated as 
        (a)(1) introductory text, (i), (ii) and (2); new (a) 
        heading and (b) added; new (a)(1) amended; interim.........50510
655.00  Heading revised; text amended; interim.....................50510
655.000  (a) amended; interim......................................50510
655.1--655.3 (Subpart A)  Heading revised; interim.................50510
655.1  Removed; new 655.1 redesignated from 621.1 and revised; 
        interim....................................................50510
655.2  Redesignated from 621.2 and amended; interim................50510
655.3  Redesignated from 621.3; (a) through (d) amended; interim 
                                                                   50510
655.103  (e) republished; interim..................................29358
655.106  (f) and (g) republished; interim..........................29358
655.300--655.350 (Subpart D)  Added; interim.......................50511
655.400--655.455 (Supart E)  Added; interim.................50511, 50523
675  Removed.......................................................13007
    Technical correction...........................................23634
676  Removed.......................................................13007
    Technical correction...........................................23634
677  Removed.......................................................13007
    Technical correction...........................................23634
678  Removed.......................................................13007
    Technical correction...........................................23634
679  Removed.......................................................13007
    Technical correction...........................................23634
680  Removed.......................................................13007
    Technical correction...........................................23634
684  Redesignated as Part 638 and revised..........................12996
    Technical correction...........................................23634
685  Removed.......................................................13007
    Technical correction...........................................23634
688  Removed.......................................................13007
    Technical correction...........................................23634
689  Removed.......................................................13007
    Technical correction...........................................23634
Chapter VI
701  Authority citation revised....................................28606
    Authority citation corrected...................................33669
701.201  Revised...................................................28606
701.202  Revised...................................................28606
701.301  (a)(7) revised............................................28606
702  Authority citation revised; nomenclature change...............28606
    Authority citation corrected...................................33669
702.105  Added.....................................................28606
702.433  (e) and (f) nomeclature changes...........................28606
702.434  (a), (b), and (c) nomenclature change.....................28606
703  Authority citation revised; nomenclature change...............28606
    Authority citation corrected...................................33669
704  Authority citation revised; nomenclature change...............28606
    Authority citation corrected...................................33669
718  Authority citation revised; nomenclature change...............28606
722  Authority citation revised....................................28606
725  Authority citation revised....................................28606
725.101  (a)(11) revised...........................................28606
726  Authority citation revised....................................28606
    Nomenclature change............................................28607
727  Authority citation revised....................................28606
    Nomenclature change............................................28607

                                  1991

20 CFR
                                                                   56 FR
                                                                    Page
Chapter V
625.1  Regulation at 55 FR 554 confirmed...........................22805
625.2  Regulation at 55 FR 554 confirmed; (p), (q)(1), (2) and 
        (r)(1)(ii) amended.........................................22805
625.3  Regulation at 55 FR 554 confirmed...........................22805
    (b) amended....................................................22806
625.4  Regulation at 55 FR 555 confirmed...........................22805
625.5  Regulation at 55 FR 555 confirmed...........................22805
    (a)(1) and (b)(1) amended......................................22806

[[Page 950]]

625.6  Regulation at 55 FR 555 confirmed; (a)(1) amended...........22805
    (b) and (c) amended............................................22806
625.8  Regulation at 55 FR 555 confirmed...........................22805
625.9  Regulation at 55 FR 555 confirmed...........................22805
625.10  Regulation at 55 FR 555 confirmed; (a)(1) and (b)(1) 
        amended....................................................22805
625.12  Regulation at 55 FR 556 confirmed..........................22805
625.13  Regulation at 55 FR 556 confirmed..........................22805
625.14  Regulation at 55 FR 556 confirmed..........................22805
625.20  Regulation at 55 FR 557 confirmed..........................22805
625.30  Regulation at 55 FR 557 confirmed; heading, (a) and (b)(1) 
        amended....................................................22805
625  Appendix A regulation at 55 FR 558 confirmed..................22805
    Appendix B regulation at 55 FR 559 confirmed...................22805
    Appendix C regulation at 55 FR 562 confirmed...................22805
629.57  (c)(1) amended.............................................54708
636.10  (a)(1) amended.............................................54708
655  Authority citation revised......................24666, 54738, 56875
655.0  (c) redesignated as (a)(3); new (c) added; interim; 
        effective to 12-31-91......................................24667
    (d) added; interim.............................................54738
    (e) added; interim.............................................56875
655.000  (a) amended; interim; effective to 12-31-91...............24667
    Redesignated as 655.4 and revised; interim.....................56875
655.4  Redesignated from 655.000 and revised; interim..............56875
655.215  Added; interim............................................56876
655.500--655.550 (Subpart F)  Added; interim; effective to 12-31-
        91..................................................24654, 24667
655.510  Corrected; OMB number.....................................29431
655.520  Corrected; OMB number.....................................29431
655.550  Corrected; OMB number.....................................29431
655.500--655.550 (Subpart F)  Appendix 1 correctly added...........29431
655.600--655.675 (Subpart G)  Added; interim; effective to 12-31-
        91..................................................24660, 24667
655.700--655.760 (Subpart H)  Added; interim................54727, 54738
655.800--655.855 (Subpart I)  Added; interim................54734, 54738
655.900--655.950 (Subpart J)  Added; interim................56865, 56876
655.1000--655.1060 (Subpart K)  Added; interim..............56872, 56876
656  Authority citation revised....................................54927
656.1  (a) introductory text and (c) amended.......................54927
656.2  Revised; interim............................................54927
656.3  Redesignated from 656.50; amended; interim..................54930
656.10  Introductory text amended; interim.........................54927
656.11  Introductory text amended; interim.........................54927
656.20  (d)(1)(ii)(B) removed; (d)(1)(ii)(B) redesignated as 
        (d)(1)(ii)(A); (d)(1)(i), (ii)(A) and new (d)(1)(ii)(B) 
        amended; (g) and (h) added; interim........................54927
656.21  (b)(3) removed; (b)(4) through (7) redesignated as (b)(3) 
        through (6); (a) introductory text, (b)(1) introductory 
        text, (c), (e), (f) introductory text, (1), (2), (g)(1), 
        (i) introductory text, (1)(i), (2) through (5), (j)(2) and 
        (k) amended; interim.......................................54928
656.21a  (a) introductory text, (1)(i), (ii), (iii)(E), (2), (3), 
        (b)(1) introductory text and (2)(ii) amended; interim......54928
656.22  Revised; interim...........................................54929
656.23  (a), (b), (c), (d) introductory text and (1) amended; 
        interim....................................................54929
656.24  (a), (b)(2)(i) and (iii) amended; interim..................54930
656.26  (c)(2) amended.............................................54708
    (c)(2) and (5) amended; interim................................54930
656.28  Revised; interim,..........................................54930
656.30  (b)(1), (c)(1), (2) and (d) amended; interim...............54930
656.50 (Subpart E)  Heading removed; interim.......................54930

[[Page 951]]

    Redesignated as 656.3; amended; interim........................54930
656.60  Amended....................................................54930
658.424  (a)(3) amended............................................54708
Chapter VI
725.101  (a)(13) amended...........................................54708
Chapter VII
801  Authority citation revised....................................54538
801.303  Revised...................................................54538
802  Authority citation revised....................................54538
802.204  Amended...................................................54538

                                  1992

20 CFR
                                                                   57 FR
                                                                    Page
Chapter V
614.1  (a) amended; interim........................................59799
614.2  (g) revised; (p)(1) amended; interim........................59799
614.3  (e) removed; interim........................................59799
    (c) and (d) revised; interim...................................59800
614.4  (c) and (d) revised; interim................................59800
614.27  Removed; interim...........................................59800
626  Revised; interim; effective to 6-1-93.........................62025
627  Revised; interim; effective to 6-1-93.........................62030
628  Revised; interim; effective to 6-1-93.........................62052
629  Removed; interim; effective 12-18-92..........................62061
630  Removed; interim; effective 12-18-92..........................62061
631  Revised; interim; effective to 6-1-93.........................62062
637  Revised; interim; effective to 6-1-93.........................62072
655  Authority citation revised..............................1337, 40989
655.0  (d) amended..................................................1337
    Regulation at 56 FR 24667 effective date extended through 3-
31-92................................................................183
    Regulation at 56 FR 24667 effective date extended through 6-
30-92..............................................................10989
    Regulation at 56 FR 24667 effective date extended through 7-
10-92..............................................................29204
    Regulation at 56 FR 24667 effective date extended through 9-8-
92.................................................................30640
    Regulation at 56 FR 24667 effective date extended through 10-
8-92 and confirmed.................................................40990
655.000  Regulation at 56 FR 24667 effective date extended through 
        3-31-92......................................................183
    Regulation at 56 FR 24667 extended through 6-30-92.............10989
    Regulation at 56 FR 24667 effective date extended through 7-
10-92..............................................................29204
    Regulation at 56 FR 24667 effective date extended through 9-8-
92.................................................................30640
    Regulation at 56 FR 24667 effective date extended through 10-
8-92 and confirmed.................................................40989
655.100  (b) amended...............................................43123
655.500--655.550 (Subpart F)  Regulations at 56 FR 24654 and 24667 
        effective date extended through 3-31-92......................183
    Regulation at 56 FR 24654, 24667 effective date extended 
through 6-30-92....................................................10989
    Regulation at 56 FR 24654, 24667 effective date extended 
through 7-10-92....................................................29204
    Regulation at 56 FR 24654, 24667 effective date extended 
through 9-8-92.....................................................30640
    Regulation at 56 FR 24654, 24667 effective date extended 
through 10-8-92....................................................40989
    Revised........................................................40990
655.510  (g)(2)(viii) corrected....................................43495
655.600--655.675 (Subpart G)  Regulations at 56 FR 24660 and 24667 
        effective date extended through 3-31-92......................183
    Regulation at 56 FR 24654, 24667 effective date extended 
through 6-30-92....................................................10989
    Regulation at 56 FR 24654, 24667 effective date extended 
through 7-10-92....................................................29204
    Regulation at 56 FR 24654, 24667 effective date extended 
through 9-8-92.....................................................30640
    Regulation at 56 FR 24654, 24667 effective date extended 
through 10-8-92....................................................40989

[[Page 952]]

    Revised........................................................40990
655.615  (b)(4)(v) corrected.......................................43495
655.700--655.760 (Subpart H)  Revised; interim................1325, 1337
655.800--655.855 (Subpart I)  Revised; interim................1333, 1337

                                  1993

20 CFR
                                                                   58 FR
                                                                    Page
Chapter V
614.1  Regulation at 57 FR 59799 confirmed.........................43783
614.2  Regulation at 57 FR 59799 confirmed.........................43783
614.3  Regulations at 57 FR 59799 and 59800 confirmed..............43783
614.4  Regulation at 57 FR 59800 confirmed.........................43783
614.27  Regulation at 57 FR 59800 confirmed........................43783
626  Regulation at 57 FR 62025 eff. date revised; interim..........31472
626.4  Table amended...............................................69099
627  Regulation at 57 FR 62030 eff. date revised; interim..........31472
627.900  Revised; interim..........................................31472
627.902  (i) and (j) removed; (h) amended; interim.................31472
627.904  (g) revised; (m), (n) and (o) added; interim..............31472
627.906  (a) amended; interim......................................31473
628  Regulation at 57 FR 62052 effective date revised; interim.....31472
629  Regulation at 57 FR 62061 effective date revised; interim.....31472
630  Regulation at 57 FR 62061 effective date revised; interim.....31472
631  Regulation at 57 FR 62062 effective date revised; interim.....31472
637  Regulation at 57 FR 62072 effective date revised; interim.....31472
638.200  Amended...................................................69099
638.301  (j) added.................................................69100
638.302  Revised...................................................69100
638.400  (a) revised...............................................69100
638.401  (d) added.................................................69100
638.539  (g)(1) revised............................................69100
638.541  Amended...................................................69100
638.542  Existing text designated as (b); (a) added................69100
655  Authority citation revised....................................69228
655.700  (c) redesignated as (c)(1); (c)(2) added; interim.........69228
Chapter VI
702  Authority citation revised....................................68032
702.202  Revised; OMB number.......................................68032
702.214  Revised...................................................68032
702.221  (a) revised...............................................68032

                                  1994

20 CFR
                                                                   59 FR
                                                                    Page
Chapter V
617.3  (j), (m), (t), (aa), (ff) and (oo)(4) revised.................926
    (h)(1),  (kk)(1) and (2) revised.................................927
617.4  (c) heading revised; (d) and (e) added........................927
617.10  (d) added....................................................928
    (c)  amended.....................................................943
617.11  Revised......................................................928
617.14  (a)(2) revised...............................................931
617.15  Revised......................................................931
617.16  Revised......................................................932
617.17  Revised......................................................932
617.18  (b) revised..................................................932
617.19  Added (OMB number)...........................................932
617.20  Revised......................................................934
617.21  Introductory text, (e) and (g) revised.......................934
617.22  (a), (b), (c), (f)(2), and (3) revised; (4) added............935
617.24  Revised......................................................936
617.25  Revised......................................................936
617.26  Revised......................................................938
617.32  (a)(4) revised...............................................938
617.33  Revised......................................................938
617.34  (b) revised..................................................939
617.42  (a)(6) revised...............................................939
617.44  Revised......................................................939
617.49  (e) added....................................................939
617.50  (a) and (d) revised..........................................939
    (g)  amended.....................................................943
617.55  Revised......................................................939
    (g)  amended.....................................................943
617.59  (h) and (i) added............................................941
617.60  Revised......................................................941
617.64  Revised......................................................941
617.67  Added........................................................941

[[Page 953]]

617  Appendixes A and B redesignated as Appendixes B and C; new 
        appendix A added.............................................943
621  Regulation at 55 FR 50510 confirmed.............................897
    Technical  correction...........................................5484
621.1  Regulation at 55 FR 50510 confirmed...........................897
621.2  Regulation at 55 FR 50510 confirmed...........................897
621.3  Regulation at 55 FR 50510 confirmed...........................897
626  Revised; eff. 6-30-95.........................................45815
626.2  (a) amended.................................................26600
626.3  (a) amended.................................................26600
626.4  Amended.....................................................26601
627  Revised; eff. in part 10-3-94 and 6-30-95.....................45821
628  Revised; eff. 6-30-95.........................................45845
631  Revised; eff. 6-30-95.........................................45857
637  Revised; eff. 6-30-95.........................................45868
655  Regulation  at 55 FR 50510 confirmed............................897
      Authority citation revised...................................65676
655.0  Regulation at 55 FR 50510 confirmed...........................897
655.1  Regulation at 55 FR 50510 confirmed...........................897
655.2  Regulation at 55 FR 50510 confirmed...........................897
655.3  Regulation at 55 FR 50510 confirmed...........................897
655.00  Regulation at 55 FR 50510 confirmed..........................897
655.000  Regulation at 55 FR 50510 confirmed.........................897
655.104  (c)(3) revised............................................41875
655.112  (a)(2) and (b)(2) revised.................................41876
655.204  (d)(2) revised............................................41876
655.206  (c) revised...............................................41876
655.212  Revised...................................................41876
655.300--655.350 (Subpart D)  Regulation at 55 FR 50511 confirmed 
        and revised..................................................897
    Regulation  at 59 FR 897 eff. date corrected to 2-7-94..........5484
655.310  OMB number pending..........................................897
    OMB  number.....................................................5487
655.350  OMB number pending..........................................897
655.400--655.460 (Subpart E)  Regulation at 55 FR 50511 confirmed 
        and revised..................................................897
    Regulation  at 59 FR 897 eff. date corrected to 2-7-94..........5484
655.700--655.760 (Subpart H)  Revised.......................65659, 65676
655.800--655.855 (Subpart I)  Revised.......................65672, 65676
655.900  (b)(2)(i) and (d) amended; interim.................64776, 64777
    (e) added; interim.............................................64777
655.910  (b)(2)(i) and (e) amended; interim........................64777
655.940  (d)(1)(i)(B), (h)(1) and (3) amended; interim.............64777
Chapter IX
1005  Removed......................................................26601

                                  1995

20 CFR
                                                                   60 FR
                                                                    Page
Chapter IV
507  Enforcement position..........................................49505
Chapter V
625.6  Revised; interim............................................25568
626  Authority citation revised....................................58229
626.4  Amended; interim............................................58229
632  Authority citation revised....................................58229
632.70  Added; interim.............................................58229
638.524  (b) and (c) revised.......................................18993
641  Redesignated from Title 29, Part 89 and revised...............26581
655  Authority citation revised.....................................3976
    655  Enforcement position......................................49505
655.104  Regulation at 59 FR 41875 confirmed.......................26970
655.112  Regulation at 59 FR 41876 confirmed.......................26970
655.204  Regulation at 59 FR 41876 confirmed.......................26970
655.206  Regulation at 59 FR 41876 confirmed.......................26970
655.212  Regulation at 59 FR 41876 confirmed.......................26970
655.500--655.550 (Subpart F)  Revised; interim................3955, 3976
655.510  OMB number.................................................3959
655.520  OMB number.................................................3963
655.550  OMB number.................................................3968
655.600--655.675 (Subpart G)  Revised; interim................3969, 3977
655.730  OMB number.................................................4029
655.760  OMB number.................................................4029

[[Page 954]]

655.900  (b)(2)(i) and (d) amended; (e) revised.....34133, 34134, 38958, 
                                                     38959, 61210, 61211
    (b)(2)(i), (d) and (e) amended; interim.................49753, 49754
655.910  (b)(2)(i) and (e) amended; interim.........34133, 34134, 38958, 
                                                            38959, 49754
    (b)(2)(i) and (e) amended...............................61210, 61211
655.940  (d)(1)(i)(B), (h)(1) and (3) amended; interim.....34133, 34134, 
                                                            38959, 49754
    (d)(1)(i)(B) amended; interim..................................38958
    (d)(1)(i)(B), (h)(1) and (3) amended....................61210, 61211
Chapter VI
702  Authority citation revised....................................51348
702.101  Removed...................................................51348
702.102  Heading revised; (a) and (b) redesignated as (b) and (c); 
        new (a) added..............................................51348
702.224  Amended...................................................51348
702.243  (b) amended...............................................51348
702.316  Amended...................................................51348
702.413  Revised...................................................51348
702.414  (a) and (c) revised.......................................51348
703  Authority citation revised....................................51348
703.121  Removed...................................................51348

                                  1996

20 CFR
                                                                   61 FR
                                                                    Page
Chapter V
601.1  (d) added...................................................19983
617.3  (ff) revised................................................19983
626.5  Amended.....................................................19983
655.500--655.550 (Subpart F)  Regulation at 60 FR 3955, 3976 
        confirmed..................................................46990
655.600--655.675 (Subpart G)  Regulation at 60 FR 3969, 3977 
        confirmed..................................................46990
658  Authority citation revised....................................19983
658.710  (d) revised...............................................19983
658.711  Revised...................................................19983
Chapter VI
702  Authority citation revised....................................19984
702.433  (e) and (f) amended.......................................19984
702.434  (a), (b) and (c) amended..................................19984

                                  1997

20 CFR
                                                                   62 FR
                                                                    Page
Chapter V
645  Added; interim................................................61603
Chapter VI
702  Authority citation revised....................................53956
702.204  Revised...................................................53956
702.236  Revised...................................................53956
702.271  (a) revised...............................................53956
Chapter VII
801  Authority citation revised....................................10666
801.303  Revised...................................................10666
802  Authority citation revised....................................10666
802.204  Amended...................................................10666

                                  1998

20 CFR
                                                                   63 FR
                                                                    Page
Chapter V
646  Added; interim................................................15988
656.3  Amended; eff. 5-4-98........................................13767
656.40  (b) introductory text amended; (c) redesignated as (d); 
        new (c) added; eff. 5-4-98.................................13767
656.50 (Subpart E)  Added; eff. 5-4-98.............................13767