[Federal Register Volume 61, Number 57 (Friday, March 22, 1996)]
[Notices]
[Pages 11871-11874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6989]



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DEPARTMENT OF LABOR

Employment and Training Administration


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

    On January 6, 1996, Public Law 104-92 was enacted. Section 312 of 
Title III of the Act created the Unemployment Compensation for Federal 
Employees Excepted Employee Program (UCFE-EEP) effective January 2, 
1996. Under the UCFE-EEP, Federal employees excepted from furlough and 
who are not being paid due to a lapse in appropriations shall be deemed 
to be totally separated from Federal service and eligible for 
unemployment

[[Page 11872]]
compensation under the regular UCFE program with no waiting period to 
accrue for eligibility.
    In its role as principal in the UCFE-EEP, the Department of Labor 
issued controlling guidance for the States and cooperating State 
agencies in the operating instructions set forth in Unemployment 
Insurance Program Letter (UIPL) No. 7-96, dated January 24, 1996, and 
UIPL 7-96, Change 1, dated March 8, 1996. The States administer the 
UCFE Program pursuant to agreements between the States and the 
Secretary of Labor. Since the UCFE-EEP is a sub-program of the UCFE 
Program, the same agreement applies.
    The States and cooperating State agencies may not vary from the 
operating instructions provided in UIPL 7-96 or UIPL 7-96, Change 1, 
(or any subsequent or supplemental operating instructions), without the 
prior approval of the Department of Labor. Therefore, UIPLs No. 7-96 
and 7-96, Change 1, are published below assuring public notification of 
the required procedures.

    Signed at Washington, DC on March 14, 1996.
Timothy M. Barnicle,
Assistant Secretary.

Directive: Unemployment Insurance Program Letter No. 7-96
To: All State Employment Security Agencies
From: Mary Ann Wyrsch, Director, Unemployment Insurance Service
Subject: Unemployment Compensation for Federal Employees (UCFE)--
Federal Employees Excepted from Furlough (UCFE-Excepted Employees 
Program)

    1. Purpose. To advise State Employment Security Agencies (SESAs) 
of the provisions of Section 312 of Title III of P.L. 102-94 
(Continuing Resolution) concerning eligibility for UCFE for Federal 
civilian employees excepted from furlough and to provide 
instructions for implementing the legislation to ensure the timely 
and accurate payment of benefits under the UCFE-Excepted Employee 
Program (UCFE-EEP) and to provide fiscal and reporting instructions.
    2. References. Title III of P.L. 102-94 (H.R. 1643) enacted 
January 6, 1996; Subchapter I of chapter 85, title 5 of the United 
States Code (5 U.S.C. 8501 et seq.) (UCFE law); 20 CFR Part 609 
(UCFE regulations); Secretary of Labor's Agreement with States to 
administer the UCFE and Unemployment Compensation for Ex-
servicemembers (UCX) Programs.
    3. Background. Generally, whenever there is a lapse in 
appropriations to fund a Federal government agency, the agency must 
shut down activities and furlough its employees. However, there are 
exceptions that permit certain employees to remain working to 
continue selected functions. This includes those functions which the 
failure to perform would result in an imminent threat to the safety 
of human life or the protection of property, or where there is an 
implied authority by statute that the function should continue.

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Rescissions
None.

    Expiration Date: January 31, 1997.

    Unless there are special provisions enacted after the furlough 
which retroactively provide a different outcome, furloughed 
employees may be eligible for UCFE under subchapter I of chapter 85 
of title 5 of the United States Code. However, employees excepted 
from such furloughs would neither be compensated (because of the 
laps in appropriations) nor eligible for UCFE because they perform 
services during the furlough period and would not be considered 
unemployed or otherwise eligible for benefits in accordance with 
State and Federal laws governing the payment of unemployment 
compensation.
    Section 312 of P.L. 102-94 changes and suspends some UCFE 
eligibility requirements, through September 30, 1996, to convey UCFE 
eligibility to employees excepted from furlough who are not being 
paid due to a lapse in appropriations. These changes have, in 
effect, created a sub-program of the regular UCFE program which will 
be known as the UCFE-Excepted Employees Program (UCFE-EEP).
    The purpose of the UCFE-EEP is to provide a weekly payment to 
unpaid workers who are excepted from furlough through September 30, 
1996, similar to that paid under the UCFE program to furloughed 
individuals. To the extent possible these instructions so provide; 
however, in certain instances provisions have had to be changed or 
new provisions added in order to provide a weekly benefit amount to 
individuals not otherwise eligible for UCFE in the absence of 
Section 312.
    This document provides the Department's interpretation of the 
requirements of Section 312 and sets forth operating instructions 
prescribed by the Department to guide the States in implementing the 
provisions of the UCFE-EEP.
    4. Legal Requirements of Section 312 of P.L. 102-94.
    Section 312 provides--
    Eligibility for Unemployment Compensation.-- Nothwithstanding 
any other provisions of law, beginning on January 2, 1996, any 
Federal employee who is excepted from furlough and is not being paid 
due to lapse in appropriations shall be deemed to be totally 
separated from Federal service and eligible for unemployment 
compensation benefits under subchapter I of chapter 85 of title 5 of 
the United States Code with no waiting period for such eligibility 
to accrue.
    Section 8502(b) of 5 U.S.C. 8501 et seq., as implemented by 20 
CFR 609.9(a) of the Secretary's regulations implementing the UCFE 
program, relative to State law applicability, provides that--
    Except where the result would be inconsistent with the 
provisions of the Act or this part or the procedures thereunder 
prescribed by the Department, the terms and conditions of the 
applicable State law which apply to claims for, and the payment of, 
State unemployment compensation shall apply to claims for, and the 
payment of, UCFE and claims for waiting period credit.
    To effectuate the provisions of Section 312 of P.L. 102-94, it 
is necessary to differ, in part, from the State and Federal laws 
normally governing the payment of UCFE. The exceptions to the laws 
and regulations necessitated by this section are described in 
section 7. below.
    5. Effective Dates. Section 312, the UCFE-EEP provisions, are 
effective beginning January 2, 1996 and remain in effect through the 
end of Federal Fiscal Year (FY) 1996 (September 30, 1996). However, 
it has been determined that only weeks of unemployment beginning on 
or after January 27, 1996 are compensable under the provisions of 
Section 312 as the Continuing Resolution provided for retroactive 
pay for excepted employees from December 16, 1995 through January 6, 
1996.
    The Continuing Resolution which provided funding for Federal 
agencies that are without FY 1996 appropriations expires on January 
26, 1996. In the absence of another Continuing Resolution or FY 1996 
appropriations for Federal agencies not funded, the UCFE-EEP will 
become operations for UCFE-EEP claims filed for a week beginning on 
or after January 27, 1996 and thereafter as long as such conditions 
exist, through a week ending on or before September 30, 1996.
    6. Policy. The instructions in this document are issued to the 
States and the cooperating State agencies and constitute controlling 
guidance provided by the Department of Labor in its role as the 
principal in the UCFE program. As agents of the United States, the 
States and the cooperating State agencies may not vary from the 
operating instructions in this directive (or any subsequent or 
supplemental operating instructions) without the prior approval of 
the Department of Labor.
    7. The Department's Interpretation of the Requirements of 
Section 312 of P.L. 102-94 and Controlling Implementation Guidance.
    The Department's interpretation is that all State and Federal 
laws and regulations applicable to UCFE claims are applicable to 
UCFE-EEP claims, except where the result of such application would 
be inconsistent with the provisions of Section 312 of P.L. 102-94, 
as described below.
    Section 312 deems all excepted employees to be totally 
unemployed with respect to Federal service and eligible for 
unemployment compensation ``under'' the UCFE law for as long as such 
excepted states continues (but not beyond September 30, 1996) 
without having to serve any waiting week. Thus, even excepted 
employees having insufficient wages under the State law base period 
must be determined eligible, as well as excepted employees outside 
the United States (i.e., outside the States of the United States, 
District of Columbia, Puerto Rico and the Virgin Islands).
    a. Notwithstanding the requirements governing the determination 
of entitlement under the UCFE/State UI laws, a weekly benefit amount 
for UCFE-EEP claimants must be established for all Federal employees 
excepted from furlough who are not being paid due to a lapse in 
appropriations and

[[Page 11873]]
who file such claims. (This includes excepted employees who would 
otherwise have insufficient base period employment and wages to 
establish monetary entitlement and excepted employees performing 
excepted services outside the United States). The weekly benefit 
amount so determined could potentially be paid through a week ending 
on or before September 30k 1996. Therefore, the State law or Federal 
law maximum total benefit amount does not apply, since, potentially, 
an individual could receive UCFE-EEP for a number of weeks that 
exceed any State's maximum.
    b. Monetary entitlement for UCFE-EEP claims must be determined 
under the qualifying requirements for regular UCFE claims by the 
State in which the excepted employee's official duty station is 
located or deemed located for purposes of UCFE-EEP. To effect this 
requirement, all base period wages covered under any State or 
Federal law will be used in computing UCFE-EEP entitlement under the 
State law.
    The official duty station of an excepted employee who is 
performing services outside of the United States is deemed to be the 
State in which the headquarters of the Federal agency is located.
    c. Charges resulting from the payment of UCFE-EEP benefits must 
be charges to the Federal agency that designated the individual 
filing such claim as a Federal excepted employee.
    d. Section 312 of P.L. 102-94 does not apply to weeks of 
unemployment during which an individual is not in excepted employee 
status. Therefore, UCFE-EEP benefits are not payable for weeks 
during which the individual is not in excepted employee status. In 
order to receive benefits for such weeks, an individual must 
establish or have a separate claim in existence with a remaining 
balance under any of the other unemployment programs and meet all 
the eligibility conditions for the receipt of regular benefits.
    3. Section 312 prohibits the application of any State or Federal 
law requiring availability for work or active work search to UCFE-
EEP claims, including weeks claimed during which the excepted 
employee performed no excepted services because of annual or sick 
leave.
    f. UCFE-EEP benefit eligibility will be determined in accordance 
with UCFE/UI requirements defining total unemployment and deductible 
earnings with respect to any services other than excepted Federal 
service performed by an excepted employee during a week claimed 
since Section 312 provides only that excepted service is treated as 
being totally unemployed.
    g. The pension deduction provisions of State law applies to 
benefits payable under the UCFE-EEP.
    h. Section 312 prohibits the application of any State or Federal 
law requiring an unpaid waiting week or period as a condition to 
receiving compensation for a week claimed by an excepted employee.
    8. UCFE-EEP Implementation Instructions Based on the 
Department's Interpretation of Section 312 of P.L. 102-94. Operating 
procedures to implement the requirements of Section 312 of P.L. 102-
94 as prescribed by the Department are set forth below.
    a. UCFE-EEP Claims Filing Procedures. Most excepted employees 
will be performing full-time excepted services, during the weeks 
involved in the furlough period. Since most excepted employees will 
be working during the normal workday, SESAs should utilize methods 
for filing claims that will allow an excepted employee to remain at 
his/her job site.
    If a State agency waives regular reporting provisions with 
respect to excepted employees, no issue will arise with respect to 
20 CFR 609.9.
    b. Initial Claims.
    (1) New. When a UCFE-EEP claim is filed, the State agency will 
issue a UCFE-EEP monetary determination based on all employment and 
wages during the base period applicable to the claim, without regard 
to separate monetary entitlement under any State or Federal law, 
including UCFE.
    c. Monetary Entitlement.
    (1) Excepted Employee has Sufficient Base Period Wages to 
Qualify. Monetary entitlement for UCFE-EEP claims will be determined 
by the State in which the excepted employee's official duty station 
is located or deemed located, based on all base period employment 
covered under any State or Federal law to establish the weekly 
benefit applicable to the UCFE-EEP claim.
    The Federal agency that designates the individual as an excepted 
employee has been instructed to furnish the State agency, of the 
State in which the excepted employee's official duty Station is 
located or deemed located, with the excepted employee's name, social 
security number, annual Federal salary, base period employment and 
wage information, home address, and effective date of excepted 
designation, within the first week of the Federal agency furlough, 
in accordance with the format and procedures established with the 
State agency prior to the beginning of such furlough. In the event 
of a delay of submittal of required information by such Federal 
agency or if it is deemed to be more expeditious, the SESA may 
utilize an affidavit to determine entitlement as outlined in ET 
Handbook 391, Chapter XIII, page XIII-2.
    To obtain information pertaining to employment and wages covered 
under another State's law, the State agency should follow its 
regular procedures to obtain information pertaining to such wages, 
including using the Request for Wage Transfer procedures (TC-IB4) 
(or the Interstate Inquiry, IBIQ, via the ICON). However, if the TC-
IB4 is used, such use must not interfere with the processing of a 
regular claim and the employment and wages must be returned as 
unused.
    (2) Excepted Employee has Insufficient Base Period Wages to 
Qualify. If the excepted employee has insufficient employment and 
wages in the base period to qualify, the State agency will prorate 
the individual's annual salary, as reported by the Federal agency 
that designated the individual as a Federal excepted employee, in 
terms of quarters or weeks of wages in the base period, as 
appropriate, and issue a monetary determination, accordingly. In 
addition, the excepted worker's most recent earnings and leave 
statement will reflect the excepted employee's annual and weekly 
salary and may be utilized for the projection utilizing the 
affidavit procedure.
    d. UCFE-EEP Weeks Claimed. When an employee is designated as an 
excepted employee, even for a portion of a week, such individual 
shall be determined eligible for UCFE-EEP for the entire week. This 
includes excepted employees who may be on leave during an entire 
week or portion thereof.
    e. Overpayments. Should an appropriation or continuing 
resolution occur that retroactively provides for the payment of 
salary to excepted employees, State and Federal laws governing 
overpayments will need to be applied to weeks paid under the UCFE-
EEP program (20 CFR 609.11).
    f. Relationship to Other Programs. Eligibility for UCFE-EEP has 
no effect on unemployment compensation payable under any other State 
or Federal law. Benefits under this program are payable only to an 
excepted employee. If an excepted employee's status changes for any 
week during the furlough period, UCFE-EEP benefits are not payable 
and the individual must establish eligibility under the regular 
requirements for such week.
    9. Instructions for Reporting UCFE-EEP Transactions on Form ETA 
2112. Advances and expenditures under the Excepted Employee Program 
are to be reported on the ETA 2112 in the same manner as 
transactions for the regular UCFE program.
    Drawdowns: On line 23, include in columns C and E, amounts which 
have been received as advances or reimbursements from the Federal 
Employees Compensation Account (FECA) for payment of benefits to 
Federal civilians under provisions of the UCFE-EEP. Disbursements: 
On line 43, include in columns C and F, net benefit payments made to 
Federal civilians under the UCFE-EEP with funds received from the 
FECA.
    10. Fiscal Requirements. All UCFE-EEP paid to an excepted 
employee during the furlough period will be billed to the Federal 
agency placing the individual in excepted employee status. 
Administrative costs for the workload associated with UCFE-EEP 
claims will be paid from contingency funds at the Fiscal Year 1996 
allocated MPU level.
    11. Reporting Instructions. While counts of UCFE-EEP claims will 
be incorporated in the existing UCFE reporting, separate counts for 
three items of data are required to track the UCFE-EEP claimants. 
Separate counts should be reported weekly on: (a) the number of 
individuals who file new and additional initial claims for UCFE-EEP 
benefits; (b) the number of weeks of UCFE-EEP benefits that were 
compensated during the report week; and (c) the amount of UCFE-EEP 
benefits paid for those weeks.
    Because this should be a temporary situation, this data is to be 
reported electronically on the Quick Response Report. The Quick 
Response Report is a blank report found in the UI Required Reports 
(UIRR) electronic entry system. Once in the UIRR system, ``Access 
Reports'' should be chosen, followed by ``Special Programs'' and 
then ``arQuick Response Report''. This is a blank report where 12 
unlabeled items may be

[[Page 11874]]
reported. Items 1 through 3 are already being used for Self 
Employment data reporting in those few States which have that 
program. Therefore, items 6, 7 and 8 will be used for UCFE-Expected 
Employee claimant data reporting.
    Fill in the report date item using the Saturday week ending date 
of the week in which the activity occurred. Report in item 6 the 
total number of initial claims, both new and additional, filed by 
UCFE-EEP claimants during the report week. Report in item 7 the 
total number of weeks compensated for UCFE-EEP claimants during the 
report week. Report in item 8 the total amount of benefits paid for 
the weeks reported in item 7. Please note in comments that the data 
is for UCFE-EEP claimants. No edits are available on the Quick 
Response Report.
    This report will be due the Friday following the week in which 
the activity took place. Reporting will continue as long as there is 
activity. These reporting requirements have been submitted to the 
Office of Management and Budget (OMB) for approval under the 
Paperwork Reduction Act of 1995. States are not required to report 
until that approval is received. When the approval is received, 
States will be notified and provided the OMB approval number and 
expiration data.
    12. Action Required.
    a. Department of Labor. The Department of Labor has instructed 
affected Federal agencies, directly and through the Office of 
Personnel Management (OPM), to furnish SESAs with the list of each 
agency's excepted employees, including the employee's home address, 
Social Security Number, annual Federal salary rate, effective date 
of designation, and base period qualifying wage and employment 
information. Also, Federal agencies are being instructed to furnish 
an on-going list of employee changes to and from excepted employee 
status if applicable. Once the State agency has been provided with 
all of the information pertaining to an excepted employee, the 
Federal agency will furnish only the pertinent information for 
changes.
    In addition, Federal agencies are being advised to establish a 
liaison person(s) to work with each SESA in administering the UCFE 
program for excepted workers. This may be the same person already 
assigned UCFE program liaison responsibilities.
    To the extent possible, the Department of Labor National Office 
and Regional Offices will work with the affected Federal agencies to 
provide information to the SESAs that will expedite and 
administratively ease the establishment of UCFE-EEP by the SESAs.
    b. State Agencies. SESA Administrators shall:
    (1) Provide the above guidance in this UIPL to appropriate 
staff.
    (2) Ensure that appropriate staff perform all actions necessary 
to provide for the proper payment of UCFE-EEP to excepted employees 
for a program that could begin as early as January 27, 1996. This 
will include--
    (A) When contacted by the Federal agency liaison, coordinating 
with such individual(s) actions necessary to receive the 
information, described in section a. above and any other actions 
determined necessary by the State agency, that will enable UCFE-EEP 
claims to be processed. The claims filing procedures that excepted 
employees are to follow should also be explained to the Federal 
agency;
    (B) Establishing UCFE-EEP claims for excepted employees in a 
prompt manner, minimizing any in-person reporting by such employees. 
For example, the State could send appropriate claims forms to 
individuals identified by the Federal agency as excepted employees 
in order for such individuals to file claims;
    (C) Promptly determining monetary eligibility for UCFE-EEP 
claims based on base period qualifying employment and earnings or 
the annual salary figure supplied by the Federal agency and/or the 
earnings and leave statement furnished by the applicant through the 
use of the ES-935 affidavit process in the absence of base period 
wages reported by the Federal agency;
    (D) Making prompt payment of UCFE-EEP benefits to excepted 
employees including payment for what would otherwise be a waiting 
period;
    (E) Developing any other procedures with Federal agencies that 
will ease administration of this special program;
    (F) Adhering to the fiscal guidelines set forth in this document 
and furnishing required reports in a timely manner.
    13. Inquiries. Questions should be directed to the appropriate 
Regional Office.

Directive: Unemployment Insurance Program Letter No. 7-96, Change 1
To: All State Employment Security Agencies
From: Mary Ann Wyrsch, Director, Unemployment Insurance Service
Subject: Unemployment Compensation for Federal Employees (UCFE) 
Excepted Employee Program (UCFE-EEP)

    1. Purpose. To inform States of Office of Management and Budget 
approval of the reporting on the UCFE-EEP and to correct the 
reference to Public Law (P.L.) 104-92 in UIPL 7-96.
    2. Reference. UIPL 7-96.
    3. OMB Approval. Reporting requirements set forth in the 
referenced UIPL are approved by OMB under the Paperwork Reduction 
Act of 1995. The OMB number is 1205-0364 with an expiration date of 
April 30, 1996. States are not required to respond to this 
collection of information unless it displays a currently valid OMB 
control number.
    4. Burden Estimate. Public reporting burden for this collection 
of information is estimated to average 1 hour per response, 
including the time for reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed, and 
completing and reviewing the information. Send comments regarding 
this burden estimate or any other aspect of this collection of 
information, including suggestions for reducing this burden, to the 
U.S. Department of Labor. Office of Unemployment Insurance, 200 
Constitution Avenue NW., Room S-4519, Washington, D.C. 20210 
(Paperwork Reduction Project 1205-0364).
    5. Correction to UIPL 7-96. All referenced to P.L. 102-94 in 
UIPL 7-96 should be changed to read P.L. 104-92.
    6. Action Required. States are now required to report UCFE-
Excepted Employee data, when appropriate as outlined in the 
referenced UIPL.
    7. Questions. Inquiries should be directed to the appropriate 
Regional Office.

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Rescissions
None.

    Expiration date:

[FR Doc. 96-6989 Filed 3-21-96; 8:45 am]
BILLING CODE 4510-30-M