[Federal Register Volume 62, Number 78 (Wednesday, April 23, 1997)]
[Notices]
[Pages 19813-19814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10466]


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DEPARTMENT OF LABOR

Employment and Training Administration


Federal-State Unemployment Compensation Program: Unemployment 
Insurance Program Letters Interpreting Federal Unemployment Insurance 
Law

    The Employment and Training Administration interprets Federal law

[[Page 19814]]

requirements pertaining to unemployment compensation as part of its 
role in the administration of the Federal-State unemployment 
compensation program. These interpretations are issued in Unemployment 
Insurance Program Letters (UIPLs) to the State Employment Security 
Agencies (SESAs). The UIPL described below is published in the Federal 
Register in order to inform the public.

UIPL 22-97

    Several questions have arisen concerning the coverage of certain 
governmental services performed as a result of natural disasters. These 
questions have concerned Section 3309(b)(3)(D) of the Federal 
Unemployment Tax Act, which permits the exclusion from coverage of 
temporary governmental services performed ``in case of * * * 
emergency''. This UIPL is issued to restate the Department's 
interpretation concerning what services are performed ``in case of * * 
* emergency'' and to provide the Department's position on the 
distinction between emergencies and disasters. This UIPL does not 
represent a change to the Department's interpretation of Federal law.

    Dated: April 17, 1997.
Raymond J. Uhalde,
Acting Assistant Secretary of Labor.

U.S. Department of Labor

Employment and Training Administration, Washington, DC 20210

Classification, UI
Correspondence Symbol, TEUL
Date, April 14, 1997

Directive: Unemployment Insurance Program Letter No. 22-97
To: All State Employment Security Agencies
From: Grace A. Kilbane, Director, Unemployment Insurance Service
Subject: Exclusion of Governmental Services Performed ``In Case of 
Emergency''

    1. Purpose. To restate a Departmental interpretation of a 
Federal law exclusion from unemployment compensation (UC) coverage 
for governmental services performed in case of emergency and to 
provide the Department's position on the distinction between 
emergencies and disasters.
    2. References. The Federal Unemployment Tax Act (FUTA); Draft 
Language and Commentary to Implement the Unemployment Compensation 
Amendments of 1976--P.L. 94-566 (1976 Draft Language).
    3. Background. In the past year, several questions have arisen 
concerning the coverage of certain governmental services performed 
as a result of natural disasters. These questions have concerned 
Section 3309(b)(3)(D), FUTA, which permits the exclusion from 
coverage of temporary governmental services performed ``in case of * 
* * emergency''. This UIPL is issued to restate the Department's 
interpretation concerning what services are performed ``in case of * 
* * emergency'' and to provide the Department's position on the 
distinction between emergencies and disasters.

Rescissions, None
Expiration Date, Continuing
    4. Federal Law Requirements. The Department has long taken the 
position that, because FUTA is a remedial statute aimed at 
overcoming the evils of unemployment, it is to be liberally 
construed to effectuate its purposes and exceptions to its coverage 
requirements are to be narrowly construed. This rule of construction 
avoids ``difficulties for which the remedy was devised and adroit 
schemes by some employers and employees to avoid the immediate 
burdens at the expense of the benefits sought by the legislation.'' 
\1\ As such, provisions requiring coverage of services are construed 
broadly, while exceptions to required coverage are construed 
narrowly.
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    \1\ This rule of construction was set forth on page 5 of 
Supplement #5--Questions and Answers Supplementing Draft Language 
and Commentary to Implement the Unemployment Compensation Amendments 
of 1976--P.L. 94-566, dated November 13, 1978. Several Federal court 
decisions, including two involving Federal UC law, United States v. 
Silk, 331 U.S. 704, 712 (1947) and Farming, Inc. v. Manning, 219 
F.2d 779, 782 (3d Cir., 1955), state this principle. More recently 
this principle was stated in UIPL 30-96, dated August 8, 1996.
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    Among other things, Section 3304(a)(6)(A), FUTA, requires 
coverage of services performed for certain governmental entities. 
Specifically, it requires coverage of services to which Section 
3309(a)(1) applies. Among these services are those excluded from the 
term ``employment'' solely by reason of Section 3306(c)(7). Section 
3306(c)(7) applies to services performed for a ``State, or any 
political subdivision thereof'' and instrumentalities of these 
entities. Exceptions to this required coverage are permitted only 
when specified by Federal law.
    Section 3309(b)(3) excludes from required coverage services 
performed for the above governmental entities if such service is 
performed by an individual in the exercise of his duties--
    (d) as an employee serving on a temporary basis in case of fire, 
storm, snow, earthquake, flood, or similar emergency. * * * 
[Emphasis added.]
    5. Discussion. In his remarks on the legislation which created 
the emergency exclusion, Representative Corman, the acting chairman 
of the responsible subcommittee, stated that--
    A similarly worded exclusion is also contained in the Social 
Security Act and in the unemployment compensation program for 
Federal employees. This exclusion has the purpose of excluding only 
those individuals hired or impressed into service to deal directly 
with an emergency or urgent distress associated with an emergency. 
[122 Cong. Rec. 35131 (1976). Emphasis added.]
    In 1976 the Department quoted the above language and stated 
that--
    [T]he exclusion applies to individuals who are hired or 
impressed to assist in emergencies and includes such tasks as fire-
fighting, removal of storm debris, restoration of public facilities, 
snow removal, road clearance, etc. [1976 Draft Legislation, page 27. 
Emphasis added.]
    The FUTA exclusion applies only to services performed ``in case 
of'' fire, storm, snow, earthquake, flood, or similar emergency. 
``Emergency'' is defined in the Second College Edition of the 
American Heritage Dictionary as ``an unexpected situation or sudden 
occurrence of a serious and urgent nature that demands immediate 
action.'' The FUTA language ``in case of'' indicates that it is the 
emergency itself--or the urgent distress caused by the emergency--
which must directly cause the need for the services to be performed. 
Therefore, for the services to be performed ``in case of * * * 
emergency,'' a direct relationship must exist between the services 
and the emergency, as defined above.
    Whether services performed as a result of a disaster are also 
performed ``in case of * * * emergency'' must be determined on a 
case-by-case basis. ``Disaster'' is defined in the Second College 
Edition of the American Heritage Dictionary as ``an occurrence 
causing widespread destruction and distress.'' Since disaster-
related services may be performed after the need for immediate 
action has passed, they are not necessarily performed ``in case of * 
* * emergency.'' For example, services performed removing hurricane 
debris to gain access to a hospital are performed ``in case of * * * 
emergency'' when there is an immediate need to obtain access to the 
hospital. However, when the removal of hurricane debris from the 
roadside does not require immediate action, services are not 
performed ``in case of * * * emergency'' and may not be excluded 
from coverage on that basis.
    Conversely, an emergency situation does not always rise to the 
level of a disaster. For example, an emergency situation need not be 
widespread. Thus, even in the absence of a disaster, services may be 
performed ``in case of * * * emergency'' and the services may be 
excluded from coverage.
    Each State is responsible for obtaining sufficient facts to 
support a determination under provisions of State law corresponding 
to the FUTA exclusion that the services were performed ``in case of 
* * * emergency.''
    6. Action required. State agency administrators are requested to 
provide this UIPL to appropriate staff.
    7. Inquiries. Direct questions to your Regional Office.

[FR Doc. 97-10466 Filed 4-22-97; 8:45 am]
BILLING CODE 4510-30-M