[Federal Register Volume 63, Number 71 (Tuesday, April 14, 1998)]
[Notices]
[Pages 18230-18231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9830]


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DEPARTMENT OF LABOR

Employment and Training Administration


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

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

UIPL 18-98

    The Department of Labor (DOL) has noticed that some States treat 
the ``between seasons'' denial involving athletic services in the same 
manner as the ``between and within terms'' denial involving educational 
services. UIPL 18-98 explains the differences between these two 
sections of the Federal Unemployment Tax Act (FUTA) and advises the 
States of DOL's position on when UC is payable on athletic services.
    Under the between seasons denial provision, DOL interpreted FUTA as 
requiring States to deny UC to athletes on the basis of any services 
where ``substantially all'' of the services performed by the individual 
during the base period are based on athletically-related services. If 
``substantially all'' of the services have been performed in athletics, 
and a reasonable assurance of participating in athletics in the later 
season exists, then none of the wages may be used to establish 
eligibility and all UC must be denied. Conversely, if the 
``substantially all'' test has not been met, the use of all wages for 
both athletic services and other services, is permissible to determine 
eligibility for UC. Under the between and within terms denial 
provision, DOL interpreted FUTA as requiring that UC not be paid based 
on certain educational services between and within academic periods 
under certain conditions. The denial requirement under this provision 
of FUTA pertains only to UC based on educational, and not athletic, 
services.

    Dated: April 8, 1998.
Raymond J. Uhalde,
Acting Assistant Secretary of Labor.

U.S. Department of Labor

Employment and Training Administration, Washington, D.C. 20210

CLASSIFICATION: UI
CORRESPONDENCE SYMBOL: TEUL
DATE: March 30, 1998
DIRECTIVE: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 18-98
TO: ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM: GRACE A. KILBANE, Director, Unemployment Insurance Service
SUBJECT: Use of Services Performed by Professional Athletes Between 
Seasons

    1. Purpose. To remind States of the Department of Labor's 
(DOL's) position concerning how services performed by professional 
athletes (``athletes'') are used in determining eligibility for 
unemployment compensation (UC).
    2. References. Section 3304(a), Federal Unemployment Tax Act 
(FUTA); Draft Language and Commentary to Implement the Unemployment 
Compensation Amendments of 1976--P.L. 94-566 (``1976 Draft 
Language'') and Supplements 1-5; Employment and Training 
Administration (ETA) Handbook 301; Unemployment Insurance Program 
Letter (UIPL) No. 43-80, dated May 23, 1980.
    3. Background. As a result of implementing its new method of 
measuring nonmonetary performance, DOL has discovered that some 
States treat the ``between seasons'' denial involving athletic 
services in the same manner as the ``between and within terms'' 
denial involving educational services. Although there are 
similarities in the language of these laws, the applications are 
different. As a result, DOL is issuing this UIPL to remind the 
States of its position on when UC is not payable on athletic 
services and to explain the differences between the two sections.
    4. The Between Seasons Denial. Section 3304(a)(13), FUTA, 
requires, as a condition of employers in a State receiving credit 
against the Federal unemployment tax, that--

    Compensation shall not be payable to any individual on the basis 
of any services, substantially all of which consist of participating 
in sports or athletic events or training or preparing to so 
participate, for any week which commences during the period between 
two successive sport seasons (or similar periods) if such individual 
performed services in the first of such seasons (or similar periods) 
and there is a reasonable assurance that such individual will 
perform such services in the later of such seasons (or similar 
periods). [Emphasis added.]

    The Department, thus, interpreted FUTA as requiring States to 
deny UC to athletes on the basis of any services where 
``substantially all'' of the services performed by the individual 
during the base period are based on athletically-related services. 
(See page 22, of Supplement 1, to the 1976 Draft Language.) To 
determine whether ``substantially all'' of the services were 
athletically-related, all services (athletic and non-athletic) must 
be considered together. If ``substantially all'' of the services 
have been performed in athletics, and a reasonable assurance that 
the individual will participate in athletics in the later season 
exists, then none of the wages may be used to establish eligibility, 
and all UC must be denied. Conversely, if the ``substantially all'' 
test has not been met, then FUTA permits the use of all wages to 
determine eligibility for UC.
    Concerning what constitutes ``substantially all,'' DOL has 
previously stated that, at a minimum, ``an individual shall be 
deemed to have performed substantially all services in such sports 
or athletic events if the individual engaged in such sports or 
athletic events for 90 percent or more of the total time spent in 
the base period in the performance of all covered services.'' (See 
page 22, of Supplement 1, to the 1976 Draft Language.)
    The definition of ``substantially all'' as 90 percent as a basis 
for denial of athletic services under Section 3304(a)(13), FUTA, is 
a minimum requirement. FUTA does not prohibit a more stringent 
denial. Therefore, a State may enact a law to deny benefits between 
seasons if the amount of time spent in athletic services was less 
than 90 percent of the total time spent in the performance of all 
services in the base period. (1976 Draft Language, Supplement 4, 
page 11.) For example, a State may choose to deny an athlete if only 
80 percent or more of the total time in the base period was spent 
participating in athletic services.
    Finally, a State may also deny benefits to athletes between 
sport seasons where there is no reasonable assurance.
    5. The Between and Within Terms Denial. Section 3304(a)(6)(A), 
FUTA, requires that UC not be paid based on certain educational 
services between and within periods under certain conditions. This 
denial pertains only to UC based on educational services. It does 
not apply to UC based on any other covered employment.
    As noted in UIPL 34-80, ``since compensation is based only on 
base period employment, the denial must apply only to the amount of 
benefits based on school service performed in the base period. An 
individual who has participated in the labor force in a capacity 
other than as a school employee cannot be denied benefit entitlement 
based on the non-school work simply because of also being a school 
employee.''
    Thus, an unemployed individual who performed services for an 
educational employer and also performed services for a non-
educational employer could receive reduced UC during the summer 
based on the non-educational employment (even if a reasonable 
assurance of school employment in the next school term exists). The 
denial would apply only to that portion of benefits based on 
educational employment during the base period.
    Also, unlike the athletic services provision, the States may not 
apply a stricter denial to educational services.

[[Page 18231]]

    6. Reasonable Assurance. Reasonable assurance in the ``between 
seasons'' denial for athletic services is used in a different manner 
than in the ``between and within terms'' denial for educational 
services. For the professional athlete, a mere indication of his/her 
intent to participate in the subsequent sports season without any 
verification from any sports organization can constitute 
``reasonable assurance.'' (See page 56, of the 1976 Draft Language.) 
However, the term ``reasonable assurance,'' as it applies to 
educational employees under the ``between and within terms'' denial, 
must be verified by the educational institution before it can be 
established as a fact. (See page 54, of the 1976 Draft Language and 
page 17, Supplement 1, to the 1976 Draft Language).
    7. Action Required. Administrators are to provide this 
information to appropriate staff.
    8. Inquiries. Inquiries should be directed to the appropriate 
Regional Office.

[FR Doc. 98-9830 Filed 4-13-98; 8:45 am]
BILLING CODE 4510-30-M