[Federal Register Volume 64, Number 134 (Wednesday, July 14, 1999)]
[Notices]
[Pages 38088-38097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17895]



[[Page 38087]]

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Part III

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Department of Labor





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Employment and Training Administration



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Unemployment Insurance Program: Unemployment Insurance Program Letter 
No. 37-99, UI PERFORMS Performance Measures and Minimum Performance 
Criteria for Tier 1 Measures; Notice

  Federal Register / Vol. 64, No. 134 / Wednesday, July 14, 1999 / 
Notices  

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DEPARTMENT OF LABOR

Employment and Training Administration

Unemployment Insurance Program:


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

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice.

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SUMMARY: UI PERFORMS is the Department of Labor's management system for 
promoting continuous improvement in Unemployment Insurance (UI) 
operational performance. Unemployment Insurance Program Letter (UIPL) 
No. 41-95 (August 24, 1995) described in detail the features of the UI 
PERFORMS performance management system, including Tier I performance 
measures, for which uniform national criteria representing minimum 
levels of acceptable performance would be established, and Tier II 
measures, for which no uniform national criteria would be established.
    The proposed minimum performance criteria for UI PERFORMS Tier I 
measures were published in UIPL No. 4-99 (October 20, 1998) and the 
Federal Register (FR) at 63 FR 63544 (November 13, 1998). These 
issuances also proposed additional Tier II measures beyond those 
initially identified in UIPL No. 41-95 and invited the comments of 
State Employment Security Agency (SESA) Administrators and the public. 
This notice consists of the Department of Labor's responses to the 
comments that were submitted, and a UIPL which disseminates the minimum 
performance criteria for Tier I measures and their effective dates and 
describes the relationship of the Tier I and Tier II measures to the 
State Quality Service Plan (SQSP) process.

EFFECTIVE DATES: The effective dates for each of the minimum 
performance criteria for UI PERFORMS Tier I measures are provided in 
the summary table in section four of the UIPL.

FOR FURTHER INFORMATION CONTACT: Ms. Sandra King, Director, Division of 
Performance Review, Unemployment Insurance Service, U.S. Department of 
Labor, Employment and Training Administration, 200 Constitution Avenue, 
NW, Room S-4231, Washington, DC 20210 (telephone: 202-219-5223, 
extension 160); or Andrew Spisak, who can be contacted at the same 
address or by telephone at 202-219-5223, extension 157. (These are not 
toll free numbers.)

SUPPLEMENTARY INFORMATION:

Background

    When the State-Federal Performance Enhancement Work Group (PEWG) 
established the outlines of the UI PERFORMS system for promoting 
continuous improvement in UI operational performance, it identified ten 
key measures for which uniform national criteria would be set. It 
called these ``Tier I'' measures. The criteria for these measures were 
to be interpreted as minimum levels which States always would be 
required to meet.
    In November 1997, the Performance Enhancement Group (PEG) met for 
the first time in Washington, DC. The PEG is the successor to the PEWG, 
and, like the PEWG, is comprised of State and Federal employment 
security administrators. The PEG was convened to complete the design 
and implementation of the UI PERFORMS system.
    The PEG ratified the PEWG's definitions of the performance measures 
and established three workgroups--Appeals, Benefits, and Tax--to 
develop recommendations for the criteria. Each group included Federal 
staff from the National and Regional Offices, and representatives from 
at least two States. The PEG developed guidelines for the workgroups to 
follow in developing their recommendations. The PEG also deferred 
setting a criterion for one Tier I measure, cashiering timeliness, 
until a data collection methodology can be developed for that measure 
that can be applied uniformly by all States.
    The workgroups' reports were presented to the PEG at its meeting in 
Washington, DC, on September 28-30, 1998. The PEG reviewed the 
workgroups' recommendations, both in terms of the individual Tier I 
measures and in light of their cumulative burden, and recommended 
appropriate adjustments. UIPL No. 4-99 and the November 13, 1998 FR 
Notice identified and discussed the proposed minimum performance 
criteria for UI PERFORMS Tier I measures and solicited the comments of 
the SESA administrators and the public on the proposed performance 
criteria.

Summary of Comments and Department of Labor Responses

    A total of 26 States submitted comments in response to UIPL No. 4-
99. Six States submitted comments in response to the November 13, 1998 
FR Notice, which provided a 60-day period for public comment on the 
proposed criteria. The comments of three of these States were the same 
as the comments these States submitted in response to the UIPL. In 
addition to the States, two public interest groups submitted comments 
in response to the FR Notice.
    The following sections identify the minimum criteria for the nine 
Tier I measures that were proposed in UIPL No. 4-99 and the November 
13, 1998 FR Notice; summarize the comments; and give the Department of 
Labor's responses.

I. First Payment Timeliness

    Proposed criteria effective fiscal year (FY) 2000: One aggregate 
measure combining total and partial/part-total first payments for 
intrastate and interstate State UI, Unemployment Compensation for 
Federal Employees (UCFE), and Unemployment Compensation for Ex-
Servicemembers (UCX):
    1. 87 percent within 14 days of the week-ending date of the first 
compensable week for States requiring a waiting week of unemployment 
and 21 days of the week-ending date of the first compensable week for 
non-waiting week States.
    2. 93 percent within 35 days.
    Proposed criteria effective FY 2002 or the first SQSP cycle 
following the issuance of the regulation governing UI PERFORMS, 
whichever is later:
    One aggregate measure combining total and partial/part-total first 
payments for intrastate and interstate State UI, UCFE, and UCX:
    1. 90 percent within 14 days of the week-ending date of the first 
compensable week for States requiring a waiting week of unemployment 
and 21 days for non-waiting week States.
    2. 95 percent within 35 days.
    Summary of Comments and the Department's Response: Thirteen States 
commented on this measure.
    Two States supported the proposed criteria for the aggregate 
measure of first payment timeliness. One of these States also endorsed 
the proposal to establish separate Tier II measures for UI interstate, 
UCFE, and UCX first payments. Two States expressed their expectations 
of meeting the proposed criteria without commenting on the merits of 
the proposed criteria.
    Nine States objected to the proposed criteria for the aggregate 
measure, although one of these States supported the current criterion 
for compliance in 20 CFR 640.5 of 87 percent of first payments issued 
within 14 days from the week-ending date of the first compensable week 
in States that require a waiting week and 21 days in States that do not 
require a waiting week. These nine States cited several reasons

[[Page 38089]]

for objecting, such as the inclusion in the measure of interstate UI, 
UCFE, and UCX claims (for which prompt first payments might be more 
difficult), State alternative base period provisions, the fact-finding 
efforts required to satisfy the nonmonetary quality review, the 
inclusion of payments resulting from appeals reversals, and State law 
provisions such as backdating claims for partial unemployment.
    The Department believes that the proposed minimum criteria are 
administratively feasible, and that differences in State UI laws and 
procedures will not affect the ability of States to meet the criteria. 
For the period April 1998 through March 1999, 46 States met the current 
14/21-day timeliness criterion for compliance in 20 CFR 640.5 for first 
payment of benefits for weeks of total unemployment for intrastate 
claims under the State UI program, and five of the seven States that 
did not meet the criterion were within five percentage points of 
meeting it. Fifty-two States met the 35-day timeliness criterion for 
compliance in 20 CFR 640.5 for first payment of benefits for weeks of 
total unemployment for intrastate claims under the State UI program. 
For first payment of benefits for weeks of total unemployment for 
interstate claims under the State UI program, 49 States met the 14/21-
day criterion, and 51 States met the 35-day criterion in 20 CFR 640.5.
    Performance data do not support the contention that including 
payments for interstate UI, UCFE, and UCX claims in the measure will 
preclude States from meeting the minimum criteria. From April 1998 
through March 1999, only 3 of the 46 States that met the 14/21-day 
timeliness criterion for compliance in 20 CFR 640.5 for first payment 
of benefits for weeks of total unemployment for intrastate claims under 
the State UI program would fail to meet the same criterion applied to 
an aggregate timeliness measure that included first payments for weeks 
of total and partial/part-total unemployment for interstate and 
intrastate claims in the State UI, UCFE, and UCX programs.
    For the same period, none of the 52 States that met the 35-day 
timeliness criterion for compliance in 20 CFR 640.5 for first payment 
of benefits for weeks of total unemployment for intrastate claims under 
the State UI program would fail to meet the same criterion applied to 
an aggregate timeliness measure.
    The Department intends to issue a notice for comment on a proposed 
regulation establishing a UI PERFORMS management system. The Department 
intends that this regulation will supersede 20 CFR Part 640. Comments 
submitted in response to the UI PERFORMS proposed regulation will be 
considered along with the comments submitted in response to UIPL No. 4-
99 and the November 13, 1998 FR Notice prior to publishing a UI 
PERFORMS Final Rule. Until the UI PERFORMS Final Rule takes effect, the 
existing criteria for compliance with the Secretary's Standard for 
Unemployment Compensation benefit payment promptness (20 CFR 640.5) 
continues to be the minimum performance criteria for the first payment 
timeliness Tier I measure.
    For first payments of weeks of total unemployment for intrastate 
State UI claims, consistent with 20 CFR 640.5, the minimum Tier I 
performance criteria are:
    1. 87 percent within 14 days of the week-ending date of the first 
compensable week for States requiring a waiting week of unemployment 
and 21 days of the week-ending date of the first compensable week for 
non-waiting week States.
    2. 93 percent within 35 days.
    For first payments of weeks of total unemployment for interstate 
State UI claims, consistent with 20 CFR 640.5, the minimum Tier I 
performance criteria are:
    1. 70 percent within 14 days of the week-ending date of the first 
compensable week for States requiring a waiting week of unemployment 
and 21 days of the week-ending date of the first compensable week for 
non-waiting week States.
    2. 78 percent within 35 days.

II. Nonmonetary Determinations Timeliness

    Proposed criteria effective FY 2002: Single aggregate measure 
including determinations for intrastate and interstate claims for State 
UI, UCFE, and UCX:
    1. 80 percent of separation determinations issued within 21 days 
from date of detection by the SESA of any nonmonetary issue which had 
the potential to affect the claimant's past, present, or future benefit 
rights to date of the determination.
    2. 80 percent of nonseparation determinations issued within 14 days 
from date of detection by the SESA of any nonmonetary issue which had 
the potential to affect the claimant's past, present, or future benefit 
rights to date of the determination.
    Summary of Comments and the Department's Response: Fourteen States 
and one public interest group commented on this measure.
    Six States objected to the disparate treatment of separation and 
nonseparation determinations, because separation and nonseparation 
issues are detected often at the same time.
    With respect to the point of time at which separation and 
nonseparation issues are detected, although both separation and 
nonseparation issues that must be adjudicated can arise when a new 
initial claim for UI benefits is filed, most nonseparation issues arise 
from continued claims. The Department believes that the proposed 
timeliness intervals for separation and nonseparation determinations 
ensure that UI claimants receive payments expeditiously while taking 
into account differences in the extent of fact-finding that is required 
to adjudicate separation and nonseparation issues. Recognizing that 
nonmonetary determinations vary in their degree of complexity, 
separation issues, in general, require that the agency contact and 
gather information from the claimant, one or more employers, and, in 
some instances, third parties in order to decide eligibility. 
Nonseparation issues can, more frequently than separation issues, be 
adjudicated on the basis of information obtained from the claimant or 
agency records. Therefore, a shorter time interval is justified for 
nonseparation issues.
    Five States believed there was an inconsistency between the 
proposed criteria for the timeliness of nonmonetary determinations and 
the proposed criteria for first payment promptness. Three States cited 
examples in which nonmonetary determinations are required prior to the 
date by which the first payment must be issued. For example, one State 
cited a separation issue detected on a new initial claim on the 2nd of 
the month. In order to meet the proposed timeliness criteria, an 
eligibility decision would have to be issued by the 23rd, and, assuming 
the claimant was determined to be eligible for benefits, the first 
payment would be due within 14 days of the first compensable week. If 
the first compensable week ended on the 14th, the first payment must be 
issued no later than the 28th.
    The Department does not agree that there is a conflict between the 
proposed timeliness criteria for first payment of benefits and 
nonmonetary determinations. The Department believes that it is, in 
fact, logical to require the nonmonetary issues to be adjudicated and 
claimant eligibility determined prior to the date by which a first 
payment must be issued.

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    Six States cited adjudication procedures, including due process 
requirements for notification and response and the practice of issuing 
nonmonetary determinations only after a week of unemployment has been 
claimed, as factors making it difficult to meet the proposed criteria.
    The Department believes that many of the concerns cited by the 
States arise from a small number of more complex claims that are not 
typical of the majority of nonmonetary adjudications, so that for the 
totality of nonmonetary adjudications, the proposed criteria are 
administratively feasible.
    With respect to States that do not issue nonmonetary determinations 
until a claim is filed, ET Handbook No. 301, page V-9, states that the 
issue detection date is, ``[T]he date the SESA first detected the issue 
to which the nonmonetary determination applies. The exception to this 
rule is a case where the claimant fails to file a timely certification 
and the State has a policy of waiting for a week to be claimed prior to 
making a determination. In such cases, the detection date for the 
original unresolved issue(s) is the date the claimant subsequently 
files an additional or reopened claim.''
    Two States commented that the majority of States currently perform 
below the proposed criteria, and that it is unrealistic to expect 
dramatically improved performance by FY 2002. Conversely, the public 
interest group questioned the justification for delaying the effective 
date until FY 2002 when so many States are failing to achieve the 
criteria and questioned whether the Department currently has the 
authority to sanction these States.
    The PEG discussed the issue of an appropriate effective date and 
agreed that, given the number of States currently performing below the 
minimum levels (34 States for the period April 1998 through March 1999) 
and the degree of improvement that is needed for several of the States 
to meet the criteria (only 5 of the 34 States not meeting the criteria 
were within 5 percentage points), an effective date prior to FY 2002 
would not be realistic. A two-year delay in implementing these criteria 
will provide additional time for States to work with the Federal 
partner to identify those areas of UI operations that need to be 
addressed and to undertake actions required to improve performance and 
meet the criteria.
    With respect to the ability to sanction States, the Department 
notes that currently there are no criteria specified in regulation for 
this measure. States which do not meet the minimum performance criteria 
for this measure will be required to submit plans identifying the steps 
the State will take to achieve those criteria, and must demonstrate 
progress toward meeting them. However, the Department will not initiate 
formal action if State performance fails to meet a new criterion prior 
to its effective date, provided the Department has received and 
approved a satisfactory corrective action plan, and there is evidence 
of continuing progress in its achievement.
    The public interest group commented also that timeliness should be 
measured from the date the claim is filed rather than from the date of 
detection. Measuring timeliness from the date of detection might 
discourage adjudicators from finding out what the actual issues are or 
pursuing leads of issues that are disclosed through fact-finding from 
sources other than the employer. The group also believes that it would 
also be easier to monitor timeliness measured from the claim date.
    The Department notes that State nonmonetary adjudications are 
reviewed each quarter to evaluate the quality of the SESA's fact-
finding efforts with respect to claimants, employers, and other 
interested parties. The Department has no evidence that measuring 
timeliness from the date of detection has an adverse effect on fact-
finding. The Department also notes that, as defined in ET Handbook No. 
401 (page V-3-6), ``The issue detection date is the date the new, 
additional, or reopened claim is filed. If no issue exists at the time 
a claim is filed but information is later received that presents an 
issue, then the issue detection date is the date this information is 
received by the agency.''
    One State ``strongly opposed'' the requirement to produce 
improvement plans prior to the effective date of the criteria.

(Note: this State also applied this comment to the proposed 
criterion for nonmonetary quality.)

    In order to achieve the goal of continuous program improvement, the 
Department believes that it is essential for the Department and the 
States to work cooperatively in identifying those practices and 
procedures that are necessary to raise the State's level of 
performance, especially for those States not meeting performance 
floors.
    One State did not comment specifically on the proposed criteria but 
noted that it had previously expressed its concerns about the UI 
PERFORMS process.

III. Nonmonetary Determinations Quality

    Proposed criterion effective FY 2002: 75 percent of all 
determinations with scores greater than 80 points, based on evaluation 
results of quarterly samples of nonmonetary determinations selected 
from the universe of nonmonetary determinations for intrastate and 
interstate claims for State UI, UCFE, and UCX, reported on the ETA 9052 
report. Nonmonetary determination samples will be evaluated as 
instructed in ET Handbook No. 301 (rev. January 1998).
    Summary of Comments and the Department's Response: Thirteen States 
and one public interest group commented on this measure.
    Five States supported the proposed criterion in general. However, 
one of these States commented that the quality evaluation should be 
limited to discharge, voluntary quit, able and available, and job 
refusal issues. This State felt that inclusion of such issues as full-
time employment and holiday pay will inflate the scores of some States. 
Another of these States urged the Department to increase its support 
and scheduling of benefits quality training.
    The Department believes that it is important to include all 
nonmonetary issues in order to conduct a comprehensive evaluation of 
quality. Because the State quality samples are representative of the 
population of nonmonetary determinations, the State's aggregate score 
will reflect the relative importance of the four issue areas cited by 
the State. Further, the Department is committed to continue to schedule 
benefits quality training at various times and locations.
    Three States questioned the scoring system used to evaluate the 
quality of nonmonetary determinations. One State felt that the quality 
evaluation is a de facto pass/fail system, because a deduction of 
points other than for an inadequate written determination will result 
in a score of less than 80 points, which is a failing score.
    The Department believes that the nonmonetary quality measurement 
instrument produces a comprehensive and fair evaluation of the critical 
indicators of the quality of State nonmonetary procedures: adequacy of 
claimant, employer, and third party fact-finding; opportunity for 
rebuttal to the interested parties; correct application of State law 
and policy; and the adequacy of the written determination. Evaluators 
assign scores which reflect the State agency's performance in these 
critical areas. Scoring is conducted as a tripartite review in which at 
least one, and preferably two, of the reviewers are

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nonmonetary experts from outside the State which is being evaluated. 
Five tripartite review options are available, depending on the 
composition of the review team (i.e., the mix of staff from the State 
being evaluated, staff from other States, and Federal staff) and the 
method used to resolve scoring disagreements. The tripartite review 
procedure is described in detail in ET Handbook No. 301, chapter IV and 
Appendix B.
    Three States urged the Department to identify the reasons so many 
States fail to meet the criterion, including a reexamination of the 
evaluation measurement tool. One of these States urged that the States 
that are meeting the criterion share information with the other States 
on the reasons for their success, and another State urged the 
Department to collect information on State best practices, share these 
with all States, and use this information to provide technical and 
financial assistance to the States. Two States urged the Department to 
defer implementation of a minimum performance criterion until the 
Department and the States identify the reasons why so many States are 
failing to meet the proposed criterion.
    As stated in UIPL No. 4-99 and the November 13, 1998 FR Notice, the 
Department will study the reasons why States fail to meet the minimum 
level of performance and will share this information with the States. 
The Department will also encourage States that are performing above the 
minimum level to share best practices with other States.
    The PEG discussed the issue of an appropriate effective date and 
agreed that a two-year delay in implementing this criterion will 
provide States with sufficient time to undertake actions required to 
improve performance and meet the criterion. The Department believes 
that an effective date of FY 2002 is realistic, given the number of 
States currently performing below the minimum levels (26 States in 
calendar year 1998) and the degree of improvement that is needed for 
several of the States to meet the criterion (only 7 of the 26 States 
not meeting the criterion were within 5 percentage points).
    One State commented that it would have to improve its performance 
for this measure without commenting on the merits of the proposed 
criterion. Another State did not comment specifically on the proposed 
criterion but noted that it had previously expressed its concerns about 
the UI PERFORMS process.

IV. Lower Authority Appeals Timeliness

    Proposed criteria effective FY 2000:
    1. 60 percent of decisions within 30 days. (Existing Secretary's 
Standard at 20 CFR 650.4(b))
    2. 80 percent of decisions within 45 days. (Existing Secretary's 
Standard at 20 CFR 650.4(b))
    Proposed criteria effective FY 2002 or the first SQSP cycle 
following the issuance of the regulation governing UI PERFORMS, 
whichever is later:
    1. 60 percent of decisions within 30 days.
    2. 85 percent of decisions within 45 days.
    3. 95 percent of decisions within 75 days.
    Summary of Comments and the Department's Response: Ten States 
commented on this measure.
    Although two of the States that submitted comments supported the 
proposed criteria, eight States expressed concerns that centered on 
three issues: (1) The concern that improvements in timeliness will 
compromise quality and/or due process; (2) the ability to meet the 
proposed criteria during periods of high workloads; and (3) the 
justification for raising the 45-day performance criterion and adding a 
third criterion.
    State performance data on lower authority appeals timeliness (ETA 
9054 report) and quality (ETA 9057) do not support the contention that 
there is a trade-off between quality and promptness. For calendar year 
1998, 48 States met the 30-day criterion for compliance in 20 CFR 
650.4(b) for lower authority appeals promptness, and 50 States met the 
45-day criterion for compliance in 20 CFR 650.4(b) for lower authority 
appeals promptness. Only four of the States meeting the 45-day 
timeliness criterion failed to meet the proposed lower authority 
appeals quality criterion of 80 percent of all benefit appeals with 
combined scores equal to at least 85 percent of the potential points 
that could be awarded for the evaluation. Only one of the States 
meeting the 45-day timeliness criterion failed to meet the current 
lower authority appeals quality desired level of achievement of 80 
percent of all benefit appeals with combined scores equal to at least 
80 percent of the potential points that could be awarded for the 
evaluation.
    These quarterly evaluations of lower authority appeals quality 
include several elements addressing due process. Based on the results 
of these evaluations, the Department believes that the timeliness 
criteria will not compromise the due process rights of the interested 
parties.
    With respect to the ability of States to meet the proposed criteria 
during periods of high workloads, the PEWG established, as one of the 
performance criteria guidelines, the principle that States would be 
expected to meet or exceed the criteria, unless attaining the 
established levels was not ``administratively feasible'' for the period 
measured. State workload is one of several factors that the State and 
the Department will consider when assessing administrative feasibility.
    The proposal to raise the performance criterion for the 45-day 
timeliness measure and add a third criterion reflects the Department's 
goal of ensuring that a greater percentage of the cases are disposed of 
as efficiently as possible; that cases are not allowed to accumulate 
for long periods of time; and that parties to an appeal receive a 
hearing and decision in a reasonable amount of time. The third 
criterion for the issuance of 95 percent of lower authority appeals 
decisions within a specified period will encourage States to reduce the 
number of cases that have not been decided within 45 days.
    Six States cited concerns about the effect on quality of the 
proposed new criterion for issuing 95 percent of lower authority 
appeals decisions within 75 days. Two States proposed modifying the 
criterion to require that States issue 90 percent of lower authority 
appeals decisions within 75 days.
    The Department believes that in order to adequately address the 
case-aging concerns that motivated the PEG to propose a third 
criterion, the criterion must require that 95 percent of the lower 
authority appeals decisions be issued within a designated time period. 
This will ensure the disposition of all but the most complex cases 
within a reasonable time period. However, in order to provide States 
with more flexibility to adapt their lower authority appeals practices 
and procedures to the new criterion, the Department proposed, and the 
PEG agreed, to modify the criterion to require that States issue 95 
percent of lower authority appeals decisions within 90 days, rather 
than 75 days.
    One State suggested that the time lapse measure be replaced with an 
``average pendency level'' measure, defined as the total number of days 
all appeals have been pending divided by the number of appeals.
    The PEG decided that consideration of this measure should be 
deferred pending further study of State performance based on this 
measure and changes in State data collection procedures that would be 
required for its implementation.

[[Page 38092]]

    The Department intends to issue a notice for comment on a proposed 
regulation establishing a UI PERFORMS management system. The Department 
intends that this regulation will supersede 20 CFR Part 650. Comments 
submitted in response to the UI PERFORMS proposed regulation will be 
considered along with the comments submitted in response to UIPL No. 4-
99 and the November 13, 1998 FR Notice prior to publishing a UI 
PERFORMS Final Rule. Until the UI PERFORMS Final Rule takes effect, the 
existing criteria for compliance with the Secretary's Standard for 
Unemployment Compensation appeals promptness (20 CFR 650.4(b)) 
continues to be the minimum performance criteria for the lower 
authority appeals timeliness Tier I measure:
    1. 60 percent of decisions within 30 days.
    2. 80 percent of decisions within 45 days.

V. Higher Authority Appeals Timeliness

    Proposed criteria effective FY 2000:
    1. 50 percent of decisions within 45 days.
    2. 80 percent of decisions within 75 days.
    3. 95 percent of decisions within 120 days.
    Summary of Comments and the Department's Response:
    Nine States and one public interest group commented on this 
measure. A second public interest group endorsed the comments of the 
first.
    One State described the proposed criteria as ``fair and 
reasonable'', and another State did not comment on the merits of the 
proposed criteria but stated that it would have no problem in meeting 
them.
    Seven States expressed concerns that centered on one or more of 
three issues: (1) The ability to meet the proposed criteria during 
periods of high workloads; (2) the justification for adding a third 
criterion; and (3) the concern that improvements in timeliness will 
compromise quality and/or due process.
    With respect to the ability of States to meet the proposed criteria 
during periods of high workloads, the PEWG established, as one of the 
performance criteria guidelines, the principle that States would be 
expected to meet or exceed the criteria, unless attaining the 
established levels was not ``administratively feasible'' for the period 
measured. State workload is one of several factors that the State and 
the Department will consider when assessing administrative feasibility.
    The proposal to add a third criterion reflects the Department's 
goal of ensuring that a greater percentage of the cases are disposed of 
as efficiently as possible; that cases are not allowed to accumulate 
for long periods of time; and that parties to an appeal receive a 
hearing and decision in a reasonable amount of time. The third 
criterion for the issuance of 95 percent of higher authority appeals 
decisions within a specified period will encourage States to reduce the 
aging of cases that have not been decided within 75 days.
    Four States disagreed with the proposed time interval for the 95 
percent completion criterion and suggested alternative completion 
percentages and/or time intervals.
    The Department believes that in order to adequately address the 
case-aging concerns that motivated the PEG to propose a third 
criterion, the criterion must require that 95 percent of the higher 
authority appeals be issued within a designated time period. This will 
ensure the disposition of all but the most complex cases within a 
reasonable time period. However, in order to provide States with more 
flexibility to adapt their higher authority appeals practices and 
procedures to the new criterion, the Department proposed, and the PEG 
agreed, to modify the criterion to require that States issue 95 percent 
of higher authority appeals decisions within 150 days, rather than 120 
days.
    Three States commented that due to the precedential and policy 
setting implication of their decisions, higher authority appeals often 
require additional time for fact finding, hearings, research, and 
drafting opinions. One of these States commented that appellants prefer 
the thoroughness and quality of the review process and the due process 
guarantees of their State law, to a speedy decision that does not 
include a careful review of the facts.
    Based on State performance data, the Department believes that the 
proposed minimum performance criteria for higher authority appeals 
timeliness are reasonable and achievable, given the need to meet the 
due process requirements of State law and policy. For the period April 
1998 through March 1999, 44 of the 50 States that provide for a higher 
authority appeals process met the 45-day and 75-day timeliness 
criteria, and 43 States met the proposed 150-day timeliness criterion.
    The public interest group urged the establishment of a quality 
criterion for higher authority appeals, in addition to the timeliness 
measure. A second public interest group endorsed this recommendation.
    The Department notes that developing a cost-effective method to 
measure higher authority appeals quality that all States can apply 
uniformly might be difficult. Nevertheless, because higher authority 
appeals quality is important, the PEWG established such a measure under 
Tier II, and the Department is committed to its development. As a Tier 
II measure, higher authority appeals quality will not have a minimum 
performance criterion. However, all UI PERFORMS measures, including 
their categorization as Tier I or Tier II measures, will be 
periodically reviewed.

VI. Lower Authority Appeals Quality

    Proposed criterion effective FY 2000: 80 percent of all benefit 
appeals with combined scores equal to at least 85 percent of potential 
points, based on the results of quarterly samples of lower authority 
benefit appeals hearings selected and evaluated as instructed in ET 
Handbook No. 382 (2nd ed.).
    Summary of Comments and the Department's Response: Six States 
commented on this measure.
    Comments were generally positive, although one State commented that 
setting the minimum passing score at 85 percent of the potential points 
is a significant change from the current desired level of achievement, 
for which the minimum passing score is 80 percent of the potential 
points, and increases the likelihood that a case will fail the 
evaluation. This State urged postponement of the higher criterion until 
FY 2002 to allow States to correct any problems developing from the 
criterion.
    Data for calendar year 1998 show that 46 States met the proposed 
criterion and 2 other States were within 5 percentage points of meeting 
the criterion. Therefore, based on State performance, the Department 
believes the criterion is reasonable and should not be postponed.
    One State recommended that any hearing that fails any of the eight 
critical elements should fail the quality review.
    The Department believes that it would be premature to propose a 
criterion for minimum performance with respect to the critical 
elements. After additional data are collected, State performance on 
these critical elements can be evaluated, and the role of these 
elements in setting minimum performance criteria can be considered when 
the Tier I measures are next reviewed.

VII. Timeliness of New Employer Status Determinations

    Proposed criteria effective FY 2002: 

[[Page 38093]]

    1. 60 percent of determinations made within 90 days of the quarter 
ending date (QED).
    2. 80 percent of determinations made within 180 days of the QED.
    Summary of Comments and the Department's Response: Nine States 
commented on this measure.
    Comments were generally positive, although one State proposed that 
for those employer determinations for which the tax office has not been 
notified timely that liability has occurred, the notification date 
(comparable to the date of detection for nonmonetary determinations) 
should be used to calculate timeliness instead of the QED.
    The Department does not agree with this proposal, because relying 
on the employer notification date will remove any incentive for States 
to actively identify new employers. Further, the current reporting 
system does not use the notification date and, therefore, does not 
support this proposal.

VIII. New Employer Status Determinations Accuracy

    Proposed criterion effective FY 2002: No more than 6 cases from an 
acceptance sample of 60 cases can fail the evaluation. This criterion 
implies that at least 95 percent of the samples will pass (that is, 6 
or fewer cases will fail the evaluation) if State accuracy rate is 
greater than or equal to 94.5 percent, and that at least 90 percent of 
the samples will fail (that is, more than 6 cases will fail the 
evaluation) if State accuracy rate is less than or equal to 82.4 
percent.
    Summary of Comments and the Department's Response: Nine States 
commented on this measure.
    Comments were generally positive, although 2 States questioned 
whether the proposed criterion of 6 failures in a sample of 60 cases 
should apply also to other Tax Performance System (TPS) measures.
    Currently, no more than 2 cases in an acceptance sample of 60 cases 
may fail an evaluation for a TPS measure. This standard implies a level 
of performance higher than the level that is appropriate for Tier I 
measures, which are minimum performance levels. New Employer Status 
Determinations Accuracy is the only TPS acceptance sample measure that 
is in Tier I and, therefore, should be subject to a different criterion 
from other TPS measures.
    One State sought clarification of whether this measure includes the 
accuracy of both the determination and the posting of the determination 
(that is, the accurate recording of the accounts maintenance function 
information in the agency's records).
    This measure will apply to the accuracy of the determination only. 
This includes the accuracy of the liability decision, whether the State 
followed correct procedures and obtained proper documentation, and 
whether it assigned the correct tax rate. Accuracy of the posting will 
be evaluated as a Tier II measure.

IX. Timeliness of Transfer From Clearing Account to Trust Fund

    Proposed criterion effective for the FY 2000 and FY 2001 SQSP: A 
maximum of two days to transfer funds from the State clearing account 
to the State account in the Unemployment Trust Fund.
    Effective with the FY 2002 SQSP: Maintenance of an annual ratio of 
the monthly average daily available balance (line 10, ETA 8414 report) 
to the average daily transfer to the trust fund (line 3, ETA 8405 
report, divided by the number of days in the month) less than or equal 
to 1.75.
    Effective with the FY 2005 SQSP: Maintenance of an annual ratio 
less than or equal to 1.0.
    Summary of Comments and the Department's Response: Fourteen States 
commented on this measure.
    Comments were mixed, with six States offering outright or qualified 
support for the proposed criteria. However, four States strongly 
objected to both the current timeliness and proposed ratio criteria on 
the grounds that States which finance banking services through clearing 
account balances would not be able to meet either the time lapse or 
ratio criteria. Two States noted that States would be forced to 
eliminate a source for paying for banking services in order to meet the 
criterion. Another State suggested that this measure be moved to Tier 
II, because State performance cannot be measured in a uniform manner, 
or that separate measures be developed for States funding lockbox 
operations through clearing account balances. One State urged the 
Department to provide States with incentives to make the transition to 
electronic filing and payment. One State ``strongly'' urged the 
Department to consider the funding of banking services in developing 
cash management performance measures.
    The Department acknowledges the States' desire to maintain 
compensating balances in the clearing account to support State banking 
services and lockbox operations. However, the PEWG considered it 
important to establish a Tier I measure that reflects the immediate 
deposit and withdrawal requirements. The PEG ratified this decision. 
Compensating balances in the clearing account are in direct conflict 
with Federal law governing the ``immediate deposit'' (section 
3304(a)(3) of the Federal Unemployment Tax Act (FUTA) and section 
303(a)(4) of the Social Security Act (SSA)) and ``withdrawal'' (section 
3304(a)(4) of FUTA and section 303(a)(5) of the SSA) requirements. 
Under the ``immediate deposit'' standard, in order for employers in a 
State to receive credit against the Federal unemployment tax, and for 
States to receive their administrative grants, all UI taxes must be 
transferred to and deposited in the Unemployment Trust Fund immediately 
after going through the State's clearing account. Under the 
``withdrawal'' standard, money must be withdrawn from the State's 
unemployment fund solely for payment of unemployment compensation. The 
use of such funds for ``expenses of administration'' is explicitly 
prohibited. Therefore, the constructive use of compensating balances by 
States is inconsistent with Federal law.
    The President's FY 2000 budget proposal committed the Department to 
discuss UI and employment service reform with stakeholders and Congress 
for purposes of developing a comprehensive bipartisan legislative 
reform proposal. As a result of discussions which have occurred so far, 
two proposals are under consideration which, if enacted, would affect 
this criterion. The first would allow States to use earnings on moneys 
in the clearing account to pay routine banking costs. The second would 
allow also for the payment of additional costs such as those incurred 
in operating a lockbox. Should either of these changes become law, the 
criterion for this measure will be revised accordingly.
    Two States sought a more complete discussion of the data reporting 
issues that need to be resolved as a prerequisite to the implementation 
of the ratio measure.
    The Department believes that the proposal provides adequate time to 
resolve data reporting inconsistencies before the proposed ratio 
measure is introduced. The Department is committed to resolving these 
issues with the full participation of the States.
    Two States expressed concern that use of the average daily 
available balance in the ratio measure would produce a skewed or 
misleading result due to the commingling of funds in the State clearing 
account that are not transferred to the trust fund.
    The Department notes that States must identify and report 
separately

[[Page 38094]]

funds other than employer contributions that are deposited in the 
clearing account, which eliminates the potential for skewed or 
misleading results.
    Three States believed the proposed ratio criterion will be more 
difficult to meet than the time lapse measure.
    Performance data do not support the contention that States which 
are able to meet the 2-day time lapse criterion would have difficulty 
meeting the proposed ratio of 1.75 or less. For the reporting period 
April 1998 through March 1999, only 2 of the 31 States that met the 2-
day time lapse criterion had ratios greater than 1.75. On the other 
hand, 7 States that failed to meet the 2-day time lapse criterion had 
ratios less than 1.75.

General Comments

    Nine States and two public interest groups offered comments that 
were not specific to any measure.
     Two States requested clarification of the term 
``administratively feasible''.
    The Department measures administrative feasibility by observing and 
evaluating State performance. If States are performing at or above a 
minimum performance level of quality, promptness, etc., this 
constitutes evidence that a criterion is administratively feasible. 
However, a variety of evidence may be used to measure administrative 
feasibility. Because circumstances in States vary, the Department 
reserves the right to evaluate administrative feasibility on a case-by-
case basis.
     One State requested that the reference to ``persistent 
performance below the established criterion'' be described or defined.
    The period must be long enough to establish that the poor 
performance is not transitory, and also to allow the State a reasonable 
time to improve performance. In general, the Department believes that 
two years of continuous performance below the criterion demonstrates 
sustained poor performance. However, since circumstances in States 
vary, the Department reserves the right to handle performance problems 
on a case-by-case basis.
     Two States pointed out the difficulty of applying 
universal criteria to diverse State operations. One of these States 
expressed concern that States might be forced into standardizing their 
operations to meet national criteria, thereby compromising their rights 
in the State/Federal partnership.
    The Department believes that uniform performance criteria must be 
applied as a matter of fairness and equity for States, employers, and 
UI claimants across all jurisdictions. The application of different 
criteria in an attempt to take into account differences in State laws 
and administrative practices inevitably invites subjective judgements, 
which would be inconsistent with a national program improvement system 
such as UI PERFORMS. Among the principles for Tier I performance 
measures established by the PEWG and ratified by the PEG is the 
requirement that Tier I measures would have the same meaning in all 
States so that interstate comparisons are valid. In contrast, the PEWG 
and PEG recognized that some performance measures inherently reflect 
interstate variability and, accordingly, designated these as Tier II 
measures.
    The Department believes that the Tier I measures represent core or 
critical areas of UI customer service and that the criteria are minimum 
levels, at or above which all States should be able to perform, 
regardless of differences in State operations.
     One State recommended that a customer satisfaction survey 
be added as a performance measure.
    The Department will require States to include information on their 
plans for evaluating customer satisfaction and utilizing customer input 
to promote continuous improvement in the SQSP narrative. However, the 
Department does not agree that the results of State customer 
satisfaction surveys can be used as a Tier I measure. The Department 
believes that the results of State customer satisfaction surveys will 
reflect differences in survey design and administration. Therefore, 
these results cannot be used to establish uniform national criteria for 
Tier I measures.
    We note that the Department's Unemployment Insurance Service (UIS) 
conducted a national survey of customer satisfaction and transmitted 
the final report to Regional Administrators via UIS Information 
Bulletin 6-99 (February 19, 1999). States may obtain copies by 
contacting their respective Regional Office.
     One State questioned whether resources in small States are 
adequate to achieve the performance criteria, given the commitment of 
resources required to achieve Y2K compliance of automated systems, and 
the need to commit resources to continuous program improvement, which 
have placed a strain on UI program operations, particularly in smaller 
States.
    Although the Department is aware of the many demands on program 
resources, the Department believes that all States have the resources 
necessary to meet these minimum levels of UI program performance. State 
data do not indicate that there is any correlation between State UI 
workload and State performance for the Tier I measures. An examination 
of the most recent annual performance data shows that the smaller 
States were no more likely to fail to meet the proposed criteria than 
were the larger States.
     One State questioned why no large States were represented 
on the PEG.
    The Department asked the Interstate Conference of Employment 
Security Agencies (ICESA) to solicit State participation on both the 
PEWG and PEG and selected members from the State volunteers identified 
by ICESA.
     The public interest groups strongly urged the Department 
to implement all of the performance measures and minimum criteria in 
regulation, rather than through a UIPL and FR Notice, to provide added 
weight in achieving compliance.
    The Department intends to establish a regulation governing the 
structure of the UI PERFORMS system. A principal goal of UI PERFORMS is 
the continuous improvement of the UI system. The Department believes 
that achieving this goal requires flexibility, especially in the early 
stages, and that the specification of performance measures and criteria 
through UIPLs and FR Notices, instead of through regulation, provides 
this flexibility and simplifies the process of changing the measures or 
criteria as needed. However, the Department will make no changes in the 
performance measures without providing advance notice and an 
opportunity for comment.
    The Department is committed to reviewing performance measures and 
criteria periodically, as agreed to by the PEWG and affirmed by the 
PEG. Final determination of the criteria for the two current 
Secretary's Standards--first payment timeliness and lower authority 
appeals timeliness--will occur in conjunction with proposed UI PERFORMS 
rulemaking. The first periodic review of the full set of Tier I 
measures will occur not more than five years from the date of issuance, 
with the exception of the criteria for nonmonetary determinations 
timeliness, nonmonetary determinations quality, and new employer status 
determinations accuracy, which will be reviewed after two years.
     With respect to all of the timeliness measures, one of the 
public interest groups noted that the criteria do not impose any 
requirements with respect to those matters, above the maximum 
percentage listed, which do not meet the longest time interval. The 
group noted that both the Department and others need information on 
what has happened to those cases, because they, too, are

[[Page 38095]]

governed by the ``payment of unemployment compensation when due'' 
requirement of section 303(a)(1) of the Social Security Act. The group 
commented that State reports must continue to include information on 
the precise time lapses for these cases, and that the Department should 
review this data, make a factual inquiry into why those decisions have 
been delayed, and assess whether the State has met the administrative 
feasibility standard of the ``when due'' clause of section 303(a)(1), 
SSA, as interpreted in California Dept. of Human Resources Development 
v. Java, 402 U.S. 121, 91 S.Ct. 1347 (1971).
    The Department will continue to require that States report UI 
program data for all time intervals defined in ET Handbook No. 401, 
including intervals greater than the maximum intervals specified for 
the Tier I timeliness measures. The Department will use this 
information as part of the SQSP process to achieve the UI PERFORM's 
goal of continuous program improvement.
    Attached is UIPL No. 37-99, titled ``UI PERFORMS Tier I and Tier II 
Performance Measures, and Minimum Performance Criteria for Tier I 
Measures''.

    Signed at Washington, DC, on June 28, 1999.
Grace A. Kilbane,
Director, Unemployment Insurance Service.

    Date: July 1, 1999.
    Directive: Unemployment Insurance Program Letter No. 37-99.
    To: All State Employment Security Agencies.
    From: Grace A. Kilbane, Director, Unemployment Insurance 
Service.
    Subject: UI PERFORMS Tier I and Tier II Performance Measures, 
and Minimum Performance Criteria for Tier I Measures.
    1. Purpose. To disseminate the performance measures that will be 
used to assess program operations and plans for program improvement, 
establish the minimum performance criteria for Tier I measures and 
their effective dates, and discuss the relationship of the Tier I 
and Tier II measures to the State Quality Service Plan (SQSP) 
process.
    2. References. Unemployment Insurance Program Letter (UIPL) No. 
41-95 (August 24, 1995), UIPL No. 19-98 (March 30, 1998), UIPL No. 
34-98 (July 23, 1998), UIPL No. 4-99 (October 20, 1998), and Federal 
Register Notice (FRN) 63 FR 63544 (November 13, 1998).
    3. Background. The State-Federal Performance Enhancement Work 
Group (PEWG) established the outlines of the UI PERFORMS system for 
promoting continuous improvement in UI operational performance and 
identified performance measures for the performance management 
system. Ten of these measures were designated ``Tier I'' measures, 
for which uniform national criteria representing minimum levels of 
acceptable performance would be established.
    UIPL No. 41-95 provided a detailed description of the UI 
PERFORMS system and solicited comments on the proposed system from 
State Employment Security Agency (SESA) administrators.
    UIPL No. 41-95 included:
     A discussion of the principles of the State and Federal 
partnership, including the roles and responsibilities of each party.
     The identification of key performance measures, which 
were designated as either Tier I or Tier II measures.
     Ten Tier I measures were identified. These measures 
represent core or critical areas of UI customer service for which 
uniform national criteria would be established. States would address 
their performance for the Tier I measures annually through the SQSP.
     The Tier II measures were established for other 
important UI activities. States would report performance data on a 
regular basis to the Department of Labor; however, no performance 
criteria were established for Tier II measures. States would set 
performance targets for the Tier II measures in consultation with 
the Federal partner and plan for performance improvement through the 
SQSP process. The Tier II measures are listed in the Attachment.
     A general description of the continuous improvement, 
``Plan-Do-Check-Act'' cycle, and a detailed discussion of the SQSP 
and the planning process, including the plan narrative, quantitative 
displays of performance data, and criteria to identify performance 
needing improvement.
     A discussion of Federal oversight, including technical 
assistance, financial assistance, rewarding State accomplishments, 
and actions to improve performance. This last activity includes the 
development of corrective action plans by States that fail to meet 
the minimum performance criteria, and conformity/compliance actions 
to address exceptional instances of continued failure to meet 
minimum levels of performance.
    The PEWG's successor, the Performance Enhancement Group (PEG), 
ratified the performance criteria principles established by the 
PEWG. These principles were included in UIPL No. 4-99. PEG materials 
related to the establishment of performance criteria for the Tier I 
measures were provided in UIPL No. 19-98, and UIPL No. 34-98 
described the process for establishing the performance criteria.
    The PEG also deferred setting a criterion for one of the ten 
Tier I measures, cashiering timeliness, until a data collection 
methodology can be developed for that measure that can be applied 
uniformly by all States.
    The PEG established three workgroups--Appeals, Benefits, and 
Tax--to develop recommendations for the criteria for the nine other 
Tier I measures. Each workgroup included Federal staff from the 
National and Regional Offices and representatives from at least two 
States. The PEG developed guidelines for the workgroups to follow in 
developing their recommendations.
    The workgroups' reports were presented to the PEG at its meeting 
in Washington, DC, on September 28-30, 1998. The PEG reviewed the 
workgroups' recommendations, both in terms of the individual Tier I 
measures and in light of their cumulative burden, and recommended 
appropriate adjustments.
    UIPL No. 4-99 disseminated the proposed criteria and solicited 
the comments of the SESA Administrators. The November 13, 1998 FRN 
disseminated the proposed criteria and provided a 60-day period for 
public comment on the proposed criteria.
    A total of 26 States submitted comments in response to UIPL No. 
4-99. Six States submitted comments in response to the November 13, 
1998 FRN. However, the comments of three of these States were the 
same as the comments these States submitted in response to the UIPL. 
In addition to the States, two public interest groups submitted 
comments in response to the FRN.
    4. Definitions, Criteria, and Effective Dates. Tier I criteria 
will be used to assess State performance beginning with the SQSP 
cycle shown in the following Tier I performance measure table. 
States which do not meet minimum performance criteria which become 
effective in fiscal year (FY) 2002 (or later) will be required to 
submit plans identifying the steps the State will take to achieve 
those criteria, and must demonstrate progress toward meeting them. 
However, the Department of Labor will not initiate formal action if 
State performance fails to meet a new criterion prior to its 
effective date, provided the Department of Labor has received and 
approved a satisfactory corrective action plan and evidence of 
continuing progress in its achievement.
    State performance assessment is discussed in detail in the State 
Quality Service Plan Handbook (ET Handbook No. 336, 16th Edition).

----------------------------------------------------------------------------------------------------------------
                                                                           Effective date/criterion Fiscal year--
 
                              Tier I measure                              --------------------------------------
                                                                            2000 SQSP    2002 SQSP    2005 SQSP
----------------------------------------------------------------------------------------------------------------
 First Payment Timeliness: Number of days elapsed from week-ending date of the first compensable week in benefit
year to date payment is made in person, mailed, or offset or intercept is applied on the claim. Source: ETA 9050
                                                     report.
 
----------------------------------------------------------------------------------------------------------------
Percent of 1st Payments within 14/21 days: Intrastate UI, full weeks.....           87  ...........  ...........

[[Page 38096]]

 
Percent of 1st Payments within 35 days: Intrastate UI, full weeks........           93  ...........  ...........
Percent of 1st Payments within 14/21 days: Interstate UI, full weeks.....           70  ...........  ...........
Percent of 1st Payments within 35 days: Interstate UI, full weeks........           78  ...........  ...........
Percent of 1st Payments within 14/21 days: Intrastate + Interstate UI,     ...........          *90          *90
 UCFE, UCX programs, full + partial/part-total weeks.....................
Percent of 1st Payments within 35 days: Intrastate + Interstate UI, UCFE,  ...........          *95          *95
 UCX programs, full + partial/part-total weeks...........................
 
----------------------------------------------------------------------------------------------------------------
     Nonmonetary Determinations Timeliness: Number of days elapsed from date of detection by the SESA of any
  nonmonetary issue which had the potential to affect the claimant's past, present or future benefit rights to
                               date of the determination. Source: ETA 9052 report.
 
----------------------------------------------------------------------------------------------------------------
Percent of separation determinations within 21 days of detection date:     ...........           80           80
 Intrastate + Interstate UI, UCFE, UCX...................................
Percent of nonseparation determinations within 14 days of detection date:  ...........           80           80
 Intrastate + Interstate UI, UCFE, UCX...................................
 
----------------------------------------------------------------------------------------------------------------
    Nonmonetary Determinations Quality: Evaluation results of quarterly samples of nonmonetary determinations
  selected from the universe of nonmonetary determinations reported on the ETA 9052 report, as instructed in ET
                        Handbook No. 301 (revised January 1998). Source: ETA 9056 report.
 
----------------------------------------------------------------------------------------------------------------
Percent of separation and nonseparation determinations with quality        ...........           75           75
 scores >80 points: Intrastate + Interstate UI, UCFE, UCX................
 
----------------------------------------------------------------------------------------------------------------
   Lower Authority Appeals Timeliness: Number of days elapsed from the date the request for a lower authority
                   appeals hearing is filed to date of the decision. Source: ETA 9054 report.
 
----------------------------------------------------------------------------------------------------------------
Percent of lower authority appeals decided within 30 days of filing:                60          *60          *60
 Intrastate + Interstate UI, UCFE, UCX...................................
Percent of lower authority appeals decided within 45 days of filing:                80          *85          *85
 Intrastate + Interstate UI, UCFE, UCX...................................
Percent of lower authority appeals decided within 90 days of filing:       ...........          *95          *95
 Intrastate + Interstate UI, UCFE, UCX...................................
 
----------------------------------------------------------------------------------------------------------------
 Higher Authority Appeals Timeliness: Number of days elapsed from the date a higher authority appeal is filed to
                                 date of the decision. Source: ETA 9054 report.
 
----------------------------------------------------------------------------------------------------------------
Percent of higher authority appeals decided within 45 days of filing:               50           50           50
 Intrastate + Interstate UI, UCFE, UCX...................................
Percent of Higher authority appeals decided within 75 days of filing:               80           80           80
 Intrastate + Interstate UI, UCFE, UCX...................................
Percent of higher authority appeals decided within 150 days of filing:              95           95           95
 Intrastate + Interstate UI, UCFE, UCX...................................
 
----------------------------------------------------------------------------------------------------------------
   Lower Authority Appeals Quality: Evaluation results of quarterly samples of lower authority benefit appeals
  hearings selected and evaluated as instructed in ET Handbook No. 382 (2nd Edition). Source: ETA 9057 report.
 
----------------------------------------------------------------------------------------------------------------
Percent of lower authority appeals with quality scores equal to at least            80           80           80
 85% of the potential points: Intrastate + Interstate UI, UCFE, UCX......
 
----------------------------------------------------------------------------------------------------------------
   New Employer Status Determinations Timeliness: Number of days elapsed from last day of the quarter (Quarter
  Ending Date--QED) in which liability occurred to date of determination (date that the status information was
                      officially entered into the State's system). Source: ETA 581 report.
 
----------------------------------------------------------------------------------------------------------------
Percent of status determinations for newly established employers made               60           60           60
 within 90 days of the QED...............................................
Percent of status determinations for newly established employers made               80           80           80
 within 180 days of the QED..............................................
 
----------------------------------------------------------------------------------------------------------------
  New Employer Status Determinations Accuracy: Accuracy of status determinations based on the application of a
 review instrument for an annual acceptance sample selected from a universe of all status determinations for new
 and reactivated employers made during one complete calendar year, as instructed in ET Handbook No. 407 (revised
         December 1998). This measure includes only the accuracy of the determination, not the posting.
 
----------------------------------------------------------------------------------------------------------------
Pass new employer status determinations accuracy acceptance sample: No     ...........         Pass         Pass
 more than 6 failed cases in a sample of 60..............................
 
----------------------------------------------------------------------------------------------------------------

[[Page 38097]]

 
                 Timeliness of Transfer from Clearing Account to Unemployment Trust Fund (UTF):
 
----------------------------------------------------------------------------------------------------------------
Average number of days funds are on deposit in the State clearing account          <=2  ...........  ...........
 before transfer to the State account in the UTF, estimated from total            days
 deposits to the clearing account and total daily ledger balance reported
 on the ETA 8414 report..................................................
Ratio of average daily loanable balance in clearing account to average     ...........       <=1.75        <=1.0
 daily transfer to UTF: Ratio of the monthly average daily loanable
 balance (line 10, ETA 8414 report) to the average daily transfer to the
 Trust Fund (line 3, ETA 8405 report, divided by the number of days in
 the month)..............................................................
 
----------------------------------------------------------------------------------------------------------------
 Timeliness of Deposit to the Clearing Account: Elapsed time from the State's receipt of employer contributions
 to their deposit in the clearing account, estimated from a random sample of contributions received by the State
                                        during a specified time interval.
 
----------------------------------------------------------------------------------------------------------------
Criterion deferred until uniform measurement methodology is developed....  ...........  ...........  ...........
----------------------------------------------------------------------------------------------------------------
*The criteria proposed for First Payment Timeliness and Lower Authority Appeals Timeliness will not be effective
  unless and until the final UI PERFORMS regulation replaces the existing criteria for compliance in 20 CFR
  640.5 and 20 CFR 650.4(b).

    5. Periodic Review and Affirmation or Revision. The Department 
of Labor is committed to reviewing performance measures and criteria 
periodically, as agreed to by the PEWG and affirmed by the PEG. 
Final determination of the criteria for the two current Secretary's 
Standards--first payment timeliness and lower authority appeals 
timeliness--will occur in conjunction with proposed UI PERFORMS 
rulemaking. The first periodic review of the full set of Tier I 
measures will occur not more than five years from the date of 
issuance, with the exception of the criteria for nonmonetary 
determinations timeliness, nonmonetary determinations quality, and 
new employer status determinations accuracy, which will be reviewed 
after two years. The reviews will include all State performance data 
for these measures available at the time of the review.
    6. Action Required. SESA Administrators are requested to provide 
this information to appropriate staff.
    7. Inquiries. Please refer inquiries to the appropriate Regional 
Office.
    8. Attachment. UI PERFORMS Tier II measures.

Attachment

UI PERFORMS Tier II Measures

Benefits Payment Timeliness Measures

1. Intrastate UI First Payments Timeliness*
2. Interstate UI First Payments Timeliness*
3. UI First Payments Timeliness (Partials/Part Totals)
4. UCFE First Payments Timeliness
5. UCX First Payments Timeliness
6. Continued Weeks Payments Timeliness*
7. Continued Weeks Payments Timeliness (Partials/Part Totals)
8. Workshare First Payments Timeliness
9. Workshare Continued Weeks Payment Timeliness

    *Includes Total and Partials/Part-Total payments.

Nonmonetary Determinations Timeliness Measures

10. Intrastate Separation Determinations Timeliness
11. Intrastate Nonseparation Determinations Timeliness
12. Interstate Separation Determinations Timeliness
13. Interstate Nonseparation Determinations Timeliness
14. Nonmonetary Issue Detection Timeliness
15. Nonmonetary Determinations Implementation Timeliness

Appeals Timeliness Measures

16. Implementation of Appeals Decision Timeliness
17. Employer Tax Appeal Timeliness [to be developed]
18. Lower Authority Appeals, Case Aging
19. Higher Authority Appeals, Case Aging

Combined Wage Claims Timeliness Measures

20. Combined Wage Claim Wage Transfer Timeliness
21. Combined Wage Claim Billing Timeliness
22. Combined Wage Claim Reimbursements Timeliness

Tax Timeliness Measures

23. Contributory Employer Report Filing Timeliness
24. Reimbursing Employer Report Filing Timeliness
25. Securing Delinquent Contributory Reports Timeliness
26. Securing Delinquent Reimbursing Reports Timeliness
27. Resolving Delinquent Contributory Reports Timeliness
28. Resolving Delinquent Reimbursing Reports Timeliness
29. Contributory Employer Payments Timeliness
30. Reimbursing Employer Payments Timeliness
31. Successor Status Determination Timeliness (within 90 days of 
Quarter End Date)
32. Successor Status Determination Timeliness (within 180 days of 
Quarter End Date)

Appeals Quality Measures

33. Lower Authority Appeals Due Process Quality
34. Higher Authority Appeals Quality--[to be developed]

Tax Quality Measures

35. Employer Tax Appeals Quality--[to be developed]
36. Delinquent Reports Resolution Quality
37. Collection Actions Quality
38. Turnover of Contributory Receivables to Tax Due
39. Turnover of Reimbursing Receivables to Tax Due
40. Writeoff of Contributory Receivables to Tax Due
41. Writeoff of Reimbursing Receivables to Tax Due
42. Contributory Accounts Receivable as a Proportion of Tax Due
43. Reimbursing Accounts Receivable as a Proportion of Tax Due
44. Field Audits Quality
45. Field Audit Penetration, Employers
46. Field Audit Penetration, Wages
47. Percent Change as a Result of Field Audit

Benefits Accuracy Measures

48. Paid Claim Accuracy
49. Denied Claim Accuracy [under development]

Tax Accuracy Measures

50. Posting New Determinations Accuracy
51. Successor Determinations Accuracy
52. Posting Successor Determinations Accuracy
53. Inactivating Employer Accounts Accuracy
54. Posting Inactivations Accuracy
55. Employer Reports Processing Accuracy
56. Contributory Employer Debits/Billings Accuracy
57. Reimbursing Employer Debits/Billings Accuracy
58. Employer Credits/Refunds Accuracy
59. Benefit Charging Accuracy
60. Experience Rating Accuracy

Benefit Payment Control Measures

61. Benefit Payment Control, Establishment Effectiveness [under 
development]
62. Benefit Payment Control, Collection Effectiveness [under 
development]

[FR Doc. 99-17895 Filed 7-13-99; 8:45 am]
BILLING CODE 4520-30-P