[Federal Register Volume 76, Number 113 (Monday, June 13, 2011)]
[Notices]
[Pages 34270-34271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14478]


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DEPARTMENT OF LABOR

Employment and Training Administration


Federal-State Extended Benefits Program--Methodology for 
Calculating ``on'' or ``off'' Total Unemployment Rate Indicators for 
Purposes of Determining When a State Begins and Ends an Extended 
Benefit Period

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice.

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SUMMARY: UIPL 16-11 informs states of the methodology used to calculate 
the ``on'' or ``off'' total unemployment rate (TUR) indicators to 
determine when extended benefit (EB) periods begin and end in a state. 
UIPL 16-11 is published below to inform the public and is available at: 
http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3027.

SUPPLEMENTARY INFORMATION: 

UIPL 16-11: Federal-State Extended Benefits Program--Methodology for 
Calculating ``on'' or ``off'' Total Unemployment Rate Indicators for 
Purposes of Determining When a State Begins and Ends an Extended 
Benefit Period

    1. Purpose. To inform states of the new methodology used to 
calculate the ``on'' or ``off'' total unemployment rate (TUR) 
indicators to determine when extended benefit (EB) periods begin and 
end in a state.
    2. References. The Federal-State Extended Unemployment Compensation 
Act of 1970 (EUCA); Section 2005 of Division B, Title II, the 
Assistance for

[[Page 34271]]

Unemployed Workers and Struggling Families Act, Public Law (Pub. L.) 
111-5; Section 502 of the Tax Relief, Unemployment Insurance 
Reauthorization, and Job Creation Act of 2010, Public Law 111-312; 26 
U.S.C. 3304(a)(11) note; 20 CFR 615.12; Unemployment Insurance Program 
Letter (UIPL) No. 45-92; UIPL No. 4-10, Change 6.
    3. Background. EB is payable in a state only during an EB period in 
the state, that is, a period of unusually high unemployment. Section 
203, EUCA, provides methods for determining whether a state's current 
unemployment situation qualifies as an EB period. EB periods are 
determined by ``on'' and ``off'' indicators (commonly referred to as 
triggers) in the state. Section 203(d), EUCA, provides for an ``on'' 
indicator based on the insured unemployment rate (IUR). The IUR is 
calculated weekly by the states using administrative data on state 
unemployment compensation claims filed and the total population of 
employed individuals covered by unemployment insurance. States trigger 
``on'' EB if the IUR for the most recent 13-week period equals or 
exceeds 5 percent and equals or exceeds 120 percent of the average of 
such rates for the corresponding 13-week period ending in each of the 
preceding two calendar years. The calculation of the relationship 
between the current rate and prior year's rates is commonly referred to 
as the ``look-back.''
    The Unemployment Compensation Amendments of 1992, Pub. L. 102-318, 
added Section 203(f), EUCA, to provide for an optional alternative 
indicator that states may use to trigger ``on'' EB based on the TUR. 
That indicator requires that, for the most recent three months for 
which data for all states is published, the average TUR in the state 
(seasonally adjusted) for the most recent three-month period equals or 
exceeds 6.5 percent and the average TUR in the state (seasonally 
adjusted) equals or exceeds 110 percent of the average TUR for either 
or both of the corresponding three-month periods in the two preceding 
calendar years (look-back). The 1992 amendments also provided for a 
calculation of a ``high unemployment period'' when the TUR in a state 
equals or exceeds 8 percent and meets the 110 percent look-back 
described above, permitting the payment of additional weeks of EB. 
Section 203(f)(3), EUCA, provides that ``determinations of the rate of 
total unemployment in any state for any period * * * shall be made by 
the Secretary.'' An EB period ends when the state no longer meets any 
of the ``on'' triggers provided for in state law.
    Regulations at 20 CFR 615 implement the provisions of EUCA relating 
to the IUR indicators, including how they will be calculated. The 
regulation, at 20 CFR 615.12, explains the IUR triggers and how the 
rates are calculated. The regulation does not address the TUR 
indicator. The Department is issuing this guidance to describe how the 
TUR indicators are calculated for purposes of determining whether a 
state meets the 110 percent look-back requirement. The Department plans 
to promulgate regulations about this methodology in the near future.
    In the absence of explicit guidance and regulation, the Department 
previously adapted a portion of the existing guidance for the IUR look-
back indicator as a basis for calculating the TUR look-back indicator 
as well. Specifically, in computing the look-back percentage for the 
TUR trigger the procedure for determining the number of significant 
digits from the resulting fraction followed 20 CFR 615.12(c)(3).
    The TUR trigger is calculated using unemployment rates determined 
by the Bureau of Labor Statistics. These rates are determined using 
sampled data and therefore have error around them. In contrast, IUR 
triggers are calculated from administrative data and thus represent the 
full universe. Because of these differences in the calculation of the 
insured and total unemployment rates, the Department has determined 
that an appropriate methodology for calculating the look-back on the 
TUR indicator is to switch from truncation at the fourth decimal place 
as used for the IUR to rounding at the second decimal place.
    The Tax Relief, Unemployment Insurance Reauthorization, and Job 
Creation Act of 2010 permitted states to amend state law in order to 
make determinations of whether there is an ``on'' or ``off'' indicator 
by comparing current unemployment rates to the unemployment rates for 
the corresponding period in the three preceding years. Authority to use 
this three-year look-back applies only for weeks of unemployment 
beginning after December 17, 2010, and ending on or before December 31, 
2011. The Department will also use the methodology described below in 
determining whether a state meets the three-year TUR look-back criteria 
for those states that chose to amend their law to take advantage of 
this temporary authority.
    4. Methodology. The Department will now use the following method of 
computing the current rate as a percentage of the comparable rate in 
prior years (look-back) for the TUR indicator: On a monthly basis, the 
three month average, seasonally adjusted rate of total unemployment is 
divided by the same measure for the corresponding three months in each 
of the applicable prior years, that is, either a two- or three-year 
look-back, as specified in state law. The resultant decimal fraction is 
then rounded to the hundredths place (the second digit to the right of 
the decimal place). The resulting number is then multiplied by 100 and 
reported as an integer and compared to the statutory threshold to 
determine the state's trigger status.
    5. Effective date of implementation. In order to give full effect 
to this methodology, and to ensure that all unemployed individuals who 
are eligible to receive EB are paid in a timely manner, the Department 
is implementing the methodology described in Section 4 of this guidance 
retroactive to April 16, 2011.
    6. Action requested. Administrators are to provide this information 
to the appropriate staff.
    7. Inquiries. Please direct inquiries to the appropriate Regional 
Office.

    Dated: June 6, 2011.
Jane Oates,
Assistant Secretary, Employment and Training Administration.
[FR Doc. 2011-14478 Filed 6-10-11; 8:45 am]
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