Retirement of the combined-wage claim interstate notification application

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                  Unemployment Insurance
               ADVISORY SYSTEM                             CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                         OUI/DUIO
             Washington, D.C. 20210                        DATE
                                                           October 30, 2024


ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 02-12,
                Change 3

TO:             STATE WORKFORCE AGENCIES

FROM:           JOSÉ JAVIER RODRÍGUEZ
                Assistant Secretary

SUBJECT:        Retirement of the Combined Wage Claim (CWC) 02-12 Application from the
                Unemployment Insurance (UI) Interstate Connection Network (ICON)

1. Purpose. To inform states of the discontinuation of the CWC 02-12 application in UI-ICON
   and provide an alternative method for paying states to communicate to the transferring
   state(s) an employer’s failure to timely or adequately respond to State Workforce Agencies’
   (SWA) requests for information relating to a CWC.

2. Action Requested. The Department of Labor’s (Department) Employment and Training
   Administration (ETA) requests SWA administrators provide the information contained in this
   Unemployment Insurance Program Letter (UIPL) to the appropriate staff and arrange for an
   alternate method for communicating these occurrences to the transferring state(s).

3. Summary and Background.

   a. Summary – The CWC 02-12 application, hosted by the National Association of State
      Workforce Agencies (NASWA) UI-ICON system, was developed to provide an efficient,
      secure, and expedient method for states to communicate an employer’s failure to respond
      timely and adequately to requests for information relating to CWCs. In recent years, this
      functionality has been rarely used and it will be retired effective December 1, 2024.

       States are advised there is no change in the requirement for the paying state to
       communicate an employer’s failure to timely and adequately respond to the SWA’s
       request for claim information to the transferring state(s). ETA encourages states to utilize
       UI-ICON UIMail for this notification.

   b. Background – Section 3303(a)(1) of the Federal Unemployment Tax Act (FUTA),
      governs the conditions under which a state may reduce employers’ rates of contributions
      to its unemployment fund. Many states relieve an employer’s unemployment account of
      charges (e.g., benefits or benefit wages) that the state determined were made improperly.
      Section 252(a) of the Trade Adjustment Assistance Extension Act of 2011 (TAAEA)
      (Public Law (Pub. L.) 112-40), enacted on October 21, 2011, added a new subsection (f)

   RESCISSIONS                                              EXPIRATION DATE
   None                                                     Continuing

       to section 3303, FUTA, to provide that, for a state law to meet the requirements of
       section 3303(a)(1), FUTA, the state must not relieve an employer of charges
       (noncharging) when the employer, or an agent of the employer, does both of the
       following:

       •   “was at fault for failing to respond timely or adequately to the request of the [state]
           agency for information relating to [a] claim” for unemployment compensation (UC)
           benefits that was subsequently overpaid; and
       •   “has established a pattern of failing to respond timely or adequately” to requests from
           the state agency for information relating to claims for UC benefits. (See UIPL No. 02-
           12 for more information.)

       As explained in UIPL No. 02-12, Change 2, each state is responsible for determining its
       own standard for what constitutes a “pattern” under these TAAEA provisions. CWC
       claims inherently involve employers from two or more states. In cases where an
       overpayment is attributable to an employer covered by the UC law of the paying state, the
       paying state determines whether the employer or its agent has established a “pattern.”
       Conversely, if the overpayment is attributable to an employer covered by the UC law of a
       transferring state, the transferring state must apply its own standard to establish a
       “pattern.” In cases where a paying state determines that a benefit overpayment is due to
       an out-of-state employer’s failure to respond timely or adequately to the paying state’s
       request for information, the paying state must promptly communicate its determination to
       the appropriate transferring state to determine if a “pattern” exists.

       To this end, the Department, in partnership with NASWA developed the UI-ICON CWC
       02-12 application to enable the paying state to promptly communicate its determination
       that an overpayment is the result of the failure of an employer covered by the UC law of
       the transferring state to timely or adequately respond to the paying state’s request. Since
       its creation, states have demonstrated that the CWC 02-12 application is not a valuable
       resource and have rarely used it to convey information about an employer’s failure to
       timely or accurately respond.

       The Department has supported a project to modernize the UI ICON system, which began
       in April of 2022 and is discussed in Training and Employment Notice No. 03-24.

4. Guidance. As NASWA continues modernization of the UI-ICON system, applications that
   are rarely used or obsolete are being retired. As a result, the CWC 02-12 application will no
   longer be available in UI-ICON effective December 1, 2024.

   The retirement of the CWC 02-12 application has no impact on the requirements of the
   TAAEA and paying states must continue to communicate to the transferring state an
   employer’s failure to timely and adequately respond to the paying state’s request for claim
   information. ETA strongly encourages states to utilize UI-ICON UIMail for this notification.
   UIMail is a closed, secure system accessed through UI-ICON that allows authorized state
   users to send and receive email to other authorized state users across the UI system.

5. Inquiries. Please direct inquiries to the appropriate ETA Regional Office.

6. References.
   • Trade Adjustment Assistance Extension Act of 2011 (TAAEA), Pub. L. 112-40, (19
      U.S.C. § 2101), enacted October 21, 2011;
   • Federal Unemployment Tax Act (FUTA) Section 3301 (26 U.S.C. § 3301);
   • UIPL No. 02-12, Unemployment Compensation (UC) Program Integrity – Amendments
      made by the Trade Adjustment Assistance Extension Act of 2011 (TAAEA), issued
      December 20, 2011, https://www.dol.gov/agencies/eta/advisories/unemployment-
      insurance-program-letter-no-02-12;
   • UIPL No. 02-12, Change 2, Unemployment Compensation (UC) Program Integrity
      Provisions – Amendments made by the Trade Adjustment Assistance Extension Act of
      2011 (TAAEA) – Combined Wage Claim (CWC) Program Questions and Answers, issued
      October 15, 2014, https://www.dol.gov/agencies/eta/advisories/unemployment-insurance-
      program-letter-no-02-12-change-2; and
   • TEN No. 03-24, Announcing the Availability of Real-Time Services in Production for the
      Modernized Unemployment Insurance (UI) Interstate Connection Network (ICON),
      issued August 9, 2024, https://www.dol.gov/agencies/eta/advisories/ten-03-24.

7. Attachment(s). N/A.