EUC work search requirements and audits

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 EUC
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
                                                          OUI/DUIO
          U.S. DEPARTMENT OF LABOR
                                                          DATE
             Washington, D.C. 20210                       September 20, 2012


ADVISORY:        UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 04-10,
                 Change 10

TO:              STATE WORKFORCE AGENCIES

FROM:            JANE OATES /s/
                 Assistant Secretary

SUBJECT:         Work Search Requirements for Emergency Unemployment Compensation
                 (EUC) Recipients

1. Purpose. To advise state workforce agencies of the new provisions under the Middle Class
   Tax Relief and Job Creation Act of 2012 governing work search requirements for EUC
   recipients and state responsibilities for conducting random audits of recipients’ work search
   activities.

2. References.

   •   Middle Class Tax Relief and Job Creation Act of 2012, (Public Law (Pub. L.) 112-96),
       Title II, Sections 2001-2184 (Extended Benefits, Reemployment and Program Integrity
       Improvement Act (Act));
   •   Supplemental Appropriations Act, 2008, as amended, Pub. L. 110-252, Title IV, Sections
       4001-4007 (EUC Act);
   •   Training and Employment Guidance Letter (TEGL) No. 20-11, Reemployment Services
       and Reemployment and Eligibility Assessments for Recipients of Emergency
       Unemployment Compensation;
   •   Unemployment Insurance Program Letter (UIPL) No. 23-08, Supplemental
       Appropriation Act, 2008, Title IV—Emergency Unemployment Compensation, and its
       Changes 1, 2, 3, 4, 5, and 6; and
   •   UIPL No. 04-10, Extension of Temporary Provisions—Emergency Unemployment
       Compensation, 2008, Federal Additional Compensation, and Extended Benefits, and its
       Changes 1, 2, 3, 4, 5, 6, 7, 8, and 9.

3. Background. Pub. L. 112-96 amended Section 4001(b) of the EUC Act by adding new
   Subsection (4) that conditions EUC eligibility upon a claimant being “able to work, available
   to work, and actively seeking work.” New Section 4001(h)(1) defines “actively seeking
   work” to mean that an individual must:

   •   Register for Employment Services as prescribed by the state agency;


 RESCISSIONS                                              EXPIRATION DATE
 None                                                     Continuing

    •    Engage in an active search for work that is appropriate in light of the labor market and
         the individual’s skills and capabilities, and includes an appropriate number of employer
         contacts as determined/prescribed by the state;
    •    Maintain a record of his/her work search, including employers contacted, method of
         contact, and date of contact; and
    •    When requested, provide the work search record to the state agency.

Section 4001(h)(2) was added requiring the Secretary of Labor to establish a minimum number
of claims for which work search records must be randomly selected for audit in any given week.
States must conduct these random audits to ensure that claimants receiving EUC are meeting the
state’s work search requirements. This UIPL provides guidance to states for these audits.

4. Notification of Work Search Requirements. UIPL No. 04-10, Change 9, and TEGL No.
20-11, which the Employment and Training Administration (ETA) issued recently on
amendments to the EUC Act made by the Middle Class Tax Relief and Job Creation Act, advised
states to immediately begin notifying EUC claimants that they must meet new EUC work search
requirements. The UIPL advised states that they may make such notification by mail, Internet,
or interactive voice response telephone systems.

Exceptions to the Work Search Requirements

•   An EUC claimant participating in a state-approved training program may not be disqualified
    from receiving benefits for unavailability for, or not actively seeking, work or refusal to
    accept work (see Section 3304(a)(8), Federal Unemployment Tax Act). 1
•   Section 4001(h)(1)(A) requires state Employment Service registration “in such a manner and
    to such extent as prescribed by the state agency.” Therefore, if the agency under state law
    does not require registration for certain groups, such as union members who seek work
    through a hiring hall, these groups are excused from this requirement.
•   Section 4001(h)(1)(B) requires an active search for work that is “appropriate in light of the
    employment available in the labor market, the individual’s skills and capabilities, and
    includes a number of employer contacts that is consistent with the standards communicated
    to the individual by the state.” If state law permits or requires some workers to seek work
    through a hiring hall, that could impact the number of employer contacts that is appropriate
    for these claimants. Further, the state may determine that the appropriate number of contacts
    for an individual on a short term or seasonal layoff or with a letter of “intent to hire” from an
    employer is zero, since the individual is job attached.

Exception Related to Demonstration Projects

The active search for work requirement will not apply to individuals participating in a
demonstration project authorized under section 305, SSA. Section 305(e) authorizes two types
of activities that a demonstration project may include: subsidies for employer-provided training,


1 That section provides: “(8) compensation shall not be denied to an individual for any week because he is in training

with the approval of the State agency (or because of the application, to any such week in training, of State law
provisions relating to availability for work, active search for work, or refusal to accept work)…”
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such as wage subsidies; and direct disbursements to employers who hire individuals receiving
Unemployment Compensation (UC), including EUC.

With regard to the first activity, section 3304(a)(8), FUTA, provides that “compensation shall
not be denied to an individual for any week because he is in training with the approval of the
State agency (or because of the application, to any such week in training, of State law provisions
relating to availability for work, active search for work, or refusal to accept work)[.]”
Since training approved under a demonstration project is approved training, the work search
requirement will not apply to individuals while in that training.

With regard to the second activity, an individual will be ineligible for UC/EUC while employed
by an employer participating in a demonstration project. Accordingly, the work search
requirement will not apply to this individual while in that employment. States are not required to
and should not modify their state laws or otherwise weaken work search requirements in order to
participate in the demonstration project.

5. Auditing Work Search Records. Section 4001(h)(2) requires the U.S. Department of Labor
(Department) to “establish for each state a minimum number of claims for which work search
records must be audited on a random basis in any given week.” Attachment 1 to this UIPL
includes procedures to help states select the sample of claims to be audited each week. The
universe is the total number of paid EUC weeks, and the sample size is 0.5 percent of that
universe. The procedures in Attachment 1 are designed so that the number of resulting samples
will be between 50 and 1,500. Random audits are intended to be conducted for claims paid for a
specific week of unemployment. States that use bi-weekly certifications for continued claims
filing must ensure that each paid week is included in the pool of claims to be sampled.

•   For those claims randomly selected, the audit of the EUC recipients’ work search must
    include a review of the claimants’ work search activities for the selected week to determine
    whether the claimants met the work search requirements for that week as prescribed by the
    state.

•   To help claimants meet the new work search requirements, the state may develop a work
    search log that claimants can use to track their work search efforts, recording at a minimum,
    employers contacted, method of contact, and date contacted. The log may be returned by
    mail, e-mail, Internet, or by any cost effective means. There is no requirement that a work
    search audit for a claim record randomly selected under section 4001(h)(2) be conducted
    with the claimant present. However, if the only way to verify that the work search
    requirements were met is through an in person review, states must schedule the claimant for
    an in-person interview.

Verification of Activities

In conducting random audits, states must attempt to verify at least one work search activity or
contact listed by the claimant. A number of different methods may be used by states to verify
work search activity. For example, if the claimant indicated that s/he sent a resume to an
employer by e-mail, the state may verify that the resume was sent by requesting that the claimant

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provide a snapshot of his/her “Sent Items” e-mail log. This will contain information such as the
recipient, subject of the document, the date and time the document was received by the intended
recipient, etc. Verification can also be made by the claimant providing documentation that
shows the employer’s acknowledgement of the application and/or resume. In the states’
notifications to claimants, the state should advise claimants that they should retain copies of such
e-mail exchanges and/or other electronic evidence as part of their work search records. Another
verification method would be contacting the employer by phone, as appropriate. This is a
traditional practice that states already use. Note: Verification with the state Employment
Service alone that a claimant has registered as prescribed by the state does not satisfy this
verification requirement since the claimant must also contact employers to meet the EUC work
search requirement.

The statute makes these audits mandatory; it does not allow the Department to waive the
requirement. Thus, for monitoring purposes, states must report the audit activities that
correspond to the “weeks compensated” as reported on the EUC-specific ETA 5159 (Item 14).
States must determine the acceptability of the work search documentation presented and whether
the claimant met the requirements or was appropriately excused from the work search
requirement. Any issues related to EUC work search requirements, such as when individuals do
not provide documentation of their work search activities, must be referred for adjudication, as
must any other issue uncovered during the audit. As noted above, the Department recognizes
that states may, under their state law, waive the work search requirements for certain reasons,
such as when individuals are attending approved training. Thus, when a claimant whose claim is
selected for audit is in approved training, the state will review the individual’s approved training
status to ensure such waiver was appropriate.

6. Work Search Audit Administrative Funding. State agencies should include requests for
reimbursement for the administrative costs associated with the auditing of work search records
on line 26 of the online ETA UI3 - Quarterly Financial Report (Regular). Thirty minutes are
allowed for each audit. The calculation for determining such costs will follow the computation
of above base earnings and should be documented in the comments section of the UI3. An
example of this calculation is as follows: ((number of audits conducted x 30 minutes)/(standard
quarterly hours paid x 60 minutes)) x experience leave factor x quarterly PS/PB rate x 1.19 =
total reimbursement. Note: The standard quarterly hours paid, experience leave factor and
quarterly PS/PB rate are reported on the UI3 under the section B heading, line 23 and line 24
respectively. The number of audits conducted for which reimbursement is requested must agree
with the number of random audits conducted as reported on line 3 of the ETA 9162, Random
Audit of EUC 2008 Claimants.

7. Required Reporting. The reporting requirements for the EUC program that were in place
before these amendments have not changed. However, the new work search requirements and
the requirement that states conduct random audits of claimants’ work search activities necessitate
that states track and report these audit activities and the resulting outcomes.

Attachment 2 to this UIPL contains the instructions for completing the new Form ETA 9162,
which states will use to report aggregate random audit activity and outcomes. This report was
recently approved (OMB No. 1205-0495) and must be submitted, on a quarterly basis, through

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the current electronic reporting system that states use to submit virtually all Unemployment
Insurance required reports. The Department anticipates that this report will be available in the
reporting system by mid-July, 2012, and that the first report, for activity during the second
calendar quarter of 2012, will be due November 1, 2012. States with questions about the new
Form ETA 9162 or Attachment 1 to this UIPL should contact the appropriate Regional Office.

8. Interpretation. The information in this document is issued to the states and cooperating
state agencies as guidance provided by the Department in its role as the principal in the EUC
program. As agents of the Federal government, the states and cooperating state agencies may
not deviate from this guidance without the prior approval of the Department.

9. Action Requested. Administrators are to provide this guidance to the appropriate staff.

10. Inquiries. Questions should be directed to the appropriate Regional Office.

11. Attachments.

   Attachment 1 - Sampling Procedures for EUC Claims Work Search Audits
   Attachment 2 - Form ETA 9162 Random Audit of EUC 2008 Claimants




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Attachment 1 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_4_10_Chg10_Att1.pdf)

ATTACHMENT 1


                 Sampling Procedures for EUC Claims Work Search Audits

EUC Payment File

1. Create a file of all EUC claims paid during the week beginning 12:01 am on Sunday and
   ending 11:59 pm on Saturday. The minimum data elements in the file are:
       Claimant’s Social Security Number (SSN);
       Amount paid to the claimant (must be >= $1);
       Week ending date of the week in which the agency issued the payment (not the week
          ending date of the week claimed). Format is MM/DD/YYYY; and
       State may include additional data elements for control or identification (optional).

2. Sort the file created in step 1 by: a) amount paid (ascending), and b) the last four digits of the
   claimant’s SSN (ascending).

3. Assign a case number from 1 to the total number of records in the sorted file (N).

4. The Department of Labor has developed a spreadsheet sampling tool. It can be downloaded
   from http://ows.doleta.gov/unemploy/docs/wsaudit-06-25-2012.xls. The spreadsheet is
   designed to be used in conjunction with the file created in steps 1 to 3. The file created in
   steps 1 to 3 is external to the spreadsheet; that is, the cases are not imported into the
   spreadsheet.
        Enter the week ending date for the payment file created in steps 1 to 3 using the drop-
           down menu.
        Enter the number of records in the file created in steps 1 to 3 in column B on the row
           “Enter Population.” This will equal N (from step 3).
        Enter the sample size between 50 and 1,500 cases. If the number of records in the file
           created in steps 1 to 3 is less than 50, audit all the records; if more than 1,500, audit a
           sample of 1,500.

5. The spreadsheet will retrieve the random number for the week ending date, calculate the skip
   interval, and display the case numbers of the EUC payments randomly selected.

6. Cases are selected using systematic selection.
       A skip interval (i) = N / n is calculated, where N is the number of records in the EUC
          payment file created in step 1 and n is the requested sample size.
       The first case (n1) is selected by multiplying the skip interval (i) by the random
          number (r); the result is rounded to the nearest integer.
       The next (n-1) cases are selected by: [n1 + (j x i)], where j = 1, 2… (n-1); the results
          are rounded to the nearest integer.

7. Query the file created in steps 1 to 3 and select the records corresponding to the case
   numbers selected by the spreadsheet in step 5 (in the column labeled “Case Number”).
   These are the cases you will audit.

Attachment 2 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_4_10_Chg10_Att2.pdf)

ATTACHMENT 2
                      ETA 9162 Random Audit of EUC 2008 Claimants

    A.     Facsimile of Form

    STATE               REGION                           REPORT FOR PERIOD ENDING
                                                               calendar quarter end date

Section A: Claimants referred to Random Audit

1. Claimants Eligible for Random Audit                                                                      c1
2. Claimants Selected for Random Audit                                                                      c2
3. Random Audits Conducted                                                                                  c3
4. Claimants Who Failed to Report or Contact the Agency, as Directed                                        c4
5. Claimants Rescheduled for Random Audit                                                                   c5


Section B: Random Audit Results

6. Claimants With No Issues Raised as Result of Random Audit                                                c6
7. Claimants Without Sufficient Work Search Documentation                                                   c7
8. Claimants Disqualified Because Work Search Did Not Meet State or                                         c8
Federal Standards
9. Claimants Disqualified, or Determined Ineligible, For Failure to Report, As                              c9
Directed
10. Claimants Disqualified for Other Reasons                                                               c10



Comments:

OMB No.: 1205-0495          OMB Expiration Date: 11/30/2012           Estimated Average Response Time: 3 hours

O M B Burden Statement: These reporting instructions have been approved under the Paperwork Reduction Act of 1995.
Persons are not required to respond to this collection of information unless it displays a valid OMB control number. Public
reporting burden for this collection of information includes the time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Submission is required to retain or obtain benefits under SSA 303(a)(6). Respondents have no expectation of
confidentiality. Send comments regarding this burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to the U.S. Department of Labor, Office of Workforce Security, Room S-
4526, 200 Constitution Ave., NW, Washington, DC, 20210.

                                                                                         ATTACHMENT 2
B.   Purpose
     The ETA 9162 report is intended to provide a data describing random audits of the work search
     provision of Pub. L. 112-96. Random audits are conducted to ensure that claimants in the Emergency
     Unemployment Compensation Program of 2008 (EUC08) are performing an appropriate work search as
     required by state and Federal Law. States will audit, on a weekly basis, a cohort of EUC claimants of
     pre-defined size. Any EUC08 claimant that receives a week of payment is potentially subject to random
     audit of their work search documentation.

C.   Due Date and Transmittal
     The electronically submitted report is due in the ETA National Office on the first day of the second
     month following the quarter of reference (e.g., August 1 for the April-June quarter). The first report,
     based on data for the second calendar quarter of 2012, is due in the National Office on August 1, 2012.
     Any activity that occurs in late March of 2012 should be included with the report for the April to June
     time period.

D.   General Reporting Instructions
     States should use ETA guidance as a source of information on how to conduct the random audits.
     Report the general items specified in Section A of this report at the time they occur. Claimants identified
     for a random audit will receive an audit of their work search activities and records as required under
     state and Federal law. States will report summary data on the audits themselves, as well as any
     resulting disqualifications or denials from issues that were raised during the audit, in section B of the
     report.

     Claimants eligible for Random Audit (Item 1) should tie very closely to the number of weeks paid for the
     reporting period that the state is reporting on their EUC-specific ETA 5159 report. Unless otherwise
     noted, all reporting elements should be a total count of occurrences during a reporting period, and not
     just a single occurrence for each individual claimant.

     The state will conduct random audits on a pool of claimants of pre-defined size: 0.5 percent of all weeks
     paid in any Tier of the EUC program, with a minimum number of 50 and a maximum of number of 1,500,
     for any given week. There is no option for waivers in the random audit program so states should be
     reporting the appropriate number of audit activities relative to the weeks compensated being reported on
     the EUC-specific ETA 5159.

     Because of operational issues such as backdating of claims and bi-weekly certification, and to minimize
     state burden, states should draw the pool for random audit from all weeks compensated, including
     individuals multiple times if they were paid multiple weeks. There is no need to produce a unique set of
     claimant identifiers for each individual week: states should draw their pool for random audits, for any
     given week, from all weekly certifications that they determined compensable in the prior week.

E.   Item by Item Instructions
     1.    Claimants Eligible for Random Audit: Report the number of checks issued to claimants in the
           EUC08 program during the reporting period. Use the same protocol for tabulating this number
           that is used in generating the weeks compensated for the EUC-specific ETA 5159 report.
     2.    Claimants Selected for Random Audit: Report the number of claimants from the pool
           described in item 1 that are selected to receive a random audit.
     3.    Random Audits Conducted: Report the number of claimants who were selected for a random
           audit and had a random audit conducted. Include claimants who were scheduled for a
           random audit in a prior reporting period but have their audit conducted in the current reporting
           period.


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                                                                                ATTACHMENT 2

4.    Claimants Who Failed to Report or Contact the Agency, as Directed: Report the number of
      claimants who were selected for a random audit and failed to report, irrespective of whether
      they were rescheduled or not.
5.    Claimants Rescheduled for Random Audit: Report the number of claimants who were
      scheduled for a random audit, did not have the random audit conducted and now have a
      scheduled date for a random audit.
6.    Claimants With No Issues Raised as Result of Random Audit: Report the number of random
      audits conducted which resulted in a finding that the claimant had met all state and Federal
      work search requirements and were not referred to adjudication on the basis of anything
      found during the random audit.
7.    Claimants Without Sufficient Work Search Documentation: Report the number of random
      audits conducted which resulted in a finding that the claimant could not properly document
      their work search. Include cases where the claimant was referred to adjudication and cases
      where the claimant was not referred to adjudication.
8.    Claimants Disqualified Because Work Search Did Not Meet State or Federal Standards:
      Report the number of claimants disqualified or determined ineligible for a week following a
      random audit that found the claimant’s work search did not meet state or Federal
      requirements.
9.    Claimants Disqualified, or Determined Ineligible, For Failure to Report, As Directed: Report
      the number of claimants disqualified or determined ineligible for a week following failure to
      participate in the random audit.
10.   Claimants Disqualified for Other Reasons: Report the number of claimants disqualified or
      determined ineligible for a week following a random audit in which the claimant’s work search
      did meet state or Federal requirements but other issues were raised that resulted in
      subsequent disqualification or denial of the paid week that was the basis of the random audit.




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