Limited outsourcing of unemployment claims intake

UIPL12-01_Ch1_Acc.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2007/UIPL12-01_Ch1_Acc.pdf)

                                                      CLASSIFICATION
     Employment and Training Administration
                Advisory System                       Merit Staffing
           U.S. Department of Labor                   CORRESPONDENCE SYMBOL
            Washington, D.C. 20210                    OWS/DL
                                                      DATE
                                                      November 26, 2007

ADVISORY:              UNEMPLOYMENT INSURANCE PROGRAM LETTER
                       NO. 12-01, CHANGE 1

TO:                    STATE WORKFORCE AGENCIES

FROM:                  EMILY STOVER DeROCCO /s/
                       Assistant Secretary

SUBJECT:               Outsourcing of Unemployment Compensation Administrative Functions –
                       Claims Taking.

1.      Purpose. To provide additional guidance to the states regarding the Department of
        Labor's (Department’s) interpretation of Federal law concerning the "outsourcing" of
        unemployment compensation (UC) claims taking functions.

2.      References. Section 303(a)(1), Social Security Act (SSA); Office of Management and
        Budget (OMB) Circular No. A-76 (Revised), 68 Fed. Reg. 32,134 (May 29, 2003); OMB
        Office of Federal Procurement Policy (OFPP) Letter 92-1, 57 Fed. Reg. 45,096
        (September 30, 1992); Unemployment Insurance Program Letter (UIPL) 12-01, dated
        December 28, 2000, 66 Fed. Reg. 1696 (January 9, 2001).

3.      Background. UIPL 12-01 addressed the outsourcing (or contracting out) of
        functions related to the administration of state UC programs, based upon the merit
        staffing requirements of section 303(a)(1), SSA. As explained in that UIPL, “In
        determining what functions may be outsourced in State offices where Federal merit-
        staffing requirements apply, States are to rely on guidance in OMB Circular No. A-76
        (Revised) . . . .” Those OMB issuances do not permit the outsourcing of “inherently
        governmental functions,” essentially those involving the exercise of discretion. On May
        29, 2003, OMB issued a revision to Circular No. A-76. The Department reviewed UIPL
        12-01 in light of the revised circular and determined that the revision does not affect the
        UIPL’s guidance. However, in the course of this review and in light of changes in state
        claims processes, the Department identified limited, additional flexibility that can be
        afforded states regarding the outsourcing of UC claims taking.

RESCISSIONS                                        EXPIRATION DATE
None                                               Continuing

4.   Claims taking. UIPL 12-01 stated that because the UC claims taking functions involved
     the exercise of discretion, they could be performed only by government employees. This
     position was based on the fact that “[c]laims taking involves providing claimants with an
     understanding of their rights to UC and with advice concerning when to file as well as
     what type of claim to file (e.g., intrastate, interstate, or combined-wage). Discretion must
     be exercised as to what advice is given.” The information and advice provided by the
     claims taker concerning UC could affect the claimant’s eligibility for benefits and the
     amount thereof.

     Since 2001, some states have adopted telephone or internet based claims filing systems
     that accept information from the individual filing the claim and compile it in a database
     for further processing. Questions or issues that could potentially bear upon eligibility are
     referred to government employees who discuss the matter with the claimant.
     Government employees make all eligibility decisions.

     The same principles of rote acceptance of information to complete a UC claim applicable
     to automated systems can be applied to claims taken by telephone directly by call center
     employees, or in-person claims taking, because rote acceptance does not involve the
     exercise of substantial discretion. In such cases, the claims taker merely receives
     information and refers all questions bearing upon eligibility to a government employee.
     The Department concludes that these rote activities may be outsourced because, unlike
     the claims taking contemplated in UIPL 12-01, the claims takers do not exercise
     substantial discretion in providing advice; instead, they merely accept information to be
     relayed to government employees who process claims.

     The Department cautions that states must ensure that such outsourced claims takers’
     duties remain limited to the rote acceptance of information so as to ensure only
     government employees answer questions, provide advice, or make decisions that could
     affect claimants’ eligibility.

5.   Action. State administrators should distribute this advisory to appropriate staff.

6.   Inquiries. Questions should be addressed to your Regional Office.