Statewide hiring freezes and unemployment insurance administration

UIPL18-09acc.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2009/UIPL18-09acc.pdf)

                                                           CLASSIFICATION
            U. S. Department of Labor                      Methods of Administration
      Employment and Training Administration               CORRESPONDENCE SYMBOL
             Washington, D.C. 20210                        OWS
                                                           DATE
                                                           March 11, 2009


DIRECTIVE:            UNEMPLOYMENT INSURANCE PROGRAM LETTER No. 18-09

TO:                   STATE WORKFORCE AGENCIES

FROM:                 DOUGLAS F. SMALL /s/
                      Deputy Assistant Secretary

SUBJECT:              Application of State-Wide Personnel Actions, including Hiring Freezes, to
                      the Unemployment Insurance Program

1.     Purpose. To advise states that Unemployment Insurance Program Letter (UIPL) 09-98
       expresses the Department’s position concerning the application of state-wide personnel
       actions such as hiring freezes, shutdowns, and furloughs to the unemployment insurance
       (UI) program.

2.     References. Section 303(a)(1) of the Social Security Act (SSA) and UIPL 09-98, issued
       on January 12, 1998 (63 Fed. Reg. 6774, 6779 (February 10, 1998)).

3.     Background. During economic downturns, state revenues decline while demands for UI
       services increase. As a result of declines in state revenues, states face budget constraints
       and some may impose hiring freezes or other personnel actions such as furloughs on a
       state-wide basis. When applied to the UI program, these actions will likely have a
       detrimental effect on unemployed workers and businesses and result in decreased
       performance against Federal standards.

       UIPL 09-98 expresses the Department’s interpretation of the Federal UI law requirements
       as applied to these state-wide personnel actions. In brief, UIPL 09-98 provides that any
       state-wide personnel action that does not take into account the needs of the UI program is
       not a “method of administration” for assuring the proper and prompt delivery of UI
       services consistent with Section 303(a)(1), SSA. If the UI program is not exempted from
       such state-wide actions, the UIPL requires states to demonstrate to the Department that it
       has adequately addressed the UI program’s needs.


Rescissions:                                       Expiration Date:
None                                               Continuing


     A copy of UIPL 09-98 is attached.

4.   Action. States are to address state-wide personnel actions applied to the UI program
     consistent with UIPL 09-98.

5.   Inquiries. Inquiries should be directed to your Regional Office.

6.   Attachment. UIPL 09-98.

UIPL09-98acc.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2009/UIPL09-98acc.pdf)

                                                    CLASSIFICATION
          U.S. Department of Labor                  UI
           Employment and Training Administration   CORRESPONDENCE SYMBOL
                 Washington, D.C. 20210             TEUL
                                                    DATE
                                                    January 12, 1998


DIRECTIVE       :      UNEMPLOYMENT INSURANCE PROGRAM LETTER NO.            09-98

TO              :      ALL STATE EMPLOYMENT SECURITY AGENCIES

FROM            :      GRACE A. KILBANE /s/
                       Director
                       Unemployment Insurance Service

SUBJECT         :      Application of State-Wide Personnel Actions,
                       including Hiring Freezes, to the Unemployment
                       Insurance (UI) Program


1.   Purpose. To advise States of the Department's position
concerning the application of State-wide personnel actions
such as hiring freezes, shutdowns and furloughs to the UI
program.
2.   References.               Section 303(a)(1) of the Social Security
Act (SSA).
3.   Background.    Due to State budget constraints, some
States have, in the past, imposed hiring freezes, furloughs
and other actions on a State-wide basis. These actions are
usually taken during economic downturns when State revenues
decline while the demand for UI services increases.
State UI agencies have objected to being subjected to these
State fiscal actions on the basis that, because Federal UI
grants may only be used for UI purposes, there are no
savings to the State budget. The Department has supported
the UI agencies in articulating this argument. The
Department has noted that these actions will likely have a
detrimental effect on unemployed workers and businesses and
result in decreased performance against Federal standards.
Finally, the Department has noted that, since the amount of


 RESCISSIONS                                        EXPIRATION DATE
 None                                               Continuing

Federal funds provided to a State takes into account the
State's workload, Federal funding for UI increases during
downturns. In spite of these objections, the UI program has
been subjected to these fiscal restrictions.
As a result, the Department has re-examined this matter to
determine whether a more proactive stance may be taken to
assure the continued delivery of UI services during
downturns. This UIPL is issued to advise States of the
Department's determination and its basis in Federal law.

4.   Department's Position.   Section 303(a)(1), SSA,
requires, as a condition of a State receiving grants for the
administration of its UI law, that State law provide for--
     Such methods of administration . . . as are
     found by the Secretary of Labor to be
     reasonably calculated to insure full payment
     of unemployment compensation when due;
One of the basic purposes of this "methods of administra-
tion" requirement is to assure the proper and prompt
delivery of UI services to claimants and employers.
Therefore, any action that does not take into account the
service delivery needs of the UI program, is not a "method
of administration" consistent with Section 303(a)(1), SSA.
This position applies to all State-wide personnel actions,
including hiring freezes, shutdowns, furloughs, across-the-
board staff reductions, and any process that serves to delay
the hiring of UI staff when additional staff is needed.
When a State subjects the UI program to State-wide personnel
actions, the State will be required to demonstrate to the
Department that it has adequately addressed the UI program's
needs. These needs include all activities funded by Federal
dollars - payments, determinations, appeals, integrity and
tax functions, etc. The State will be required to address
how its workload will be handled without a decline in
performance. If a State fails to show that its actions
adequately take into account the needs of its UI program,
then the action is not an acceptable "method of
administration" under the SSA and the State's entire UI
grant could be at risk. Similarly, if State performance
declines despite the State's "showing" that program needs
have been considered, then the action may not be an
acceptable "method of administration."

The Department recognizes that there may be situations where
hiring freezes, staff reductions or other personnel actions
taken by the UI agency are necessary. For example, when
workload decreases, the need for staff decreases and the UI
agency will need to take appropriate action to assure that
only amounts necessary for the proper and efficient
administration of the UI program are expended from grant
funds. Since these actions take into account the needs of
the UI program, they raise no issue under Federal law.

5.   Action Required.    State agency administrators are
requested to provide this UIPL to appropriate staff.
6.   Inquiries.     Direct questions to your Regional Office.