Using EUC funds for unemployment benefits to laid-off staff

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 UI/EUC
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        DFAS
             Washington, D.C. 20210                       DATE
                                                           September 11, 2014


ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 22-14

TO:             STATE WORKFORCE AGENCIES

FROM:           PORTIA WU /s/
                Assistant Secretary

SUBJECT:        Use of Emergency Unemployment Compensation (EUC) Administrative Funds
                to Pay Unemployment Insurance (UI) Benefits to Staff Separated as a Result of
                the EUC Program Not Being Extended


1. Purpose. To notify State Workforce Agencies of the conditions under which EUC
   administrative funds may be used to pay UI benefits to staff separated as a result of the EUC
   program expiring on January 1, 2014.

2. References.
   • Supplemental Appropriations Act of 2008 (Public Law 110-252);
   • American Recovery and Reinvestment Act (Public Law 111-5);
   • Middle Class Tax Relief and Job Creation Act of 2012 (Public Law 112-96); and
   • American Taxpayer Relief Act of 2012 (Public Law 112-240).

3. Background. The EUC program was first implemented on July 1, 2008, by the
   Supplemental Appropriations Act of 2008, and was extended several times to provide
   unemployment compensation (UC) to long-term unemployed workers unable to find
   employment as a result of the Great Recession and its aftermath. The American Taxpayer
   Relief Act of 2012, enacted on January 2, 2013, contained the most recent extension of EUC,
   which expired on January 1, 2014. The extension of EUC contained in the Middle Class Tax
   Relief and Job Creation Act of 2012 contained a provision requiring certain EUC claimants
   to participate in reemployment services and eligibility assessments (RES/REAs). The EUC
   RES/REA requirements were in effect through January 1, 2014.

   As a result of EUC not being extended, states began laying-off staff working on EUC
   activities, which abruptly created a financial liability for payment of UC when these former
   state agency employees filed for UC.

4. Funding UC Costs. The Department of Labor (Department) advises states that EUC
   administrative funds may be used to pay UC costs for individuals who were working full-

 RESCISSIONS                                              EXPIRATION DATE
 None                                                     Continuing

   time on EUC activities before the termination of the program and whose layoffs are a direct
   result of the expiration of the EUC program. States may also use these funds to reimburse
   accounts to which such UC costs were charged. For individuals who worked on EUC
   activities and non-EUC activities (e.g., worked on collection of EUC and regular UC
   overpayments after the termination of EUC) and who were laid off due to the EUC program’s
   expiration, UC may be paid with EUC administrative funds on a pro-rata basis according to
   the activities on which they worked. Use of the EUC administrative funds for UC applies to
   individuals laid-off as a result of the termination of the EUC program. It is the state’s
   responsibility to ensure the pro-rata amounts are accurate and in accordance with state law
   and appropriate cost allocation methods as they are subject to audit.

   If sufficient EUC administrative funds are not available in the state, states may request
   additional EUC administrative funds to pay the UC costs of separated staff described above
   or to reimburse accounts to which those costs are being charged. To do so, states must
   submit these supplemental requests on line 26 of form ETA UI-3 with costs noted in the
   Comments section. In addition to UC costs, states are asked to include the number of
   employees collecting such benefits by entering the number of first payments in the Comments
   section. Information covering the first two calendar quarters of 2014 may be reported on the
   June 2014 UI-3 report. States that have already submitted the UI-3 report for the quarter
   ending June 2014 may submit a revised report, or they may submit the costs on the next UI-3
   submission. If states incur additional costs in the quarter ending September 2014 and beyond,
   they may continue to report such costs on future submissions of the UI-3 report.

5. Action Requested. The Department requests that state administrators provide the above
   information and instructions to all appropriate staff.

6. Inquiries. Please direct inquiries to the appropriate regional office.




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