DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 07-93
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	BARBARA ANN FARMER Administrator for Regional Management
SUBJECT	:	State Law Claims Filing Requirements Applicable to UCX and UCFE Claims and Their Impact on the Assignment of Wages

1. Purpose. To rescind existing policy guidance transmitted in UIPL 9-81 and provide revised policy and procedural guidance that requires that the claims filing requirements of the applicable State law permitting the withdrawal of an unemployment insurance (UI) claim be applied to UCX and UCFE claimants.

2. References. 20 CFR parts 609 and 614, Chapter XII of ET Handbook No. 384, Chapter III of ET Handbook No. 391, and UIPLs 44-79, 10-81, 31-86 and 33-92.

3. Background. Many State laws permit UI claims to be withdrawn by the claimant, within certain timeframes, after the filing of an initial (first) claim. This action also cancels the claimant's benefit year. In UIPL 9-81, the Department took the position that once Federal military wages were assigned to a State under 20 CPR 614.8(b) after the filing of a first claim, those Federal military wages would be permanently assigned to that State regardless of whether that State's law permitted the cancellation or withdrawal of that first claim and cancellation of the claimant's benefit year. Thus, those Federal military wages would be unavailable for assignment should the claimant file a new first claim in a different State after the cancellation or withdrawal of the original UCX claim. There is currently no UCFE policy guidance in place regarding the assignment of Federal civilian wages should a UCFE or a joint UI/UCFE claim be withdrawn.

4. Policy and the Impact on the Assignment of Wages. UIPL 9-81 is rescinded. Upon reconsideration, it has been determined that the position is inconsistent with the equal treatment requirement, as set forth in S 614.9(a)(1), which provides that the claims filing requirements of applicable State law apply to UCX claims.

   Under the UCFE and UCX equal treatment requirements at S 609.9(a)(1) and S 614.9(a)(1) respectively, the provisions of the applicable State law governing claims filing apply to UCFE and UCX claims, except where the result would be inconsistent with the provisions of Federal law, 20 CFR Parts 609 and 614 or the UCFE and UCX operating procedures issued by the U.S. Department of Labor (the Department). Accordingly, the Department has determined that if a State law permits a regular UI claim to the withdrawn (and the benefit year cancelled), then the same rule must be followed for UCFE and UCX claims.

   For the UCFE program, the Department has further determined that State law claims filing requirements (including provisions permitting the withdrawal of State UI claims) cannot be applied to remove the legal requirement at S 609.8 (b)(1) that Federal civilian service and wages are to be assigned to the State in which the individual has his/her last official duty station prior to filing a UCFE first claim. For the UCFE program, the policy change in this directive only affects the exceptions at S 609.8(b)(1)(i) and (ii), unless, of course, the assignment of Federal civilian service and wages to another Sate is authorized under S 609.8(b)(3).

   Once a UCFE or UCX first claim is withdrawn in accordance with State law, the assignment of the individual's Federal civilian and/or military service and wages to that State lapses because a first claim no longer exists. The Federal wages then become available to be assigned in accordance with S 609.8(b) and/or 614.8(b).

   It is important to note that the UCFE and UCX equal treatment requirements at S 609.12 and S 614.13 respectively also provide that claimants' rights to UCFE and UCX shall be protected from waiver in the same manner and to the same extent as the rights of persons to State UI are protected under the applicable State law. This equal treatment includes protection against discrimination and obstruction in regard to seeking, applying for , and receiving any right to UCFE and UCX.

   This policy is effective after the date of the release of this directive. (Refer to Sections 7.a and 7.b of this directive for its effect on UCFE and UCX claims filing and redeterminations respectively.)

5. Application of the New Policy. The application of the new policy to UCX claims primarily involves severance bonus payments made to ex-servicemembers as part of the military "downsizing" effort. As required by UIPL 33-92, SESAs apply the disqualifying income provisions of the applicable State law in adjudicating the effect that an exservicemember's receipt of severance bonus payments has upon his/her UCX weekly benefit amount (WBA). State laws provide for disparate treatment of the effect of disqualifying income upon an individual's UI (and UCX) WBA. Several ex-servicemembers have filed UCX "first claims" in States which prorate the amount of these bonuses received to a weekly figure and deduct the prorated amount from the ex-servicemembers' UCX WBA. The result is to reduce these ex-servicemembers' WBA to zero. As permitted by applicable State law, these ex-servicemembers withdraw their UCX claims within prescribed time limits and their benefit years are cancelled. They subsequently file UCX claims in another State whose State law does not provide for the reduction of these bonuses from the WBA. Under the policy in effect before the release of this directive, the State in which the subsequent UCX claim is filed denies the UCX claim because it maintains that those ex-servicemembers' Federal military service and wages were assigned under 20 CFR 614.8(b) to the State in which the first claim was filed, regardless of whether the first claim was withdrawn, and thus, under 20 CFR 614.8(d), are unavailable for use in any other State (with certain exceptions not relevant here).

   In the UCX scenario cited above, the application of the new policy contained in Section 4. Of the directive will result in the following actions. The assignment of Federal military service and wages to State A lapses upon the withdrawal of the UCX claim in State A. The Federal military service and wages are subsequently assigned to State B upon the filing of the new first UCX claim in that State.

   In the UCFE program, the assignment of Federal civilian service and wages is solely governed by the provisions of S CFR 609.8(b). When a UCFE first claim is withdrawn in accordance with State law, the assignment of Federal civilian service and wages to that State lapses. However, unless specifically authorized by the provisions of $ 609.8(b), the individual's Federal civilian service and wages cannot be assigned to another state upon the filing of a new (initial) claim in the other State.

6. Procedures on withdrawn UCX or UCFE First Claims. State employment security agencies (SESAs) will continue to make an inquiry to the Louisiana Claims Control Center (LCCC) at the time a UCX or UCFE first claim is filed. If that first claim is subsequently withdrawn and the claimant's benefit year is cancelled (as permitted by applicable State law), the SESA will immediately send a subsequent inquiry to the LCCC using existing UCX and UCFE inquiry procedures and formats. The subsequent inquiry will contain identical information as the original inquiry and, for UCX subsequent inquiries, characters 63-68 should contain the work CANCEL, and, for UCFE subsequent inquiries, characters 66-71 should contain the word CANCEL.

7. Claims Filing, Redeterminations, and Appeals. 

   1. Claims Filing, UCFE and UCX first (initial) and weekly claims shall be filed in the established manner in order to implement the policy contained in this directive, i.e., applying State law on procedural matters as provided by S 609.9(a)(1) and S 614.9(a)(1) and Federal laws, regulations, and operating procedures issued by the Department on substantive matters. State law provisions regarding the back dating of claims shall be applied to UCFE and UCX first claims to implement the policy contained in this directive.

   2. Redeterminations. The authority for a SESA to issue redeterminations of UCX and UCFE determinations to implement the policy contained in this directive is limited to redetermination authoritiy contained in S 609.6(c) and 614.6(c). This authority shall be undertaken according to State law provisions applicable to UI Claims.

   3. Appeals. SESAs shall apply the policy contained in this directive to all appeals decisions issued after the date of the release of this directive.

   For this purpose, the State UI law includes judicial decisions of the courts of the State in comparable UI cases as well as State statutory provisions, and thus is the same as the "State law" which is relevant for conformity and compliance purposes under Title III of the Social Security Act and the Federal Unemployment Tax Act.

8. Action Required. State Administrators are required to:

   1. Inform all appropriate UI and appeals staff of the new policy and procedural guidance issued in this UIPL and advise them to immediately discontinue using the policy guidance provided in UIPL 9-81 since that UIPL is now rescinded.

   2. Take appropriate actions, consistent with State law, to take UCFE and UCX first claims and to issue redeterminations and appeals decisions of all UCX claims with respect to which the decisions on ex-servicemembers' and former Federal employees' eligibility are inconsistent with the operating instructions in this UIPL.

9. Inquiries. Direct inquiries pertaining to this UIPL to the appropriate Regional Office.