DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 21-01
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Administrator Office of Workforce Security
SUBJECT	:	Survey of Estimated Costs of Proposed Revision to Quarterly Wage Reports

1. Purpose. To inform State Employment Security Agencies (SESAs) that a survey has been placed on the Office of Workforce Security (OWS) web site. The purpose of the survey is to assess the estimated cost that would be incurred by SESAs if expanded name fields and three additional labor market information (LMI) elements were added to SESAs' quarterly wage reports.

2. References. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and The Workforce Investment Act (WIA) of 1998.

3. Background. Unemployment insurance (UI) wage records are a resource for a number of government programs. The Social Security Administration (SSA) maintains the National Directory of New Hires (NDNH), which includes UI wage records from each State, and may use the records for child support enforcement and Social Security-related purposes. The WIA requires States to use UI wage records to evaluate the performance of WIA programs and services. The SSA expressed interest several years ago in State UI agencies adopting the larger name field format for wage records that SSA will require for electronic and magnetic media reporting of W-2 information for tax year 2001.

   Additionally, employment and training program evaluators have expressed interest in the collection of certain labor market data elements that would make wage records more useful for measuring program performance. In the likelihood that there will be proposals to expand wage record fields or data elements for these purposes, the Department of Labor needs information to assess State UI agencies' implementation costs in order to prepare accurate budget requests and conduct a meaningful cost-benefit analysis of any particular proposal. The attached survey was developed to gather that information.

   It is acknowledged that if a change of this magnitude were to be made, it would be costly for some employers and States to implement. However, other employers and States may already be using these or similar standards. It should be noted that this survey covers only SESA costs and that employer costs will be estimated in a separate study.

   The name field expansion and additional data elements for which cost estimates are requested are discussed briefly below.

4. Expanded Name Fields. The passage of the PRWORA provided for establishment of the NDNH. The primary purpose of the NDNH data base, which is maintained by the SSA, is to locate parents who are not providing support for their children. States began submitting wage tapes to the NDNH with the third quarter of 1997, and benefit tapes with the fourth quarter of 1997. However, SESAs submit the name data in many different size formats and in some cases, due to the short name fields submitted by SESAs, the SSA is unable to make positive matches of parents on their delinquency lists with wages submitted by the SESAs. The expanded name fields would enhance the SSA's ability to more efficiently and accurately perform these matches and may also improve results in the State UI benefit payment control cross match programs.

   The new standard sets the following format for the name fields on wage detail reports: first name - 15 characters, center name - 15 characters, last name - 20 characters, suffix - 4 characters and the social security number (SSN) - 9 characters. Beginning with tax year 2001, employers who report Form W-2 either electronically or on magnetic media must convert to the new format (for W-2s due in calendar year 2002). ⁽¹⁾ Some employers who report electronically have already begun testing these new standards with the W-2 forms issued in January 1999.

5. Additional Data Elements: The survey asks that SESAs estimate the cost an agency might experience in gathering quarterly hours paid, quarterly weeks worked and a zip code showing where the work was performed. The addition of these LMI elements to the wage reports would enhance the national employment statistics system in several ways. Addition of the hours paid element would improve the ability to compute average hourly wage statistics by dividing the quarterly wages by the hours paid. By adding the zip code element for work location labor market officials would have the ability to compute wage information broken down into zip code areas. These data would also be valuable for evaluation of employment and training programs and services based on the improvement in employment and wages experienced by individuals served and assisting individuals in finding the most desirable jobs, as well as for evaluation of service providers.

   Current survey information shows that no States currently gather hours paid and only two States gather and use hours worked (Washington and Oregon). Four States (Michigan, New Jersey, New York, and Ohio) gather and use weeks worked to determine monetary eligibility for unemployment insurance benefits. However, other States may be interested in using hours paid or weeks worked for benefit eligibility if the information becomes available.

6. OMB Approval. This survey has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 under OMB approval No.1205-0419 to expire 12/31/2001. NOTE: Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number.

7. Disclosure Statement. Public reporting burden for this collection of information is estimated to average 51 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. 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 S4231, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0419).

8. Completion and Transmittal of Survey. The survey is posted on the OWS Workforce Security web site at the following uniform resource locator: https://ows.doleta.gov/form/survey.asp It is requested that each State complete and submit the survey by following the instructions on the survey form. The form should be completed no later than April 1, 2001. SESAs who are unable to complete the survey electronically may complete it on paper and mail it to: The Department of Labor, Office of Workforce Security, Room S4231, 200 Constitution Ave., NW, Washington, D.C. 20210, Attention - Bill Whitt or the survey may be faxed to: 202-693-3229, Attention - Bill Whitt.

9. Action Required. SESA administrators are requested to provide this information to appropriate staff.

10. Inquiries. Questions regarding this directive should be directed to the appropriate Employment and Training Administration Regional Office.

11. Attachments. Survey form.

     

     

    1. See "What's New For Employers" at SSA web page site: http://www.ssa.gov/employer_info/wagereporting_text.html