4.  Summary of the New Provisions.  For weeks of unemployment beginning after April 16, 2003, the new provisions (see Attachment A to this UIPL) do the following for displaced airline and related workers:

       a.  Prescribes that TEUC-A is payable and monetary determinations and redeterminations may be effective through the last week ending before December 29, 2003;

       b.  Prescribes a basic TEUC-A benefit amount that is the lesser of 150 percent of the maximum benefit amount (MBA) of regular benefits of the parent claim or 39 times the individual’s average weekly benefit amount (AWBA);

       c.  Provides a TEUC-AX augmentation of 1/3 of the basic TEUC-A MBA for “eligible individuals.”

       d.  Provides a transition period during which benefits may be paid to each eligible individual who has “an amount remaining” in his/her TEUC-A or AX account as of December 28, 2003.  The transition period ends with the last week beginning on or before December 26, 2004.

5.  Interpretation.  SWAs are required to continue to follow the Department of Labor’s interpretation of the TEUC Act and the operating instructions previously published in UIPL No. 30-02, and UIPL No. 30-02, Change 1, to guide states in administering the TEUC program, except as changed by this advisory with respect to the determination of eligibility for “eligible individuals” as defined in Section 4002(a)(1) of Public Law 108-11.

These instructions are issued to the states and cooperating state agencies as guidance provided by the Department in its role as the principal in the TEUC program.  As agents of the United States, the states and cooperating state agencies may not vary from the operating instructions without the prior approval of the Department.  The interpretations and procedures issued in this document are in addition to those previously issued as UIPL No. 30-02, and UIPL No. 30-02, Change 1, and apply only with respect to the TEUC determination in accordance with the provisions of Public Law 108-11.

6.  TEUC Agreements.  TEUC, including TEUC-A, is administered through voluntary agreements between states and the Department of Labor.  All states have agreements with the Secretary to administer the TEUC program under provisions of the TEUC Act.  The existing agreements remain in effect, and no new agreements are necessary.

7.  Notifications.

       a.  Identification and Notification of Potentially Eligible Claimants.  Implementation of the requirements of Section 4002, Public Law 108-11, requires identification of each potentially “eligible individual,” including each interstate claimant.  To satisfy this requirement, SWAs must send written notification to each individual who was laid-off from a base period employer on or after September 11, 2001.  SWAs must send immediate written notification to each such individual who has exhausted all available TEUC benefits from the beginning of the TEUC program.  (SWAs are not required to contact individuals whose separation was not due to a lay-off.  As discussed in item 8.b. below, these individuals are not eligible for TEUC-A.)  We provide the following draft notice:

Notice

Additional benefits are now available under the Temporary Emergency Unemployment Compensation program for unemployed airline and related workers.

If you are currently unemployed, you should contact us if you worked in an airline or related industry and you believe that you lost your job with a base period employer, at least partially, as a result of terrorist actions of September 11, 2001, as a result of security responses to these attacks or the closing of an airport, or as a result of the military conflict in Iraq.

Airline and related industries are:  air carriers, businesses operating at an airport, businesses that perform additional, value-added production processes for air carriers or businesses providing products, supplies and services that are received or utilized by an airline.

To distribute the workload associated with making TEUC-A nonmonetary determinations and resulting monetary redeterminations, SWAs should consider staggering  notifications to such individuals who are in current TEUC or TEUC-X benefit status, allowing sufficient time to determine whether or not the claimant is an ‘eligible individual” for TEUC-A purposes prior to exhaustion.  The notification of claimants that are currently in regular, additional, or extended benefit (EB) status (under the permanent EB program) can be accomplished as a notice included with a TEUC monetary determination.      

       b.  Notification of Media.  To assure public knowledge of this special extension of the TEUC program for airline and related workers, the SWA must notify appropriate news media having coverage throughout the state and provide appropriate information on its website.

8.  Qualifying Base Period Employment.  Establishing base period employment as “qualifying employment” for TEUC-A purposes is three-fold.  First, the employment must have occurred “in whole or in part” during the base period of the “applicable benefit year” for the TEUC-A claim.  Second, the employment must be with the type of employer(s) or at the location specified below.   Third, the separation from such employment, which may have occurred during the base period or later, must be “in whole or in part” due to a qualifying reason specified in ‘b’ below.

          a.  Qualifying Employment.  To satisfy the requirement for “qualifying employment,” some base period employment must be with the type of employer(s) or at the location specified as follows:

                (1)  Air Carriers.  Air carriers for purposes of TEUC-A are limited to those that hold a certificate issued under chapter 411 of title 49, United States Code, by the Federal Aviation Administration of the U. S. Department of Transportation.  Certificates issued under this chapter include those issued for charter air carriers and all-cargo air carriers.  Attachment C provides a listing of all such carriers.

                    (2)  At a facility at an airport.  A “facility at an airport” includes any employer that is physically located on the grounds of an airport such as:

§         Retail food facilities such as restaurants, bars, fast-food shops, and popcorn stands.

§         Other retail facilities such as gift shops, newsstands, clothing stores, and kiosks.

§         Hotels located on the airport grounds.

§         Aircraft maintenance and service facilities.

§         Parking facilities.

§         Car rental facilities.

§         Any other business physically located on the airport grounds, regardless of its business activities.

A “facility at an airport” also includes any airline related business which, although offsite, provides functions that are integrally related to the operation of the airport.  These include airport parking on privately owned land, car rental services, or aircraft maintenance and service facilities.  Employment with the same employer at a facility that does not meet this definition of “facility at an airport” is not “qualifying employment” for purposes of TEUC-A.

              (3)  Supplier for an Air Carrier.  A “supplier” is an employer that produces component parts for, or articles and contract services considered to be a part of the production process or services for, an air carrier or for another supplier or upstream producer whose supplies, products or services are received or utilized by an air carrier and used for airline industry purposes.

Example 1:  A catering service that supplies an air carrier with food purchased from another firm is a supplier.  The firm from which the food is purchased is also a supplier because it is supplying products to a supplier that are received by an air carrier.

Example 2:  An employer manufactures commercial aircraft for air carriers and private aircraft for individuals and non-airline corporations.  As a result of the terrorist action, the employer suffers a loss of business in its private aircraft business.  It loses no sales to air carriers.  The employer separates some workers, including those who manufactured commercial aircraft, because of the lost revenues.  Even though the employer supplies air carriers and even though workers who worked on those supplies were separated, the separated workers are not eligible for TEUC-A because there is no loss in air carrier-related business.

Example 3:  A janitorial company provides services for an aircraft manufacturer.  It does not provide services to an air carrier.  Due to a loss in air carrier business, the aircraft manufacturer no longer has a need for these janitorial services.  As a result, the janitorial company separates several workers.  Even though these workers were separated due to a loss of business by the aircraft manufacturer that could be traced back to the air carrier, they are not eligible for TEUC-A because they did not supply any item or service which was used or received by an air carrier.  For eligibility, services must always extend to an air carrier.

Example 4:  An accounting firm provides accounting services for a caterer to an air carrier.  The air carrier goes out of business because of the terrorist action. The caterer closes because the air carrier was its sole customer.  The caterer’s closing causes the accounting firm to separate one of its employees who provided services for the caterer.  That individual does not have “qualifying employment" because the accounting firm is not a “supplier" within the meaning of the statute.  The accounting firm’s service to the caterer did not extend to the air carrier.

              (4) Upstream Producer for an Air Carrier.  An “upstream producer” is an employer that “performs additional, value-added, production processes, including firms that perform final assembly, finishing, or packaging of articles, for another firm.”

We are not providing an example of an “upstream producer” because the definition of supplier appears to cover all entities eligible under the two definitions.   

       b.  Qualifying Separations.  To be in qualified employment the separation from base period employment must be due - in whole or in part - to one or more of the following reasons:

• Reductions in service by an air carrier as a result of the terrorist actions on September 11, 2001, or a security measure taken in response to such actions.

• A closure of an airport in the United States as a result of the terrorist actions on September 11, 2001, or a security measure taken in response to such actions.

• The military conflict with Iraq.

The separation from “qualifying employment” that establishes a claimant as an “eligible individual” may occur during the base period or lag period and does not have to be the most recent separation when the “applicable benefit year” was established.

A separation from lag period only employment with a qualified employer does not establish an individual as an “eligible individual.”  Also, any separation from a qualified employer due to a voluntary quit or discharge for any reason is not a separation for a qualifying reason; the separation must be a “lack-of-work” separation due to one or more of the reasons stated above.

         c.  Determining Whether a Claimant has “Qualifying Employment” and is an “Eligible Individual”.  To determine if a claimant is an “eligible individual” for TEUC-A purposes,  

SWAs must determine if the claimant has “qualifying employment” during the base period of the “applicable benefit year” that was used in the monetary determination for regular benefits.  In making this determination, SWAs will follow their usual fact-finding procedures.  This will require the SWA to contact employers to determine if the employment was of the type, or performed at the location, specified above, and if the reason for separation was one of the reasons specified above.  We have attached a sample form that SWAs may elect to use for this purpose.  SWAs may use an altered design as long as the required information is solicited from the employer.  Where, after reasonable efforts to obtain information from the employer, the SWA does not have sufficient information to make a determination, then SWAs should evaluate the claimant’s statement and follow standard procedures for issuing nonmonetary determinations.  SWAs will be expected to preserve all documents relating to the determination for audit purposes.

In the case of larger employers, it may be evident that the employer is an air carrier (based on the attached listing), another type of easily identifiable large employer, or a facility located at an airport; it will not be necessary to verify the nature of the base period employment in such cases.  As a result, when such an employer is identified, SWAs are encouraged, in lieu of sending a form for each claimant, to contact the employer as soon as possible to obtain a listing of all individuals laid-off, in whole or in part, due to the reasons described above.

If the SWA determines that the claimant is not an “eligible individual” for TEUC-A purposes, an appealable nonmonetary determination must be issued.

9.  Calculating Entitlement to TEUC-A and TEUC-AX.  Once an individual has been identified as an “eligible individual” qualifying for TEUC-A, the SWA will issue a monetary determination (or redetermination as the case may be) establishing TEUC-A eligibility.  Any TEUC-A balance will be payable only for weeks of unemployment beginning after April 16, 2003. 

       a.  TEUC-A Entitlement.  TEUC-A entitlement will equal the lesser of 150 percent of the MBA of regular benefits payable to the individual during the benefit year or 39 times the individual’s AWBA payable during the benefit year for a week of total unemployment.  If the state includes dependents’ allowances in the calculation of the weekly benefit amount (WBA) for regular benefits, the same rule applies to the calculation of TEUC benefits.  If the state calculates dependents’ allowances separately from the WBA, the state will apply the same rule to the TEUC determination.

If an individual has already been paid TEUC or TEUC-X, the available TEUC-A balance will be reduced by the amount already paid in TEUC or TEUC-X benefits.  Any TEUC-X previously paid is converted to TEUC-A and the TEUC-X determination is disregarded.

         b.  TEUC-AX Entitlement.  The amount of TEUC-AX payable equals one-third of the TEUC-A entitlement.  This means TEUC-AX is payable up to 13 times the WBA.  Whether an individual qualifies for TEUC-AX will be determined by using the same criteria that apply to TEUC-X.  Specifically, an individual must exhaust TEUC-A during an EB or TEUC-X period as authorized by the TEUC Act. 

10.  Transition Payments.  TEUC-A and TEUC-AX continue to be payable to individuals with a balance in their TEUC account as of December 28, 2003, during the transition period which ends with the last week beginning on or before December 26, 2004.

11.  Reporting TEUC-A and TEUC-AX Activity.  TEUC-A and TEUC-AX activity is reportable under the existing TEUC reporting requirements for the ETA 207, ETA 218, ETA 227, ETA 539, ETA 2112, ETA 5130 and ETA 5159.  Please note that form ETA 2112 has changed recently.  Previously, TEUC payment totals had been reported on line 39.  The totals are now reportable on line 41.  For reporting purposes, no separation of TEUC-A and AX from other TEUC program activity is required, with the following exception:  States are to report the total number of newly qualified TEUC-A claimants determined during the month in the comments section of the TEUC ETA 5159 report.  This total should be the sum of new TEUC-A determinations for recent exhaustees (of regular, additional or extended benefits, as appropriate) plus the redeterminations of existing or previously exhausted TEUC/TEUC-X claims.

The separate financial status report (Standard Form 269) for administrative grants and costs associated with the TEUC program is to include costs associated with this extension related to displaced airline and related workers (TEUC -A and TEUC-AX).

12.  Administrative Funding.  The payment of TEUC-A and TEUC-AX will involve an increase in claims activity and one-time implementation costs.

       a. Claims.  The UI-3 report will compile workload data from the TEUC versions of the ETA 5159, ETA 207, and ETA 5130.  In addition, SWAs should enter the number of monetary redeterminations in column (a) of line 12, and a minutes per unit value of 05.000 in column (b).

   b.  Implementation Supplemental Budget Requests (SBRs).  SWAs may submit an SBR for reimbursement of TEUC-A implementation costs.  SBRs should be limited to one-time costs for the items listed below that are attributable to implementation of TEUC-A:

              (1)       Forms and supplies (e.g., printed notices mailed

                          to exhaustees)

              (2)  Computer programming

              (3)  Training and travel

              (4)  Public notices on television, radio, or in the

                          newspapers         

              (5)  Overhead related only to the above

Calculations for costs of SWA staff and contractors should be shown in accordance with the SBR instructions in ET Handbook No. 336.  Costs for SWA staff should be included only if they are for overtime or if the positions were back-filled.

13.  OMB Approval.  The reporting instructions for the TEUC program have been approved by the Office of Management and Budget (OMB) under OMB Approval No. 1205-0433, expiration date December 31, 2004.  However, OMB approval is being sought for approval of the burden hours associated with the request for employer information that is necessary for determining eligibility for TEUC-A.  ETA will notify states upon OMB approval.

14.   Action Required.  Administrators are requested to provide this information and instructions to the appropriate staff.

15.  Inquiries.  Direct questions to the appropriate regional office.

16.        Attachment A:  Text of Section 4002, Public Law 108-11 

            Attachment B:  Questions and Answers

            Attachment C:  List of Certified Air Carriers

            Attachment D:  Sample Employer Notice