Notice Requesting Public Comment on the Proposed Methodology To Distribute Outcome Payments to States for the Unemployment Insurance (UI) Reemployment Services and Eligibility Assessments (RESEA) Program in Accordance With Title III, Section 306(f)(2) of the Social Security Act (SSA)
| Published date | 07 May 2020 |
| Citation | 85 FR 27249 |
| Record Number | 2020-09803 |
| Section | Notices |
| Court | Employment And Training Administration,Labor Department |
Federal Register, Volume 85 Issue 89 (Thursday, May 7, 2020)
[Federal Register Volume 85, Number 89 (Thursday, May 7, 2020)]
[Notices]
[Pages 27249-27251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09803]
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DEPARTMENT OF LABOR
Employment and Training Administration
Notice Requesting Public Comment on the Proposed Methodology To
Distribute Outcome Payments to States for the Unemployment Insurance
(UI) Reemployment Services and Eligibility Assessments (RESEA) Program
in Accordance With Title III, Section 306(f)(2) of the Social Security
Act (SSA)
AGENCY: Employment and Training Administration (ETA), U.S. Department
of Labor (Department).
ACTION: Request for public comment.
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SUMMARY: The Department is seeking public comment on the proposed
methodology to distribute RESEA outcome payments to states each fiscal
year (FY) after FY 2020 as required by Section 306(f)(2), SSA.
DATES: Submit written comments to the office listed in the addresses
section below on or before June 8, 2020.
ADDRESSES: Questions on this notice and responsive comments related to
the RESEA outcome payments allocation can be submitted to the U.S.
Department of Labor, Employment and Training Administration, Office of
Unemployment Insurance, 200 Constitution Avenue NW, Room S-4524,
Washington, DC 20210, Attention: Lawrence Burns, or by email at [email protected].
FOR FURTHER INFORMATION CONTACT: Lawrence Burns, Division of
Unemployment Insurance Operations, at 202 693-3141 (this is not a toll-
free number), TTY 1-877-889-5627 (this is not a toll-free number), or
by email at [email protected]. The Department will respond to
comments directly as necessary.
SUPPLEMENTARY INFORMATION: ETA proposes a three-step approach to
determine whether a state is eligible for RESEA Outcome Payments. The
proposed approach reflects RESEA's statutory purpose, as defined in
Section 306(b)(1), SSA, to improve employment outcomes of individuals
that receive unemployment compensation (UC) and to reduce the average
duration of receipt of such compensation through employment. The three-
step approach includes:
1. Evaluation of state reemployment performance using the RESEA
program to determine if a state met or exceeded the target for the
Reemployment Rate in the 2nd Quarter After Program Exit for RESEA
participants performance measure;
2. Evaluation of the state's Average UI duration to determine if
the state demonstrated a decrease in its average UI duration as a
result of the RESEA services provided to UI claimants; and
3. Award allocation.
I. Introduction
The federal-state UI program is a required partner in the
comprehensive, integrated workforce system. Individuals who have lost
employment through no fault of their own and have earned sufficient
wage credits, may receive UI benefits if they meet initial and
continuing eligibility requirements. Beginning in 2005, the Department
and participating state workforce agencies have been addressing the
individual reemployment needs of UI claimants and working to prevent
and detect UI improper payments through the voluntary UI Reemployment
and Eligibility Assessment (REA) program. Beginning in FY 2015, the
voluntary RESEA program replaced the REA program. On February 9, 2018,
the President signed the Bipartisan Budget Act of 2018 (Pub. L. 115-
123) (BBA), which included amendments to the SSA creating a permanent
authorization for the RESEA program. In FY 2019, a total of 50 states
and jurisdictions operated a RESEA program.
The primary goals for the RESEA program are to: Improve employment
outcomes for individuals that receive UC and to reduce average duration
of receipt of UC through employment; strengthen program integrity and
reduce improper payments; promote alignment with the broader vision of
the Workforce Innovation and Opportunity Act (WIOA)--increasing program
integration and service delivery for job seekers; and establish RESEA
as an entry point to other workforce system partner programs for
individuals receiving UC.
II. Background
The RESEA provisions are contained in Section 30206 of the BBA,
enacting Section 306 of the SSA. In addition to program requirements,
Section 306 of the SSA also contains provisions for the funding of the
RESEA program. The law specifies three uses and designates the
proportion of annual appropriations to be assigned to these uses: (1)
Base funding for states to operate the RESEA program (84 percent to 89
percent depending on the year); (2) outcome payments designed to reward
states meeting or exceeding certain criteria (10 percent to 15 percent
of the appropriation depending on the year); and (3) up to one percent
for the Secretary of Labor to use for research and technical assistance
to states. Additionally, the law requires the Department to develop a
methodology to allocate and distribute base funding and outcome
payments to states beginning in FY 2021.
In August 2019, ETA published a Notice in the Federal Register to
inform states of the methodology to allocate base funding to states for
the RESEA program. Details regarding the RESEA base formula allocation
methodology can be found at: https://www.federalregister.gov/documents/2019/08/08/2019-16988/allocating-grants-to-states-for-reemployment-services-and-eligibility-assessments-resea-in. The present Notice
proposes the methodology to distribute RESEA outcome payments to
states.
Section 306(f)(2)(A), SSA requires ETA to make ``outcome payments''
to states that meet or exceed the outcome goals for reducing the
average duration of receipt of UC by improving employment outcomes. The
law specifically states:
``IN GENERAL.--Of the amounts made available for grants under
this section for each fiscal year after 2020, the Secretary shall
reserve a percentage equal to the outcome reservation percentage \1\
for such fiscal year for outcome payments to increase the amount
otherwise awarded to a State under paragraph (1). Such outcome
payments shall be paid to States conducting reemployment services
and eligibility assessments under this section that, during the
previous fiscal year, met or exceeded the outcome goals provided in
subsection (b)(1) related to reducing the average duration of
receipt of unemployment compensation by improving employment
outcomes''.
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\1\ Section 306(f)(2)(B), SSA defines the ``outcome reservation
percentage'' as 10 percent for fiscal years 2021 through 2026 and 15
percent for fiscal years thereafter.
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[[Page 27250]]
III. Proposed Methodology To Determine States Eligible for Outcome
Payments
ETA is proposing a three-step approach to identify eligible states
for the outcome payments. To assess RESEA program performance related
to employment outcomes, ETA will use the four-quarter period ending
September 30. While this proposed assessment period for the outcome
payments differs from the RESEA program performance year (January to
December), it aligns with statutory requirements under WIOA and
provides for the necessary time for data collection, reporting, and
analysis.
Step 1: RESEA Reemployment Measure
To be considered eligible for receiving an outcome payment, a state
must first meet or exceed its target for the Reemployment Rate in the
2nd Quarter After Program Exit. Data for this measure is collected
through the Participant Individual Record Layout (PIRL) (ETA 9172). The
PIRL framework allows states to organize data in a standardized format
within the Workforce Integrated Performance System (WIPS) using various
elements or data points. Additional information on the PIRL elements
can be found in the DOL-only PIRL at the following link: https://www.doleta.gov/performance/reporting/.
Further details on the methodology of this measure are outlined in
the Notice published by ETA in the Federal Register in May 2019 (84 FR
24, 819).
ETA will initially measure reemployment performance by adopting
established targets based on the negotiated levels of performance for
the Wagner-Peyser program participants. These performance targets are
generated by the WIOA Statistical Adjustment Model required under Sec.
116(b)(3)(viii), of WIOA. The Department established this Statistical
Adjustment Model as an objective statistical regression model to adjust
individual state negotiated levels of performance using actual economic
conditions and the characteristics of participants served at the end of
the performance period. The model will be updated and refined with
ongoing use and application as additional quarters of WIOA outcome data
become available. More detailed information on the Statistical
Adjustment Model is available at the Department website: https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3430.
ETA will announce the negotiated targets applicable to the
performance period using a separate guidance. States that do not meet
or exceed the criteria for this measure will be eliminated from the
outcome payment pool and will not proceed to the next step of
performance outcome analysis.
ETA will also continue to review and baseline RESEA data submitted
by states. As data quality and reporting of the RESEA program improves,
ETA will create a new statistical adjustment model that will enable the
development of more refined performance targets to measure reemployment
outcomes for RESEA participants only. These performance targets that
are more tailored to the RESEA program will then replace the
established targets based on the negotiated levels of performance for
the Wagner-Peyser program participants.
Step 2: UI Duration
States that meet or exceed the target established for the RESEA
Reemployment Measure (Step 1) must also demonstrate reduced average UI
duration. Average UI duration is defined as ``The number of weeks
compensated for the year divided by the number of first payments in the
year.'' \2\ The performance period used to evaluate UI duration will be
the same four-quarter period ending September 30 as the reemployment
measure, and will be computed using data reported by states on the ETA
5159 Report.
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\2\ https://oui.doleta.gov/unemploy/content/data_stats/datasum99/4thqtr/gloss.asp.
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Because UI duration can be impacted by factors such as changes in
the economy or state laws, it is necessary to use a regression model to
achieve consistency across states. Therefore, ETA has developed a
regression model to estimate a state's average duration that
incorporates state-specific explanatory variables. The following
variables allow the model to develop state estimates for UI duration
that are unique to a state based on its localized economic conditions:
Total Unemployment Rate--the number of unemployed people
as a percentage of the labor force; \3\
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\3\ https://www.bls.gov/cps/cps_htgm.htm#definitions.
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Potential Duration of UI benefits--the number of full
weeks of benefits for which a claimant is eligible within a benefit
year; \4\
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\4\ https://wdr.doleta.gov/directives/attach/ETAH/ETHand401_5th.pdf, page I-2-24, Section 2(B)(a).
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UI Exhaustion Rate--the average monthly exhaustions
divided by the average monthly first payments; \5\
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\5\ https://oui.doleta.gov/unemploy/content/data_stats/datasum99/4thqtr/gloss.asp.
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Average state weekly benefit amount payment--the total
amount of benefits paid divided by the total number of weeks
compensated; \6\ and
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\6\ https://wdr.doleta.gov/directives/attach/ETAH/ETHand401_5th.pdf, page I-6-59, Section 2(B)(a)(1).
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Year-to-year change in payroll employment (nonfarm
payroll)--the total number of persons on establishment payrolls
employed full or part time who received pay for any part of the pay
period which includes the 12th day of the month.\7\
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\7\ https://www.bls.gov/bls/glossary.htm#P.
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The regression model generates the estimated average UI duration
for each state and compares it to each state's actual average UI
duration. If a state's actual average UI duration is lower than the
state's estimated average UI duration provided by the regression model,
the state will have demonstrated a reduction in UI duration. A state
that does not demonstrate a reduction in UI duration as described above
will be eliminated from the outcome payment pool. The regression model
will be updated each year to incorporate changing state conditions.
Step 3: Award Allocation
Once the pool of eligible states is identified after completing
Steps 1 and 2, ETA will distribute the funds reserved for outcome
payments. The same methodology used to calculate RESEA base funding, as
outlined in the Notice in the Federal Register announcing the RESEA
base allocation formula (84 FR 39018), will be applied to calculate the
amounts to distribute as outcome payments to eligible states. The base
allocation formula uses two primary input variables:
State Average Insured Unemployment Rate--the number of
unemployed persons as a percent of the labor force (employed and
unemployed persons); \8\ and
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\8\ https://www.bls.gov/cps/uiclaims.htm.
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Civilian Labor Force--all people age 16 and older who are
classified as employed or unemployed. In other words, the labor force
level is the number of people who are either working or actively
looking for work.\9\
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\9\ https://www.bls.gov/cps/definitions.htm#laborforce.
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By adopting the base formula allocation, outcome payments will be
proportional to the size of the RESEA program operated in each awarded
state.
IV. Outcome Payments Distribution Timeline
Section 306(f)(2)(A), of the SSA, requires the Department to make
outcome payments based on RESEA outcomes reported for the previous
fiscal year starting in FY 2020. There are
[[Page 27251]]
several timing issues associated with calculation of the performance to
enable the outcome payments. First, the period of performance for RESEA
is January 1 through December 31. The reemployment outcomes data has a
four-quarter lag (three quarters for reemployment outcomes to be
available, and one quarter for state reporting). In order to allow time
for necessary data collection and analysis, the distribution of funds
will occur in December of the FY following the year in which the RESEA
grant funds are awarded. For example, the outcome payments for FY 2020
will be made to states by December 31, 2021 (note that the UI and RESEA
programs have five quarters to distribute funding in any fiscal year).
The following schedule applies to the 2020 performance period:
Data for performance period October 2019 through September
2020 is available for ETA review in November 2021;
Once performance data is available, the pool of eligible
states will be determined using the methodology outlined in Section III
above; and
Outcome payments will be distributed no later than
December 2021.
Questions or comments concerning the proposed methodology for RESEA
outcome payments must be submitted using the instructions set out in
the ADDRESSES section above. Submitted comments will be a matter of
public record and can posted on the internet, without redaction. The
Department encourages commenters not to include personally identifiable
information, confidential business data, or other sensitive statements/
information in any comments. It is the responsibility of the commenter
to determine what is personal or confidential business information.
Signed in Washington, DC.
John Pallasch,
Assistant Secretary for Employment and Training.
[FR Doc. 2020-09803 Filed 5-6-20; 8:45 am]
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