Title 20—Employees' Benefits--Volume 1
PART 652—ESTABLISHMENT AND FUNCTIONING OF STATE EMPLOYMENT SERVICE
§ 652.1   Introduction.
These regulations implement the provisions of the Wagner-Peyser Act, known hereafter as the Wagner-Peyser Act, as amended by title III of the Workforce Innovation and Opportunity Act (WIOA), Public Law 113-128. The Wagner-Peyser Act Employment Service (ES) is a core program under the WIOA, and an integral component of the one-stop delivery system. Congress intended that the States exercise broad authority in implementing provisions of the Wagner-Peyser Act.
§ 652.2   Scope and purpose of the Wagner-Peyser Act Employment Service.
The basic purpose of the ES is to improve the functioning of the nation's labor markets by bringing together individuals who are seeking employment and employers who are seeking workers.
§ 652.3   Public labor exchange services system.
At a minimum, each State must administer a labor exchange system which has the capacity, to:
(a) Assist job seekers in finding employment, including promoting their familiarity with the Department's electronic tools;
(b) Assist employers in filling jobs;
(c) Facilitate the match between job seekers and employers;
(d) Participate in a system for clearing labor among the States, including the use of standardized classification systems issued by the Secretary, under sec. 15 of the Wagner-Peyser Act;
(e) Meet the work test requirements of the State unemployment compensation system; and
(f) Provide labor exchange services as identified in § 678.430(a) of this chapter, sec. 7(a) of the Wagner-Peyser Act, and sec. 134(c)(2)(A)(iv) of WIOA.
§ 652.4   Allotment of funds and grant agreement.
(a) Allotments. The Secretary must provide planning estimates in accordance with sec. 6(b)(5) of the Wagner-Peyser Act. Within 30 days of receipt of planning estimates from the Secretary, the State must make public the sub-State resource distributions, and describe the process and schedule under which these resources will be issued, planned, and committed. This notification must include a description of the procedures by which the public may review and comment on the sub-State distributions, including a process by which the State will resolve any complaints.
(b) Grant agreement. To establish a continuing relationship under the Wagner-Peyser Act, the Governor and the Secretary must sign a grant agreement, including a statement assuring that the State must comply with the Wagner-Peyser Act and all applicable rules and regulations. Consistent with this agreement and sec. 6 of the Wagner-Peyser Act, State allotments will be obligated through a notification of obligation.
§ 652.5   Services authorized.
The funds allotted to each State under sec. 6 of the Wagner-Peyser Act must be expended consistent with an approved plan under §§ 676.100 through 676.145 of this chapter and § 652.211. At a minimum, each State must provide the minimum labor exchange elements listed at § 652.3.
§§ 652.6-652.7   [Reserved]
§ 652.8   Administrative provisions.
(a) Administrative requirements. The Employment Security Manual is not applicable to funds appropriated under the Wagner-Peyser Act. Except as provided for in paragraph (f) of this section, administrative requirements and cost principles applicable to grants under this part are as specified in 2 CFR parts 200 and 2900 which govern the Uniform Guidelines, cost principles, and audit requirements for Federal awards.
(b) Management systems, reporting, and recordkeeping. (1) The State must ensure that a financial system provides fiscal control and accounting procedures sufficient to permit preparation of required reports, and the tracing of funds to a level of expenditure adequate to establish that funds have not been expended in violation of the restrictions on the use of such funds. (sec. 10(a) of the Wagner-Peyser Act)
(2) The financial management system and the program information system must provide Federally-required records and reports that are uniform in definition, accessible to authorized Federal and State staff, and verifiable for monitoring, reporting, audit and evaluation purposes. (sec. 10(c) of the Wagner-Peyser Act)
(c) Reports required. (1) Each State must make reports pursuant to instructions issued by the Secretary and in such format as the Secretary prescribes.
(2) The Secretary is authorized to monitor and investigate pursuant to sec. 10 of the Wagner-Peyser Act.
(d) Special administrative and cost provisions. (1) Neither the Department nor the State is a guarantor of the accuracy or truthfulness of information obtained from employers or applicants in the process of operating a labor exchange activity.
(2) Prior approval authority—as described in various sections of 29 CFR part 97, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, and Office of Management and Budget Circular A-87 (Revised)—is delegated to the State except that the Secretary reserves the right to require transfer of title on nonexpendable Automated Data Processing Equipment (ADPE), in accordance with provisions contained in 2 CFR parts 200 and 2900. The Secretary reserves the right to exercise prior approval authority in other areas, after providing advance notice to the State.
(3) Application for financial assistance and modification requirements must be as specified under this part.
(4) Cost of promotional and informational activities consistent with the provisions of the Wagner-Peyser Act, describing services offered by employment security agencies, job openings, labor market information, and similar items are allowable.
(5) Each State must retain basic documents for the minimum period specified below, consistent with 2 CFR parts 200 and 2900:
(i) Work application: 3 years.
(ii) Job order: 3 years.
(6) Payments from the State's Wagner-Peyser Act allotment made into a State's account in the Unemployment Trust Fund for the purpose of reducing charges against Reed Act funds (sec. 903(c) of the Social Security Act, as amended (42 U.S.C. 1103(c)) are allowable costs, provided that:
(i) The charges against Reed Act funds were for amounts appropriated, obligated, and expended for the acquisition of automatic data processing installations or for the acquisition or major renovation of State-owned office building; and
(ii) With respect to each acquisition of improvement of property pursuant to paragraph (d)(6)(i) of this section, the payments are accounted for in the State's records as credits against equivalent amounts of Reed Act funds used for administrative expenditures.
(e) Disclosure of information. (1) The State must assure the proper disclosure of information pursuant to sec. 3(b) of the Wagner-Peyser Act.
(2) The information specified in sec. 3(b) and other sections of the Wagner-Peyser Act, also must be provided to officers or any employee of the Federal government or of a State government lawfully charged with administration of unemployment compensation laws, ES activities under the Wagner-Peyser Act or other related legislation, but only for purposes reasonably necessary for the proper administration of such laws.
(f) Audits. (1) The State must follow the audit requirements found at § 683.210 of this chapter, except that funds expended pursuant to sec. 7(b) of the Wagner-Peyser Act must be audited annually.
(2) The Comptroller General and the Inspector General of the Department have the authority to conduct audits, evaluations or investigations necessary to meet their responsibilities under sec. 9(b)(1) and 9(b)(2), respectively, of the Wagner-Peyser Act.
(3) The audit, conducted pursuant to paragraph (f)(1) or (2) of this section, must be submitted to the Secretary who will follow the resolution process specified in §§ 683.420 through 683.440 of this chapter.
(g) Sanctions for violation of the Wagner-Peyser Act. (1) The Secretary may impose appropriate sanctions and corrective actions for violation of the Wagner-Peyser Act, regulations, or State Plan, including the following:
(i) Requiring repayment, for debts owed the government under the grant, from non-Federal funds;
(ii) Offsetting debts arising from the misexpenditure of grant funds, against amounts to which the State is or may be entitled under the Wagner-Peyser Act, provided that debts arising from gross negligence or willful misuse of funds may not be offset against future grants. When the Secretary reduces amounts allotted to the State by the amount of the misexpenditure, the debt must be fully satisfied;
(iii) Determining the amount of Federal cash maintained by the State or a subrecipient in excess of reasonable grant needs, establishing a debt for the amount of such excessive cash, and charging interest on that debt; and
(iv) Imposing other appropriate sanctions or corrective actions, except where specifically prohibited by the Wagner-Peyser Act or regulations.
(2) To impose a sanction or corrective action, the Secretary must utilize the initial and final determination procedures outlined in paragraph (f)(3) of this section and specified in the administrative provisions at §§ 683.420 through 683.440 of this chapter.
(h) Other violations. Violations or alleged violations of the Wagner-Peyser Act, regulations, or grant terms and conditions except those pertaining to audits or discrimination must be determined and processed in accordance with part 658, subpart H, of this chapter.
(i) Fraud and abuse. Any persons having knowledge of fraud, criminal activity or other abuse must report such information directly and immediately to the Secretary, including all complaints involving such matters.
(j) Nondiscrimination requirements. States must:
(1) Assure that no individual be excluded from participation in, denied the benefits of, subjected to discrimination under, or denied employment in the administration or in connection with any services or activities authorized under the Wagner-Peyser Act in violation of any applicable nondiscrimination law. All complaints alleging discrimination must be filed and processed according to the procedures in the applicable Department of Labor nondiscrimination regulations.
(2) Assure that discriminatory job orders will not be accepted, except where the stated requirement is a bona fide occupational qualification (BFOQ). See generally 42 U.S.C. 2000e-2(e) and 29 CFR parts 1604, 1605, 1606, and 1625.
(3) Assure that ES offices are in compliance with the veteran referral and job listing requirements at 41 CFR 60-300.84.
(4) Assure that employment testing programs will comply with 41 CFR part 60-3 and 29 CFR part 32 and 29 CFR 1627.3(b)(1)(iv).
(5) Nondiscrimination and equal opportunity requirements and procedures, including complaint processing and compliance reviews, will be governed by the applicable Department of Labor nondiscrimination regulations.
§ 652.9   Labor disputes.
(a) State agencies may not make a job referral on job orders which will aid directly or indirectly in the filling of a job opening which is vacant because the former occupant is on strike, or is being locked out in the course of a labor dispute, or the filling of which is otherwise an issue in a labor dispute involving a work stoppage.
(b) Written notification must be provided to all applicants referred to jobs not at issue in the labor dispute that a labor dispute exists in the employing establishment and that the job to which the applicant is being referred is not at issue in the dispute.
(c) When a job order is received from an employer reportedly involved in a labor dispute involving a work stoppage, State agencies must:
(1) Verify the existence of the labor dispute and determine its significance with respect to each vacancy involved in the job order; and
(2) Notify all potentially affected staff concerning the labor dispute.
(d) State agencies must resume full referral services when they have been notified of, and verified with the employer and workers' representative(s), that the labor dispute has been terminated.
(e) State agencies must notify the regional office in writing of the existence of labor disputes which:
(1) Result in a work stoppage at an establishment involving a significant number of workers; or
(2) Involve multi-establishment employers with other establishments outside the reporting State.
§ 652.10   Severability.
Should a court hold any portion of any provision of this part to be invalid, the provision will be construed so as to continue to give the maximum effect to the provision permitted by law, unless such holding is one of total invalidity or unenforceability, in which event the provision or subprovision will be severable from this part and will not affect the remainder thereof.
§ 652.100   Services for veterans.
Veterans receive priority of service for all Department-funded employment and training programs as described in 20 CFR part 1010. The Department's Veterans' Employment and Training Service (VETS) administers the Jobs for Veterans State Grants (JVSG) program under chapter 41 of title 38 of the U.S. Code and other activities and training programs which provide services to specific populations of eligible veterans. VETS' general regulations are located in parts 1001, 1002, and 1010 of this title.
§ 652.200   What is the purpose of this subpart?
(a) This subpart provides guidance to States to implement the services provided under the Wagner-Peyser Act, as amended by WIOA, in a one-stop delivery system environment.
(b) Except as otherwise provided, the definitions contained in part 651 of this chapter and sec. 2 of the Wagner-Peyser Act apply to this subpart.
§ 652.201   What is the role of the State Workforce Agency in the one-stop delivery system?
(a) The role of the State Workforce Agency (SWA) in the one-stop delivery system is to ensure the delivery of services authorized under sec. 7(a) of the Wagner-Peyser Act. The SWA is a required one-stop partner in each local one-stop delivery system and is subject to the provisions relating to such partners that are described at part 678 of this chapter.
(b) Consistent with those provisions, the State agency must:
(1) Participate in the one-stop delivery system in accordance with sec. 7(e) of the Wagner-Peyser Act;
(2) Be represented on the Workforce Development Boards (WDBs) that oversee the local and State one-stop delivery system and be a party to the Memorandum of Understanding, described at § 678.500 of this chapter, addressing the operation of the one-stop delivery system; and
(3) Provide these services as part of the one-stop delivery system.
§ 652.202   May local Employment Service offices exist outside of the one-stop delivery system?
No. Local ES offices may not exist outside of the one-stop service delivery system. A State must colocate ES, as provided in §§ 678.310 through 678.315 of this chapter.
§ 652.203   Who is responsible for funds authorized under the Wagner-Peyser Act in the workforce development system?
The SWA retains responsibility for all funds authorized under the Wagner-Peyser Act, including those funds authorized under sec. 7(a) required for providing the services and activities delivered as part of the one-stop delivery system.
§ 652.204   Must funds authorized under the Wagner-Peyser Act Governor's Reserve flow through the one-stop delivery system?
No, sec. 7(b) of the Wagner-Peyser Act provides that 10 percent of the State's allotment under the Wagner-Peyser Act is reserved for use by the Governor for performance incentives, supporting exemplary models of service delivery, professional development and career advancement of SWA officials as applicable, and services for groups with special needs. However, these funds may flow through the one-stop delivery system.
§ 652.205   May funds authorized under the Wagner-Peyser Act be used to supplement funding for labor exchange programs authorized under separate legislation?
(a) Section 7(c) of the Wagner-Peyser Act enables States to use funds authorized under sec. 7(a) or 7(b) of the Wagner-Peyser Act to supplement funding of any workforce activity carried out under WIOA.
(b) Funds authorized under the Wagner-Peyser Act may be used under sec. 7(c) to provide additional funding to other activities authorized under WIOA if:
(1) The activity meets the requirements of the Wagner-Peyser Act, and its own requirements;
(2) The activity serves the same individuals as are served under the Wagner-Peyser Act;
(3) The activity provides services that are coordinated with ES services; and
(4) The funds supplement, rather than supplant, funds provided from non-Federal sources.
§ 652.206   May a State use funds authorized under the Wagner-Peyser Act to provide applicable “career services,” as defined in the Workforce Innovation and Opportunity Act?
Yes, funds authorized under sec. 7(a) of the Wagner-Peyser Act must be used to provide basic career services as identified in § 678.430(a) of this chapter and secs. 134(c)(2)(A)(i)-(xi) of WIOA, and may be used to provide individualized career services as identified in § 678.430(b) of this chapter and sec. 134(c)(2)(A)(xii) of WIOA. Funds authorized under sec. 7(b) of the Wagner-Peyser Act may be used to provide career services. Career services must be provided consistent with the requirements of the Wagner-Peyser Act.
§ 652.207   How does a State meet the requirement for universal access to Employment Service services?
(a) A State has discretion in how it meets the requirement for universal access to ES services. In exercising this discretion, a State must meet the Wagner-Peyser Act's requirements.
(b) These requirements are:
(1) Labor exchange services must be available to all employers and job seekers, including unemployment insurance (UI) claimants, veterans, migrant and seasonal farmworkers, and individuals with disabilities;
(2) The State must have the capacity to deliver labor exchange services to employers and job seekers, as described in the Wagner-Peyser Act, on a statewide basis through:
(i) Self-service, including virtual services;
(ii) Facilitated self-help service; and
(iii) Staff-assisted service;
(3) In each local area, in at least one comprehensive physical center, ES staff must provide labor exchange services (including staff-assisted labor exchange services) and career services as described in § 652.206; and
(4) Those labor exchange services provided under the Wagner-Peyser Act in a local area must be described in the Memorandum of Understanding (MOU) described in § 678.500 of this chapter.
§ 652.208   How are applicable career services related to the methods of service delivery described in in this part?
Career services may be delivered through any of the applicable three methods of service delivery described in § 652.207(b)(2). These methods are:
(a) Self-service, including virtual services;
(b) Facilitated self-help service; and
(c) Staff-assisted service.
§ 652.209   What are the requirements under the Wagner-Peyser Act for providing reemployment services and other activities to referred unemployment insurance claimants?
(a) In accordance with sec. 3(c)(3) of the Wagner-Peyser Act, the SWA, as part of the one-stop delivery system, must provide reemployment services to UI claimants for whom such services are required as a condition for receipt of UI benefits. Services must be appropriate to the needs of UI claimants who are referred to reemployment services under any Federal or State UI law.
(b) The SWA also must provide other activities, including:
(1) Coordination of labor exchange services with the provision of UI eligibility services as required by sec. 5(b)(2) of the Wagner-Peyser Act;
(2) Administration of the work test, conducting eligibility assessments, and registering UI claimants for employment services in accordance with a State's unemployment compensation law, and provision of job finding and placement services as required by sec. 3(c)(3) and described in sec. 7(a)(3)(F) of the Wagner-Peyser Act; and
(3) Referring UI claimants to, and providing application assistance for, training and education resources and programs, including Federal Pell grants and other student assistance under title IV of the Higher Education Act, the Montgomery GI Bill, Post-9/11 GI Bill, and other Veterans Educational Assistance, training provided for youth, and adult and dislocated workers, as well as other employment training programs under WIOA, and for Vocational Rehabilitation Services under title I of the Rehabilitation Act of 1973.
§ 652.210   What are the Wagner-Peyser Act's requirements for administration of the work test, including eligibility assessments, as appropriate, and assistance to unemployment insurance claimants?
(a) State UI law or rules establish the requirements under which UI claimants must register and search for work in order to fulfill the UI work test requirements.
(b) ES staff must assure that:
(1) UI claimants receive the full range of labor exchange services available under the Wagner-Peyser Act that are necessary and appropriate to facilitate their earliest return to work, including career services specified in § 652.206 and listed in sec. 134(c)(2)A) of WIOA;
(2) UI claimants requiring assistance in seeking work receive the necessary guidance and counseling to ensure they make a meaningful and realistic work search; and
(3) ES staff will provide UI program staff with information about UI claimants' ability or availability for work, or the suitability of work offered to them.
§ 652.211   What are State planning requirements under the Wagner-Peyser Act?
The ES is a core program identified in WIOA and must be included as part of each State's Unified or Combined State Plans. See §§ 676.105 through 676.125 of this chapter for planning requirements for the core programs.
§ 652.215   What staffing models must be used to deliver services in the Employment Service?
(a) Except as provided in paragraph (b) of this section, the Secretary requires that States deliver the labor exchange services described in § 652.3 using State merit-staff employees employed according to the merit-system principles described in 5 CFR part 900, subpart F—Standards for a Merit System of Personnel Administration. This requirement also applies to the provision of services and activities under parts 653 and 658 of this chapter.
(b) States authorized prior to February 5, 2020, to use a staffing model other than that described in paragraph (a) of this section to deliver ES services may use the staffing model consistent with the model previously authorized for the State. These States may use merit-staffing flexibility only to the same extent that the Department had authorized it prior to February 5, 2020.
(c) States using staffing models under paragraph (b) of this section are required to participate in evaluations of their delivery of ES services conducted by the Department.
(d) All States must comply with the requirements in this section no later than January 22, 2026.
§ 652.216   May the one-stop operator provide guidance to Employment Service staff in accordance with the Wagner-Peyser Act?
(a) Yes, the one-stop delivery system envisions a partnership in which Wagner-Peyser Act labor exchange services are coordinated with other activities provided by other partners in a one-stop setting. As part of the local MOU described in § 678.500 of this chapter, the SWA, as a one-stop partner, may agree to have ES staff receive guidance from the one-stop operator regarding the provision of labor exchange services.
(b) The guidance given to ES staff must be consistent with the provisions of the Wagner-Peyser Act, the local MOU, and applicable collective bargaining agreements.
§ 652.300   What role does the Secretary of Labor have concerning the Workforce and Labor Market Information System?
(a) The Secretary of Labor must oversee the development, maintenance, and continuous improvement of the workforce and labor market information system defined in Wagner-Peyser Act sec. 15 and § 651.10 of this chapter. The Department also will identify parameters of continuous improvement. The Secretary will consult with the Workforce Information Advisory Council on these matters and consider the council's recommendations.
(b) With respect to data collection, analysis, and dissemination of workforce and labor market information as defined in Wagner-Peyser Act sec. 15 and § 651.10 of this chapter, the Secretary must:
(1) Assign responsibilities within the Department of Labor for elements of the workforce and labor market information system described in sec. 15(a) of the Wagner-Peyser Act to ensure that the statistical and administrative data collected are consistent with appropriate Bureau of Labor Statistics standards and definitions, and that the information is accessible and understandable to users of such data;
(2) Actively seek the cooperation of heads of other Federal agencies to establish and maintain mechanisms for ensuring complementarity and non-duplication in the development and operation of statistical and administrative data collection activities;
(3) Solicit, receive, and evaluate the recommendations of the Workforce Information Advisory Council established by Wagner-Peyser Act sec. 15(d);
(4) Eliminate gaps and duplication in statistical undertakings;
(5) Through the Bureau of Labor Statistics and the Employment and Training Administration, and in collaboration with States, develop and maintain the elements of the workforce and labor market information system, including the development of consistent procedures and definitions for use by States in collecting and reporting the workforce and labor market information data described in Wagner-Peyser Act sec. 15 and defined in § 651.10 of this chapter;
(6) Establish procedures for the system to ensure that the data and information are timely, and paperwork and reporting for the system are reduced to a minimum; and
(7) Prepare a 2-year plan for the workforce and labor market information system, as described in the Wagner-Peyser Act sec. 15(c), as amended by WIOA sec. 308(d).
§ 652.301   What are wage records for purposes of the Wagner-Peyser Act?
Wage records, for purposes of the Wagner-Peyser Act, are records that contain “wage information” as defined in § 603.2(k) of this chapter. In this part, “State wage records” refers to wage records produced or maintained by a State.
§ 652.302   How do the Secretary of Labor's responsibilities described in this part apply to State wage records?
(a) A significant portion of the workforce and labor market information—defined in § 651.10 of this chapter—are developed using State wage records.
(b) Based on the Secretary of Labor's responsibilities described in Wagner-Peyser Act sec. 15 and § 652.300, the Secretary of Labor will, in consultation with Federal agencies, and States, and considering recommendations from the Workforce Information Advisory Council described in Wagner-Peyser Act sec. 15(d), develop:
(1) Standardized definitions for the data elements comprising “wage records” as defined in § 652.301; and
(2) Improved processes and systems for the collection and reporting of wage records.
(c) In carrying out these activities, the Secretary also may consult with other stakeholders, such as employers.
§ 652.303   How do the requirements of part 603 of this chapter apply to wage records?
All information collected by the State in wage records referred to in § 652.302 is subject to the confidentiality regulations at part 603 of this chapter.