25560 Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations

DEPARTMENT OF LABOR

Employment and Training

Administration

20 CFR Part 625

RIN 1205–AA50

Disaster Unemployment Assistance

Program; Interim Final Rule; Request

for Comments

AGENCY: Employment and Training

Administration, Labor.

ACTION: Interim final rule; request for

comments.

SUMMARY: The Employment and

Training Administration of the

Department of Labor is issuing this

interim final rule, effective upon

publication, amending 20 CFR 625.6 to

remove restrictive provisions, provide a

more equitable weekly assistance

amount to individuals unemployed as a

result of a major disaster, and to clarify

and simplify the States’ administration

of the Disaster Unemployment

Assistance Program. To provide an

opportunity for public participation in

this rulemaking, a comment period is

provided, and a final rule will be

published after taking into account any

comments that are received.

DATES: Effective date: The effective date

of this interim final rule is May 11,

1995.

Comment date: Written comments on

this interim final rule must be received

in the Department of Labor on or before

July 10, 1995.

ADDRESSES: Written comments on this

interim final rule may be mailed or

delivered to Mary Ann Wyrsch,

Director, Unemployment Insurance

Service, Employment and Training

Administration, U.S. Department of

Labor, Room S4231, 200 Constitution

Avenue, NW., Washington, DC 20210.

All comments received will be

available for public inspection during

normal business hours in Room S4231

at the above address.

Copies of this interim final rule are

available in the following formats:

electronic file on computer disk and

audio tape. They may be obtained at the

above office.

FOR FURTHER INFORMATION CONTACT:

Robert Gillham, Group Chief, Federal

Programs Group, Division of Program

Development and Implementation,

Office of Program Management in the

Unemployment Insurance Service at the

address listed under ADDRESSES:

Telephone (202) 219–5312 (this is not a

toll-free number).

SUPPLEMENTARY INFORMATION: Section

410(a) of The Robert T. Stafford Disaster

Relief and Emergency Assistance Act

(hereafter the ‘‘Stafford Act’’) (42 U.S.C.

5177) sets forth the outlines of the

Disaster Unemployment Assistance

Program (hereafter the ‘‘DUA Program’’).

The President is authorized by section

410(a) of the Stafford Act to provide to

any individual unemployed as a result

of a major disaster declared by the

President under the Stafford Act ‘‘such

benefit assistance as he deems

appropriate while such individual is

unemployed for the weeks of such

unemployment with respect to which

the individual is not entitled to any

other unemployment compensation

* * * or waiting period credit.’’ Other

terms of section 410(a) provide that

disaster unemployment assistance

(hereafter ‘‘DUA’’) is to be furnished to

individuals for no longer than 26 weeks

after the major disaster is declared; and

that for any week of unemployment of

DUA payment is not to exceed the

maximum weekly benefit amount

(hereafter ‘‘WBA’’) authorized under the

unemployment compensation (hereafter

‘‘UC’’) law of the State in which the

disaster occurred.

Pursuant to a delegation of authority

(51 FR 4988, Feb. 10, 1986) to the

Secretary of Labor from the Director of

the Federal Emergency Management

Agency (hereafter ‘‘FEMA’’), the DUA

Program authorized by section 410(a) of

the Stafford Act is implemented in

regulations promulgated by the

Department of Labor (hereafter

‘‘Department’’) and published at part

625 of title 20 of the Code of Federal

Regulations.

The amendments made by this

interim final rule are applicable for all

major disasters declared on and after its

effective date.

Summary of Major Provisions/

Amendments to § 625.6

First, the amendments retain the

current provisions of § 625.6(a)(1) to

utilize earnings from employment or

self-employment in a base period to

compute a DUA WBA. However, new

§ 625.6(a)(2) provides that for purposes

of a DUA WBA computation, the most

recent tax year that has ended will be

considered as the base period to be

utilized in computing a DUA WBA

under § 625.6(a)(1). Only in certain

circumstances does a tax year coincide

with the State law base period, which,

under the current provisions, requires

the projection of net income by the

individual for certain periods, which

may not be accurate.

Second, under new § 625.6(a)(3),

adult family members employed or selfemployed as a family unit or in the

same self-employment business or trade

will be treated equally in allocating

wages from such employment or selfemployment where all performed

services. Under the current provisions,

income may be allocated only to one

individual because of the manner in

which the family was paid or based on

the manner which a tax return was filed

even though all adult individuals in the

family may have participated in the

employment or self-employment. This

will permit DUA to be paid to each

adult family member who participates

in a family business.

Third, the up to four-step process to

compute a DUA WBA under §§ 625.6(a)

(2) through (5) is eliminated. It is

replaced with new § 625.6(b) to pay 50

percent of the average weekly UC

amount as the DUA WBA to all

individuals who worked full-time but

have insufficient wages to compute a

weekly amount under § 625.6(a)(1), or

are entitled to a DUA WBA less than 50

percent of the average weekly UC

amount as computed under the basic

computation method in § 625.6(a)(1).

The payment of 50 percent of the

average weekly UC amount as a

minimum DUA WBA (with certain

adjustments) is a significant increase in

the DUA WBA for many affected

workers. Currently, the minimum DUA

WBA is generally the minimum UC

weekly amount; however, in certain

cases where earnings are less than the

minimum amount needed to qualify

under the State UC law, the DUA WBA

may be computed at less than the State

UC minimum amount under the current

provisions of § 625.6(a)(3). In these

cases, individuals are often not eligible

for DUA because of the limitation

imposed by the application of

§ 625.6(a)(5) that the DUA WBA may not

exceed 70 percent of the individual’s

average weekly wage.

Fourth, newly added § 625.6(b)(1)

provides that adjustments will be made

to reduce the minimum DUA WBA

determined in accordance with

§ 625.6(b) for workers employed parttime prior to the date they became

unemployed due to the major disaster.

However, if the DUA WBA computed

under § 625.6(a)(1) is higher than the

reduced DUA WBA computed under

paragraph (b)(1), the higher amount

shall be paid.

Fifth, while the above provisions

address the calculation of an

individual’s DUA WBA based on

employment and wages earned prior to

the disaster, new § 625.6(f)(1) provides

that wages earned after the disaster may

reduce the DUA payments for the weeks

in which those wages were earned. If an

individual earns wages in a week during

which DUA is claimed, the amount
Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations 25561

payable for that week is the DUA WBA

reduced in accordance with the earnings

allowance provisions of the applicable

State law. This is the same provision

that was previously set forth at

§ 625.6(d). However, new § 625.6(f)(2)

provides that gross earnings received

from the self-employment business

during a week by a self-employed

individual will be deducted only during

the week received. No longer will there

be a projection of future income to be

deducted on a pro rata basis from each

week’s benefits, which often

disqualified individuals from receiving

any DUA.

Sixth, newly added § 625.6(e)

provides that an immediate

determination of a DUA WBA will be

made based on the applicant’s statement

of wages and employment or selfemployment, or a combination of the

applicant’s statement and

documentation to support the

employment or self-employment and

wages, or State agency records.

However, if the determination is based

on the individual’s statement only, the

individual must provide evidence of

employment or self-employment or

wages within 21 calendar days. Failure

to do so will result in a denial of DUA.

Section 625.6(e) also provides for

certain adjustments to the DUA WBA if

partial information is submitted by an

individual within 21 days and for a later

adjustment when necessary

documentation to support a

redetermination is submitted.

Background—Basis for Amendments

The weekly amount computation

methodology set forth in section 625.6,

Disaster Unemployment Assistance:

Weekly Amount, was last revised and

published in the Federal Register as a

final rule on September 16, 1977 (42 FR

46712). The section was amended,

however, by an interim final rule

published in the Federal Register on

January 5, 1990 (55 FR 550) and

confirmed in a final rule published in

the Federal Register on May 16, 1991

(56 FR 22800) only to incorporate the

amended definition of ‘‘State’’ set forth

in amended § 625.2(p). At the time of

the 1977 final rule, the current section

410 of the Stafford Act was section 407

of the Disaster Relief Act of 1974

(hereafter ‘‘DRA’’). The Disaster Relief

and Emergency Assistance Amendments

of 1988 (Pub. L. 100–107, November 23,

1988) redesignated section 407 as

section 410 and the short title of the

DRA was changed to the Stafford Act.

Among the amendments to section 407

included in the newly designated

section 410 were the deletion of a

provision that provided that the weekly

DUA amount would be reduced by the

amount of any UC available to the

individual, and the addition of the

provision that if an individual is eligible

for UC, such individual is not eligible

for DUA. This former provision

provided the basis for the methods of

the computation of a weekly DUA

amount under § 625.6. At the time the

interim final rule was confirmed in the

May 16, 1991, final rule, the Department

was not aware of any problems with the

States’ administration of § 625.6 or of

any inconsistencies in the weekly

amounts of DUA paid. Therefore, no

amendments were made to the

computation methodology provided in

the section.

The Department’s most recent

guidance to the States for administering

the provisions of § 625.6 for

unemployed self-employed individuals

was set forth in Unemployment

Insurance Program Letter (hereafter

‘‘UIPL’’) No. 35–87, issued August 25,

1987. The UIPL contained several key

instructions. First, a self-employed

individual did not have to be totally

unable to perform customary services in

self-employment as a direct result of the

disaster in order to be eligible for DUA,

but could be determined eligible if he/

she were partially unemployed, where

there was a substantial reduction in the

customary services that could be

performed each week as a direct result

of the disaster. Second, the DUA WBA

for an unemployed self-employed

individual would be computed under

§ 625.6 based on the net earnings shown

on the individual’s Federal income tax

return for the year preceding the

beginning date of the disaster. Third,

reductions from the DUA WBA for

partial or part-total unemployment, as

provided in § 625.6(d), would be based

on net earnings. Fourth, such net

earnings for a week would be

determined by the individual filing an

affidavit stating what his/her

anticipated net earnings would be for

the taxable year in which the disaster

occurred, and such net earnings would

be prorated to a fixed weekly amount

and deducted from the DUA WBA in

accordance with the earnings allowance

applicable under State law. If the

individual projected no net earnings, no

reduction would occur. If the prorated

net earnings equaled or exceeded the

weekly amount of DUA payable,

application of the State law earnings

allowance provisions prevented the

individual from being eligible for any

DUA payments even where the

individual was only partially employed

a few hours each week. Fifth, if more

than one family member claimed DUA

based on the same self-employment

business, each individual’s selfemployment income had to be

supported by the previous year’s

Federal tax return showing separate SE

schedules, and if a husband and wife

operated the business as a partnership,

there would have to exist a form 1065

filed with the IRS and a schedule K–1

to show how the partnership income or

loss was to be allocated, in order for

both individuals to be eligible for DUA.

Simply filing a joint tax return was not

sufficient for purposes of determining

DUA entitlement for all family

members.

The Department’s recent experience

with the DUA Program pointed out

unnecessary complexities,

inconsistencies and problems with

certain provisions in § 625.6 and the

implementing instructions in UIPL No.

35–87. This experience stemmed from

several major disasters declared from

1993 to 1994. These major disasters

were: the Midwest States which were

declared major disaster areas due to

flooding occurring during the late spring

and summer of 1993; the Northridge,

California area earthquake in January,

1994; the March, 1994, major disasters

declared in several Southeastern States

due to severe storms and flooding; and

most recently, the salmon fishing

disaster beginning in May, 1994, in

California, Oregon and Washington.

Principally, these unnecessary

complexities, inconsistencies, and

problems arose from: the diversity of

occupations and unemployment

situations for thousands of unemployed

individuals, particularly the

unemployed self-employed; the

unavailability of individuals’ tax and

business records because they were lost

due to the disasters, except for the

salmon fishers; and the fact that many

thousands of individuals were partially

unemployed as a result of the disasters.

The current DUA regulations at

§ 625.6(a) provide an up to 5-step

process to compute a DUA WBA: (1)

Determined a WBA based on earnings

(net income for the self-employed)

during the State’s UC base period and

then apply the State’s UC benefit

formula; (2) if the amount determined

under (1) is less than the average

amount of UC paid in the State, and a

higher amount can be determined based

on the individual’s average weekly wage

for the 13-week period immediately

preceding the date of the disaster, the

higher amount will be the DUA WBA;

(3) if an amount cannot be computed

under (1), then the weekly wage earned

or that would have been earned in

employment or self-employment in the

13-week period preceding the date of
25562 Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations

the disaster is utilized; (4) if, under (1)

or (3), it is impossible to compute a

WBA for a self-employed individual

because there were not net earnings, the

individual is entitled to the minimum

UC WBA paid in the State; (5) any

amount computed under (2) or (3) may

not exceed 70 percent of the

individual’s average weekly wage, and if

the result is a WBA less than the

minimum paid in the State, the

individual is ineligible for DUA.

For the self-employed, as provided in

UIPL No. 35–87, and for some workers,

using steps (2) or (3) requires a

projection of income. This problem is

compounded for the self-employed, in

that net income is for a year and has to

be divided by 52 to determine net

earnings for the 13-week period.

In addition to the complexities of the

current computation, there are

inconsistencies. One inconsistency

arises in computing a DUA WBA for

individuals (workers or self-employed)

who have minimal wages versus a selfemployed individual with no wages (net

income). Under § 625.6(a)(4), an

unemployed self-employed individual

with no net income (and who meets

other eligibility requirements) is entitled

to the minimum WBA under State law.

But § 625.6(a)(5) provides that a weekly

amount determined under § 625.6(a) (2)

or (3) (which provide for alternate

methods of calculation based on

earnings in a 13-week period) must not

exceed 70 percent of the average weekly

earnings of the individual in the 13-

week period prior to the individual’s

unemployment, and if the application of

this limitation results in a weekly

amount less than the minimum UC

weekly amount, the individual is not

eligible for DUA. Therefore, if a wage

earner or self-employed individual has

$1.00 in wages up to the minimum UC

qualifying amount during the 13-week

period, he/she is usually not entitled to

DUA, because the 70 percent limitation

imposed by § 625.6(a)(5) often causes

the individual to be ineligible for DUA.

As a result, an individual with minimal

wages may not be eligible for DUA, but

a self-employed individual with no

wages is entitled to DUA.

Another inconsistency arises under

the provisions of §§ 625.6 (b) and (c)

(computations for the South Pacific

island jurisdictions, which are defined

as ‘‘States’’ under § 625.2(p)) when

compared to the computation

methodology under §§ 625.6(a) (3) and

(4). Paragraphs (b) and (c) provide for a

uniform DUA WBA equal to the average

UC weekly amount paid under all State

UC laws or another uniform amount that

is determined at the time of the disaster.

Therefore, the weekly amount paid in

the South Pacific island jurisdictions is

significantly higher than what is paid to

a self-employed individual with no net

income or to an individual with

minimal earnings in the rest of the

States. The amendments made by this

interim final rule will not, however,

entirely eliminate the inconsistency of

paying a higher weekly DUA amount to

claimants in the South Pacific island

jurisdictions. This problem is further

discussed below.

Inconsistencies also arise under

§ 625.6(d) in computing reductions from

the WBA for partial and part-total

employment during a week for the selfemployed. Section 625.6(d) provides

that a reduction will occur for wages

earned during the week by applying the

wages and earnings allowance for

partial and part-total employment

prescribed under the State UC law.

Under the instructions in UIPL No. 35–

87, if a self-employed individual

resumes some of his/her customary selfemployment activities, a projection

must be made of the individual’s selfemployment net income for the year

taking into account any losses due to the

disaster which will adversely affect the

farmer’s future income. This is because

the self-employed often perform

services for their income year round, but

may receive actual income only once or

twice a year.

Net income for the self-employed

farmer must include any projected or

actual payments received for crop

insurance proceeds or disaster relief

paid by the U.S. Department of

Agriculture (hereafter ‘‘USDA’’) because

such payments are considered income

for Federal income tax purposes and are

paid in lieu of being able to fully harvest

a crop for income. This annualized

figure is divided by 52 to determine the

weekly income, and this weekly income

figure is deducted from the DUA WBA.

If the self-employed individual projects

no net income, no deduction is made.

In many cases, the computed

deductible amount is equal to or greater

than the WBA; therefore, no DUA is

payable even though the individual may

have been able to work only a few hours

each week. On the other hand, a wage

earner working less than full-time may

receive a full or partial DUA weekly

payment since all State UC laws permit

a certain amount of income to be earned

before any deduction is made from the

WBA.

The Department realized, as a result

of the Midwest floods, the California

earthquake, the Southeast floods, the

salmon fishing disaster, and the

thousands of partially unemployed selfemployed individuals affected by them,

that the provision in § 625.6(d) requiring

a reduction for wages earned and its

position (as set forth in UIPL No. 35–87)

that a self-employed individual must

project net income is overly complex

and may contribute to the improper

payment or denial of DUA. A selfemployed individual’s projected net

income is often only an ‘‘estimate’’ that

may or may not be accurate. Such an

‘‘estimate’’ may result in an improper

payment to a self-employed individual

determined eligible or an improper

denial of DUA to an individual

determined not eligible.

Accordingly, the Department has

consulted with FEMA and USDA and

solicited comments on proposed

changes to the regulations from the

States. The majority of the States

commented that the simplification of

the weekly monetary computation, in

order to remove or reduce the inequities

described above, should have priority.

The Department, FEMA and USDA

considered the comments and the

Department has incorporated many of

the States’ specific comments in the

amendments to § 625.6 described below,

such as the payment of 50 percent of the

average UC amount as the minimum

DUA amount and elimination of the

current provisions in §§ 625.6(a) (2)

through (5). The Department concurs

that the amendments should have

priority and should be implemented as

rapidly as possible.

Changes to 20 CFR 625.6

Section 625.6 is amended in its

entirety as set forth and discussed

below.

The heading of § 625.6 is amended to

read, Weekly Amount; Jurisdictions;

Reductions, which reflects the contents

and provisions of the section more

accurately than the current heading.

Section 625.6(a) provides that the

weekly amount of DUA for all States,

except the South Pacific island

jurisdictions, shall be the same as

computed under the State UC law for

regular compensation and the amount

so computed shall not exceed the

maximum WBA for UC authorized

under the applicable State law. This is

the same provision as is currently in the

first part of § 625.6(a)(1). However, the

amendments add three new paragraphs

to § 625.6(a) that clarify and simplify the

computations made under this section

and reduce or eliminate the potential for

improper DUA payments or fraudulent

applications.

Newly added paragraph (a)(1) reads

nearly the same as the proviso in current

paragraph (a)(1). That is, the amended

regulation continues to provide that in

computing an individual’s DUA WBA,

the qualifying employment and wage
Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations 25563

requirements of the applicable State UC

law and the benefit formula of the

applicable State UC law shall be

applied, except for computations as

provided under new paragraphs (a)(2) or

(b) (discussed below). The State UC law

base period is no longer applicable.

In addition, the provision, in current

paragraph (a)(1), that wages ‘‘shall not

include employment or selfemployment, or wages earned or paid

for employment or self-employment,

which is contrary to or prohibited by

any Federal law’’ is retained. For

clarification, and as an example of the

application of this provision, new

paragraph (a)(1) cites section

3304(a)(14)(A) of the Federal

Unemployment Tax Act (hereafter

‘‘FUTA’’) (26 U.S.C. 3304(a)(14)(A)) as

one of the Federal law provisions which

is included in this exclusion. The

Department’s long-standing position on

the administration of this FUTA

provision as it relates to services

performed by an alien is set out in

UIPLs No. 1–86 (51 FR 10102, August

20, 1986), 12–87 (54 FR 10102), 12–87,

Change 1 (54 FR 10113) and 6–89 (54 FR

10116), all published on March 9, 1989.

The Department’s position and

applicability of section 3304(a)(14)(A),

FUTA, to the DUA Program was also set

forth in the preamble to the DUA final

rule published May 16, 1991 (56 FR

22800).

Newly added paragraph (a)(2)

provides that for all individuals,

whether they are self-employed, or are

individuals with a combination of

income from self-employment and

remuneration for services performed for

another, or are wage earners only, the

base period to be utilized to determine

the DUA WBA shall be the most recent

tax year that has ended for the

individual prior to the individual’s

unemployment that was a direct result

of the major disaster. The reasons for

this amendment are as follows.

Most State UC laws provide that the

base period utilized in determining

monetary entitlement for a UC claim is

the first four of the five completed

calendar quarters preceding the filing

quarter. Therefore, if an individual

becomes unemployed in April, May, or

June, the base period is the prior

calendar year, which, for individuals, is

also a tax year. If an individual becomes

unemployed in a later quarter in the

current year, it results in a different base

period which, for some individuals,

means that a projection of income has

to be made for the quarters outside the

most recent tax year. This will result in

a projection which may or may not be

accurate. An individual who became

unemployed in the January-March

quarter would have to provide

information from a tax year prior to the

most recent calendar year in order for

the State agency to properly compute a

DUA WBA. In addition, the tax year for

certain self-employed individuals,

depending on filing status, is different

than a calender year. This causes

additional problems when projecting

income for a State UC law base period.

Therefore, in order to reduce errors by

eliminating income projections and

provide a more easily administered

provision, the Department has

determined that the most recently

completed tax year for the individual

preceding the individual’s

unemployment that was a direct result

of the major disaster will be the base

period to be utilized in computing the

DUA WBA, rather than the State UC law

base period.

The self-employment income to be

considered wages (as defined in

§ 625.2(u)) shall be all the net income

that was reported on the tax return that

was dependent on the performance of

services in all self-employment. This

provision eliminates problems that

occurred where the net income reported

on the individual’s tax year return for

the year preceding the beginning date of

the disaster under the instructions in

UIPL No. 35–87 did not coincide with

the State UC law base period. The

individual’s projection of net income for

the periods outside the tax year may not

have included all self-employment net

income from services performed in two

or more businesses, but only the net

income from those businesses affected

by the disaster. This may have limited

State agency use of base period selfemployment in computing a DUA WBA.

This inconsistency could occur because

§ 625.2(t) defines ‘‘unemployed selfemployed individual’’ as an individual

who was self-employed in or was to

commence self-employment in the

major disaster area at the time the major

disaster began, and whose principal

source of income and livelihood is

dependent upon that self-employment,

and whose unemployment is caused by

a major disaster.

Inclusion of all net income derived

from the performance of services in all

self-employment parallels the inclusion

of all wages earned in covered

employment by wage earners on a State

UC claim and in covered and

noncovered employment on a DUA

claim by an unemployed worker, and is

in accordance with the provisions of

§ 625.6(a)(1). Using all net income from

the performance of all services in selfemployment will lessen the burden on

State agency personnel to perform

analytical activities more associated

with income tax auditors in attempting

to split out income from one business

when reviewing tax returns or other

business records. Base period (tax year)

income from sources not requiring the

performance of services, such as

interest, dividends, and capital gains

from the sale of investments (or stock

portfolios) is not to be included for selfemployed individuals, just as it is not

included as wages in determining

entitlement to UC, since no services are

performed. Since these sources of

income are reported separately on the

tax return, their exclusion from base

period income is not difficult.

However, any net income during the

tax year base period derived from the

business, such as income derived when

a self-employed farmer receives crop

insurance or disaster relief payments for

the loss of a crop, is income that must

be included. This is because such

payments are made in lieu of income

that would have been received from the

harvest of the crops.

Inclusion of all net income from the

performance of services in selfemployment derived from any business

carried on by such individual follows

the definition of ‘‘net earnings from selfemployment’’ in section 1402(a) of the

Internal Revenue Code of 1986 (26

U.S.C. 1402(a)).

The Department also recognizes that

some individuals may not have

completed their tax returns at the time

of their unemployment due to the major

disaster; however, such individuals will

be entitled to a DUA WBA determined

in accordance with paragraph (e)(3) of

this section, discussed below.

In addition, the Department

recognizes that to utilize wages in the

most recently completed tax year for the

individual preceding the individual’s

unemployment as a direct result of the

major disaster as the base period for

computing a DUA WBA under § 625.6(a)

could result in the use of wages not

representative of the income an

individual is currently receiving at the

time his/her unemployment begins. The

most recently completed tax year base

period may result in some individuals

receiving a lower DUA WBA than if

more current wages were used.

However, since all individuals who are

fully employed or self-employed prior

to their unemployment as a direct result

of the major disaster will, at a minimum

(unless reduced for disqualifying

income or because of pre-disaster partial

employment or partial selfemployment), receive 50 percent of the

average State UC weekly amount as

their DUA WBA, they will receive a

reasonable DUA WBA that will permit

them to temporarily provide for their
25564 Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations

needs. Therefore, no individual will

suffer significant harm. Also, the most

recently completed tax year base period

provision was established in the interest

of simplifying the administration of the

DUA Program and reducing or

eliminating the potential for

determining an incorrect or improper

DUA WBA.

The Department, however, invites

interested parties to suggest provisions

that would use more recent wages in an

alternate base period where this would

provide a higher DUA WBA than the

use of wages in the most recently

completed tax year. Specifically,

comments are requested on what would

be an appropriate alternate base period

without having to utilize income

projections and in which the wages (net

income for the self-employed) could be

easily substantiated by the individual

and easily verified by the State agency.

Newly added paragraph (a)(3) of this

section provides a rule for the allocation

of income in cases where several family

members work in a business. It provides

that, as of the date of filing an initial

application for DUA, if family members

who are over the age of majority, as

defined under the statutes of the

applicable State, were customarily or

routinely employed or self-employed as

a family unit or in the same selfemployment business prior to the date

the individuals became unemployed as

a direct result of the major disaster, the

wages from such employment or net

income from self-employment shall be

allocated equally among such adult

family members for purposes of

computations of the DUA WBA. There

is an exception provided. If the

documentation substantiating

employment or self-employment and

wages from such employment or selfemployment, submitted in accordance

with new § 625.6(e), justifies a different

allocation, it will be used rather than

the equal allocation.

The Department recognizes that in

many self-employment ventures adult

members of a family, particularly

husbands and wives, may jointly own

the business or trade and share equally

in performing services resulting in the

success or failure of the business, yet

may never have formally entered into a

partnership or filed form 1065 or

schedule K–1, which reflects the

distribution of income, with the Internal

Revenue Service as part of their tax

return. Therefore, the Department

concludes that to restrict the allocation

of income only to those situations where

a partnership exists, as proven by the

schedule K–1, is overly restrictive and

has prevented the payment of DUA to

individuals otherwise entitled.

In addition, the Department

recognizes that in certain occupations,

particularly in agriculture, it is common

for family members to work as a unit for

an employer, yet only one member of

the family is paid by the employer. The

family member that is paid then divides

the wages between the other family

members or uses such wages to provide

for all the family members’ needs and

expenses. Paragraph (a)(3) clarifies the

Department’s position that all adult

family members who performed services

should be treated equally in the

allocation of income for purposes of

computing a DUA weekly amount.

The term ‘‘family,’’ as used for

purposes of determining a DUA WBA, is

not limited to the traditional family of

husband, wife, and children, but

includes any family members related by

blood, adoption, or marriage who

customarily work as a family unit.

However, the Department also

recognizes that members of a family

under the age of majority often perform

services in employment and selfemployment for family units or family

businesses, particularly in the

agricultural industry. Such employment

or self-employment is usually

performed during periods such

individuals are not attending school and

may be full-time during vacation or

between term periods, and part-time or

not at all during times that school is in

session. The fact that such individuals

are under the age of majority does not,

in itself, mean these individuals are not

entitled to DUA. These individuals

would be entitled to DUA if they meet

the definition of unemployed worker or

unemployed self-employed individual

at §§ 625.2 (s) and (t) and the eligibility

requirements for a week of

unemployment in § 625.4.

For these reasons, paragraph (a)(3)

also provides that, for purposes of

computing a DUA WBA for an

individual under the age of majority, the

actual wages earned or received during

the base period in employment or selfemployment are utilized, rather than an

equal allocation of the wages as

provided for family members over the

age of majority.

The Department also recognizes that

in many family businesses, particularly

in the agricultural industry, individuals

under the age of majority may not be

paid wages as payment for services that

are performed, but may be paid an

allowance or receive a percentage of the

proceeds resulting from a product or

livestock that is sold. Therefore, such

individuals may not have any tax

returns, bank accounts, or other

business records to support their

statement of employment and earnings,

as would the business owner or

employer. Such individuals may

provide an affidavit from an adult

family member, which is duly certified

before an official, such as a notary

public, or have the adult family member

provide a signed statement, under

penalty of perjury, to a State agency

representative, substantiating that they

performed services and received the

amount of the allowance or proceeds as

payment. If the individuals have other

documentation substantiating their

employment, the affidavit or adult

family member statement is not

necessary. In these cases, the State

agency must give careful consideration

to whether the individual meets the

definitions of ‘‘unemployed worker’’ or

‘‘unemployed self-employed

individual’’ in §§ 625.2 (s) and (t),

respectively.

Newly added § 625.6(b) provides that

if the DUA weekly amount computed

under paragraph (a) for an individual is

less than 50 percent of the average

weekly payment of regular UC paid in

the State, or if an individual has

insufficient or no wages in the base

period to compute a DUA weekly

amount, the individual shall be entitled

to a weekly amount equal to 50 percent

of the average weekly UC payment in

the State. Any individual whose weekly

DUA amount is determined under

paragraph (b) must submit

documentation to substantiate

employment or self-employment, or

wages paid or earned for such

employment or self-employment, or

documentation to substantiate that the

disaster prevented planned

commencement of employment or selfemployment. Such documentation must

be submitted within 21 calendar days

from the date of application for DUA. If

such individual fails to provide such

documentation, he/she will be denied

DUA.

This provision provides a significant

increase in the minimum DUA amount

payable (in most cases, from the

minimum payable under the State UC

law to 50 percent of the average

payable). In addition, it reduces the

inconsistency between the DUA weekly

amount established for the South Pacific

island jurisdictions (as discussed

previously) and the other States.

Elimination of the inconsistency is

discussed below. A remaining

inconsistency is that the South Pacific

island jurisdictions use a uniform

weekly DUA amount, while the other

States treat the proposed DUA

minimum as a floor that can be

exceeded if justified by prior earnings.

In addition, newly added § 625.6(b) also

ensures that individuals having minimal
Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations 25565

earnings ($1.00 up to the minimum

needed to qualify under the State UC

law), or no wages (no net income in the

case of the self-employed), will be

entitled to a weekly DUA amount.

The Department has determined that

to set the minimum weekly DUA

amount at 50 percent of the average

weekly UC amount paid in a State is

sufficient to permit unemployed

individuals to temporarily provide for

the necessities of living. Workers whose

prior wages justify a higher weekly DUA

amount will receive more, up to the

State’s maximum weekly amount for

regular compensation. Most State UC

laws establish the weekly UC amounts

based on a percentage of the average

weekly wage paid in the State, taking

into consideration the labor force,

geography and other factors unique to

the State. Therefore, the Department has

determined that a minimum DUA

payment in a State equal to 50 percent

of the average UC weekly amount paid

in the State is an amount that will allow

for the temporary needs of unemployed

individuals to provide for certain

necessities of living, which, as

discussed below, may be reduced for

individuals who are customarily or

routinely employed or self-employed

less than full-time.

Section 625.6(b)(1) provides that if an

individual was customarily or routinely

employed or self-employed less than

full-time prior to his/her unemployment

as a direct result of the major disaster,

such individual’s weekly amount shall

be determined based on the percentage

of time the individual was employed or

self-employed compared to the

customary and usual hours per week

that would constitute full-time

employment or self-employment in the

occupation. The State agency will

determine what constitutes full-time

employment based on information

requested from the applicant and State

agency records or occupational and

labor market information. An exception

is provided if an individual employed

or self-employed less than full-time has

base period earnings that would result

in the computation of a DUA WBA

under paragraph (a) that is less than 50

percent of the average UC weekly

amount but is greater than the DUA

WBA computed under paragraph (b)(1).

In this case, the individual will be paid

the higher weekly amount.

The purpose of this provision is to

prevent payment of 50 percent of the

average UC weekly amount to an

individual who was employed or selfemployed less than full-time prior to the

major disaster. This provision prevents

an individual from receiving a DUA

WBA exceeding the wages received for

such employment or self-employment.

The Department recognizes, and FEMA

and the State agencies have also

expressed concern, that if the minimum

DUA weekly amount is too high, it

works as a disincentive for the

individual to seek and return to work.

For example, assume a college student

works 20 hours per week at the hourly

wage of $4.25 for a weekly wage of

$85.00. This individual becomes

unemployed as a direct result of a major

disaster, and is dependent upon the

employment as his/her principal source

of income and livelihood. If the

minimum DUA weekly payment (50

percent of the average UC payment) is

$90.00 per week in the State, such

amount exceeds the weekly wages for

his/her employment. Therefore, if 40

hours per week is considered full-time

employment for the occupation by the

State agency, the individual’s DUA

weekly amount would be established at

$45.00 (20 hours is 50 percent of 40

hours, and 50 percent of $90.00 equals

$45.00). That amount is a more

equitable income replacement for the

services performed and provides an

income to the individual in the same

kind of relationship to the income

received from the job, as a full weekly

amount is to the income received by an

individual who worked full-time.

Section 625.6(b)(2) provides that if the

DUA WBA computed under paragraph

(b)(1) is not an even dollar amount, the

amount will be rounded in accordance

with the rounding provisions for regular

UC under the applicable State law.

Sections 625.6 (c) and (d) are

redesignated from current paragraphs

(b) and (c) and otherwise remain

unchanged. These paragraphs provide

for determining the DUA WBA for the

South Pacific island jurisdictions. The

provisions of newly added paragraphs

625.6 (e) and (f) (discussed below) also

are applicable to individuals filing for

DUA in those South Pacific island

jurisdictions.

The Department is considering

issuing a notice of proposed rulemaking,

which would propose two amendments

to § 625.6 to reduce the DUA WBA in

the South Pacific island jurisdictions.

One amendment would provide that the

DUA WBA established under § 625.6(c)

for Guam and the Commonwealth of the

Northern Mariana Islands would be

more akin to the amount determined

under paragraph (b) for the remainder of

the States (i.e., 50 percent of the average

weekly UC amount paid in each State).

For the remainder of the jurisdictions at

§ 625.6(d), the DUA WBA would remain

at 50 percent of the area-wide average of

weekly wages paid to individuals in

those jurisdictions. Amending § 625.6 in

accordance with the above proposal

would eliminate the inconsistency of

unemployed workers in Guam and the

Commonwealth of the Northern Mariana

Islands receiving a higher DUA WBA

than many unemployed workers in the

other States.

The second proposed amendment

would set forth in § 625.6(b)(1) that an

individual in any South Pacific island

jurisdiction would be subject to a

reduction to his/her determined DUA

WBA if he/she were employed or selfemployed less than full-time prior to

his/her unemployment as a direct result

of the major disaster. The reason for

including South Pacific islanders under

§ 625.6(b)(1) is to achieve consistency

and uniformity across jurisdictions.

The Department has decided not to

provide for the above amendments in

this interim final rule because to do so

would reduce benefits to some

individuals in the South Pacific island

jurisdictions, should a major disaster be

declared, without notice and an

opportunity for comments prior to the

effective date of the rule, which is the

date of publication.

Newly added § 625.6(e) sets forth that

the State agency shall immediately

determine a DUA WBA under the

provisions of paragraphs (a) through (d)

based on the individual’s statement of

employment or self-employment and

the wages earned or paid for each

employment or self-employment. In

addition, an immediate determination of

a DUA WBA will be made if, at the time

of filing for DUA, the individual

submits documentation substantiating

employment or self-employment or

wages earned or paid for such

employment or self-employment, or if

the State agency has records of

employment or self-employment and

wages earned or paid. An immediate

determination shall also be made based

on the individual’s statement or in

conjunction with the submittal of

documentation in those cases where the

individual was to commence

employment or self-employment on or

after the date the major disaster began

but was prevented from doing so as a

direct result of the major disaster.

Section § 625.6(e)(1) provides that if

entitlement is based only on the

individual’s statement, the individual

must furnish documentation to

substantiate such employment or selfemployment and/or wages earned or

paid for such employment or selfemployment. In addition,

documentation must be submitted in

those cases where the individual was to

commence employment or selfemployment at the time of the disaster,

but was prevented from commencing it
25566 Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations

as a direct result of the major disaster.

The documentation must be submitted

within 21 calendar days of the filing of

the DUA initial application.

Section § 625.6(e)(2) provides that if

an individual fails to submit, within 21

days, sufficient documentation to

establish that he/she was employed or

self-employed in the major disaster area

prior to his/her unemployment as a

direct result of the major disaster, or

was to commence employment or selfemployment on or after the date the

major disaster began but was prevented

from doing so as a direct result of the

disaster, the individual shall be

ineligible for the payment of DUA for

any week of unemployment due to the

major disaster. In addition, if the

individual received payments of DUA

for any weeks of unemployment prior to

the date of the determination of

ineligibility, such weeks shall be

considered overpaid and a

determination will be issued

establishing the overpayment. The State

agency shall also consider whether the

individual should be subject to a

disqualification for fraudulently filing

an initial application for DUA.

The primary purpose for these

provisions (§§ 625.6(e)(1) and (e)(2)) is

to provide for the prompt payment of

benefits to those affected by a major

disaster while also protecting against

fraudulent claims for DUA. The

Department’s position is that, given the

disruptions caused by a major disaster,

it is important to provide financial relief

in affected areas as quickly as possible.

It also is necessary to be sure that

benefits are being paid only to those

who are eligible for them. Thus, the

regulations provide for the quick

determination and payment of benefits

based on the applicant’s representation.

Once conditions have stabilized,

however, it is reasonable to require

documentation substantiating that an

individual meets the eligibility

conditions, i.e., was employed or selfemployed or was to commence

employment or self-employment in the

disaster area at the time he/she became

unemployed as a direct result of the

major disaster. The documentation to

prove employment or self-employment

would not have to consist of detailed

income data, such as income tax records

or W–2 forms, which may have been

lost or destroyed because of the disaster,

but could, for example, simply consist

of a statement from a bank that the

individual had a business account or an

account with payroll deposit, or a copy

of a title or deed to property, or any

other simple evidence that could easily

be obtained within 21 days. In those

cases where an individual was to

commence employment or selfemployment, the documentation could

simply consist of a statement from the

employer indicating the date

employment was to start or when a selfemployment contract for services was to

start.

Section 625.6(e)(3) provides that, for

purposes of DUA WBA computed under

paragraph (a), if an individual submits

documentation to verify his/her

employment or self-employment within

21 calendar days of the filing of the

initial application for DUA, but not

documentation to support his/her

statement of wages earned or paid

during the base period, the DUA WBA

shall be immediately redetermined in

accordance with the provisions in

paragraph 625.6(b). This includes those

instances where an individual has not

filed a tax return for the most recent tax

year that has ended.

The purpose of paragraph (e)(3) is to

ensure that if an individual has stated

that he/she has earnings that result in a

computation of a weekly DUA amount

higher than 50 percent of the average

UC amount paid in the State, the

individual must support the statement

by providing documentation of his/her

earnings within a reasonable time. This

rule will prevent a significant amount of

incorrect or improper payments from

occurring and prevent a large

overpayment from being established

against the individual. The Department

views 21 calendar days as a reasonable

time frame for the individual to contact

sources and obtain acceptable proof of

income. Examples of acceptable forms

of proof are bank records, employer

statements of earnings, income tax

preparer copies of documents, and State

and/or Federal income tax returns.

An individual who planned to

commence employment or selfemployment but was prevented because

of the major disaster would have to

produce the same forms of proof as

other individuals if the individual had

base period employment. However, the

Department recognizes that many

individuals who were about to

commence employment or selfemployment may not have had any

employment prior to the date of

unemployment. Such individuals could

only be determined entitled to a weekly

amount under the provisions of

paragraph (b) of this section. The

Department also recognizes that these

individuals may have expected to have

had earnings that would have resulted

in a DUA WBA higher than 50 percent

of the average UC weekly amount, had

they been included in a base period.

However, the Department’s position is

that there is no basis to project what the

individual might have received in future

earnings and apply such amount to the

base period utilized for computations

under § 625.6(a). There is no assurance

the individual would have the earnings

projected for various reasons such as

closure of the business or termination

from employment, or, in the case of the

self-employed, business expenses may

exceed projections, or income may not

result as planned. In other words,

individuals who were prevented from

commencing employment or selfemployment have not proven the same

attachment to the workforce as have

individuals who were employed or selfemployed prior to their unemployment

as a direct result of the major disaster.

Therefore, the payment of 50 percent of

the average UC weekly amount to an

individual who had no income prior to

the employment or self-employment he/

she was to commence is reasonable.

If an individual fails to submit proof

within 21 days, the State agency

generally would not have processed

more than three weeks of payments of

DUA at the higher amount; hence, any

overpayment established as a result of

the recomputation would be minimal

and could be more readily offset against

future amounts payable, causing

minimal hardship to the individual.

Conversely, the applicant’s records

submitted within 21 calendar days may

result in the individual being entitled to

a higher DUA WBA and an adjustment

must be made for the underpaid weeks.

This rule will also provide such

individuals with a steadier income

stream.

Section 625.6(e)(4) provides that if an

individual has had his/her DUA WBA

redetermined in accordance with

paragraph (e)(3) because the required

wage documentation was not submitted

within 21 calendar days, such

individual may have his/her DUA WBA

redetermined upon submittal of

documentation prior to the end of the

disaster assistance period to substantiate

that the wages earned or paid during the

base period would be sufficient to

compute a DUA WBA higher than was

redetermined under paragraph (b). This

provision will benefit all individuals

who were unable to obtain and submit

base period wage documentation with

21 days. This provision will particularly

accommodate those individuals who

had not filed a tax return at the time of

application for DUA by allowing such

individuals up to 26 weeks to submit a

copy of a tax return filed for the most

recent tax year. Any higher weekly

amount determined would be applicable

to all weeks for which the individual

was eligible for the payment of DUA.
Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations 25567

Newly added § 625.6(f)(1) sets forth,

for partial and part-total unemployed

workers and unemployed self-employed

individuals, the current methodology

that is prescribed in § 625.6(d) for

reducing the weekly amount of DUA

payable. It requires that the weekly

amount of DUA payable shall be

reduced (but not below zero) by the

amount of wages earned in that week as

determined by applying to such wages

the earnings allowance for partial or

part-total employment prescribed in the

applicable State UC law for partial or

part-total employment by individuals

received regular UC.

Newly added § 625.6(f)(2) provides

that the weekly DUA amount payable to

an unemployed self-employed

individual shall also be reduced (but not

below zero) by the full amount of any

income received during the week that

was based on the performance of

services in self-employment by applying

the earnings reduction allowance

provided in paragraph (f)(1). Paragraph

(f)(2) also provides that,

notwithstanding the definition of

‘‘wages’’ at § 625.2(u), the term ‘‘any

income’’ for purposes of this paragraph

means gross income.

The basis for the reductions in

paragraph (f)(2) of this section derive

from the fact that the definition of a

‘‘week of employment’’ for an

unemployed self-employed individual

at § 625.2(w)(2) does not take into

consideration that in the case of many

self-employed, particularly farmers, all

income for year round performance of

services may be paid in one or two

weeks. The instructions in UIPL No. 35–

87 attempted to reconcile the problem

by having the individual project his/her

net income for the year, then prorate

such amount to each week and deduct

the amount from the DUA WBA for each

week claimed. The result of this, as

discussed previously, was that, in many

cases, the projected prorated weekly

amount exceeded the DUA WBA and

the individual received no DUA, even

though such individual was

unemployed and had no income from

any source.

The Department believes it is far more

equitable, and will provide weekly DUA

payments to a greater number of

individuals, to deduct from the DUA

WBA the gross earnings received during

a week that were or are derived from the

performance of services in selfemployment, than to attempt to have the

individual determine or project net

earnings for a year from the income and

then prorate such annual figure to each

week.

Application of this new provision

means, for example, in the case of a

farmer, that if the farmer sold some

product(s) during a week and received

$30,000.00 in gross income, the

individual would be ineligible for DUA

for that week only, and then he/she

could continue to receive DUA in

subsequent weeks provided the

eligibility requirements of § 625.4 are

met. However, if the net income for tax

purposes to be derived from the

$30,000.00, plus any additional

projected net income to be received

during the tax year, were prorated to 52

weeks and deducted from the amount of

DUA payable, it may mean the

individual is not entitled to any DUA

for any week because of excessive

earnings each week. Likewise, if a selfemployed individual performed services

prior to becoming unemployed due to

the major disaster and is receiving

monthly installment payments of, for

example, $50.00, such amount would be

deducted from the DUA WBA during

the week received.

The Department recognizes that

application of the reduction provisions

in paragraph (f)(2) of § 625.6 will result

in no reduction being made for weeks of

unemployment after the individual’s

unemployment as a direct result of the

major disaster where the individual

performs less than full-time selfemployment but has no income during

the week. Therefore, the Department is

considering issuing a notice of proposed

rulemaking, which would amend

§ 625.6 to reduce the DUA WBA based

on the hours an individual performed

less than full-time services in selfemployment during the week compared

to the individual’s usual or customary

full-time hours performing services.

This amendment is not being made in

this interim final rule because selfemployed individuals affected by such

an amendment would receive less

benefits without opportunity for

comment prior to the effective date of

this rule should a major disaster be

declared.

Publication in Interim Final; Effective

Date

The Department has determined,

pursuant to 5 U.S.C. 553(b)(B), that good

cause exists for publishing the

amendments to 20 CFR 625.6 as an

interim final rule with a postpublication comment period, because a

pre-publication comment period is

impracticable and contrary to the public

interest. It is impractical because major

disasters continue to occur, which

means that thousands of individuals

will again be unemployed and applying

for DUA if areas in the States or entire

States are declared major disaster areas

by the President. To not have the

regulations in place at that time would

be contrary to the public interest

because of the inconsistencies and

unduly restrictive provisions in the

current regulations. In addition, there is

little likelihood that the majority of any

potential beneficiaries will object to the

changes since they provide more

equitable and, in most cases, greater

benefits.

For all of the reasons stated above, the

Department has determined, pursuant to

5 U.S.C. 553(d)(3), that good cause

exists for making the amendments to 20

CFR 625.6 effective upon publication in

the Federal Register. Such amendments

are applicable to all major disasters

declared by the President on or after the

date of publication and will, therefore,

cover any major disaster in the spring or

summer. Historically, these are the

seasons of the year when most major

disasters occur because of the

prevalence of severe storms, floods,

tornadoes, and hurricanes.

Drafting Information

This document was prepared under

the direction and control of the Director,

Unemployment Insurance Service,

Employment and Training

Administration, U.S. Department of

Labor, 200 Constitution Avenue, NW.,

Washington, DC 20210: Telephone (202)

219–7831 (this is not a toll-free

number).

Classification—Executive Order 12866

The interim final rule in this

document is classified as a ‘‘significant

regulatory action’’ under Executive

Order 12866 on Federal Regulations. It

may: (1) Materially alter the budgetary

impact of entitlements or the rights and

obligations of recipients thereof; or (2)

raise novel legal or policy issues arising

out of legal mandates and the

President’s priorities. It is not likely to

result: (3) in having an annual effect on

the economy of $100 million or more; or

(4) create a serious inconsistency or

interfere with action taken or planned

by another agency.

Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1980, 44 U.S.C. 3501

et seq., approval has been obtained from

the Office of Management and Budget

(OMB) for the recordkeeping and

reporting requirements under 20 CFR

625.16(a) for the DUA forms ETA 90–2,

81, 81A, 82, 83, and 84. The OMB

control number for the 90–2 is 1205–

0234, and for the 81, 81A, 82, 83, and

84 it is 1205–0051. OMB approval has

also been obtained for the recordkeeping

and reporting required under 20 CFR
25568 Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations

625.19(b) under OMB control number

1205–0051.

Regulatory Flexibility Act

No regulatory flexibility analysis is

required where the rule ‘‘will not * * *

have a significant economic impact on

a substantial number of small entities’’

(5 U.S.C. 605(b)). The definition of the

term ‘‘small entity’’ under 5 U.S.C.

601(6) does not include States. Since

these regulations involve an entitlement

program administered by the States, and

are directed to the States, no regulatory

flexibility analysis is required. The

Secretary has certified to the Chief

Counsel for Advocacy of the Small

Business Administration to this effect.

Catalog of Federal Domestic Assistance

Number

This program is listed in the Catalog of

Federal Domestic Assistance at No. 17. 225,

‘‘Disaster Unemployment Assistance (DUA).’’

Lists of Subjects in 20 CFR Part 625

Disaster Unemployment Assistance,

Labor, Reemployment services,

Unemployment compensation.

Signed at Washington, DC, on May 4, 1995.

Doug Ross,

Assistant Secretary of Labor.

For the reasons set out in the

preamble, part 625 of title 20, Code of

Federal Regulations, is amended as set

forth below.

PART 625—DISASTER

UNEMPLOYMENT ASSISTANCE

1. The authority for part 625

continues to read as follows:

Authority: 42 U.S.C. 1302; 42 U.S.C. 5164;

42 U.S.C. 5201(a); Executive Order 12673 of

March 23, 1989 (54 FR 12571); delegation of

authority from the Director of the Federal

Emergency Management Agency to the

Secretary of Labor, effective December 1,

1985 (51 FR 4988); Secretary’s Order No. 4–

75 (40 FR 18515).

2. Section 625.6 is revised to read as

follows:

§ 625.6 Weekly amount; jurisdictions;

reductions.

(a) In all States, except as provided in

paragraphs (c) and (d) of this section,

the amount of DUA payable to an

unemployed worker or unemployed

self-employed individual for a week of

total unemployment shall be the weekly

amount of compensation the individual

would have been paid as regular

compensation, as computed under the

provisions of the applicable State law

for a week of total unemployment. In no

event shall such amount be in excess of

the maximum amount of regular

compensation authorized under the

applicable State law for that week.

(1) Except as provided in paragraph

(a)(2) or (b) of this section, in computing

an individual’s weekly amount of DUA,

qualifying employment and wage

requirements and benefit formula of the

applicable State law shall be applied;

and for purposes of this section,

employment, wages, and selfemployment which are not covered by

the applicable State law shall be treated

in the same manner and with the same

effect as covered employment and

wages, but shall not include

employment or self-employment, or

wages earned or paid for employment or

self-employment, which is contrary to

or prohibited by any Federal law, such

as, but not limited to, section

3304(a)(14)(A) of the Federal

Unemployment Tax Act (26 U.S.C.

3304(a)(14)(A)).

(2) For purposes of paragraph (a)(1) of

this section, the base period to be

utilized in computing the DUA weekly

amount shall be the most recent tax year

that has ended for the individual

(whether an employee or self-employed)

prior to the individual’s unemployment

that was a direct result of the major

disaster. The self-employment income

to be treated as wages for purposes of

computing the weekly amount under

this paragraph (a) shall be the net

income reported on the tax return of the

individual as income from all selfemployment that was dependent upon

the performance of services by the

individual. If an individual has not filed

a tax return for the most recent tax year

that has ended at the time of such

individual’s initial application for DUA,

such individual shall have a weekly

amount determined in accordance with

paragraph (e)(3) of this section.

(3) As of the date of filing an initial

application for DUA, family members

over the age of majority, as defined

under the statutes of the applicable

State, who were customarily or

routinely employed or self-employed as

a family unit or in the same selfemployment business prior to the

individuals’ unemployment that was a

direct result of the major disaster, shall

have the wages from such employment

or net income from the self-employment

allocated equally among such adult

family members for purposes of

computing a weekly amount under this

paragraph (a), unless the documentation

to substantiate employment or selfemployment and wages earned or paid

for such employment or selfemployment submitted as required by

paragraph (e) of this section supports a

different allocation. Family members

under the age of majority as of the date

of filing an initial application for DUA

shall have a weekly amount computed

under this paragraph (a) based on the

actual wages earned or paid for

employment or self-employment rather

than an equal allocation.

(b) If the weekly amount computed

under paragraph (a) of this section is

less than 50 percent of the average

weekly payment of regular

compensation in the State, as provided

quarterly by the Department, or, if the

individual has insufficient wages from

employment or insufficient or no net

income from self-employment (which

includes individuals falling within

paragraphs (a)(3) and (b)(3) of § 625.5) in

the applicable base period to compute a

weekly amount under paragraph (a) of

this section, the individual shall be

determined entitled to a weekly amount

equal to 50 percent of the average

weekly payment of regular

compensation in the State.

(1) If an individual was customarily or

routinely employed or self-employed

less than full-time prior to the

individual’s unemployment as a direct

result of the major disaster, such

individual’s weekly amount under this

paragraph (b)(1) shall be determined by

calculating the percent of time the

individual was employed or selfemployed compared to the customary

and usual hours per week that would

constitute the average per week hours

for year-round full-time employment or

self-employment for the occupation,

then applying the percentage to the

determined 50 percent of the average

weekly amount of regular compensation

paid in the State. The State agency shall

utilize information furnished by the

applicant at the time of filing an initial

application for DUA and any labor

market or occupational information

available within the State agency to

determine the average per week hours

for full-time employment or selfemployment for the occupation. If the

weekly amount computed for an

individual under this paragraph (b)(1) is

less than the weekly amount computed

under paragraph (a) of this section for

the individual, the individual shall be

entitled to the higher weekly amount.

(2) The weekly amount so determined

under paragraph (b)(1) of this section, if

not an even dollar amount, shall be

rounded in accordance with the

applicable State law.

(c) In the Territory of Guam and the

Commonwealth of the Northern Mariana

Islands, the amount of DUA payable to

an unemployed worker or unemployed

self-employed individual for a week of

total unemployment shall be the average

of the payments of regular

compensation made under all State laws

referred to in § 625.2(r)(1)(i) for weeks of

total unemployment in the first four of
Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules and Regulations 25569

the last five completed calendar quarters

immediately preceding the quarter in

which the major disaster began. The

weekly amount so determined, if not an

even dollar amount, shall be rounded to

the next higher dollar.

(d) In American Samoa, Federated

States of Micronesia, Republic of the

Marshall Islands and the Trust Territory

of the Pacific Islands, the amount of

DUA payable to an unemployed worker

or unemployed self-employed

individual for a week of total

unemployment shall be the amount

agreed upon by the Regional

Administrator, Employment and

Training Administration, for Region IX

(San Francisco), and the Federal

Coordinating Officer, which shall

approximate 50 percent of the area-wide

average of the weekly wages paid to

individuals in the major disaster area in

the quarter immediately preceding the

quarter in which the major disaster

began. The weekly amount so

determined, if not an even dollar

amount, shall be rounded to the next

higher dollar.

(e) The State agency shall

immediately determine, upon the filing

of an initial application for DUA, a

weekly amount under the provisions of

paragraphs (a) through (d) of this

section, as the case may be, based on the

individual’s statement of employment

or self-employment preceding the

individual’s unemployment that was a

direct result of the major disaster, and

wages earned or paid for such

employment or self-employment. An

immediate determination of a weekly

amount shall also be made where, in

conjunction with the filing of an initial

application for DUA, the individual

submits documentation substantiating

employment or self-employment and

wages earned or paid for such

employment or self-employment, or, in

the absence of documentation, where

any State agency records of employment

or self-employment and wages earned or

paid for such employment or selfemployment, justify the determination

of a weekly amount. An immediate

determination shall also be made based

on the individual’s statement or in

conjunction with the submittal of

documentation in those cases where the

individual was to commence

employment or self-employment on or

after the date the major disaster began

but was prevented from doing so as a

direct result of the disaster.

(1) In the case of a weekly amount

determined in accordance with

paragraph (e) of this section, based only

on the individual’s statement of

earnings, the individual shall furnish

documentation to substantiate the

employment or self-employment or

wages earned from or paid for such

employment or self-employment or

documentation to support that the

individual was to commence

employment or self-employment on or

after the date the major disaster began.

In either case, documentation shall be

submitted within 21 calendar days of

the filing of the initial application for

DUA.

(2) Any individual who fails to submit

documentation to substantiate

employment or self-employment or the

planned commencement of employment

or self-employment in accordance with

paragraph (e)(1) of this section, shall be

determined ineligible for the payment of

DUA for any week of unemployment

due to the disaster. Any weeks for

which DUA was already paid on the

application prior to the date of the

determination of ineligibility under this

paragraph (e)(2) are overpaid and a

determination shall be issued in

accordance with § 625.14(a). In

addition, the State agency shall consider

whether the individual is subject to a

disqualification for fraud in accordance

with the provisions set forth in

§ 625.14(i).

(3) For purposes of a computation of

a weekly amount under paragraph (a) of

this section, if an individual submits

documentation to substantiate

employment or self-employment in

accordance with paragraph (e)(1), but

not documentation of wages earned or

paid during the base period set forth in

paragraph (a)(2) of this section,

including those cases where the

individual has not filed a tax return for

the most recent tax year that has ended,

the State agency shall immediately

redetermine the weekly amount of DUA

payable to the individual in accordance

with paragraph (b) of this section.

(4) Any individual determined

eligible for a weekly amount of DUA

under the provisions of paragraph (e)(3)

of this section may submit necessary

documentation to substantiate wages

earned or paid during the base period

set forth in paragraph (a)(2) of this

section, including those cases where the

individual has not filed a tax return for

the most recent tax year that has ended,

at any time prior to the end of the

disaster assistance period. A

redetermination of the weekly amount

payable, as previously determined

under paragraph (b) of this section, shall

immediately be made if the wages

earned or paid for services performed in

employment or self-employment

reflected in such documentation is

sufficient to permit a computation

under paragraph (a) of this section of a

weekly amount higher than was

determined under paragraph (b) of this

section. Any higher amount so

determined shall be applicable to all

weeks during the disaster assistance

period for which the individual was

eligible for the payment of DUA.

(f)(1) The weekly amount of DUA

payable to an unemployed worker or

unemployed self-employed individual

for a week of partial or part-total

unemployment shall be the weekly

amount determined under paragraph (a),

(b), (c) or (d) of this section, as the case

may be, reduced (but not below zero) by

the amount of wages that the individual

earned in that week as determined by

applying to such wages the earnings

allowance for partial or part-total

employment prescribed by the

applicable State law.

(2) The weekly amount of DUA

payable to an unemployed selfemployed individual for a week of

unemployment shall be the weekly

amount determined under paragraph (a),

(b), (c) or (d) of this section, as the case

may be, reduced (but not below zero) by

the full amount of any income received

during the week for the performance of

services in self-employment, regardless

of whether or not any services were

performed during the week, by applying

the earnings allowance as set forth in

paragraph (f)(1) of this section.

Notwithstanding the definition of

‘‘wages’’ for a self-employed individual

under § 625.2(u), the term ‘‘any income’’

for purposes of this paragraph (f)(2)

means gross income.

[FR Doc. 95–11617 Filed 5–10–95; 8:45 am]

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