DAR File No. 42861

Workforce Services, Unemployment Insurance

Rule R994-405

Ineligibility for Benefits

Notice of Proposed Rule

(Amendment)

DAR File No.: 42861
Filed: 04/30/2018 03:09:59 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of these proposed rule amendments are to formally clarify the Department of Workforce Services' (Department) position regarding when an employee of an educational institution has a reasonable assurance of returning to work for purposes of determining the employee's eligibility for unemployment insurance benefits.

Summary of the rule or change:

Under the Federal Unemployment Tax Act (FUTA), 26 U.S.C. 3301 et seq., the United States Department of Labor (DOL) establishes an unemployment trust fund out of which states may operate unemployment insurance programs and provides certain mandates as conditions of operating a state unemployment insurance program. Section 3304(a)(6) of FUTA generally mandates that states refrain from paying unemployment compensation to educational employees during the periods between successive semesters or terms (i.e., during summer vacation or holiday breaks). FUTA contains an exception for employees who do not have "a contract or reasonable assurance" that they will continue to work for an educational institution during the subsequent semester or term. On 12/22/2016, DOL issued Unemployment Insurance Program Letter (UIPL) No. 5-17. This UIPL clarifies DOL's interpretation of Section 3304(a)(6) of FUTA as it relates to educational employees who are, or have been, employed by more than one educational employer. DOL's guidance states that a reasonable assurance of future employment does not exist for purposes of FUTA if the future employment "will not earn at least 90% of the amount that the claimant earned in the first academic year or term, or in a corresponding term." The UIPL also addresses situations in which an employee works for multiple educational employers and may have a reasonable assurance of return to one employer but not another. In these situations, states are required to determine eligibility for unemployment insurance benefits based either on: 1) only the services performed for the employer(s) that will not bring the employee back for another semester or term, or 2) the totality of the work and earnings to which the employee can return in the new semester or term. The Department has brought its policies and procedures into compliance with this UIPL. These proposed rule changes make technical changes to the unemployment rule relating to educational employees so as to reflect the Department's continued compliance with the UIPL. As these proposed rule changes reflect, "reasonable assurance" for educational employment purposes is determined by reference to the totality of the work and earnings to which the employee can return in the new semester or term. The Department has specific authority to enact these proposed rule changes pursuant to Sections 35A-1-104, 35A-4-207, 35A-4-406, and 35A-4-502.

Statutory or constitutional authorization for this rule:

• 26 U.S.C. 3301 et seq.
• Section 35A-4-405

Anticipated cost or savings to:

the state budget:

No costs or savings to the state budget are anticipated from these proposed rule changes because these proposed rule changes merely formalize existing Department policy and procedure, and will not affect the amount of unemployment insurance benefits paid out or otherwise affect the Department's budget.

local governments:

No costs or savings to local governments are anticipated from these proposed rule changes because the unemployment insurance program is a state-level program that does not rely on local governments for its funding, administration, or enforcement.

small businesses:

No costs or savings to small businesses are anticipated from these proposed rule changes because these proposed rule changes merely formalize existing Department policy and procedure, and will not affect the amount of unemployment insurance benefits paid out or the amount of benefit costs charged to employers. The Department has considered whether these proposed rule changes will have a measurable negative fiscal impact on small businesses and has determined that these proposed rule changes will not have a negative fiscal impact.

persons other than small businesses, businesses, or local governmental entities:

No costs or savings to persons other than small businesses, businesses, or local government entities are anticipated from these proposed rule changes because these proposed rule changes merely formalize existing Department policy and procedure, and will not affect the amount of unemployment insurance benefits paid out to claimants or the amount of benefit costs charged to employers.

Compliance costs for affected persons:

No compliance costs are expected for any affected persons because these proposed rule changes do not change any compliance or reporting requirements for either claimants or employers.

Comments by the department head on the fiscal impact the rule may have on businesses:

After a thorough analysis, it was determined that these proposed rule changes will not result in a fiscal impact to businesses.

Jon Pierpont, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Nathan White at the above address, by phone at 801-526-9647, by FAX at , or by Internet E-mail at nwhite@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2018

This rule may become effective on:

06/21/2018

Authorized by:

Jon Pierpont, Executive Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2018	FY 2019	FY 2020
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non - Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

After a thorough analysis, it was determined that these proposed rule changes will not result in a fiscal impact to businesses.

 

 

R994. Workforce Services, Unemployment Insurance.

R994-405. Ineligibility for Benefits.

R994-405-802. Elements Required for Denial.

(1) The claimant is ineligible if all of the following elements are met:

(a) The Claimant is an Employee of an Educational Institution.

The claimant's benefits are based on employment for an educational institution or a governmental agency established and operated exclusively for the purpose of providing services to an educational institution. The service performed for the educational institution may be in any capacity including professional employees teachers, researchers and principals and all non-professional employees including secretaries, lunch workers, teacher's aides, and janitors.

(b) School is Not in Session or the Claimant is on a Paid Sabbatical Leave.

Benefits are only denied if the week for which benefits are claimed is during a period between two successive academic years or a similar period between two regular terms whether or not successive, during a period of paid sabbatical leave provided in the contract, or during holiday recesses and customary vacation periods.

(c) The claimant has a reasonable assurance of returning to work for [an]one or more educational institutions at the next regular year or term as set forth in Rule R994-405-805.

 

R994-405-805. Reasonable Assurance.

(1) "Reasonable assurance" is defined as a written, oral, or implied agreement that the employee will perform service in the same or similar capacity during the ensuing academic year, term, or remainder of a term.

(2) Reasonable Assurance Presumed.

A claimant is presumed to have implied reasonable assurance of employment during the next regular school year or term with an educational institution if he or she worked for the educational institution during the prior school term and there has been no change in the conditions of his or her employment that would indicate severance of the employment relationship. Under such circumstances benefits initially will be denied.

(3) Advised on Non-Recall.

If the claimant has been advised by proper school administrative authorities that he or she will not be offered employment when the next school term begins, benefits would not be denied under Subsection 35A-4-405(8) unless the claimant otherwise has a reasonable assurance of returning to work that is not substantially less suitable under Subsection (4) below.

(4) Offer of New Work by an Educational Institution.

Reasonable assurance is not limited to the same school where the claimant was employed during the base period or the same type of work[, but includes any bona fide offer of suitable work at any educational institution]. Reasonable assurance exists if the terms and conditions of [any]the new work offered in the second term are not substantially less suitable, as defined by Subsection 35A-4-405(3), than the terms and conditions of the work performed during the first term. For purposes of this section, new work in the educational field is considered to be substantially less suitable if the claimant will not earn from all educational employers at least 90% of the amount earned from all educational employers during the previous academic year or term at issue. A disqualification under Subsection 35A-4-405(8) would begin with the week the employment is offered, and a disqualification under Subsection 35A-4-405(3) may begin with the week in which the offered employment would become available. For example: if a claimant was advised that due to reduction in enrollment he or she will not be recalled by the school where he or she last worked as a teacher's aide, but then obtains an offer of employment as a librarian from another school or another school district, a disqualification under Subsection 35A-4-405(8) would be assessed beginning with the week in which the offer of employment was made to the claimant, and a disqualification under Subsection 35A-4-405(3) would begin at the beginning of the school term if the work is not accepted.

(5) Separated Due to a Quit or Discharge.

If the employment relationship is severed either due to a quit or discharge, the provisions of Subsection 35A-4-405(8) do not apply, but Subsections 35A-4-405(1) or 35A-4-405(2) may apply and a disqualification, if assessed, would begin with the effective date of the separation or the claim, whichever is later.

 

R994-405-807. Period of Disqualification.

The effective date of the unemployment insurance claim does not have to begin between regular school terms for a disqualification to apply, but benefits will be denied for a week that begins during a period when school is not in session or the claimant is on a paid sabbatical leave. A disqualification under Subsection 35A-4-405(8) can only be assessed for weeks:

(1) between two successive academic years or terms, or

(2) during a break in school activity between two regular terms even if the terms are not successive, including school vacations and holidays as well as the break between academic terms, or

(3) when the claimant is on a paid sabbatical leave if the claimant worked during the prior school year and has a contract or reasonable assurance (as defined in Rule R994-405-805) of working in any capacity for [an]one or more educational institution s in the school term following the sabbatical leave. When the claimant is on an unpaid sabbatical leave, benefits may be allowed provided he or she is otherwise eligible including meeting the eligibility requirements of Subsection 35A-4-403(1)(c) and R994-405-106(4).

 

R994-405-808. Retroactive Payments.

Retroactive payments under Subsection 35A-4-406(2) may be made after a disqualification has been assessed only if the claimant:

(1) is not a professional employee in an instructional, research or administrative capacity,

(2) was not offered [an opportunity for a]reasonable assurance of employment , as defined in Rule R994-405-805, for [an]one or more educational institution s for the second academic years or terms,

(3) filed weekly claims in a timely manner as instructed, and

(4) benefits were denied solely by reason of Subsection 35A-4-405(8).

 

KEY: unemployment compensation, employment, employee's rights, employee terminations

Date of Enactment or Last Substantive Amendment: [March 1, 2017]2018

Notice of Continuation: March 29, 2018

Authorizing, and Implemented or Interpreted Law: 35A-4-502(1)(b); 35A-1-104(4); 35A-4-405