Employment and Training Administration
Washington, D. C. 20210






May 19, 1993




September 30, 1994











Barbara Ann Farmer
Administrator for Regional Management




Emergency Unemployment Compensation Act of 1991, As Amended-- Clarification and Revision

  1. Purpose: To provide revised operating instructions for States and State Employment Security Agencies (SESAs) for the administration of Section 105(c)(1) of Title I of the "Emergency Unemployment Compensation Act of 1991," as amended.

  2. Contact: Questions should be directed to the appropriate Regional Office.

  3. References: Title I of the Emergency Unemployment Compensation Act of 1991, P.L. 102-164, as amended by P.L.s 102-182, 102-244, 102-318, and the Emergency Unemployment Compensation Amendments of 1993, P.L. 103-6; the Federal-State Extended Unemployment Compensation Act of 1970 (FSEUCA) as amended; 20 CFR Part 615; GAL 12-92 and GAL 12-92, Changes 1 and 2; the Trade Act of 1974 (19 U.S.C. 2271 et seq.); 20 CFR Part 617.

  4. Background: GAL 4-92, dated November 27, 1991, and published on February 14, 1992 (57 FR 5472), transmitted the Department's operating instructions to the States for administration of the Emergency Unemployment Compensation (EUC) program. On June 4, 1992, the Department issued GAL 4-92, Change 3, which transmitted revised operating instructions for Section III.M., Fraud and Overpayment, in Attachment A, based on questions from States. This document was published on June 24, 1992 (57 FR 28188).

    After additional substantive changes to the operating instructions in GAL 4-92, based on amendments to the EUC Act of 1991 and other provisions of P.L. 102-318 (enacted July 3, 1992), the Department consolidated GAL 4-92 and the four changes into one document, GAL 12-92. This document, issued on September 11, 1992, became the official controlling guidance and was published on November 16, 1992 (52 FR 54106). Based on changes to the reporting requirements provided in Attachment C to GAL 12-92 and extension of the EUC program provided in P.L. 103-6, the Department issued Changes 1 and 2 to GAL 12-92 on February 16, 1993, and March 10, 1993, respectively.

    Now, additional questions have arisen from the States, as well as other interested parties, concerning the application of the offset of overpayment provisions in Section III.M.. After consideration of the comments and the provisions of the EUC Act of 1991 as a whole, the Department is revising Section III.M.2.b.(5) of Attachment A to GAL 12-92 for the reasons described below.

    Clarification and Revision--Explanation: Section 105(c)(1) of the EUC Act of 1991 (entitled Fraud and Overpayments) provides that in the event of an EUC overpayment, deductions from EUC and other unemployment compensation payable may be utilized to offset the overpayment; except that no single deduction may exceed 50 percent of the weekly benefit amount from which the deduction is made.

    Section 243(a)(2) of the Trade Act of 1974 contains nearly identical language and the Department's regulation at 20 CFR 617.55(a)(4)(C)(iii) was promulgated to implement the provision. Therefore, the Department did not vary from the provision in 20 CFR Part 617 when Section III.M.2.b.(5) was issued in GAL 4-92 and now GAL 12-92, since a precedent had been established in the Trade Act regulations.

    However, unlike the Trade Act of 1974, Section 101(d)(2) of the EUC Act of 1991 provides that the terms and conditions of State law that apply to claims for extended compensation and the payment thereof, shall apply to claims for EUC and the payment thereof, except where inconsistent with the provisions of the EUC Act or with regulations or operating instructions of the Secretary promulgated to carry out the EUC Act.

    Based on questions from the States and other interested parties, the Department has determined that part of the requirement provided in current Section III.M.2.b.(5), prescribing that any deduction must be 50 percent is too restrictive, since some States have a smaller deduction for regular compensation, which is applicable to EB, and, hence, is also applicable to EUC. Any State law requiring greater than a 50 percent reduction is inconsistent with Section 105(c)(1) and may not be applied to EUC overpayments under Section III.M.2.b.(5).

    Therefore, Section III.M.2.b.(5) is revised as described below. This interpretation is applicable to all outstanding EUC overpayments and to all offset determinations made after the date of this issuance.

    The revised operating instructions in this GAL 12-92, Change 3, are issued to the States and constitute the controlling guidance provided by the Department in its role as the principal in the EUC program. As agents of the United States, the States may not vary from the operating instructions in GAL 12-92, GAL 12-92, Change 1, GAL 12-92, Change 2, or this Change 3 (or any subsequent or supplemental operating instructions) without the prior approval of the Department of Labor.

  5. Amendment to Operating Instructions: Consistent with Section 105(c)(1) of the EUC Act of 1991, Section III.M.2.b.(5) of Attachment A of GAL 12-92 is changed to read as follows:

    "(5) No single deduction under this section III.M.2., shall exceed 50 percent of the amount otherwise payable to the individual."

  6. Action Required: SESA administrators should ensure that the above controlling guidance is issued to appropriate staff and, if State law so provides for a deduction of less than 50 percent, that such lesser reduction shall apply to all outstanding EUC overpayments and to all offset determinations made after the date of this issuance.