U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210
September 28, 1998
|DIRECTIVE||:||TRAINING AND EMPLOYMENT INFORMATION NOTICE NO. 11-98|
|TO||:||ALL STATE JTPA LIAISONS
ALL STATE EMPLOYMENT SECURITY AGENCIES
ALL STATE WORKER ADJUSTMENT LIAISONS
ALL ONE-STOP CAREER CENTER SYSTEM LEADS
Office of Regional Management
|SUBJECT||:||Information for States that are Conducting JTPA Follow-Up Using Wage Records|
Purpose. To provide worksheets, baseline levels, and other critical technical information for States to set local postprogram performance standards required under the Job Training Partnership Act (JTPA) when States are conducting follow-up using Unemployment Insurance (UI) wage records.
Background. Training and Employment Guidance Letter (TEGL) No. 12-97 announced that for Program Years (PY) 1998 and 1999, States may choose to adopt pilot wage record-based performance measures in lieu of the four required core follow-up measures. Attachment 6 of TEGL 12-97 detailed the provisions that States would be required to implement in order to participate in the pilot.
This Training and Employment Information Notice (TEIN) transmits for the pilot States further information on required performance measures; baseline levels; optional models for making adjustments to performance baselines; and adjustments for out-of-state placements and placements in noncovered employment.
Requirements for PY 1998 Optional Wage Record Pilot Measures Differ from Previous Waiver Requirements. Due to policy decisions made after the initial waivers were granted, the requirements for PY 1998 pilot measures differ from requirements provided waiver States in several ways, including:
differences in the definitions of measures (however, ETA encourages all waiver States to adopt the definitions in PY 1998 pilot measures);
differences in the baseline (departure point) levels (waiver States can establish baselines using information provided by ETA, while pilot States are given national baseline departure points for the PY 1998 measures); and
differences in the required supplementary data (waiver States are not required to submit a 5% telephone follow-up sample, but as an alternative can provide matched follow-up and UI earnings records of all terminees in a recent year).
The passage of the Workforce Investment Act of 1998, implementation of both Temporary Assistance for Needy Families (TANF) and the Welfare-to-Work reporting requirements and proposed performance bonus system, and launch of the new Trade Adjustment Act (TAA)/North American Free Trade Act (NAFTA)-TAA reporting system have all seen performance measures adopted that are based on wage record tracking of participants. These largely occurred after ETA's waiver guidance was developed. The waiver guidance stated at the time that, "These measures are considered interim and transitional, and are expected to be modified by either requirements in new legislation or further refinement of the JTPA performance standards system."
Encouraging Waiver States to Adopt Pilot Provisions. ETA will use a single approach for further development of technical guidance on wage record-based measures. States are encouraged to use the approach announced in the PY 1998 pilot requirements. Waiver States may adopt the pilot requirements from the beginning of their waiver period (PY 1997), or they may switch in PY 1998 or later.
Adjustments for Out-of-State Employment and Noncovered Employment. Attachment B provides a simple worksheet and instructions for estimating and adjusting for placements in out-of-state employment and noncovered employment, neither of which will be captured fully in wage records. The proportion of placements in out-of-state employment and noncovered employment is locally variable; without adjusting for these effects, some local programs' performance results will be adversely affected.
In implementing the adjustment, individuals should be treated as placed out of State if they are placed in a State from which wage records are not obtained. Individuals placed in a State from which wage records are obtained should be treated as placed "in State". In addition, individuals placed in jobs that have separate wage record systems from which wage records are not obtained should be treated as out of State. Examples of separate wage record systems include: federal employment, military employment, postal employment, railroad employment, and State employment (in some States). Employment with employers who do not report wage records (for example, independent contractors, small nonprofit organizations, small farms and some domestic workers) should be treated as placed in noncovered employment..
Telephone Survey 5% Sample. States participating in the pilot are required to continue to conduct the telephone follow-up survey for a 5% sample of terminees from Title II-A and/or Title III, as appropriate. The 5% sample survey should be conducted using the same procedures as the existing follow-up survey except for using the 5% sample. In particular:
The 5% sample follow-up should be conducted for the first three quarters of the program year and the last quarter of the previous program year.
The 5% follow-up data should be included in the regular Standardized Program Information Report (SPIR) submission due August 15th after the end of the program year.
The 5% sample should be selected randomly. The State can choose either a 5% statewide sample or a 5% sample in each service delivery area (SDA) and substate area (SSA).
The 70% response rate requirement applies.
The 5% sample is designed to provide the information needed to estimate national JTPA outcomes. The sample sizes will not be large enough to estimate performance at the State level, except in very large States. ETA does not plan to use these data to measure and evaluate State performance.
Reporting Instructions for Wage Record Follow-Up. Pilot States will be asked to submit both an initial and a supplemental SPIR for terminees who receive wage record-based follow-up. The initial SPIR submission will contain data (up to and including termination) for each terminee in the Program Year and the fourth quarter of the prior Program Year. The initial data submission will also include telephone follow-up information, which is to be reported for terminees in the 5% sample (if appropriate) according to the established SPIR report format and telephone follow-up guidelines. The supplemental SPIR submission due one year later is to contain wage record follow-up information for the terminees included in the initial submission. Attachment C provides interim supplementary reporting instructions for wage record-based follow-up. Final reporting instructions will be issued with the revised SPIR reporting instructions when approved by OMB.
Incentive and Sanction Policies. The time lag in the availability of performance information based on wage records raises some serious challenges for States' incentive and sanction policies. The implications of the time lag can be considered in the following example. Postprogram outcomes for individuals who terminate in the last quarter of PY 1998 (April to June 1999) occur two calendar quarters later (October to December 1999). Employers report these data to the State in the following quarter (January to March 2000) and the State's database may not be complete until sometime in the next quarter (April to June 2000). Thus, the State will not be able to measure PY 1998 performance based on wage records until about one year after the end of the program year.
States using wage records to measure performance are required to develop, for ETA approval, incentive and sanction policies that address this delay. For incentive policies, States have several options, including the following:
Wait up to one year to determine performance and award incentives for both adult and youth performance. For example, the State could make PY 1998 awards in June to September of 2000. The basic problem with this option is the transition--no incentive awards would be made in September of 1999. A year without incentive awards would not be very popular with SDAs.
Make awards for youth performance at the usual time along with awards for adult performance in the previous program year. This option allows the State to continue awarding incentives every year, although during the first year awards would be based only on youth performance and State standards. States choosing this option might want to implement State standards based on adult termination outcomes to provide more timely awards to SDAs for adult performance.
While the implications of the time lag for incentives are limited to a delay in the award of incentive funds, the implications for sanction policies are much more serious. The current JTPA system is predicated on providing technical assistance to SDAs that fail standards overall during a program year to avert failure in the next program year. However, SDAs that fail for "two consecutive program years" are subject to reorganization. With wage record follow-up, literal interpretation of "two consecutive program years" would deny SDAs the opportunity to correct performance deficiencies. For example, performance for PY 1998 adult terminees is not available until approximately June of 2000, when PY 1999 is just about to end. Thus, by the time poor performance in PY 1998 is discovered, there is no opportunity to improve performance in PY 1999, which is already nearly over. One way to address this problem is to change the interpretation to explicitly allow SDAs a year after identification of the initial failure to improve performance before becoming subject to sanctions. For example, if an SDA is identified in June 2000 as failing PY 1998 standards, performance in PY 2000 could be used as the second year in determining whether the SDA is subject to reorganization.
Title III Wage Record-Based Measures. Adjustment models and departure points will not be available for setting local wage record-based baseline levels for PYs 1997 or 1998 for Title III.
In future performance standards cycles, ETA will provide adjustment models and departure points for the full complement of Title III performance standards measures whether they are based on surveys or wage records.
Unemployment Insurance Service Confidentiality Policy. Attached for your information is a copy of Unemployment Insurance Program Letter 34-97 that provides some interpretation of Federal law regarding the confidentiality and disclosure requirements for the Federal-State Unemployment Compensation (UC) program. This information may assist States in formulating arrangements to gain access to wage records both within the State and out-of-state.
JTPA Wage Record User Group Being Formed. All waiver States and States participating in the PY 1998 or 1999 pilot of JTPA wage record-based performance measures are invited to nominate a representative to a user group being formed to assist ETA in identifying implementation issues, formulating options, and providing direction to the pilot. A meeting in the Fall of 1998 in Washington, D.C. is being planned. Nominees to the User Group should be forwarded to Valerie Lloyd at the address below.
Action Required. States are requested to:
share this information with appropriate staff;
advise the appropriate Regional Office if they are planning to participate in the pilot implementation of wage-record based performance measures in PY 1998; and
forward to Valerie Lloyd (see below) and to the Regional Office the names of nominees to the User Group. These nominations should be forwarded within 3 weeks of the date of this TEIN.
Inquiries. Questions concerning this information may be directed to Valerie Lloyd on 202/219-5487 ext. 107 (FAX: 202/219-5455 or E-mail: firstname.lastname@example.org). Additional information and materials may be found at:
Estimated Baseline Departure Points and Adjustment Models for Performance Standards Based on Wage Records
Worksheet and Instructions for Adjusting Performance Measures Based on Wage Records for Out-of-State and Noncovered Employment
Proposed Additions to SPIR Reporting Instructions
Unemployment Insurance Program Letter No. 34-97, June 10, l997
NOTE: Attachments not available to DMS