DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 18-95
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	MARY ANN WYRSCH Director Unemployment Insurance Service
SUBJECT	:	Treatment of Certain Agricultural Workers - Federal-State Unemployment Compensation (UC) Program

1. Purpose. To advise State Employment Security Agencies (SESAs) of the termination of the exemption from the definition of employment of certain agricultural workers.

2. References. The Internal Revenue Code of 1986, including the Federal Unemployment Tax Act (FUTA).

3. Background. On January 1, 1995, Section 3306(c)(1)(B), FUTA, ceased to be effective. That section exempted from the definition of employment, and therefore from the tax established by the FUTA, agricultural workers who are aliens admitted to the United States to perform agricultural labor pursuant to Sections 214(c) and 101(a)(15)(H) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H)(ii)(a)). These workers are commonly referred to as "H-2A" workers.

4. Impact on the UC Program. For FUTA-taxable services, States may continue the exclusion for services performed by H-2A workers while the employer(s) pay the full Federal tax on the exempted services without benefit of the offset credit. However, if an H-2A worker performs services for a State or local governmental entity or a nonprofit organization to which Section 3304(a)(6)(A), FUTA, pertains, States are now required to extend coverage.

5. Action Required. SESA administrators are requested to share this information with appropriate staff.

6. Inquiries. Inquiries should be directed to your Regional Office.