Employment and Training Administration
Washington, D. C. 20210






March 30, 1998















Unemployment Insurance Service




Use of Services Performed by Professional Athletes Between Seasons


  1. Purpose.  To remind States of the Department of Labor's (DOL's) position concerning how services performed by professional athletes ("athletes") are used in determining eligibility for unemployment compensation (UC).

  2. References.  Section 3304(a), Federal Unemployment Tax Act (FUTA); Draft Language and Commentary to Implement the Unemployment Compensation Amendments of 1976--P.L. 94-566 ("1976 Draft Language") and Supplements 1-5; Employment and Training Administration (ETA) Handbook 301; Unemployment Insurance Program Letter (UIPL) No. 43-80, dated May 23, 1980.

  3. Background.  As a result of implementing its new method of measuring nonmonetary performance, DOL has discovered that some States treat the "between seasons" denial involving athletic services in the same manner as the "between and within terms" denial involving educational services. Although there are similarities in the language of these laws, the applications are different. As a result, DOL is issuing this UIPL to remind the States of its position on when UC is not payable on athletic services and to explain the differences between the two sections.

  4. The Between Seasons Denial. Section 3304(a)(13), FUTA, requires, as a condition of employers in a State receiving credit against the Federal unemployment tax, that--

    compensation shall not be payable to any individual on the basis of any services, substantially all of which consist of participating in sports or athletic events or training or preparing to so participate, for any week which commences during the period between two successive sport seasons (or similar periods) if such individual performed services in the first of such seasons (or similar periods) and there is a reasonable assurance that such individual will perform such services in the later of such seasons (or similar periods). [Emphasis added.]

    The Department, thus, interpreted FUTA as requiring States to deny UC to athletes on the basis of any services where "substantially all" of the services performed by the individual during the base period are based on athletically-related services. (See page 22, of Supplement 1, to the 1976 Draft Language.) To determine whether "substantially all" of the services were athletically-related, all services (athletic and non-athletic) must be considered together. If "substantially all" of the services have been performed in athletics, and a reasonable assurance that the individual will participate in athletics in the later season exists, then none of the wages may be used to establish eligibility, and all UC must be denied. Conversely, if the "substantially all" test has not been met, then FUTA permits the use of all wages to determine eligibility for UC.

    Concerning what constitutes "substantially all," DOL has previously stated that, at a minimum, "an individual shall be deemed to have performed substantially all services in such sports or athletic events if the individual engaged in such sports or athletic events for 90 percent or more of the total time spent in the base period in the performance of all covered services." (See page 22, of Supplement 1, to the 1976 Draft Language.)

    The definition of "substantially all" as 90 percent as a basis for denial of athletic services under Section 3304(a)(13), FUTA, is a minimum requirement. FUTA does not prohibit a more stringent denial. Therefore, a State may enact a law to deny benefits between seasons if the amount of time spent in athletic services was less than 90 percent of the total time spent in the performance of all services in the base period. (1976 Draft Language, Supplement 4, page 11). For example, a State may choose to deny an athlete if only 80 percent or more of the total time in the base period was spent participating in athletic services.

    Finally, a State may also deny benefits to athletes between sport seasons where there is no reasonable assurance.

  5. The Between and Within Terms Denial. Section 3304(a)(6)(A), FUTA, requires that UC not be paid based on certain educational services between and within periods under certain conditions. This denial pertains only to UC based on educational services. It does not apply to UC based on any other covered employment.

    As noted in UIPL 34-80, "since compensation is based only on base period employment, the denial must apply only to the amount of benefits based on school service performed in the base period. An individual who has participated in the labor force in a capacity other than as a school employee cannot be denied benefit entitlement based on the non-school work simply because of also being a school employee."

    Thus, an unemployed individual who performed services for an educational employer and also performed services for a non-educational employer could receive reduced UC during the summer based on the non-educational employment (even if a reasonable assurance of school employment in the next school term exists). The denial would apply only to that portion of benefits based on educational employment during the base period.

    Also, unlike the athletic services provision, the States may not apply a stricter denial to educational services.

  6. Reasonable Assurance. Reasonable assurance in the "between seasons" denial for athletic services is used in a different manner than in the "between and within terms" denial for educational services. For the professional athlete, a mere indication of his/her intent to participate in the subsequent sports season without any verification from any sports organization can constitute "reasonable assurance." (See page 56, of the 1976 Draft Language.) However, the term "reasonable assurance," as it applies to educational employees under the "between and within terms" denial, must be verified by the educational institution before it can be established as a fact. (See page 54, of the 1976 Draft Language and page 17, Supplement 1, to the 1976 Draft Language).

  7. Action Required. Administrators are to provide this information to appropriate staff.

  8. Inquiries. Inquiries should be directed to the appropriate Regional Office.