Title of Regulation: 16VAC5-10. Definitions and General Provisions (amending 16VAC5-10-10).

Statutory Authority: § 60.2-111 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: December 21, 2022.

Effective Date: January 9, 2023.

Agency Contact: Jacob Shuford, Regulatory Coordinator, Virginia Employment Commission, 6606 West Broad Street, Henrico, VA 23230, telephone (804) 486-2360, FAX (804) 786-9034, or email jacob.shuford@vec.virginia.gov.

Basis: Statutory authority for this regulatory action is derived from §§ 60.2-113, 60.2-611, and 60.2-612 of the Code of Virginia, which authorize the Virginia Employment Commission to adopt, amend, or rescind such rules and regulations deemed necessary, including methods of procedure and regulations concerning parties reporting to or filing claims with the commission, to further the mandated goal of greater employment stabilization throughout the Commonwealth of Virginia.

Purpose: The commission must take all necessary steps to aid employment stabilization in the Commonwealth of Virginia under its duty to administer the Virginia Unemployment Compensation Act (§ 60.2-100 et seq. of the Code of Virginia) for the welfare of the citizens of the Commonwealth through unemployment benefits, labor exchange system, job services programs, and solvency of the administered trust fund. Adapting to the shift away from brick and mortar local offices through an increased utilization of technology and stream lining of claim filing processes are necessary to gain efficiency in the pursuit of those mandated goals.

Rationale for Using Fast-Track Rulemaking Process: This action is noncontroversial because the amendments are merely updating definitions so that the agency regulations better align with the Code of Virginia and current agency practices and procedures.

Substance: Changes are recommended for the following definitions within 16VAC5-10-10: Definitions:

1. Amend the term "area of high unemployment" to delete "served by a particular field office" and replace "first of the last two" with "most recent."

2. Combined-wage claimant is amended to replace "more than" with "Virginia and" add "other" to the phrase "one other state and who has filed a claim."

3. Continued claim is amended to add "or weekly" to the term (i.e. "continued or weekly claim").

4. Field office is amended to replace the term "field office" with "workforce center."

5. Initial claim is amended to delete ", additional, or reopened."

6. Interstate benefit payment plan is amended to replace "the plan approved by the National Association of State Workforce Agencies" with "an approved plan"

7. Interstate claimant is amended to delete "or more."

8. Jurisdiction is amended to add ", or any other area owned or possessed by the United States" to the end of the definition.

9. New claim is amended to delete "person at" and replace "field office, or other location designated" with "manner prescribed."

10. Partially unemployed individual is amended to delete both appearances of "full time."

11. Regional adjudication centers is amended to replace term with "adjudication center" and replace "a regional" with "an" and delete ", including one-stop centers."

12. State is amended to rewrite as "refers to the Commonwealth of Virginia, including land or premises located therein, owned, held or possessed by the United States, the states of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands."

13. Telephone hearing is amended to add "or special" after "before the appeals" and before "examiner by way of."

Issues: The primary advantage to the public is increased clarity into agency terms associated with the modernized claims process, increased usage of technology, and shift from away from brick and mortar local offices. Specifically, this action is updating the definitions reflecting those changes. There are no disadvantages to the public. The Commonwealth will benefit by aligning the definitions with current practices, gaining efficiency with the updated systems, streamlining the claims filing process, and modernizing operations. There are no disadvantages to the agency.

Department of Planning and Budget's Economic Impact Analysis: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 14 (as amended, July 16, 2018). The analysis presented represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. The Virginia Employment Commission (VEC) proposes to update definitions regarding unemployment claim processing.

Background. VEC is charged with aiding employment stabilization under its duty to administer the Virginia Unemployment Compensation Act for the welfare of the citizens of the Commonwealth through unemployment benefits, the labor exchange system, job services programs, and solvency of the administered trust fund. This chapter of the regulation contains definitions and general provisions.

VEC reports that the federal Workforce Innovation and Opportunity Act required dramatic changes in how it delivered services across the Commonwealth. Consequently, starting in September 2018, VEC modernized its unemployment claim filing process by shifting away from pen-and-paper based claim filing to online filing, which necessitates changes to this regulation regarding benefits, interstate and multistate claimants, and adjudication. VEC is proposing to make these changes to different chapters through individual regulatory actions.² This action updates the definitions to reflect the changes necessitated by the other actions.

Estimated Benefits and Costs. This action updates definitions that are necessitated by the proposed changes in other chapters of this regulation to reflect the modernized unemployment claim process. The changes to definitions in this action do not have any significant economic effect other than providing internal consistency of language throughout this regulation.

Businesses and Other Entities Affected. The proposed amendments apply to all individuals and businesses required to file or report an unemployment claim or event.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.³ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. As noted, the proposed changes in this action are not expected to have a significant economic effect. Thus, no individual or business appears to be adversely affected by the proposed changes to definitions.

Small Businesses⁴ Affected.⁵ The proposed amendments do not appear to adversely affect small businesses.

Localities⁶ Affected.⁷ The proposed amendments do not disproportionately affect any particular localities and do not introduce costs for local governments.

Projected Impact on Employment. The proposed amendments do not affect employment.

Effects on the Use and Value of Private Property. The proposed amendments do not affect the use and value of private property or the real estate development costs.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²https://townhall.virginia.gov/l/viewstage.cfm?stageid=9615

https://townhall.virginia.gov/l/viewstage.cfm?stageid=9616

https://townhall.virginia.gov/l/viewstage.cfm?stageid=9617

³Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁴Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁵If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁶"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁷Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The agency has reviewed the economic impact analysis prepared by the Department of Planning and Budget. The agency concurs with this analysis.

Summary:

The amendments update definitions to reflect the modernized unemployment claim process and accurately reflect the claims filing process as the agency increasingly moves away from local offices and into a modernized claim filing process.

16VAC5-10-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Act" means the Virginia Unemployment Compensation Act as set out in Title 60.2 (§ 60.2-100 et seq.) of the Code of Virginia.

"Additional claim" means a claim for unemployment compensation benefits filed within an existing benefit year by a claimant who has had an intervening period of employment since filing a prior claim.

"Adjudication center" means a service location designated by the commission as an official station for agency staff who are primarily involved in adjudication of disputed benefit and tax liability issues. An adjudication center may be co-located with or incorporated into other agency service locations.

"Agency" means any officer, board, commission, or other authority charged with the administration of the unemployment compensation law of a participating jurisdiction.

"Agent state" means any state in which an individual files a claim for benefits from another state.

"Area of high unemployment" means that geographic area of Virginia, including all cities and counties served by a particular field office, where the average unemployment rate as determined by the commission has been 10% or more during the first of the last two more recent completed calendar quarters.

"Benefits" means the compensation payable to an individual, with respect to his unemployment, under the unemployment insurance law of any state or under any federal program in which such compensation is payable in accordance with applicable state law.

"Cash value of remuneration" means the value of rent, housing, lodging, board, or any other payment in kind, in addition to or in lieu of money wages, as agreed upon by the employing unit and the worker at the time of entering into the contract of hire or thereafter. If there is no such agreement, the value thereof shall be an amount equal to a fair estimate of what the worker would, according to his custom and station, pay for similar goods, services, or accommodations in the same community at premises other than those provided by the employing unit.

"Combined-wage claimant" means a claimant who has covered wages under the unemployment compensation law of more than Virginia and one other state and who has filed a claim under the Interstate Arrangement for Combining Employment and Wages.

"Commission" means the Virginia Employment Commission as defined in § 60.2-108 of the Code of Virginia.

"Continued claim" or "weekly claim" means a request for the payment of unemployment compensation benefits which that is made after the filing of an initial claim.

"Days" means consecutive calendar days unless the use of the term in this chapter specifies otherwise.

"Ex parte communication" means any communication with the presiding appeals examiner or special examiner, regardless of the medium, not in the agency's record regarding substantive, procedural, or other matters that could be reasonably expected to influence the outcome of the case or case decision pending before the agency and for which reasonable notice to all parties is not given at the time of the communication. "Parties" shall include claimants and any employers or employing units that have a direct interest in the outcome of the pending case.

"Field office" means an office of the commission, which may include one-stop centers, job information, referral services, and unemployment insurance services.

"Initial claim" means any new, additional, or reopened claim for unemployment compensation benefits.

"In-person hearing" means a hearing where the parties, witnesses, and representatives personally appear before the appeals examiner or special examiner.

"Interested jurisdiction" means any participating jurisdiction to which an election submitted under 16VAC5-50-10 et seq. is sent for its approval and "interested agency" means the agency of such jurisdiction.

"Interstate Benefit Payment Plan" means the an approved plan approved by the National Association of State Workforce Agencies under which benefits shall be payable to unemployed individuals absent from the state (or states) in which benefit credits have been accumulated.

"Interstate claimant" means an individual who claims benefits under the unemployment insurance law of one or more liable states state through the facilities of an agent state. The term "interstate claimant" shall not include any individual who customarily commutes from a residence in an agent state to work in a liable state unless the commission finds that this exclusion would create undue hardship on such claimants in specified areas.

"Jurisdiction" means any state of the Commonwealth of Virginia, including land or premises located therein, owned, held, or possessed by the United States, the states of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands.

"Liable employer" means the employing unit for whom a claimant last worked during 30 days, whether or not such days were consecutive, or for 240 hours prior to filing an initial, additional, or reopened claim for benefits.

"Liable state" means any state against which an individual files, through another state, a claim for benefits.

"Mass separation" means a separation (permanently, for an expected duration of at least seven days, or for any indefinite period) at or about the same time and for the same reasons (i) of at least 20% of the total number of workers employed in an establishment, or; (ii) of at least 50% of the total number of workers employed in any division or department of any establishment,; or (iii) notwithstanding any of the foregoing, a separation at or about the same time and for the same reason of 25 or more workers employed in a single establishment.

"New claim" means a claim for unemployment compensation benefits filed in person at a field office, or other location designated manner prescribed by the commission, by an individual who does not have an existing benefit year established.

"Notification lists" means lists used by the commission to notify interested parties of regulatory actions pursuant to this chapter. Such lists may include electronic mailing lists maintained through a state website or regular mailing lists maintained by the commission.

"Partially unemployed individual" means an individual who during a particular week (i) had earnings, but less than his weekly benefit amounts, (ii) was employed by a regular employer, and (iii) worked, but less than his normal customary full-time hours for such regular employer because of lack of full-time work.

"Participating jurisdiction" means a jurisdiction whose administrative agency has subscribed to the Interstate Arrangement for Combining Employment and Wages and whose adherence thereto has not terminated.

"Part-total unemployment" means the unemployment of any individual in any week of less than full-time work in which he earns some remuneration (but less than his weekly benefit amount) and during which he is not attached to a regular employer; or, in any week in which he has wages such as holiday or vacation pay which that are less than his weekly benefit amount, but where no actual work has been performed regardless of his attachment to a regular employer.

"Paying state" means (i) the state in which a combined-wage claimant files a combined-wage claim, if the claimant qualifies for unemployment benefits in that state on the basis of combined employment and wages, and combining will increase either the weekly benefit amount or the maximum benefit amount,; or (ii) if the state in which a combined-wage claimant files a combined-wage claim is not the paying state under the criterion set forth in clause (i) above of this definition, or if the combined-wage claim is filed in Canada or the U.S. Virgin Islands, then the paying state shall be that state where the combined-wage claimant was last employed in covered employment among the states in which the claimant qualifies for unemployment benefits on the basis of combined employment and wages.

"Regional adjudication centers" means a service location designated by the commission as an official station for agency staff who are primarily involved in adjudication of disputed benefit and tax liability issues. A regional adjudication center may be co-located with or incorporated into other agency service locations, including one-stop centers.

"Reopened claim" means the first claim for unemployment compensation benefits filed within an existing benefit year after a break in the claim series caused by any reason other than intervening employment.

"Services customarily performed by an individual in more than one jurisdiction" means services performed in more than one jurisdiction during a reasonable period, if the nature of the services gives reasonable assurance that they will continue to be performed in more than one jurisdiction or if such services are required or expected to be performed in more than one jurisdiction under the election.

"Severance and dismissal pay" means, for the purpose of taxation and benefits, all payments made by an employer at or subsequent to an employee's separation, except that payments which that are exclusively for services performed prior to separation shall not be treated as severance or dismissal pay. Such payments may be allocated by the employer for any period following separation so long as such allocation is at a weekly rate at least equal to the average weekly wage received by such employee during the last calendar quarter preceding the separation, and will in such cases be deemed to have been paid in those weeks covered by the allocation. If no allocation is made by the employer, such payments will be deemed allocated to the last day of work.

"Split hearing" means an in-person hearing where one or more parties, representatives, or witnesses are allowed to participate telephonically.

"State" means one of the Commonwealth of Virginia, including land or premises located therein, owned, held, or possessed by the United States, the states of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands, and the District of Columbia.

"Telephone hearing" means a hearing where all parties, witnesses, and representatives participate before the appeals or special examiner by way of a telephone conference call.

"Total unemployment" means the unemployment of an individual for any week in which he performs no work and has no wages payable to him, regardless of whether or not he is attached to an employing unit's payroll.

"Transferring state" means a state in which a combined-wage claimant had covered employment and wages in the base period of a paying state, and which that transfers such employment and wages to the paying state for its use in determining the benefit rights of such claimant under its law.

"Workforce center" means an office of the commission, which may include one-stop centers, job information, referral services, and unemployment insurance services.