Title of Regulation: 16VAC5-70. Interstate and Multistate Claimants (amending 16VAC5-70-10, 16VAC5-70-20).

Statutory Authority: §§ 60.2-111 and 60.2-623 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: January 4, 2023.

Effective Date: January 19, 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 the Virginia Employment Commission to promulgate such regulatory action is derived from §§ 60.2-113, 60.2-611, and 60.2-612 of the Code of Virginia, which authorize the commission to adopt, amend, or repeal regulations as necessary, including methods of procedure and changes in procedure in handling interstate claims.

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: The amendments were prompted by changes in procedure in handling interstate claims such as automation. Furthermore, the shift from mail to email and telephone are part of an effort to increase efficiency and as such would be expected to benefit applicants by reducing processing times. The amendments are expected to increase flexibility and efficiency for applicants and reduce paperwork for other state employment agencies. There are no known economic or adverse impacts, so this action is considered noncontroversial.

Substance: Amendments include (i) deleting references to field offices; (ii) adding that a combined wage claim can only by established if there are base period wages in the paying state; (iii) clarifying how wages are paid to a claimant; (iv) removing redundant or outdated requirements; and (v) updating forms.

Issues: The primary advantage to the public is more accessibility and ease of use through modernized processes, increased usage of technology, and updated forms used by the agency. There are no disadvantages to the public. The Commonwealth will benefit by using technology to increase capacity and efficiency and updating the regulations to accurately reflect the current practices in use. 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) seeks to update 16VAC5-70, Interstate and Multistate Claimants, to conform to current practice, which has adapted to reflect the agency's shift from local offices to a modernized claim filing process.

Background. The 2014 federal Workforce Innovation and Opportunity Act required significant changes to VEC operations and service delivery. VEC reports that these changes included closing VEC local offices and offering services through "One-Stop" service centers operated with mandated partners and local Workforce Development Boards.² Further, interstate claims for all 50 states are controlled by processes established by the U.S. Department of Labor, including the State Identification Inquiry (SIDI) and Interstate Benefits Inquiry (IBIQ) systems.³ Increased automation in the SIDI/IBIQ systems have reduced the reliance on paper-based processes leading to some requirements being verified automatically and some paperwork becoming redundant.

Specifically, the proposed changes would (i) amend 16VAC5-70-10 by replacing "mail" with "Internet, telephone" as ways to file interstate claims and removing a requirement that claims be filed "in field offices, at an itinerant point or by mail;" (ii) amend 16VAC5-70-20 B to add "A combined wage claim can only be established if there are base period wages in the paying state;" and (iii) amend 16VAC5-70-20 E to remove three paper-based verification and recordkeeping requirements for paying and transferring states.

VEC reported that the proposed change to 16VAC5-70-20 B would not affect eligibility for interstate claims since there were no changes to the interstate agreement. Rather, these changes were prompted by changes in procedure in handling interstate claims such as automation in SIDI/IBIQ.⁴ Similarly, the changes to 16VAC5-70-20 E only remove paper-based requirements that are now obsolete.

Estimated Benefits and Costs. The proposed changes benefit claimants to the extent that the underlying modernization and automation has made the claim filing process more secure, reliable, and convenient. Some applicants would benefit by being able to submit interstate unemployment insurance claims via phone or email rather than mail. Some applicants may be made worse off by no longer being able to send claims through the mail; however, VEC reports that the shift from mail to email and telephone are part of an effort to increase efficiency and as such would be expected to benefit applicants by reducing processing times. VEC has not indicated any economic impact to its own operations as a result of these changes.⁵

Other states involved in interstate claims in Virginia would benefit from not having to send paperwork to Virginia for verification or recordkeeping, and VEC would likely benefit from not having to process and store hard-copies of that paperwork. These benefits have likely started to be realized since these changes have already been implemented through the automation in the SIDI/IBIQ processes.

Lastly, since the proposed changes are intended to conform the regulation to current practice, the primary benefits of the proposed changes would be to update the regulation and provide greater clarity regarding Virginia's regulatory requirements with respect to interstate and multistate claims.

Businesses and Other Entities Affected. The proposed amendments affect individuals filing interstate or multistate unemployment insurance claims in the Commonwealth as well as all 49 other states that might be party to an interstate or multistate claim.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁶ 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 are expected to increase flexibility and efficiency for applicants, and reduce paperwork for other states' employment agencies. Thus, an adverse impact is not indicated.

Small Businesses⁷ Affected.⁸ The proposed amendments do not affect requirements for small businesses at all. Thus they would not adversely affect small businesses.

Localities⁹ Affected.¹⁰ The proposed amendments would not affect any locality in particular or create new costs for any local government. Consequently, an adverse economic impact is not indicated for localities.

Projected Impact on Employment. The proposed amendments do not appear to affect total employment. The closure of local field offices may have reduced employment; however, those changes have been implemented as part of a broader modernizing process and would not result from the changes proposed here.

Effects on the Use and Value of Private Property. The proposed changes do not affect employers and thus would not affect the value of private property. The proposed amendments do not affect 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.

²See https://www.dol.gov/agencies/eta/wioa for information on the Workforce Innovation and Opportunity Act.

³These systems appear to have been first introduced in the middle 1990s and early 2000s; see https://oui.doleta.gov/dmstree/uipl/uipl94/uipl_1794.htm and https://oui.doleta.gov/dmstree/uipl/uipl2k5/uipl_0105.htm for memos relating to the rollout of internet-based applications for these processes.

⁴Email from VEC, June 24, 2022.

⁵Agency Background Document, page 5. See https://townhall.virginia.gov/l/GetFile.cfm?File=108\5957\9616\AgencyStatement_VEC_9616_v1.pdf.

⁶Pursuant 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.

⁷Pursuant 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."

⁸If 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.

⁹"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.

¹⁰Section 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 and concurs with this analysis.

Summary:

The amendments conform regulation to agency practice and procedure, remove obsolete information, accurately reflect the current claims filing process as the agency moves away from local offices and modernizes its claim filing process, and update forms required by the regulation.

16VAC5-70-10. Cooperative agreement.

A. This section shall govern the commission in its administrative cooperation with other states adopting a similar regulation for the payment of benefits to interstate claimants.

B. A week of unemployment for an interstate claimant shall consist of any week of unemployment as defined in the law of the liable state from which benefits with respect to such week are claimed.

C. Each interstate claimant shall be registered for work through any public employment office in the agent state when and as required by the law, regulations, and procedures of the agent state. Such registration shall be accepted as meeting the registration requirements of the liable state.

Each agent state shall duly report to the liable state in question whether each interstate claimant meets the registration requirements of the agent state.

D. If a claimant files a claim against any state and it is determined by such state that the claimant has available benefit credits in such state, then claims shall be filed only against such state as long as benefit credits are available in that state. Thereafter, the claimant may file claims against any other state in which there are available benefit credits. For the purposes of this chapter, benefit credits shall be deemed to be unavailable whenever benefits have been exhausted, terminated, or postponed for an indefinite period or for the entire period in which benefits would otherwise be payable or whenever benefits are affected by the application of a seasonal restriction.

E. Claims for benefits or a waiting period shall be filed by interstate claimants by mail Internet, telephone, or other such means as the commission may authorize.

Claims shall be filed in accordance with agent state regulations for intrastate claims in field offices, at an itinerant point or by mail.

1. With respect to claims for weeks of unemployment in which an individual was not working for his the individual's regular employer, the liable state shall, under circumstances which it considers good cause, accept a continued claim filed up to one week or one reporting period late. If a claimant files more than one reporting period late, an initial claim shall be used to begin a claim series and no continued claim for a past period shall be accepted.

2. With respect to weeks of unemployment during which an individual is attached to his the individual's regular employer, the liable state shall accept any claim which is filed within the time limit applicable to such claims under the law of the agent state.

F. The agent state shall, in connection with each claim filed by an interstate claimant, ascertain and report to the liable state in question such facts relating to the claimant's availability for work and eligibility for benefits as are readily determinable in and by the agent state. The liable state may utilize the telephone or mail to directly ascertain facts from the parties.

The agent state's responsibility and authority in connection with the determination of interstate claims shall be limited to investigation and reporting of relevant facts. The agent state shall not refuse to take an interstate claim.

G. The agent state shall afford all reasonable cooperation in the holding of hearings in connection with appealed interstate benefit claims.

With respect to the time limits imposed by the law of a liable state upon the filing of an appeal in connection with a disputed benefit claim, an appeal made by an interstate claimant shall be deemed to have been made and communicated to the liable state on the date when it is received by any qualified officer of the agent state, or the date it was mailed by the claimant, whichever is earlier.

H. This section shall apply in all its provisions to claims taken in and for Canada.

16VAC5-70-20. Interstate cooperation.

A. This section, approved by the Secretary of Labor pursuant to § 3304(a)(9)(B), Federal Unemployment Tax Act and adopted under § 60.2-609 of the Code of Virginia, shall govern the Virginia Employment Commission in its administrative cooperation with other states relating to the Interstate Arrangement for Combining Employment and Wages.

B. A claim for benefits shall be filed by a combined-wage claimant in the same manner as by a claimant who is eligible for benefits under the unemployment insurance law of the paying state. An initial combined-wage claim may be canceled if the cancellation request is made within the appeal period shown on the monetary determination. The request for cancellation must be submitted in writing. A combined wage claim can only be established if there are base period wages in the paying state.

C. Benefits, in all cases, shall be paid to a combined-wage claimant from the unemployment insurance fund of the paying state, and all benefit rights shall be determined by the paying state pursuant to its unemployment insurance law.

D. Wages paid by the paying state to a claimant during the paying state's applicable base period, including wages reported for that period by a transferring state as available for the payment of benefits under the arrangement, shall be included by the paying state in determining such claimant's benefit rights.

Wages, once they have been transferred and used in a determination which that established monetary eligibility for benefits in the paying state, shall be unavailable for determining monetary eligibility for benefits under the unemployment insurance law of the transferring state, except to the extent that wages are usable for redetermination purposes.

E. Each state, with respect to any combined-wage claimant, in utilizing forms approved by the Interstate Benefit Payment Committee, shall:

1. Promptly request any other state in which the claimant has worked to furnish a report of the claimant's unused covered wages during the base period of the paying state as well as his current eligibility under the law of such state.

2. When acting as the transferring state, report promptly upon the request of any state the amount of any claimant's unused covered wages during the applicable base period and the current monetary eligibility of such claimant under the law of the transferring state.

3. When acting as the paying state, send to each transferring state a copy of the initial determination, together with an explanatory statement.

4. 1. When acting as the paying state, send to the claimant a copy of the initial determination, noting his rights to appeal.

5. 2. When acting as the paying state, send to each transferring state a statement of the benefits chargeable to each state. This is done at the end of each quarter in which any benefits have been paid, and each statement shall include the benefits paid during such quarter as to each combined-wage claimant. The ratio of each charge to total benefits paid shall be equal to the ratio of the wages reported by the transferring state (and used in the monetary determination) to the total wages used in the determination.

F. A transferring state shall, as soon as practicable after receipt of a statement as set forth in subsection E of this section, reimburse the paying state accordingly.

G. A claimant's wages shall not be combined, notwithstanding any other provision of this arrangement, if the paying state finds that based on combined wages the claimant would be ineligible for benefits. Wages reported by the transferring state shall in such event be returned to and reinstated by such state. The provisions of the interstate benefit payment arrangement shall apply to each claimant.

H. Whenever this plan applies, it will supersede any inconsistent provision of the Interstate Benefit Payment Plan and the regulation thereunder.

FORMS (16VAC5-70)

Initial Interstate Claim, IB-1 (rev. 11/88)

Continued Interstate Claim, IB-2 (rev. 6/89).

Claimant/Employer Separation Statement, IB-3 (rev. 6/88).

Request for Transfer of Wages Interstate Arrangement Statement for Combining Employment and Wages, IB-4 (rev. 6/88).

Instructions for Self-Filing Interstate Claims, IB-ISF (rev. 5/90).

Interstate Internet Information Sheet, IB-7 (rev. 6/89).

Interstate Eligibility Review, IB-10 (rev. 6/88).

Interstate Report of Job Search Verification, IB-10B (eff. 8/82).

Interstate Tracer, IB-12 (rev. 10/79).

Interstate Memorandum, IB-13 (rev. 1/60).

Interstate Request for Reconsideration of Monetary Determination/Wage Credits, IB-14 (rev. 6/89).

Request for Claim Status Information, IB-15 (rev. 4/81).

Interstate Change of Address, IB-16 (rev. 8/83).

Speed Message, IB-20 (rev. 5/76).

Important Information for Interstate Claimants.

Important Notice to Combined-Wage Claimants, VEC-CW-30 (rev. 5/85).

Benefit Payment Audit, IB-8605 (rev. 5/87).

Notice of Wage Transfer Determination, VEC-CW-54 (rev. 2/93)

Initial Interstate Claim, VEC 2025 IB-1 (rev. 6/2022)

Interstate Request for Reconsideration of Monetary Determination/Wage Credits, VUIS IB-14 (rev. 9/2017)

Notice of Wage Transfer Determination, VEC-CW-54 (rev. 7/2016)

Combined Wage Claim Cancellation Request, VEC-CW-31 (rev. 3/1994)