ETA Final Rule ETA Final Rule
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Part III
Department of Labor
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Employment and Training Administration
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20 CFR Part 625
Disaster Unemployment Assistance Program; Request for Comments; Interim
Final Rule
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 625
RIN 1205-AB31
Disaster Unemployment Assistance Program; Interim Final Rule;
Request for Comments
AGENCY: Employment and Training Administration, Department of Labor.
ACTION: Interim final rule; request for comments.
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SUMMARY: The Employment and Training Administration (ETA) of the
Department of Labor (Department) is issuing this interim final rule,
effective upon publication, to clarify eligibility for disaster
unemployment assistance (DUA) in the wake of the major disasters
declared as a result of the terrorist attacks of September 11, 2001. To
provide an opportunity for public participation in this emergency
rulemaking, this interim final rule includes a post-publication comment
period. The Department will publish a final rule after taking into
account any comments that are received.
DATES: This interim final rule is effective November 13, 2001. Written
comments must be received in the Department on or before December 13,
2001.
ADDRESSES: Written comments on this interim final rule may be mailed or
delivered to Grace A. Kilbane, Director, Office of Workforce Security,
Employment and Training Administration, U.S. Department of Labor, 200
Constitution Avenue, N.W., Room S-4231, Washington, DC 20210.
All comments received will be available for public inspection
during normal business hours in Room S-4231 at the above address.
FOR FURTHER INFORMATION CONTACT: Betty Castillo, Division Chief,
Division of Unemployment Insurance Operations, Office of Workforce
Security, Employment and Training Administration (ETA), U.S. Department
of Labor, 200 Constitution Avenue, N.W., Room S-4231, Washington, DC
20210. Telephone: (202) 693-3209 (this is not a toll-free member);
facsimile: (202) 693-3229; E-mail: bcastillo@doleta.gov.
SUPPLEMENTARY INFORMATION:
I. The Disaster Unemployment Assistance Program
Section 410(a) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (Stafford Act) (42 U.S.C 5177(a)) sets forth
the framework of the Disaster Unemployment Assistance (DUA) Program.
The President is authorized by section 410(a) of the Stafford Act to
provide to any individual unemployed as a result of a major disaster
declared by the President under the Stafford Act ``such benefit
assistance as he deems appropriate while such individual is unemployed
for the weeks of such unemployment with respect to which the individual
is not entitled to any other unemployment compensation * * * or waiting
period credit.'' Section 410(a) provides that DUA is to be furnished to
individuals for no longer than 26 weeks after the major disaster is
declared. Further, for any week of unemployment, a DUA payment (a type
of unemployment compensation (UC)) is not to exceed the maximum weekly
benefit amount authorized under the applicable UC state law, as
specified in the Department's DUA regulations implementing section
410(a) of the Act.
The Department operates the DUA program under a delegation of
authority (51 FR 4988, February 10, 1986) to the Secretary of Labor
from the Director of the Federal Emergency Management Agency (FEMA).
The Secretary of Labor has promulgated and published regulations for
the DUA program at part 625 of title 20 of the Code of Federal
Regulations. The DUA Program is administered by the states in
accordance with an agreement each state has signed with the Secretary
of Labor.
II. Explanation of the Interim Final Rule
The Department is adding, at Sec. 625.5(c), a definition of the
phrase ``unemployment is a direct result of the major disaster,'' used
in Secs. 625.5(a)(1) an (b)(1) for determining if a worker or self-
employed individual's unemployment is caused by a major disaster.
Section 410(a) of the Stafford Act provides, in pertinent part, that
the President is authorized to provide benefit assistance to any
individual ``unemployed as a result of a major disaster.'' The
Department has consistently interpreted this phrase in its regulations
as requiring, for DUA eligibility, that the individual's ``unemployment
is a direct result of the major disaster.'' However, the phrase has
never been defined in the Department's regulations. (Note that
paragraphs (a)(2)-(a)(5) and (b)(2)-(b)(4) of Sec. 625.5 also provide
for other circumstances where an individual's unemployment is caused by
a major disaster. However, these provisions are not involved here.)
The recent terrorist attacks of September 11, 2001, resulting in
declarations of major disasters in New York City and Arlington County,
Virginia, were of catastrophic proportions. They presented a number of
situations the regulations did not contemplate, such as the extended
closure of Reagan National Airport. In order to address these types of
situations, the Department is now defining the phrase ``unemployment is
a direct result of the major disaster'' to clarify eligibility. The
Department has received many inquiries regarding whether an
individual's unemployment was a direct result of either the New York or
Arlington disasters. By defining the phrase ``unemployment is a direct
result of the major disaster,'' the Department will ensure greater
uniformity. This is consistent with the first and second rules of
construction of Secs. 625.1(b) and (c) of the DUA regulations, which
provide that sections 410 and 423 of the Stafford Act and the
implementing regulations must be construed liberally to carry out the
purposes of the Act and to assure, insofar as possible, the uniform
interpretation and application of the DUA provisions of the Act
throughout the United States.
Definition of ``Unemployment is a Direct Result of the Major Disaster''
The Department interprets the phrase ``unemployment is a direct
result of the major disaster'' under paragraphs (a)(1) and (b)(1) of
Sec. 625.5 to mean that an individual's unemployment must be an
immediate result of the disaster itself, and not the result of a longer
chain of events precipitated or exacerbated by the major disaster. This
rule seeks to clarify that an individual's unemployment is a direct
result of the major disaster if the unemployment resulted from: the
physical damage or destruction of the work site; the physical
inaccessibility of the work site due to a federal government closure of
the work site, in immediate response to the major disaster; or lack of
work, or loss of revenues, provided that the employer, or the business
in the case of a self-employed individual, prior to the disaster,
received at least a majority of its revenue or income from either an
entity damaged or destroyed in the disaster, or an entity closed by the
federal government in immediate response to the disaster. This rule
simply sets forth whose unemployment is a direct result of a major
disaster. Once that determination is made, however, claimants covered
under this new definition must still meet the same
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eligibility criteria as all other claimants in order to receive DUA.
The Department recognizes that the terrorist attacks of September
11 had a ``ripple effect'' throughout the economy, and that many
businesses nationwide suffered serious declines due to the effect these
disasters had on commerce. However, individuals who became unemployed
as the result of a general decline in commerce in response to the major
disasters are not unemployed as a ``direct result'' of the major
disasters and thus are not eligible for DUA.
The above considerations apply equally to any major disaster. They
lead the Department to conclude that workers and self-employed
individuals whose work site, for example, is outside a major disaster
area, and who no longer have a job because the federal government
either closed or took over the job site in response to the major
disaster, are potentially eligible for DUA. This includes only
employees and self-employed individuals at facilities closed by the
federal government. Examples of eligible individuals in the case of an
airport shutdown might include airport employees, owners and employees
of restaurants and shops located in airport terminal buildings, and
workers or service providers for these and other facilities where the
above conditions are met. However, workers at other airports not closed
by the federal government would not be eligible for DUA. Individuals
potentially eligible for DUA would also include employees and self-
employed individuals who could not perform services or get to their
workplace because a federal agency, such as FEMA, took over such site
for disaster administration purposes. Similarly, the federal government
may, as an immediate emergency response to the major disaster, close
certain facilities such as bridges or tunnels. Employees of those
facilities could, therefore, be potentially eligible for DUA.
As noted above, an employee or self-employed individual may be
eligible for DUA if the major disaster caused physical damage or
destruction of an entity which, before the major disaster, provided at
least a majority of the employer's or self-employed individual's
revenue or income. Where less than a majority of the employer's or
self-employed individual's revenue or income came from that entity, the
link to the unemployment is too tenuous to be considered direct under
the regulations. Just as this test may be employed to determine whether
employees of suppliers of goods or services to facilities physically
damaged by the major disaster may be eligible for DUA, so too would
that analysis be applicable to employees of suppliers of goods or
services to other facilities closed or taken over by the federal
government in immediate response to the major disaster. Thus, if one of
those facilities provided at least a majority of the revenue or income
of that employer or self-employed individual, the employees of that
business or that self-employed individual may be eligible for DUA.
Where it cannot be established that at least a majority of the
revenue or income of a business or self-employed individual was
dependent upon providing goods or services to the businesses at these
facilities, DUA eligibility must be denied. For example, a taxicab
driver would be potentially eligible for DUA where a majority of his or
her business depended on providing transportation services between
points which include areas cordoned off because of the physical damage
of the major disaster or because facilities were closed or commandeered
by the federal government. On the other hand, DUA eligibility must be
denied a taxicab driver who cannot establish that a majority of his or
her livelihood depended on providing transportation services between
points which include areas cordoned off because of either the physical
damage of the major disaster or the closing or commandeering of the
facilities by the federal government.
Further, DUA is payable only for those weeks of unemployment during
the disaster assistance period that continues to be the direct result
of the major disaster. Therefore, if the state agency finds that an
eligible DUA applicant's unemployment can no longer be directly
attributed to the major disaster, the applicant is no longer unemployed
as a direct result of the disaster and is no longer eligible for DUA.
Publication of Interim Final Rule
This rule interprets the statutory term in section 410(a) of the
Stafford Act requiring, as a condition of DUA eligibility, that an
individual be unemployed as a ``result'' of a major disaster. The
Department has determined that the new Sec. 625.5(c) defining this
statutory term, should be added immediately to clarify eligibility and
assure uniform interpretation and application nationwide. Notice-and-
comment rulemaking is not required under 5 U.S.C. 553(b)(A) because the
rule is interpretative. However, because of the public interest in this
program, the Department has included a post-publication comment period
in this interim final rule. Any comments received on the interim final
rule adding Sec. 625.5(c) will be considered before a final rule is
issued.
Even were this not an interpretative rule, good cause, under 5
U.S.C. 553(b)(B), exists for adding Sec. 625.5(c) in an interim final
rule with a post-publication comment period because a pre-publication
comment period is impracticable and contrary to the public interest.
Communities are still recovering and individuals are filing claims due
to the major disasters arising from the terrorist attacks of September
11, 2001. To not have the regulations in place at this time would be
contrary to the public interest, especially under the current
exigencies. Because of the scope of the effects of this disaster, this
clarification will effect claims made through many States. In order to
assure that all States will be able to respond as promptly and
accurately as possible to this disaster, this regulation must be
effective immediately.
Effective Date
The Department has determined that this interim final rule will be
effective on publication. This rule clarifies which unemployed workers
about whom eligibility questions have arisen are potentially eligible
for DUA benefits. The exception to a 30-day delay in the effective date
at 5 U.S.C. 553(d)(1) applies because the rule clarifies a statutory
term which has the effect of relieving a restriction on the eligibility
of individuals to receive benefits under the DUA Program.
Moreover, this rule interprets the statutory term unemployed as a
``result'' of a major disaster in section 410(a) of the Stafford Act.
Therefore, under 5 U.S.C. 553(d)(2), a 30-day waiting period for the
rule to become effective is not required because this is an
interpretative rule.
Lastly, the Department has determined, under 5 U.S.C. 553(d)(3),
that good cause exists for making the addition of Sec. 625.5(c)
effective upon publication in the Federal Register. As explained above,
due to the exigencies arising from the events of September 11, 2001,
the Department believes it contrary to the public interest and harmful
to potential beneficiaries not to have the changes in place while so
many individuals are recovering from those major disasters. Therefore,
these amendments are effective immediately.
Executive Order 12866
This interim final rule is a ``significant regulatory action''
within the meaning of Executive Order 12866 because it meets the
criteria of section 3(f)(4) of that Order in that it raises
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novel or legal policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order. Accordingly, this rule was submitted to, and reviewed by, the
Office of Management and Budget. It is not ``economically significant''
within the meaning of section 3(f)(1) of that Executive Order because
it will not have an annual effect on the economy of $100 million or
more. Rather, the Department estimates the cost of benefits under this
rule for the major disasters of September 11, 2001, to be $1.47 million
and, therefore, projects that the annual cost of benefits under this
rule will be far less than $100 million.
The Department has evaluated the rule and finds it consistent with
the regulatory philosophy and principles set forth in Executive Order
12866, which governs agency rulemaking. The rule will not impact states
and state agencies in a material way because it would not impose any
new requirements on states. Instead, the rule simply clarifies the
rules states use to determine the eligibility of individuals affected
by these new types of disasters now affecting the nation, such as the
terrorist attacks of September 11, 2001, and the benefits are financed
by the federal government.
Paperwork Reduction Act
The Department has determined that this interim final rule contains
no new information collection requirements. The existing information
collection requirements are approved under Office of Management and
Budget control number 1205-0051.
Executive Order 13132
The Department has reviewed this interim final rule in accordance
with Executive Order 13132 regarding federalism. The order requires
that agencies, to the extent possible, refrain from limiting state
policy options, consult with states prior to taking any actions which
would restrict states' policy options, and take such action only when
there is clear constitutional authority and the presence of a problem
of national scope. Because this is a federal benefit program, the
Department has determined that the rule does not have federalism
implications.
Executive Order 12988
The Department drafted and reviewed this rule in accordance with
Executive Order 12988, Civil Justice Reform, and will not unduly burden
the federal court system. The rule has been written to minimize
litigation and provide a clear legal standard for affected conduct, and
has been reviewed carefully to eliminate drafting errors and
ambiguities.
Unfunded Mandates Reform Act of 1995 and Executive Order 12875
The Department has reviewed this interim final rule in accordance
with the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et
seq.) and Executive Order 12875. The Department has determined that
this rule does not include any federal mandate that may result in
increased expenditures by state, local, or tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year. Accordingly, the Department has not prepared a budgetary impact
statement.
Regulatory Flexibility Act
The Department has determined that this interim final rule will not
have a significant economic impact on a substantial number of small
entities. The rule sets forth the terms under which states and state
agencies, which are not within the definition of ``small entity'' under
5 U.S.C. 601(6), will pay federal benefits. Under 5 U.S.C. 605(b), the
Secretary has certified to the Chief Counsel for Advocacy of the Small
Business Administration to this effect. Accordingly, no regulatory
flexibility analysis is required.
Effect on Family Life
The Department certifies that this interim final rule has been
assessed in accordance with section 654 of Pub. L. 105-277, 112 Stat.
2681, for its effect on family well-being. The Department concludes
that the rule will not adversely affect the well-being of the nation's
families. Rather, it should have a positive effect on family well-being
by providing benefits to more individuals whose households have been
affected by major disasters.
Congressional Review Act
This interim final rule is not a major rule for purposes of the
Congressional Review Act.
Catalogue of Federal Domestic Assistance Number
This program is listed in the Catalogue of Federal Domestic
Assistance at No. 17.225, ``Disaster Unemployment Assistance (DUA).''
List of Subjects in 20 CFR Part 625
Disaster assistance, Labor, and Unemployment compensation.
Words of Issuance
For the reasons set forth in this preamble, part 625 of chapter V
of title 20, Code of Federal Regulations, is amended as follows:
PART 625--DISASTER UNEMPLOYMENT ASSISTANCE
1. The authority for part 625 continues to read as follows:
Authority: 42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5189a(c);
42 U.S.C. 5201(a); Executive Order 12673 of March 23, 1989 (54 FR
12571); delegation of authority from the Director of the Federal
Emergency Management Agency to the Secretary of Labor, effective
December 1, 1985 (51 FR 4988); Secretary's Order No. 4-75 (40 FR
18515).
2. Section 625.5 is amended by adding a new paragraph (c) to read
as follows:
Sec. 625.5 Unemployment caused by a major disaster.
* * * * *
(c) Unemployment is a direct result of the major disaster. For the
purposes of paragraphs (a)(1) and (b)(1) of this section, a worker's or
self-employed individual's unemployment is a direct result of the major
disaster where the unemployment is an immediate result of the major
disaster itself, and not the result of a longer chain of events
precipitated or exacerbated by the disaster. Such an individual's
unemployment is a direct result of the major disaster if the
unemployment resulted from:
(1) the physical damage or destruction of the place of employment;
(2) the physical inaccessibility of the place of employment due to
its closure by the federal government, in immediate response to the
disaster; or
(3) lack of work, or loss of revenues, provided that, prior to the
disaster, the employer, or the business in the case of a self-employed
individual, received at least a majority of its revenue or income from
an entity that was either damaged or destroyed in the disaster, or an
entity closed by the federal government in immediate response to the
disaster.
Signed at Washington, D.C. on November 7, 2001.
Elaine L. Chao,
Secretary of Labor.
Emily S. DeRocco,
Assistant Secretary of Labor.
[FR Doc. 01-28412 Filed 11-9-01; 8:45 am]
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