PROPOSED RULEMAKING
DEPARTMENT OF
LABOR AND INDUSTRY
[ 34 PA. CODE CH. 61 ]
Unemployment Compensation; Administration
[40 Pa.B. 2639]
[Saturday, May 22, 2010]The Department of Labor and Industry (Department), Office of Unemployment Compensation Benefits and Office of Unemployment Compensation Tax Services, propose to amend Chapter 61 (relating to administration) to read as set forth in Annex A.
A. Statutory Authority
This rulemaking is proposed under section 201(a) of the Unemployment Compensation Law (law) (43 P. S. § 761(a)) which authorizes the Department to promulgate and amend rules and regulations necessary to administer the law.
B. Background and Description of Proposed Rulemaking
This proposed rulemaking, which covers ten sections of Chapter 61, updates the Department's regulations to conform to current law and practice.
Section 61.1 (relating to definitions) contains definitions for Part II, Subpart A (relating to unemployment compensation). Definitions regarding the organization of the Department are proposed to be amended or added to reflect the current structure of the Department. Also, obsolete definitions are deleted.
Proposed amendments to § 61.3 (relating to wages) distinguish the tax treatment of delayed wage payments from the existing approach that will continue to be used for benefit purposes. For purposes of taxation, the proposed amendments treat wages as paid on the date the employer actually pays them. This treatment reflects the decision of the United States Supreme Court in United States v. Cleveland Indians Baseball Company, 532 U.S. 2001. In that case, the Court held that, for Federal employment tax purposes, back wages should be attributed to the date on which they actually are paid. The Department is required to follow this decision when allocating wages for tax purposes because section 4(x)(6) of the law (43 P. S. § 753(x)(6)) requires that payments subject to taxation under the Federal Unemployment Tax Act (26 U.S.C.A. §§ 3301—3311) also are taxed as wages under the law. For benefits purposes, however, the existing treatment of wages remains in effect. That is, when a payment of wages is delayed, the wages are considered paid on the day on which the employer generally pays amounts definitely assignable to a payroll period.
Section 61.3 is also amended regarding the valuation of remuneration made in mediums other than cash. In addition to prescribing the general rule that the value of noncash compensation is its fair market value, this section specifies minimum values to be placed on meals and lodging by reference to recognized Federal standards, subject to rebuttal by the employer.
When sick pay is paid to a worker by a third party, proposed § 61.3a (relating to third party sick pay) provides that the third party is responsible to report, and pay unemployment compensation (UC) taxes on, the sick pay. An exception provides that the third party may meet certain requirements to shift that responsibility to the employer.
Proposed amendments to § 61.11 (relating to persons eligible for compensation and expenses) provide that an agent of an employer, like the employer he represents, is ineligible for witness fees for participating in an administrative proceeding if the employer is an interested party in the proceeding.
Proposed amendments to § 61.12 (relating to reimbursable items) delete specific amounts for the mileage allowance and the per diem fee for witnesses. As amended, the section will provide that witnesses may be paid compensation and expenses in accordance with 42 Pa.C.S. (relating to Judicial Code).
Sections 61.21—61.24, regarding confidentiality of information, are proposed to be rescinded and replaced by § 61.25 (relating to confidentiality of information and fees), which implements new Federal confidentiality requirements that were recently promulgated by the United States Department of Labor.
C. Affected Persons
Because this proposed rulemaking amends the definitions for all chapters of the UC regulations, it potentially affects the 280,000 employers covered by the law and UC claimants who file approximately 617,000 new applications for benefits each year. Specifically, this proposed rulemaking would affect payors and recipients of delayed wages and noncash compensation, witnesses at UC administrative proceedings and third party payors of sick pay.
D. Fiscal Impact
Commonwealth and the Regulated Community
Some provisions of this proposed rulemaking reflect current practice and, as a result, would not involve fiscal impact. The section prescribing the date when wages are considered paid for tax purposes and the section updating the valuation of noncash compensation could affect the amount of UC tax owed by certain employers, and the latter provision could cause some claimants to qualify for an increased amount of UC benefits. While the Department is unable to estimate the amount of monetary impact from these sections, the number of employers and claimants affected is expected to be small and the overall fiscal impact is expected to be minimal.
Political Subdivisions
This proposed rulemaking does not affect political subdivisions, except to the extent that they are employers covered by the law.
General Public
This proposed rulemaking does not affect the general public.
E. Paperwork Requirement
This proposed rulemaking will not impose additional paperwork requirements on the regulated community.
F. Sunset Date
The proposed rulemaking will be monitored through practice and application. Therefore, no sunset date is designated.
G. Effective Date
The proposed rulemaking will be effective upon final-form publication in the Pennsylvania Bulletin, with one exception. Amended § 61.3 will be in effect as to wages paid on or after the first January 1 following publication.
H. Public Comment
Interested parties are invited to submit written comments, objections or suggestions about the proposed rulemaking to Michael L. Ziemke, Office of Unemployment Compensation Tax Services, Room 900, Labor and Industry Building, 651 Boas Street, Harrisburg, PA 17121 within 30 days following publication of this proposed rulemaking in the Pennsylvania Bulletin. Written comments received by the Department may be made available to the public.
Comments may also be submitted electronically to mziemke@state.pa.us. A subject heading referencing the proposed rulemaking, name and return mailing address must be included in each transmission. In addition, electronic comments shall be contained in the text of the transmission, not in an attachment.
For further information on this proposed rulemaking, contact Michael L. Ziemke at (717) 772-1581.
I. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 10, 2010, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the House Labor Relations Committee and the Senate Labor and Industry Committee (Committees). A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, if IRRC has objections to a portion of the proposed rulemaking, it will notify the Department within 30 days of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of comments, recommendations or objections raised.
SANDI VITO,
SecretaryFiscal Note: 12-78. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 34. LABOR AND INDUSTRY
PART II. BUREAU OF EMPLOYMENT SECURITY
Subpart A. UNEMPLOYMENT COMPENSATION
CHAPTER 61. ADMINISTRATION
GENERAL PROVISIONS § 61.1. Definitions.
Terms which are defined in the law and which are used in this subpart have the same meanings as provided in the law. In addition, the following words and terms, when used in the subpart, have the following meanings, unless the context clearly indicates otherwise:
Applicant—An individual applying for [employment at an] services with an employment office [at the Pennsylvania State Employment Service].
Application for benefits—The initial request for unemployment compensation filed under section 501(a) of the law (43 P. S. § 821(a)), preliminary to filing claims for compensation. If an application for benefits is valid, as defined in section 4(w) of the law (43 P. S. § 753(w)), the application establishes a benefit year commencing on the effective date of the application.
Board—The Unemployment Compensation Board of Review of the Commonwealth.
Bureau—The [Bureau of Employment Security of the Commonwealth] Department.
Claim for compensation—[Either claim for waiting period credit or a claim for compensation, sometimes referred to as a ''pay order.''] A request for waiting week credit or payment of compensation for a week when the claimant was unemployed, filed under section 501(c) of the law.
* * * * * [Partial unemployment—An individual shall be considered partially unemployed with respect to a week during which he was employed by his regular employer and earned less than his weekly benefit rate plus his partial benefit credit, and was employed less than customary full-time hours due to lack of work.
Part-total unemployment—An individual shall be considered to be part-totally unemployed with respect to any week during which he was not employed by his regular employer, earned less than his weekly benefit rate plus his partial benefit credit, and was employed less than his customary full-time hours due to lack of work.]
Payments in lieu of contributions—The money payments made into the Unemployment Compensation Fund by an employer with respect to employment, under sections 1003, 1104 and [1202] 1202.2 of the law (43 P. S. §§ 893, 904 and [912] 912.2).
Secretary—The Secretary of the Department.
[Total unemployment—An individual shall be considered totally unemployed with respect to a week during which he performs no services and with respect to which no remuneration is paid or payable to him.]
* * * * * UC Office—A Department office established to accept and process applications for benefits and claims for compensation.
UC Tax Review Office—The individual or agency within the Department that administers appeals to the Secretary or the Secretary's designee.
UCTS—The Office of Unemployment Compensation Tax Services, or its successor agency, within the Department.
Week—Except as otherwise specifically provided, a week, with respect to an individual who files a claim for [total, part-total or partial] unemployment, means the calendar week—Sunday through Saturday, except that those individuals who are filing claims for compensation for a period of unemployment which began prior to the effective date of this section shall continue to file claims for weeks of any 7 consecutive days for as long as that period of unemployment continues and they are otherwise eligible. For purposes of this section, if the workday of an individual includes parts of 2 calendar days, the work performed by the individual during the workdays shall be considered to have been performed during the first of the calendar days.
§ 61.3. Wages.
(a) Date of payment.
(1) General rule—Wages [shall be considered to be paid on the day on which] are considered paid on the date when the employer actually pays them.
(2) Delayed payment of wages—For purposes of benefits, if payment of wages is delayed, the wages are considered paid on the date when the employer generally pays amounts definitely assignable to a payroll period [are generally paid by the employer, even though the wages have not actually been reduced to the possession of employes].
* * * * * (c) [Board and lodging. The money value of board or lodging constituting wages shall be the reasonable cash value to the employe of the board or lodging, but may not be considered less than the following minimum amounts, unless the employer produces evidence to the satisfaction of the Bureau that the minimum amounts are in excess of the actual value to the employe of his board or lodging:
(1) Lodging for 1 week, $2.50.
(2) Meals for 1 week, $4.50.
(3) Meals for 1 day, 75¢.
(4) One meal, 25¢.]
Noncash wages.
(1) General rule—Except as provided in paragraph (2), the money value of remuneration paid in mediums other than cash is the fair market value of the remuneration at the time of payment.
(2) Meals and lodging—Meals and lodging are valued at amounts assigned to meals and lodging in the documents referenced in 41 CFR 301-11.6 (relating to where do I find maximum per diem and actual expense rates), for the calendar year in which they are provided and for the location where they are provided, unless the employer is able to produce sufficient, credible evidence that the fair market value of the meals and lodging is less than such values.
§ 61.3a. Third party sick pay.
(a) Definitions. For purposes of this section:
(1) A sick pay payment is any payment on account of sickness or accident disability that is ''wages'' as provided in the law.
(2) A third party payor is an entity that makes a sick pay payment, is not reimbursed for the payment on a cost plus fee basis, and is not an employer of the recipient.
(3) A funding employer is an entity that finances, directly or indirectly, in whole or in part, a sick pay payment to one or more of its employees by a third party payor.
(b) Reporting and contribution requirements.
(1) A funding employer shall report, and pay the contributions due with respect to, a sick pay payment, unless a third party payor is required to do so.
(2) A third party payor shall report, and pay the contributions due with respect to, a sick pay payment it makes, unless within 15 days of payment the third party payor gives written notice to the funding employer for which the recipient most recently performed services, of the name and social security account number of the recipient and the amount of the payment.
(c) Date of payment. A sick pay payment is considered paid as provided in subsection (a).
(d) Enforcement. A third party payor that is required to report, and pay contributions on, a sick pay payment, is deemed to be an employer for the purpose of application of all provisions in the law relating to its enforcement, and the collection of contributions, interest and penalties.
WITNESS FEES AND EXPENSES § 61.11. Persons [reimbursable] eligible for compensation and expenses.
The payment of fees and expenses to individuals who have served as witnesses in proceedings conducted by the Board [of Review] or the [Bureau] Department will be made subject to the following conditions:
(1) Persons not parties-in-interest.
(i) Payment may be made only to individuals who have received a summons or a subpoena issued by the [Bureau] Department or the Board [of Review] in accordance with sections 506 and 304 of the law (43 P. S. §§ 784 and 826), and who are not a party-in-interest to the proceeding.
* * * * * (iv) [Employes] Agents and employees, including corporate officers, of an employer who is a party-in-interest to a proceeding, shall be considered as parties-in-interest to the proceeding.
(2) [Employes] Employees of the Department. [Employes] Employees of the Department may not be entitled to a payment provided by the provisions of this section, but shall be reimbursed for proper expenses in accordance with the provisions of Departmental rules and regulations governing traveling expenses of [employes] employees. The receipt of a summons or a subpoena by an [employe] employee of the Department, however, will justify the issuance of whatever authorization for travel as may be required under the travel rules and regulations.
(3) Commonwealth [employes] employees and [employes] employees of the Department. An [employe] employee of the Commonwealth who is not an [employe] employee of the Department will not be entitled to a payment provided by the provisions of this section, but will be reimbursed for expenses in the same manner as provided for [employes] employees of the Department, unless the [employe] employee shows to the satisfaction of the [comptroller of the Bureau] Department that he is not entitled to State pay for the period of time spent in attendance at a proceeding in response to a summons or a subpoena. In this event the [employe] employee is entitled to allowances as provided for other individuals who are not [employes] employees of the Commonwealth.
§ 61.12. Reimbursable items.
(a) [Transportation.
(1) An individual who is entitled to reimbursement under § 61.11 (relating to persons reimbursable) and who resides outside the place where his attendance is required, whether the residence is within or without this Commonwealth, may be paid mileage at the rate of 7¢ for each mile he actually travels in going to the place from his place of residence and returning, but he will not be reimbursed for a greater number of miles than would be required for traveling by the usually traveled route between those places.
(2) When a proceeding is adjourned, continued or postponed for more than 1 day or is prolonged from 1 week to the next, a witness necessarily present both before and after the interval and who returns to his place of residence during the interim may be paid one additional mileage allowance for each interval.
(b) Fees.
(1) An individual entitled to reimbursement under § 61.11 may be allowed a fee of $5.00 for each day or part of a day spent in attending or traveling to and from a proceeding.
(2) When a proceeding is prolonged from 1 day to the next a witness necessarily present on both days who resides more than 50 miles by the usually traveled route from the place the proceeding is held and who remains there overnight may be paid an additional amount equal to the per diem witness fee for each night.]
Compensation and expenses. An individual who is entitled to reimbursement under § 61.11 (relating to persons eligible for compensation and expenses) and who resides outside the place where his attendance is required, whether the residence is within or without this Commonwealth, may be paid compensation and expenses by the Department in accordance with of 42 Pa.C.S. § 5903(b)—(g) (relating to compensation and expenses of witnesses).
[(c)] (b) Time limit for filing claims. An allowance or fee payable under the provisions of this section shall be paid only if a claim [therefor] therefore is filed with the Board or the [Bureau] Department within 30 days from the date of the proceeding.
DISCLOSURE OF OFFICIAL RECORDS AND INFORMATION § 61.21. [Authorization required] (Reserved).
[No officer or employe of the Department or the Board or other public employe, except as authorized by the provisions of this chapter, shall produce or disclose to any person or before any tribunal, directly or indirectly, any record or any information acquired from a record pertaining to any employer, applicant, claimant or trainee.]
§ 61.22. [Procedure when served with a subpoena] (Reserved).
[An officer or employe of the Department or the Board, upon being served with a subpoena or other compulsory process, shall immediately bring the matter to the attention of his superior officer who shall forthwith supply the following information to the legal division of the Department:
(1) The caption of the case, the names of the parties and other general information.
(2) The nature of the case, if known.
(3) The name of the employe served with the subpoena.
(4) The time and place where the employe is directed to appear.
(5) What records, if any, the employe is directed to produce.]
§ 61.23. [Furnishing of information] (Reserved).
[Disclosure of records or information may be authorized by specific instruction of the Department or Board in the following cases:
(1) To individual applicants and employers to the extent necessary for the efficient performance of recruitment, placement, employment counseling and other employment service functions.
(2) To any properly identified claimant for benefits or payments under a State, territorial or Federal unemployment compensation or re-adjustment allowance law, or training allowance law, or to his authorized representative, including information which directly concerns the claimant and is reasonably necessary for the proper presentation of his claim.
(3) To officers and employes of the Department and the Board of Review, and to an officer or employe of an agency of the Federal government or of a State or territorial government, lawfully charged with the administration of a Federal, State or territorial unemployment compensation, readjustment allowance or training allowance law, but only for purposes reasonably necessary for the proper administration of the law.
(4) To an officer or employe of an agency of the Federal government or of a State or territorial government, lawfully charged with the administration of a law providing for old age assistance or other public assistance, work relief, pension, retirement or other benefit payments, but only for purposes reasonably necessary for the proper administration of the law.
(5) To applicants, employers and the public when the information is of a general nature concerning employment opportunities, employment levels and trends, and labor supply and demand, but only if the release or publication does not include information identifiable to individual applicants, employers or employing establishments.
(6) To governmental authorities, such as antidiscrimination and fair employment practice authorities, whose functions will aid the Pennsylvania State Employment Service in carrying out an amplified and more effective placement service, including information relating to fair employment practices.
(7) To individuals, organizations and agencies, or for purposes other than as specified in paragraphs (1)—(6), if a disclosure does not impede the operation of, and is not inconsistent with the purposes of the employment security program, and is authorized in writing in individual cases by the Executive Director.]
§ 61.24. [Statistical publications] (Reserved).
[Nothing in this chapter may be construed to prohibit the publication of statistical data or other general information, if the publication is not identifiable to individual employers, employes, applicants or claimants.]
§ 61.25. Confidentiality of information and fees.
(a) Confidentiality.
(1) Definition. For purposes of this subsection, ''unemployment compensation information'' means both of the following:
(1) Information in the possession of the Department or the Board pertaining to the administration of the law which reveals the name or any other identifying particular about an employer, employee or claimant or which could foreseeably be combined with publicly available information to reveal any identifying particular.
(2) Information obtained directly or indirectly from the Department or the Board that is included in paragraph (1) while in the possession of the Department or the Board.
(2) Rule of confidentiality.
(i) Unemployment compensation information is confidential and may be disclosed only as permitted in this subsection.
(ii) Except as provided in paragraph (5), unemployment compensation information will not be competent evidence and may not be used in any action or proceeding in any court or other tribunal.
(3) Permissible disclosure. The Department or the Board may disclose or authorize disclosure of unemployment compensation information only as follows:
(i) To officers and employees of the Department and members and employees of the Board in the administration of the law.
(ii) To a claimant, the last employer of the claimant or a base year employer of a claimant, to the extent necessary for the proper determination of the claimant's application for benefits and claims for compensation.
(iii) To an employer, to the extent necessary for the proper determination of the employer's liability for reports and payments under the law and the proper administration of the employer's account.
(iv) To public employees in the performance of their public duties.
(v) As determined by the Department or the Board to be necessary for the proper administration of the unemployment compensation program.
(vi) As permitted by provisions of the law or as required or permitted under Federal law.
(4) Redisclosure prohibited.
(i) Officers and employees of the Department and members and employees of the Board to whom unemployment compensation information is disclosed under paragraph (3)(i) may not disclose the information to any person or before any court or other tribunal, except as authorized by the Department or the Board under paragraph (3).
(ii) Except as provided in paragraph (5), a person, other than an officer or employee of the Department or a member or employee of the Board, to whom unemployment compensation information is disclosed under paragraph (3) or otherwise may not disclose the information to any person or before any court or other tribunal without the prior, written authorization of the Department or the Board. This subparagraph applies to the initial person to whom the information is disclosed and subsequent recipients of the information.
(5) Exceptions. Paragraphs (2)(ii) and (4)(ii) do not apply to the following:
(1) A legal proceeding under the law or a statute administered or enforced by the Commonwealth.
(2) Information disclosed to a claimant or employer under paragraph (3)(ii) or (iii).
(3) Information filed with the unified judicial system by the Department or the Board in the administration of the law.
(6) Safeguards. A person to whom unemployment compensation information is disclosed under paragraph (3) shall implement and maintain all safeguards required by the Department to protect the confidentiality of the information and comply with all other terms and conditions specified by the Department in connection with disclosure of the information.
(b) Fees. Except as provided in section 702 of the law (43 P. S. § 862), the Department or the Board may charge a fee to a person seeking documents or information from the Department or the Board. The fee will be an amount sufficient to compensate the Department or the Board for the costs to process the request and, if the requested documents or information are available, the cost to provide the documents and information. The amount of the fee will be calculated by the Department within its discretion.
[Pa.B. Doc. No. 10-936. Filed for public inspection May 21, 2010, 9:00 a.m.]
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