References: a. UI Occasional Paper 89-3, New Jersey Unemployment Insurance Reemployment Demonstration Project, 1989. b. UI Occasional Paper 90-3 . A Study of Unemployment Insurance Recipients and Exhaustees: Findings from a National Survey, 1990. c. UI Occasional Paper 91-1, The New Jersey Unemployment Insurance Demonstration Project Follow-Up Report, 1991. d. Kirsch, Irwin and Ann Jungeblut. Profiling the Literacy Proficiencies of JTPA and ES/UI Populations. Report to Department of Labor, 1992. e. Ross, Murray and Ralph Smith. Displaced Workers: Trends in the 1980s and Implications for the Future. Congressional Budget Office, 1993 f. Swaim, Paul and Michael Podgursky. "Do More-Educated Workers Fare Better Following Job Displacement?" Monthly Labor Review, Aug. 1989. Background: Since the mid-1970s, major structural changes have been taking place in the American economy. Advances in technology, international competition, plant closings and corporate streamlining have resulted in the dislocation of thousands of workers from their jobs. These individuals have little or no hope of ever returning to their former occupations. Between one and two million dislocated workers are served by the UI program each year; however, a growing number are exhausting their UI benefits before they are able to re-enter the work force. Some of these claimants possess skills that are no longer in demand; others are suffering from a lack of job search skills. As a result, dislocated workers are experiencing extreme difficulties in their searches for new employment. Clearly these individuals need more than the traditional assistance that they receive under the current UI program. Research sponsored by the Department of Labor and conducted in the State of New Jersey conclusively demonstrated that, based on UI claims information, newly dislocated workers could be profiled and referred to reemployment services by their fifth week of unemployment. The term "profiling" is based on the premise that a set of characteristics--a profile--can be developed to identify, at an early stage of their unemployment spell, UI claimants who are likely to be permanently displaced from their previous jobs. In the New Jersey study, identified claimants were referred to and provided with a range of reemployment services. Subsequent to referral and assistance, a significant number of claimants returned to work earlier than those claimants who did not receive reemployment services. The New Jersey study proved that the profiling approach of early identification and referral based on a set of claimant characteristics works. Likewise, academic studies on the long-term unemployed have documented strong relationships between reemployment difficulty and individual characteristics such as schooling and job tenure. The Department of Labor has analyzed these study results, as well as the individual characteristics that were found to be successful in profiling new UI claimants. Building on the knowledge gained through statistical analyses of these studies, the Department has developed a comprehensive profiling system for nationwide implementation. The profiling system embraces the concept that, through a Federal/State partnership with States assuming operational leadership roles, those claimants that run the risk of being unemployed for prolonged periods and exhausting their UI benefits can be identified early in their unemployment experience. Once identification is made, the claimants can be referred to effective, much-needed reemployment assistance to help them get back into the work force. The Profiling System: The critical need for a comprehensive early identification system to help the structurally unemployed received both Presidential and congressional attention; on March 4, 1993, the Worker Profiling Initiative was signed into law as Section 4 of the Emergency Unemployment Compensation (EUC) Amendments of 1993. The goal of the initiative is twofold: (1) establish an efficient, uniform UI profiling system that will identify those workers on permanent layoff who may have difficulty finding new employment, and (2) refer identified workers to reemployment services by no later than their fifth week of unemployment. The profiling system that was developed by the Department is in accordance with the goals of the legislation, and involves three key elements: a) a profiling model that uses a set of specific data elements that identify new UI claimants who are likely to exhaust their UI benefits and experience reemployment difficulty; b) a procedure for selecting claimants who meet the profile and referring them to reemployment services; and c) a feedback mechanism to provide information on referred claimants (see figure 1). a. The Profiling Model. As part of profiling system development, the Department has completed work on the general profiling model to be used in the system. The model is simple and straightforward in that it uses seven data elements or characteristics that have been tested and selected for their predictive power in determining the probability of an individual experiencing prolonged unemployment. The seven data elements are: (1) whether the claimant is on recall; (2) whether the claimant has a union hiring hall agreement; (3) employment changes in the claimant's pre-UI industry; (4) employment changes in the claimant's pre-UI occupation; (5) the claimant's years of schooling; (6) the claimant's job tenure; and (7) the State total unemployment rate. Three of the seven elements are the same ones that proved to be the most important and effective tools in the previously mentioned studies on dislocated workers; the remaining four were selected because they were statistically proven to be strong predictors of long-term unemployment, thus enhancing the efficiency of the profiling model. The model should be thought of as the foundation for the profiling system, a framework that can be customized and adjusted by each State to suit its operating environment. It is sensitive not only to State economic environments but to growing and declining industries in the State as well. Moreover, the model differs from other approaches to profiling that currently may exist in the States in that it provides a uniform, systematic approach to identifying potentially long-term unemployed UI claimants; this uniform approach is fueled by the strength of the seven predictors that are combined to provide a comprehensive look at the important characteristics of the UI claimant. b. Claimant Selection and Referral. It is envisioned that selection of claimants will be accomplished by applying the model to new UI claimants through automated processes. States would collect and maintain the data elements required to implement the profiling model. An automated process would then use this data to estimate the probability of reemployment difficulty for each claimant and compare the results to a State-determined threshold. Those claimants above the threshold would then be referred to reemployment services. Various alternatives are possible for accomplishing the selection and referral process. The Department will work with the States and support their profiling efforts and implementation of the system. c. The Feedback Mechanism. The feedback mechanism is a means for providing the UI program with information on the current status of those claimants who were identified and referred to reemployment services. Benefits associated with having a feedback mechanism include: * providing State UI staff with information on the claimant's status (whether the claimant is able and available for work or whether the claimant is in an approved training program, for example); * tracking the type of reemployment service that was provided to the claimant; and * determining whether or not the reemployment assistance that was given resulted in the claimant becoming employed. The Federal/State Partnership: While the Department will develop the general guidelines for the profiling system and the model that would be the foundation for implementing the system, it is the States that would take the lead in actual system implementation, customizing the system to account for unique State needs and deciding how to implement it in such a way that would benefit both the State and its dislocated workers. The States are in the best position to provide the greatest help to the structurally unemployed; with the sturdy framework of a strong profiling system to assist them, the States can positively address structural unemployment. The Department sees its role as providing technical assistance, advice and automation support to the States in the customization of their profiling systems. Additionally, the Department will provide materials which will offer guidance on such technical issues as how the system can be customized and installation options. Profiling System Implementation: The Timeframe. The Department has sought resources in the Fiscal Year 1994 appropriations to fund the development of the profiling system in the States and to assist with augmenting State automated systems for profiling implementation. The strategy that has been developed by the Department is to initially implement the system in three prototype States. A solicitation for these three States will be issued at the end of October 1993; the process of State installation, customization and implementation for the prototype States would begin in March 1994. The profiling system will be offered to a "first wave" of seventeen to twenty-five States in the first quarter of calendar year 1994 based on a separate solicitation; fiscal year 1994 funding will be sufficient to fund the first wave of States. Additional funds will be sought to support the remaining States in their implementation of the profiling system. "Second wave" solicitation will be offered during the fourth quarter of calendar year 1994. Availability of Additional Information: A paper which describes in more detail the profiling system and the operational design of that system will be provided to the States at the end of October 1993. This paper will take into account comments received from the States in response to this directive. The paper will offer a more comprehensive discussion of the profiling model, the selection and referral of UI claimants, data sources and collection as it pertains to selection and referral, and the nature of technical support that is to be made available to the States by the Department. SESAs will have an opportunity to provide comments on this paper. Action Requested: SESAs are encouraged to provide comments on the profiling system and the procedures that would be needed to implement the system. Comments should be sent by October 1st to the National Office, Attention: Ingrid Evans, TEURA. SESAs may also fax comments to the National Office's Unemployment Insurance Service, Attention: Ingrid Evans; the fax number is 202-219-8506.

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Reference: ET Handbook No. 394, Unemployment Insurance Financial Data 1938-1982. Background: The attached tables contain selected unemployment insurance financial information for calendar years 1990 (revised) and 1991. These tables are a supplement and therefore comparable to those tables contained in the referenced handbook and described in its glossary. Selected data on the Federal-State extended benefits program and on employers on a reimbursable basis are shown separately. Data on reserve funds are also included. All employment and wage data used in these tables were furnished by State Employment Security Agencies (SESAs) and include estimates for some States. Note that columns 02-22 are for taxable employment only; columns 34-43 are for reimbursable employment only; and columns 44-52 contain Federal-State extended benefits information. Action Required: SESAs are requested to review the attached tables and report any corrections to the National Office by October 29, 1993 (Attention: Sheila Woodard, TEURA).

Background: In line with the "reinvention effort" of the Department of Labor the signature authority for UIPLs has been delegated to Mary Ann Wyrsch, Director of Unemployment Insurance Service. This change will occur October 1, 1993. Action Required: SESA Administrators should notify staff of this change.

Reference: Unemployment Insurance Program Letter No. 45-93, Profiling Unemployment Insurance (UI) Claimants. Background: The UI program is heavily dependent upon automation for all of its functions. Much of the automation of the UI program has taken place over the last two decades. As automation technology advances and is more accessible for addressing all aspects of UI operations, many States are seeking to apply this current technology in an effort to increase productivity and improve customer services. DOL believes that a central capacity for exploring and taking advantage of the latest technology in hardware and software for all States is a means by which the Federal partner may assist in addressing State resource constraints and support DOL initiatives, such as the "new profiling system" and "one-stop career centers," which will impact SESAs' current UI operations. During Fiscal Year (FY) 1994, DOL will undertake a new comprehensive profiling system which will focus on UI claimants. The objectives of this DOL initiative are to identify new UI claimants who might experience reemployment difficulties and to refer those claimants to reemployment services early in their unemployment period. As previously envisioned, the profiling initiative will include the use of a "model" for identifying the UI claimants most likely to be dislocated workers. This model will be integrated into initial claims processing using automation. In addition, automated processes are necessary to provide for the remainder of the profiling system which includes selection, referral and feedback components. Project Concept: DOL's Employment and Training Administration (ETA) plans to enter into a cooperative agreement with a State that will be selected to establish and operate an ITC. The ITC could be an organization of a SESA, a contractor-operated facility, a facility operated by a university or consortium of SESAs, or some combination of the above. Organization of the ITC could take a number of forms. The exact organizational structure will not be finalized until input from States on various alternatives is considered and evaluated. Regardless of the ITC's organizational structure, a Steering Committee, comprised of Federal and State staff, is seen as an important element. The Steering Committee would perform strategic planning and establish, implement, and monitor ITC policies and procedures. Other responsibilities would include reviewing projects at key milestone points throughout the development life cycle and providing feedback on systems design and implementation planning, as well as evaluating ITC products for technical merit, exportability and usefulness. The selected State must be able to provide for rapid procurement procedures so that the ITC can quickly respond to changing situations, either hardware or software. The ITC must also be able to attract top-quality staff, either as permanent employees, temporary employees, independent contractors and/or consultants. A flexible staffing pattern is seen as an important feature of the ITC so that necessary adjustments can be made quickly and routinely. Initially, the ITC's focus will be on supporting the development and implementation of a national profiling system. Subsequently, the ITC will emphasize development of other UI applications for final development by SESAs and technology exchange among SESAs and other interested parties. The ITC will focus on innovative solutions and efficient use of the latest technology arising from lessons learned from SESAs' experiences with past UI automation grants, other SESA automation efforts, and other State and Federal agencies and/or private industry experiences. In addition, the ITC will be involved in supporting the UI portion of the information systems envisioned for DOL's one-stop career center initiative. Short Term Goals: As previously indicated, the first project to be undertaken by the ITC will be to support SESAs in the development and implementation of profiling systems. Appropriate models will be provided to the SESAs for final modification and implementation. The ITC will provide support for product installation and use. The ITC will also provide system enhancements periodically, based on States' requirements and feedback. The national profiling system will be designed for implementation on multiple platforms. All systems developed at the ITC would have design specifications available to the States for their own development efforts. Model systems and applications produced by the ITC will recognize the diversity of State ADP environments. Long Term Goals: The ITC will implement some combination of the following functions, based upon States' requirements: a. Perform systems analysis design and development for the SESAs. Supporting DOL initiatives such as the national profiling system and the one-stop career center initiative will be an ongoing and critical task of the ITC. When developing new applications, an individual State may be the initial customer, but all systems will be developed using structured/modular components to attain maximum portability to other States. b. Establish and support a Central UI Electronic Bulletin Board System for technology exchange and information sharing with all States regarding lessons learned, "best practices" and automation projects sponsored by SESAs along with appropriate points of contact. c. Sponsor prototype projects and demonstrations relating to maximizing the use of automation and information technology for UI operations. d. Provide clearinghouse appraisal for ADP systems and software. The ITC will appraise software applications (both UI systems developed by States and commercial packages) for their use in UI operations. e. Provide technical training to States either at the ITC or by sending trainers to seminars or conferences. Training would be on the use of new technologies, specific commercial packages, or ITC developed applications. f. Maintain a Hotline support staff capable of providing technical guidance for implementing new technologies and utilizing ITC developed products. State Responsibilities: The selected State will carry out the following tasks in accordance with the terms and conditions of the cooperative agreement: a. The State will operate, administer and oversee the ITC as agreed upon with DOL. b. The State will designate a project officer to oversee administrative functions and requirements and to serve as the State's representative with DOL. c. The State will report to DOL as defined in the cooperative agreement between DOL and the State. DOL Responsibilities: a. DOL will designate a Federal Representative. b. In coordination with the State's project officer and the Steering Committee, DOL will monitor and inspect State and ITC-contractor (if any) performance and products on an on- going basis to ensure compliance with the scope of work and ascertain the level of performance. c. DOL will review and approve the ITC's project staff as specified in the cooperative agreement and any adjustments thereto. Selection of State: To initiate the project, ETA will request interested States to submit proposals for the design, development, establishment and management of an ITC. State selection will be competitive, based on criteria outlined in a directive to be issued. Proposals received timely by the National Office will be evaluated by a panel according to criteria to be established. The panel will review each proposal to determine if the proposal meets the criteria and to select the overall best proposal. Project Implementation Date: The project should begin during the second quarter of FY 1994 with the issuance of a directive soliciting proposals from States. Selection of the State and the signing of a cooperative agreement with DOL is expected by the fourth quarter of FY 1994. Project Funding: Funding for the ITC is available for FY 1994. Continuation of the cooperative agreement in subsequent years is contingent upon the availability of appropriated funds for the ITC. The ITC is expected to be included in DOL's FY 1995 budget request. The ITC would be initially approved for a 24-month period, called the pilot phase. At the end of the pilot phase, an evaluation will be conducted to determine whether to continue operations. The cooperative agreement will provide a fixed amount of reimbursement to cover costs of the project and will specify the period of performance. Action: SESA Administrators are encouraged to comment on any aspect of the ITC plan. Alternative approaches to the management of the ITC and functions to be performed by the ITC are especially welcomed. Comments should be sent by November 12, 1993, to the National Office (ATTN: Wayne Zajac, TEUMC) or FAX on 202-219-8506.

Background: The Department of Defense (DOD) informed us that due to recent administrative changes instituted at the United States Air Force Military Personnel Center (AFMPC), Randolph Air Force Base, Texas, many mailing addresses have been changed. Information: The correct mailing address and telephone number for the Airman's Action Branch of AFMPC is as follows: HQ AFMPC/DPMDOA 550 C Street West Suite 20 Randolph AFB, Texas 78150-6001 (210) 652-5747 Additionally, the Air Force has changed item 12a on the DD Form 214 to reflect the date the member originally came on active duty. The purpose of this change is to clarify the start and end of a member's continuous active duty status. Item 12c will now reflect the member's total active service while in the U.S. Air Force. All service reflected in item 12d will be prior reserve/guard or a break in service. Action Required: The above information should be provided to appropriate staff.

Reference: Federal regulations at 20 CFR Part 609 and UIPL No. 32-89 (U.S. Coast Guard NAF), 48-89 (U.S. Army Corps of Engineers), 12-90 (Air Force), and 46-92 (Federal agencies serviced by Frick, Inc.) Background: It has come to our attention that a number of State agencies are experiencing difficulties in handling UCFE claims inquiries due to a lack of accurate Federal agency addresses. Many claim inquiries (Forms ES-931, ES-931A, ES-934, ES-936) and notices of determination and appeal are frequently forwarded to inappropriate addresses because claimants do not present an SF-8, Notice to Federal Employee About Unemployment Insurance, which contains an address for forwarding inquiries or the State agency does not have a proper forwarding address in their records. As a result, when inquiries finally reach the appropriate Federal agency address, it is next to impossible to meet the 4-day timeframe to forward the completed response to the State agency as required by 20 CFR 609.21(b). To date, we have received change of address requests from two Federal agencies that have centralized addresses--the U.S. Postal Service, and the U.S. Department of Housing and Urban Development. These address changes are included in an alphabetical listing which contains the centralized addresses of other Federal agencies that were previously forwarded to the SESAs via TWX or which were recently provided to the National Office for dissemination. In addition, included as separate attachments are decentralized address listings for the Department of the Air Force (Appropriated Fund Activities--FIC No. 424 and Non-Appropriated Fund Activities- -FIC No. 427), the Department of the Army (Appropriated Fund Activities--FIC No. 422)*, the Department of Health and Human Services (FIC No. 460), and the Department of Justice (FIC No. 430). Subsequent program letters for other Federal agencies will follow as the need dictates and/or when a Federal agency provides this office with an address listing. * Note--Listing for Army Non-Appropriated Fund Activities (FIC No. 425) not available at this time. Action Required: SESA administrators are requested to distribute this listing immediately to the appropriate State agency personnel for their use in sending forms and notices or making inquiries pertaining to UCFE claims for former Federal employees.

Background: In 1988, the Unemployment Insurance Service (UIS) signed a contract with Artecon, Inc., to purchase computer systems for the SESAs and the National Office. These systems replaced the older Digital Equipment Corporation (DEC) Pro 380 super-microcomputers running the Benefits Quality Control program. Artecon's replacement computer systems were based on Sun 3/60 CPUs, and were configured as multi-user systems. These computers are currently installed in the SESAs and at the National Office, and currently support various QC applications, the UI Required Reporting (UIRR) system, and the Performance Measurement Review (PMR) pilot. The Artecon systems have already become obsolete in today's rapidly changing computer marketplace. The vendors that provide the commercial software and the operating system have effectively abandoned the Artecon platform, and no longer provide new releases or upgrades for these systems. In recognition of the necessity to strategically plan the next migration of the State UI systems, the National Office, together with representatives from the Regions and States, formed a Vision Group that met in July, 1992, to decide on the best course of action for upgrading the Artecon computers. The Vision Group consensus was to upgrade the old equipment with current technology, continuing to run under a UNIX-based operating system capable of supporting Informix. This strategy would allow the National Office and the States to port existing UIS applications onto the new computers with a minimum amount of time and effort. Changes: After researching the marketplace, and developing a Requirements Analysis and Cost Comparison document, the National Office was able to take advantage of an existing contract available to Federal agencies through the National Aeronautics and Space Administration to order replacement equipment. Sun Microsystems SPARCstation 10 Model 40 computers were ordered to replace the Artecon computers in the SESAs. The new computers will be integrated into the current system and all existing peripherals (modems, tape drives, terminals, printers, and annex boxes) will continue to be used. Both the Sun SPARCstation and the older Sun 3/60 computers will initially be attached to the system, with all UI applications running solely on the SPARCstation machine. The 3/60 connectivity will provide States the opportunity to move their applications over to the new machine. The UI State Support and Data Processing teams were recently combined to form the UIS Operations and Support (UISOPS) group. This group provides technical support to both States and Regions, and is responsible for system administration of the UI data processing network. They are actively working on porting existing programs and applications from the 3/60 platform to the new machines. They will be available to provide technical assistance to any State requesting help in moving their products onto the new computers. To obtain technical assistance, State System Administrators may contact the Hotline at 1-800-473-0188. The SPARCstation computers will be shipped and installed in all SESAs after the National Office has upgraded all of the commercial software products to the latest available version and release numbers running under Solaris (the new Sun operating system), and after porting the UI applications to the new machines. The new computers will be shipped as turn-key systems, already loaded with all UI software applications. Service technicians will install the new computers and assist the State System Administrators in loading user files. The National Office plans to have the new SPARCstation computers in all States in early 1994. A Site Preparation Guide and an Equipment Specification Manual are currently being prepared and will be distributed to the UI State System Administrators upon completion. The National UI QC Training Center will also be offering a training course on the new system, to include any upgraded commercial software packages. Training should roughly coincide with delivery of the new systems. The National Office also purchased Hewlett Packard Laserjet Model 4SI laser printers off the same contract, to be added as an additional system printer to all State UI systems. Disposal Instructions: Maintenance will be carried on the Artecon computers for approximately 60 days after delivery of the new SPARCstations; after that all support for the 3/60s will end. At that time, in accordance with CFR 29, Part 97.32(g), the equipment may be retained, sold or otherwise disposed of with no further obligation to the Federal Government. New Equipment: Following is a description of the new computers and the additional laser printer ordered for the SESAs: a. Sun SPARCstation 10 Model 40 servers 48 MB Memory 2 x 1.05 GB internal disk drives 16" color monitor 1.44 MB 3.5" floppy drive 644 MB compact disk drive Serial/Parallel controller b. HP Laserjet 4SI Laser Printer 2 MBytes RAM 17 pages per minute 600 x 600 dpi print quality Dual-bin paper handling The new computers are projected to be capable of supporting between 20 to 60 concurrent users and will run at a speed of about 105 MIPS (millions of instructions per second). They will provide between 15-20 times the processing power of the older 3/60 models, at about one-third the cost. A schematic of the new system, with the integrated SPARCstation computer, is attached. Action Required: Administrators are to provide the above information to all appropriate State staff (including all State System Administrators for the SESA UI automated systems).

AWBA Utilization: The attached listing identifies the AWBA which is to be used when computing the weekly amount of disaster unemployment assistance (DUA) for major disasters where the date of the disaster for the individual occurs during the first quarter of FY 1994 (refer to 20 CFR 625.6). The AWBA for each State is based on the total amount of unemployment insurance paid in that State in the first four of the last five completed calendar quarters immediately preceding the quarter in which the major disaster began. States shall use the AWBA, rounded to the next higher dollar amount, in the computation of the DUA weekly benefit amount. An updated listing will be provided for each subsequent calendar quarter. Action Required: State Employment Security Agency Administrators are requested to provide this information to appropriate staff.