References. None. Background. It is possible that Congress will not have enacted an FY 1996 Appropriation at the beginning of the new Federal Fiscal Year. A number of section 401 grantees have raised questions about how they will continue operating under a Continuing Resolution (CR), or, in its absence, in the event of a general shutdown of the Federal government (euphemistically referred to in the press as "the train wreck"). We will have to wait until the end of September to give specific guidance based on the situation at that time. Action Required. Section 401 grantees will generally not be affected because they operate on a program year basis, and already have their PY 1995 funds available to them. The FY 1996 appropriation for JTPA section 401 activities will not be utilized until July 1, 1996 (PY 1996). For those grantees on the Payment Management System (PMS), arrangements are in place so that they can continue to draw cash through the PMS in the absence of a CR. Drawdowns of cash will, of course, be against program year subaccounts and any balance(s) from prior fiscal year subaccounts. For those grantees using the SF-270 (Request for Advance or Reimbursement) to obtain JTPA funds, there will be two Division of Accounting staff on duty during any shutdown to process necessary paperwork. Grantees are advised, however,? to submit their SF-270's for the second quarter well in advance of the October 1st shutdown date to ensure timely processing. Because essential financial services will continue to operate, grantees drawing down on the SF-270 will receive their checks as scheduled and approved, and not in advance. Questions. Please address all questions to Greg Gross on (202) 219-7509.

Click on the link below to view, save, or print out the document.

Background: Sec. 106 of JTPA, as amended, directs the Secretary to establish performance standards for adult, youth, and dislocated worker programs. These standards may be updated every two years based on the most recent JTPA program experience, as well as program emphases and goals established by the Department of Labor. The Secretary also issues instructions for implementing standards and parameter criteria for States to follow in adjusting the Secretary's standards for service delivery areas (SDAs) and substate areas (SSAs). The Job Training Reform Amendments (JTRA) of 1992 mandated significant changes in the design and operation of local job training programs, as well as the criteria used to assess their performance. Revised section 106 requires that performance standards for Title II-A, Title II-C, Section 204(d), and Title III programs measure the number of job placements that provide a minimum of 20 hours of work per week, and that programs be rewarded based on high performance, increased service to the "hard-to-serve," and quality job placements that are both high-paying and offer employer-assisted benefits. Incentive and sanction policies are to be structured around more explicit criteria, and performance standards failure is now federally defined to ensure greater uniformity in assessing underperformance nationwide. As a result of the JTPA amendments, section 204(d) now mandates performance measures for the older worker program. To assist the Department in responding to the substantive changes required in the section 106 amendments, a Technical Workgroup was convened in Washington, DC, in mid-July 1993. The workgroup had representatives from State and local JTPA programs; public interest groups, including the Partnership for Training and Employment Careers; the U.S. Conference of Mayors; the National Association of Counties; the National Governors' Association; the National Council on the Aging; and staff from the Department of Labor (DOL) Office of the Inspector General. This Guidance Letter incorporates, to a large extent, the workgroup's findings. Performance Management Goals for PY's 1994-1995: Departmental goals, initially established for PY 1990 in anticipation of the amendments, remain unchanged and are as follows: Targeting services to a more at-risk population; Improving the quality and intensity of services that lead to skills acquisition, long-term employability and increased earnings; Placing greater emphasis on basic skills acquisition to qualify for employment or advanced education or training; and Promoting comprehensive, coordinated human resource programs to address the multiple needs of at-risk populations. In addition, with the passage of the 1992 JTPA Amendments, the performance management system has been tasked, through its performance incentive policies, to improve service to out-of-school youth and also to foster employment in better quality jobs which offer high wages and employer-assisted benefits. These goals are reflected in the Secretary's six Title II-A and Title II-C (core) measures, national numerical standards for these measures, new incentive award criteria, and associated reporting requirements. Governors still retain authority to establish additional standards which reflect State policy and to develop the specific approach to determining incentive awards. This issuance specifies the national standards for PY's 1994-1995 and introduces the new criteria which must be a part of State incentive grant policies. Data to support additional non-cost measures will continue to be reported and Governors may use these measures, or others in making State incentive award determinations. Data on costs together with program performance will provide critical information for State monitoring, fiscal oversight, and assist States in measuring returns on their human resource investments. The Department has identified two additional goals for PY 1994-1995. These are: -- Establishing a strong customer focus and orientation toward improving the program's responsiveness in meeting the individual needs of participants; and -- Seeking and using customer feedback to monitor the appropriateness of JTPA services and to promote continuous program improvements. States and SDAs are encouraged to survey customers on a regular basis as an integral part of their program oversight to identify program weaknesses and to improve program services. Technical assistance will be made available on cost-effective ways to gather and utilize such information. Secretary's National Standards for PY's 1994-1995. The Secretary's performance measures and national standards for Title II-A, Title II-C, section 204(d), and Title III (all of section 302(c)(1) State activities, and sections 302(c)(2) and 302(d) substate area activities) are as follows: PY 1994-1995 Performance Standards Title II-A Adult Follow-up Employment Rate: 59% Adult Weekly Earnings at Follow-up : $245 Welfare Follow-up Employment Rate: 47% Welfare Weekly Earnings at Follow-up : $223 Title II-C Youth Entered Employment Rate: 41% Youth Employability Enhancement Rate: 40% Section 204(d) Older Worker Programs Entered Employment Rate: 52% Average Hourly Wage at Placement: $5.45 Title III Entered Employment Rate: 67% Average Wage at Placement State Determined The Title II-A adult and welfare follow-up measures will continue to be based on individuals who terminate during the first three quarters of the program year and the last quarter of the previous program year. Explanation of Performance Standards Levels. The Title II-A and II-C numerical standards were derived from PY 1992 aggregate performance data reported on the JTPA Annual Status Report (JASR) and are generally set at a minimally-acceptable level that approximately 75% of the SDA's can be expected to exceed. Revising the numerical standard for the Youth Entered Employment Rate (YEER) in the same way would lead to reduced standards for SDAs. However, recent National JTPA Study results suggest that employment and earnings experienced by out-of-school youth in JTPA fall short of acceptable levels. Therefore, to encourage improved services to out-of-school youth, the numerical standard for the YEER will remain at its current level of 41 percent. Earnings standards have been adjusted to account for expected future inflation. Finally, an additional special adjustment has been made to employment-related standards to account for the requirement in section 106(k) that permits credit, for performance standards purposes, only for employment that is scheduled for 20 or more hours per week. Similar to the Title II-A and Title II-C standards, the Title III standard was derived from PY 1992 performance data reported on the Worker Adjustment Program Annual Program Report (WAPR). This standard is set at a level that, approximately, 75 percent of the substate areas can be expected to exceed. As with the employment measures for Titles II-A and II-C, an adjustment has been made to take into account the 20-hour per week employment requirement. Since discrete aggregate data were not available for PY 1992 Section 204(d) Older Worker program performance, available SPIR data were used to assist in setting performance standards levels for that program. As with the employment measures for Titles II-A, II-C and III, an adjustment has been made to take into account the 20-hour per week employment requirement. NOTE: Programs operated under section 204(d) are State programs even though they may be managed by various local entities. Therefore, performance standards will be applied to the total older worker programs State-wide. Unlike the adult and youth programs under Title II-A/C, however, no incentive awards or sanctions are associated with these standards. Implementing Provisions: The following implementing requirements must be followed: A. Required Standards. For Titles II-A and II-C, Governors are required to set, for each SDA, a numerical performance standard for each of the six Secretary's measures; for the Older Worker program, Governors are required to set numerical Entered Employment Rate and Average Wage at Placement standards for programs operated under section 204(d); for Title III, Governors are required to set for each substate area a numerical performance standard for the Entered Employment Rate and are encouraged to establish an Average Wage at Placement goal B. Setting the Standards. Consistent with new legislative provisions, Governors are now required to adjust the Secretary's performance standards to reflect local area circumstances (section 106(d)). Such adjustments apply to Title II-A, Title II-C, section 204(d) and Title III programs, and must conform to the Secretary's parameters described below: 1. Procedures must be: Responsive to the intent of the Act, Consistently applied among the SDA's/SSA's, Objective and equitable throughout the State, In conformance with widely accepted statistical criteria; 2. Source data must be: Of public use quality, Available upon request; 3. Results must be: Documented, Reproducible; and 4. Adjustment factors must be limited to: Economic factors, Labor market conditions, Geographic factors, Characteristics of the population to be served, Demonstrated difficulties in serving the population (this adjustment factor is new), and Type of services to be provided. The Department offers Governors an adjustment methodology that conforms both to these parameters and to the requirement in section 106(d). This methodology covers Title II-A, Title II-C, Section 204(d), and Title III programs and will be provided to States in a soon-to-be issued Training and Employment Information Notice. Should the Governor choose to use an alternate methodology, or make adjustments not addressed by the Departmental model, it must conform to the parameter criteria and be documented in the Governor's Coordination and Special Services Plan (GCSSP) prior to the program year to which it applies. The State Job Training Coordinating Council and, where appropriate, the State Human Resources Investment Council must have an opportunity to consider adjustments to the Secretary's standards and to recommend variations. To determine whether an SDA has met or exceeded a performance standard, Governors must use actual end-of-year program data to recalculate the performance standards. C. Performance Standards Definitions. Governors must calculate the performance of their SDA's, SSA's, and section 204(d) programs according to the definitions included in the Attachments. D. Titles II-A and II-C Incentive and Sanction Policies. Performance standards are to be established for programs funded under Titles II and III of the Act. In applying the Secretary's standards for Titles II-A and II-C, Governors must use the six core measures and also consider criteria relating to programs successfully serving out-of-school youth and placement in jobs providing employer-assisted benefits. Governors are encouraged to begin using these criteria in PY 1994 incentive policies; these criteria are required (i.e., they cannot be zero-weighted) to be incorporated into State incentive policies beginning in PY 1995. Governors may select additional non-cost measures, such as increased service to hard-to-serve participants, to form the basis of incentive policies as long as the following criteria are met: 1. As the basis for making incentive awards, the Governors must use all (i.e., cannot "zero weight" any) of the six Secretary's core measures. Beginning in PY 1995, Governors will also be required to reward innovative out-of-school youth program models either identified by the Department of Labor or recognized by the State as having a demonstrated record of success, and placements in jobs providing employer- assisted benefits. Although successful programs for out-of- school youth remain the cornerstone of out-of-school incentives, SDA's will still be expected to exceed the 50 percent minimum service level to be rewarded under that criterion. Governors have considerable flexibility in implementing the new incentive criteria. Suggested approaches to addressing these criteria are included as Attachments 3 and 4 to this TEGL. Decisions regarding the relative weight or emphasis of each core measure (e.g., the Youth Entered Employment Rate) and incentive criterion (e.g., placement in jobs with employer-assisted benefits) in a State's incentive award formula rest with the Governor. The core measures will be the basis for identifying SDA's that are candidates for technical assistance and for imposing sanctions. At least 75 percent of the funds set aside for performance incentives must be related to these measures and the out-of-school youth and assisted employer-benefits criteria, in accordance with section 106(b)(7)(E). 2. Cost standards cannot be used for incentive award purposes. However, States are reminded of the integral role of financial reviews in program management. States are encouraged to explore ways of relating overall costs of job training to more direct measures of long-term employment, earnings and reductions in welfare. Incentive policies may include adjustments to incentive award amounts based upon factors such as grant size, additional services to the hard-to-serve, intensity of service, and expenditure level. 3. A Secretary's standard for service to the hard-to-serve, as required by section 106(b)(7)(B) of JTPA, has been established in the form of a stand-alone eligibility criterion ("gate") for incentive awards. In order for an SDA to be eligible to receive any incentive award, at least 65 percent of both the SDA's (a) Title II-A AND (b) Title II-C (in-school and out-of-school youth combined) participants receiving training and/or other services beyond objective assessment must be hard-to-serve. The definitions of hard-to-serve are to be consistent with the definitions in sections 203(b), 263(b), and 263(d) of the Act. For the purpose of determining compliance with this requirement, Governors are to include any SDA-defined barriers that have been approved by the Governor, as well as the characteristics of participants in school-wide projects under section 263(g) and participants in five percent-funded projects. 4. For those SDA's that successfully "pass through" the gate, three criteria (in addition to any funds set aside for Governors' standards) will determine the amount of the incentive award: 1) exceeding the Secretary's performance standards, 2) providing quality service to out-of-school youth, and 3) placing participants in employment that provides employer-assisted benefits. - The definition of "employer-assisted benefits" is to be consistent with the SPIR definition (see Attachment). For the purposes of reporting and performance standards, fringe benefits count so long as they are an acknowledged component of employment conditions, whether actually received at the time of placement or not. Thus, State incentive policies will be structured to include benefit information for those participants who entered employment at termination, and Governors will have considerable latitude in implementing this incentive policy requirement. 5. Consistent with present DOL policy, SDA's that pass through the "gate" and exceed all six of the Secretary's Titles II-A and II-C standards must receive an incentive award. 6. Determination of an SDA's failure to meet these standards and the consequent imposition of technical assistance and reorganization requirements under section 106(j) will be based only on the Secretary's Title II-A and Title II-C core measures. - "Meeting Performance Standards" overall is defined as meeting at least four of the six core standards, one of which must be a youth standard. Conversely, overall "Failure" is defined as failing any three (3) or more of the core standards or failing both youth standards. Definitions for meeting and failing individual standards will be established by Governors. - Failure for the first year precludes an SDA from receiving any incentive awards and requires Governors to provide technical assistance to the underperforming SDA. - Failure in the second consecutive year precludes an SDA from receiving any incentive award and requires Governors to impose a reorganization plan. 7. Section 106(j)(3) requires each State to report to the Secretary, not later than 90 days after the end of each program year, the actual performance and performance standards for each SDA within that State. Within the same timeframe, technical assistance plans developed by the State are required for each SDA "failing" for the first year. A 90-day timeframe also applies to the imposition of a reorganization plan, which is mandatory when an SDA "fails" for a second consecutive year. Specific procedures for the formal performance standards report and required State action will be provided under separate cover. However, in addition to the formal annual process, there should be ongoing oversight of SDA performance and continuous technical assistance and capacity-building aimed at addressing areas where program performance can be improved. In addition, the Employment and Training Administration will initiate a national JTPA Report Card that will highlight programs showing the greatest returns on their human resource investments in terms of high-quality employment (type of job, wages and fringe benefits) for those participants most at-risk of failure. Further information on the content and procedures for preparing the "report card" will be provided separately. 8. Governors must specify in the GCSSP their incentive award policy under sections 202(c)(1)(B) and 202(c)(3)(A) and imposition of sanctions policy under section 106(j). It is recognized that the timing of this issuance may have precluded some States from submitting complete incentive policies with their PY 1994-95 GCSSPs. States are to provide as much information as possible in compliance with required due dates and submit a GCSSP amendment containing complete information no later than August 31, 1994. 9. In PYs 1994 and 1995, Governors will continue to have the authority to exclude pilot projects serving "hard-to-serve" individuals funded from the 5 percent incentive fund set-aside in computing their standards and actual performance. States and SDA's are encouraged to use such funds to develop or replicate model programs serving out-of- school youth, particularly those based on contextual learning models. NOTE: For those SDA's in which "incentive projects" are indistinguishable from those that provide general training, these programs would not be considered exempt from performance standards. State Action: States are to distribute this Guidance Letter to all officials within the State who need such information to implement the new performance standards policies and requirements for PYs 1994-1995. It is especially critical that States, State Councils, Private Industry Councils and SDA operational staff become thoroughly familiar with the new provisions concerning incentive and sanctions policies.

Reference: TEIN 7-88 Information: The attached checklists are issued to notify the JTPA and ES systems of those TEINs and TEGL that have been rescinded or canceled during the last program year. There are also checklists of all TEINs and TEGLs remaining active.

Reference. DINAP BULLETIN Nos. 94-27 and 95-01. Information. One of the PY 1995 Partnership Plan goals under the topic of ReROrts is to "receive all reports no later than the final due date free of errors. Thus far, DINAP's MIS Desk has received 88 percent of all quarterly Financial Status Reports (FSR) and Program Status Summary (PSS) reports for PY94 (July 1, 1994 - June 30, 1995). If your program has failed to submit one or more of these required reports, you will find a separate memorandum attached indicating which report(s) need to be SUBMITTED IMMEDIATELY to: U.S. Department of Labor, Employment and Training Administration, Division of Indian and Native American Programs, 200 Constitution Avenue, N.W., Room N-4641, Washington, D.C. 20210, Attention: MIS DESK. The PY 1994 ASR is due OCTOBER 1, 1995. If you need technical assistance with completing this required report, please contact your Federal Representative (Fed. Rep.) Team immediately. Also, if require assistance with using theEdit Check disk mailed to all grantees several weeks ago, please contact Ms. Linda Cruz with the California Indian Manpower Consortium (CIMC), Inc. Action. To successfully achieve our partnership reporting goal depends upon each grantee completing and submitting any missing Quarterly Report(s) and the ASR by October 1, 1995. Questions. Contact Ms. Andrea T.B. Brown, DINAP's MIS Desk regarding missing reports and your Fed Rep Team regarding report content (202) 219-5504. Ms. Linda Cruz of CIMC, for Edit Check technical assistance (916) 920-0285.

Background: In 1990, Congress authorized two programs to assist specific groups of dislocated workers. The Defense Conversion Adjustment Program (DCAP) provides assistance to workers dislocated by defense cutbacks. The Clean Air Employment Transition Assistance (CAETA) Program provides assistance to workers dislocated as a result of compliance with the provisions of the Clean Air Act. Both programs are discretionary programs. Eligible grantees include States, Title III sub state grantees, employers, employer associations, and representatives of employees. A new reporting form, the DWSPR, was created for these programs because discrete grants needed to be tracked separately. This form has been utilized since September 1992. Since then, the Job Training Partnership Act (JTPA) has been amended by the Job Training Reform Amendments and the National Defense Authorization Act for Fiscal 1993. To implement the provisions that pertain to Title III, the DWSPR has been revised to include cumulative reporting on an individual grant-specific basis for National Reserve grants funded under Section 322. A separate report should be submitted for each individual grant. States need not aggregate these reports. Up until June 30, 1993, States have reported summary information for all ongoing National Reserve grants funded in their State on the Worker Adjustment Program Quarterly Financial Report (WQFR). The revised Dislocated Worker Special Project Report (DWSPR) now consists of three sections. Section I provides financial and some participant data. Section II contains items on participant characteristics, program outcomes, and program activity. (Sections I and II remain the same except for a change in the breakouts for the average needs-related payments.) A new Section III contains items dealing with program income and recipient/subrecipient funds expended for project purposes. For DCAP and CAETA grants, Section I is submitted quarterly, Section II is submitted at the end of each program year and at project completion, and Section III is submitted only at project completion. (The revised DWSPR form with the 6/30/96 expiration date should be used for DCAP and CAETA grants beginning with the report covering activity through 9/93 which is due 11/15/93). For Title III National Reserve grants, Section I is submitted quarterly, and Section III is submitted at project completion. (Data similar to that reported in Section II will be reported on the SPIR for these grants.) Starting July 1, 1993, all ongoing and newly funded Title III National Reserve grants will be reported cumulatively on an individual grant basis on the DWSPR. OMB Approval and Combined Reporting Burden: The reporting requirements are approved by the Office of Management and Budget according to the Paperwork Reduction Act of 1980 under OMB approval no. 1205-0318 to expire June 30, 1996. Action Required: State JTPA or Worker Adjustment Liaisons are requested to distribute the attached instruction to all officials within the State who need such information to implement the revised reporting requirements. The Liaisons are also requested to assist DCAP and CAETA grantees within their States that are not familiar with Title III reporting (such as employers, employer associations) with any questions they may have.

Background: This RAL continues the series of annual Tax Rate by Industry Tables. This transmission updates the series through 1993.

Click on the link below to view, save, or print out the document.

Background. The updated directory is the result of changes in grantee leadership along with some changes of address and telephone numbers sent in by a number of grantees. It also includes new grantees designated as of March 1, 1995. It is important that all corrections be forwarded whenever they occur so you can be assured that mail will be provided to the correct address and individual. Action Required. Any changes should be placed on the attached Change of Address Information form and forwarded to the Division of Indian and Native American Programs (Attention: Andrea T.B. Brown). Inquiries. Questions or suggestions should be directed to your Federal Representative.

References: Section 3304(a)(6)(A) of the Federal Unemployment Tax Act (FUTA), UIPL No. 18-78, dated March 6, 1978; UIPL No. 4-83, dated November 15, 1982; UIPL No. 41-83, dated September 13, 1983; UIPL No. 30-85, dated July 12, 1985, (50 FR 48274, 48280); UIPL No. 11-86, dated January 31, 1986; UIPL No. No. 15-92, dated January 27, 1992, (57 FR 7795, 7796); the Draft Language and Commentary to Implement the Unemployment Compensation Amendments of 1976-P.L. 94-566 ("1976 Draft Language"); and Supplements 1 through 5 to the 1976 Draft Language. Background: Section 3304(a)(6)(A), FUTA, requires each State to pay unemployment compensation (UC) based on services performed for certain governmental entities and nonprofit organizations. UC is to be paid based on these services "on the same terms, and subject to the same conditions as compensation payable on the basis of other service" covered by the State law. This is commonly referred to as the "equal treatment" requirement. Exceptions to the equal treatment requirement are found in six distinct clauses of Section 3304(a)(6)(A), FUTA. These provisions are commonly referred to as the "between and within terms denial" provisions. Some of the between and within terms denial provisions are required as a condition of certification of State law by the Secretary of Labor. Others are optional. The following describes which provisions are required and which are optional: Required: Denial between and within terms based on services performed in an instructional, research or principal administrative (i.e., a "professional") capacity for either an educational institution or an educational service agency (ESA). (Clauses (i), (iii) and (iv) of Section 3304(a)(6)(A), FUTA.) Optional: (1) Denial between and within terms based on services performed in other than an instructional, research or principal administrative (i.e., a "non- professional") capacity for either an educational institution or an ESA. (Clause (ii); clauses (iii) and (iv) which are made optional for nonprofessional services by clause (vi), all of Section 3304(a)(6)(A), FUTA.) (2) Denial between and within terms based on services performed in either a professional or nonprofessional capacity when the services are provided to or on behalf of an educational institution. (Clause (v) of Section 3304(a)(6)(A), FUTA.) In the past, the Department had taken the position that, if an optional denial clause is enacted by a State, it must be applied equally to all services described in that clause. UIPL No. 15- 92, the Department's most recent issuance on the optional clauses, provided that a State may not apply the optional denial to some nonprofessional services while excluding other nonprofessional services. UIPL No. 15-92 also restated the Department's position that "if State law contained a provision implementing clause (v), it was required to apply equally to all services described in Section 3304(a)(6)(A)(i)-(iv)." (Emphasis in original.) The Department has reconsidered its position and concluded that, if a State so chooses, an optional denial clause need not be applied to all services described in that clause. In addition, the Department has concluded that States have other options concerning the implementation of the optional clauses. This UIPL is issued to provide the Department's new position to the States. Any previous Departmental position conflicting with this new position is superseded. Discussion: As noted above, the between and within terms denial provisions are exceptions to the equal treatment requirement of Section 3304(a)(6)(A), FUTA. The equal-treatment requirement only describes the relationship of the services required to be covered by Section 3304(a)(6)(A), FUTA, to other services covered by State law. It does not address how exceptions to its requirements are to be applied. Therefore, the equal treatment requirement is not relevant to this matter. Those clauses of Section 3304(a)(6)(A), FUTA, which provide for the optional application of the between and within terms denial all provide that UC "may be denied." It is clear that the denial contained in these clauses is discretionary. No optional clause explicitly requires that all provisions of the clause be applied. Social legislation such as the FUTA is to be construed broadly with respect to coverage and benefits. Exceptions to its statutory remedies are to be narrowly construed. (See United States v. Silk, 331 U.S. 704, 712 (1947).) Accordingly, since the denial provisions are exceptions to the broad coverage provisions of Section 3304(a)(6)(A), they are given a narrow reading. The narrower reading in this case dictates that the application of an optional clause may be limited as to scope and/or time by a State. Such a reading, which permits a State to differentiate among services, or to otherwise limit application of a clause, could also result in extending coverage to the broadest number of unemployed persons, thereby accomplishing the basic purpose of the coverage requirements of Section 3304(a)(6)(A), FUTA. That is because States could choose to not apply the optional provisions to those services performed by classes of workers more deeply affected by unemployment. This discussion also indicates that an optional denial clause is not to be treated as an absolute which the States must implement in its entirety, but instead as a ceiling beyond which a State may not go without violating the equal treatment requirement of Section 3304(a)(6)(A), FUTA; a lesser application is possible. This approach has previously been followed by the Department where a "reasonable assurance" was required if a State implemented an optional clause. As was also noted in UIPL No. 15-92: States do have the option of adopting a more restrictive test than the "reasonable assurance" test for nonprofessional services. For example, instead of requiring the reasonable assurance requirement as specified under clause (ii), the State law may include a provision requiring a contract to return to work in the next year or term. Applying this concept to the optional denial clauses, States are henceforth granted discretion to apply any optional clause to some or all of the classes of services described in that clause. The term "classes of services" pertains to services performed as, for example, a custodian, cafeteria worker, bus driver, clerical worker or other nonprofessional class. Similarly, States may also limit the time period to which the optional clauses apply. Once a State elects to limit the application of a clause, the limitation must be uniformly applied throughout the State. A State may not, for example, treat services performed for one school district differently than services performed in another school district or treat services performed in a nonprofit educational institution differently from services performed in a public educational institution. This is because the denial clauses refer explicitly to "services" and certain periods of time, thereby providing a basis for providing the States the option to limit the provisions of an optional denial clause to particular classes of services or periods of time. There is no similar reference in the statute to schools, school districts or other geographical and political subdivisions and, there-fore, no basis for allowing disparate treatment of such geographical or political subdivisions. Interpretation and Application: The clauses of Section 3304(a)(6)(A), FUTA, relating to the optional application of the between and within terms denials to "nonprofessional" services are interpreted as follows: An optional clause represents an exception to the equal treatment requirement beyond which a State may not go. However, States may limit the application of the clause in the following situations, provided the limitation is applied uniformly throughout the State: (1) Clause (ii)(I) may be applied to some or all of the classes of services described in that clause. The term "classes of services" pertains to services performed as, for example, a custodian, cafeteria worker, bus driver, clerical worker or other nonprofessional class. (2) A more restrictive test than the "reasonable assurance" test required under the Department's interpretation of that term may be adopted. (3) The denial period may be limited to a shorter period than the period specified in clause (ii)(I), and the denial period may be applied only to selected vacation periods or holiday recesses specified in clause (iii). Action Required: State Administrators should provide this information to appropriate staff.