Background. Title II, Section 201 of Public Law 102-318 amended the Federal-State Extended Unemployment Compensation Act of 1970 by providing for the use of a 3-month average seasonally adjusted TUR as an alternative trigger mechanism for determining a State's eligibility to pay EB. Prior to the alternative TUR trigger, any determination of whether a State was triggered "on" or "off" EB was based on the State's 13-week insured unemployment rate (IUR) as reported by the State agency. Within 10 calendar days after the end of any week with respect to which the head of a State agency had determined that there was an "on" or "off" indicator change, the State was required to notify the Secretary of the change (see 20 CFR 615.12). This requirement still applies to EB periods based on the IUR trigger. The DOL's Bureau of Labor Statistics is the official source of the alternative TUR trigger, which makes it the DOL's responsibility to determine the rates of total unemployment for "on" or "off" EB indicators with respect to this trigger (see 203(f)(2) of Federal-State Extended Unemployment Compensation Act of 1970). This necessitates that DOL implement a notification process to advise affected States of a status change based on the alternative TUR trigger. DOL's Notification Process of an EB Status Change. Effective immediately, the Department of Labor will issue a notice to the appropriate State official when it has been determined that a State's EB status will change due to the alternative TUR trigger. This notice will include the circumstances which resulted in the status change. Except for the requirement in Section 615.12(e), States still must follow all procedural requirements of 20 CFR 615 related to notification of the Department. Action Required. State Administrators are requested to provide the above information to all appropriate staff.

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References: UIPL No. 16-94, (3/15/94) UIPL No. 18-93, (3/18/93), UIPL No.20-93 (3/8/93). Background: The RQC staff compiles questions and issues that arise during RQC training classes, Regional and National Office monitoring trips, and from other sources in order to develop a generic set of answers to those questions believed to be of universal interest to the State staff implementing RQC. Questions and Answers: The attached Q&As (dated May 1994) are an addition to the compilation of questions and answers dated February 1994. The Q&As are arranged by tax function and in the same sequence as the RQC Operations Handbook. This format provides the necessary flexibility to allow periodic Q&A updates to be inserted in the appropriate section. (For example, the May Status Acceptance Sampling pages can be inserted at the end of the February Status Acceptance Sampling section.) Numbering of the questions is continuous. Action Required: SESA Administrators are requested to provide the attached Q&As to RQC Reviewers and appropriate ADP staff. Three copies are attached for your convenience.

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Reference: UIPL NO. 16-94 (March 15, 1994), UIPL NO. 3-93 (November 9, 1992) The RQC is a continuation of the quality control system initiated under a Federal regulation published in 20 CFR Part 602, effective October 5, 1987. Under the Regulation, the Federal-State UI system is required to have a quality control program to assess the timeliness and accuracy of the States' administration of their UI programs. As a result, the Benefit Quality Control program was started in 1988 to assess the quality of paying UI benefits. To evaluate the quality of UI tax operations, the RQC program was added. The RQC was designed and developed with extensive input of State UI tax experts working in the National Office on temporary Intergovernmental Personnel Act (IPA) assignments, a panel of State experts on tax policy and administration, and State and Regional staff involved in the RQC pre-test and pilot test. Following training provided to State RQC program reviewers and ADP staff, 52 States began voluntary implementation of RQC in mid and late 1993. The voluntary implementation phase was an effective test of RQC applications under varying State rules and procedures, generating a number of improvements and modifications in RQC operating procedures. A series of clarifications, questions and answers has been released to States and Regions via UI Program Letter 16-94. To avoid duplicating QA tax performance measures, the Office of Management and Budget (OMB) conditioned approval for mandatory Federal collection of RQC data on the elimination of QA-RQC overlap. The following implementation plan is designed to address OMB stipulations. Phased Implementation of RQC: The RQC workgroup is preparing for a phased-in implementation of RQC in 1995 and 1996, under existing statutory authority. Mandatory implementation of RQC Computed Measures will coincide with distribution to the States of a revised form ETA 581 and instructions. The revised instructions contain clarifications to definitions and previous instructions, and the addition of new reporting items in the areas of Report Delinquency, Status Determination, Total Wages Audited and Accounts Receivable. These changes are in the OMB clearance process, and are expected to be approved in the fall of 1994. Immediately afterward, the revised form and instructions will be released to all State Employment Security Agencies (SESAs) via a change to ET Handbook No. 401, 2nd Edition. The following steps are designed to coordinate RQC, QA, and ETA 581 reporting for full implementation of RQC. The phased implementa- tion plan has three main components: Step 1. Initiate RQC's Computed Measures with the revised form ETA 581 reporting requirements. Reporting on the revised form is expected to become effective at the start of Calendar Year 1995 (CY 95), with data for the quarter ending March 31, 1995 due in the National Office on May 20, 1995. Step 2. Suspend Quality Appraisal tax reviews after the November 1994 - January 1995 reviews are completed. Data from final QA tax reviews will be published in the 1995 QA Report. Step 3. The balance of RQC (Systems Reviews, Acceptance Sampling and Methods Surveys) will be mandatory effective January 1, 1996, under the Secretary's existing statutory authority to require reports and operations data fromthe States. Transition of QA Measures to RQC: The following is a brief summary of current QA requirements and the measurements RQC will perform in their place. a. Promptness: QA produces promptness measures for cashiering, status determinations, collections and reports delinquency. The first three are from samples, the fourth from ETA 581 (universe) data. The RQC promptness measures will use ETA 581 data for three of the same measures. The RQC's cashiering measure--timeliness of deposit into the clearing account and the accuracy of posting the employer account--uses an expanded version of the current QA sampling approach. The RQC program has more detailed status timeliness measures, and two new report delinquency measures. b. Performance/Accuracy: QA measures audit performance through a small sample, and uses ETA 581 data to measure audit penetration. The RQC includes a comprehensive systems review of the audit function to ensure compliance with all Employment Security Manual requirements (performance). Also encompassed are measures for audit penetration, wage change, and wages audited. In addition to evaluating field audit operations, RQC will measure accuracy and completeness in: status determinations, cashiering, report delinquency, collections, and accounts maintenance (contri- bution processing, debits and billings, credits and refunds, benefit charging, and experience rating). The full transition from QA to RQC (and the rest of the UIS oversight system) will be influenced by the State-Federal Perfor- mance Enhancement group's final recommendation on the most effective way to improve UIS performance. The group's final recommendations are due late in CY 94. Action Required: The SESA Administrators are requested to prepare for the phased-in implementation of mandatory RQC, as follows: (1.) Notify appropriate staff that the phase-in implementation of RQC will begin with Computed Measures in January 1995. a. The SESA data definitions should be compared with RQC defini- tions, and the various data elements should be tested to ensure that the required Computed Measures data can be collected and reported properly for the first quarter of CY 95. b. Notify staff associated with ETA 581 activity, including ADP staff, of the need to implement the revised ETA 581 reporting requirements for the report quarter ending March 31, 1995. The first revised report will be due on May 20, 1995. (2). Advise appropriate staff that the remainder of the RQC program (Systems Reviews, Method Surveys and Acceptance Sampling) will be implemented effective January 1, 1996. Staff will need to ensure that sampling universes are created, tested and operable so that a complete RQC review can begin in January 1996. Results and findings of the 1996 RQC tax reviews are scheduled for compilation in early CY 97.

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