Revised and Final Fiscal Year (FY) 2022 State Workforce Agency Unemployment Insurance (UI) Resource Planning Targets and Guidelines

EMPLOYMENT AND TRAINING ADMINISTRATION

ADVISORY SYSTEM

U.S. DEPARTMENT OF LABOR

Washington, D.C. 20210

CLASSIFICATION

Unemployment Insurance

CORRESPONDENCE SYMBOL

OUI/DFAS

DATE

May 13, 2022

RESCISSIONS

None

EXPIRATION DATE

September 30, 2023

ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 25-21,

Change 1

TO: STATE WORKFORCE AGENCIES

FROM: ANGELA HANKS /s/

Acting Assistant Secretary

SUBJECT: Revised and Final Fiscal Year (FY) 2022 State Workforce Agency

Unemployment Insurance (UI) Resource Planning Targets and Guidelines

1. Purpose. To provide states with the revised and final FY 2022 UI State Administration base

resource planning targets, general guidelines for resource planning, and an explanation of how

the U.S. Department of Labor (Department) allocates base resources among the states.

2. Action Requested. The Department’s Employment and Training Administration (ETA)

requests that State Administrators:

a. Provide to the appropriate staff the revised and final FY 2022 planning targets and the

following instructions as soon as possible after receiving this Unemployment Insurance

Program Letter (UIPL);

b. Notify the appropriate ETA Regional Office of any questions or concerns as soon as

possible after receiving this UIPL;

c. Submit revised FY 2022 SF-424 (OMB Approval No. 4040-0004), 424A (OMB Approval

No. 4040-0006), if applicable, and 424B (OMB Approval No. 4040-0007) reflecting the

new base allocations via www.grants.gov; and

d. Update FY 2022 first quarter UI-3 reports to account for the revised FY 2022 Minutes Per

Unit (MPU) factors within two weeks/10 business days of the publication of this UIPL.

3. Summary and Background.

Summary – On March 15, 2022, the President signed the Consolidated Appropriations Act,

2022. The total amount of resources included in the enacted FY 2022 appropriation for UI

base administration is $2,432,571,000, determined at a 1.8 million average weekly insured

unemployment (AWIU) level. This includes $2,317,781,000 for base UI administration and

$114,790,000 for postage. While this is an increase in funding relative to the amount

provided in the FY 2021 appropriation, this amount is less than the Administration’s original

request.

The same state data used to produce the preliminary targets was used in accordance with the

allocation methodology described below in section 4(c). As noted in UIPL No. 25-21,

because the FY 2020 data, which serves as a basis for much of the allocation, was so volatile

the outputs from the allocation model were volatile as well. Again, as noted in UIPL 25-21, a

determination was made to distribute the increase in funding equitably across all states. To

achieve that, a “stop-gain” parameter was set such that all states receive the same percentage

increase above their FY 2021 allocation.

Because the state allocations reflected in the preliminary planning targets assumed that

Congress would appropriate the amounts reflected in the President’s proposed FY 2022

Budget request, the targets have been revised downward to reflect the actual enacted

appropriation. The revised targets therefore have been reduced by the same percentage across

all states from the preliminary targets.

Background – Prior to the beginning of each fiscal year, ETA’s Office of Unemployment

Insurance announces preliminary dollars and staff year base administration resource planning

targets for UI operations. States use this information in planning and developing State Quality

Service Plans. Typically, the only inputs that changed from year to year in the equation used

to determine the amount of state UI administrative resources to be requested through the

Federal budget cycle are the projected national UI workloads. However, for the

Administration’s request for FY 2022 state UI administration estimate used in the President’s

FY 2022 Budget, several other inputs in the budget formulation equation were updated as well

to reflect current cost and processing information.

The equation used to develop the State UI Administration funding estimate is based on unit

costs (workload per staff year), salary rates, projected workloads, and add-on percentages for

overhead and non-personal services (e.g., rents, equipment, technology). The unit costs,

salary rates, and add-on percentages have not been updated in many years. The equation used

to develop FY 2022 Budget request reflected updates to each of these components to reflect

automation efficiencies and salary rate increases. The updates to these factors resulted in an

overall increase to the requested amount of State UI Administrative funding. However, the

appropriation provided in the Consolidated Appropriations Act, 2022 did not reflect these

formulation changes. Therefore, the preliminary planning targets, provided in UIPL No. 25-

21, must be revised to reflect the lower levels of funding made available.

4. Details.

a. Data Inputs. Minutes Per Unit (MPU), annual hours worked, non-workload staff years,

personal services/personnel benefits (PS/PB) rates, and non-personal services (NPS)

dollars for FY 2022 are all drawn from the Resource Justification Model (RJM) data

collection submitted by states in FY 2021. The RJM data collection methodology is

explained in ET Handbook No. 410, 6

Edition, Resource Justification Model.

The following table shows the data inputs used for the base allocations for FY 2021 and

the planning targets for FY 2022. These inputs are described in more detail below.

DATA INPUTS

CATEGORY

FY 2021 Allocations

FY 2022 Targets

Base Workloads

National Office projections

formulated at a 1.6 million AWIU

National Office projections formulated

at a 1.8 million AWIU

MPU values

FY 2019 (less state dollars &

hours)*

Average of actuals for FYs 2018,

2019 and 2020 (less state dollars &

hours)*

Annual hours worked

FY 2021 projected*

FY 2022 projected*

Non-Workload Staff Years

FY 2019 actual

FY 2020 actual

PS/PB rates

FY 2019 actual, increased

annually by 3 percent*

FY 2020 actual, increased annually

by 3 percent*

NPS dollars

Actual expenditures in FY 2019,

not including state dollars and

one-time costs and increased

annually by 3 percent

Actual expenditures in FY 2020,

not including state dollars and one-

time costs and increased annually

by 3 percent

* Both state supplemental PS/PB expenditures and the hours worked/paid associated with those

expenditures are excluded from state RJM inputs, effectively leaving the PS/PB rates intact but

reducing annual hours worked and MPU values.

The data inputs from state RJM submissions described above produced a national total base state

funding amount of $2,661,452,168 for FY 2022. Base funding available for FY 2022 is

$2,317,781,000. The amount of funds available for allocation in each category (e.g., Workload,

Support, Administrative Staff and Technical Services (AS&T), and NPS) is determined by

multiplying the percent each category represented of the total requested budget amount by the

total dollars available, with two exceptions: the requested amounts for Benefit Payment Control

(BPC) and UI Performs were not changed in the targets.

b. Highlights of Base Planning Targets.

1. State Allocations. The amount available for FY 2022 state administration is 8.02

percent higher than the FY 2021 level and a decrease of 10.0 percent from the

preliminary planning targets, published in UIPL No. 25-21. The amount available for

FY 2022 base postage is 8.20 percent higher than FY 2021 level.

In an effort to most equitably distribute the available state UI administrative funds, a

“stop-gain” factor was set such that all states will receive the same percentage increases

from their FY 2021 base awards, and the same decrease from their preliminary base

planning targets.

2. Funding Period. The “funding period” is the period during which states may obligate

funds. The appropriations language included in the enacted FY 2022 appropriations

for State Unemployment Insurance and Employment Service Operations (SUIESO)

provides that states may obligate FY 2022 UI grant funds through December 31, 2022.

However, states may obligate FY 2022 UI grant funds through September 30, 2024, if

such funds are used for automation, or for competitive grants awarded to states for

improved operations, or to conduct in-person reemployment and eligibility

assessments, or for unemployment insurance improper payment reviews, or to provide

reemployment services and referrals to training, as appropriate.

States have an additional 90 days after the end of the funding period to liquidate

obligations. If an extension of the liquidation period is necessary, a state must seek the

approval of ETA’s Grant Officer. States should submit requests to extend the

liquidation period in writing to the appropriate ETA regional office at least 30 days

before the existing deadline.

c. Allocation Methodologies. A detailed description of the allocations methodologies

follows.

1. UI Base Staff.

• Workload Functions Allocation Methodology. The allocation methodology seeks to

achieve four objectives to the greatest extent possible: equitably allocate available

resources so that the same level of service to claimants and employers is available in all

states; promote administrative efficiency; enable resources to shift with workloads; and

avoid abrupt shifts of resources among states from year to year.

▪ Data Sources.

− Time Factors. The unprecedented UI claims volumes that were experienced

during fiscal year 2020 resulted in significantly skewed MPUs as excessively

high workloads resulted in excessively low MPUs. In an attempt to normalize

the time factors, a three-year average was computed and used as input to the

allocation. The MPU values are an average of the data for FY 2018, FY 2019,

and FY 2020. The MPUs were calculated from data states submitted in the

RJM data collection instrument.

− Work Hours. The hours per staff year are the FY 2022 projected hours states

reported in the January 2021 RJM submission.

▪ Workload Forecasts. The state’s base FY 2022 workloads for the six workload

activities – initial claims, weeks claimed, nonmonetary determinations, appeals,

subject employers, and wage records – were developed by applying each state’s

proportion of actual FY 2020 activity to the total base workload funded in FY 2022

for each activity. Additional funds are available on a quarterly basis for claims-

related workloads processed above the base level.

▪ Determination of Allowable MPU Values. For FY 2022, the calculation using

states’ unreduced three-year average MPU values from the RJM data collection

yielded 13,874 workload staff years. A three-year average was used because the

unprecedented volume of workload processed in FY 2020 resulted in significantly

lower MPU values than states’ normal operations. To fit the targets within

available funds, the allocated MPU values were developed for the six base

workload activities by reducing the MPU values for most states so that the number

of targeted workload staff years equaled the 11,818 staff years since that is the level

for which funds are available. MPU reductions in each of the six activities were

made as follows:

− MPUs were arrayed from the highest to the lowest MPU value.

− The lowest ten MPU values were not reduced.

− Within each of the six workload categories, the difference was calculated

between each of the top 43 MPU values and the tenth lowest MPU. Differences

were then reduced by a percentage determined by anticipated available

resources, and the result for each state was added back to the tenth lowest MPU

to obtain the allocated MPU for each state. In general, the higher the MPU, the

greater its reduction; however, reductions in MPUs for states with relatively

smaller workloads were mitigated by up to 25 percent of what the reduction

otherwise would have been. The percent of the mitigation was determined by

the relationship of the state's workload to the largest workload among states

being reduced.

• Non-Workload Staff Years Allocation Methodology. Staff years for non-workload

functions are drawn from the FY 2020 data in the RJM data collection. Other than

adjusting for any state supplemental funding and adjusting for changes in BAM

sampling requirements, no reduction was applied to BPC and UI Performs staff years.

Support and AS&T staff years were reduced by using the algorithm similar to the MPU

reduction algorithm. The algorithm for Support and AS&T used the percentages that

Support and AS&T staff represented of each state’s total requested staff. The ten states

with the lowest percentages in each category were not reduced. In general, the higher

the percentage Support and/or AS&T staff represented of the total, the larger the

reduction in Support and/or AS&T staff years. In addition, no state’s Support staff

years were reduced below the lesser of 15 staff years and the number of actual Support

staff years used in FY 2020.

2. Personnel Compensation Costs. The FY 2022 PS/PB rates were determined by using

each state's FY 2020 PS/PB rate for each functional activity and increasing the result by

three percent annually. As provided in P.L. 117-103, Division H, Title I, Section 105

(March 15, 2022) and Training and Employment Guidance Letter (TEGL) No. 05-06,

no FY 2020 PS/PB rates were permitted to exceed the latest enacted Executive Level II

rate, which was $197,300. See: www.opm.gov/policy-data-oversight/pay-

leave/salaries-wages/salary-tables/pdf/2020/EX.pdf.

3. Non-Personal Services. The FY 2022 NPS allocation was determined by using each

state’s 2020 NPS expenditures reported in the RJM, less any state-funded supplemental

NPS dollars and one-time expenditures. Each state’s proportion of the FY 2020 actual

expenditures was applied to the aggregate amount and then increased by three percent

annually to calculate the available amount for FY 2022. Attachment I shows a

breakout of each state’s NPS base planning level.

4. “Stop-Gain” Provision. Stop-loss and stop-gain rules are used to ease the budgetary

impacts of fundamental year over year changes in funding. Because FY 2020 serves as

the base year for much of the state specific FY 2022 allocation factors, and FY 2020

was so extremely volatile in terms of workload and staffing due to pandemic-related

claims volume, and because the initial FY 2022 dollar amount requested for state UI

administration reflected a significant increase from the previous year, a stop-gain was

set at 19.98 percent for the preliminary FY 2022 base allocations as set in UIPL No.

25-21. To limit the impact of the reduced amount available from the enacted FY 2022

appropriation, the stop-gain provision has been set at 8.02 percent which reflects an

approximately 10 percent decrease from the preliminary FY 2022 base allocations for

all states.

• State UI Base Administration Dollars. The “stop-gain” provision is set to guarantee

that each state will receive an increase of 8.02 percent in total base administration

dollars compared to FY 2021. The funding needed to bring states that would have

received less than an 8.02 percent increase will be obtained from the states that

would have received more than an 8.02 percent in total base dollars in FY 2022.

These adjustments are shown on a separate line in Attachment I.

5. Postage. For FY 2022, the Department will allocate $114,790,000 in base postage

resources directly to states, an increase of $8,695,000 from FY 2021 postage amounts.

Each state’s allocation will reflect an 8.20 percent increase from their FY 2021 base

postage award. Attachment III displays individual state-level details regarding this

allocation.

d. General Guidelines for Above-Base Workload Resource Levels. The state administration

budget activity includes a reserve for above-base workloads.

The Department will use the quarterly hours data on the UI-1 report (OMB Approval No.

1205-0132), the allocated claims activity staff years paid, and the allocated annual MPU

values in the FY 2022 above-base certification process. Revised MPU figures will be

loaded to the state systems along with the publication of this UIPL and all states will need

to resubmit their FY 2022 first quarter UI-3 reports taking into account these revised

MPUs. States are requested to resubmit these revised reports no later than 14 days

after the publication of this UIPL.

1. Above-Base Overhead. The above-base overhead percentage will remain at 19

percent.

2. Above-Base Resources. Above-base resources are tied directly to above-base

workloads. If above-base workloads decline, less above-base funding will be made

available to the state agencies. During periods of declining above-base resources,

adjustment to staffing levels may be necessary.

3. Above-Base Instructions. General instructions for completing UI-3 reports (OMB

Approval No. 1205-0132) are in ET Handbook No. 336, Chapter II.

e. Standard Form (SF) 424. All states must re-submit the SF-424 (OMB Approval No.

4040-0004) for FY 2022 base resources to reflect the new base allocations via

www.grants.gov. Instructions for completing these forms are attached. When completing

the form, states must ensure that total UI dollars are the same as the allocated levels, and

each state should enter “FY 2022 Base allocations” in the opportunity number field of the

application. Only states that vary the quarterly number of claims activity staff years paid

must submit the SF-424A (OMB Approval No. 4040-0006) and show the quarterly

distribution in item 23 (Remarks) of the form. All states must submit the SF-424B (OMB

Approval No. 4040-0007).

f. State Flexibility. States must use all state UI administrative grant funds in accordance

with the applicable Federal law, including section 303(a)(8) of the Social Security Act (42

U.S.C. 503(a)(8)), the cost principles contained in 2 CFR Part 200 (Uniform

Administrative Requirements, Cost Principles, and Audit Requirements for Federal

Awards); 2 CFR Part 2900 (Department of Labor’s Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards), and the

annual appropriation. States have the flexibility to use the funding approved by ETA

among the various UI program categories as they deem appropriate, within the parameters

of the applicable Federal law. However, for the purposes of determining certification of

above-base funding for workload above the base, the base staff year levels for claims

activities as allocated by ETA will be used. This ensures that states do not earn more

above-base resources than they otherwise would have been entitled to earn. The

flexibility of using funds among UI program categories does not apply to funding

provided for special projects, supplemental budget requests, or special allocations, which

are identified on a case by-case basis. Funding for these purposes must be spent in

accordance with the spending plans approved for these respective projects.

g. Nationally Funded Activities. As provided in the SUIESO appropriation, the Department

will, on behalf of the states, make payments to the entities operating the National

Directory of New Hires and the State Information Data Exchange System for use by the

states.

5. Inquiries. Please direct questions to the appropriate ETA regional office.

6. References.

a. Section 303(a)(8) of the Social Security Act (42 U.S.C. §503(a)(8));

b. 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit

Requirements for Federal Awards);

c. 2 CFR Part 2900 (Department of Labor’s Uniform Administrative Requirements, Cost

Principles, and Audit Requirements for Federal Awards);

d. Consolidated Appropriations Act, 2022, P.L. 117-103, Division H, Title I, enacted March

15, 2022;

e. Employment and Training (ET) Handbook No. 336, 18th Edition, Change 4:

Unemployment Insurance (UI) State Quality Service Plan (SQSP) Planning and Reporting

Guidelines;

f. ET Handbook No. 410, 6th Edition, Resource Justification Model (RJM);

g. Training and Employment Guidance Letter (TEGL) No. 05-06, Implementing the Salary

and Bonus Limitations in Public Law 109-234, August 15, 2006,

https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2262; and

h. UIPL No. 25-21, Fiscal Year (FY) 2022 State Workforce Agency Unemployment

Insurance (UI) Resource Planning Targets and Guidelines, September 2, 2021,

https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=6102.

7. Attachments.

I. Revised FY 2022 Detailed State Base Staff Planning Levels

II. Back-up Material for Workload Allocation of Revised FY 2022 UI Base Staff

III. Revised FY 2022 Base Postage Allocation

IV. Additional Grants.gov Submission Instructions

V. Additional Guidance for Completing the SF-424 and SF-424A