,

the State employment security agency. The notice sets forth the purpose of the hearing, the time, date, and place at which the hearing will be held, and the rules of procedure which will be followed. At a hearing the State is given an opportunity to present arguments and all relevant evidence, written or oral. The Secretary makes the necessary determination or findings, on the basis of the record of such hearings. A notice of the Secretary's determination or finding is sent to the State employment security agency.

(e) Civil Rights Act issues. To the extent that any proposed withholding of funds involves circumstances within the Scope of Title VI of the Civil Rights Act of 1964 and the regulations promulgated thereunder, the procedure set forth in 29 CFR Part 31 shall be applicable.

(f) Tax credit reductions. (1) Section 3302 (c) (3) of the Internal Revenue Code of 1954 prescribes the conditions under which the total credits otherwise allowable under section 3302 for a taxable year in the case of a taxpayer subject to the unemployment compensation law of a State shall be reduced on account of an outstanding balance of advances made to the State pursuant to Title XII of the .Social Security Act. As amended by section 110(a) of the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975 (Pub. L. 9445, approved June 30, 1975; 89 Stat. 236, 239), the incremental reductions in total credits will not apply to a State with respect to each of the taxable years beginning on January 1, 1975, January 1, 1976, and January 1, 1977, if the Secretary of Labor finds as to such year or years that the State has studied and taken appropriate action with respect to the financing of its unemployment compensation program so as substantially to accomplish the purpose of restoring the fiscal soundness of the State's unemployment account in the Unemployment Trust Fund and permitting the repayment within a reasonable time of any advances made to the State's account pursuant to Title XII of the Social Security Act.

(2) The Secretary of Labor's finding with respect to a State as to any of the taxable years 1975, 1976, and 1977, will be based on his determination as to whether the State has taken appropriate action resulting in

(i) Amendment of its unemployment compensation law, effective in or prior to the taxable year with respect to which the finding is made, or effective at the beginning of the succeeding taxable year, increasing the State's unemployment tax rate, increasing the State's unemployment tax base, or changing the State's experience rating formula, or a combination of such changes, so as to be estimated by the Secretary to achieve for the taxable year with respect to which the finding is made or for the period following the effective date of the amendment

(A) An average employer tax rate, computed as a percentage of the total wages in employment covered by the State's unemployment compensation law, which exceeds the State's average annual benefit cost rate, computed as a percentage of the total wages in employment covered by the State's unemployment compensation law, for the ten calendar years immediately preceding the year with respect to which the finding is made; and

(B) An effective minimum employer tax rate which is not less than 1.0 percent of the wages of any employer which are subject to tax under the Federal Unemployment Tax Act for the same year; and

(C) An effective maximum employer tax rate which exceeds 2.7 percent of the wages of any employer which are subject to tax under the Federal Unemployment Tax Act for the same year, or provision for no reduced rate of contributions for any employer subject to the State unemployment compensation law; or

(ii) (A) Amendment of its unemployment compensation law increasing the State's unemployment tax rate, increasing the State's unemployment tax base. or changing the State's experience rating formula, or a combination of such changes, so as to be estimated by the Secretary of Labor to result in increasing contributions to the State's unemployment fund, for the taxable year with respect to which the finding is made, and the allocation from such increased contributions of a sum sufficient to make the repayment in the amount and within the time limit prescribed in paragraph (f) (2) (ii) (B) of this section; and

(B) Repayment to the Treasury of the United States, for credit to the Federal unemployment account in the Unemploy

ment Trust Fund, prior to November 10 of the taxable year with respect to which the finding is made, of an amount equal to the amount of the additional tax which would be payable by all taxpayers subject to the unemployment compensation law of the State for that taxable year if the reduction in total credits prescribed by section 3302(c)(3) of the Internal Revenue Code of 1954 for that taxable year was applied without regard to the amendment added by section 110 (a) of the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975. The amount determined under the preceding sentence shall be reduced by the amount of any additional tax payable for that taxable year by taxpayers subject to the unemployment compensation law of the State by reason of the reduced credit provisions of section 3302(c) (3) of the Internal Revenue Code of 1954, as amended by section 110 (a) of the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975.

(3) A finding by the Secretary of Labor with respect to any State shall be made as of November 10 of the taxable year with respect to which the finding is made, and such finding shall be published in the FEDERAL REGISTER together with the reasons for the finding.

(26 U.S.C. 3303(b)(3) and 3304 (c)) [30 FR 6942, May 22, 1965, as amended at 40 FR 52000, Nov. 7, 1975]

Subpart B-Grants, Advances and Audits

§ 601.6 Grants for administration of unemployment insurance and employ. ment service.

Grants of funds for administration of State unemployment insurance and public employment service programs are made to States under section 302(a) of the Social Security Act, the Wagner-Peyser Act, and the Appropriation Acts.

(a) Requests for funds. The forms and instructions used by State agencies in requesting funds are available upon request from the Employment and Training Administration, Department of Labor, Washington, D.C. 20210, and at the regional offices. The forms and instructions call for detailed information for each budgetary period concerning the specific amounts requested for personal services and other current expenses of State agencies, supported by

workload and unit-cost estimates. Supplementary budget requests are processed in the same manner as regular requests. The Administration's representatives in the regional offices furnish assistance to the State agencies in preparing requests for funds.

(b) Processing of requests. State agencies send their requests for funds to the RAETA who reviews the requests and forwards them to the central office of the Administration with his recommendation as to the amounts necessary for proper and efficient administration of the State unemployment compensation law and employment service program.

The Administration appraises the requests and the recommendations of the regional representatives from a nationwide point of view, examining each State's request in the light of the experience of other States to insure equitable treatment among the States in the allocation of funds made available by Congress for the administration of State unemployment compensation laws and public employment service programs.

(c) Action by Director of the Employment Service. If the Director of the Employment Service approves the State's budget request, the State agency is notified; and, provided the conditions precedent to grants continue during the budgetary period, certifications for payment, under the approved budget, stating the amounts, are made by the Director to the Secretary of the Treasury quarterly. Upon denial of a request, in whole or in part, the State agency is notified and the RAETA is instructed to negotiate with the State with a view to removing the basis for denial.

§ 601.7 Requests for funds for servicemen's readjustment allowance program.

Allotments of funds for the administration of the servicemen's readjustment allowance program are made to States by the Secretary of Labor upon quarterly certification by the Administrator of Veterans' Affairs under section 1100 (f) of the Servicemen's Readjustment Act of 1944. The certifications by the Administrator of Veterans' Affairs are based upon requests submitted to the Veterans' Administration by the State agencies administering unemployment insurance and employment service

programs.

The Secretary of Labor and the Postmaster General have been directed by the Congress (Title II of the Labor-Federal Security Agency Appropriation Act, 1950) to prescribe a mutually satisfactory procedure whereby official State employment security postal matter will be handled without the prepayment of postage. In lieu of such prepayments, the Director periodically certifies to the Secretary of the Treasury for payment to the Post Office Department the amount necessary to cover the cost of State agency mailings. The amount of payment is based on a formula agreed upon by the Secretary of Labor and the Post Office Department.

As soon as practicable after the close of each budgetary period, or at other times as necessary, the books of account and records pertaining to employment security administration in each State are audited by the State Audit Branch, Division of Business Management, ETA to determine whether the expenditures have been made for purposes and in amounts found necessary by the Director for proper and efficient administration of the State's unemployment compensation law and public employment service.

(a) If the audit, as reviewed by the regional office, results in no exceptions the agency is advised by letter of this result. If the regional office concurs in exceptions taken by the examining auditor, the State agency is given an opportunity within 15 days to concur in them or to submit additional facts for purposes of clearing the exceptions. If the agency's reply does not result in clearance of the exceptions, they are presented to the Secretary with the agency's statement of its reasons for non-concurrence.

(b) The Secretary, upon consideration of the audit report and the agency's reply, determines whether (1) the exceptions are properly taken and replacement of the amount involved is required or (2) the exception should be withdrawn. In either case the State agency is notified of the action taken.

PART 602-COOPERATION OF THE UNITED STATES EMPLOYMENT SERV. ICE AND STATES IN ESTABLISHING AND MAINTAINING A NATIONAL SYSTEM OF PUBLIC EMPLOYMENT OFFICES

Sec.

602.1

602.2

602.3

602.4 602.48

602.5

602.6

Definitions.

Placement services.

Employment counseling and selec tive placement services. Occupational analysis.

Industrial services.

Special service for veterans.

602.5a Special service for the handicapped. Labor market information service. Participation in community programs.

602.7

602.8

602.9

Agricultural and related industry placement services.

Interstate recruitment of agricul tural workers.

CERTIFICATION AND USE OF TEMPORARY FOREIGN LABOR FOR AGRICULTURAL AND LOGGING EMPLOYMENT

602.10 The certification processes. 602.10a Job offers and contracts. 602.10b Wage rates.

602.11

602.12

602.13

Services and facilities.
Organization.

Arrangements between United State!

Employment Service and related

Federal agencies.

Personnel administration.

602.14

Manual of instructions.

602.15

602.16

Fiscal affairs.

Confidential character of records.

Reports and studies.

State plans of operation.

Delegation of authority.

Amounts and purposes of grants.

AUTHORITY: The provisions of this Part 602 issued under sec. 12, 48 Stat. 117, as amended, secs. 1-13, 48 Stat. 113, as amended; secs. 2010-2014, 72 Stat. 1221; 29 US.C. 49-491; 38 U.S.C. 2010-2014.

§ 602.1 Definitions.

In this part, the following words shall, unless the context requires otherwise, have the following meanings:

(a) "Wagner-Peyser Act" means the Act of June 6, 1933, as amended (48 Stat. 113), and all rules, regulations, and standards promulgated thereunder.

(b) "State" includes the several States, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.

(c) "State agency" means the agency designated under section 4 of the Wagner-Peyser Act as the agency to cooper

ate with the United States Employment Service.

(d) "State Director" means the individual, regardless of organizational title, who is responsible, subject to the over-all direction and supervision of the chief official of the State agency or department in which the State service is located, for the proper and efficient administration of the Statewide system of public em– ployment offices.

(e) "United States Employment Service" means the organizational component of the Employment Training AdminisEtration (ETA) in the Department of Labor which is responsible for carrying out the Department's responsibilities in connection with the Wagner-Peyser Act, and other employment and training responsibilities.

(f) "Administrator United States Employment Service" (Administrator) means the chief official of the United States Employment Service.

(g) "State Veterans' Employment Representative" means the individual assigned by the United States Employment Service to each State public employment service system, who is administratively responsible to the Chief of the Veterans' Employment Service of the United States Employment Service, for the execution, through the public employment service in the State, of the policies of the Secretary of Labor.

[15 F.R. 5887, Aug. 31, 1950, as amended at 18 F.R. 305, Jan. 15, 1953; 22 F.R. 5993, July 31, 1957; 34 FR. 19800, Dec. 18, 1969] #§ 602.2 Placement services.

(a) Functions. Each State Agency $ shall maintain, through its State and local employment offices, a placement service for the free use of employers, workers, and veterans and for the purpose of assisting employers to secure the number of workers possessing the occupational qualifications such employers require, and of assisting all workers to find promptly, jobs for which they are Occupationally qualified and which are =most advantageous to them. The State

service shall promote the full use of its placement facilities, for the purpose of assuring the maximum of job opportunities for veterans and other workers and the maximum recruitment and placement assistance for employers.

(b) Referrals in labor dispute situations. No person shall be referred to position the filling of which will aid directly or indirectly in filling a job which (1) is vacant because the former occupant is on strike or is being locked out in the course of a labor dispute, or (2) the filling of which is an issue in a labor dispute. With respect to positions not covered by subparagraph (1) or (2) of this paragraph, any individual may be referred to a place of employment in which a labor dispute exists, provided he is given written notice of such dispute prior to or at the time of his referral.

(c) Inter-area and interstate clearance of labor. Each State agency shall cooperate with the United States Employment Service in the interstate recruitment and transfer of workers. Each State agency shall maintain an adequate system for the recruitment and transfer of workers between areas within the State.

(d) Multi-State labor market areas. With respect to any single labor market area covering parts of two or more States, the State agencies involved shall establish and maintain adequate arrangements and procedures to assure that workers and employers have full access to job opportunities and the available labor supply within the area, without regard to State boundaries. [15 F.R. 5888, Aug. 31, 1950]

§ 602.3 Employment counseling and selective placement services.

Each state agency shall maintain an adequate local office employment counseling service for veterans and other applicants of employable age. Such employment counseling service shall assist the applicant to evaluate his potential abilities in relation to job requirements and employment opportunities. Local employment offices shall provide such special services and utilize such selective placement techniques as may be necessary to assist handicapped veterans and other applicants to secure employment in occupations which are suited to their physical capacities, interest, and abilities. Local offices shall establish and maintain cooperative relationships with other community and State agencies and organizations for the coordination and mutual_improvement of vocational ad

Justment services. In those States where State boards, departments, or agencies exist which are charged with the administration of State laws for the vocational rehabilitation of handicapped persons, the State agency shall make provision for cooperation with such boards, departments, or agencies.

[15 F.R. 5888, Aug. 31, 1950]

8 602.4 Occupational analysis.

Each State agency shall maintain, through its State administrative office and local offices, an adequate occupational analysis activity concerned with the collection, organization, processing, adapting, or issuing of information about the duties, responsibilities, and performance requirements of jobs and the relationships that exist among jobs to permit effective matching of workers and jobs and to broaden the employment opportunities for applicants and the sources of workers for employers. In connection with this activity, each State agency shall cooperate with the United States Employment Service in the development and use of the occupational analysis and related materials of the United States Employment Service. [18 F.R. 306, Jan. 15, 1953]

§ 602.4a Industrial services.

Each State agency shall maintain, through its State administrative office and local offices, an adequate industrial services activity concerned with assisting employers, labor organizations, and other organizations in analyzing and evaluating the basic causes of in-plant manpower problems in individual establishments, and giving instruction in the application and/or use of those materials, techniques, and related information developed by or recommended by the United States Employment Service which will aid in resolving these problems. In connection with this activity, each state agency shall cooperate with the United States Employment Service in the use of the occupational analysis and related materials of the United States Employment Service.

[18 FR 306, Jan. 15, 1953; 18 FR 2819, May 15, 1953]

§ 602.5 Special service for veterans.

Each State agency shall maintain through its State administrative office and local employment offices, effective placement and counseling services for

veterans, to carry out the provisions of the Wagner-Peyser Act and of Title IV of the Servicemen's Readjustment Act of 1944. In connection therewith, each State agency shall carry out the policies as determined by the Secretary of Labor and promulgated through the United States Employment Service. The State veterans' employment representative shall be consulted on all matters affecting veterans' employment activities and shall be invited to attend staff meetings of the senior employment service staff. Each State agency shall make available adequate and appropriate space and facilities for the representatives of the Veterans' Employment Serv. ice located within the State, and shall assure that State and local employment offices cooperate with field personnel of the Veterans' Employment Service. The State Director shall, after consultation with the State veterans' employment representative, designate one or more employees (preferably veterans) in each local employment office as veterans' em. ployment representatives who shall, under the administrative direction of the local office manager, carry out the services and functions prescribed in section 602 of the Servicemen's Readjustment Act of 1944.

[15 FR. 5888, Aug. 31, 1950]

§ 602.5a Special service for the handicapped.

Each State agency shall maintain, through its State administrative office and local employment offices effective services for the promotion and development of employment opportunities for handicapped persons and for job counseling and placement of such persons to carry out the provisions of the Wagner-Peyser Act, as amended. Each State agency shall designate at least one person in the State administrative office and in each local employment office whose duties shall include the effectustion of such purposes.

[20 F.R. 1763, Mar. 24, 1955]

§ 602.6 Labor market information serv. ice.

Each State agency shall maintain, through its State administrative office and local employment offices, an effective labor market information service, through which it shall provide for the collection, analysis and public issuance of information on current labor market