PART 640—STANDARD FOR BENEFIT PAYMENT PROMPTNESS—UNEMPLOYMENT COMPENSATION Authority: Sec. 1102, Social Security Act (42 U.S.C. 1302); Secretary's order No. 4-75, dated April 16, 1975 (40 FR 18515) (5 U.S.C. 553). Interpret and apply secs. 303(a)(1) and 303(b)(2) of the Social Security Act (42 U.S.C. 503(a)(1), 503(b)(2)). Source: 43 FR 33225, July 28, 1978, unless otherwise noted. § 640.1 Purpose and scope. (a) Purpose. (2) Although the standard applies to the promptness of all benefit payments and the criteria apply directly to the promptness of first benefit payments, it is recognized that adequate performance is contingent upon the prompt determination of eligibility by the State as a condition for the payment or denial of benefits. Accordingly, implicit in prompt performance with respect to benefit payments is the corresponding need for promptness by the State in making determinations of eligibility. However, applicable Federal laws provide no authority for the Secretary of Labor to determine the eligibility of individuals under a State law. (b) Scope. (2) The standard specified in § 640.4 applies to all claims for unemployment compensation. The criteria for State compliance in § 640.5 apply to first payments of unemployment compensation under the State law to eligible claimants following the filing of initial claims and first compensable claims. [43 FR 33225, July 28, 1978, as amended at 71 FR 35516, June 21, 2006] § 640.2 Federal law requirements. (a) Conformity. Such methods of administration * * * as are found by the Secretary of Labor to be reasonably calculated to insure full payment of unemployment compensation when due. (b) Compliance. Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that in the administration of the law there is: (1) * * * (2) a failure to comply substantially with any provision specified in subsection (a) of this section; the Secretary of Labor shall notify such State agency that further payments will not be made to the State until the Secretary of Labor is satisfied that there is no longer any such * * * failure to comply. Until he is so satisfied, he shall make no further certification to the Secretary of the Treasury with respect to such State * * *. § 640.3 Interpretation of Federal law requirements. (a) Section 303(a)(1). (b) Section 303(b)(2). (2) The greatest promptness that is administratively feasible will depend upon the circumstances in each State that impacts upon its performance in paying benefits. Factors reasonably beyond a State's control may cause its performance to drop below the level of adequacy expressed in the table below as criteria for substantial compliance applicable to all States. Where it is demonstrated that failure to meet the criteria of adequacy is attributable to factors reasonably beyond the State's control and, in light of those factors, the State has performed at the highest level administratively feasible, it will be considered that the State is in substantial compliance with the Standard for conformity. Whether or not the State is in substantial compliance, the remedial provisions of §§ 640.7 and 640.8 will be applicable when the pertinent criteria are not met. § 640.4 Standard for conformity. A State law will satisfy the requirement of section 303(a)(1), if it contains a provision requiring, or which is construed to require, such methods of administration as will reasonably insure the full payment of unemployment benefits to eligible claimants with the greatest promptness that is administratively feasible. § 640.5 Criteria for compliance. The criteria in the schedule below shall apply in determining whether, in the administration of a State law, there has been substantial compliance with the provision required by section 303(a)(1) in the issuance of benefit payments to eligible claimants for the first compensable weeks of unemployment in their benefit years: Percentage of first payments issued—days following end of first compensable week 14 days, waiting week States 21 days, nonwaiting week States 1 35 days, all States Intrastate Claims Performance to be achieved for the 12-mo. period ending on March 31 of each year 87 87 93 Interstate Claims Performance to be achieved for the 12-mo. period ending on March 31 of each year 70 70 78 1 A State will be deemed to comply substantially, as set out in §§ 640.2(b) and 640.3(b), if its average performance, for the period of review, meets or exceeds the applicable criteria set forth above. [43 FR 33225, July 28, 1978, as amended at 71 FR 35516, June 21, 2006] § 640.6 Review of State compliance. (a) Annual reviews. (b) Periodic review. § 640.7 Benefit payment performance plans. (a) Annual plan. (b) Periodic plan. (c) Content of plan. (Approved by the Office of Management and Budget under control number 1205-0132) (Pub. L. No. 96-511) [43 FR 33225, July 28, 1978, as amended at 49 FR 18295, Apr. 30, 1984] § 640.8 Enforcement of the standard. (a) Action by the Department of Labor. (1) Initiate informal discussion with State agency officials pursuant to § 601.5(b) of this chapter. (2) Conduct an evaluation of the State's benefit payment processes and analyze the reasons for the State's failure to meet the standard. (3) Recommend specific actions for the State to take to improve its benefit payment performance. (4) Request the State to submit a plan for complying with the standard by a prescribed date. (5) Initiate special reporting requirements for a specified period of time. (6) Consult with the Governor of the State regarding the consequences of the State's noncompliance with the standard. (7) Propose to the Governor of the State and on an agreed upon basis arrange for the use of expert Federal staff to furnish technical assistance to the State agency with respect to its payment operations. (b) Action by the Assistant Secretary. § 640.9 Information, reports and studies. A State shall furnish to the Secretary of Labor such information and reports and make such studies as the Secretary decides are necessary or appropriate to carry out this part.