I.Purpose

To provide guidance regarding the limitations on salary and bonus payments from funds administered or provided by the United States Department of Labor, Employment and Training Administration (USDOL ETA).

II.EffectiveDate

Immediately.

III.Background

Public Law 109-234 section 7013, enacted on June 15, 2006, limits the salary and bonus payments to individuals from funds appropriated to the ETA. Training and Employment Guidance Letter (TEGL) 5-06, issued on August 15, 2006, provides further details on the implementation of Public Law 109-234.

IV.GuidanceStatement

The limit for salary and bonus payments to individuals funded from any ETA program, grant or contract is set at the rate of the Executive Level II. A salary table providing this rate is listed on the Federal Office of Personnel Management Web site: www.opm.gov. These levels and the web site are revised annually. The rate for Executive Level II is $165,200 for the Fiscal Year (FY) 2006. The sum of all bonuses received over the previous 12-month period when added to the employee's salary may not at any time exceed this limitation. For example, an employee paid at a rate of $162,000 may not receive bonuses in any 12-month period that exceeds $3,200, assuming the limitation of $165,200. If an individual works part time, let's say 60% of the time on any program funded by the ETA, then his/her salary and bonus payments may not be more than 60% of the Executive Level II, or $99,120. All ETA funds that were appropriated in FY 2006, and any prior years' funds that are available for expenditure on or after June 15, 2006 are affected by this limitation. This limitation must be implemented retroactively to June 15, 2006.

Any limits for payments to individuals that have been previously set are not affected by this WIATL if they are more restrictive than the limit in the TEGL 5-06. For example, the limitations set for payments to individuals through the Job Corps program, as well as any limitations that are contained in grants or contracts that are more restrictive than the limit set in this letter are still in effect.

The limitation in this WIATL applies to funds used by recipients and sub-recipients to pay for salaries or bonuses regardless of whether these are considered as direct or indirect costs. Recipients are entities that directly or indirectly receive contracts or grants from ETA. If an individual's payments include only a portion of ETA appropriated funds, this limit pertains to that portion. Thus, if an employee spends 25% of the time on an ETA funded program, the limit for this individual ETA funded salary is 25% of the Executive Level II.

The limit pertains to programs that received appropriations through the ETA, even if these programs are administered by another agency. The Veterans Employment and Training Service (VETS) programs that are funded by ETA are subject to the salary and bonus limitations. Conversely, programs funded by H-1B grants, Disaster Unemployment Assistance (DUA) program, and WIA incentive grants that are financed only through the Department of Education (DOE), are not subject to ETA appropriations and are not affected by this limit.

TEGL 5-06 affects recipients, sub-recipients, contractors and sub-contractors, but it does not apply to vendors that provide goods and services to other entities, and to ETA funded programs. The definition of "vendor" is found in OMB Circular A-133, and it generally refers to an organization that meets all of the following:

(1)Provides the goods and services within normal business operations;

(2)Provides similar goods or services to many different purchasers;

(3)Operates in a competitive environment;

(4)Provides goods or services that are ancillary to the operation of the federal program; and

(5)Is not subject to compliance requirements of the federal program.

A recipient or a sub-recipient is an organization that:

(1)Determines who is eligible to receive federal assistance;

(2)Has its performance measured against whether the objectives of the federal program are met;

(3)Has responsibility for programmatic decision making;

(4)Has responsibility for adherence to applicable federal program compliance requirements; and

(5)Uses the federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

The determination of whether an organization is a sub-recipient or a vendor is based on the substance of the relationship. For instance, when deciding whether a vendor or sub-recipient relationship exists, no one factor should be taken in isolation; all the applicable criteria should be reviewed. However, under no circumstances should a designation of vendor be made for providers that have a financial or performance requirement related to eligibility or selection of participants. The designations of sub-recipient and vendor relate to type of product or service provided, and not to the type of agreement document used or whether that agreement is called a contract or a subgrant.

V.Technical Assistance

For additional information, you may send your questions to the Bureau of Workforce Services: wiaqna@odjfs.state.oh.us.

VI.References

Emergency Supplemental Appropriations Bill, Public Law 109-234, June 15, 2006

USDOL, Training and Employment Guidance Letter (TEGL) 5-06, August 15, 2006