Labor Surplus Area: Frequently Asked Questions
What is a Labor Surplus Area?
A Labor Surplus Area (LSA) is a civil jurisdiction that has a civilian average annual unemployment rate during the previous two calendar years of 20 percent or more above the average annual civilian unemployment rate for all states (including Puerto Rico) during the same 24-month reference period. If the National annual average unemployment rate during the referenced period is less than 6.0 percent then the qualifying rate if 6.0 percent. If the National annual average unemployment rate during the referenced period is above 10 percent then the qualifying rate is 10 percent.
What is a Civil Jurisdiction?
Civil jurisdictions are defined as follows:
- A city of at least 25,000 population on the basis of the most recently available estimates from the Bureau of the Census; or
- A town or township in the States of Michigan, New Jersey, New York, or Pennsylvania of 25,000 or more population and which possess powers and functions similar to those of cities; or
- A county, except those counties which contain any type of civil jurisdictions defined in A or B above; or
- A "balance of county" consisting of a county less any component cities and townships identified in paragraphs A or B above; or
- A county equivalent which is a town in the States of Connecticut, Massachusetts, and Rhode Island, or a municipio in the Commonwealth of Puerto Rico.
Who are some of the users of the LSA list and what are the reasons they use the list?
- The Administrator for Federal Procurement Policy uses the LSA list to identify where procurement set asides should be emphasized in order to strengthen our Nation's economy;
- General Service Administration (GSA) Online Representations and Certifications Application (ORCA) system uses the LSA list as a tool to determine if a business qualifies as a Labor Surplus Area concern;
- The Small Business Administration uses the LSA list for bid selections for small business awards in Historically Underutilized Business Zones (HUBZones);
- Some state and local area governments use the LSA list to allocate employment related assistance (food stamps and training); and
- Private industry has used the LSA list for strategic planning and potential areas of human capital.
What is the Balance of County Geography?
The balance of county is defined as the reminder of the county after all cities that are civil jurisdictions are disaggregated from the county.
Can an area be added to the Labor Surplus List if that area's unemployment rate was below the qualifying unemployment rate for the referenced period?
An area can be classified as a labor surplus area if that area's unemployment rate was below the qualifying unemployment rate for the referenced period under the exceptional circumstance provision. The exceptional circumstance provision is a written petition by the state workforce agency to the Department of Labor's ETA requesting an area(s) be classified a Labor Surplus Area. The criteria for an exceptional circumstance classification are:
- An area's unemployment rate will be greater than or equal to the Labor Surplus Area qualifying unemployment rate for each of the three most recent months;
- a projected unemployment rate that will be greater than or equal to the qualifying unemployment rate for each of the next 12 months;
- and documentation that the exceptional circumstance event has already occurred.
Can an area be added to the Labor Surplus List if that area is not a civil jurisdiction?
Under the Labor Surplus Area program's exceptional circumstance procedures, labor surplus area classifications can also be made for Metropolitan Statistical Areas as defined by the Office of Management and Budget.