USDOL Reviewing Wage Data Exchange

Rachel Zinn
July 28, 2017

The U.S. Department of Labor (DOL) announced today that it will review operations of the Federal Employment Data Exchange System (FEDES), which facilitates state use of data on federal and military employees to report on the outcomes of workforce development programs.

DOL will suspend FEDES starting in January 2018, when its agreement with the state of Maryland to operate the system expires. DOL plans to consult with state and federal leaders to assess the structure of FEDES, as well as its costs and benefits, and evaluate the feasibility of a system overhaul. Discussions are expected to take about six months.

FEDES launched in 2003 to help states do more complete performance reporting for Workforce Investment Act (WIA) programs. The exchange system allows states to submit automated queries with information about program participants, and receive back matching employment data from the Department of Defense and the Office of Personnel Management. Currently, 41 states and the District of Columbia participate.

The data from FEDES augments information from Unemployment Insurance (UI) wage records, states' primary source of data for calculating post-program employment rates and average earnings. UI wage records are reported quarterly by businesses to state governments, so the data is missing federal employees. That means program participants that move on to work at a federal agency won't show up as employed.

Only about 2 percent of workers nationwide are employed by the federal government, but in some metro areas it's more than 10 percent, so lack of federal employee data can cause noticeable distortions in performance reporting.

DOL also is in the process of working with states to develop a new agreement for sharing quarterly wage records across state lines. State agencies collect these records as part of the Unemployment Insurance program, and they are the primary source for reporting on workforce and education programs' employment outcomes. 

Officials at DOL are revising a draft agreement for the new exchange, currently being called the State Wage Interchange System (SWIS), based on feedback from state leaders. They plan to seek additional state feedback this fall.