Rule: Income and Eligibility Verification System: Federal-State Unemployment Compensation Program State Unemployment Compensation Information Confidentiality and Disclosure Requirements

Wednesday,
September 27, 2006
Part VIII
Department of Labor
Employment and Training Administration
20 CFR Part 603

Federal-State Unemployment
Compensation Program (UC);
Confidentiality and Disclosure of State UC
Information; Final Rule
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56830 Federal Register / Vol. 71, No. 187 / Wednesday, September 27, 2006 / Rules and Regulations
DEPARTMENT OF LABOR to ensure responsible use when UC objected to the rule. The remaining 16
information is disclosed. The State UC agencies appeared neutral, or
Employment and Training confidentiality requirement even supported the objectives of the
Administration implemented by this rule is derived rule, while offering technical comments.
from the ‘‘methods of administration’’ Other commenters included employer
20 CFR Part 603 requirement of Section 303(a)(1), SSA. interest groups, researchers, the U.S.
RIN 1205–AB18
The disclosure requirements are from Census Bureau, and the National
Sections 303(a)(7), (c)(1), (d), (e), (f), (h), Association of State Workforce
Federal-State Unemployment and (i), SSA, and Section 3304(a)(16), Agencies. All timely comments were
Compensation Program (UC); FUTA. This rule revises the regulations considered and are included in the
Confidentiality and Disclosure of State at 20 CFR Part 603, to implement all of rulemaking record. Several comments
UC Information these statutory provisions. (The present were not germane to this rulemaking
rule at Part 603, which this final rule and, therefore, are not addressed.
AGENCY: Employment and Training replaces, addresses only Section 303(f),
Administration, Labor. SSA (concerning IEVS)). These statutory Discussion of Comments—General
ACTION: Final rule. provisions each address disclosure to Rule not necessary. Several
governmental entities, but they vary commenters stated that the rule was not
SUMMARY: The U.S. Department of Labor with respect to the specific information necessary because the UC program has
(Department) is issuing this final rule to to be disclosed and the terms and functioned for 60 years without such a
set forth the statutory confidentiality conditions of disclosure. rule and there was no evidence of a
and disclosure requirements of Title III The confidentiality and disclosure problem that would be rectified by a
of the Social Security Act (SSA) and the requirements in Title III of the SSA Federal rule, which one commenter said
Federal Unemployment Tax Act (FUTA) relating to UC information are was an ‘‘overreaction’’ to any abuses
concerning unemployment conditions for receipt of grants by the that may have occurred.
compensation (UC) information. The States for UC administration. The While the Department appreciates
final rule also amends the Income and disclosure requirements in the FUTA that States have long protected certain
Eligibility Verification System (IEVS) are conditions required of a State in UC information, the rule is necessary to
regulations, a system of required order for employers in that State to comply with statutory mandates in the
information sharing primarily among receive credit against the Federal SSA. The SSA provides that the
State and local agencies administering unemployment tax under 26 U.S.C.
Department establish safeguards ‘‘in
several federally assisted programs. 3302.
regulations’’ to insure that information
DATES: Effective Date: This final rule is Other Federal laws may require use or
disclosure of confidential UC required to be disclosed to certain
effective October 27, 2006. governmental entities is used only for
Applicability Date: States that need to information. For example, the
Workforce Investment Act (WIA) of the purposes for which it is disclosed.
amend their laws, rules, procedures, or Sections 303(d)(1)(B), (e)(1)(B), and
existing agreements in order to conform 1998, Public Law 105–220, requires
States to measure their progress in (i)(1)(B), SSA. Section 303(h)(1)(C),
and comply with the requirements of SSA, also provides that the Department
this rule have two years from the providing services funded under Title I
of the WIA against State and local establish ‘‘safeguards’’ although it does
effective date of the final rule to do so. not explicitly refer to regulations.
performance measures using ‘‘quarterly
FOR FURTHER INFORMATION CONTACT: Applying the regulation to all disclosed
wage records, consistent with State
Gerard Hildebrand, Chief, Division of law.’’ 29 U.S.C. 2871(f)(2); 20 CFR UC information will result in more
Legislation, Office of Workforce 666.150(a). Because these laws do not uniform treatment among entities and,
Security, Employment and Training condition receipt of UC grants under the thereby, a certain degree of simplicity.
Administration, (202) 693–3038 (this is SSA or certification for employer tax Moreover, absent this regulation,
not a toll-free number) or 1–877–889– credits under the FUTA on such use or information that is highly protected
5627 (TTY), or by e-mail at disclosure, the rule does not implement when collected for other Federal
hildebrand.gerard@dol.gov. these laws. However, the disclosure of purposes (for example, Social Security
SUPPLEMENTARY INFORMATION: confidential UC information in and Federal income tax) would lack
compliance with the WIA and other explicit protection under Federal laws
Background and regulations when it is collected for
Federal laws is permitted under the
The first Notice of Proposed general exceptions to confidentiality in purposes of the Federal-State UC
Rulemaking concerning confidentiality § 603.5 of this final rule. (For more program. Indeed, much of the demand
and disclosure of State UC information information on the requirement to use for use of UC information for non-UC
was issued in 1992. (57 FR 10063 wage records under the WIA, see 20 purposes exists because information
(March 23, 1992).) Given the time that CFR 666.150.) The Department stated collected for the UC program is
elapsed following this 1992 NPRM, the previously and repeats here that it currently subject to less stringent legal
Department published a new NPRM on strongly encourages States to amend protections, although it is no less
August 12, 2004. (69 FR 50022.) their laws to permit disclosure for WIA sensitive. That demand has been
Comments were invited through purposes if their State laws do not increasing as technology makes data
October 12, 2004. already provide for such disclosure. sharing easier and as UC information is
used for program evaluations. Thus,
General Discussion of Final Rule Comments Received on the NPRM while the Department believes that a
This final rule implements Federal The Department received 38 pieces of considerable degree of State flexibility
UC laws concerning confidentiality and correspondence commenting on the should exist with regard to
disclosure of UC information and NPRM by the close of the comment confidentiality and that data should be
establishes uniform minimum period. The majority of the comments— shared under certain circumstances, we
requirements for the payment of costs, 24—were from State UC agencies. Eight do not believe it is appropriate to be
safeguards, and data-sharing agreements commenters—all State UC agencies— passive in this matter, particularly in a
Federal Register / Vol. 71, No. 187 / Wednesday, September 27, 2006 / Rules and Regulations 56831
climate of heightened concern regarding not to regulate State court practices there is need to change the definition of
identity theft. involving the UC program. States are, ‘‘State law.’’
Requirements of the Rule. Several therefore, free to address disposition by One commenter expressed the
comments indicated confusion their courts as they see fit. In addition, concern that the rule would lead to a
concerning the requirements of the rule. the Department does not believe it is ‘‘lack of uniformity’’ among States.
For example, some commenters viewed necessary to define certain commonly Other commenters believed that the rule
the rule as requiring that certain records used terms (such as ‘‘audit’’), as one would undermine State laws that are
must be open to the public or requiring commenter requested. currently more restrictive than the rule.
certain disclosures that are merely Finally, several commenters The Department believes that the rule
optional on the part of the States. expressed concerns about the limited will result in greater, rather than less,
In response, we note that the rule has scope of the mandatory disclosure uniformity among States because it
two distinct aspects. First, it sets provisions. For example, one requires some States to raise their
minimum requirements concerning commenter noted that the disclosure confidentiality requirements to meet the
what UC information must be kept provision in § 603.6(b)(3) required minimum requirements of this rule. The
confidential and for the payment of disclosure of certain information to Department appreciates that States have
costs, safeguards, and data-sharing ‘‘officers and employees of any State valid reasons for maintaining UC
agreements. Nothing prohibits States food stamp agency,’’ but not to ‘‘county confidentiality laws that are stricter
from having more stringent social service agencies [that] carry out than those required by the rule. On
confidentiality provisions than those Food Stamp eligibility determinations balance, we believe that the rule will
imposed by the rule, except for certain under the policy direction of the State serve to enhance confidentiality
required disclosures (discussed in the Food Stamp agency.’’ In this case, the requirements by making disclosure
next paragraph). For example, States rule reflects Federal law, which requires subject to the minimum requirements of
may keep appellate records confidential disclosure only to ‘‘any State food stamp the rule, while permitting States to
even though the rule does not require it. agency.’’ (See Section 303(d)(1)(A), provide additional protections.
Second, the rule implements certain SSA.) However, nothing prohibits Rule would increase costs and
provisions of Federal law requiring that disclosure to public officials employed burdens. Several State UC agencies
certain UC information must be by a county when such disclosure is for objected to the rule on the grounds that
disclosed to certain governmental use in the performance of a public it would result in substantial new costs,
entities. For example, Section 303(e)(1), official’s duties and is otherwise would be excessively burdensome, or
SSA, requires States to disclose consistent with the rule. (See § 603.5(e)) would be a distraction to program
information to State child support Effect of Rule. One commenter administration.
agencies for purposes of establishing expressed concern that any rule should The rule is, to the extent possible,
certain child support obligations. These ‘‘(1) encourage uniform procedures written to minimize the burden on the
required disclosure provisions address among the States, preferably by States, recognize existing State
what information must be disclosed to including a model State law in the practices, and permit implementation
the relevant governmental entities. rulemaking, and (2) avoid unnecessary within existing resource levels. Our
However, we note that the rule also State legislation.’’ That commenter was analysis of the objections regarding
permits, at State option, disclosure to also concerned about why a ‘‘State law’’ costs and burdens indicate that most
public officials in the performance of needed to specifically address were based on misunderstanding of the
their duties. As a result, the rule does disclosure of ‘‘an individual’s requirements of the rule. Notably, some
not prohibit the State from disclosing information to that individual, or an commenters read the rule to require
more information to a governmental employer’s information to that formal agreements before disclosure
entity than is required under Federal UC employer.’’ In a similar vein, another may be made to an individual’s agent,
law, provided such disclosures commenter stated that the definition of and some commenters objected to the
otherwise meet the conditions of the ‘‘State law’’ should be expanded to requirement that States ‘‘periodically
rule (such as payment of costs). include ‘‘an administrative rule, written audit’’ every entity receiving UC
Also, several State UC agencies policy or administrative interpretation,’’ information, including the individual’s
requested more specificity regarding the thereby avoiding State legislation. agent. (See §§ 603.10(b)(2) and
regulation’s application in certain areas The Department does not believe 603.9(b)(2), respectively.) However, both
or the meaning of certain words. While model legislation is necessary or of these requirements pertained only to
these comments have resulted in certain desirable. All State UC laws currently ongoing disclosures made to a third
clarifications (discussed in the contain confidentiality provisions, party (other than an agent), who
Summary of Comments), in other cases which have been interpreted over the typically requests many individuals to
no change to the rule resulted. In years through regulations, court cases, authorize the disclosure of information
keeping with the principle that the rule and administrative rulings. State UC to them. (For example, mortgage lenders
establishes minimum requirements, the agencies are aware of these once routinely asked applicants to
Department has chosen to leave many interpretations, which will influence authorize disclosure of their
specific details of implementation to the their implementation of the regulation’s confidential UC information.) Also,
States. For example, although the rule requirements, including their these types of ongoing disclosures are
requires that penalties be assessed determination of whether amendments entirely optional on the part of the State.
under State law for unlawful disclosure to the State code, rules, or procedures Similarly, some commenters read the
of confidential UC information, it does are necessary to specifically address the rule to require States to charge for the
not specify what these penalties must requirements of the regulation. costs associated with disclosing an
be. Similarly, although the rule The Department considers regulations individual’s information to that
addresses disposition of confidential UC and administrative rulings to be part of individual or an agent, and stated that
information when it is disclosed to the ‘‘State UC law’’ for purposes of the administrative costs of establishing
governmental agencies or private conformity with Federal law. Since such a collection system would be
entities, the Department, consistent with these regulations and rulings are treated burdensome. However, such a collection
its long-established practice, has chosen as law, the Department does not believe system would only be necessary where
the disclosure of information is for non- 302(a), SSA, permits the Secretary to the UC program. Therefore, under the
UC purposes and where the associated certify as payable to States only rule, the State is not required to make
costs for the disclosure are not nominal amounts ‘‘necessary for the proper and such corrections.
(as determined on a case-by-case basis) efficient administration of’’ the State’s The Department’s expectation is that
and which, therefore, must be UC law. Further, Section 303(a)(8), SSA, wage records will be corrected as
reimbursed. (See § 603.8(b).) While limits the use of the State’s UC grant to necessary in the course of the routine
nominal costs need not be reimbursed the ‘‘proper and efficient administration administration of the State’s UC law.
under this final rule, the State or State of’’ the State’s UC law.) State UC This usually occurs during the claims
UC agency is not precluded from agencies should already be charging for determination process or in the process
charging for the costs of such all costs associated with disclosures that of determining if the worker’s services
disclosures. incur more than incidental costs. Thus, were performed in covered
Another notable area concerning on this point, the rule merely reflects employment.
burden was that some commenters read current law. For this reason, we do not Another commenter stated it would
the notification provisions of § 603.11 believe the rule is ‘‘economically be helpful to ‘‘provide further
(pertaining to claimants and employers) significant’’ because, based on the illumination of these fair information
to require far greater effort than they information available to the Department, principles because it would be helpful
actually require. The content of the almost all States already charge for State agencies in explaining the
notice to claimants and employers need recipients for the costs of disclosure. rationale behind the federal rule.’’ The
not be complex or lengthy, and need not Confidentiality Principles. Two Department believes sufficient
specify all potential uses of confidential commenters raised questions explanation of these principles in terms
UC information. The notice may simply concerning the confidentiality of the UC program and the rationale for
state that confidential UC information principles that were contained in the promulgating this rule were provided in
will be used for other governmental preamble of the proposed rule. the preamble to the proposed rule.
purposes, including verifying an One commenter noted that, although Timeframe for Compliance with Rule.
individual’s eligibility for other one fair information principle provided Several commenters asked questions
governmental programs. Because the that subjects of an information concerning the effective date of the rule.
current rule at § 603.4 already requires collection ‘‘should have the right to The rule is effective 30 days after
notice to claimants that information will access and amend information about publication and States should make
be used for IEVS purposes, the them,’’ the rule itself did not reasonable efforts to implement its
Department does not believe that the specifically address the right to amend. requirements by that date, especially in
new notification requirements The commenter expressed concern that, cases where the rule involves only
materially increase the burden on if amendment of the wage record were minor changes to State procedures.
States. required, this would create new costs However, the Department recognizes
As a result of these comments, the and questioned whether these costs that States may need additional time to
final rule has been edited for clarity. would be payable through UC grant changes laws, rules, procedures, or
Specific clarifications are discussed in funds. existing agreements. As such, States will
the Summary of Comments. Also This commenter is correct that the be given two years from the effective
discussed in the Summary of Comments right to amend is not explicitly date of this rule to conform and comply
are revisions to the provisions requiring addressed in the rule. As a result, States with its requirements, as provided in
a motion to quash subpoenas to are left to decide when allegations of the ‘‘Applicability Date’’ section of this
recognize that States may have more erroneous wage records would be preamble.
informal, less costly means of prevailing investigated and when amendment Use of Social Security Account
against subpoenas without actually would occur. Because most wage Numbers for UC Purposes. One
filing a motion to quash. (See discussion records are purged without ever being commenter, representing employer
of § 603.7(a).) used for UC purposes, it is unnecessary interests, encouraged the Department
Some commenters were concerned to attempt to correct every alleged ‘‘to require all State UC agencies to use
that the rule would be ‘‘an unfunded erroneous wage record. Further, the [social security account number] as
mandate’’ on State UC agencies or on correcting wage records might impose a the sole UC claim record identifier’’ or,
requesting entities. One commenter substantial, but unnecessary, burden on alternatively, to create a ‘‘uniform
disagreed with our determination that the State. For example, prior to record identifier, which attaches to an
the rule was not ‘‘economically correcting a wage record, an audit may existing [social security account
significant’’ because of the costs that be needed to resolve an individual’s number] after the filing of a claim.’’
recipients of UC data would incur under allegation that an employer failed to Essentially, this comment reflected
the rule. In response, the Department report wages, or whether the individual concerns that employers may not be
notes that the final rule—like the was properly classified as an able to identify claimants, and therefore
proposed rule—requires that costs of independent contractor, in which case participate in the UC eligibility process,
providing UC information for non-UC no wages would be reportable. States if the social security account number is
purposes must be paid by the requesting may use such assertions in targeting not used.
entity. The final rule further provides employers for UC audits, which may be The Department appreciates this
that such costs may be paid, if paid from UC grants. However, if such concern. However, the Department
applicable, by another source paying on corrections do not in any way serve the believes this comment is beyond the
behalf of the recipient. Thus, with administration of the UC program (such scope of this rulemaking, which sets
regard to UC agencies, which this rule as correcting a wage record that is no minimum requirements for States in
regulates, it will not create an unfunded longer in the State’s base period and preserving the confidentiality of UC
mandate. that does not affect taxes owed by the information. Instead, the Department is
The sharing of UC information for employer), the costs of these corrections addressing this commenter’s concern by
non-UC purposes has never been a may not be paid from grant funds working with the States to assure that
permissible cost of administering the because they are not necessary for the employer participation in the UC
State’s UC law. (Specifically, Section proper and efficient administration of program is not impinged. The
Department issued Unemployment are addressed more fully in the program this provision has been
Insurance Program Letter (UIPL) 21–05 discussion relating to § 603.5(b). interpreted to require the confidentiality
to raise awareness of this concern. of information collected from
(d) Public Official
Comments that are not addressed in individuals and employers for UC
the above general discussion are The proposed rule limited disclosures program administration. Confidentiality
discussed below in the Summary of for legislators (elected officials) to those is necessary to avoid deterring
Comments. Also discussed below are who need confidential UC information individuals from claiming benefits or
any substantive changes made to the for ‘‘oversight’’ purposes. Commenters exercising their rights, to encourage
rule, stemming primarily from the expressed concern that this standard, as employers to provide information
comments received. Non-substantive it related to elected officials, was vague
necessary for program operations, to
changes are not discussed. The and that, as a result, it would be
avoid interference with the
following Summary is organized difficult to implement and difficult to
determine whether a particular elected administration of the UC program, and
sequentially by section heading. to avoid notoriety for the program if
official was performing ‘‘oversight’’
Summary of Comments functions. In response to these program information were misused.
To efficiently respond to public comments, the Department has omitted Two commenters, while generally
comments and explain changes to the the reference to ‘‘oversight’’ in the agreeing that UC information should be
rule resulting, in large part, from those definition of ‘‘public official’’ in the kept confidential, objected to using the
comments, only the pertinent portions final rule. ‘‘methods of administration’’
of the rule are discussed below. The Some commenters also expressed requirement of Section 303(a)(1), SSA,
basic format of the below summary of concern that the proposed rule would as a statutory basis for the rule. One
comments begins with a review of the impinge upon an elected official’s need noted that this section’s language does
proposed rule provision, followed by a and ability to address constituent not ‘‘lead to the conclusion that
discussion of the public comments, and inquiries concerning a UC matter. confidentiality is required by federal
concludes with what, if any, resulting However, the proposed rule would have law.’’ While the Department agrees that
changes are reflected in the final rule. permitted an elected official performing this section of the law contains no
constituent services to obtain explicit reference to confidentiality, it
Section 603.2 What definitions apply confidential UC information because the
to this part? does give the Secretary the authority to
elected official is acting as the agent of
determine what ‘‘methods of
(c) Public Domain Information the constituent who requested the
elected official’s assistance. The final administration’’ are necessary. For the
The proposed rule included appeals rule clarifies this treatment of elected reasons explained above, the
records and decisions, and precedential officials and this clarification is further Department has long interpreted Section
determinations on coverage or discussed in § 603.5(d)(1) (pertaining to 303(a)(1), SSA, to require confidentiality
employers, employment, and wages agents). of certain UC information as a ‘‘method
within the definition of public domain. of administration * * * reasonably
Section 603.4 What is the calculated to insure full payment of
The inclusion of these records within
confidentiality requirement of Section unemployment compensation when
this definition was intended to afford
303(a)(1) of the SSA? due.’’ Also, Congress has several times
States discretion in choosing whether to
permit the disclosure of such (b) Interpretation directed the Department to establish
information, since the proposed rule The proposed rule set forth the safeguards ‘‘in regulations’’ to insure
would not have required that Department’s interpretation of Section that certain information is used only for
information in the public domain be 303(a)(1), SSA, as including a basic the purposes for which it is disclosed.
kept confidential. requirement of confidentiality. It Since it makes no sense to require States
However, several commenters explained that States are required to to assure the continued confidentiality
expressed concern about treating maintain the confidentiality of any UC of disclosed information if that
appeals records and decisions as public information which reveals the name or information is not, in the first place,
domain information. They apparently any identifying particular about any considered confidential, the Department
interpreted the treatment of appeals individual or any past or present believes Congress recognized a
records and decisions as being in the employer or employing unit, or which longstanding Federal requirement that
‘‘public domain’’ to imply that the could foreseeably be combined with UC information be confidential. Section
public had a right to such decisions. To other publicly available information to 303(a)(1), SSA, is the source of that
establish that this is not the case, and to reveal any such particulars, and to bar requirement. No change to the final rule
insure that some appeals information the disclosure of such information, resulted from the above comments.
such as social security account numbers except as provided in the rule.
remain confidential, appeals records Two other commenters asserted that
Moreover, the proposed rule
and decisions have been removed from Section 906, SSA, which relates to the
explained that the confidentiality
the definition of public domain Secretary establishing a program of
requirement has its origin in the
information in the final rule. beginning of the program and is derived research for the UC system, should be
Appeals records and decisions, as from Section 303(a)(1), SSA. Section used as a statutory basis for the rule.
well as precedential determinations on 303(a)(1), SSA, requires States to While some research conducted under
coverage of employers, employment, provide in their laws, as a condition of Section 906 may result in the Secretary
and wages (which often are appellate administrative grants, for such (or her agents) obtaining confidential
decisions), are now treated in the final ‘‘methods of administration’’ as the UC information from the States, it does
rule under § 603.5(b) as exceptions to Secretary determines are ‘‘reasonably not in any way place any requirements
the confidentiality requirement. This calculated to insure full payment of on the States. Therefore, the Department
means that a State may, but need not, unemployment compensation when has not added Section 906 to the
disclose this information. These matters due.’’ From the early years of the statutory authority.
Section 603.5 What are the exceptions confusion on the part of commenters, or her social security account number
to the confidentiality requirement? caused by its original placement within becoming publicly available. While the
This section of the proposed rule sets the definition of ‘‘public domain.’’ In Department does not believe redaction
forth the permissible exceptions to the the proposed rule, appeals records were of an individual or employer’s name is
confidentiality requirement. Only those treated as being excluded from the necessary, the final rule does not
paragraphs for which comments were confidentiality requirements because prohibit States from redacting more
received are discussed below. they were identified as ‘‘public domain’’ information than is required to be kept
information. Because some commenters confidential. Indeed, we recognize that
(a) Public Domain Information took this to mean that appeals records redaction of such information already
The confidentiality requirement does must be in the public domain, the occurs in some States and may be
not apply to information in the public Department has placed ‘‘UC appeals mandated by both the State’s UC law
domain, as defined in § 603.2(c). This records’’ in paragraph (b) as an and other State confidentiality statutes.
means the determination of whether and exception to the confidentiality Recognizing this, the final rule provides
how much information is open to the requirement. Thus it should be clear that disclosure of appeals records and
public or is kept confidential is left to that a State may, but need not, disclose decisions, including precedential
the State. these records. decisions, is conditioned upon the
Some UC information, such as Two commenters argued that hearing above redactions as consistent with
employer names and addresses, is records and appeals decisions should be applicable laws.
public in the sense that it is available closed to the public. One commenter As a result of these comments, the
from other public sources like telephone noted that employers may have to final rule has been revised to provide
directories, but it is not public domain disclose ‘‘trade secrets such as customer that appeals records and decisions are
information for the purposes of this lists, cost and price data, sales forecasts, excluded from the confidentiality
final rule and, therefore, must be kept and financial reports during [the] requirement as are precedential
confidential by the State or State UC proceeding.’’ This commenter noted that determinations on coverage of
agency because it is collected from parties may also have to ‘‘submit employers, employment, and wages
employers expressly for purposes of information that may be embarrassing, (which usually are appellate decisions).
administering the UC program. Since such as drug test results, or The final rule also conditions disclosure
the scope of this final rule applies to inflammatory, such as allegations of of these records upon the redaction of
State and State UC agencies, it does not sexual harassment’’ and that ‘‘a critical social security account numbers,
attempt to restrict access to information element of a case may require disclosure provided that such disclosure is
that may be available from other public of information that would be protected otherwise consistent with Federal and
resources. by law in other contexts, such as State law.
As noted previously and detailed personal medical information.’’
Although the Department recognizes (d) Informed Consent
below, the final rule differs from the
proposed rule in that ‘‘appeals records that these are strong arguments for The proposed rule provided for
and decisions’’ are no longer listed as closing appeals hearings and keeping all disclosure of confidential UC
being public domain information, appeals records confidential, there are information on the basis of informed
although ‘‘precedential decisions on also arguments for open hearings and consent to an ‘‘agent or attorney’’ of the
benefit eligibility’’ would be public records. The Department has individual or employer about whom the
domain information, as are any other historically held that the public interest information pertains and to ‘‘third
precedential decision. Appeals records in proper administration of the UC parties.’’ Under both informed consent
and decisions are now treated under program, specifically in payments of provisions, a written release from the
paragraph (b) of § 603.5. benefits only to eligible individuals, and individual or employer was required;
in open governmental adjudicatory however, additional conditions were
(b) UC Appeals Records proceedings is served by open hearings placed upon disclosures to ‘‘third
(‘‘Administration of the UC Program’’ in and hearing records. Further, public parties’’ because of the greater potential
the Proposed Rule) access to hearings ensures fair treatment for misuse of the information. The
In the proposed rule, paragraph (b) of by the appeals tribunal. Thus, in ‘‘third parties’’ provision was intended
§ 603.5 addressed the inapplicability of recognition of these competing views, to capture those requests for
the confidentiality requirement when the Department continues to believe that confidential UC information that occur
disclosure was necessary for the proper any determination of whether to close on an ongoing basis (such as an income
administration of the UC program. appellate hearings and keep records verification service for lenders), not
However, paragraph (a) of § 603.6 of the confidential should be left to the States. requests wherein the entity is acting as
proposed rule also required the As a result, the final rule maintains the an agent, that is, someone who is
disclosure of confidential UC position that appeals records and working on behalf of the individual or
information necessary for the proper decisions are not subject to the employer (such as an attorney
administration of the UC program. confidentiality requirement. representing an individual or employer
Because the rule requires this One commenter addressed the issue in the litigation of a UC claim). This
disclosure, the Department determined of redacting information that may distinction was not clear to commenters
that the exception at paragraph (b) of identify the individual or claimant. The and led to confusion as to the intent and
§ 603.5 relating to ‘‘administration of the Department agrees that social security actual requirements of each provision.
UC program’’ was repetitive and account numbers should be redacted As a result of comments, the
unnecessary. As a result, proposed from appeals records and decisions Department has made several changes in
paragraph (b) of § 603.5 has been before they may be made available to paragraph (d) in the final rule. The
deleted from the final rule and replaced the public. Identity theft related to paragraph has been restructured to
with the new paragraph on ‘‘UC appeals misuse of social security account eliminate confusion regarding the
records’’. numbers is a growing concern, and, as requirements of each provision
This new paragraph on UC appeals a result, an individual may be reluctant (including the requirements associated
records was developed to minimize the to pursue an appeal if it results in his with written releases). Further, we re-
titled paragraph (d)(2) and we clarified list all possible applications of this Department agrees that an attorney’s
that it applies to instances where an principle in the final rule. However, to assertion that he or she has been
entity is not acting as an agent and to eliminate the confusion regarding retained to represent an individual or
instances where disclosure is made on constituent services, the final rule now employer on a UC matter is sufficient to
an ongoing basis. Specific changes explicitly acknowledges that an elected authorize the disclosure of confidential
relating to the each provision are official performing constituent services UC information to the attorney. As in
addressed below following a discussion is acting as an agent of the constituent. the above case of disclosure to an
of the comments that led to those The following discussion pertains to elected official performing constituent
changes. comments on the proposed written services, when the individual or
As a general note, the Department release requirements associated with employer retains an attorney for UC
emphasizes that this provision imposes disclosures to an agent under paragraph purposes, the expectation is that the
minimum requirements on disclosure. (d)(1). attorney will have access to the
The final rule does not require States to Some commenters noted that many confidential UC information necessary
disclose information under this States have established ‘‘electronic’’ to act on behalf of the individual or
exception. Also, if a State authorizes relationships with claimants and employer. As a result, paragraph (d)(1)
disclosure based on informed consent, employers and questioned whether the of the final rule has been revised to
the final rule does not prohibit States requirement for ‘‘written releases’’ permit disclosure when the attorney
from placing additional restrictions on would mean that States could not do asserts that he or she has been retained
such disclosures. business electronically. In response to to represent the individual or employer
such comments, paragraph (d)(1) of the on a UC matter.
Paragraph (d)(1)—Agent (‘‘Agent or final rule was revised to permit a State
Attorney’’ in the Proposed Rule) to disclose confidential UC information Paragraph (d)(2)—Third Party (Other
The title of paragraph (d)(1) was based on an electronically submitted Than an Agent) or Disclosures Made on
changed from ‘‘Agent or attorney’’ in the release, if the State determines that the an Ongoing Basis (‘‘Third Party’’ in the
proposed rule to ‘‘Agent’’ in the final release is authentic. The final rule does Proposed Rule)
rule with explanation provided as to the not prescribe requirements for As mentioned previously, the title of
meaning of ‘‘agent,’’ which would determining if a written (including paragraph (d)(2) was changed from
include an attorney. These changes electronic) release is authentic. Rather, ‘‘Third party’’ in the proposed rule to
resulted from confusion expressed by such a determination would depend ‘‘Third party (other than an agent) or
commenters and to better distinguish upon the State’s own practices and disclosures made on an ongoing basis’’
between paragraph (d)(1) and paragraph whether the State has established such in the final rule in an effort to better
(d)(2) (discussed below) and their ‘‘electronic relationships’’. distinguish it from paragraph (d)(1).
differing requirements. It was and still Another commenter pointed out that The purpose behind this provision is
is intended that disclosures under elected officials may receive requests for to permit disclosure of confidential UC
paragraph (d)(1) will generally be one- assistance that do not specifically information, under certain conditions,
time only events in terms of both the authorize the disclosure of confidential to third parties who are not acting as the
individual (or employer) requesting the UC information, even though such agent of the individual or employer and
disclosure and the agent receiving the disclosure is necessary for the official to to third parties who may reasonably be
information. adequately respond to the constituent. expected to obtain confidential UC
Two commenters requested In response, the final rule has been information on an ongoing basis. These
explanation of the term ‘‘agent.’’ Under revised by adding language in paragraph often include situations where an entity
common usage, the term ‘‘agent’’ (d)(1) that permits the elected official to requests or encourages an individual to
describes one who acts for or in the present reasonable evidence of a request permit the disclosure of confidential UC
place of an individual or employer by for assistance, such as a letter from the information through signing a release
the authority of that individual or individual or employer requesting form. One such example is the
employer. In response to such assistance or a written record of a disclosure of wage records to a third
comments, paragraph (d)(1) of the final telephone request from the individual or party for purposes of determining if an
rule has been changed to include this employer rather than being required to individual qualifies for a mortgage.
description of ‘‘agent.’’ present the ‘‘written release’’ described Such a practice, when routinely
Several commenters expressed in the proposed rule. It is the followed, may result in the entity
concern that the proposed rule did not Department’s experience that, in most compiling considerable information
permit disclosure to elected officials cases, a U.S. Congressman’s request for pertaining to individuals. (The
performing constituent services. (This the Department’s assistance in Department notes that, if the third party
was discussed above under § 603.2 reviewing a particular claim includes entity is a governmental entity, then the
regarding disclosure to public officials.) such reasonable evidence and, as a governmental entity may be able to
The Department disagrees. When an result, it is unnecessary to request obtain information under paragraph (e),
elected official is acting in response to further evidence from the Congressman. permitting disclosure to public officials
a constituent’s inquiry about a UC One commenter argued that an for use in the performance of his or her
matter, such as the individual’s UC attorney’s legal and ethical obligations official duties, without such a written
claim, the elected official is acting on would sufficiently protect the party release.)
the individual’s behalf and, therefore, is about whom information is requested As explained in the proposed rule, the
effectively the individual’s agent in without the need for written releases. Department believes that additional
resolving issues related to the claim. While the Department recognizes these protections, including additional
This general principle of acting on obligations, we are not convinced that conditions attached to the written
behalf of an individual (or employer) an attorney should in all cases release, are necessary for these types of
may apply to other situations, such as automatically be given any information third party disclosures because of the
a governor’s ombudsman acting on the regarding a client without the client’s greater potential threat to employer or
individual’s (or employer’s) behalf. We knowledge, which is evinced through a individual privacy posed by the entity’s
do not believe it practical to attempt to written release. However, the collection, storage, maintenance, use,
and possible misuse of confidential UC where confidential UC information will executive or legislative branches of
information. (This question was dealt automatically be disclosed for certain government.
with in Unemployment Insurance purposes under the Workforce As discussed above in § 603.2 (d)
Program Letter 23–96 (‘‘Disclosure of Investment Act unless the individual (definition of public official),
Confidential Employment information ‘‘opts out’’ from disclosing personal commenters expressed concern that
to Private Entities,’’ 61 FR 28236), information. Under the proposed and limiting disclosure to only those
which is superseded by this final rule.) the final rule, this type of system would legislators with ‘‘oversight’’
The purpose specified in the release be permissible when disclosure is solely responsibility for the UC program was
must be limited to providing a service to public officials in the performance of vague and, as a result, difficult to
or benefit to the individual signing the his or her official duties. However, for implement and determine as to the
release that such individual expects to non-governmental entities, the performance of ‘‘oversight’’ functions. In
receive as a result of signing the release, Department believes that any sharing of response, this reference to ‘‘oversight’’
or carrying out administration or confidential UC information in this was removed from the final rule. In so
evaluation of a public program to which regard should be made only following doing, paragraph (e) also required
the release pertains. If the release does an affirmative release by the individual. revision since it, too, included the
not meet these requirements, the State A passive system, such as an ‘‘opt out’’ ‘‘oversight’’ limitation as to elected
may not disclose confidential UC system, does not guarantee that the officials (with regard to the meaning of
information. It is expected that the individual fully understands the ‘‘performance of official duties’’).
entity requesting information on an purposes of the disclosure and may As a result, paragraph (e) of the final
ongoing basis would create a standard result in the individual feeling coerced rule has been revised so that
release form, approved by the State to disclose data. No change in the final ‘‘performance of official duties’’ now
agency, that would meet all these rule is made as a result of this comment. means ‘‘administration or enforcement
requirements. States are expected to use of law or the execution of the official
their judgment in confirming whether a (e) Public Official responsibilities of a Federal, State, or
release provides a service or benefit to The proposed rule provided for local elected official.’’ For further
the individual. disclosure of confidential UC clarification, it also now provides that
Additional requirements are payment ‘‘administration of law’’ includes
information to a public official in the
of costs, safeguards, and agreements, as research related to the law administered
performance of his or her official duties.
provided in §§ 603.8 through 603.10. by the public official. This sentence has
Since the 1970s, the Department’s
Also, the States are required by §§ 603.9 been added to the final rule to eliminate
guidance to States has recognized this
and 603.10 to impose certain penalties any confusion regarding whether
exception, which allows for a variety of
for the misuse of data and to maintain research conducted by a public official
uses of confidential UC information that
systems sufficient to allow an audit of is part of the administration of its law.
the Department believes are beneficial, In addition, new language has been
disclosed information, among other such as law enforcement, fraud and
things. added to the final rule to explain that
benefit accuracy in programs not ‘‘execution of official responsibilities’’
One commenter argued that the rule
addressed by Federal UC law (for does not include solicitation of
should permit sharing information for
purposes of evaluating education and example, Black Lung and State workers’ contributions or expenditures to or on
training programs established under compensation programs), program behalf of a candidate for public or
State law. The commenter stated that assessment (for example, of WIA and political office or a political party. This
‘‘States should also be allowed to share Vocational Education programs), and language has been added to make it
data on an interagency basis where the research. clear that UC records are not to be used
same level of confidentiality protections The proposed rule described to identify subjects for campaign
are in place within the State’’ without ‘‘performance of official duties’’ as solicitations.
requiring ‘‘informed consent.’’ The administration or enforcement of law or,
in the case of the legislative branch, (f) Agent or Contractor of Public Official
Department agrees and notes that the
rule already provides for the type of oversight of UC law. It also stated that The proposed rule provided for
data-sharing addressed in the comment. although research by a public official disclosure of confidential UC
Where sharing occurs with another was permitted under this exception, this information to an agent or contractor of
governmental entity for purposes of exception did not include research by a public official to whom disclosure is
administering a law, disclosure of an individual at a public or private permissible under paragraph (e) (public
confidential UC information is university. However, it also stated that, official). This provision took into
permitted under paragraph (e) where appropriate, a researcher could account that certain functions,
(discussed below) without any obtain access to confidential UC including research, are often contracted
‘‘informed consent’’ on the part of the information under the exceptions out by public agencies. If confidential
individual. Further, under this rule, provided for in proposed paragraph (f) UC information could not be disclosed
administering a law includes (agent or contractor of a public official) to agents or contractors of public
conducting research with respect to or proposed paragraph (d)(2) (third officials, valuable research might be
whatever program(s) are administered party). Under paragraph (f) of the forgone or become more expensive, as
under the law. This is discussed in proposed rule, the public official would agencies would have to undertake
paragraph (e) (exception pertaining to maintain the responsibility of insuring interviews of program participants in
disclosures to ‘‘public officials’’) since it that the confidential UC information is order to gather program evaluation
relates directly to that exception and safeguarded by its agent (for example, information. A public official, ideally
serves to clarify an element of that the researcher). The Department one with responsibility for the program
provision. No change is made in continues to believe that there is less or initiative on which research is being
paragraph (d)(2) of the final rule as a risk of unauthorized use or disclosure of conducted, would be required to enter
result of this comment. confidential UC information if into the written agreement required by
Another commenter stated that the responsibility for safeguarding § 603.10 and be held responsible for use
Department should permit a system confidentiality remains within the of the information by the contractor or
agent. Redisclosure of such information encryption so that the researcher can are permitted to disclose confidential
by a public official to an agent or conduct longitudinal studies. UC information), it appears that the rule
contractor would be permitted only as would not inhibit its ability to obtain
(g) Bureau of Labor Statistics
provided in § 603.9(c). this information. Indeed, the rule
One commenter suggested that the The proposed rule provided that the merely sets forth the Department’s long-
regulation be expanded ‘‘to allow State confidentiality requirement did not standing guidance to States regarding
agencies to disclose [confidential] UC apply to information collected disclosure to public officials and the
information to researchers if the State exclusively for statistical purposes terms and conditions which apply.
agencies believe that the results of such under a cooperative agreement with the States should already be following this
research would be beneficial to the Bureau of Labor Statistics (BLS) and that guidance when disclosing to the Census
agency for the administration of agency Part 603 did not restrict or impose any Bureau. Therefore, no change to the rule
programs,’’ in light of the fact ‘‘States do condition on the transfer of any other is made as a result of these comments.
not have to pay’’ for research from information to the BLS under an
which they benefit. Another commenter, agreement, or the BLS’s disclosure or (i) UC Program Oversight and Audits
from a university, indicated concern use of such information. (‘‘As Required by Federal Law’’ in the
that the public official must actually pay Under the proposed rule, transfers of Proposed Rule)
for the research as opposed to private information to the BLS were excepted This paragraph of the proposed rule
foundations. The same commenter from the confidentiality requirement provided for the disclosure of
expressed concern that a university because the conditions under which confidential UC information as required
could not be viewed as an ‘‘agent’’ of the they occur already satisfied the by ‘‘Federal Law.’’ However, other
public official if the university was requirements of the confidentiality rule, Federal agencies would already be
performing research of privately funded and the Department did not wish to covered under § 603.5(e) (disclosure to
programs, such as employer-funded interfere with the BLS’ existing public officials, including disclosure to
training or those supported by entities agreements or the ability of the BLS to the IRS for Health Coverage Tax Credit
such as the United Way. The commenter carry out its statistical programs. (HCTC) purposes), § 603.5 (h)
stated that this ‘‘significantly narrowed’’ Specifically, safeguards, agreements, (disclosure in response to a court order
allowable uses of data. and payment of costs are already in or to an official with subpoena
In response, the Department notes place. The BLS funds States for authority), or § 603.6(a) (disclosure
that neither the proposed nor this final collection and disclosure of necessary for the proper administration
rule prohibits the sharing of information information. The BLS applies strict of the UC program, including
with researchers when an official of a safeguards to protect the confidentiality disclosures to the Internal Revenue
public agency believes the research of information it receives. Transfers of Service for purposes of UC tax
would be beneficial to the public information to the BLS are governed by administration). Given the unnecessary
agency. In such case, the researcher agreements that provide assurance that duplication it presented, proposed
functions as the public agency’s these safeguards will be followed. paragraph (i) (as required by Federal
‘‘agent,’’ even if the research was not Moreover, the exemption for BLS is also law) has been revised in the final rule
initiated or funded by the agency, or based on the fact that its data is (as discussed below).
even if the research may have integrally related to the administration To be more specific regarding its
applicability beyond the agency itself. of the UC program. The collection and scope, paragraph (i) of the final rule is
To address the commenter’s example of reporting authority of BLS is based on now limited to UC program oversight
private training programs, the existing Federal law (29 U.S.C. 2) and and audits. The proposed rule lacked
Department believes that allowing a subject to the confidentiality protections such a provision (unlike the 1992
public agency to correlate results of outlined in the Secretary of Labor’s proposed rule) and the Department
private research initiatives with its own Order No. 9–75. believes it is necessary to explicitly
programs would be beneficial to the The U.S. Census Bureau commented address the inapplicability of the
public agency and, thus, the public on the proposed rule and expressed confidentiality requirement to any
agency could be persuaded to accept concern that ‘‘several components of the disclosure to the Federal Government
responsibility for the disclosure and use proposed rule, if enacted, would be for purposes of UC program oversight
of confidential UC information. The problematic for the Census Bureau’s and audits. As a result, paragraph (i) of
Department believes this properly need to continue accessing [UC the final rule provides that the
balances the need to protect confidential information].’’ Further, the Census confidentiality requirement does not
UC information with the desire to not Bureau wanted to ensure that its apply to any disclosures to a Federal
restrict research. Therefore, no change is activities would not be hampered by official for purposes of UC program
made in the final rule. implementation of the confidentiality oversight and audits, including
The Department emphasizes (as it rule. As such, the Census Bureau disclosures necessary under the
stated in the preamble to the proposed requested it be afforded the same Department’s rules at 20 CFR part 601
rule) that States should provide non- exemption as BLS from the and 29 CFR parts 96 and 97.
confidential UC information to confidentiality requirement. Another The Department notes that the final
researchers in lieu of confidential UC commenter also expressed support for rule does not implement the Secretary
information. Indeed, the expectation is exempting the Census Bureau from the of Labor’s authority under Section
that State agencies would explore this confidentiality requirement. 303(a)(6), SSA. Section 303(a)(6)
approach prior to providing confidential The Department fully supports the requires that State UC laws include
UC information. State agencies may, for Census Bureau’s analytical efforts and provision for ‘‘[t]he making of such
example, encrypt identifiers before its policy-relevant research. However, reports, in such form and containing
providing data to a researcher so that based on the Census Bureau’s such information, as the Secretary of
the researcher cannot identify description of its current processes for Labor may from time to time require
individuals or employers. The agency securing and protecting confidential UC * * * Section 303(a)(6) stands as a basis
could add subsequent years of data for information and the fact that it is a for requiring disclosure to the
the researcher using the same public agency (to whose officials States Department.
Section 603.6 What disclosures are confidential UC information may be well-established pattern of prior court
required by this subpart? disclosed, but only upon such terms as decisions have required the same type
(‘‘What disclosures are required by the court or other forum may order, of disclosure. Nonetheless, the
Federal UC law’’ in the proposed rule.) including that the recipient protect the Department encourages those States
In the proposed rule, this section was disclosed information and pay the within which courts routinely deny
entitled, ‘‘What disclosures are required State’s or State UC agency’s costs of motions to quash, to examine their laws
by Federal UC law?’’ The Department disclosure. and regulations to determine if an
determined, upon further review, that a Several State UC agencies noted that amendment may result in such motions
more appropriate characterization of the proposed rule appeared to require a being upheld.
this section is ‘‘disclosures required by motion to quash a subpoena even Two State UC agencies noted the
this subpart’’ since the regulation is the though most subpoenas can be avoided proposed rule’s exception from filing a
mechanism that effectively implements or resolved through other means that are motion to quash applied to State or
the provisions of Federal UC law. far more efficient and economical. Federal governmental officials with
Paragraph (a) of the proposed rule set These commenters recommended that subpoena authority, but did not apply to
forth the Department’s interpretation of the rule recognize these other means. county or metropolitan governmental
Section 303(a)(1), SSA, as requiring Another commenter noted that the court officials with the authority to subpoena
disclosure of all information necessary may order the disclosure of information records, such as prosecutors. The
for the proper administration of the UC through ‘‘a true court order, and not Department notes that, generally, a
program. This included disclosure to merely a subpoena,’’ and questioned the governmental official will need to
the Internal Revenue Service for application of the rule in such cases. exercise subpoena authority only when
purposes of UC tax administration or to The Department agrees with these State UC law does not specifically allow
the U.S. Citizenship and Immigration comments. As a result, this provision of the disclosure to such official. However,
Services for purposes of verifying a the final rule has been revised to the Department did not intend to
claimant’s immigration status. It also recognize that other means of avoiding prohibit these officials from obtaining
required disclosure for purposes of disclosure of confidential UC information for administration of their
interstate and cross-program offsets information may be pursued before the official duties. As a result, the final rule
under Section 303(g), SSA. need to file a motion to quash. Also, the has been revised to include ‘‘local’’
The Department believes it is final rule now recognizes that a motion governmental officials within this
necessary to clarify that the disclosures to quash is necessary only if the court exception.
required under paragraph (a) are not has not already ruled on the disclosure. One commenter noted that § 603.7(b)
subject to the confidentiality of the proposed rule was ‘‘confusing’’
(b) Exceptions because it stated that the exceptions to
requirement. As a result, the final rule
The proposed rule provided two filing a motion to quash a subpoena
explicitly provides that the
exceptions to the requirement to quash applied ‘‘regardless of whether a
confidentiality requirement of 303(a)(1),
a subpoena: First, where a court has subpoena was issued.’’ The quoted
SSA, and § 603.4 are not applicable to
previously issued a binding language was included to permit the
the disclosures required under
precedential decision that requires such State UC agency, if it so chose, to
paragraph (a). This paragraph continues
disclosures and, second, when disclose information that was requested
to provide that ‘‘administration of the
confidential UC information is by a public official with subpoena
UC program’’ includes disclosures to requested by an official of State or authority without forcing the public
claimants, employers, the Internal Federal government, other than a clerk official to actually issue the subpoena.
Revenue Service (for purposes of UC tax of court on behalf of a litigant, with To more accurately reflect this option,
administration), and the U.S. authority to obtain the information by the Department has changed the final
Citizenship and Immigration Services subpoena under State or Federal law. rule to clarify that the State or State UC
(for purposes of verifying a claimant’s These proposed exceptions recognized agency may disclose the requested
immigration status). that filing a motion to quash in these confidential UC information to a public
Section 603.7 What requirements circumstances may indeed be futile and official with subpoena authority without
apply to subpoenas, other compulsory a waste of administrative resources. the actual issuance of a subpoena.
process, and disclosure to officials with They would also facilitate State The Department believes that filing
subpoena authority? cooperation with law enforcement. motions to quash subpoenas involving
Commenters requested clarification of the disclosure of confidential UC
(a) In General the reference to ‘‘binding legal information is an important means of
In the proposed rule, this section set precedent,’’ noting that courts routinely avoiding unnecessary or unlawful
forth the Department’s long-standing deny motions to quash or otherwise disclosures, which might deter
position on State responses to order disclosure of confidential UC claimants from exercising their rights or
subpoenas and other compulsory information without ever publishing a employers from providing information.
processes attempting to obtain decision that may be considered Where the exceptions apply, a State may
confidential UC information. Under precedential. In the same vein, another still file such a motion if warranted, or
certain conditions, it required the State commenter objected to ‘‘futile’’ motions may file a motion to require that the
or State UC agency to file and pursue a to quash, while another addressed this recipient protect the disclosed
motion to quash, in the appropriate situation by urging an exception for information or for reimbursement of
forum, when a subpoena or other situations ‘‘where the obligation to costs. (As described in § 603.8(b),
compulsory process of a lawful disclose such data has been well seeking reimbursement in some manner
authority, which required the established by a pattern of prior judicial is required if grant funds are used to
production of or appearance for decisions.’’ The Department agrees that cover the costs of the disclosure.) If the
testimony about such information, is well-established patterns of judicial State law is sufficiently rigorous
served upon the State UC agency or the decisions may be treated as precedent. concerning the disclosure of
State. If such a motion were denied, As a result, the final rule has been confidential UC information, the courts
after a hearing in the appropriate forum, revised to permit disclosure where a may be less inclined to enforce
subpoenas; so, States may wish to Second, revision to the final rule in place a reciprocal data-sharing
review their State laws in this regard. To became necessary because the rule did agreement or arrangement with another
conserve time and funds, States may not distinguish between the two types of agency or entity. ‘‘Reciprocal’’ means
wish to pursue a motion to quash by informed consent disclosures that the relative benefits received by
mail or by telephone if permitted by (addressed in § 603.5(d)) as they related each party to the agreement or
State law. to the use of grant funds for the costs of arrangement are approximately equal.
Finally, some commenters questioned such disclosures. Thus, revision to Two commenters observed that the
the need for the proposed rule to paragraph (a) (and to paragraph (b) of proposed rule appeared to prohibit
address disclosing confidential UC this section, as discussed below) became another entity from paying costs on
information to public officials with necessary to make explicit the fact that behalf of the recipient and suggested
subpoena authority given that § 603.5(e) grant funds have never been allowed to that the rule be amended to permit such
permits disclosure to public officials. be used for the costs of making payments. The purpose of requiring
The Department’s answer is that disclosures to third parties (other than payment of costs is to assure that UC
disclosures under § 603.5(e) must be agents) on the basis of informed grant funds are not used for purposes
made under the agreements described in consent. Accordingly, the final rule was unrelated to the administration of the
§ 603.10, which require, among other revised to explicitly state that grant UC program. Receiving payment from
things, the payment of costs and the funds may not be used to pay for the an entity other than the recipient
safeguarding of information, before any costs of disclosures under § 603.5(d)(2) accomplishes this. As a result of these
information may be disclosed. Thus, (third party (other than an agent) or comments, the final rule has been
that provision is limited to cases where disclosures made on an ongoing basis). revised to recognize that costs may be
disclosure is explicitly authorized or paid by another source on behalf of the
(b) Use of Grant Funds Permitted recipient.
required under the State UC law. The
subpoena exception, however, pertains This paragraph of the proposed rule Two other commenters requested
to situations where governmental set forth the circumstances under which clarification regarding the proposed
officials have the authority to demand grant funds may be used to pay for the rule’s statement that, if the recipient is
information under their laws, but where costs of disclosing confidential UC not a public official, ‘‘costs, except for
State UC law may not permit such information. As discussed above, good reasons (such as when the
disclosure or where an agreement may revision to this paragraph became disclosure involves minimal cost) must
not have been entered into, thus necessary to clarify that grant funds may be paid’’ in advance. These commenters
necessitating the public official to be used to pay for costs associated with questioned whether the reference to
obtain the confidential UC information disclosures to an agent on the basis of ‘‘minimal costs’’ meant that the
through a subpoena. Therefore, no informed consent. Therefore, paragraph recipient need not pay any costs. As
change is made in the final rule. (b) of the final rule has been revised to noted elsewhere in the rule, all costs
make this permitted use of grant funds incurred by a recipient must be paid
Section 603.8 What are the explicit. except when there ‘‘is not more than an
requirements for the payment of costs As discussed previously, § 603.5(i) of incidental amount of [UC agency] staff
and program income? the proposed rule was changed to time and no more than nominal
explicitly address the inapplicability of processing costs’’ are involved.
(a) In General
the confidentiality requirement to any (§ 603.8(b).) Thus, the reference to
This paragraph of the proposed rule disclosure for purposes of UC program minimal costs only relates to the
explained, in general, that grant funds oversight and audits. In so doing, advance payment of costs. To avoid
could not be used to pay any of the costs revision to § 603.8(b) of the proposed confusion, the Department has deleted
of making any disclosure (except as rule was also required in order to the reference to minimal costs from the
provided in paragraph (b) of this properly address those costs relating to final rule.
section). Upon review, clarifications to disclosures for UC program oversight
proposed paragraph (a) became (e) Program Income
and audits under § 603.5(i) of the final
necessary. rule. Accordingly, § 603.8 (b) of the final The proposed rule provided that
First, ‘‘disclosure to the IRS for HCTC rule has been revised to specifically reimbursed costs and any funds
purposes’’ was misidentified in provide that grant funds may be used to generated by the disclosure of
proposed paragraph (a) as a reference to pay the costs associated with information are program income and
§ 603.5(h) when it should have disclosures to the Department for may be used only as permitted by 29
referenced § 603.5(i). However, as oversight and audits. CFR 97.25(g) (on program income). It
discussed previously, proposed also provided that program income may
paragraph (i) of § 603.5 was replaced (d) Payment of Costs not be used to benefit a State’s general
with a new provision in the final rule The proposed rule required the fund or another program.
concerning UC program oversight and payment of costs, calculated in One commenter expressed concern
audits. In the discussion concerning the accordance with paragraph (c), to be about how the cost requirements would
changes to proposed paragraph (i), it paid by the recipient of the information impact the Wage Record Interchange
was explained that ‘‘disclosure to the either in advance or by way of System (WRIS), which is an interstate
IRS for HCTC purposes,’’ like reimbursement. If the recipient is not a data exchange system that facilitates the
disclosures to other Federal agencies, public official, such costs, except for exchange of UC wage records for
would already be covered under the good reason, would be required to be assessing program performance under
provision relating to disclosure to paid in advance. Payment in advance the WIA. Noting that the proposed rule
public officials (§ 603.5(e)). As a result, means full payment of costs before or at provided that UC grant funds may be
rather than correct the misidentification the time the disclosed information is used to pay if disclosure does not result
in proposed paragraph (a) of § 603.8, we given in hand or sent to the recipient. in ‘‘more than an incidental amount of
have deleted the reference to The proposed rule further provided staff time and no more than nominal
‘‘disclosure to the IRS for HCTC that the requirement for payment of processing costs are involved,’’ the
purposes.’’ costs is met when a State UC agency has commenter stated a belief that WRIS
costs are ‘‘relatively minor’’ and transmitted to another governmental be audited, taking into account volume,
therefore should be considered agency, it is sufficient that, prior to any any past audit exceptions, and the
incidental or nominal. The Department audit, the UC agency be able to re-run nature of the recipient, such as whether
does not agree. By permitting the use of the computer program that generated the recipient is in the business of
UC grants where costs of disclosure are the wage records that were transmitted disclosing information for profit. What
incidental or nominal, we merely and use that output for the basis of its is important is that any audit process be
recognize that some costs are so small audit. The Department also notes that sufficient to assure that no misuse of
that there may be no practical purpose not all disclosures must be subject to confidential UC information is taking
served by attempting to recover these this system. For example, the safeguards place. The Department also notes that
costs. Generally, these will be one-time required by § 603.9 do not apply to the costs of performing any such audits
only, ad hoc requests from individuals disclosures made to an individual must be built into the agreement that
or their agents. The Department does (§ 603.5(c)) or the individual’s agent authorizes disclosure of confidential UC
not believe that the costs of setting up (§ 603.5(d)(1)). information to the recipient. Thus, for
agreements, establishing data exchange Paragraph (b)(2) of the proposed rule example, the costs of auditing a private
protocols, and exchanging data on an specifically required the State to business that receives confidential UC
ongoing basis can be said to be conduct, in the case of optional information under an informed consent
incidental or nominal. No change in the disclosures to entities on the basis of agreement are to be built into the
final rule is made as a result of this informed consent (§ 603.5(d)(2)), a disclosure agreement. No change is
comment. periodic audit of sample transactions to made in the final rule as a result of these
assure that the entity receiving comments.
Section 603.9 What safeguards and information has on file a written release Paragraph (b)(2) of the proposed rule
security requirements apply to disclosed authorizing each access. The audit was also required that all employees of
information? required to ensure that the information entities receiving access to information
(b) Safeguards To Be Required of was not being used for any under § 603.5(d)(2) be subject to the
Recipients unauthorized purpose. same confidentiality requirements, and
Several commenters expressed State criminal penalties for violation of
Paragraph (b) of the proposed rule set concern regarding this requirement, those requirements, as are employees of
forth the safeguards that the State or stating that such audits are costly and the State UC agency.
State UC agency had to require of burdensome. As the Department noted The National Association of State
recipients. in the general comments regarding Workforce Agencies questioned how
Paragraph (b)(1)(vii) of the proposed increased costs and burden, this audit penalties would be assessed for
rule required States to maintain a requirement is applicable only to information that is sent from one State
tracking system sufficient to allow an disclosure made under § 603.5(d)(2) to another State, particularly in regard
audit of compliance with the pertaining to a third party (other than an to the WRIS. The specific question was
requirements of this subpart. The agent) or disclosures made on an whether the law of the sending or
purpose of maintaining this system was ongoing basis. (The Department notes receiving State would apply in the case
to ensure that recipients of disclosed that, in cases involving governmental of unauthorized disclosures. The
information were complying with the entities receiving information under Department believes that no State
required safeguards. The proposed rule §§ 603.5(e) or 603.6, the recipient is should disclose confidential UC
provided that this responsibility could merely required to provide for ‘‘on-site information to another entity—
not be handed over to the recipient. It inspections.’’ The final rule does not including another State—unless it
also provided that where recipients mandate audits in these cases given the retains the authority to apply its legal
were required to pay for the costs of nature of the governmental entities, sanctions for unauthorized uses. This is
making a disclosure, the costs of which are also subject to their own reflected in § 603.9(b)(1), regarding
maintaining this system should be confidentiality laws; however, the safeguards to be required of recipients,
reflected in the amount charged to the Department believes it is important to which provides that ‘‘The State or State
recipient. Thus, the maintenance of this maintain the right to perform ‘‘on-site UC agency must * * * (v) Require each
system would not increase costs for inspections’’ in the event any allegation recipient agency or entity to (A) Instruct
State UC agencies. of misuse arises.) all personnel having access to the
Several commenters stated that it was The Department believes States must disclosed information about * * * the
impractical or expensive to maintain a take reasonable actions to periodically sanctions specified in the State law for
‘‘tracking system’’ that is ‘‘sufficient to audit these third parties. As discussed unauthorized disclosure of information
allow an audit of compliance.’’ As a previously, the Department is concerned * * * ’’.
result of these comments, the that such disclosures have a greater As a practical matter, the Department
requirement for a ‘‘tracking system’’ has potential threat to employer or recognizes that a receiving State is in a
been deleted from § 603.9(b)(1)(vii) of individual privacy. As such, we do not better position to apply sanctions on
the final rule. However, the Department believe it is responsible to provide violators who reside in that State,
continues to believe that some system confidential UC information to such provided its confidentiality law is
must exist for allowing an audit if there third parties without some requirement applicable to such violation. As such, in
is to be any guarantee that confidential for auditing. Therefore, no change is the case of interstate data sharing
UC information received from a UC made to the final rule. arrangements such as WRIS, a wise
agency is not misused. Therefore, the The proposed rule did not, as additional step is to require the
final rule requires a system ‘‘sufficient commenters appeared to assume, dictate receiving State to take the lead in
to allow an audit of compliance.’’ While when audits must occur, nor did it applying legal sanctions. Although no
tracking individual transactions may be dictate the nature and the extent of the change to the rule is made as a result of
the most efficient means of monitoring audit. The Department believes these this comment, a State must make certain
certain disclosures, other methods may matters are best left to the States, which that prior to the release of confidential
be equally effective. For example, in the are in the best position to determine UC information to an entity outside the
case of wage records that are routinely how often a particular recipient should State, some provision exists to protect
such information, either by the notifying claimants concerning sharing provide that claimants must be notified
disclosing State or by the law of the of confidential UC information under ‘‘at the time of application, and
receiving State within which the entity IEVS. This final rule merely expands periodically thereafter, that confidential
exists. this claimant notification requirement UC information pertaining to the
so that the notice refers to uses beyond claimant may be requested and utilized
Section 603.11 How do States notify the IEVS program. It also extends for other governmental purposes,
claimants and employers about the uses notification to employers as well as including, but not limited to,
of their information? claimants. verification of eligibility under other
(a) Claimants Since the requirement that claimants government programs.’’
be notified ‘‘periodically thereafter’’ is a With regard to employer notification,
This section of the proposed rule
statutory requirement, States must the content of such notice may be as
required State UC agencies to notify periodically notify claimants. The simple as that which is given to the
claimants and employers how Department recognizes that ‘‘periodic’’ claimant. It is sufficient that employers
confidential UC information about them notice to UC claimants is not always be notified annually with their yearly
may be requested and utilized. This necessary due to the relatively short contribution rate notices (although
section was derived from the current 20 duration of UC claims. Although some special provision would need to be
CFR 603.4 (revised by this rule) but, commenters asked for clarification as to made for reimbursing employers since
unlike the current 20 CFR 603.4, it how this ‘‘periodic’’ requirement could they do not receive annual rate notices),
applied to employers as well as be met, we believe that the rule is clear through any agency UC letter sent to all
claimants. State privacy law may that ‘‘notice on or attached to employers, or a statement on the
require more detailed notification. subsequent additional claims will quarterly wage report form. To parallel
(b) Employers satisfy the requirements for periodic the revision to § 603.11(a) (concerning
notice thereafter.’’ States are not claimant notification), § 603.11(b) is
The proposed rule provided that
required to offer other forms of periodic revised to provide that employers must
current Part 603 (specifically, § 603.4 of notice to claimants if they offer such be notified ‘‘that wage information and
that Part) implemented the notification notice as part of taking an additional other confidential UC information may
requirement applicable to the IEVS of claim. be requested and utilized for other
Section 1137(a)(6), SSA. The proposed The content of the notice to claimants governmental purposes, including, but
rule restated the notification need not be complex or lengthy. It not limited to, verification of an
requirement of Section 1137(a)(6), SSA, could, for example, simply state that individual’s eligibility for other
as a general requirement of Section confidential UC information will be government programs.’’
303(a)(1), SSA. It further explained that used for other governmental purposes,
notifying claimants and employers what including verifying an individual’s Executive Order 12866
use may be made of UC information is eligibility for other governmental This final rule is a ‘‘significant
necessary to maintaining their programs. Although the statutory regulatory action’’ within the meaning
confidence in the Federal-State UC requirement appears to permit oral of Executive Order 12866 because it
system, which is critical to its proper notice, the Department prefers, but does meets the criteria of Section 3(f)(4) of
and efficient administration. not require, that notice be written. Such that Order in that it raises novel or legal
With regard to claimant notification, written notification may be, for policy issues arising out of legal
several State UC agencies questioned example, in the form of a benefit rights mandates, the President’s priorities, or
the proposed requirement that claimants pamphlet or a special enclosure in a the principles set forth in the Executive
be notified ‘‘at the time of application, routine mailing to the claimant that is Order. Accordingly, the final rule has
and periodically thereafter, in what associated with the initial application. been submitted to, and reviewed by, the
situations confidential UC information In the case of Internet claims, a special Office of Management and Budget
pertaining to the claimant may be screen may advise the claimant of the (OMB).
requested and utilized’’ and the similar uses of confidential UC information. However, the final rule is not
requirement for employers. Some The notice need not say that UC ‘‘economically significant’’ because it
requested more detail about when the information will be used for UC does not have an annual effect on the
notification is provided, what is meant purposes, or address any releases that economy of $100 million or more. The
by ‘‘periodically thereafter,’’ and the may be authorized by the claimant. At Department has also determined that the
contents of the notice, specifically with the same time, this rule does not final rule has no adverse material
respect to the details of the ‘‘situations’’ prohibit States from providing such impact upon the economy and that it
the notice must cover. One commenter information. does not materially alter the budgeting
objected to orally informing claimants at Concerns relating to the content of the impact of entitlement, grants, user fees
the time of ‘‘initial claim intake’’ notification may have been a result of or loan programs, or the rights and
because of the costs involved. Others the language in the proposed rule obligations of recipients thereof.
suggested that notification ‘‘at the time referring to identifying the ‘‘situations’’ Further, the Department has evaluated
an initial claim is filed by an within which confidential UC the final rule and found it consistent
individual’’ would be adequate. information may be requested and with the regulatory philosophy and
The requirement that claimants be utilized. The use of the word principles set forth in Executive Order
notified ‘‘at the time of filing [a claim] ‘‘situations’’ was not intended to require 12866, which governs agency
and periodically thereafter’’ has been a that the notice contain an exhaustive rulemaking. Although it impacts States
requirement of Section 1137(a)(6), SSA, listing of all potential recipients of and State UC agencies, it does not
pertaining to the IEVS program, since confidential UC information. In adversely affect them in a material way.
1984. As such, it became a part of the response to any misperception and to The final rule protects State UC agencies
Department’s implementation of the provide more guidance on the actual from becoming clearinghouses of
IEVS program, currently found at 20 contents of the notice (including confidential UC information and
CFR 603.4 (revised by this rule). Thus, assuring any notice meets the IEVS preserves UC grant funds for program
State UC agencies should already be requirement), § 603.11(a) is revised to purposes. In addition, the final rule
maintains State flexibility in deciding Paperwork Reduction Act Signed at Washington, DC on September
whether to permit certain disclosures of 18, 2006.
The following sections of this final Emily Stover DeRocco,
confidential UC information for rule contain information collection
purposes other than the administration Assistant Secretary of Labor, Employment
requirements or revises information and Training Administration.
of the UC program so long as certain collection requirements in current 20
safeguards are followed. CFR part 603: §§ 603.5, 603.6, 603.7, Words of Issuance
Executive Order 13132 603.8, 603.9, 603.10, 603.11, 603.22, and ■ For the reasons set forth in the
603.23. As required by the Paperwork preamble, part 603 of Title 20, Code of
This rule was reviewed in accordance Reduction Act of 1995 (44 U.S.C. Federal Regulations is revised as set
with Executive Order 13132. It was 3507(d)), the information collection forth below:
determined that the rule may have requirements in this final rule were
federalism implications. During an submitted to the OMB for approval PART 603—FEDERAL-STATE
earlier stage in this rulemaking process, during the NPRM stage. This collection UNEMPLOYMENT COMPENSATION
a federalism consultation with of information was approved under (UC) PROGRAM; CONFIDENTIALITY
organizations representing State elected OMB control number 1205–0238 AND DISCLOSURE OF STATE UC
officials was held at the Department on through August 31, 2007. INFORMATION
October 19, 2000. These organizations The annual burden associated with
expressed no concerns at that time or in this final rule for all States combined is Subpart A—In General
the following months. Twenty-five approximately 25,810 hours. Sec.
States submitted comments on the 1992 603.1 What are the purpose and scope of
Regulatory Flexibility Act this part?
proposed regulation, and these
This final rule does not have a 603.2 What definitions apply to this part?
comments were considered in the
development of the most recent ‘‘significant economic impact on a Subpart B—Confidentiality and Disclosure
proposed rule published in the Federal substantial number of small entities.’’ Requirements
Register on August 12, 2004 (69 FR The final rule affects States and State 603.3 What is the purpose and scope of this
50022). agencies, which are not within the subpart?
definition of ‘‘small entity’’ under 5 603.4 What is the confidentiality
In connection with the most recent U.S.C. 601(6). Under 5 U.S.C. 605(b), the requirement of Federal UC law?
proposed rule, federalism consultations Secretary has certified to the Chief 603.5 What are the exceptions to the
with organizations representing State Counsel for Advocacy of the Small confidentiality requirement?
elected officials occurred on October 4 603.6 What disclosures are required by this
Business Administration to this effect. subpart?
and 5, 2004. Again, these organizations Accordingly, no regulatory flexibility 603.7 What requirements apply to
expressed no concerns during the analysis is required. subpoenas, other compulsory processes,
consultation process. The majority of and disclosure to officials with subpoena
comments received were from Congressional Review Act
authority?
individual State agencies. The This final rule is not a ‘‘major rule’’ 603.8 What are the requirements for
Department believes this final rule as defined by Section 804 of the Small payment of costs and program income?
adequately addresses the concerns Business Regulatory Enforcement 603.9 What safeguards and security
expressed in those comments. Fairness Act of 1996. This final rule requirements apply to disclosed
information?
does not result in an annual effect on 603.10 What are the requirements for
Executive Order 12988
the economy of $100 million or more; a agreements?
The Department drafted and reviewed major increase in costs or prices; or 603.11 How do States notify claimants and
this final regulation in accordance with significant adverse effects on employers about the uses of their
Executive Order 12988, Civil Justice competition, employment, investment, information?
Reform, and it does not unduly burden productivity, innovation, or the ability 603.12 How are the requirements of this
of United States-based companies to part enforced?
the Federal court system. The final rule
was written to minimize litigation and compete with foreign-based companies Subpart C—Mandatory Disclosure for
provide a clear legal standard for in domestic and export markets. Income and Eligibility Verification System
affected conduct, and was reviewed (IEVS)
Effect on Family Life
carefully to eliminate drafting errors and 603.20 What is the purpose and scope of
ambiguities. The Department certifies that this this subpart?
final rule was assessed in accordance 603.21 What is a requesting agency?
Unfunded Mandates Reform Act of with Pub. L. 105–277, 112 Stat. 2681, 603.22 What information must State UC
1995 and Executive Order 12875 and that the final rule does not agencies disclose for purposes of an
adversely affect the well-being of the IEVS?
This final rule was reviewed in nation’s families. 603.23 What information must State UC
accordance with the Unfunded agencies obtain from other agencies, and
Mandates Reform Act of 1995 (UMRA) List of Subjects in 20 CFR Part 603 crossmatch with wage information, for
purposes of an IEVS?
(2 U.S.C. 1501 et. seq.) and Executive Employment and Training
Order 12875. The Department has Administration, Labor, and Authority: 42 U.S.C. 1302(a); Secretary’s
determined that this final rule does not Unemployment Compensation. Order No. 4–75 (40 FR 18515) and Secretary’s
include any Federal mandate that may Order No. 14–75 (November 12, 1975).
result in increased expenditures by Catalogue of Federal Domestic
Assistance Number Subpart A—In General

State, local, or tribal governments, in the
aggregate, or by the private sector, of This program is listed in the § 603.1 What are the purpose and scope of
$100 million or more in any one year. Catalogue of Federal Domestic this part?
Accordingly, we have not prepared a Assistance at No. 17.225, The purpose of this part is to
budgetary impact statement. Unemployment Insurance. implement the requirements of Federal
UC law concerning confidentiality and (g) State UC agency means an agency § 603.4 What is the confidentiality
disclosure of UC information. This part charged with the administration of the requirement of Federal UC law?
applies to States and State UC agencies, State UC law. (a) Statute. Section 303(a)(1) of the
as defined in § 603.2(f) and (g). (h) State UC law means the law of a SSA (42 U.S.C. 503(a)(1)) provides that,
State approved under Section 3304(a) of for the purposes of certification of
§ 603.2 What definitions apply to this part? payment of granted funds to a State
the Internal Revenue Code of 1986 (26
For the purposes of this part: U.S.C. 3304(a)). under Section 302(a) (42 U.S.C. 502(a)),
(a)(1) Claim information means (i) Unemployment compensation (UC) State law must include provision for
information about: means cash benefits payable to such methods of administration as are
(i) Whether an individual is receiving, individuals with respect to their found by the Secretary of Labor to be
has received, or has applied for UC; unemployment. reasonably calculated to insure full
(ii) The amount of compensation the (j) UC information and State UC payment of unemployment
individual is receiving or is entitled to information means information in the compensation when due.
receive; and records of a State or State UC agency (b) Interpretation. The Department of
(iii) The individual’s current (or most that pertains to the administration of the Labor interprets Section 303(a)(1), SSA,
recent) home address. State UC law. This term includes those to mean that ‘‘methods of
(2) For purposes of subpart C (IEVS), State wage reports collected under the administration’’ that are reasonably
claim information also includes: IEVS (Section 1137 of the Social calculated to insure the full payment of
(i) Whether the individual has refused Security Act (SSA)) that are obtained by UC when due must include provision
an offer of work and, if so, a description the State UC agency for determining UC for maintaining the confidentiality of
of the job offered including the terms, monetary eligibility or are downloaded any UC information which reveals the
conditions, and rate of pay; and to the State UC agency’s files as a result name or any identifying particular about
(ii) Any other information contained of a crossmatch but does not otherwise any individual or any past or present
in the records of the State UC agency include those wage reports. It does not employer or employing unit, or which
that is needed by the requesting agency include information in a State’s could foreseeably be combined with
to verify eligibility for, and the amount Directory of New Hires, but does other publicly available information to
of, benefits. include any such information that has reveal any such particulars, and must
(b) Confidential UC information and been disclosed to the State UC agency include provision for barring the
confidential information mean any UC for use in the UC program. It also does disclosure of any such information,
information, as defined in paragraph (j) not include the personnel or fiscal except as provided in this part.
of this section, required to be kept (c) Application. Each State law must
information of a State UC agency.
confidential under § 603.4. contain provisions that are interpreted
(k) Wage information means and applied consistently with the
(c) Public domain information information in the records of a State UC
means— interpretation in paragraph (b) of this
agency (and, for purposes of § 603.23 section and with this subpart, and must
(1) Information about the organization (IEVS)), information reported under
of the State and the State UC agency and provide penalties for any disclosure of
provisions of State law which fulfill the confidential UC information that is
appellate authorities, including the requirements of Section 1137, SSA)
names and positions of officials and inconsistent with any provision of this
about the— subpart.
employees thereof; (1) Wages paid to an individual,
(2) Information about the State UC (2) Social security account number (or § 603.5 What are the exceptions to the
law (and applicable Federal law) numbers, if more than one) of such confidentiality requirement?
provisions, rules, regulations, and individual, and The following are exceptions to the
interpretations thereof, including confidentiality requirement. Disclosure
(3) Name, address, State, and the
statements of general policy and of confidential UC information is
Federal employer identification number
interpretations of general applicability; permissible under the exceptions in
of the employer who paid such wages to
and paragraphs (a) through (g) of this section
such individual.
(3) Any agreement of whatever kind only if authorized by State law and if
or nature, including interstate Subpart B—Confidentiality and such disclosure does not interfere with
arrangements and reciprocal agreements Disclosure Requirements the efficient administration of the State
and any agreement with the Department UC law. Disclosure of confidential UC
of Labor or the Secretary, relating to the § 603.3 What is the purpose and scope of information is permissible under the
administration of the State UC law. this subpart?
exceptions in paragraphs (h) and (i) of
(d) Public official means an official, This subpart implements the basic this section without such restrictions.
agency, or public entity within the confidentiality requirement derived (a) Public domain information. The
executive branch of Federal, State, or from Section 303(a)(1), SSA, and the confidentiality requirement of § 603.4
local government who (or which) has disclosure requirements of Sections does not apply to public domain
responsibility for administering or 303(a)(7), (c)(1), (d), (e), (h), and (i), information, as defined at § 603.2(c).
enforcing a law, or an elected official in SSA, and Section 3304(a)(16), Federal (b) UC appeals records. Disclosure of
the Federal, State, or local government. Unemployment Tax Act (FUTA). This appeals records and decisions, and
(e) Secretary and Secretary of Labor subpart also establishes uniform precedential determinations on coverage
mean the cabinet officer heading the minimum requirements for the payment of employers, employment, and wages,
United States Department of Labor, or of costs, safeguards, and data-sharing is permissible provided all social
his or her designee. agreements when UC information is security account numbers have been
(f) State means a State of the United disclosed, and for conformity and removed and such disclosure is
States of America, the District of substantial compliance with this otherwise consistent with Federal and
Columbia, the Commonwealth of Puerto proposed rule. This subpart applies to State law.
Rico, and the United States Virgin States and State UC agencies, as defined (c) Individual or employer. Disclosure
Islands. in § 603.2(f) and (g), respectively. for non-UC purposes, of confidential UC
information about an individual to that Note to paragraph (d): The Electronic not apply to any disclosure to a Federal
individual, or of confidential UC Signatures in Global and National Commerce official for purposes of UC program
information about an employer to that Act of 2000 (E-Sign), Pub. L. 106–229, may oversight and audits, including
apply where a party wishes to effectuate
employer, is permissible. disclosures under 20 CFR part 601 and
electronically an informed consent release
(d) Informed consent. Disclosure of (§ 603.5(d)(2)) or a disclosure agreement 29 CFR parts 96 and 97.
confidential UC information on the (§ 603.10(a)) with an entity that uses
basis of informed consent is permissible § 603.6 What disclosures are required by
informed consent releases. E-Sign, among
in the following circumstances— this subpart?
other things, sets forth the circumstances
(1) Agent—to one who acts for or in under which electronic signatures, contracts, (a) The confidentiality requirement of
the place of an individual or an and other records relating to such 303(a)(1), SSA, and § 603.4 are not
employer by the authority of that transactions (in lieu of paper documents) are applicable to this paragraph (a) and the
individual or employer if— legally binding. Thus, an electronic Department of Labor interprets Section
(i) In general— communication may suffice under E-Sign to 303(a)(1), SSA, as requiring disclosure
(A) The agent presents a written establish a legally binding contract. The
of all information necessary for the
States will need to consider E-Sign’s
release (which may include an application to these informed consent proper administration of the UC
electronically submitted release that the releases and disclosure agreements. In program. This includes disclosures to
State determines is authentic) from the particular, a State must, to conform and claimants, employers, the Internal
individual or employer being substantially comply with this regulation, Revenue Service (for purposes of UC tax
represented; assure that these informed consent releases administration), and the U.S.
(B) When a written release is and disclosure agreements are legally Citizenship and Immigration Services
impossible or impracticable to obtain, enforceable. If an informed consent release or (for purposes of verifying a claimant’s
the agent presents such other form of disclosure agreement is to be effectuated
electronically, the State must determine immigration status).
consent as is permitted by the State UC (b) In addition to Section 303(f), SSA
whether E-Sign applies to that transaction,
agency in accordance with State law; and, if so, make certain that the transaction (concerning an IEVS), which is
(ii) In the case of an elected official satisfies the conditions imposed by E-Sign. addressed in subpart C, the following
performing constituent services, the The State must also make certain that the provisions of Federal UC law also
official presents reasonable evidence electronic transaction complies with every specifically require disclosure of State
(such as a letter from the individual or other condition necessary to make it legally UC information and State-held
employer requesting assistance or a enforceable.
information pertaining to the Federal
written record of a telephone request (e) Public official. Disclosure of UC and benefit programs of
from the individual or employer) that confidential UC information to a public Unemployment Compensation for
the individual or employer has official for use in the performance of his Federal Employees (UCFE),
authorized such disclosure; or or her official duties is permissible. Unemployment Compensation for Ex-
(iii) In the case of an attorney retained Servicemembers (UCX), Trade
‘‘Performance of official duties’’ means
for purposes related to the State’s UC Adjustment Assistance (TAA) (except
administration or enforcement of law or
law, the attorney asserts that he or she for confidential business information
the execution of the official
is representing the individual or collected by States), Disaster
responsibilities of a Federal, State, or
employer.
local elected official. Administration of Unemployment Assistance (DUA), and
(2) Third party (other than an agent)
law includes research related to the law any Federal UC benefit extension
or disclosure made on an ongoing
basis—to a third party that is not acting administered by the public official. program:
Execution of official responsibilities (1) Section 303(a)(7), SSA, requires
as an agent or that receives confidential
does not include solicitation of State law to provide for making
information following an informed
contributions or expenditures to or on available, upon request, to any agency of
consent disclosure on an ongoing basis
behalf of a candidate for public or the United States charged with the
(even if such entity is an agent), but
only if that entity obtains a written political office or a political party. administration of public works or
(f) Agent or contractor of public assistance through public employment,
release from the individual or employer
official. Disclosure of confidential UC disclosure of the following information
to whom the information pertains.
(i) The release must be signed and information to an agent or contractor of with respect to each recipient of UC—
must include a statement— a public official to whom disclosure is (i) Name;
(A) Specifically identifying the permissible under paragraph (e) of this (ii) Address;
information that is to be disclosed; section. (iii) Ordinary occupation;
(B) That State government files will be (g) Bureau of Labor Statistics. The (iv) Employment status; and
accessed to obtain that information; confidentiality requirement does not (v) A statement of such recipient’s
(C) Of the specific purpose or apply to information collected rights to further compensation under the
purposes for which the information is exclusively for statistical purposes State law.
sought and a statement that information under a cooperative agreement with the (2) Section 303(c)(1), SSA, requires
obtained under the release will only be Bureau of Labor Statistics (BLS). each State to make its UC records
used for that purpose or purposes; and Further, this part does not restrict or available to the Railroad Retirement
(D) Indicating all the parties who may impose any condition on the transfer of Board, and to furnish such copies of its
receive the information disclosed. any other information to the BLS under UC records to the Railroad Retirement
(ii) The purpose specified in the an agreement, or the BLS’s disclosure or Board as the Board deems necessary for
release must be limited to— use of such information. its purposes.
(A) Providing a service or benefit to (h) Court order; official with subpoena (3) Section 303(d)(1), SSA, requires
the individual signing the release that authority. Disclosure of confidential UC each State UC agency, for purposes of
such individual expects to receive as a information in response to a court order determining an individual’s eligibility
result of signing the release; or or to an official with subpoena authority benefits, or the amount of benefits,
(B) Carrying out administration or is permissible as specified in § 603.7(b). under a food stamp program established
evaluation of a public program to which (i) UC Program Oversight and Audits. under the Food Stamp Act of 1977, to
the release pertains. The confidentiality requirement does disclose, upon request, to officers and
employees of the Department of application for, UC, and the amount of (1) Court Decision—a subpoena or
Agriculture, and to officers or any such compensation being received other compulsory legal process has been
employees of any State food stamp (or to be received) by such individual. served and a court has previously issued
agency, any of the following information (7) Section 3304(a)(16), FUTA a binding precedential decision that
contained in the records of the State UC requires each State UC agency— requires disclosures of this type, or a
agency— (i) To disclose, upon request, to any well-established pattern of prior court
(i) Wage information, State or political subdivision thereof decisions have required disclosures of
(ii) Whether an individual is administering a Temporary Assistance this type, or
receiving, has received, or has made (2) Official with Subpoena
to Needy Families Agency (TANF)
application for, UC, and the amount of Authority—Confidential UC information
program funded under part A of Title IV
any such compensation being received, has been subpoenaed, by a local, State
of the SSA, wage information contained
or to be received, by such individual, or Federal governmental official, other
(iii) The current (or most recent) home in the records of the State UC agency
which is necessary (as determined by than a clerk of court on behalf of a
address of such individual, and litigant, with authority to obtain such
(iv) Whether an individual has the Secretary of HHS in regulations) for
purposes of determining an individual’s information by subpoena under State or
refused an offer of employment and, if Federal law. The State or State UC
so, a description of the employment so eligibility for TANF assistance or the
agency may choose to disclose such
offered and the terms, conditions, and amount of TANF assistance; and
confidential UC information to these
rate of pay therefore. (ii) To furnish to the Secretary of officials without the actual issuance of
(4) Section 303(e)(1), SSA, requires HHS, in accordance with that a subpoena.
each State UC agency to disclose, upon Secretary’s regulations at 45 CFR
request, directly to officers or employees 303.108, wage information (as defined at § 603.8 What are the requirements for
of any State or local child support 45 CFR 303.108(a)(2)) and UC payment of costs and program income?
enforcement agency, any wage information (as defined at 45 CFR (a) In general. Except as provided in
information contained in the records of 303.108(a)(3)) contained in the records paragraph (b) of this section, grant funds
the State UC agency for purposes of of such agency for the purposes of the must not be used to pay any of the costs
establishing and collecting child National Directory of New Hires of making any disclosure of UC
support obligations (not to include established under Section 453(i) of the information. Grant funds may not be
custodial parent support obligations) SSA. used to pay any of the costs of making
from, and locating, individuals owing (c) Each State law must contain any disclosures under § 603.5(d)(2)
such obligations. provisions that are interpreted and (third party (other than an agent) or
(5) Section 303(h), SSA, requires each applied consistently with the disclosure made on an ongoing basis),
State UC agency to disclose quarterly, to requirements listed in this section. § 603.5(e) (optional disclosure to a
the Secretary of Health and Human public official), § 603.5(f) (optional
Services (HHS), wage information and § 603.7 What requirements apply to disclosure to an agent or contractor of a
subpoenas, other compulsory processes, public official), and § 603.5(g) (optional
claim information as required under and disclosure to officials with subpoena
Section 453(i)(1) of the SSA disclosure to BLS), § 603.6(b)
authority?
(establishing the National Directory of (mandatory disclosures for non-UC
New Hires), contained in the records of (a) In general. Except as provided in purposes), or § 603.22 (mandatory
such agency, for purposes of paragraph (b) of this section, when a disclosure for purposes of an IEVS).
Subsections (i)(1), (i)(3), and (j) of subpoena or other compulsory process (b) Use of grant funds permitted.
Section 453, SSA (establishing the is served upon a State UC agency or the Grant funds paid to a State under
National Directory of New Hires and its State, any official or employee thereof, Section 302(a), SSA, may be used to pay
uses for purposes of child support or any recipient of confidential UC the costs of only those disclosures
enforcement, Temporary Assistance to information, which requires the necessary for proper administration of
Needy Families (TANF), TANF production of confidential UC the UC program. (This may include
research, administration of the earned information or appearance for testimony some disclosures under § 603.5(a)
income tax credit, and use by the Social upon any matter concerning such (concerning public domain
Security Administration). information, the State or State UC information), § 603.5(c) (to an
(6) Section 303(i), SSA, requires each agency or recipient must file and individual or employer), and
State UC agency to disclose, upon diligently pursue a motion to quash the § 603.5(d)(1) (to an agent).) In addition,
request, to officers or employees of the subpoena or other compulsory process if grant funds may be used to pay costs of
Department of Housing and Urban other means of avoiding the disclosure disclosures under § 603.5(i) (for UC
Development (HUD) and to of confidential UC information are not Program Oversight and Audits) and
representatives of a public housing successful or if the court has not already § 603.6(a) (for the proper administration
agency, for purposes of determining an ruled on the disclosure. Only if such of the UC program). Grant funds may
individual’s eligibility for benefits, or motion is denied by the court or other also be used to pay costs associated with
the amount of benefits, under a housing forum may the requested confidential disclosures under § 603.7(b)(1)
assistance program of HUD, any of the UC information be disclosed, and only (concerning court-ordered compliance
following information contained in the upon such terms as the court or forum with subpoenas) if a court has denied
records of such State agency about any may order, such as that the recipient recovery of costs, or to pay costs
individual applying for or participating protect the disclosed information and associated with disclosures under
in any housing assistance program pay the State’s or State UC agency’s § 603.7(b)(2) (to officials with subpoena
administered by HUD who has signed a costs of disclosure. authority) if the State UC agency has
consent form approved by the Secretary (b) Exceptions. The requirement of attempted but not been successful in
of HUD— paragraph (a) of this section to move to obtaining reimbursement of costs.
(i) Wage information, and quash subpoenas shall not be Finally, grant funds may be used to pay
(ii) Whether the individual is applicable, so that disclosure is costs associated with any disclosure of
receiving, has received, or has made permissible, where— UC information if not more than an
incidental amount of staff time and no income and may be used only as procedures which are consistent with
more than nominal processing costs are permitted by 29 CFR 97.25(g) (on this subpart B and the agreement
involved in making the disclosure. program income). Such income may not required by § 603.10, and agreeing to
(c) Calculation of costs. The costs to be used to benefit a State’s general fund report any infraction of these rules to
a State or State UC agency of processing or other program. the State UC agency fully and promptly,
and handling a request for disclosure of (vi) Require the recipient to dispose of
information must be calculated in § 603.9 What safeguards and security information disclosed or obtained, and
accordance with the cost principles and requirements apply to disclosed
any copies thereof made by the recipient
information?
administrative requirements of 29 CFR agency, entity, or contractor, after the
part 97 and Office of Management and (a) In general. For disclosures of purpose for which the information is
Budget Circular No. A–87 (Revised). For confidential UC information under disclosed is served, except for disclosed
the purpose of calculating such costs, § 603.5(d)(2) (to a third party (other than information possessed by any court.
any initial start-up costs incurred by the an agent) or disclosures made on an Disposal means return of the
State UC agency in preparation for ongoing basis); § 603.5(e) (to a public information to the disclosing State or
making the requested disclosure(s), such official), except as provided in State UC agency or destruction of the
as computer reprogramming necessary paragraph (d) of this section; § 603.5(f) information, as directed by the State or
to respond to the request, and the costs (to an agent or contractor of a public State UC agency. Disposal includes
of implementing safeguards and official); § 603.6(b)(1) through (4), (6), deletion of personal identifiers by the
agreements required by §§ 603.9 and and (7)(i) (as required by Federal UC State or State UC agency in lieu of
603.10, must be charged to and paid by law); and § 603.22 (to a requesting destruction. In any case, the information
the recipient. (Start-up costs do not agency for purposes of an IEVS), a State disclosed must not be retained with
include the costs to the State UC agency or State UC agency must require the personal identifiers for longer than such
of obtaining, compiling, or maintaining recipient to safeguard the information period of time as the State or State UC
information for its own purposes.) disclosed against unauthorized access or agency deems appropriate on a case-by-
Postage or other delivery costs incurred redisclosure, as provided in paragraphs case basis; and
in making any disclosure are part of the (b) and (c) of this section, and must (vii) Maintain a system sufficient to
costs of making the disclosure. Penalty subject the recipient to penalties allow an audit of compliance with the
mail, as defined in 39 U.S.C. 3201(1), provided by the State law for requirements of this part.
must not be used to transmit unauthorized disclosure of confidential (2) In the case of disclosures made
information being disclosed, except UC information. under § 603.5(d)(2) (to a third party
information disclosed for purposes of (b) Safeguards to be required of (other than an agent) or disclosures
administration of State UC law. As recipients. (1) The State or State UC made on an ongoing basis), the State or
provided in Sections 453(e)(2) and agency must: State UC agency must also—
453(g) of the SSA, the Secretary of HHS (i) Require the recipient to use the (i) Periodically audit a sample of
has the authority to determine what disclosed information only for purposes transactions accessing information
constitutes a reasonable amount for the authorized by law and consistent with disclosed under that section to assure
reimbursement for disclosures under an agreement that meets the that the entity receiving disclosed
Section 303(h), SSA, and Section requirements of § 603.10; information has on file a written release
3304(a)(16)(B), FUTA. (ii) Require the recipient to store the authorizing each access. The audit must
(d) Payment of costs. The costs to a disclosed information in a place ensure that the information is not being
State or State UC agency of making a physically secure from access by used for any unauthorized purpose;
disclosure of UC information, calculated unauthorized persons; (ii) Ensure that all employees of
in accordance with paragraph (c) of this (iii) Require the recipient to store and entities receiving access to information
section, must be paid by the recipient of process disclosed information disclosed under § 603.5(d)(2) are subject
the information or another source maintained in electronic format, such as to the same confidentiality
paying on behalf of the recipient, either magnetic tapes or discs, in such a way requirements, and State criminal
in advance or by way of reimbursement. that unauthorized persons cannot obtain penalties for violation of those
If the recipient is not a public official, the information by any means; requirements, as are employees of the
such costs, except for good reason must (iv) Require the recipient to undertake State UC agency.
be paid in advance. For the purposes of precautions to ensure that only (c) Redisclosure of confidential UC
this paragraph (d), payment in advance authorized personnel are given access to information. (1) A State or State UC
means full payment of all costs before disclosed information stored in agency may authorize any recipient of
or at the time the disclosed information computer systems; confidential UC information under
is given in hand or sent to the recipient. (v) Require each recipient agency or paragraph (a) of this section to
The requirement of payment of costs in entity to: redisclose information only as follows:
this paragraph is met when a State UC (A) Instruct all personnel having (i) To the individual or employer who
agency has in place a reciprocal cost access to the disclosed information is the subject of the information;
agreement or arrangement with the about confidentiality requirements, the (ii) To an attorney or other duly
recipient. As used in this section, requirements of this subpart B, and the authorized agent representing the
reciprocal means that the relative sanctions specified in the State law for individual or employer;
benefits received by each are unauthorized disclosure of information, (iii) In any civil or criminal
approximately equal. Payment or and proceedings for or on behalf of a
reimbursement of costs must include (B) Sign an acknowledgment that all recipient agency or entity;
any initial start-up costs associated with personnel having access to the disclosed (iv) In response to a subpoena only as
making the disclosure. information have been instructed in provided in § 603.7;

(e) Program income. Costs paid as accordance with paragraph (b)(1)(v)(A) (v) To an agent or contractor of a
required by this section, and any funds of this section and will adhere to the public official only if the person
generated by the disclosure of UC State’s or State UC agency’s redisclosing is a public official, if the
information under this part, are program confidentiality requirements and redisclosure is authorized by the State
law, and if the public official retains (b) Contents of agreement. (1) In (2) Enforcement. In addition to the
responsibility for the uses of the general. Any agreement required by actions required to be taken by
confidential UC information by the paragraph (a) of this section must paragraph (c)(1) of this section, the state
agent or contractor; include, but need not be limited to, the or state UC agency must undertake any
(vi) From one public official to following terms and conditions: other action under the agreement, or
another if the redisclosure is authorized (i) A description of the specific under any law of the State or of the
by the State law; information to be furnished and the United States, to enforce the agreement
(vii) When so authorized by Section purposes for which the information is and secure satisfactory corrective action
303(e)(5), SSA, (redisclosure of wage sought; or surrender of the information, and
information by a State or local child (ii) A statement that those who must take other remedial actions
support enforcement agency to an agent request or receive information under the permitted under State or Federal law to
under contract with such agency for agreement will be limited to those with effect adherence to the requirements of
purposes of carrying out child support a need to access it for purposes listed in this subpart B, including seeking
enforcement) and by State law; or the agreement; damages, penalties, and restitution as
(iii) The methods and timing of permitted under such law for any
(viii) When specifically authorized by requests for information and responses
a written release that meets the charges to granted funds and all costs
to those requests, including the format incurred by the state or the state UC
requirements of § 603.5(d) (to a third to be used;
party with informed consent). agency in pursuing the breach of the
(iv) Provision for paying the State or
(2) Information redisclosed under agreement and enforcement as required
State UC agency for any costs of
paragraphs (c)(1)(v) and (vi) of this by this paragraph (c).
furnishing information, as required by (d) The requirements of this section
section must be subject to the safeguards § 603.8 (on costs);
in paragraph (b) of this section. do not apply to disclosures of UC
(v) Provision for safeguarding the
(d) The requirements of this section information to a Federal agency which
information disclosed, as required by
do not apply to disclosures of UC the Department has determined, by
§ 603.9 (on safeguards); and
information to a Federal agency which (vi) Provision for on-site inspections notice published in the Federal
the Department has determined, by of the agency, entity, or contractor, to Register, to have in place safeguards
notice published in the Federal assure that the requirements of the adequate to satisfy the confidentiality
Register, to have in place safeguards State’s law and the agreement or requirement of Section 303(a)(1), SSA,
adequate to satisfy the confidentiality contract required by this section are and an appropriate method of paying or
requirement of Section 303(a)(1), SSA. being met. reimbursing the State UC agency (which
(2) In the case of disclosures under may involve a reciprocal cost
§ 603.10 What are the requirements for § 603.5(d)(2) (to a third party (other than arrangement) for costs involved in such
agreements? disclosures. These determinations will
an agent) or disclosures made on an
(a) Requirements. (1) For disclosures ongoing basis), the agreement required be published in the Federal Register.
of confidential UC information under by paragraph (a) of this section must § 603.11 How do States notify claimants
§ 603.5(d)(2) (to a third party (other than assure that the information will be and employers about the uses of their
an agent) or disclosures made on an accessed by only those entities with information?
ongoing basis); § 603.5(e) (to a public authorization under the individual’s or (a) Claimants. Every claimant for
official), except as provided in employer’s release, and that it may be compensation must be notified, at the
paragraph (d) of this section; § 603.5(f) used only for the specific purposes time of application, and periodically
(to an agent or contractor of a public authorized in that release. thereafter, that confidential UC
official); § 603.6(b)(1) through (4), (6), (c) Breach of agreement. (1) In information pertaining to the claimant
and (7)(i) (as required by Federal UC general. If an agency, entity, or may be requested and utilized for other
law); and § 603.22 (to a requesting contractor, or any official, employee, or governmental purposes, including, but
agency for purposes of an IEVS), a State agent thereof, fails to comply with any not limited to, verification of eligibility
or State UC agency must enter into a provision of an agreement required by under other government programs.
written, enforceable agreement with any this section, including timely payment Notice on or attached to subsequent
agency or entity requesting disclosure(s) of the state’s or state UC agency’s costs additional claims will satisfy the
of such information. The agreement billed to the agency, entity, or requirement for periodic notice
must be terminable if the State or State contractor, the agreement must be thereafter.
UC agency determines that the suspended, and further disclosure of (b) Employers. Every employer subject
safeguards in the agreement are not information (including any disclosure to a State’s law must be notified that
adhered to. being processed) to such agency, entity, wage information and other confidential
(2) For disclosures referred to in or contractor is prohibited, until the UC information may be requested and
§ 603.5(f) (to an agent or contractor of a State or State UC agency is satisfied that utilized for other governmental
public official), the State or State UC corrective action has been taken and purposes, including, but not limited to,
agency must enter into a written, there will be no further breach. In the verification of an individual’s eligibility
enforceable agreement with the public absence of prompt and satisfactory for other government programs.
official on whose behalf the agent or corrective action, the agreement must be
contractor will obtain information. The canceled, and the agency, entity, or § 603.12 How are the requirements of this
agreement must hold the public official contractor must be required to surrender part enforced?
responsible for ensuring that the agent to the state or state UC agency all (a) Resolving conformity and
or contractor complies with the confidential UC information (and copies compliance issues. For the purposes of
safeguards of § 603.9. The agreement thereof) obtained under the agreement resolving issues of conformity and
must be terminable if the State or State which has not previously been returned substantial compliance with the
UC agency determines that the to the state or state UC agency, and any requirements set forth in subparts B and
safeguards in the agreement are not other information relevant to the C, the provisions of 20 CFR 601.5(b)
adhered to. agreement. (informal discussions with the
Department of Labor to resolve 1137(a)(1), SSA, provides that each State approved under part D of Title IV of the
conformity and substantial compliance must require claimants for compensation to SSA.
issues), and 20 CFR 601.5(d) (Secretary furnish to the State UC agency their social
security account numbers, as a condition of (f) Social Security Administration—
of Labor’s hearing and decision on eligibility for compensation, and further Commissioner of the Social Security
conformity and substantial compliance) requires States to utilize such account Administration in establishing or
apply. numbers in the administration of the State verifying eligibility or benefit amounts
(b) Conformity and substantial UC laws. Section 1137(a)(3), SSA, further under Titles II (Old-Age, Survivors, and
compliance. Whenever the Secretary of provides that employers must make quarterly Disability Insurance Benefits) and XVI
Labor, after reasonable notice and wage reports to a State UC agency, or an (Supplemental Security Income for the
opportunity for a hearing to the State alternative agency, for use in verifying
eligibility for, and the amount of, benefits.
Aged, Blind, and Disabled) of the SSA.
UC agency of a State, finds that the State
Section 1137(d)(1), SSA, provides that each § 603.22 What information must State UC
law fails to conform, or that the State or
State must require claimants for agencies disclose for purposes of an IEVS?
State UC agency fails to comply compensation, as a condition of eligibility, to
substantially, with: declare in writing, under penalty of perjury, (a) Disclosure of information. Each
(1) The requirements of Title III, SSA, whether the individual is a citizen or State UC agency must disclose, upon
implemented in subparts B and C of this national of the United States, and, if not, that request, to any requesting agency, as
part, the Secretary of Labor shall notify the individual is in a satisfactory defined in § 603.21, that has entered
the Governor of the State and such State immigration status. Other provisions of into an agreement required by § 603.10,
UC agency that further payments for the Section 1137(d), SSA, not implemented in
this regulation require the States to obtain,
wage information (as defined at
administration of the State UC law will § 603.2(k)) and claim information (as
and individuals to furnish, information
not be made to the State until the which shows immigration status, and require defined at § 603.2(a)) contained in the
Secretary of Labor is satisfied that there the States to verify immigration status with records of such State UC agency.
is no longer any such failure. Until the the Bureau of Citizenship and Immigration (b) Format. The State UC agency must
Secretary of Labor is so satisfied, the Services. adhere to standardized formats
Department of Labor shall make no established by the Secretary of HHS (in
further payments to such State. § 603.21 What is a requesting agency? consultation with the Secretary of
(2) The FUTA requirements For the purposes of this subpart C, Agriculture) and set forth in 42 CFR
implemented in this subpart B, the requesting agency means: 435.960 (concerning standardized
Secretary of Labor shall make no (a) Temporary Assistance to Needy formats for furnishing and obtaining
certification under that section to the Families Agency—Any State or local information to verify income and
Secretary of the Treasury for such State agency charged with the responsibility eligibility).
as of October 31 of the 12-month period of administering a program funded
for which such finding is made. under part A of Title IV of the SSA. § 603.23 What information must State UC
(b) Medicaid Agency—Any State or agencies obtain from other agencies, and
Subpart C—Mandatory Disclosure for local agency charged with the crossmatch with wage information, for
Income and Eligibility Verification responsibility of administering the purposes of an IEVS?
System (IEVS) provisions of the Medicaid program (a) Crossmatch with information from
§ 603.20 What is the purpose and scope of under a State plan approved under Title requesting agencies. Each State UC
this subpart? XIX of the SSA. agency must obtain such information
(c) Food Stamp Agency—Any State or from the Social Security Administration
(a) Purpose. Subpart C implements
local agency charged with the and any requesting agency as may be
Section 303(f), SSA. Section 303(f)
responsibility of administering the needed in verifying eligibility for, and
requires States to have in effect an
provisions of the Food Stamp Program the amount of, compensation payable
income and eligibility verification
under the Food Stamp Act of 1977. under the State UC law.
system, which meets the requirements (d) Other SSA Programs Agency—Any
of Section 1137, SSA, under which (b) Crossmatch of wage and benefit
State or local agency charged with the information. The State UC agency must
information is requested and exchanged responsibility of administering a
for the purpose of verifying eligibility crossmatch quarterly wage information
program under a State plan approved with UC payment information to the
for, and the amount of, benefits under Title I, X, XIV, or XVI
available under several federally extent that such information is likely, as
(Supplemental Security Income for the determined by the Secretary of Labor, to
assisted programs, including the Aged, Blind, and Disabled) of the SSA.
Federal-State UC program. be productive in identifying ineligibility
(e) Child Support Enforcement
(b) Scope. This subpart C applies only for benefits and preventing or
Agency—Any State or local child
to a State UC agency. discovering incorrect payments.
support enforcement agency charged
Note to paragraph (b): Although not with the responsibility of enforcing [FR Doc. 06–8185 Filed 9–26–06; 8:45 am]
implemented in this part 603, Section child support obligations under a plan BILLING CODE 4510–30–P

Rule: Income and Eligibility Verification System: Federal-State Unemployment Compensation Program State Unemployment Compensation Information Confidentiality and Disclosure Requirements

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Rule: Income and Eligibility Verification System: Federal-State Unemployment Compensation Program State Unemployment Compensation Information Confidentiality and Disclosure Requirements

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Wednesday,

September 27, 2006

20 CFR Part 603

Assistance Number Subpart A—In General

making the disclosure. information have been instructed in provided in § 603.7;

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