[Federal Register Volume 62, Number 143 (Friday, July 25, 1997)]
[Notices]
[Pages 40118-40120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19648]


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DEPARTMENT OF LABOR

Employment and Training Administration


Federal-State Unemployment Compensation Program: Unemployment 
Insurance Program Letters Interpreting Federal Unemployment Insurance 
Law

    The Employment and Training Administration interprets Federal law 
requirements pertaining to unemployment compensation as part of its 
role in the administration of the Federal-State unemployment 
compensation program. These interpretations are issued in

[[Page 40119]]

Unemployment Insurance Program Letters (UIPLs) to the State Employment 
Security Agencies (SESAs). The UIPL described below is published in the 
Federal Register in order to inform the public.

UIPL 37-96  Change 1

    The Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996, popularly known as the ``welfare reform'' bill, made several 
changes which affect the unemployment compensation (US) program. The 
purpose of this UIPL is to provide information on one of these changes 
which was not discussed in the Department's previous issuance on 
PRWORA, UIPL 37-96. This change relates to the definition of ``legal 
process'' used for purposes of intercepting child support obligations 
from UC.

UIPL 34-97

    For a number of years, State US agencies have been seeking guidance 
concerning the permissible disclosure of UC information, particularly 
in the areas of payment of costs and safeguarding information. In March 
of 1992, the Department of Labor published a Notice of Proposed 
Rulemaking in the Federal Register on the confidentiality and 
disclosure of State records compiled or maintained for the Purposes of 
the Federal-State UC program. As an interim step, until the rule is 
published, the Department is issuing this UIPL to inform States of the 
Department's position in this area.

    Dated: July 22, 1997.
Raymond J. Uhalde,
Acting Assistant Secretary of Labor.

U.S. Department of Labor

Employment and Training Administration, Washington, D.C. 20210

Classification: UI
Correspondence Symbol: TEUL
Date: June 10, 1997
Rescissions: None
Expiration Date: Continuing
Directive: Unemployment Insurance Program Letter No. 34-97
To: All State Employment Security Agencies
From: Grace A. Kilbane, Director, Unemployment Insurance Service
Subject: Disclosure of Confidential Unemployment Compensation 
Information

    1. Purpose. To advise States of the Department of Labor's 
(Department) interpretation of Federal law regarding the basic 
confidentiality and disclosure requirements for the Federal-State 
unemployment compensation (UC) program and to announce that the 
Department is planning to move ahead with development of a rule.
    2. References. Sections 303(a)(1) and 303(a)(8) of the Social 
Security Act (SSA); Income and Eligibility Verification System 
(IEVS) regulations at 20 CFR Part 603; Unemployment Insurance 
Program Letter (UIPL) No 52-80, dated September 9, 1980 (disclosure 
to food stamp agencies and to child support enforcement agencies); 
UIPL No. 12-87, dated March 11, 1987 (disclosure to agencies 
participating in a State IEVS); UIPL No. 11-89, dated January 5, 
1989 (disclosure to the Department of Housing and Urban Development 
and to representatives of a public housing agency; this disclosure 
provision expired on October 1, 1994); UIPL No. 23-96, dated May 31, 
1996 (disclosure to private entities); UIPL No. 37-96, dated 
September 25, 1996 (disclosure to child support enforcement agencies 
and redisclosure to an agent, and disclosure to the Secretary of 
Health and Human Services for purposes of the National Directory of 
New Hires operated by the Federal Parent Locator Service).
    3. Background. For a number of years, State UC agencies have 
been seeking guidance concerning the permissible disclosure of UC 
information, particularly in the areas of payment of costs and 
safeguarding information. Accordingly, the Department published a 
Notice of Proposed Rulemaking (NPRM) in the Federal Register (57 FR 
10064) on March 23, 1992, on the confidentiality and disclosure of 
State records compiled or maintained for the purposes of the 
Federal-State UC program. Just over 100 responses were received from 
various interested parties. As an interim step, until the rule is 
published, the Department is issuing this UIPL.
    4. Rulemaking. The Department will seek to place in regulations 
all of the requirements of statutory provisions relating to the 
confidentiality and disclosure of State records compiled or 
maintained for the purposes of the Federal-State UC program. The aim 
of the rule will be to prescribe comprehensive requirements for 
protecting the confidentiality of State records collected for the 
purposes of the Federal-State UC program, define the limits on the 
rule of confidentiality, set forth the statutorily required and 
permitted exceptions to the rule of confidentiality, and prescribe 
the conditions under which the required and permitted disclosures 
shall or may be made. Among the various issues to be discussed in 
the rule will be disclosure to governmental entities and ``quasi'' 
governmental entities and redisclosure to private entities acting as 
agents for governmental entities, as well as issues raised in 
response to the NPRM.
    Until a rule is issued, this UIPL, the UIPLs cited above in item 
2, References, other UIPLs subsequently issued and 20 CFR Part 603 
are the Department's interpretation of Federal law with respect to 
confidentiality and disclosure.
    5. Interpretaiton. The basic confidentiality requirement for the 
Federal-State UC program has its origin in the beginning of the 
program and is derived form Sections 303(a)(1) and 303(a)(8), SSA. 
It pertains to information required from individuals and employers 
or employing units for the purposes of the administration of the 
revenue and benefit provisions of State UC laws, hereafter ``UC 
information.'' It applies to State UC agencies and the entire 
executive branch of State government.
    Section 303(a)(1), SSA, requires, as a condition for a State to 
receive administrative grants, that the State law provide for:
    [S]uch methods of administration * * * as are found by the 
Secretary of Labor to be reasonably calculated to insure full 
payment of unemployment compensation when due.
    Section 303(a)(8), SSA requires, as a condition for a State to 
receive administrative grants, that the State law provide for:
    The expenditure of all moneys received * * * solely for the 
purposes and in the amounts found necessary by the Secretary of 
Labor for the proper and efficient administration of such State law 
* * *.
    It has been the Department's longstanding interpretation of 
Sections 303(a)(1) and 303(a)(8), SSA, that UC information is 
confidential and, except as noted in item 6 below, is not subject to 
disclosure. The basis for this prohibition is that disclosure may 
discourage individuals claiming benefits from exercising their 
rights under the law, may deter employers from furnishing 
information necessary for UC program operations, may impede the 
``proper and efficient administration'' of the UC program, and may 
create notoriety for the UC program if the information were misused. 
Any publicity could have disrupting effects on the operations of the 
State agency and effect the agency's mission of insuring claimants 
``full payment of unemployment compensation when due.''
    6. Exceptions. Following are exceptions to the rule of 
confidentiality.
    a. Disclosure to Public Officials--Permissible. UC records may 
be disclosed to Federal, State and local public officials, including 
law enforcement officials, in the administration or enforcement of a 
law by the public official. The Department encourages such 
disclosure in the interest of effective government. This disclosure 
of records to public officials is permitted only under the following 
conditions:
     Disclosure of the specific record(s) requested is 
permitted by the State law of the State to which the request is 
made.
     Such disclosure would not significantly hinder or delay 
the processing of UC claims or other UC activities, and such 
disclosure would not impede the efficient administration of the 
State UC law.
     The use of the disclosed information is limited to 
official governmental duties.
     If disclosure entails more than casual or incidental 
staff time, arrangements are made for the reimbursement of the costs 
involved in providing the information.
    b. Disclosure to Public Officials--Required. Several specific 
provisions of Federal law require disclosure of UC information to 
certain governmental entities, which are food stamp agencies, child 
support enforcement agencies, the National Directory of New Hires 
and agencies participating in a State IEVS. This UIPL will not 
discuss these requirements as they have already been addressed in 20 
CFR Part 603 and the various UIPLs cited above in item 2, 
References.
    c. Disclosure to Private Entities--UIPL No. 23-96. UC 
information may be disclosed to a private entity under a written 
agreement

[[Page 40120]]

which requires ``informed consent'' from the individual to whom the 
information pertains, safeguards the information once it is in the 
hands of the private entity and closely restricts or prohibits 
further dissemination, and requires the private entity to pay all 
costs associated with disclosure. Consent is not informed if an 
individual is not told that governmental records, including a 
State's records, may be released and to whom the information may be 
provided. A more complete discussion is found in UIPL No. 23-96.
    d. Subpoenas. Where a subpoena requests the disclosure of 
confidential UC information that is not permitted to be disclosed to 
the party seeking it, disclosure is permitted only after a motion to 
quash, on the grounds that it is privileged UC information, has been 
overruled by a court. This is because, while subpoenas may be issued 
by a public official (e.g., a clerk of court), they are generally 
requested for a private party, such as a claimant or an employer. 
Cooperation with law enforcement officials is encouraged so that 
there should be no need for these officials to rely upon subpoenas.
    7. Action Required. State administrators are requested to 
provide the above information to appropriate staff.
    8. Inquiries. Direct questions to the appropriate Regional 
Office.

U.S. Department of Labor

Employment and Training Administration

Washington, D.C. 20210

Classification: UI
Correspondence Symbol: TEUL
Date: July 21, 1997
Rescissions: None
Expiration Date: Continuing
Directive: Unemployment Insurance Program Letter No. 37-96 Change 1
To: All State Employment Security Agencies
From: GRACE A. KILBANE, Director, Unemployment Insurance Service
Subject: The Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996--Deduction of Child Support Obligations 
from Unemployment Compensation through Legal Process

    1. Purpose. To advise States of an amendment to the definition 
of legal process made to Federal law by the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996.
    2. References. The Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (P.L. 104-193); the Social Security Act 
(SSA); and Unemployment Insurance Program Letter (UIPL) No. 37-96.
    3. Background. The Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (PRWORA), popularly known as the 
``welfare reform'' bill, made several changes which affect the 
unemployment compensation (UC) program. The purpose of this UIPL is 
to provide information on one of these changes which was not 
discussed in the Department's previous issuance on PRWORA, UIPL 37-
96. This change relates to the definition of ``legal process'' used 
for purposes of intercepting child support obligations from UC.
    4. Legal Process. The child support intercept requirement for UC 
is found at Section 303(e)(2)(A)(iii)(III), SSA. It requires States, 
as a condition for UC administrative grants, to deduct and withhold 
child support obligations from any UC otherwise payable to an 
individual if the obligation is ``required to be so deducted and 
withheld from such unemployment compensation through legal process 
(as defined in section 462(e)),'' SSA. This definition of legal 
process was repealed by Section 362(b)(1), PRWORA. Although a new 
definition of legal process was added to the SSA, the UC intercept 
provisions were not amended to reference this new definition.
    The new definition of legal process is found at Section 
459(i)(5), SSA, as amended by Section 362(a), PRWORA. It is 
substantially similar to the old definition. However, whereas the 
old definition included only courts of competent jurisdiction, the 
new definition is expanded to include administrative agencies of 
competent jurisdiction. Thus, a writ, order, summons, or other 
similar process in the nature of garnishment which is issued by an 
administrative agency of competent jurisdiction is now included in 
the definition of legal process.
    Under the repealed Section 462(e), the definition of legal 
process applied to Section 459. In contrast, the new definition is 
itself contained in Section 459. In the Department's view, the 
shifting of the definition from Section 462 to Section 459 is merely 
technical. Further, the child support intercept provision must be 
effectuated. Therefore, although the child support intercept 
provision was not amended to reference the new definition, the 
Department interprets it as re/quiring that States deduct and 
withhold UC in accordance with the new definition of legal process. 
This interpretation gives effect to one of the purposes of the 
PRWORA--to strengthen child support enforcement mechanisms.
    States should be aware that any additional costs incurred by the 
State UC agency in administering this new definition must be 
reimbursed by the appropriate State or local child support 
enforcement agency as required by Section 303(e)(2)(C), SSA.
    5. Action. States will need to determine whether amendment to 
State law is necessary.
    6. Inquiries. Please direct inquiries to the appropriate 
Regional Office.

[FR Doc. 97-19648 Filed 7-24-97; 8:45 am]
BILLING CODE 4510-30-M