[Federal Register Volume 79, Number 196 (Thursday, October 9, 2014)]
[Proposed Rules]
[Pages 61013-61020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24098]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 620

RIN 1205-AB63


Federal-State Unemployment Compensation Program; Middle Class Tax 
Relief and Job Creation Act of 2012 Provision on Establishing 
Appropriate Occupations for Drug Testing of Unemployment Compensation 
Applicants

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Employment and Training Administration (ETA) of the U.S. 
Department of Labor (Department) proposes to establish in regulation, 
for State Unemployment Insurance (UI) program purposes, occupations 
that regularly conduct drug testing. These regulations would implement 
the Middle Class Tax Relief and Job Creation Act of 2012 (the Act) 
amendments to the Social Security Act (SSA), permitting States to enact 
legislation that would allow State UI agencies to conduct drug testing 
on unemployment compensation (UC) applicants for whom suitable work (as 
defined under the State law) is only available in an occupation that 
regularly conducts drug testing (as determined under regulations issued 
by the Secretary of Labor (Secretary)). States may deny UC to an 
applicant who tests positive for drug use under these circumstances. 
The Secretary is required under the SSA to issue regulations 
determining those occupations that regularly conduct drug testing.

[[Page 61014]]


DATES: To be ensured consideration, comments must be submitted in 
writing on or before December 8, 2014.

ADDRESSES: You may submit comments, identified by Regulatory 
Information Number (RIN) 1205-AB63, by one of the following methods:
    Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the 
Web site instructions for submitting comments.
    Mail and hand delivery/courier: Written comments, disk, and CD-ROM 
submissions may be mailed to Adele Gagliardi, Administrator, Office of 
Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue NW., Room N-5641, Washington, DC 20210.
    Instructions: Label all submissions with ``RIN 1205-AB63.''
    Please submit your comments by only one method. Please be advised 
that the Department will post all comments received that that related 
to this NPRM on http://www.regulations.gov without making any change to 
the comments or redacting any information. The http://www.regulations.gov Web site is the Federal e-rulemaking portal and all 
comments posted there are available and accessible to the public. 
Therefore, the Department recommends that commenters remove personal 
information such as Social Security Numbers, personal addresses, 
telephone numbers, and email addresses included in their comments as 
such information may become easily available to the public via the 
http://www.regulations.gov Web site. It is the responsibility of the 
commenter to safeguard personal information.
    Also, please note that due to security concerns, postal mail 
delivery in Washington, DC may be delayed. Therefore, the Department 
encourages the public to submit comments on http://www.regulations.gov.
    Docket: All comments on this proposed rule will be available on the 
http://www.regulations.gov Web site and can be found using RIN 1205-
AB63. The Department also will make all the comments it receives 
available for public inspection by appointment during normal business 
hours at the above address. If you need assistance to review the 
comments, the Department will provide appropriate aids such as readers 
or print magnifiers. The Department will make copies of this proposed 
rule available, upon request, in large print and electronic file on 
computer disk. To schedule an appointment to review the comments and/or 
obtain the proposed rule in an alternative format, contact the Office 
of Policy Development and Research at (202) 693-3700 (this is not a 
toll-free number). You may also contact this office at the address 
listed below.
    Comments under the Paperwork Reduction Act: In addition to filing 
comments with ETA, persons wishing to comment on the information 
collection aspects of this rule may send comments to: Office of 
Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-ETA, 
Office of Management and Budget, Room 10235, 725 17th Street NW., 
Washington, DC 20503, Fax: 202-395-6881 (this is not a toll-free 
number), email: [email protected].

FOR FURTHER INFORMATION CONTACT: Adele Gagliardi, Administrator, Office 
of Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue NW., Room N-5641, Washington, DC 20210; telephone 
(202) 693-3700 (this is not a toll-free number).
    Individuals with hearing or speech impairments may access the 
telephone number above via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:  The preamble to this proposed rule is 
organized as follows:

I. Background--provides a brief description of the development of 
the proposed rule
II. Section-by-Section Review--summarizes and discusses the proposed 
regulations
III. Administrative Information--sets forth the applicable 
regulatory requirements

I. Background

    On February 22, 2012, President Obama signed the Act, Public Law 
112-96. Title II of the Act amended section 303, SSA, to add a new 
subsection (l) permitting States to drug test UC applicants as a 
condition of UC eligibility under two specific circumstances. The first 
circumstance is if the applicant was terminated from employment with 
the applicant's most recent employer because of the unlawful use of a 
controlled substance. (Section 303(l)(1)(A)(i), SSA.) The second 
circumstance is if the only available suitable work (as defined in the 
law of the State conducting the drug testing) for an individual is in 
an occupation that regularly conducts drug testing (as determined in 
regulations by the Secretary). A State may deny UC to an applicant who 
tests positive for drug use under these circumstances. (Section 
303(l)(1)(A)(ii), SSA.) This proposed rule defines those occupations 
that regularly conduct drug testing as required by section 
303(l)(1)(A)(ii), SSA. The Department of Labor will, separately from 
this rulemaking, issue further guidance to States to address other 
issues related to the implementation of drug testing under 303(l), SSA.

Consultations With Other Federal Agencies

    The Department consulted with a number of Federal agencies with 
expertise in drug testing to inform this proposed regulation. 
Specifically, we consulted with the Substance Abuse and Mental Health 
Services Administration (SAMHSA) in the U.S. Department of Health and 
Human Services (HHS); the U.S. Department of Transportation (DOT); the 
U.S. Department of Defense (DOD); the U.S. Department of Homeland 
Security (DHS); DOL's Bureau of Labor Statistics (BLS); and DOL's 
Occupational Safety and Health Administration (OSHA). These agencies 
were consulted because they have experience with required drug testing. 
DOD and DHS defer to SAMHSA for interpretation of the drug testing 
requirements. Therefore, the Department gave deference to the SAMHSA 
guidance when developing this rule. The Department also canvassed State 
laws to develop an understanding of what occupations require regular 
drug testing at the State level.
    SAMHSA: The Department consulted with SAMHSA because it is the 
Federal agency mandated to oversee Federal workplace drug testing by 
Pub. L. 100-71 and, further, by E.O. 12564, entitled Drug-Free Federal 
Workplace. E.O. 12564 requires that the head of each Federal agency 
``shall establish a program to test for the use of illegal drugs by 
employees in sensitive positions.'' Public Law 100-71 directed HHS to 
establish scientific and technical guidelines and ensure that 
comprehensive standards are published to govern the drug testing of 
Federal employees. SAMHSA provides oversight for:
    [rtarr8] The Federal Drug-Free Workplace Program, which aims to 
eliminate illicit drug use in the Federal workforce; and
    [rtarr8] The National Laboratory Certification Program, which 
certifies laboratories to conduct forensic drug testing for the Federal 
agencies and for some Federally-regulated industries.

In order to oversee Federal workplace drug testing, SAMHSA reviews 
Federal agencies' drug testing designated positions (TDPs), which 
SAMSHA requires Federal agencies to designate.
    OSHA: ETA consulted with DOL's OSHA because of its knowledge of 
employer drug testing programs. OSHA also was instrumental in 
identifying

[[Page 61015]]

expertise in other Federal agencies that proved valuable to the 
development of the NPRM.
    DOT: ETA consulted with DOT partly because DOT has a number of 
occupations designated as TDPs by SAMHSA, and more significantly 
because DOT regulations at 49 CFR part 40 identify public and private 
employment in transportation industries as being subject to drug 
testing. These regulations require that the Secretary of Transportation 
ensure drug and alcohol testing policies are developed and carried out 
in a consistent, efficient, and effective manner within the 
transportation industries for the ultimate safety and protection of the 
traveling public.
    BLS: ETA consulted with BLS and determined that currently no 
statistical collections exist that relate to occupations where 
employers regularly drug test.
Review of State Drug Testing Laws
    ETA's consultation did not reveal any single reliable and current 
source of occupations that regularly drug test. Therefore, ETA relied 
on current Federal and State laws as the primary sources to determine 
what occupations regularly drug test for purposes of implementing 
Section 303(l), SSA. Some States have not enacted workplace drug and 
alcohol testing laws. Others have enacted laws that permit and 
encourage employers to conduct drug testing of applicants and/or 
employees, but they are not based on occupations and therefore do not 
fall within the scope of this rulemaking. For example, most States 
allow a private employer to decide whether and when to test job 
applicants and employees, often in accordance with a written policy 
created by the employer according to State law. In some instances, 
State law specifies that the employer may test job applicants and 
current employees for any job-related purpose consistent with business 
necessity and the terms of the employer's written policy. If States do 
provide restrictions on workplace drug testing, then they commonly 
provide more protection to employees than to job applicants. For 
example, a State's law may permit employers to require all job 
applicants with conditional offers of employment to take drug tests, 
but they permit an employer to require a drug test of an employee only 
if the employer has reasonable suspicion that use of drugs is impairing 
the employee's job performance or has probable cause to believe that 
the employee, while on the job, is using or is under the influence of 
drugs. These provisions are not relevant to this rulemaking, which 
must, under section 303(l)(1)(A)(ii), SSA, determine what occupations 
are ``regularly'' drug tested.
    Many States also provide various discounts and credits to employers 
that adopt drug-free workplace programs. Some States' programs require 
drug testing of applicants and/or employees as part of these programs, 
while others do not. Some States that require participating employers 
to test job applicants nevertheless allow the employers to limit such 
testing based on reasonable classifications of job positions. Employer 
sponsorship of a drug-free workplace program is usually voluntary but 
may be required of state contractors.
    State laws that clearly fall within the scope of this regulation 
include those that identify types of positions for which employers may 
conduct drug testing. For example, a State's law may permit drug 
testing only of individuals ``employed in safety-sensitive positions'' 
or if the ``employee serves in an occupation which has been designated 
as a high-risk or safety-sensitive occupation.'' At least one State 
permits testing of individuals who ``participate in activities upon 
which pari-mutuel wagering is authorized.''
    State laws that identify specific classes of positions for which 
drug testing of applicants and/or employees is required also fall 
affirmatively within the scope of this regulation. State laws most 
commonly require drug testing of drivers of school transportation 
vehicles and commercial motor vehicles. States may also require certain 
types of private employers to conduct at least some drug testing of 
employees and/or job applicants (e.g., nursing homes and home health 
agencies, residential childcare facilities, public works projects 
contractors, corrections facilities, and nuclear and radioactive 
storage and transfer facilities).
    In conclusion, ETA's research of some Federal and State laws 
related to drug testing found that they refer to classes of positions 
(e.g., any position requiring an employee to carry a firearm) that are 
required to be drug tested, rather than occupations as defined by BLS 
in the Standard Occupational Classification System. Therefore, this 
NPRM defines (as explained below) an ``occupation'' to mean a position 
or class of positions identified as subject to drug testing under 
specified Federal or State laws as described in these proposed 
regulations.

Summary of the Proposed Rule

    We concluded from our research of what it means in Federal or State 
law to ``regularly'' drug test that no consistent standard applies 
across classes of positions or occupations to determine that 
``regular'' drug testing occurs. While some State laws might permit, 
but not require, drug testing of certain ``occupations,'' whether drug 
testing is ``regularly'' conducted when merely permitted can vary 
widely across occupations and industries and trades, and regularity 
also can change over time. Thus, we believe it would be overbroad to 
include occupations for which State law merely permits, but does not 
require, drug testing. However, it is a given that any occupation for 
which drug testing is required is one that is drug tested 
``regularly.'' Therefore, occupations that ``regularly'' require drug 
testing are limited in these regulations to those for which drug 
testing is required, not merely permitted. Therefore, this proposed 
regulation identifies classes of positions, or ``occupations,'' that 
are required to be drug tested in Federal or State law as the standard 
for determining ``occupations'' that ``regularly'' drug test.
    Accordingly, we propose that an applicant may be drug tested by the 
State in order to be eligible to receive State UC if the applicant's 
only suitable work, as defined under the State UC law, is in a position 
or class of positions, i.e., an ``occupation,'' for which Federal law 
or that State's law requires employee drug testing in that occupation. 
Additionally, we propose that only those State laws which identify 
occupations or positions (e.g., school bus drivers) may be the basis 
for such testing; this regulation excludes, as the basis for testing, 
State laws that go beyond the scope of identifying occupations or 
position classifications, and instead identify types of employers 
(e.g., public works projects contractors) or permit testing at the 
employer discretion (e.g., in connection with a drug free workplace 
policy that applies to all applicants).
    We also propose that classes of positions, or ``occupations,'' 
requiring drug testing under Federal and State laws be limited to those 
identified in Federal and State laws already in effect at the date of 
the publication of this NPRM. Because drug testing as a condition of UC 
eligibility is a new policy and has the potential to be implemented in 
ways that may have unintended consequences, the Department considers it 
prudent to apply Federal and State law drug testing requirements 
currently in place, to be able to assess and evaluate most effectively 
the impact of this new policy. The Department recognizes that Federal 
and State laws may evolve in identifying which positions or

[[Page 61016]]

occupations are required to drug test. The Department will monitor such 
changes and may amend this regulation accordingly in the future. The 
Department encourages comments on methods to refresh the list of 
occupations that regularly drug test.
    For Federal laws requiring drug testing, SAMHSA has designated some 
classes of positions as ``presumptive'' TDPs, i.e., positions that may 
be designated as requiring a drug test without the agency being 
required to justify the designation to SAMHSA. A list of presumptive 
TDPs is included in the HHS publication ``2010 Guidance for Selection 
of Testing Designated Positions,'' April 5, 2010, available on the 
SAMHSA Web site at http://workplace.samhsa.gov/federal.html. These 
classes of positions include those that require carrying a firearm, 
motor vehicle operators carrying passengers, aviation flight crew 
members and air traffic controllers, and railroad operating crews. This 
NPRM proposes that these classes of positions be deemed ``occupations'' 
that regularly drug test.
    In addition, DOT requires drug testing for classes of positions in 
various transportation industries in 49 CFR Part 40,\1\ Procedures for 
Transportation Workplace Drug and Alcohol Testing Programs. These 
regulations require the Secretary of Transportation to ensure drug and 
alcohol testing policies are developed and carried out in a consistent, 
efficient, and effective manner within the transportation industries 
for the ultimate safety and protection of the traveling public. DOT's 
Office of Drug and Alcohol Policy and Compliance provides guidance to 
the Federal agencies covered by DOT on the drug testing policy of 
covered employees (i.e., those subject to drug testing). The 
regulations apply to safety-sensitive classes of positions in the 
transportation industries including aviation, trucking, mass transit, 
railroads, pipelines, and other vital transportation related 
industries. Mandatory drug testing requirements are identified in the 
sections of the CFR that apply to the specific Federal agencies that 
regulate these industry sectors. Federal agency regulations that 
implement the drug testing requirements of 49 CFR part 40 for the 
industries these agencies regulate are as follows: Federal Aviation 
Administration, 14 CFR part 120; Federal Motor Carrier Safety 
Administration, 49 CFR part 382; Federal Railroad Administration, 49 
CFR part 219; Federal Transit Administration, 49 CFR part 655; Pipeline 
and Hazardous Materials Safety Administration, 49 CFR part 199; and 
crewmembers and maritime credential holders by the Coast Guard, 46 CFR 
part 16. The proposed regulation identifies the specific sections of 
these regulations that identify the classes of positions that are 
subject to drug testing.
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    \1\ DOT was granted authority to establish regulations at 49 CFR 
Part 40 by the Omnibus Transportation Employee Testing Act of 1991, 
Public Law 102-143.
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II. Section-by-Section Review

What is the purpose of the proposed regulation? (Sec.  620.1)

    Proposed Sec.  620.1 explains that the purpose of the NPRM is to 
implement section 303(l)(A)(ii), SSA, permitting drug testing UC 
applicants for the use of controlled substances where suitable work (as 
defined under the State's UC law) is only available in an occupation 
for which drug testing is regularly conducted (as determined under this 
part 620).

What definitions apply to this part? (Sec.  620.2)

    ``Applicant'' means an individual who files an initial claim for UC 
under State law. ``Applicant'' excludes an individual already found 
initially eligible and filing a continued claim. This is consistent 
with common usage of the term ``applicant'' in UC nomenclature.
    ``Controlled substance,'' as defined by Section 303(l)(2)(B), SSA, 
has the same meaning given such term in section 102 of the Controlled 
Substances Act (Pub. L. 91-513, 21 U.S.C. 801 et seq.). ``Controlled 
substance'' means a drug or other substance, or immediate precursor, 
included in schedule I, II, III, IV, or V of part B of 21 U.S.C. 801 et 
seq. The term does not include distilled spirits, wine, malt beverages, 
or tobacco, as those terms are defined or used in subtitle E of the 
Internal Revenue Code of 1986.
    ``Occupation'' means a position or class of positions. As discussed 
above, Federal and State laws on drug testing do not specify or refer 
to ``occupations'' requiring drug testing, but rather identify 
positions or classes of positions, in descriptive terms such as, for 
example, positions requiring the carrying of a firearm. Because we 
propose to refer to specific provisions of law in defining 
``occupations'' for purposes of UC drug testing, the proposed 
definition of occupation identifies the specific provisions of law in 
the later section.
    ``Suitable Work'' means suitable work as defined under the UC law 
of the State against which the claim is filed. This is the same 
definition of ``suitable work'' under that State law as the State 
otherwise uses for determining UC eligibility based on seeking work or 
refusal of work.
    ``Unemployment Compensation'' is defined in Section 303(l)(2)(A), 
SSA, to have the same meaning given to the term in Section 
303(d)(2)(A), SSA, which states that the term unemployment compensation 
means ``any unemployment compensation payable under the State law 
(including amounts payable pursuant to an agreement under a Federal 
unemployment compensation law.)'' Section 3306(h) of the Federal 
Unemployment Tax Act (26 U.S.C. 3306(h)) defines compensation to mean 
``cash benefits payable to individuals with respect to their 
unemployment.''

What are the occupations for which drug testing is regularly conducted 
for purposes of this part 620? (Sec.  620.3)

    Proposed Sec.  620.3 identifies occupations for which drug testing 
is regularly conducted. These occupations are those that require the 
employee to carry a firearm. They also include classes of positions/
occupations identified by SAMHSA as presumptive drug testing positions; 
classes of positions/occupations for which employers are required to 
drug test employees as identified in DOT's regulations at 49 CFR parts 
199, 219, 382, and 655; classes of positions/occupations for which drug 
testing is required under United States Coast Guard regulations at 46 
CFR part 16; and classes of positions/occupations in which an employee 
must be tested under Federal Aviation Administration regulations at 14 
CFR part 120. As explained above, these occupations are limited to 
those identified in these regulations as of the date of the publication 
of the proposed rule. They also include occupations for which drug 
testing was required already under State law in effect at the date of 
publication of this NPRM. States are not required to drug test as a 
condition of UC eligibility for any of these occupations; however, they 
may not, except as permitted by section 303(l)(1)(A)(i), SSA, 
(governing drug testing of individuals terminated for the unlawful use 
of a controlled substance) drug test for any occupation that does not 
meet the definition in Sec.  620.3. As noted previously, it is the 
Department's intent to monitor Federal and State legislation in 
relation to classes of positions or occupations that are required to 
drug test and consider changes to the regulation as appropriate.

[[Page 61017]]

DOL seeks comments on how to refresh the list of occupations.

What are the parameters for the testing of applicants for the unlawful 
use of a controlled substance? (Sec.  620.4)

    Proposed Sec.  620.4, consistent with section 303(l), SSA, provides 
that a State may require applicants to take and pass a drug test for 
the illegal use of controlled substances as a condition of initial 
eligibility for UC under specified conditions. Applicants may be denied 
UC based on the results of these tests.
    Proposed paragraph (a) provides that an applicant, as defined in 
proposed Sec.  620.2, may be tested for the unlawful use of controlled 
substances, as defined in proposed Sec.  620.2, as an eligibility 
condition for UC if the individual is one for whom suitable work, as 
defined by that State's UC law, is only available in an occupation that 
regularly conducts drug testing, as determined under proposed Sec.  
620.3. The reference to ``applicant,'' ensures that only an applicant 
who is filing an initial UC claim, and not a claimant filing a 
continued claim, may be subject to drug testing.
    Proposed paragraph (b) provides that a State requiring drug testing 
as a condition of UC eligibility may apply drug testing to any one or 
more of the occupations listed under Sec.  620.3, but is not required 
to apply drug testing to any of them. The Act does not require a State 
to conduct drug tests at all, and consistent with the partnership 
nature of the Federal-State UC system, the Department proposes to allow 
States flexibility to decide which permitted occupations may be subject 
to State-conducted drug testing.
    Proposed paragraph (c) provides that the standards which a State 
establishes relating to drug testing of applicants for UC must be in 
accordance with guidance issued by the Department. While section 
303(l), SSA, requires the Secretary to issue regulations on the 
occupations that regularly conduct drug testing, the Secretary will 
address all other issues relating to section 303(l), SSA, in later 
guidance such as program letters and other issuances.

What are the consequences of failing to implement a drug testing 
program in accordance with these regulations? (Sec.  620.5)

    Section 620.5 explains that implementation of drug testing of UC 
applicants as authorized under State laws must be in conformity with 
these regulations in order for States to be certified under Section 302 
of the SSA (42 U.S.C. 502), with respect to whether a State is eligible 
to receive Federal grants for the administration of its UC program.

III. Administrative Information

Executive Orders 12866 and 13563: Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. For a ``significant regulatory action,'' E.O. 12866 asks 
agencies to describe the need for the regulatory action and explain how 
the regulatory action will meet that need, as well as assess the costs 
and benefits of the regulation.\2\ This regulation is necessary because 
of the statutory requirement contained in new section 303(l)(1)(A)(ii), 
SSA, which requires the Secretary to determine the occupations that 
regularly conduct drug testing for the propose of determining which 
applicants may be drug tested when applying for State unemployment 
compensation. The Department considers this rule to be a ``significant 
regulatory action'' as defined in section 3(f) of E.O. 12866, because 
it raises novel legal or policy issues arising out of legal mandates. 
Before the amendment of Federal law to add new section 303(l)(1), SSA, 
drug testing of applicants for UC as a condition of eligibility was 
prohibited.
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    \2\ Executive Order No. 12866, section 6(a)(3)(B).
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    The Department believes this is not an economically significant 
rulemaking within the definition of E.O. 12866 because it is not an 
action that is likely to result in the following: An annual effect on 
the economy of $100 million or more; an adverse or material effect on a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local or Tribal 
governments or communities; serious inconsistency or interference with 
an action taken or planned by another agency; or a material change in 
the budgetary impact of entitlements, grants, user fees, or loan 
programs, or the rights and obligations of recipients thereof. In 
addition, since the rule is entirely voluntary on the part of the 
States and since Section 303(l), SSA is written so narrowly that the 
number of UI applicants eligible to be tested will be small, the 
Department believes it is unlikely that many States will establish a 
testing program because they won't deem it cost effective to do so. The 
Department seeks comment from interested stakeholders on this 
assumption.
    There are limited data on which to base estimates of the cost 
associated with establishing a testing program. Only one of the two 
States that have enacted a conforming drug testing law issued a fiscal 
note. That State is Texas, which estimated that the 5-year cost of 
administering the program would be $1,175,954. This includes both one-
time technology personnel services for the first year to program the 
system and ongoing administrative costs for personnel. The Texas 
analysis estimated a potential savings to the Unemployment Trust Fund 
of $13,700,580 over the 5-year period, resulting in a net savings of 
approximately $12.5 million. The Department believes it would be 
inappropriate to extrapolate the Texas analysis to all States in part 
because of differences in the Texas law and the requirements in this 
proposed rule. The Department has included this information about Texas 
for illustrative purposes only and emphasizes that by doing so, it is 
not validating the methodology or assumptions in the Texas analysis. 
Under the proposed rule, States will be prohibited from testing 
applicants for unemployment compensation who do not meet the narrow 
criteria established in the law. The Department requests that 
interested stakeholders with data on the costs of establishing a state-
wide testing program; the number of applicants for unemployment 
compensation that fit the narrow criteria established in the law; and 
estimates of the number of individuals that would subsequently be 
denied unemployment compensation due to a failed drug test submit it 
during the comment period.
    In the absence of data, the Department is unable to quantify the 
administrative costs States will incur if they choose to implement drug 
testing pursuant to this rule. States may need to find funding to 
implement a conforming drug testing program for unemployment 
compensation applicants. No additional funding has been appropriated 
for this purpose and current Federal funding for the administration of 
State unemployment compensation programs may be insufficient to support 
the additional costs of establishing and operating a drug testing 
program. Permissible alternative funding sources are not readily 
available. States will need to fund the cost of the drug tests,

[[Page 61018]]

staff costs for administration of the drug testing function, and 
technology costs to track drug testing outcomes. States will incur ramp 
up costs that will include implementing business processes necessary to 
determine whether an applicant is one for whom drug testing is 
permissible pursuant to the law; developing a process to refer and 
track applicants referred for drug testing; and the costs of testing 
that meets the standards required by the Secretary of Labor. States 
will also have to factor in increased costs of adjudication and appeals 
of both the determination of applicability of the drug testing to the 
individual and of the resulting determinations of benefit eligibility 
based on the test results.
    To date, very few States have expressed interest in drug testing 
unemployment compensation applicants. Only two States have enacted 
conforming legislation. Only six other States introduced conforming 
drug testing bills so far and none of them were passed by the house of 
introduction.
    Benefits of the rule are equally hard to determine. As discussed 
above, the provisions will impact a very limited number of applicants 
for unemployment compensation benefits.

Paperwork Reduction Act

    The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501 et seq., include minimizing the paperwork burden on 
affected entities. The PRA requires certain actions before an agency 
can adopt or revise a collection of information, including publishing a 
summary of the collection of information, a brief description of the 
need for and proposed use of the information, and a request for 
comments on the information collections.
    A Federal agency may not conduct or sponsor a collection of 
information unless it is approved by OMB under the PRA, and displays a 
currently valid OMB control number, and the public is not required to 
respond to a collection of information unless it displays a currently 
valid OMB control number. Also, notwithstanding any other provisions of 
law, no person shall be subject to penalty for failing to comply with a 
collection of information if the collection of information does not 
display a currently valid OMB control number (44 U.S.C. 3512).
    The Department has determined that this proposed rule does not 
contain a ``collection of information,'' as the term is defined. See 5 
CFR 1320.3(c). DOL expressly seeks comments on this determination.

Executive Order 13132: Federalism

    Section 6 of Executive Order 13132 requires Federal agencies to 
consult with State entities when a regulation or policy may have a 
substantial direct effect on the States or the relationship between the 
National Government and the States, or the distribution of power and 
responsibilities among the various levels of government, within the 
meaning of the Executive Order. Section 3(b) of the Executive Order 
further provides that Federal agencies must implement regulations that 
have a substantial direct effect only if statutory authority permits 
the regulation and it is of national significance.
    This proposed rule does not have a substantial direct effect on the 
States or the relationship between the National Government and the 
States, or the distribution of power and responsibilities among the 
various levels of Government, within the meaning of the Executive 
Order. This is because drug testing authorized by the regulation is 
voluntary on the part of the State, not required.

Unfunded Mandates Reform Act of 1995

    This regulatory action has been reviewed in accordance with the 
Unfunded Mandates Reform Act of 1995 (the Reform Act). Under the Reform 
Act, a Federal agency must determine whether a regulation proposes a 
Federal mandate that would result in the increased expenditures by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any single year. The 
Department has determined that since States have an option of drug 
testing UC applicants and can elect not to do so, this proposed rule 
does not include any Federal mandate that could result in increased 
expenditure by State, local, and Tribal governments. Drug testing under 
this rule is purely voluntary, so that any increased cost to the States 
is not the result of any mandate. Accordingly, it is unnecessary for 
the Department to prepare a budgetary impact statement.

Plain Language

    The Department drafted this proposed rule in plain language.

Effect on Family Life

    The Department certifies that this proposed rule has been assessed 
according to section 654 of the Treasury and General Government 
Appropriations Act, enacted as part of the Omnibus Consolidated and 
Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 
Stat. 2681) for its effect on family well-being. The Department 
certifies that this proposed rule does not adversely impact family 
well-being as discussed under section 654 of the Treasury and General 
Government Appropriations Act of 1999.

Regulatory Flexibility Act/Small Business Regulatory Enforcement 
Fairness Act

    The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603(a) requires 
agencies to prepare and make available for public comment an initial 
regulatory flexibility analysis which will describe the impact of the 
proposed rule on small entities. Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities. This rule does not 
affect small entities as defined in the RFA. Therefore, the rule will 
not have a significant economic impact on a substantial number of these 
small entities. The Department has certified this to the Chief Counsel 
for Advocacy, Small Business Administration, pursuant to the Regulatory 
Flexibility Act.

List of Subjects in 20 CFR Part 620

    Unemployment compensation.

    For the reasons stated in the preamble, the Department proposes to 
amend 20 CFR chapter V by adding part 620 to read as follows:

PART 620--OCCUPATIONS THAT REGULARLY CONDUCT DRUG TESTING FOR STATE 
UNEMPLOYMENT COMPENSATION ELIGIBILITY DETERMINATION PURPOSES

Sec.
620.1 Purpose.
620.2 Definitions.
620.3 Occupations that regularly conduct drug testing for purposes 
of determining which applicants may be drug tested when applying for 
state unemployment compensation.
620.4 Testing of unemployment compensation applicants for the 
unlawful use of a controlled substance.
620.5 Conformity and substantial compliance.

    Authority: 42 U.S.C. 1302(a); 42 U.S.C. 503(l)(1)(ii)


Sec.  620.1  Purpose.

    The regulations in this part implement section 303(l) of the Social 
Security Act (SSA) (42 U.S.C. 503(l)). Section 303(l), SSA, permits 
States to enact legislation to provide for the State-conducted testing 
of an unemployment compensation applicant for the

[[Page 61019]]

unlawful use of controlled substances, as a condition of unemployment 
compensation eligibility, if the applicant was discharged for unlawful 
use of controlled substances by his or her most recent employer, or if 
suitable work (as defined under the State unemployment compensation 
law) is only available in an occupation for which drug testing is 
regularly conducted (as determined under this part 620). Section 
303(l)(1)(A)(ii), SSA, requires the Secretary of Labor to issue 
regulations determining the occupations that regularly conduct drug 
testing. These regulations are limited to that requirement.


Sec.  620.2  Definitions.

    As used in this part--
    Applicant means an individual who files an initial claim for 
unemployment compensation under State law. Applicant excludes an 
individual already found initially eligible and filing a continued 
claim.
    Controlled substance means a drug or other substance, or immediate 
precursor, included in schedule I, II, III, IV, or V of part B of 21 
U.S.C. 801 et seq., as defined in section 102 of the Controlled 
Substances Act (Pub. L. 91-513, 21 U.S.C. 801 et seq.). The term does 
not include distilled spirits, wine, malt beverages, or tobacco, as 
those terms are defined or used in subtitle E of the Internal Revenue 
Code of 1986.
    Occupation means a position or class of positions. Federal and 
State laws governing drug testing refer to the classes of positions 
that are required to be drug tested rather than occupations, such as 
those defined by the Bureau of Labor Statistics in the Standard 
Occupational Classification System. Therefore, for purposes of this 
regulation, a position or class of positions will be considered the 
same as an ``occupation.''
    Suitable work means suitable work as defined by the unemployment 
compensation law of a State against which the claim is filed. It must 
be the same definition the State law otherwise uses for determining the 
type of work an individual must seek given the individual's education, 
experience and previous level of remuneration.
    Unemployment compensation means any cash benefits payable to an 
individual with respect to their unemployment under the State law 
(including amounts payable under an agreement under a Federal 
unemployment compensation law.)


Sec.  620.3  Occupations that regularly conduct drug testing for 
purposes of determining which applicants may be drug tested when 
applying for State unemployment compensation.

    Occupations that regularly conduct drug testing, for purposes of 
Sec.  620.4, are:
    (a) An occupation that requires the employee to carry a firearm;
    (b) An occupation identified in 14 CFR 120.105 (as in effect on 
October 9, 2014) by the Federal Aviation Administration, in which the 
employee must be tested (Aviation flight crew members and air traffic 
controllers);
    (c) An occupation identified in 49 CFR 382.103 (as in effect on 
October 9, 2014) by the Federal Motor Carrier Safety Administration, in 
which the employee must be tested (Commercial drivers);
    (d) An occupation identified in 49 CFR 219.3 (as in effect on 
October 9, 2014) by the Federal Railroad Administration, in which the 
employee must be tested (Railroad operating crew members);
    (e) An occupation identified in 49 CFR 655.3 (as in effect on 
October 9, 2014) by the Federal Transit Administration, in which the 
employee must be tested (Public transportation operators);
    (f) An occupation identified in 49 CFR 199.2 (as in effect on 
October 9, 2014) by the Pipeline and Hazardous Materials Safety 
Administration, in which the employee must be tested (Pipeline 
operation and maintenance crew members);
    (g) An occupation identified in 46 CFR 16.201(as in effect on 
October 9, 2014) by the United States Coast Guard, in which the 
employee must be tested (Crewmembers and maritime credential holders on 
a commercial vessel);
    (h) An occupation specifically identified as requiring an employee 
to be tested for controlled substances in a State law that took effect 
no later than October 9, 2014, and still remains in effect. DOL seeks 
comments specifically on how to refresh the list of occupations.


Sec.  620.4  Testing of unemployment compensation applicants for the 
unlawful use of a controlled substance.

    (a) States may conduct a drug test on an unemployment compensation 
applicant, as defined in Sec.  620.2 of this part, for the unlawful use 
of controlled substances, as defined in Sec.  620.2, as a condition of 
eligibility for unemployment compensation if the individual is one for 
whom suitable work, as defined in State law, as defined in Sec.  620.2, 
is only available in an occupation that regularly conducts drug testing 
under Sec.  620.3 of this part. Drug testing is permitted only of an 
applicant, and not of an individual filing a continued claim for 
unemployment compensation after initially being determined eligible. No 
State is required to apply drug testing to UC applicants under this 
part 620.
    (b) A State conducting drug testing as a condition of unemployment 
compensation eligibility as provided in paragraph (a) of this section 
may apply drug testing only to the occupations listed under Sec.  
620.3, but is not required to apply drug testing to any of them.
    (c) State standards governing drug testing of UC applicants must be 
in accordance with guidance, in the form of program letters or other 
issuances, issued by the Department of Labor.


Sec.  620.5  Conformity and substantial compliance.

    (a) In general. A State law implementing the drug testing of 
applicants for unemployment compensation must conform with, and the 
law's administration must substantially comply with, the requirements 
of this part 620 for purposes of certification under section 302 of the 
SSA (42 U.S.C. 502), of whether a State is eligible to receive Federal 
grants for the administration of its UC program.
    (b) Resolving issues of conformity and substantial compliance. For 
the purposes of resolving issues of conformity and substantial 
compliance with the requirements of this part 620, the following 
provisions of 20 CFR 601.5 apply:
    (1) Paragraph (b) of 20 CFR 601.5, pertaining to informal 
discussions with the Department of Labor to resolve conformity and 
substantial compliance issues, and
    (2) Paragraph (d) of 20 CFR 601.5, pertaining to the Secretary of 
Labor's hearing and decision on conformity and substantial compliance.
    (c) Result of failure to conform or substantially comply. Whenever 
the Secretary of Labor, after reasonable notice and opportunity for a 
hearing to the State UC agency, finds that the State UC law fails to 
conform, or that the State or State UC agency fails to comply 
substantially, with the requirements of title III, SSA (42 U.S.C. 501-
504), as implemented in this part 620, then the Secretary of Labor must 
notify the Governor of the State and such State UC agency that further 
payments for the administration of the State UC law will not be made to 
the State until the Secretary of Labor is satisfied that there is no 
longer any such failure. Until the Secretary of Labor is so satisfied, 
the

[[Page 61020]]

Department of Labor will not make further payments to such State.

Portia Wu,
Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2014-24098 Filed 10-8-14; 8:45 am]
BILLING CODE 4510-FN-P