Federal-State Unemployment Compensation Program; Establishing Appropriate Occupations for Drug Testing of Unemployment Compensation Applicants Under the Middle Class Tax Relief and Job Creation Act of 2012, 55311-55318 [2018-23952]

Agencies

• Employment and Training Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 83, Number 214 (Monday, November 5, 2018)]
[Proposed Rules]
[Pages 55311-55318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-23952]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 620

RIN 1205-AB81


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

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of proposed rulemaking

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SUMMARY: This Notice of Proposed Rulemaking (NPRM) sets forth the 
Department of Labor's proposal to permit States to drug test 
unemployment compensation (UC) applicants, including a proposed list of 
occupations which the Department of Labor (``Department'' or ``DOL'') 
has determined regularly conduct drug testing.

[[Page 55312]]


DATES: Comments must be submitted, in writing, on or before January 4, 
2019.

ADDRESSES: You may submit comments, identified by Regulatory 
Information Number (RIN) 1205-AB81, by one of the following methods:
    Federal e-Rulemaking Portal: https://www.regulations.gov. Follow the 
website 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-AB81.''
    Please submit your comments by only one method. Please be advised 
that the Department will post all comments received that relate to this 
NPRM on https://www.regulations.gov without making any change to the 
comments or redacting any information. The https://www.regulations.gov 
website 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 https://www.regulations.gov website. 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 https://www.regulations.gov.
    Docket: All comments on this proposed Rule will be available on the 
https://www.regulations.gov website, and can be found using RIN 1205-
AB81. 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.

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:

I. Background

    President Obama signed the Middle Class Tax Relief and Job Creation 
Act of 2012 (the Act), Public Law 112-96, on February 22, 2012. Title 
II of the Act amended 42 U.S.C. 503, to add a new subsection (l) 
permitting States to enact legislation to require drug testing of 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. See 42 U.S.C. 
503(l)(1)(A)(i). The second circumstance is if the only available 
suitable work (as defined in the law of the State providing the UC) for 
an individual is ``in an occupation that regularly conducts drug 
testing (as determined under regulations issued by the Secretary).'' 
See 42 U.S.C. 503(l)(1)(A)(ii). States are not required to drug test in 
either circumstance; the law merely makes it permissible for States to 
enact legislation to do so when one of the two circumstances is 
present. A State may deny UC to an applicant who tests positive for 
drug use under either of these circumstances. See 42 U.S.C. 
503(l)(1)(B).
    On October 9, 2014, the Department published an NPRM determining 
occupations that regularly conduct drug testing for the purposes of 42 
U.S.C. 503(l)(1)(A)(2). See 79 FR 61013 (Oct. 9, 2014). After reviewing 
the comments received, the Rule, as proposed in the NPRM, was modified, 
and on August 1, 2016, the Secretary of Labor (Secretary) published a 
regulation determining each occupation ``that regularly conducts drug 
testing'' in the Federal Register as 20 CFR part 620. It became 
effective on September 30, 2016.
    The 2016 Rule included several components. It identified seven 
specific occupations that regularly conduct drug testing: An occupation 
that requires the employee to carry a firearm, along with six specific 
occupational categories identified in Federal regulations in which the 
employee must be tested. The Rule also included within its 
determination any occupation specifically identified in a State or 
Federal law as requiring an employee to be tested for controlled 
substances. Finally, the Rule defined key terms as used in the Act. At 
the same time the Department published its previous NPRM, it issued 
guidance to States in Unemployment Insurance Program Letter No. 01-15 
to address other issues related to the implementation of drug testing 
under 42 U.S.C. 503(l). On March 31, 2017, President Trump signed a 
resolution of disapproval under the Congressional Review Act (CRA) (5 
U.S.C. 801 et seq.) as Public Law 115-17. The joint resolution was 
enacted under the authority of 5 U.S.C. 801(b), enacted by the CRA, 
Public Law 104-121. Section 801(b) provides that a disapproved rule can 
not take effect, and that such a rule cannot be reissued in 
substantially the same form unless authorized by Congress. Consistent 
with this law, the Department published the notice of revocation of the 
regulation in the Federal Register at 82 FR 21916 (May 11, 2017).
    Because the statute was not repealed or amended following the 
resolution of disapproval, the statute continues to require the 
Secretary to issue regulations to enable the determination of 
occupations in which drug testing regularly occurs. But the CRA 
prohibits the Department from reissuing the rule ``in substantially the 
same form'' or issuing ``a new rule that is substantially the same'' as 
the old rule. 5 U.S.C. 801(b). To comply with both the mandate to issue 
regulations to enable the determination of occupations in which drug 
testing regularly occurs, and the CRA prohibition on reissuing the rule 
``in substantially the same form,'' the Department has carefully 
considered the Act, the 2016 Rule, and the congressional notice of 
disapproval.
    In this NPRM, the Department now proposes a substantially different 
and more flexible approach to the statutory requirements than the 2016 
Rule, enabling States to enact legislation to require drug testing for 
a far larger group of UC applicants than the previous Rule permitted. 
This flexibility is intended to respect the diversity of States' 
economies and the different roles played by employment drug testing in 
those economies. The Department recognizes that imposing a nationally 
uniform list--like the one-size-fits-all approach that the Department 
attempted in the disapproved 2016 rule--may not

[[Page 55313]]

fully effectuate Congress' intent, as expressed in 42 U.S.C. 
503(l)(1)(A)(ii), that States be permitted to drug test when the only 
suitable work for an applicant is in an occupation that regularly 
conducts such tests. Employers exercise a variety of approaches and 
practices in conducting drug testing of employees. Some States have 
laws that impose very minimal restrictions on employer drug testing of 
employees while other States have very detailed and proscriptive 
requirements about what actions the employer can take. That diversity 
of State treatment also renders an exhaustive list of such occupations 
impractical. The proposed Rule therefore lays out a flexible standard 
that States can individually meet under the facts of their specific 
economies and practices. In the Departments' view, the Rule's 
substantially different scope and fundamentally different approach 
satisfies the requirements of the CRA, at least where, as here, the 
Department is under a continuing statutory obligation to propose 
regulations in this space.
    This proposed Rule is not expected to be subject to the 
requirements of Executive Order (E.O.) 13771 because this proposed rule 
is expected to result in no more than de minimis costs.
    When developing the previous proposed Rule published in 2014, the 
Department consulted with a number of Federal agencies with expertise 
in drug testing to inform the proposed regulation. Specifically, the 
Department 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). The Department 
consulted these agencies because they have experience with required 
drug testing. DOD and DHS deferred to SAMHSA for interpretation of the 
drug testing requirements, and the Department gave due consideration to 
the SAMHSA guidance when developing the 2014 proposed Rule.
    In revisiting these regulations, the Department determined that 
these consultations with Federal agencies are sufficient, although it 
took steps to ensure that the information provided remains current.

Review of State Drug Testing Laws

    As it did in developing the previous Rule, the Department has 
canvassed State laws to develop an understanding of what occupations 
require regular drug testing at the State level. In particular, the 
Department reviewed all current State legislation implementing 42 
U.S.C. 503(l), as part of developing this proposal.
    Reflecting their diverse needs and workforces, States vary widely 
in their drug testing requirements. Some State laws identify specific 
classes of positions for which drug testing of applicants and/or 
employees is required. For example, State laws commonly require 
employers to drug test employees in occupations where public safety is 
involved. States may require private employers to conduct at least some 
drug testing of employees and/or job applicants who work as drivers of 
school transportation vehicles and commercial motor vehicles (similar 
to federal law requirements), or who work for nursing homes and home 
health agencies, residential childcare facilities, public works 
projects contractors, corrections facilities, and nuclear and 
radioactive storage and transfer facilities.
    Other States have enacted laws that permit and encourage, but do 
not require, employers to conduct drug testing of applicants and/or 
employees. Some State laws identify types of positions for which 
employers may conduct drug testing, such as individuals employed in 
safety-sensitive positions or 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.'' \1\ Most States allow 
a private employer to decide whether and when to drug 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.
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    \1\ Conn. Gen. Stat. Sec.  31-51y(c).
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    When States provide restrictions on workplace drug testing, they 
commonly provide more protection to current 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 permit an employer to require an employee to submit to a 
drug test 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.
    At least six 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 for State contractors.
    DOL's research of Federal and State laws related to drug testing 
found that these laws often refer to classes of positions with similar 
functions and duties that are required to be drug tested (e.g., 
positions requiring an employee to carry a firearm, or positions 
involving the operation of motor vehicles carrying members of the 
public).
    Since 42 U.S.C. 503 was amended to add subsection 503(l) in 2012, 
three States, Mississippi, Texas, and Wisconsin, have enacted laws 
specifically addressing drug testing of unemployment compensation 
applicants that directly refer to drug testing under 42 U.S.C. 
503(l)(1)(A)(ii).\2\
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    \2\ The State enactments in each of these States refer to the 
Federal law and note that the occupations that regularly conduct 
drug testing are those designated under regulations developed by the 
Secretary of Labor, which are the regulations proposed in this NPRM. 
See Miss. Code Ann. Sec.  71-5-513(A)(3)(c), Tex. Lab. Code Ann. 
Sec.  207.021(b-1), and Wis. Stat. Sec.  108.133(1)(c)(ii).
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Summary of the Proposed Rule

    The proposed Rule implements the statutory requirement that the 
Secretary issue regulations determining how to identify ``an occupation 
that regularly conducts drug testing'' for the purposes of requiring an 
applicant for UC benefits, for whom the only suitable work is in an 
occupation that regularly drug tests, to pass a drug test to be 
eligible for UC benefits.
    The proposed new Rule takes a fundamentally different approach to 
identifying these occupations than did the Department's earlier rule. 
The 2016 Rule limited the list of occupations that ``regularly'' 
conduct drug testing to certain specifically listed occupations and 
those in which drug testing is required by Federal or State law. The 
Department has reconsidered that list in light of the congressional 
disapproval of the 2016 Rule. The Department now acknowledges that the 
list did not adequately account for the significant

[[Page 55314]]

variation in State practices with respect to drug testing. An 
occupation that is regularly drug tested in one State may not be 
regularly tested in another, making a national one-size-fits-all list 
inappropriate. This variation also makes developing a nationally 
applicable and exhaustive list of occupations that ``regularly'' 
conduct drug testing wholly impractical. Therefore, the Secretary has 
determined in this proposed Rule to include in the list of occupations 
that regularly conduct drug testing those occupations for which a State 
has a factual basis for finding that employers in that State conduct 
drug testing as a standard eligibility requirement for employing or 
retaining employees. This new addition provides substantially more 
flexibility to States and recognizes the reality that, in some States, 
drug testing is regularly conducted in many more occupations than were 
initially listed in the 2016 Rule.
    This proposed regulation also provides definitions of key terms. It 
identifies positions or classes of positions with similar functions or 
duties as ``occupations,'' for the purposes of determining 
``occupations'' that regularly test for drugs in this proposed Rule. 
While the Department considered adopting a specific taxonomy of 
occupations, such as the Standard Occupational Classification (SOC) 
System, the proposed Rule does not do so, in order to provide 
flexibility to States to choose a system that matches its workforce 
best. Due to the wide variation in State economies and practices, a 
one-size-fits-all taxonomy imposed by the Federal government could not 
be tailored to each State's situation and would thus be impracticable. 
States may utilize the SOC system, the O*NET system developed under a 
grant by the Department by the North Carolina State Department of 
Commerce, or another system of the State's choosing.
    The Department, in proposing this new Rule, adopts the finding in 
the 2016 Rule that any occupation for which Federal or State law 
requires drug testing is among those that are drug tested 
``regularly.'' The Department recognizes that Federal and State laws 
may evolve in identifying which positions or occupations are required 
to drug test. Thus, the new proposed Rule allows for occupations 
identified in future Federal or State laws as requiring drug testing to 
be occupations that States will be able to consider for drug testing of 
UC applicants.
    Finally, the proposed Rule includes a section on conformity and 
substantial compliance.
    The Department seeks comments on the entirety of the proposed Rule, 
and, in the section-by-section description of the proposed Rule, 
highlights areas where comments would be particularly helpful.

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 42 U.S.C. 503(l)(A)(ii), permitting drug testing of 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. The Department came to 
this conclusion based on how the word ``applicant'' is used elsewhere 
in 42 U.S.C. 503 and the Social Security Act. Specifically, in enacting 
42 U.S.C. 503(l), Congress also enacted 42 U.S.C. 503(a)(11), which 
describes in different language those seeking continued eligibility. 
Paragraph (a)(11) provides that a State unemployment law must include 
``[a] requirement that, as a condition of eligibility for regular 
compensation for any week, a claimant must be able to work, available 
to work, and actually seeking work.'' Thus, Congress distinguished 
``applicants'' and ``claimants'' in the Act. This distinction appears 
elsewhere in Section 503. Paragraphs (d)(2)(A) and (e)(2)(A) both refer 
to ``new applicants'' in the context of individuals whose UC 
eligibility has yet to be determined. In contrast, paragraph (j)(1) 
refers to ``new claimants'' in the context of individuals who have been 
found eligible for UC. Likewise, 42 U.S.C. 503(h)(3)(B) and 
(i)(1)(A)(ii), which require UC information disclosures to HHS and the 
Department of Housing and Urban Development, both refer to an 
individual who ``is receiving, has received, or has made application 
for'' UC. There as well, the Act, distinguishes an individual making 
``application for'' UC benefits from one who ``is receiving'' or ``has 
received'' UC. This distinction between applicants and recipients is 
similar to that found elsewhere in the Social Security Act. See, e.g., 
42 U.S.C. 1396w(b)(1)(A) (``applicant for, or recipient of, medical 
assistance''); id. Sec.  1320b-6(j)(1)(A) (``applicant for, or 
recipient of, benefits''); Sec.  1396a(a)(4) (``services to applicants 
and recipients'').
    ``Controlled substance,'' as defined by 42 U.S.C. 503(l)(2)(B), has 
the same meaning given such term in Sec. 102 of the Controlled 
Substances Act (Pub. L. 91-513, 21 U.S.C. 802). ``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 with similar 
functions and duties. As discussed above, Federal and State drug 
testing laws do not generally specify or refer to ``occupations'' 
requiring drug testing, but rather identify classes or categories of 
positions, in descriptive terms--such as, for example, positions 
requiring the carrying of a firearm, or positions that use motor 
vehicles to carry members of the public. These types of position 
descriptions identify a crucial aspect, function, or duty of these 
positions (e.g., driving a motor vehicle, or carrying a firearm) that 
is the basis for the drug testing requirement. This definition gives 
States flexibility to identify occupations based on their own systems 
for classifying occupations. The Department considered and rejected 
mandating the use of the Standard Occupational Classification (SOC) 
system. While the SOC system provides a methodology for classifying 
workers into occupational categories for the purpose of data collection 
and statistical analysis, it may not provide the best mechanism to 
support states in identifying the occupations in which employers 
regularly drug test. To assist states in identifying additional 
occupations that regularly drug test, the definition of ``occupation,'' 
for purposes of this rule, clarifies that the positions or classes of 
positions identified as occupations must have similar functions and 
duties, a change from the 2016 Final Rule. As noted previously, 
employer drug testing, whether mandated by law or not, tends to focus 
on positions where employees are carrying out specific functions and 
duties such as jobs in which the worker carries a firearm, transports 
the public, or handles financial transactions. States remain free to 
choose to use the SOC system, but are not required to use it.
    ``Suitable Work'' means suitable work as defined under the UC law 
of the State

[[Page 55315]]

against which the claim is filed. This is the same definition of 
``suitable work'' under that State's law as the State otherwise uses 
for determining UC eligibility based on seeking work or refusing work.
    ``Unemployment Compensation'' is defined in Sec. 303(l)(2)(A) of 
the Social Security Act (SSA), to have the same meaning given to the 
term in 42 U.S.C. 503(d)(2)(A), which states the term unemployment 
compensation means any unemployment compensation payable under 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)

    In this proposed Rule, the Department recognizes both the historic 
Federal-State partnership that is a key hallmark of the UC program as 
well as the wide variation among States' economies and practices. The 
proposed rule thus recognizes the need for States' participation in 
identifying which, and whether additional, occupations regularly 
conduct drug testing in each State. Proposed Sec.  620.3 describes a 
number of different occupations that the Department has determined 
regularly drug test. States may use this list, in addition to the 
broader criterion, in identifying occupations for which drug testing is 
regularly conducted based on the criteria set by the Secretary under 
these regulations.
    Proposed subsection 620.3(a) includes the class of positions that 
requires the employee to carry a firearm as an ``occupation'' that 
regularly drug tests.
    Proposed subsections 620.3(b)-(g) include various specific 
occupations that were listed in the previous Rule as ones that 
regularly drug test, since various Federal laws require drug testing of 
employees in each of these occupations. The proposed Rule identifies in 
subsections 620.3(b)-(g) six specific sections of regulations issued by 
several agencies of DOT and the Coast Guard that identify the classes 
of positions that are subject to drug testing. Any position with a 
Federal legal requirement for drug testing unquestionably constitutes 
an occupation that regularly drug tests.
    Proposed subsections 620.3(h) and (i) include in the list of 
occupations that regularly drug test any occupation that is required to 
be drug tested under any future Federal law or under the law of the 
State seeking to drug test UC applicants in that occupation. As with 
the previous six sections, any position with a legal requirement for 
drug testing unquestionably constitutes an occupation that regularly 
drug tests.
    Proposed subsection 620.3(j) adds to the list of occupations that 
regularly drug test a significant provision not contained in the 
previous Final Rule that fundamentally transforms the regulatory 
approach and scope of the proposed regulation, and thus satisfies the 
requirements of the CRA, at least where, as here, the Department is 
under a continuing statutory obligation to propose regulations in this 
space. Proposed subsection 620.3(j) provides that a State may identify 
additional occupations in that State where employers require pre-hire 
or post-hire drug testing as a standard eligibility requirement and 
consider those occupations as regularly conducting drug testing. This 
provision reflects the Secretary's determination that, because there is 
wide variation among State economies and employment practices, it is 
not practicable to exhaustively list all occupations that ``regularly 
conduct[ ] drug testing.'' Instead, the Department sets out a Federal 
standard by which it is possible to assess--under Federal, not State, 
law--whether a State has a sufficient basis to require drug testing of 
a particular class of UC applicants. That proposed Federal standard is 
as follows: When identifying an occupation that regularly conducts drug 
testing, the State must identify a factual basis for its finding that 
employers conduct pre-employment or post-hire drug testing as a 
standard eligibility requirement for obtaining or maintaining 
employment in the identified occupation. Factual bases may include, but 
are not limited to: Labor market surveys; reports of trade and 
professional organizations; and academic, government, or other studies. 
This proposed standard effectuates the plain meaning of the Act's 
authorization of drug testing where suitable work ``is only available 
in an occupation that regularly conducts drug testing.'' Section 
303(l)(1)(A)(ii) (emphasis added). If this rule were enacted as 
proposed, the Department would review States' factual bases through 
reports authorized under 42 U.S.C. 503(a)(6) and 20 CFR 601.3; these 
reports are currently made through States' submissions of Form MA-8-7.
    DOL seeks comments on whether it should instead impose a heightened 
standard of evidence to demonstrate that an occupation is one that 
regularly conducts drug tests and therefore can be considered an 
occupation for which drug testing is a standard eligibility 
requirement. If so, what heightened level of evidence of drug testing 
would be appropriate?
    DOL also seeks comments on any suggested additions, deletions, or 
edits to the list and descriptions of occupations that regularly 
conduct drug testing, or on the scope of the latitude accorded to 
States in the approach proposed here. DOL likewise seeks comments on 
its determination that it is impracticable to develop a nationally 
uniform list of occupations that regularly drug test, given the wide 
variations in regional economies and in State law.
    Finally, DOL seeks comments on its planned approach of using 
submissions through Form MA-8-7 as the method for reviewing States' 
factual bases for finding that employers conduct pre-employment or 
post-hire drug testing as a standard eligibility requirement for 
obtaining or maintaining employment in the identified occupation.

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 42 U.S.C. 503(l), provides 
that a State may require applicants to take and pass a test for the 
illegal use of controlled substances as a condition of initial 
eligibility for UC under specified conditions, and that applicants may 
be denied UC based on the results of these tests. States are not 
required to drug test as a condition of UC eligibility based on any of 
the occupations set out under this proposed Rule. States may choose to 
do so based on some or all of the identified occupations, however, 
States may not, except as permitted by 42 U.S.C. 503(l)(1)(A)(i) 
(governing drug testing of individuals terminated for the unlawful use 
of a controlled substance), drug test based on any occupation that does 
not meet the definition in Sec.  620.3 for purposes of determining UC 
eligibility.
    Proposed subsection 620.4(a) provides that an applicant, as defined 
in proposed Sec.  620.2, may be tested for the unlawful use of one or 
more controlled substances, also 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. As discussed in the Summary of the proposed Rule, 
the term ``applicant'' means that only an individual who is filing an 
initial UC claim, not a claimant filing a continued claim, may be 
subject to drug testing.

[[Page 55316]]

    Proposed subsection 620.4(b) provides that a State choosing to 
require drug testing as a condition of UC eligibility may apply drug 
testing based on one or more of the occupations under Sec.  620.3. This 
flexibility is consistent with the statute, which permits, but does not 
require, drug testing, and the partnership nature of the Federal-State 
UC system.
    Proposed subsection 620.4(c) provides that no State would be 
required to drug test UC applicants under this part 620. This provision 
was not in the 2016 Final Rule, but again reflects the partnership 
nature of the Federal-State UC system and the Department's 
understanding that the Act permitted, but did not require, States to 
drug test UC applicants under the identified circumstances.
    While 42 U.S.C. 503(l) requires the Secretary to issue regulations 
determining the occupations that regularly conduct drug testing, the 
Secretary may address other issues relating to 42 U.S.C. 503(l) in 
guidance, such as program letters and other issuances, and may issue 
additional guidance as needed.

What are the consequences of implementing a drug testing program that 
is not in accordance with these regulations? (Sec.  620.5)

    Proposed subsection 620.5(a) explains that implementation of drug 
testing of UC applicants as authorized under State laws must be in 
conformity with these regulations for States to be certified as 
eligible to receive Federal grants for the administration of its UC 
program under 42 U.S.C. 502. The procedures for resolving issues of 
conformity or compliance with the requirements of the proposed Rule, 
and the remedies for failure to conform or comply, are found in 20 CFR 
601.5.

III. Administrative Information

Executive Orders 12866 and 13563: Regulatory Planning and Review

    E.O.s 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). E.O. 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.\3\ This regulation is necessary because of the statutory 
requirement contained in 42 U.S.C. 503(l)(1)(A)(ii), which requires the 
Secretary to determine the occupations that regularly conduct drug 
testing for the purpose of determining which applicants may be drug 
tested when applying for State unemployment compensation. The 
Department considers this proposed Rule to be a ``significant 
regulatory action,'' as defined in Sec. 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 the new 42 U.S.C. 503(l)(1), 
drug testing of applicants for UC as a condition of eligibility was 
prohibited.
---------------------------------------------------------------------------

    \3\ Exec. Order No. 12866, Sec.  6(a)(3)(B).
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    The proposed Rule is entirely voluntary on the part of the States, 
and the Department does not yet have sufficient data to predict how 
many States will establish a drug testing program. Before the enactment 
of the Federal law in 2012, States were not permitted to condition 
eligibility for UC on drug testing. The unsettled federal regulatory 
landscape since that time may have chilled States' interest in pursuing 
drug testing, and it is uncertain to what extent States' costs in 
administering drug testing would be offset by savings in their UC 
programs. Whatever the reason, to date, only three States have enacted 
State laws to pursue drug testing of UC applicants under this statutory 
provision.
    There are limited data on which to base estimates of the cost 
associated with establishing a testing program, or the offsetting 
savings that a testing program could realize. Only one of the three 
States that have enacted conforming drug testing laws issued a fiscal 
estimate. That State, Texas, estimated that the 5-year cost of 
administering the program would be $1,175,954, taking into account both 
one-time technology personnel services 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 commenting on or endorsing the methodology or assumptions in the 
Texas analysis.
    The Department requests comments from interested stakeholders on 
the costs of establishing and administering a State-wide testing 
program; the number of applicants for unemployment compensation that 
fit the criteria established in the law; estimates of the number of 
individuals who would subsequently be denied unemployment compensation 
due to a failed drug test; and the offsetting savings that could 
result.
    In the absence of such data, the Department is unable to quantify 
the administrative costs States will incur if they choose to implement 
drug testing pursuant to this proposed Rule. 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 
administering a drug testing program, which would include the cost of 
the drug tests, staff for administration of the drug testing function, 
and technology to track drug testing outcomes. States would also incur 
ramp up costs to implement the processes necessary for determining 
whether an applicant is one for whom drug testing is legally 
permissible; referring and tracking applicants referred for drug 
testing; and conducting and processing the drug tests. States would 
also have to factor in increased costs of adjudication and appeals of 
both the determination that an individual is subject to drug testing 
and resulting determinations of benefit eligibility based on the test 
results.

Paperwork Reduction Act

    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 E.O. 13132 requires Federal agencies to consult with 
State entities when a regulation or policy may have a substantial 
direct effect on the States, 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 E.O. Section 3(b) of the E.O. further provides that 
Federal agencies must implement regulations that have a substantial 
direct effect only if statutory authority permits the

[[Page 55317]]

regulation and it is of national significance.
    This proposed Rule does not have a substantial direct effect on the 
States, 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 E.O. This is 
because drug testing authorized by the regulation is voluntary on the 
part of the State--it is 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 the option to drug 
test 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 proposed Rule is purely voluntary, so any increased cost to the 
States is not the result of a 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 Sec. 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 Sec. 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 describes 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 proposed Rule 
does not affect small entities as defined in the RFA. Therefore, the 
proposed 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 RFA.

List of Subjects in 20 CFR Part 620

    Unemployment compensation.

0
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--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 42 U.S.C. 503(l). 42 U.S.C. 
503(l) permits States to enact legislation to provide for State-
conducted testing of an unemployment compensation applicant for the 
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). 42 U.S.C. 
503(l)(1)(A)(ii) provides that the occupations that regularly conduct 
drug testing will be determined under regulations issued by the 
Secretary of Labor.


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 Sec. 102 of the Controlled Substances 
Act (21 U.S.C. 802). 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 with similar 
functions and duties. Federal and State laws governing drug testing 
refer to classes of positions that are required to be drug tested. 
Other taxonomies of occupations, such as those in the Standard 
Occupational Classification (SOC) system, may be used by States in 
determining the boundaries of a position or class of positions with 
similar functions and duties under Sec.  620.3. Use of the SOC codes, 
however, is not required, and States may use other taxonomies to 
identify a position or class of positions with similar functions and 
duties.
    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 the individual's 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.

    In electing to test applicants for unemployment compensation under 
this part, States may require drug testing for applicants for whom the 
only suitable work is in one or more of the following occupations that 
regularly conduct drug testing, for purposes of Sec.  620.4:
    (a) An occupation that requires the employee to carry a firearm;
    (b) An occupation identified in 14 CFR 120.105 by the Federal 
Aviation Administration, in which the employee

[[Page 55318]]

must be tested (Aviation flight crew members and air traffic 
controllers);
    (c) An occupation identified in 49 CFR 382.103 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 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 by the Federal Transit 
Administration, in which the employee must be tested (Public 
transportation operators);
    (f) An occupation identified in 49 CFR 199.2 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 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 in Federal law as 
requiring an employee to be tested for controlled substances;
    (i) An occupation specifically identified in the State law of that 
State as requiring an employee to be tested for controlled substances; 
and
    (j) An occupation where the State has a factual basis for finding 
that employers hiring employees in that occupation conduct pre- or 
post-hire drug testing as a standard eligibility requirement for 
obtaining or maintaining employment in the occupation.


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

    (a) States may require drug testing for unemployment compensation 
applicants, as defined in Sec.  620.2, for the unlawful use of one or 
more 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 of, is only available in an occupation that regularly conducts 
drug testing as identified under Sec.  620.3.
    (b) A State conducting drug testing as a condition of unemployment 
compensation eligibility, as provided in paragraph (a) of this section, 
may only elect to require drug testing of applicants for whom the only 
suitable work is available in one or more of the occupations listed 
under Sec.  620.3. States are not required to apply drug testing to any 
applicants for whom the only suitable work is available in any or all 
of the occupations listed.
    (c) No State is required to drug test UC applicants under this part 
620.


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 42 U.S.C. 502(a), 
governing State eligibility 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 provisions of 20 
CFR 601.5 apply.

Molly E. Conway,
Acting Assistant Secretary for Employment and Training, Labor .
[FR Doc. 2018-23952 Filed 11-2-18; 8:45 am]
 BILLING CODE 4510-FW-P