UIPL-1-15_Acc.pdf

ETA Advisory File Text

RESCISSIONS None EXPIRATION DATE Continuing ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 1-15 TO STATE WORKFORCE AGENCIES FROM GERRI FIALA s for PORTIA WU Assistant Secretary SUBJECT Permissible Drug Testing of Certain Unemployment Compensation Applicants Provided for in Title II Subtitle A of the Middle Class Tax Relief and Job Creation Act of 2012 1. Purpose. To provide guidance about permissible drug testing of certain unemployment compensation UC applicants. 2. References. Section 2105 of Pub. L. 112-96 the Middle Class Tax Relief and Job Creation Act of 2012 Act Section 303 of the Social Security Act SSA and 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 79 FR 61013 proposed October 9 2014 to be codified at 20 C.F.R. part 620 . 3. Background. President Obama signed the Act on February 22 2012. Section 2105 of the Act Attachment I adds subsection l to section 303 SSA to permit states to test a UC applicant for the unlawful use of controlled substances drugs as an eligibility condition if the applicant a. Was terminated from employment with his her most recent employer as defined under state law because of the unlawful use of controlled substances or b. Is an individual for whom suitable work as defined under state law is only available in an occupation that regularly conducts drug testing as determined under regulations issued by the Secretary of Labor Secretary . These are the only circumstances under which a state is permitted to require applicants to take and pass a drug test as a condition of initial eligibility for UC. An applicant may if state law provides be denied UC based on a positive result of this drug test. EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION Unemployment Compensation CORRESPONDENCE SYMBOL OUI DL DATE October 9 2014 2 This Unemployment Insurance Program Letter UIPL provides general guidance about these drug testing provisions and specific guidance about the testing permitted by Section 303 l 1 A i SSA for individuals who were terminated from employment with their most recent employer because of the unlawful use of controlled substances. As required by the Act the U.S. Department of Labor Department will identify the occupations that regularly conduct drug testing in regulations. The Department has recently issued a Notice of Proposed Rulemaking seeking comment on a proposed list of such occupations. Further guidance on drug testing permitted by Section 303 l 1 A ii SSA for individuals for whom the only available suitable work as defined in state law is in an occupation that regularly conducts drug testing will be issued after the final regulations identifying such occupations have been promulgated. 4. Discussion. a. Applicant. Section 303 l 1 A SSA limits testing to an applicant for unemployment compensation. As such drug testing under either clause i or ii of Section 303 l 1 A SSA is permitted only when an individual submits an initial application for UC. Once individuals have applied for UC and have been determined eligible for UC regardless of whether they have already taken and passed a drug test states may not require them to submit to any further drug tests as a condition of continued eligibility for UC. b. Most Recent Employer. Section 303 l 1 A i SSA permits states to enact laws that provide for the drug testing of UC applicants who have been separated from their most recent employer because of the unlawful use of a controlled substance. The definition of the term most recent employer must be established in state law and be the same as the definition used for other UC purposes such as when determining which employer is the separating or chargeable employer. Thus if an employer is not the most recent employer under state law for purposes of adjudicating a separation from work the state may not consider that employer as the most recent employer for purposes of determining whether the separation was for the illegal use of a controlled substance. While separations from other employers an individual worked for during the base period may if state law so provides be adjudicated to determine UC eligibility state law may provide for drug testing of a UC applicant only if the individual separated from the most recent employer due to the unlawful use of controlled substances. It is important to note that this basis for drug testing is very limited because in most cases separation from employment due to illegal drug use in violation of an employer s drug free workplace policy constitutes misconduct connected with work which itself results in an individual being disqualified from receiving UC. Some states provide for a total denial of benefit rights for misconduct connected with work in those states there would be no reason to drug test as a condition of eligibility. Other states require an individual to work a specified period of time and earn a specified amount of wages before the individual can requalify for UC. If the individual later becomes unemployed and separation from the most recent employer was not due to the illegal use of a controlled substance the state may not test the 3 individual for drug use as a condition of UC eligibility. In this case the most recent employer would be the employer for whom the individual performed services in order to purge the disqualification. However if state law provides for a fixed-period-of-time disqualification and the individual performed no subsequent work the state may test the individual for drug use as a condition of eligibility when the individual reapplies for UC because the most recent employer will not have changed. c. Suitable Work. New section 303 l 1 A ii SSA permits drug testing of UC applicants for whom suitable work as defined under state law is only available in an occupation that regularly conducts drug testing as determined under regulations issued by the Secretary. States must use the same definition of suitable work under their law for UC applicant drug testing purposes that they use for work search and refusal of work purposes when determining eligibility for UC. Some states establish different definitions of suitable work depending on how long individuals have been unemployed. Since drug testing is permissible only for certain UC applicants states must use the definition of suitable work that applies to individuals who file initial claims. d. Only Available. New section 303 l 1 A ii SSA permits drug testing of UC applicants for whom suitable work as defined under state law is only available in an occupation that regularly conducts drug testing as determined under regulations issued by the Secretary. This means that all work that is suitable for an individual must be in an occupation that regularly conducts drug testing. If suitable work for an individual is available in any occupation for which drug testing is not regularly conducted that individual may not be subject to drug testing under section 303 l 1 A ii SSA. Additionally in order for work in a specified occupation to be available there must be work in the local labor market for that specific occupation. e. Drug Testing Standard. New section 303 l 2 B SSA defines controlled substance by reference to Section 102 of the Controlled Substances Act 21 U.S.C. 802 . Therefore states may condition UC eligibility on passing tests under either clause i or ii of Section 303 l 1 A SSA only for substances that are identified in Section 102 of the Controlled Substances Act. That section provides that a controlled substance means a drug or other substance or immediate precursor included in schedule I II III IV or V of part B of that subchapter. 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. The current list of controlled substances is found at 21 U.S.C. 812 Attachment II . States that enact laws to drug test UC applicants must establish their own drug testing programs. However states may enter into a contract with an entity to conduct the drug tests on behalf of the state. When conducting tests for illegal use of controlled substances the state must use a test that meets or exceeds the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs published by the Substance Abuse and Mental Health Services Administration SAMHSA or the U.S. Department of Transportation DOT procedures. Those are the standards that the Federal government uses and are the standards that most laboratories and government or private-sector employers use when following the provisions of the Drug Free Workplace Act. Tests that do not meet or exceed i.e. have more rigorous standards for sample collection chain of custody and other procedural requirements 4 the SAMHSA or DOT procedures may not be used to determine an individual s eligibility for UC. Additionally any laboratory used by the state to conduct drug testing must meet all of the requirements to be certified by SAMHSA under Subpart K of the Mandatory Guidelines for Federal Workplace Drug Testing Programs. See 73 FR71858 published on November 25 2008. The Mandatory Guidelines for Federal Workplace Drug Testing Programs may be found online at http www.gpo.gov fdsys pkg FR-2008-11-25 pdf E8-26726.pdf . Information about DOT standards may be found online at http www.dot.gov odapc . All questions regarding these standards should be directed to those agencies. f. Cost of Drug Testing. Section 301 SSA provides that the Federal government will provide grants to the states for the administration of their UC laws. Section 303 a 1 SSA requires as a condition of a state receiving these administrative grants that state law include provision for s uch methods of administration . . . as are found by the Secretary of Labor to be reasonably calculated to insure full payment of unemployment compensation when due. These provisions of law have been historically interpreted to prohibit states from transferring the cost of administering the UC program to unemployed workers because these costs may inhibit individuals who may be eligible from filing a claim and receiving UC when due. If a state chooses to require drug tests under either clause i or ii of Section 303 l 1 A SSA the testing would be an expense of administering the state UC law. As such it may be paid from the state s UC administrative grant. Further because it is a cost of program administration states may not require applicants to pay any of the cost of drug tests. g. Total Reduction of Benefit Rights. Section 3304 a 10 of the Federal Unemployment Tax Act FUTA requires that compensation shall not be denied to any individual by reason of cancellation of wage credits or total reduction of benefit rights for any cause other than discharge for misconduct connected with his work fraud in connection with a claim for compensation or receipt of disqualifying income. Section 303 l 1 B SSA as added by the Act specifies that n othing in this Act or any other provision of Federal law shall be considered to prevent a State from enacting legislation to provide for denying such compensation to such applicant on the basis of the result of the drug testing conducted by the State ... As such it provides an exception to the requirements of section 3304 a 10 FUTA. Thus states may cancel wage credits or impose a total denial of benefit rights on applicants who fail a drug test permitted under either clause i or ii of Section 303 l 1 A SSA. h. Timely Eligibility Determinations. The requirement that UC payments be made when due in section 303 a 1 SSA has been interpreted to require that UC be paid as soon as administratively feasible. See California Department of Human Resources Development v. Java 402 U.S. 121 130-31 1971 . The Department s regulations at 20 CFR part 640 establish the standard for benefit payment promptness. As a result states that implement drug testing provisions consistent with the requirements of either clause i or ii of Section 303 l 1 A SSA must establish procedures to ensure that eligibility determinations are made promptly that benefits are provided with the greatest promptness that is administratively feasible and that they meet all of the promptness requirements in 20 CFR part 640. 5 i. Confidentiality of information. The results of or even the fact of a drug test for an applicant for UC is confidential UC information as defined in 20 CFR 603.2 j . Therefore the confidentiality requirements of 20 CFR 603.4 apply. States may not release information about an individual s drug test except as provided under state law that conforms to the requirements of 20 CFR part 603. j. Limits on Permissible Drug Testing. Section 3304 a 4 FUTA requires as a condition for employers in a state to receive credit against the Federal tax that state law provide that all money withdrawn from the unemployment fund of the State shall be used solely in the payment of unemployment compensation exclusive of expenses of administration and for refunds of sums erroneously paid into such fund . . . . Section 303 a 5 SSA provides a similar requirement as a condition for a state to receive administrative grants. Section 3306 h FUTA defines compensation as cash benefits payable to individuals with respect to their unemployment. These provisions taken together are commonly referred to as the withdrawal standard of Federal UC law. UIPL No. 787 transmitted the Secretary s decision in the 1964 conformity case involving South Dakota that interpreted these sections to mean UC eligibility must be based on the fact or cause of unemployment. Specifically the Secretary ruled that the payment of UC premised on a condition of entitlement unrelated to the fact or cause of unemployment is inconsistent with Federal law. Because of this longstanding interpretation the only permissible reasons for drug testing are those provided for in Section 303 l SSA. As a general rule when there is no direct link between a person becoming unemployed and the illegal use of a controlled substance drug testing does not relate to the fact or cause of unemployment because the fact or possibility of drug use has nothing to do with the reason a person became unemployed. Even in Section 303 l SSA testing is permitted only if the cause of unemployment is termination from employment because of unlawful use of controlled substances or the fact of unemployment is due to an inability to pass a required drug test. Thus the underlying requirement remains that UC eligibility must be based on the fact or cause of an individual s unemployment. As exceptions to any of the requirements of Federal UC law are narrowly construed drug testing of claimants as a condition of eligibility for UC for any reason other than those specifically authorized by section 303 l 1 A SSA would violate the withdrawal standard. k. Effective Date. Because Section 2105 does not provide for an effective date section 303 l SSA became effective upon enactment of the Act on February 22 2012. However as discussed above only drug testing under clause i of Section 303 l 1 A may be implemented by states at this time drug testing under clause ii is not permitted until a final rule is in effect. Also as a reminder since drug testing under the Act is optional no changes to state UC law are required unless a state wishes to provide for drug testing of UC applicants as authorized by the Act. However states that wish to conduct drug testing as permitted by Section 303 l 1 A SSA must amend their state law to explicitly provide for such testing. 5. Action Required. States are requested to review this UIPL and assure their laws and practices conform to and comply with its guidance. 6 6. Inquiries. Inquiries should be directed to the appropriate Regional Office. 7. Attachments. I Text of Section 2105 of Pub. L. 112-96 the Middle Class Tax Relief and Job Creation Act of 2012. II 21 U.S.C. 812. Schedules of controlled substances.