Federal-State Unemployment Compensation (UC) Program; Data Availability

DEPARTMENT OF LABOR <SUBAGY>Employment and Training Administration</SUBAGY> <CFR>20 CFR Part 603</CFR> <DEPDOC>[Docket ETA-2025-0004]</DEPDOC> <RIN>RIN 1205-AC11</RIN> <SUBJECT>Federal-State Unemployment Compensation (UC) Program; Data Availability</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Employment and Training Administration, Labor. <HD SOURCE="HED">ACTION:</HD> Proposed rule; request for comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of Labor (DOL or the Department) is issuing this proposed rule to require the disclosure of confidential Unemployment Compensation (UC) information to Federal officials for the purposes of UC program oversight and audits. This rule will ensure that Federal officials, including the DOL Office of Inspector General (DOL-OIG), are able to obtain the information they need in order to ensure proper oversight of the UC program and to identify and address fraud in the UC program. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received by September 29, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may send comments, identified by Docket No. ETA-2025-0004 and Regulatory Identification Number (RIN) 1205-AC11, by the following method: • <E T="03">Federal eRulemaking Portal:</E> <E T="03">https://www.regulations.gov.</E> Search for the above-referenced RIN, open proposed rule, and follow the on-screen instructions for submitting comments. • <E T="03">Instructions:</E> All submissions received must include the agency name and docket number for this rulemaking or “RIN 1205-AC11.” Please be advised that the Department will post comments received that relate to this proposed rule to <E T="03">https://www.regulations.gov,</E> including any personal information provided. The <E T="03">https://www.regulations.gov</E> website is the Federal e-Rulemaking Portal and all comments posted there are available and accessible to the public. Please do not submit comments containing trade secrets, confidential or proprietary commercial or financial information, personal health information, sensitive personally identifiable information (for example, Social Security numbers, driver's license or State identification numbers, passport numbers, or financial account numbers), or other information that you do not want to be made available to the public. Should the Department become aware of such information, the Department reserves the right to redact or refrain from posting sensitive information; libelous, or otherwise inappropriate comments, including those that contain obscene, indecent, or profane language; comments that contain threats or defamatory statements; and comments that contain hate speech. Please note that depending on how information is submitted, the Department may not be able to redact the information, and instead reserves the right to refrain from posting the information or comment in such situations. <E T="03">Docket:</E> For access to the docket to read background documents, comments received, or the plain-language summary of the proposed rule of not more than 100 words in length required by the Providing Accountability Through Transparency Act of 2023, go to <E T="03">https://www.regulations.gov</E> (search using RIN 1205-AC11 or Docket No. ETA-2025-0004). If you need assistance to review the comments, contact the Office of Policy Development and Research at 202-693-3700 (this is not a toll-free number). <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Luke Murren, Deputy Administrator, Office of Policy Development and Research, Employment and Training Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5641, Washington, DC 20210, Telephone: (202) 693-3700 (voice) (this is not a toll-free number). For persons with a hearing or speech disability who need assistance to use the telephone system, please dial 711 to access telecommunications relay services. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> Title 20 CFR part 603 establishes requirements for maintaining the confidentiality of UC information along with standards for required and permissible disclosures of such information. The current regulation at 20 CFR 603.5(i) provides that State UC agency disclosures to Federal officials for UC program oversight and audits are permissible. When paragraph (i) of section 603.5 was last updated in 2006, the notice of proposed rulemaking (NPRM) proposed an exception to 20 CFR part 603 for disclosures required by Federal law. <SU>1</SU> <FTREF/> The Final Rule changed the provision proposed at 20 CFR 603.5(i) to limit it to disclosures for UC program oversight and audits because disclosures to Federal officials as “required by Federal Law” was already covered by other provisions in the rule, including the section allowing disclosure to public officials at 20 CFR 603.5(e). See 71 FR 56830, 56837 (Sept. 27, 2006). The Department explained in the Final Rule that it included the provision regarding permissible disclosures for the purpose of Federal oversight and audits because “the Department believe[d] it [was] necessary to explicitly address the inapplicability of the confidentiality requirement to any disclosure to the Federal Government for purposes of UC program oversight and audits.” See 71 FR 56830, 56837 (Sept. 27, 2006). The Department now proposes to revise part 603 to make these disclosures required. <FTNT> <SU>1</SU>  See 69 FR 50022 (Aug. 12, 2004) (proposing § 603.5(i)). </FTNT> As State UC operations have evolved since this regulation was first promulgated, States have faced increased fraud incidents including sophisticated multistate fraud schemes by organized criminals. The COVID-19 pandemic caused a sizable increase in fraudulent activity, costing the UC program billions of dollars according to estimates by DOL-OIG. DOL-OIG identified $45.6 billion in potentially fraudulent unemployment insurance (UI) benefits paid in six high-risk areas, <SU>2</SU> <FTREF/> and estimated $191 billion in UI benefits during the pandemic period could have been paid improperly, with a significant portion attributable to fraud. <SU>3</SU> <FTREF/> The Secretary must be able to ensure that the UC program is administered consistent with the requirements of Federal law. Audits and oversight of the UC program by DOL-OIG and other Federal officials help detect fraud vulnerabilities and identify possible solutions, which help to ensure the UC program is being administered consistent with Federal law requirements. <FTNT> <SU>2</SU>  OIG Alert Memorandum: <E T="03">Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas Increased to $45.6 Billion Report Number: 19-22-005-03-315,</E> September 21, 2022, <E T="03">https://www.oig.dol.gov/public/reports/oa/2022/19-22-005-03-315.pdf.</E> </FTNT> <FTNT> <SU>3</SU>  “The Greatest Theft of American Tax Dollars: Unchecked Unemployment Fraud,” Hearing, Statement for the Record of Larry D. Turner, Inspector General, U.S. Department of Labor; House Committee on Ways and Means, February 8, 2023, available at: <E T="03">https://www.oig.dol.gov/public/testimony/02082023.pdf.</E> </FTNT> The Department previously published a related request for information, entitled “Federal-State Unemployment Compensation (UC) Program; Confidentiality and Disclosure of State UC Information,” on July 25, 2023 (88 FR 47829). In total, 30 commenters responded, representing a cross-section of stakeholders including but not limited to State UC agencies, local workforce development boards, private organizations, and individuals. Question 113 of the request for information explicitly asked about required disclosures to DOL-OIG for purposes of UC program oversight and audit. Of the 30 commenters, two responded specifically to this question and their comments were not substantive. Amending the regulation to require these disclosures will allow the Department to continue the important work of identifying and preventing fraud in the UC program. <HD SOURCE="HD1">II. Discussion</HD> The Department is proposing to remove paragraph 20 CFR 603.5(i), which permits State UC agencies to disclose confidential UC information to Federal officials for purposes of UC program oversight and audits, and to add a provision requiring the disclosure of confidential UC information for purposes of UC program oversight and audits to 20 CFR 603.6, which contains required disclosures. Moving the disclosure to Federal officials for the purposes of UC program oversight and audits to 20 CFR 603.6 would make these disclosures a requirement under 20 CFR part 603. The proposed rule would effectuate this change by redesignating paragraph (c) of § 603.6 as paragraph (d) and inserting a new paragraph (c) in § 603.6. The proposed rule would also make conforming amendments to the introductory matter of § 603.5 and to paragraph (b) of § 603.8. On March 20, 2025, President Trump issued Executive Order (E.O.) 14243 titled “Stopping Waste, Fraud, and Abuse by Eliminating Information Silos,”  <SU>4</SU> <FTREF/> which required that “the Secretary of Labor and the Secretary's designees shall receive, to the maximum extent consistent with law, unfettered access to all unemployment data and related payment records. . .” E.O. 14243, Section 3(d), 90 FR 13681 (Mar. 25, 2025). This NPRM's proposed amendment would further the objectives of the E.O. by requiring, rather than allowing, the disclosure of confidential UC information to Federal officials for the purposes of UC program oversight and audits. <FTNT> <SU>4</SU>  See <E T="03">https://www.whitehouse.gov/presidential-actions/2025/03/stopping-waste-fraud-and-abuse-by-eliminating-information-silos/.</E> </FTNT> Audits and oversight of the UC program performed by Federal officials, su ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 41k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━