81 FR 50298 - 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

DEPARTMENT OF LABOR
Employment and Training Administration

Federal Register Volume 81, Issue 147 (August 1, 2016)

The Employment and Training Administration (ETA) of the U.S. Department of Labor (Department) is issuing this final rule to establish, for State Unemployment Compensation (UC) program purposes, occupations that regularly conduct drug testing. These regulations 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 UC agencies to conduct drug testing on UC applicants for whom suitable work (as defined under the State law) is available only 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.

[Federal Register Volume 81, Number 147 (Monday, August 1, 2016)]
[Rules and Regulations]
[Pages 50298-50303]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17738]


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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: Final rule.

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SUMMARY: The Employment and Training Administration (ETA) of the U.S. 
Department of Labor (Department) is issuing this final rule to 
establish, for State Unemployment Compensation (UC) program purposes, 
occupations that regularly conduct drug testing. These regulations 
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 UC agencies to conduct drug 
testing on UC applicants for whom suitable work (as defined under the 
State law) is available only 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.

DATES: Effective Date: This final rule is effective September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Suzanne Simonetta, Office of 
Unemployment Insurance, ETA, U.S. Department of Labor, 200 Constitution 
Avenue NW., Room S-4524, Washington, DC 20210; telephone: (202) 693-
3225 (this is not a toll-free number); email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    On October 9, 2014, The Department published a Notice of Proposed 
Rulemaking (NPRM) concerning occupations that regularly conduct drug 
testing at 79 FR 61013. The Department invited comments through 
December 8, 2014.

II. General Discussion of the Final Rule

    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 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). If an applicant who is tested for drug 
use under either circumstance tests positive, the State may deny UC to

[[Page 50299]]

that applicant. On October 9, 2014, the Department published a Notice 
of Proposed Rulemaking (NPRM) concerning occupations that regularly 
conduct drug testing at 79 FR 61013. The NPRM proposed that occupations 
that regularly drug test be defined as those required to be drug tested 
in Federal or State laws at the time the NPRM was published. The NPRM 
also defined key terms:
     An ``applicant'' means an individual who files an initial 
claim for UC.
     ``Controlled substance'' is defined by reference to the 
definition of the term in Section 102 of the Controlled Substances Act. 
(This definition is in the Act.)
     ``Suitable work'' means suitable work as defined under the 
UC law of the State against which the claim is filed. It must be the 
same definition that the State otherwise uses for determining UC 
eligibility based on seeking work or refusal of work for an initial 
applicant for UC.
     Occupation means a position or class of positions.
     ``Unemployment compensation'' is defined as ``cash 
benefits payable to an individual with respect to their unemployment 
under the State law.'' This definition derives from the definition 
found in Federal UC law at Section 3306(h), FUTA.
    The Department invited comments through December 8, 2014. This 
final rule defines those occupations that regularly conduct drug 
testing as required by section 303(l)(1)(A)(ii), SSA. The Department, 
separately from this rulemaking, issued guidance (Unemployment 
Insurance Program Letter (UIPL) No. 1-15) to States to address other 
issues related to the implementation of drug testing under 303(l), SSA.

III. Summary of the Comments

Comments Received on the Proposed Rule

    The Department received sixteen (16) comments (by letter or through 
the Federal e-Rulemaking Portal) by the close of the comment period. 
Ten (10) of the comments were from individuals; one was from an 
employer advocacy group; one was from an industry association; one was 
from a worker advocacy group; and three (3) were from governmental 
officials or committees. The Department considered all timely comments 
and included them in the rulemaking record. There were no late 
comments.
    These comments are discussed below in the Discussion of Comments. 
We address only those comments addressing the scope and purpose of the 
rule, the identification of occupations that regularly conduct drug 
testing. Therefore, comments received concerning the Department's 
previously issued guidance about drug testing in UIPL No. 1-15; 
comments supporting or opposing drug testing in general; and comments 
about drug testing procedures, the efficacy of drug tests, and the cost 
of drug tests, are not addressed as these issues fall outside the scope 
of the statutory requirement that is the basis for this regulation. We 
made one change, discussed below, in response to the comments.

Discussion of Comments

    A number of commenters opposed the limitation on the list of 
occupations requiring drug testing. Three commenters wrote that 
limiting the list of occupations requiring drug testing to those 
identified in Federal or State laws that were in effect on the date of 
publication of the NPRM (October 9, 2014) was not appropriate. Of 
those, one wrote it was uncertain if future amendments to the Federal 
regulations would incorporate future State law enactments mandating 
testing. One wrote that States would not be given sufficient time to 
enact legislation to add any occupations to the list already 
established by Federal or State law, and the public interest would be 
served by a broader interpretation of ``regularly conducting drug 
testing.'' One wrote it was an unnecessary obstacle to States using 
drug screening and testing to improve the chances that unemployed 
workers are ready to return to work.
    One commenter wrote that the limitation was appropriate in order to 
provide the ability to assess the cost effectiveness of implementing 
drug testing in the UC program and that to do otherwise would 
circumvent the intent of Congress to limit authority to drug test to a 
small pool of workers for whom, because of their job requirements, drug 
testing is directly related to continued employment. The commenter 
asserted it was not the intent of Congress to cover a more expansive 
segment of the workforce, such as those subject to pre-employment 
screening.
    The Department agrees with the commenters that the rule should not 
limit the list of occupations requiring drug testing, set forth in the 
NPRM, to those identified in specified Federal laws or those State laws 
that were in effect on the date of publication of the NPRM; thus, this 
provision is revised in the final rule to broaden its applicability as 
requested by commenters. In a dynamic economy, occupations change over 
time, sometimes rapidly, and new occupations are created, and it is 
important that this rule contain the flexibility necessary to allow 
States and the Federal government to adapt to those changes. Thus, the 
regulation has been expanded to encompass any Federal or State law 
requiring drug testing regardless of when enacted. Specifically, 
section 620.3(h) has been revised to specify that occupations that 
regularly conduct drug testing include any ``occupation specifically 
identified in a State or Federal law as requiring an employee to be 
tested for controlled substances.'' In recognition of the fact that new 
federal laws may be enacted that may require drug testing for other 
occupations, and that those occupations may not necessarily be included 
in Sec.  620.3(a)-(g), the Department added ``Federal law'' to Sec.  
620.3(h). This additional change ensures the final rule is consistent 
with the policy change being made in response to the comments. 
Additionally, the final rule eliminates the reference to dates where 
the proposed rule referenced State law and the specified Federal 
regulations in Sec.  620.3(a)-(g). The Department will monitor changes 
in Federal law that affect the definition of ``occupations'' for which 
drug testing is required and inform States of any changes through 
guidance.
    There is no evidence of Congressional intent for the legislation to 
permit testing on any basis other than the plain language of the 
statute, i.e., occupations that regularly test for drugs. However, the 
Department agrees that changes to those occupations for which Federal 
or State law require drug testing should be accommodated by the 
regulation.
    One commenter wrote that the proposed rule in Section 620.4(a), 
that 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, would unduly limit drug testing to 
only the period after an applicant files an initial claim and before 
the applicant files a continued claim for unemployment compensation.
    The plain language of Section 303(l), SSA, limits permissible drug 
testing to applicants for UC. ``Applicants'' are individuals who have 
submitted an initial application for UC. Once individuals have been 
determined eligible to receive UC, they are no longer applicants for 
UC. The act of certifying that certain conditions are met to maintain 
eligibility is different than making an application for UC benefits. 
This is illustrated throughout Title III, SSA. Section 303(h)(3)(B), 
SSA,

[[Page 50300]]

requiring UC information disclosures to the Department of Health and 
Human Services, and Section 303(i)(1)(A)(ii)), SSA, requiring UC 
information disclosures to the Department of Housing and Urban 
Development, both refer to an individual who ``has made application 
for'' UC, distinguishing them from an individual who ``is receiving'' 
or ``has received'' UC. Similarly, Section 303(d)(2)(B), SSA, and 
Section 303(e)(2)(A), SSA, both refer to a ``new applicant'' for UC and 
then use the term ``applicant'' throughout the remainder of the 
subsection, signifying that the term is used to denote only an 
individual applying for UC for the first time. Thus, those provisions 
clarify that, as used in Section 303, SSA, an applicant is not a 
continuing claimant. Similarly, Section 303(l)(1)(B), SSA, permits the 
denial of UC based on the results of a drug test only to 
``applicants,'' not as a condition of continued eligibility. As these 
provisions demonstrate, ``applicant'' refers to an initial claimant, 
not a continuing claimant; therefore, the final rule includes no 
changes to the requirements of Section 620.4(a).
    Two commenters wrote that the rule arbitrarily narrows the 
definition of ``occupations that regularly test for drugs'' so that the 
potential number of applicants affected is negligible. They also noted 
that businesses regularly conduct drug testing in occupations without 
Federal or State mandate. For this reason, they believe the definition 
``occupations that regularly conduct drug testing'' should include 
occupations for which employers already conduct drug testing outside 
those mandated by State or Federal law.
    Section 303(l)(1)(A)(ii), SSA, requires the Secretary to identify 
those ``occupations,'' not employers, that regularly conduct drug 
testing. As explained in the NPRM, whether an occupation is subject to 
``regular'' drug testing in private employment was not chosen as the 
standard here because it would be very difficult to implement in a 
consistent manner. Drug testing in occupations where it is not required 
by law is not consistent across employers, across industries, across 
the States, or over time; thus, we are unable to reliably and 
consistently determine which occupations require ``regular'' drug 
testing where not required by law. Even if certain employers do conduct 
drug testing for certain occupations when permitted to do so, that is 
not sufficient to show that those occupations are subject to regular 
drug testing because a significant number of employers may not drug 
test individuals working in those occupations. In addition, those 
employers who conduct drug testing when they are not required by law to 
do so do not necessarily limit the testing to applicants or employees 
working in a specific occupation. The determination by an employer to 
drug-test all of its employees is not a determination that all of the 
occupations in which its employees fall are occupations for which drug 
testing is appropriate, under the requirements of this rule, but rather 
a determination in keeping with that employer's beliefs about its 
business needs that drug testing is appropriate for all of its 
employees.
    The final rule will permit States to require drug testing for UC 
eligibility for occupations that are subjected under State law to drug 
testing after the date of the NPRM publication, which ensures that 
there is flexibility for States to require drug testing for other 
occupations, while still providing predictability and consistency in 
identifying in this final rule what occupations are ``regularly'' drug 
tested. Thus, the Department has not changed the rule to address this 
concern.
    One commenter wrote that the proposed rules would impose an 
unnecessary burden on the State agency to determine whether ``suitable 
work'' in a specific occupation is available in the local labor market.
    The comment appears to misunderstand the proposed rule, which 
requires only that a State use the same definition of ``suitable work'' 
for UC drug testing as otherwise used in State UC law. The rule does 
not use the term ``local labor market'' when addressing suitable work. 
State UC agencies routinely make eligibility determinations about 
availability for work, search for work, and refusal of offers of 
suitable work. Whether work is available in the local labor market for 
UC claimants is one criterion for determining what constitutes 
``suitable'' work under State UC law in some States, but this rule does 
not require it. For drug testing, section 303(l)(1)(A)(ii), SSA, 
provides, as one of the two permissible reasons for drug testing as a 
condition for the receipt of UC, that the applicant ``is an individual 
for whom suitable work (as defined under the State law) is only 
available in an occupation that regularly conducts drug testing . . . 
'' [Emphasis added.] Thus, the NPRM required that drug testing is 
permitted only if the applicant's only suitable work requires it as a 
condition of employment. Because the rule's definition of ``suitable 
work'' allows the States to apply their own current laws, the 
definition of suitable work in the proposed rule would not impose any 
burden on States, and the Department has not changed the definition in 
the final rule.
    One commenter wrote that the proposed rule, by limiting the scope 
of permissible drug testing, contradicts Congressional intent and the 
practices of many American businesses and the best interests of 
American workers.
    The Department drafted the NPRM to be consistent with the language 
of the statute. The scope of drug testing contemplated in the NPRM is 
consistent with the statutory language; there is no evidence of 
Congressional intent in the legislative history which would require it 
to be interpreted more broadly than the Department interprets it in 
this regulation. Therefore, the Department declines to expand the scope 
of drug testing in this rule.

IV. 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.\1\ 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 purpose of determining which 
applicants may be drug tested when applying for State unemployment 
compensation. OMB has determined that this rule is ``significant'' as 
defined in section 3(f) of E.O. 12866. 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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    \1\ Executive Order No. 12866, section 6(a)(3)(B).
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    However, the Department has determined that this final rule 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

[[Page 50301]]

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 drug testing of UC applicants as a condition of UC 
eligibility is entirely voluntary on the part of the States, and since 
Section 303(l), SSA, is written narrowly, the Department believes that 
it is unlikely that many States will establish a testing program 
because they will not deem it cost effective to do so. The Department 
sought comment from interested stakeholders on this assumption. We 
received no comments on this topic.
    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 
State UI computer 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 final 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 rule, States are 
prohibited from testing applicants for unemployment compensation who do 
not meet the narrow criteria established in the law. The Department 
requested 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. We received no comments that 
provided the requested information.
    In the absence of data, the Department is unable to quantify the 
administrative costs States will incur if they choose to implement drug 
testing under 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. 
States will need to fund the cost of the drug tests, 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 under 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.
    The benefits of the rule are equally hard to determine. As 
discussed above, because permissible drug testing is limited under the 
statute and this rule, the Department of Labor believes that the 
provisions will impact a very limited number of applicants for 
unemployment compensation benefits. Only one State has estimated 
savings from a drug testing program in a fiscal note and the Department 
cannot and should not extrapolate results from those estimates.

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 final rule does not contain 
a ``collection of information,'' as the term is defined. See 5 CFR 
1320.3(c). The Department received no 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 final 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 final 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 a Federal mandate. Accordingly, it is unnecessary 
for the

[[Page 50302]]

Department to prepare a budgetary impact statement.

Plain Language

    The Department drafted this final rule in plain language.

Effect on Family Life

    The Department certifies that this final 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 final 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 
final 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 or 
final rulemaking is not expected to have a significant economic impact 
on a substantial number of small entities. This final 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 amends 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 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 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 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 a State or Federal law 
as requiring an employee to be tested for controlled substances.


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, 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

[[Page 50303]]

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

Portia Wu,
Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2016-17738 Filed 7-29-16; 8:45 am]
 BILLING CODE 4510-FN-P