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U.S. Code as of:
01/19/04
Section 503. State laws
(a) Provisions required
The Secretary of Labor shall make no certification for payment to
any State unless he finds that the law of such State, approved by
the Secretary of Labor under the Federal Unemployment Tax Act [26
U.S.C. 3301 et seq.], includes provision for -
(1) Such methods of administration (including after January 1,
1940, methods relating to the establishment and maintenance of
personnel standards on a merit basis, except that the Secretary
of Labor shall exercise no authority with respect to the
selection, tenure of office, and compensation of any individual
employed in accordance with such methods) as are found by the
Secretary of Labor to be reasonably calculated to insure full
payment of unemployment compensation when due; and
(2) Payment of unemployment compensation solely through public
employment offices or such other agencies as the Secretary of
Labor may approve; and
(3) Opportunity for a fair hearing, before an impartial
tribunal, for all individuals whose claims for unemployment
compensation are denied; and
(4) The payment of all money received in the unemployment fund
of such State (except for refunds of sums erroneously paid into
such fund and except for refunds paid in accordance with the
provisions of section 3305(b) of the Federal Unemployment Tax Act
[26 U.S.C. 3305(b)]), immediately upon such receipt, to the
Secretary of the Treasury to the credit of the unemployment trust
fund (!1) established by section 1104 of this title; and
(5) Expenditure of all money withdrawn from an unemployment
fund of such State, in the payment of unemployment compensation,
exclusive of expenses of administration, and for refunds of sums
erroneously paid into such fund and refunds paid in accordance
with the provisions of section 3305(b) of the Federal
Unemployment Tax Act [26 U.S.C. 3305(b)]: Provided, That an
amount equal to the amount of employee payments into the
unemployment fund of a State may be used in the payment of cash
benefits to individuals with respect to their disability,
exclusive of expenses of administration: Provided further, That
the amounts specified by section 1103(c)(2) or 1103(d)(4) of this
title may, subject to the conditions prescribed in such section,
be used for expenses incurred by the State for administration of
its unemployment compensation law and public employment offices:
Provided further, That nothing in this paragraph shall be
construed to prohibit deducting an amount from unemployment
compensation otherwise payable to an individual and using the
amount so deducted to pay for health insurance, or the
withholding of Federal, State, or local individual income tax, if
the individual elected to have such deduction made and such
deduction was made under a program approved by the Secretary of
Labor: Provided further, That amounts may be deducted from
unemployment benefits and used to repay overpayments as provided
in subsection (g) of this section: Provided further, That amounts
may be withdrawn for the payment of short-time compensation under
a plan approved by the Secretary of Labor: Provided further, That
amounts may be withdrawn for the payment of allowances under a
self-employment assistance program (as defined in section 3306(t)
of the Internal Revenue Code of 1986 [26 U.S.C. 3306(t)]); and
(6) The making of such reports, in such form and containing
such information, as the Secretary of Labor may from time to time
require, and compliance with such provisions as the Secretary of
Labor may from time to time find necessary to assure the
correctness and verification of such reports; and
(7) Making available upon request to any agency of the United
States charged with the administration of public works or
assistance through public employment, the name, address, ordinary
occupation and employment status of each recipient of
unemployment compensation, and a statement of such recipient's
rights to further compensation under such law; and
(8) Effective July 1, 1941, the expenditure of all moneys
received pursuant to section 502 of this title solely for the
purposes and in the amounts found necessary by the Secretary of
Labor for the proper and efficient administration of such State
law; and
(9) Effective July 1, 1941, the replacement, within a
reasonable time, of any moneys received pursuant to section 502
of this title, which, because of any action or contingency, have
been lost or have been expended for purposes other than, or in
amounts in excess of, those found necessary by the Secretary of
Labor for the proper administration of such State law; and
(10) A requirement that, as a condition of eligibility for
regular compensation for any week, any claimant who has been
referred to reemployment services pursuant to the profiling
system under subsection (j)(1)(B) of this section participate in
such services or in similar services unless the State agency
charged with the administration of the State law determines -
(A) such claimant has completed such services; or
(B) there is justifiable cause for such claimant's failure to
participate in such services.
(b) Failure to comply; payments stopped
Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that in the administration
of the law there is -
(1) a denial, in a substantial number of cases, of unemployment
compensation to individuals entitled thereto under such law; or
(2) a failure to comply substantially with any provision
specified in subsection (a) of this section;
the Secretary of Labor shall notify such State agency that further
payments will not be made to the State until the Secretary of Labor
is satisfied that there is no longer any such denial or failure to
comply. Until he is so satisfied he shall make no further
certification to the Secretary of the Treasury with respect to such
State: Provided, That there shall be no finding under clause (1)
until the question of entitlement shall have been decided by the
highest judicial authority given jurisdiction under such State law:
Provided further, That any costs may be paid with respect to any
claimant by a State and included as costs of administration of its
law.
(c) Denial of certification; availability of records to Railroad
Retirement Board; cooperation with Federal agencies
The Secretary of Labor shall make no certification for payment to
any State if he finds, after reasonable notice and opportunity for
hearing to the State agency charged with the administration of the
State law -
(1) that such State does not make its records available to the
Railroad Retirement Board, and furnish to the Railroad Retirement
Board at the expense of the Railroad Retirement Board such copies
thereof as the Railroad Retirement Board deems necessary for its
purposes;
(2) that such State is failing to afford reasonable cooperation
with every agency of the United States charged with the
administration of any unemployment insurance law; or
(3) that any interest required to be paid on advances under
subchapter XII of this chapter has not been paid by the date on
which such interest is required to be paid or has been paid
directly or indirectly (by an equivalent reduction in State
unemployment taxes or otherwise) by such State from amounts in
such State's unemployment fund, until such interest is properly
paid.
(d) Disclosure of unemployment compensation information; deduction
and withholding of amounts owed to State food stamp agencies;
reimbursement of administrative costs; non-compliance of State
agency
(1) The State agency charged with the administration of the State
law -
(A) shall disclose, upon request and on a reimbursable basis,
to officers and employees of the Department of Agriculture and to
officers or employees of any State food stamp agency any of the
following information contained in the records of such State
agency -
(i) wage information,
(ii) whether an individual is receiving, has received, or has
made application for, unemployment compensation, and the amount
of any such compensation being received (or to be received) by
such individual,
(iii) the current (or most recent) home address of such
individual, and
(iv) whether an individual has refused an offer of employment
and, if so, a description of the employment so offered and the
terms, conditions, and rate of pay therefor, and
(B) shall establish such safeguards as are necessary (as
determined by the Secretary of Labor in regulations) to insure
that information disclosed under subparagraph (A) is used only
for purposes of determining an individual's eligibility for
benefits, or the amount of benefits, under the food stamp program
established under the Food Stamp Act of 1977 [7 U.S.C. 2011 et
seq.].
(2)(A) For purposes of this paragraph, the term "unemployment
compensation" means any unemployment compensation payable under the
State law (including amounts payable pursuant to an agreement under
a Federal unemployment compensation law).
(B) The State agency charged with the administration of the State
law -
(i) may require each new applicant for unemployment
compensation to disclose whether the applicant owes an
uncollected overissuance (as defined in section 13(c)(1) of the
Food Stamp Act of 1977 [7 U.S.C. 2022(c)(1)]) of food stamp
coupons,
(ii) may notify the State food stamp agency to which the
uncollected overissuance is owed that the applicant has been
determined to be eligible for unemployment compensation if the
applicant discloses under clause (i) that the applicant owes an
uncollected overissuance and the applicant is determined to be so
eligible,
(iii) may deduct and withhold from any unemployment
compensation otherwise payable to an individual -
(I) the amount specified by the individual to the State
agency to be deducted and withheld under this clause,
(II) the amount (if any) determined pursuant to an agreement
submitted to the State food stamp agency under section
13(c)(3)(A) of the Food Stamp Act of 1977 [7 U.S.C.
2022(c)(3)(A)], or
(III) any amount otherwise required to be deducted and
withheld from the unemployment compensation pursuant to section
13(c)(3)(B) of such Act [7 U.S.C. 2022(c)(3)(B)], and
(iv) shall pay any amount deducted and withheld under clause
(iii) to the appropriate State food stamp agency.
(C) Any amount deducted and withheld under subparagraph (B)(iii)
shall for all purposes be treated as if it were paid to the
individual as unemployment compensation and paid by the individual
to the State food stamp agency to which the uncollected
overissuance is owed as repayment of the individual's uncollected
overissuance.
(D) A State food stamp agency to which an uncollected
overissuance is owed shall reimburse the State agency charged with
the administration of the State unemployment compensation law for
the administrative costs incurred by the State agency under this
paragraph that are attributable to repayment of uncollected
overissuance to the State food stamp agency to which the
uncollected overissuance is owed.
(3) Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that there is a failure to
comply substantially with the requirements of paragraph (1), the
Secretary of Labor shall notify such State agency that further
payments will not be made to the State until he is satisfied that
there is no longer any such failure. Until the Secretary of Labor
is so satisfied, he shall make no further certification to the
Secretary of the Treasury with respect to such State.
(4) For purposes of this subsection, the term "State food stamp
agency" means any agency described in section 3(n)(1) of the Food
Stamp Act of 1977 [7 U.S.C. 2012(n)(1)] which administers the food
stamp program established under such Act.
(e) Disclosure of wage information; non-compliance of State agency
(1) The State agency charged with the administration of the State
law -
(A) shall disclose, upon request and on a reimbursable basis,
directly to officers or employees of any State or local child
support enforcement agency any wage information contained in the
records of such State agency, and
(B) shall establish such safeguards as are necessary (as
determined by the Secretary of Labor in regulations) to insure
that information disclosed under subparagraph (A) is used only
for purposes of establishing and collecting child support
obligations from, and locating, individuals owing such
obligations.
For purposes of this subsection, the term "child support
obligations" only includes obligations which are being enforced
pursuant to a plan described in section 654 of this title which has
been approved by the Secretary of Health and Human Services under
part D of subchapter IV of this chapter.
(2)(A) The State agency charged with the administration of the
State law -
(i) shall require each new applicant for unemployment
compensation to disclose whether or not such applicant owes child
support obligations (as defined in the last sentence of paragraph
(1)),
(ii) shall notify the State or local child support enforcement
agency enforcing such obligations, if any applicant discloses
under clause (i) that he owes child support obligations and he is
determined to be eligible for unemployment compensation, that
such applicant has been so determined to be eligible,
(iii) shall deduct and withhold from any unemployment
compensation otherwise payable to an individual -
(I) the amount specified by the individual to the State
agency to be deducted and withheld under this clause,
(II) the amount (if any) determined pursuant to an agreement
submitted to the State agency under section 654(19)(B)(i) of
this title, or
(III) any amount otherwise required to be so deducted and
withheld from such unemployment compensation through legal
process (as defined in section 662(e) (!2) of this title), and
(iv) shall pay any amount deducted and withheld under clause
(iii) to the appropriate State or local child support enforcement
agency.
Any amount deducted and withheld under clause (iii) shall for all
purposes be treated as if it were paid to the individual as
unemployment compensation and paid by such individual to the State
or local child support enforcement agency in satisfaction of his
child support obligations.
(B) For purposes of this paragraph, the term "unemployment
compensation" means any compensation payable under the State law
(including amounts payable pursuant to agreements under any Federal
unemployment compensation law).
(C) Each State or local child support enforcement agency shall
reimburse the State agency charged with the administration of the
State unemployment compensation law for the administrative costs
incurred by such State agency under this paragraph which are
attributable to child support obligations being enforced by the
State or local child support enforcement agency.
(3) Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that there is a failure to
comply substantially with the requirements of paragraph (1) or (2),
the Secretary of Labor shall notify such State agency that further
payments will not be made to the State until he is satisfied that
there is no longer any such failure. Until the Secretary of Labor
is so satisfied, he shall make no further certification to the
Secretary of the Treasury with respect to such State.
(4) For purposes of this subsection, the term "State or local
child support enforcement agency" means any agency of a State or
political subdivision thereof operating pursuant to a plan
described in the last sentence of paragraph (1).
(5) A State or local child support enforcement agency may
disclose to any agent of the agency that is under contract with the
agency to carry out the purposes described in paragraph (1)(B) wage
information that is disclosed to an officer or employee of the
agency under paragraph (1)(A). Any agent of a State or local child
support agency that receives wage information under this paragraph
shall comply with the safeguards established pursuant to paragraph
(1)(B).
(f) Income and eligibility verification system
The State agency charged with the administration of the State law
shall provide that information shall be requested and exchanged for
purposes of income and eligibility verification in accordance with
a State system which meets the requirements of section 1320b-7 of
this title.
(g) Recovery of unemployment benefit payments
(1) A State may deduct from unemployment benefits otherwise
payable to an individual an amount equal to any overpayment made to
such individual under an unemployment benefit program of the United
States or of any other State, and not previously recovered. The
amount so deducted shall be paid to the jurisdiction under whose
program such overpayment was made. Any such deduction shall be made
only in accordance with the same procedures relating to notice and
opportunity for a hearing as apply to the recovery of overpayments
of regular unemployment compensation paid by such State.
(2) Any State may enter into an agreement with the Secretary of
Labor under which -
(A) the State agrees to recover from unemployment benefits
otherwise payable to an individual by such State any overpayments
made under an unemployment benefit program of the United States
to such individual and not previously recovered, in accordance
with paragraph (1), and to pay such amounts recovered to the
United States for credit to the appropriate account, and
(B) the United States agrees to allow the State to recover from
unemployment benefits otherwise payable to an individual under an
unemployment benefit program of the United States any
overpayments made by such State to such individual under a State
unemployment benefit program and not previously recovered, in
accordance with the same procedures as apply under paragraph (1).
(3) For purposes of this subsection, "unemployment benefits"
means unemployment compensation, trade adjustment allowances, and
other unemployment assistance.
(h) Disclosure to Secretary of Health and Human Services of wage
and unemployment compensation claims information; suspension by
Secretary of Labor of payments to State for noncompliance
(1) The State agency charged with the administration of the State
law shall, on a reimbursable basis -
(A) disclose quarterly, to the Secretary of Health and Human
Services, wage and claim information, as required pursuant to
section 653(i)(1) of this title, contained in the records of such
agency;
(B) ensure that information provided pursuant to subparagraph
(A) meets such standards relating to correctness and verification
as the Secretary of Health and Human Services, with the
concurrence of the Secretary of Labor, may find necessary; and
(C) establish such safeguards as the Secretary of Labor
determines are necessary to insure that information disclosed
under subparagraph (A) is used only for purposes of subsections
(i)(1), (i)(3), and (j) of section 653 of this title.
(2) Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that there is a failure to
comply substantially with the requirements of paragraph (1), the
Secretary of Labor shall notify such State agency that further
payments 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 Secretary shall make no
future certification to the Secretary of the Treasury with respect
to the State.
(3) For purposes of this subsection -
(A) the term "wage information" means information regarding
wages paid to an individual, the social security account number
of such individual, and the name, address, State, and the Federal
employer identification number of the employer paying such wages
to such individual; and
(B) the term "claim information" means information regarding
whether an individual is receiving, has received, or has made
application for, unemployment compensation, the amount of any
such compensation being received (or to be received by such
individual), and the individual's current (or most recent) home
address.
(i) Access to State employment records
(1) The State agency charged with the administration of the State
law -
(A) shall disclose, upon request and on a reimbursable basis,
only to officers and employees of the Department of Housing and
Urban Development and to representatives of a public housing
agency, any of the following information contained in the records
of such State agency with respect to individuals applying for or
participating in any housing assistance program administered by
the Department who have signed an appropriate consent form
approved by the Secretary of Housing and Urban Development -
(i) wage information, and
(ii) whether an individual is receiving, has received, or has
made application for, unemployment compensation, and the amount
of any such compensation being received (or to be received) by
such individual, and
(B) shall establish such safeguards as are necessary (as
determined by the Secretary of Labor in regulations) to ensure
that information disclosed under subparagraph (A) is used only
for purposes of determining an individual's eligibility for
benefits, or the amount of benefits, under a housing assistance
program of the Department of Housing and Urban Development.
(2) The Secretary of Labor shall prescribe regulations governing
how often and in what form information may be disclosed under
paragraph (1)(A).
(3) Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that there is a failure to
comply substantially with the requirements of paragraph (1), the
Secretary of Labor shall notify such State agency that further
payments will not be made to the State until he or she is satisfied
that there is no longer any such failure. Until the Secretary of
Labor is so satisfied, he or she shall make no future certification
to the Secretary of the Treasury with respect to such State.
(4) For purposes of this subsection, the term "public housing
agency" means any agency described in section 1437a(b)(6) of this
title.
(j) Worker profiling
(1) The State agency charged with the administration of the State
law shall establish and utilize a system of profiling all new
claimants for regular compensation that -
(A) identifies which claimants will be likely to exhaust
regular compensation and will need job search assistance services
to make a successful transition to new employment;
(B) refers claimants identified pursuant to subparagraph (A) to
reemployment services, such as job search assistance services,
available under any State or Federal law;
(C) collects follow-up information relating to the services
received by such claimants and the employment outcomes for such
claimants subsequent to receiving such services and utilizes such
information in making identifications pursuant to subparagraph
(A); and
(D) meets such other requirements as the Secretary of Labor
determines are appropriate.
(2) Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that there is a failure to
comply substantially with the requirements of paragraph (1), the
Secretary of Labor shall notify such State agency that further
payments will not be made to the State until he is satisfied that
there is no longer any such failure. Until the Secretary of Labor
is so satisfied, he shall make no further certification to the
Secretary of the Treasury with respect to such State.
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