Labor & Employment Law Daily Proposed DOL rule would broaden states’ right to drug test unemployment comp recipients
Tuesday, November 6, 2018

Proposed DOL rule would broaden states’ right to drug test unemployment comp recipients

In a proposed rule published in the November 5, 2018, Federal Register, the Department of Labor would allow state unemployment compensation programs greater flexibility in outlining which recipients could be subjected to drug-testing. The proposed rule replaces an Obama-era DOL rule that outlines specific occupations for which drug-testing would be permissible. President Trump had signed a resolution of disapproval under the Congressional Review Act (CRA) scrapping that measure, tasking the DOL to come up with a replacement that substantially differed in scope, one not “substantially the same” as the old rule.

With wide latitude afforded state agencies, the new proposed rule, 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, is supposed to do just that.

The notice of proposed rulemaking sets forth the proposal by the DOL’s Employment and Training Administration (ETA) to permit states to drug test unemployment compensation applicants, including a proposed list of occupations that the DOL has determined regularly conduct drug testing.

2012 eligibility requirements. In 2012, President Obama signed the Middle Class Tax Relief and Job Creation Act of 2012, which permitted states to enact legislation to require drug testing of unemployment applicants as a condition of eligibility. However, that permission was granted only under two specific circumstances: (1) if the applicant was terminated from employment with the applicant’s most recent employer because of the unlawful use of a controlled substance; (2) if the only available suitable work (as defined in the law of the state providing the unemployment compensation) for an individual is “in an occupation that regularly conducts drug testing (as determined under regulations issued by the Secretary of Labor). Under the measure, states were not required to drug test in either circumstance; the law merely made it permissible for states to enact legislation to do so under these two circumstances—and to deny unemployment benefits to applicants who tests positive for drug use under either of these circumstances.

2016 occupations that “regularly conduct drug testing.” In October 2014, the ETA published a proposed rule determining occupations that regularly conduct drug testing. After reviewing comments received, the proposed rule was modified and a final rule was published on August 1, 2016, identifying each occupation “that regularly conducts drug testing.” The rule became effective on September 30, 2016. The 2016 rule 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 any occupation specifically identified in a state or federal law as requiring an employee to be tested for controlled substances. At the same time, the ETA issued guidance to states, in the form of Unemployment Insurance Program Letter No. 01-15, to address other issues related to the implementation of drug testing.

Trump scraps 2016 rule. On March 31, 2017, President Trump signed a resolution of disapproval, precluding the rule from taking effect. Because the statute itself was not repealed or amended following the resolution of disapproval, however, it continues to require the Labor Secretary to issue regulations to enable the determination of occupations in which drug testing regularly occurs. However, the CRA prohibits the DOL from reissuing the rule “in substantially the same form” or issuing “a new rule that is substantially the same” as the old rule. Consequently, the agency was required to issue regulations to enable the determination of occupations in which drug testing regularly occurs, and to do so in a manner that was substantially different than the prior rule.

In the DOL’s view, the newly proposed 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.”

Far more applicants may be tested. Accordingly, this rulemaking proposes a substantially different regulation—and offers a more flexible approach to the statutory requirements than the 2016 rule. In short, it allows states to enact legislation to require drug testing for a far larger group of unemployment compensation applicants than the previous rule permitted. According to the NPRM, this more flexible approach “is intended to respect the diversity of States’ economies and the different roles played by employment drug testing in those economies.”

Flexible standard. The DOL said that imposing a uniform, “one-size-fits-all” federal rule may not effectuate the intent of Congress to allow states to permit drug testing “when the only suitable work for an applicant is in an occupation that regularly conducts such tests.” The NPRM notes that: “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.” Therefore, the proposed rule lays out a flexible standard, one that states “can individually meet under the facts of their specific economies and practices.”

The agency is seeking public comments, which must be submitted in writing on or before 60 days after the date of publication in the Federal Register.

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