Proposed Rule2026-22903
Unemployment Insurance Program National Minimum Weekly Work Search Requirements
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Published
November 10, 2026
Issuing agencies
Labor DepartmentEmployment and Training Administration
Abstract
The U.S. Department of Labor (Department), through the Employment and Training Administration (ETA), is proposing to amend 20 CFR part 604 both to reflect a 2012 update in Federal law in which Congress, by amending section 303(a) of the Social Security Act (SSA), established a Federal work search requirement; and to establish a national minimum weekly work search requirement standard for the Federal-State unemployment compensation (UC) program. This proposed rule would mandate, among other things, that States require individuals claiming UC to complete at least five qualifying work search activities or, where applicable, meet State-adopted points-based system requirements amounting to five qualifying activities or satisfy equivalent labor force attachment criteria, each week for which UC is claimed; that individuals report their work search activities as part of their certification process prior to payment being issued; and that State law allow for certain qualifying work search activities beyond simply employer contacts. This action is necessary to reduce inconsistencies beyond those created by local labor markets in State- level requirements for individuals to actively seek work. The intended effect is to hold States accountable for administering a UC program that provides temporary wage replacement to eligible individuals while they are actively seeking work through a meaningful engagement with the labor market.
Full Text
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<title>Federal Register, Volume 91 Issue 216 (Tuesday, November 10, 2026)</title>
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[Federal Register Volume 91, Number 216 (Tuesday, November 10, 2026)]
[Proposed Rules]
[Pages 72472-72493]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22903]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 604
[Docket No. ETA-2026-0100]
RIN 1205-AC31
Unemployment Insurance Program National Minimum Weekly Work
Search Requirements
AGENCY: Employment and Training Administration, Labor.
ACTION: Proposed rule, request for comment.
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SUMMARY: The U.S. Department of Labor (Department), through the
Employment and Training Administration (ETA), is proposing to amend 20
CFR part 604 both to reflect a 2012 update in Federal law in which
Congress, by amending section 303(a) of the Social Security Act (SSA),
established a Federal work search requirement; and to establish a
national minimum weekly work search requirement standard for the
Federal-State unemployment compensation (UC) program. This proposed
rule would mandate, among other things, that States require individuals
claiming UC to complete at least five qualifying work search activities
or, where applicable, meet State-adopted points-based system
requirements amounting to five qualifying activities or satisfy
equivalent labor force attachment criteria, each week for which UC is
claimed; that individuals report their work search activities as part
of their certification process prior to payment being issued; and that
State law allow for certain qualifying work search activities beyond
simply employer contacts. This action is necessary to reduce
inconsistencies beyond those created by local labor markets in State-
level requirements for individuals to actively seek work. The intended
effect is to hold States accountable for administering a UC program
that provides temporary wage replacement to eligible individuals while
they are actively seeking work through a meaningful engagement with the
labor market.
DATES: Interested persons are invited to submit written comments on
this notice of proposed rulemaking (NPRM or proposed rule) on or before
January 11, 2027.
ADDRESSES: You may submit comments electronically by the following
method:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Search for docket number ETA-2026-0100 or RIN 1205-AC31, open the
proposed rule,
[[Page 72473]]
select the ``Comment'' option, and follow the instructions for
submitting comments.
Instructions: Include the agency name, docket number ETA-2026-0100,
and RIN 1205-AC31 in your comment.
Please be advised that the Department will post comments received
that relate to this proposed rule to <a href="https://www.regulations.gov">https://www.regulations.gov</a>,
including any personal information provided. All comments posted to
<a href="https://www.regulations.gov">https://www.regulations.gov</a> 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 or 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 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 content, or otherwise inappropriate
comments, including those that contain obscene, indecent, or profane
language; comments that contain threats or defamatory statements; or
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.
Docket: For access to the docket to read background documents,
comments received, or the plain-language summary (of not more than 100
words in length) of the proposed rule required by the Providing
Accountability Through Transparency Act of 2023, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> (search using docket number ETA-2026-0100 or RIN
1205-AC31). If you need assistance to review the comments, contact the
Office of Policy Development and Research at 202-693-3637 (this is not
a toll-free number).
FOR FURTHER INFORMATION CONTACT: Luke Murren, Acting 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; email: <a href="/cdn-cgi/l/email-protection#bdf0c8cfcfd8d393f1c8d6d8fdd9d2d193dad2cb"><span class="__cf_email__" data-cfemail="ca87bfb8b8afa4e486bfa1af8aaea5a6e4ada5bc">[email protected]</span></a>, 202-693-
4711.
SUPPLEMENTARY INFORMATION:
Preamble Table of Contents
I. Acronyms and Abbreviations
II. Executive Summary
Purpose of the Rule and Summary of the Rule's Major Provisions
III. Background
A. Need for Rulemaking
B. Statutory and Regulatory History and Authority
IV. Section-by-Section Discussion of the Proposed Changes
A. Proposed Changes to Sec. Sec. 604.1, 604.2, and 604.5
B. Section 604.6 Work Search Requirement
C. Paragraph 604.6(a) In General
D. Paragraph 604.6(b) Work Search Requirement
E. Paragraph 604.6(c) Minimum Number of Work Search Activities
F. Paragraph 604.6(d) Work Search Activity Reporting
G. Paragraph 604.6(e) Work Search Activity
H. Paragraph 604.6(f) Points-Based System
I. Paragraph 604.6(g) Equivalent Labor Force Attachment
J. Paragraph 604.6(h) Notification Requirements
K. Paragraph 604.6(i) Prohibition on Formal and Informal
Warnings
L. Section 604.7 Conformity and Substantial Compliance
V. Regulatory Analysis and Review
A. Executive Orders 12866 (Regulatory Planning and Review),
13563 (Improving Regulation and Regulatory Review), and 14192
(Unleashing Prosperity Through Deregulation)
B. Review Under the Regulatory Flexibility Act
C. Paperwork Reduction Act of 1995
D. Executive Order 13132 (Federalism)
E. Unfunded Mandates Reform Act of 1995
F. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
I. Acronyms and Abbreviations
2012 Act Middle Class Tax Relief and Job Creation Act of 2012
A&A able and available (for work)
BAM Benefit Accuracy Measurement
BLS U.S. Bureau of Labor Statistics
CFR Code of Federal Regulations
Department U.S. Department of Labor
E.O. Executive Order
ETA Employment and Training Administration
EUCA Federal-State Extended Unemployment Compensation Act of 1970
FR Federal Register
FY Fiscal Year
IT information technology
NPRM or proposed rule notice of proposed rulemaking
OIRA Office of Information and Regulatory Affairs
OMB Office of Management and Budget
PRA Paperwork Reduction Act of 1995
Pub. L. Public Law
RESEA Reemployment Services and Eligibility Assessment
RFA Regulatory Flexibility Act
RIN Regulatory Identification Number
SEA Self-Employment Assistance
Secretary U.S. Secretary of Labor
SOC Standard Occupational Classification
SSA Social Security Act
STC Short-Time Compensation
TEGL Training and Employment Guidance Letter
TEN Training and Employment Notice
UC unemployment compensation
UIPL Unemployment Insurance Program Letter
UMRA Unfunded Mandates Reform Act of 1995
U.S.C. United States Code
II. Executive Summary
Purpose of the Rule and Summary of the Rule's Major Provisions
In 2012, Congress amended the SSA at section 303(a) to require that
an individual must be actively seeking work to be eligible for UC.
However, implementation across States of the requirement to actively
seek work has demonstrated inconsistencies in expectations for
individuals receiving UC. This rule will operationalize the statutory
requirement at section 303(a)(12) of the SSA that States require that,
to be eligible for UC, individuals are able to work, available to work,
and are actively seeking work for each week that benefits are claimed.
To implement the statutory changes, the Department is proposing
this rule, which would establish a national minimum weekly work search
standard for the UC program. This proposed regulation would establish
that:
<bullet> State law must require individuals to complete a minimum
of five qualifying work search activities or, where applicable as
defined later in this preamble, meet State-adopted points-based system
requirements amounting to five qualifying activities or satisfy
equivalent labor force attachment criteria, each week for which UC is
claimed. Circumstances under which individuals may be deemed to have
met the minimum work search requirement are when work search activities
would not serve to promote labor force attachment, when the timing of
an initial claim does not provide time to complete the minimum number
of work search activities, or when there are other limited extenuating
circumstances that would preclude an individual from meeting the
minimum number of work search activities in a week.
<bullet> State law must require individuals to report work search
activity as part of the continued claim certification process prior to
payment being released.
<bullet> State law must allow for certain qualifying work search
activities beyond simply employer contacts, to include registration and
ongoing contact with placement agencies or unions for the purposes of
seeking employment. States may designate additional activities as
satisfying the requirement as enumerated in the proposed text. These
[[Page 72474]]
examples are illustrative, non-exhaustive, and include qualifying
activities that are reasonably calculated to lead to reemployment.
These standards codify and provide consistency across the UC system
for best practices and standards that the Department has previously
placed in subregulatory guidance. The proposed rule also would:
<bullet> Require States to provide notice to individuals regarding
the applicable work search requirements; and
<bullet> Prohibit States from giving formal or informal warnings to
individuals who fail to complete the required work search activities
for each benefit week claimed, in lieu of determining their
ineligibility.
Under the proposed framework, States would have latitude to adapt
the work search requirement to labor market conditions by adopting a
points-based system for satisfying the minimum weekly work search
requirement. Under such a system, States may assign point values to
qualifying work search activities and require individuals to accumulate
a minimum of five points per benefit week.
The proposed rule would not require a specific reporting method,
form, or questions. States could continue to accept work search
activity reporting using existing reporting methods within their
systems, provided the work search activities are reported for each
benefit week claimed and before payment is issued. States will continue
to follow their existing UC record retention policies, as required in
20 CFR part 604, with respect to work search activity reported data.
Additionally, the proposed rule does not mandate how States verify
reported work search activities, the frequency or scope of audits, or
the adjudication procedures applied when an individual fails to
complete or report the required work search activities or fails to
demonstrate equivalent labor force attachment. These operational and
enforcement decisions would remain within the discretion of States,
consistent with applicable Federal law.
The Department acknowledges that these proposed provisions could
temporarily increase the UC program's estimated improper payment rate
as States and individuals adapt to the new requirements and asserts
that such risk is necessary to ensure the UC system is effectively
meeting its mission of providing temporary assistance to eligible
individuals while they become reemployed.
III. Background
To qualify for UC, an individual must have demonstrated recent
attachment to the labor market and be unemployed through no fault of
their own. As such, they have also demonstrated skills that enabled
them to maintain employment, though such skills may be dated or no
longer relevant to the labor market within which they are seeking work.
The UC system plays a critical role in connecting these recently
unemployed individuals with tools and resources and jobs to become
reemployed. State work search requirements must recognize the
individual within this context and allow for a broad array of
activities to connect the individual with the broader workforce system.
Eligibility for UC is determined on a week-to-week basis. Once an
individual files their initial claim for UC, they are required to
submit continued claim certifications for confirmation of their
continued eligibility. Most States require such certification on a
weekly basis and some States provide for submission on a biweekly
basis, though this still requires that the individual confirm their
continued eligibility for each separate week within the biweekly
period.
States currently implement the Federal ``actively seeking work''
requirement under section 303(a)(12) of the SSA using a wide range of
inconsistent work search standards. A comparative compilation of State
UC laws shows that minimum required weekly work search activities vary
substantially across States, including numeric requirements,
qualitative standards (e.g., ``quality not quantity''), and
circumstances in which the number of required activities is unspecified
or varies based on labor market, individual circumstances, or policy
preferences.\1\ Policy preferences also vary by State in whether they
are set by the State UC agency, Governor's office, or State
legislature.
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\1\ U.S. Department of Labor, ``Comparison of State Unemployment
Insurance Laws'' (2023), Chapter 5, Nonmonetary Eligibility, Table
5-14, Work Search Requirements, <a href="https://oui.doleta.gov/unemploy/pdf/uilawcompar/2023/complete.pdf">https://oui.doleta.gov/unemploy/pdf/uilawcompar/2023/complete.pdf</a>.
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Across States, acceptable work search activities are typically
defined broadly and may include, among other actions: direct employer
contacts and employment applications; resume creation or updates; use
of online job search tools and job matching systems; participation in
American Job Center services and workshops; job fairs and recruitment
events attendance; and other activities reasonably calculated to lead
to reemployment. In many States, contact with an individual's union is
also an acceptable work search activity.
States monitor compliance with work search requirements through
multiple channels, including program integrity sampling (e.g., Benefit
Accuracy Measurement (BAM)) and reemployment engagement processes
(e.g., Reemployment Services and Eligibility Assessment (RESEA)). Many
States also conduct eligibility reviews, random or targeted audits,
interviews, or other State-defined checks.
The proposed rule would not require a specific reporting method.
States could continue to accept work search activity reporting using
existing reporting methods within their systems, provided the work
search activities are reported for each benefit week claimed and before
payment is issued. Additionally, the proposed rule does not mandate how
States verify reported work search activities, the frequency or scope
of audits, or the adjudication procedures applied when an individual
fails to meet a work search requirement. These operational and
enforcement decisions would remain within the discretion of States,
consistent with applicable Federal law.
A. Need for Rulemaking
Federal law requires individuals receiving UC to be able to work,
available to work, and actively seeking work as a condition of
eligibility. Section 303(a)(12) of the SSA (42 U.S.C. 503(a)(12)).
States have developed differing standards to enforce this requirement
that speak to both the number and type of required activities, as well
as the frequency and methods of reporting them. States range from
simply requiring an affirmative statement of conducting work search
activities to requiring upwards of five activities in any given week.
States also vary in what they consider to be a qualifying activity.
As of January 1, 2025, a few States already generally require five
work search activities per week, a few States generally require four
work search activities per week, nearly one-half of States generally
require three work search activities per week, some States generally
require two work search activities per week, and the remaining States
generally require one work search activity per week.
These inconsistencies can create confusion for individuals, lead to
uneven enforcement when allowable activities are not clearly defined,
and increase the likelihood that otherwise eligible individuals may
fail to meet requirements simply because expectations are unclear.
Additionally,
[[Page 72475]]
variability in how States notify individuals of work search
requirements can result in individuals engaging in activities that may
not support reemployment or may not satisfy the State's rules.
Despite the issuance of guidance and model legislation, work search
errors continue to be one of the primary drivers of improper payment
rates across the UC system and the UC improper payment rate remains
above the 10-percent performance target established by the Payment
Integrity Information Act (31 U.S.C. 3351-3358). Significant
improvement was made in addressing work search errors in the year
leading up to the March 2020 start of the pandemic. However, Congress
enacted legislation to temporarily waive the work search requirement
during the pandemic; once reinstated, work search errors again
increased significantly. This proposed rule would specifically increase
program integrity by requiring individuals claiming UC to report their
work search activities prior to the payment of benefits, and by
establishing consistency in the way that States apply equivalent labor
force attachment.
Given these challenges, this proposed rule would establish a
national minimum weekly work search standard that provides a clear and
consistent expectation for individuals to be ``actively seeking work''
across the Federal-State UC program. The proposed approach supports
meaningful engagement with the labor market and reflects modern job
search practices, which can involve multi-day or clustered activities
such as interviews, job fairs, or assessments. By requiring individuals
to complete at least five weekly work search activities--with limited
and specified exceptions--and to report such activities prior to
issuing payment, the proposed rule would improve program integrity and
strengthen labor market attachment. The proposed rule also supports an
assurance that individuals are informed of the requirements and have
access to a broader set of qualifying activities.
In drafting this proposed regulation, the Department is also
addressing the risk of prolonged unemployment due to an insufficient
search for work, a risk that may arise from a potential moral hazard
\2\ associated with UC. UC provides temporary partial wage replacement
and, by replacing a portion of lost wages, reduces some of the
immediate financial cost of continued unemployment, which may
marginally reduce the financial incentive to search for or accept
suitable work.
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\2\ Merriam-Webster defines ``moral hazard'' as ``a situation in
which a party is incentivized to risk causing harm because another
party is obligated to remedy the consequences of the harm caused.''
See <a href="https://www.merriam-webster.com/dictionary/moral%20hazard">https://www.merriam-webster.com/dictionary/moral%20hazard</a> (last
accessed Aug. 21, 2026).
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The proposed rule would help address this risk by establishing a
clear national minimum weekly work search requirement and requiring
individuals to report qualifying work search activities as part of the
continued claim certification process before payment is issued.
Requiring activities that are specific, identifiable, and reasonably
calculated to lead to reemployment would help unemployed individuals
find work more quickly. Conditioning eligibility for a claimed week on
satisfaction of the applicable work search requirement would also
strengthen the incentive for individuals claiming UC to remain
meaningfully engaged with the labor market, thus helping them return to
work faster. The reporting requirements in the proposed regulation
would provide States with contemporaneous information regarding
compliance and a record that States can use for eligibility reviews,
audits, and other program integrity activities.
The Department expects that establishing a national minimum weekly
work search standard as proposed would also result in a reduction in
the duration of unemployment because individuals would obtain
reemployment more quickly. A randomized controlled trial by Lachowska,
Meral, and Woodbury (2016) examined the long-term effects of more
stringent work search requirements on individuals claiming UC in
Washington State over a 9-year follow-up period. The study found that
individuals subject to more intensive work search requirements exited
the UC program sooner and experienced higher employment rates in the
year following their claims. Specifically, individuals with standard or
modified work tests received approximately $429-$484 (1986 and 1987
nominal dollars) less in UC and experienced roughly 3 fewer weeks of
benefit receipt compared with individuals who were not subject to work
test requirements.\3\
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\3\ Marta Lachowska, Merve Meral, and Stephen A. Woodbury,
``Effects of the Unemployment Insurance Work Test on Long-Term
Employment Outcomes'' (2016), Labour Economics, vol. 41, pp. 246-
265.
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B. Statutory and Regulatory History and Authority
Statutory and Regulatory History
Section 303 of the SSA (42 U.S.C. 503) provides that specific
conditions must be included under State UC law for the State to be
certified by the U.S. Secretary of Labor (Secretary) to receive Federal
administrative grants (42 U.S.C. 502(a)), including requirements
related to eligibility conditions and methods of administration. Under
42 U.S.C. 1302(a) the Secretary has authority to promulgate regulations
that are ``necessary to the efficient administration of the functions''
the Secretary is responsible for under chapter 7 of the SSA, which
includes title III (42 U.S.C. 501 et seq.).
The Department and its predecessors have consistently interpreted
provisions of Federal UC law to require that individuals be able and
available (A&A) for work. This longstanding interpretation was codified
on January 16, 2007, when the Department issued a final rule, set forth
at 20 CFR part 604 (72 FR 1890) (Part 604 Final Rule). Based on the
Federal statutory authority in place at that time, the Part 604 Final
Rule provided that an active work search provision was not required,
although a State could require an individual to actively seek work as
part of the requirement to be available for work or could impose a
separate State law requirement that the individual must actively seek
work as a condition of weekly eligibility.
The Department's July 22, 2005, proposed rule (70 FR 42474)
preceding the Part 604 Final Rule also noted that almost every State
had an active work search requirement (70 FR 42479). In the Part 604
Final Rule, when addressing public comments submitted regarding work
search, the Department expressed agreement as a policy matter that
States should require an active work search but explained that a
Federal ``work search requirement would need to be legislated by
Congress'' (72 FR 1891).
On February 22, 2012, the Middle Class Tax Relief and Job Creation
Act of 2012 (2012 Act), Public Law 112-96, was signed into law. Title
II of the 2012 Act amended section 303(a) of the SSA to add a new
paragraph (12), which specifies that a State must require, as a
condition of eligibility for regular compensation, that ``a claimant
must be able to work, available to work, and actively seeking work,''
thereby establishing a Federal work search requirement.
Passage of the 2012 Act both established the Federal mandate that
States require individuals to actively search for work as a condition
of UC eligibility and directly set out the Federal A&A requirement that
previously had been implicit.
[[Page 72476]]
Subregulatory Guidance and Agency Policy
Following enactment of the 2012 Act specifying that ``actively
seeking work'' was a required condition of eligibility for UC, ETA
played an active role in creating best practices and facilitating State
implementation of the work search requirement, including publishing
subregulatory guidance, conducting webinars with States, and providing
model legislative language.
Soon after Congress enacted the 2012 Act, the Department published
Unemployment Insurance Program Letter (UIPL) No. 05-13, ``Work Search
and Overpayment Offset Provisions Added to Permanent Federal
Unemployment Compensation Law by Title II, Subtitle A of the Middle
Class Tax Relief and Job Creation Act of 2012'' (issued Jan. 10, 2013).
This subregulatory guidance informed States of the codified work search
requirement and advised that ``States will exercise their discretion
consistent with the strong expectation that UC beneficiaries will be
engaged in concerted and effective efforts calculated to find a
suitable job in the shortest period of time that is practicable. . . .
Any requirements established by [States] on the type or number of work
search contacts must be closely tied to an expectation that the
claimant will be quickly reemployed.'' However, the regulation
promulgated to address the A&A requirement has not been updated to
reflect this statutory change to incorporate the work search
requirement.
Since this time, ETA has issued several advisories to States
regarding work search requirements for individuals claiming UC. The
guidance issued included: Training and Employment Notice (TEN) No. 18-
16, ``Pathways to Reemployment Tools and Resources'' (issued Nov. 21,
2016); TEN No. 02-17, ``Enhanced My Reemployment Plan Tools and
Resources'' (issued July 14, 2017); and TEN No. 17-19, ``Model
Unemployment Insurance State Work Search Legislation'' (issued Feb. 10,
2020).
TEN No. 18-16 announced the Pathways to Reemployment framework and
introduced the My Reemployment Plan as a resource for job seekers and
workforce professionals. The framework ``re-envisions'' work search
requirements for individuals claiming UC to support their successful
reemployment in the 21st-century labor market. The guidance encouraged
States to modernize work search policies and expand the scope of
activities that meet the work search requirement but did not mandate
any changes. States were ``encouraged to access, review and use'' the
tools, and to ``assess current reemployment policies and procedures to
identify areas in need of modernization.''
TEN No. 02-17 announced enhanced tools the Department developed to
implement the My Reemployment Plan, including a companion video series
for job seekers and a reference guide for workforce professionals in
American Job Centers. The notice ``encouraged'' State workforce
agencies to use these resources but did not require compliance.
TEN No. 17-19 announced the availability of Model Unemployment
Insurance State Work Search Legislation and ``strongly encouraged''
States to adopt the model language and framework. The notice requested
State administrators to ``consider working with the [State's]
legislature and [UC] stakeholders to adopt the model legislative
language,'' but specified that States ``may implement'' the model
legislation, which was ``developed to assist [States].'' ETA provided
this model legislation as technical assistance and ``encourage[d]
[States] to review their work search laws, regulations, and policies,
and to consider adopting the approach.'' Attachment I to TEN No. 17-19
provided detailed model statutory language for work search
requirements, including definitions of acceptable work search
activities and documentation requirements. The language was presented
as a model for States to consider, not as a Federal mandate.
The advisories provided suggestions for States to improve work
search models, including expanding the scope of acceptable work search
activities, encouraging the use of individualized reemployment plans,
promoting integration of workforce services and technology, providing
tools and resources for job seekers and workforce professionals, and
offering model legislative language for States to adopt. However,
States were not required to comply with the guidance, and adoption of
the suggestions remained voluntary.
Additionally, the RESEA program includes a review of each
individual's work search activities for purposes of assessing UC
eligibility and providing reemployment support as part of the
individualized RESEA engagement. The Department has regularly published
annual guidance specifically applicable to grants available for States
to administer their RESEA programs and not the broader UC program. This
operating guidance is generally published as a joint UIPL and Training
and Employment Guidance Letter (TEGL) to ensure awareness across the UC
and workforce systems, most recently including: UIPL No. 02-23/TEGL No.
08-22 for Fiscal Year (FY) 2023 (issued Feb. 23, 2023); UIPL No. 08-24/
TEGL No. 11-23 for FY 2024 (issued Feb. 21, 2024); and UIPL No. 12-25/
TEGL No. 14-24 for FY 2025 (June 10, 2025). Within this scope, States
are advised to ensure communication feedback loops between their UC and
workforce operations to ensure support for swift reemployment and to
use evidence-based strategies for helping individuals return to work.
The Department views the publication of this proposed regulation as
the next step in effectuating the requirements of the 2012 Act. The
Department is proposing to amend 20 CFR part 604 to reflect the Federal
work search requirement created by the 2012 Act, which is set out in
section 303(a)(12) of the SSA.
IV. Section-by-Section Discussion of the Proposed Changes
Section IV of this NPRM's preamble describes how the proposed rule
would operationalize the statutory requirement at section 303(a)(12) of
the SSA that individuals must actively seek work to be eligible for UC.
This proposed rule also includes a definition of the term ``employer
contact'' and sets forth a national minimum weekly work search
standard.
The Department recognizes that certain provisions of the proposed
rule would require States to amend their laws. In recognition of
varying State legislature schedules, the Department proposes a
compliance date of 1 year from the effective date of the final rule for
States to comply with the requirements of the final rule. To facilitate
a smooth transition, the Department expects States to discontinue both
formal and informal warnings to individuals who fail to complete the
required work search activities upon publication of this final rule, or
as soon as possible if State law must be amended, as such warnings are
inconsistent with Federal law.
A. Proposed Changes to Sec. Sec. 604.1, 604.2, and 604.5
Section 604.1 Purpose and Scope
The Department is proposing a revision to Sec. 604.1 from the
current requirement that individuals are ``able to work and available
for work'' to add the phrase ``and actively seeking work.'' This would
codify the existing requirement in section 303(a)(12) of the SSA that,
as a condition of eligibility,
[[Page 72477]]
States require that individuals are able to work, available to work,
and are actively seeking work each week. The existing regulation
applies to all State UC programs. To the extent that Federal UC
programs, such as Unemployment Compensation for Federal Employees or
Unemployment Compensation for Ex-Servicemembers, defer to State
requirements with respect to A&A and work search, this regulation would
also be applicable.
Section 604.2 Definitions
Section 604.2 provides definitions for this part. The Department is
proposing to add a new definition of the term ``employer contact.'' As
proposed, employer contacts are communications between an individual
and an individual employer by various means. The Department is
proposing to define employer contact broadly to encompass the various
ways in which individuals may contact employers and not solely limited
to in person contact.
Section 604.5 Application--Availability for Work
The Department is proposing to remove paragraph (h), which
addresses work search, from Sec. 604.5. When paragraph (h) was
adopted, there was no Federal work search requirement explicitly in
statute and so it provides that States may include a work search
requirement, which would be included either as an element of satisfying
the available for work requirement or as a separate State requirement.
As noted earlier in this NPRM's preamble, the 2012 Act amended section
303(a) of the SSA to require that an individual claiming UC be able to
work, available to work, and actively seeking work. With this NPRM, the
Department is proposing to align the Federal regulatory requirements
with the statutory requirement by removing existing paragraph (h).
B. Section 604.6 Work Search Requirement
Proposed Sec. 604.6 would establish a national minimum framework
for work search standards applicable to all States as a condition of
certification of its State UC law under title III of the SSA.
Paragraphs (a) through (i) would define the minimum weekly work search
activity requirement, identify permissible methods of satisfying that
requirement, explain reporting expectations, provide guardrails
designed to promote consistency across States, and require clear
communication of work search expectations to individuals.
C. Paragraph 604.6(a) In General
Paragraph (a) would establish a requirement that States implement
and administer a work search requirement for individuals consistent
with Sec. 604.6 to qualify for certification under title III of the
SSA. This proposed paragraph would introduce the framework for the
specific requirements, which are set forth in proposed paragraphs (b)
through (i).
Paragraph (a) would also make clear that this new work search
requirement would defer to existing work search requirements under 20
CFR part 615 that apply to the Federal-State Extended Benefits program.
The Department is not seeking to contravene the work search regime that
States implement under section 202(a)(3)(A)(ii) of the Federal-State
Extended Unemployment Compensation Act of 1970 (EUCA). To the extent
that the proposed provisions would conflict with the regulations at 20
CFR part 615 as they apply to the Extended Benefits program, 20 CFR
part 604 would not apply. Conversely, to the extent that 20 CFR part
615 defers to State law, then State law must, at a minimum, align with
the proposed revisions to 20 CFR part 604.
Under this paragraph, a State would not be permitted to pay UC for
a claimed week of unemployment unless the individual completes the work
search requirement under Sec. 604.6 or demonstrates an equivalent
labor force attachment as provided in State law, consistent with
paragraph (g).
The Department is proposing this paragraph to establish a clear
national baseline, consistent with section 303(a)(12) of the SSA.
Section 303(a)(12) requires State law to condition the payment of UC on
an individual actively seeking work. This proposed paragraph is
intended to clarify that the obligation to implement and enforce work
search requirements rests with the State. This approach is consistent
with the Department's authority to regulate State law for conformity
and compliance under the Federal-State UC program.
D. Paragraph 604.6(b) Work Search Requirement
Paragraph (b) would establish that States must condition individual
eligibility to receive UC only if the individual satisfies the
applicable work search requirement for that week under proposed
paragraphs (c) and (d) or demonstrates equivalent labor force
attachment under proposed paragraph (g), in addition to meeting the
other eligibility requirements set forth in State and Federal law.
E. Paragraph 604.6(c) Minimum Number of Work Search Activities
Paragraph (c) would establish the minimum number of weekly work
search activities required for individuals to demonstrate that they are
actively seeking work, as required under section 303(a)(12) of the SSA.
Under this proposed paragraph, an individual must complete at least
five qualifying work search activities during each week of unemployment
for which UC is claimed, unless the individual satisfies the
requirement through a State-adopted points-based system under paragraph
(f) or meets the requirements under paragraph (g).
In determining the minimum number of work search activities in this
proposed rule, the Department reviewed State work search requirements
nationwide. While there is variability in the number of work search
activities required in States, there are a few States that already
require five work search activities per week. Therefore, the Department
has concluded that proposing a minimum of five work search activities
per week is a reasonable and implementable requirement. The Department
believes that establishing a clear minimum of five work search
activities per week, with consideration for alternative demonstrations
of sufficient labor force attachment described in paragraphs (f) and
(g), provides a consistent and understandable baseline for active work
search while remaining reasonable, achievable, and administratively
feasible. The proposed requirement reflects a reasonable minimum
demonstration of active labor market engagement.
F. Paragraph 604.6(d) Work Search Activity Reporting
Paragraph (d) would add a requirement that State law must require
individuals to report the details of each completed work search
activity, or the details of the individual's equivalent labor force
attachment under paragraph (g) of this section, as part of the
certification process prior to the payment of UC for a claimed week.
Some States already include this reporting requirement at the time
of continued claim certification. All States currently require
reporting work search activities when a claim is selected for a BAM
audit, with the exception of one territory that does not operate a BAM
program. Some States may also request work search information, or
equivalent labor force attachment information, after payment through
randomized audits, targeted reviews, or post-payment
[[Page 72478]]
verification processes. Requesting work search activities, or
equivalent labor force attachment information, post-payment creates
challenges for individuals, States, and employers to accurately recall,
document, and verify such activities weeks or months after the
activities, or equivalent labor force attachment, occurred. This
delayed reporting contributes to improper payments and administrative
inefficiencies.
States would retain flexibility in how they implement this proposed
requirement, provided that such reporting is required for each week of
claimed UC before payment is released. States would also retain
discretion to determine what specific information individuals must
report to the State, consistent with State law and administrative
practices. The proposed provision would allow States to determine the
information that individuals would be required to report with respect
to their work search activities, or equivalent labor force attachment,
as part of the continued claim certification process. States should
only collect information that is necessary for the proper
administration of the UC program. The Department recommends States
collect enough information to facilitate any future audit of work
search activity, or equivalent labor force attachment. The proposed
provision does not prescribe specific information that must be reported
to the State. The Department anticipates that most States would
implement this requirement through existing certification systems and
processes.
For States that administer the continued claim certification on a
biweekly basis, this proposed paragraph clarifies that the work search
requirement must be satisfied separately for each week of unemployment
for which UC is claimed. However, States with continued claim
certifications administered biweekly may satisfy the proposed
requirements in Sec. 604.6 by obtaining weekly work search activity,
or equivalent labor force attachment, information from individuals on a
biweekly basis and before a biweekly payment is made.
G. Paragraph 604.6(e) Work Search Activity
Paragraph (e) would establish the general requirements governing
what constitutes a qualifying work search activity for purposes of
satisfying the work search requirement under Sec. 604.6. Under this
proposed paragraph, State law would be required to include only those
work search activities that allow individuals to meet the requirement
by completing specified work search activities that are specific,
identifiable and reasonably calculated to lead to reemployment. States
must provide for certain activities, including employer contacts, as
well as registration and ongoing contact with placement agencies or
unions for the purposes of seeking employment. States would retain
discretion to define additional qualifying work search activities
consistent with Sec. 604.6.
The Department is proposing the work search activity provisions in
paragraph (e) to reflect modern job search behavior, which generally
comprises many types of activities, not only employer contacts, and to
provide room for such activities to evolve over time. The Department
considers these types of activities, when specific, identifiable, and
reasonably calculated to lead to reemployment, to be legitimate work
search activities.
The Department intends for this provision to provide States with
flexibility to tailor work search requirements to local labor market
conditions, individual populations, and administrative capacity, while
ensuring that individuals are able to understand and comply with the
requirement. The Department further intends to reduce procedural
denials that may occur when work search requirements are vague,
inconsistently applied, or difficult for individuals to understand.
The Department expects that an individual may perform multiple
activities of the same type in a given week. Some examples of how this
requirement might be applied include:
<bullet> An individual makes five discrete employer contacts for
the purpose of seeking work in a given week; or
<bullet> An individual does two job interviews, attends a job fair,
takes a professional assessment, and submits an employment application
in a given week.
Paragraph (e)(1)
As proposed, paragraph (e)(1) would provide that State law must not
limit qualifying work search activities solely to employer contacts.
The Department recognizes that modern work search behavior includes a
broader range of activities as described in subsequent paragraphs.
Paragraph (e)(2)
Paragraph (e)(2) is a proposed list of work search activities that
States would be required to recognize as work search activities in
State law for purposes of the work search requirement set out in
paragraph (b): employer contacts (as defined in Sec. 604.2) for the
purpose of seeking employment, specifically including employment
application submissions, job interviews, and skill, aptitude, or
competency assessments with a specific employer; registration and
ongoing contact with placement agencies for the purpose of seeking
employment; and contact with the individual's union for a job referral.
The Department has determined that these work search activities are
integral to the reemployment process and thus individuals should always
be given credit toward the work search requirement for completing them
in a given week.
Employer contacts are an important and effective component of
active work search and are reasonably calculated to lead to
reemployment. The Department believes requiring States to recognize
employer contacts as qualifying work search activities would promote
more rapid reemployment and ensure that direct employer engagement
remains a core component of the work search requirement.
The Department's intent in requiring that skill, aptitude, or
competency assessments with a specific employer be recognized as
qualifying work search activities in State law is that such activities
are important evaluation tools used to assess individuals for
employment. Skills assessments measure an individual's technical or
functional ability to perform tasks related to a specific job. Aptitude
assessments are intended to measure an individual's potential to
succeed in a given job. Competency assessments are intended to evaluate
an individual's skills and knowledge, generally, for a particular role
within an organization. The Department proposes to include registration
and ongoing contact with placement agencies because such contacts are
important routes to obtaining employment. Much like contacting an
individual employer for work, contacting a placement agency is a useful
way to obtain a job.
Additionally, contact with the individual's union for a job
referral would be a qualifying work search activity for the purpose of
the work search requirement in paragraph (b). Contact with a union
would be recognized in State law as a qualifying work search activity
regardless of whether the union offers a hiring hall. Therefore, the
Department proposes that a union member contacting their union for a
job referral must also be considered a valid work search activity.
The Department recognizes that for an individual who is a member of
a union that prohibits members from taking non-union work, accepting
non-union work
[[Page 72479]]
may result in the individual violating the terms of their union
membership agreement. Under such circumstances, an individual who
otherwise does not meet the requirement in accordance with paragraph
(g)(2) may meet the minimum work search requirement by making contact
with their union for job referrals and completing any other work search
activities described in paragraph (e)(2), such as skill and competency
assessments, as well as work search activities that may be recognized
by the State consistent with paragraph (e)(3), such as training, that
do not require contacting non-union employers for the purpose of
obtaining work.
The Department is considering including a requirement that at least
one of the individual's work search activities each week be an activity
from the list in paragraph (e)(2) and welcomes comment on this
approach.
Paragraph (e)(3)
The Department strongly encourages States to allow a wide variety
of work search activities to satisfy the work search requirement.
Paragraph (e)(3) proposes a non-exhaustive list of additional
activities that States may include as qualifying work search
activities. These include:
<bullet> Attending job fairs or hiring events (proposed paragraph
(e)(3)(i));
<bullet> Utilizing career center or employment services (proposed
paragraph (e)(3)(ii));
<bullet> Attending workshops, training, or skill-building
educational events (proposed paragraph (e)(3)(iii));
<bullet> Taking professional assessments or certification
examinations (proposed paragraph (e)(3)(iv)); and
<bullet> Other activities reasonably calculated to lead to
reemployment, as determined by the State (proposed paragraph
(e)(3)(v)).
All of these activities may be considered to be reasonably
calculated to lead to reemployment. An individual taking a professional
assessment may more easily obtain employment in a specific industry and
the assessment may contain aspects of skill, aptitude, or competency
assessments. The Department believes professional assessments and
certifications are valuable work search activities and can lead an
individual to reemployment. However, because professional assessments
and certificate exams can vary widely from industry to industry and
State to State, the Department does not propose to make these
activities mandatory for inclusion in State law. This optional category
is distinct from the skill, aptitude, or competency assessments related
to employment that States must recognize under proposed paragraph
(e)(2)(i)(C).
The Department proposes including the illustrative list in
paragraph (e)(3) to preserve State flexibility to account for
differences in labor markets, industries, geography, and administrative
systems. This approach allows States to define additional qualifying
activities as appropriate and also provides room for such activities to
evolve over time, based on economic conditions within the State,
changes in technology, or other factors that would require the State to
add or delete acceptable work search activities.
The Department recognizes that there may be other government
programs that involve work search requirements. For example, the
Department notes that the U.S. Department of Health and Human Services,
Centers for Medicare & Medicaid Services issued an interim final rule
on June 3, 2026, regarding the requirement for certain Medicaid
applicants and beneficiaries to demonstrate community engagement
through specific qualifying activities as a condition of their Medicaid
eligibility (91 FR 33348). Accordingly, the Department encourages
States to work with their State Medicaid agency to align, to the extent
appropriate, their work search requirements so that the work search
activities that individuals applying for UC may complete align with the
mandatory community engagement activities required by their State
Medicaid agency.
H. Paragraph 604.6(f) Points-Based System
The Department included proposed regulatory text under paragraph
(f) to solicit comments on a proposed points-based system. The
Department is considering whether such a system aligns with the goals
of this proposed rule and, if included in the final rule, how it might
be implemented. Paragraph (f) would permit a State to adopt a points-
based system as a method for satisfying the weekly work search
requirement proposed in paragraph (b). Proposed paragraph (f) offers
States flexibility to establish a points-based system to accomplish the
requirement in proposed paragraph (c). Under a points-based system,
qualifying work search activities would be assigned point values, as
determined by the State, and an individual would satisfy the weekly
work search requirement when the total point value of completed and
reported activities equals or exceeds the minimum threshold of five
points established by this paragraph. Nothing would preclude an
individual from completing five one-point work search activities in a
claimed week--the adoption of a points-based system simply encourages
an individual to do certain activities over others by providing those
activities a greater weight in completing the work search requirement.
The option for States to adopt a points-based system is intended to
provide a tool for prioritizing activities that connect individuals to
sectors and localities with greater job openings--the specific
application of which can change over time. A carefully developed
points-based system may act as an incentive for individuals to engage
in activities that are more likely to result in rapid reemployment,
especially employment in occupations that are experiencing worker
shortages. It also may incentivize individuals to broaden their work
search to geographical areas that may have more or better reemployment
opportunities and mitigate work search difficulties when work where the
individual resides may be limited.
The Department intends this provision to preserve flexibility for
States while ensuring that any points-based system remains
substantially equivalent to the minimum weekly work search requirement
established in paragraph (c).
Paragraph (f)(1)
Paragraph (f)(1) would establish the minimum requirements for a
State points-based system. Under this proposed paragraph:
<bullet> Qualifying work search activities would be assigned point
values by the State (proposed paragraph (f)(1)(i)) and must be
consistent with the qualifying work search activities described in
paragraph (e);
<bullet> The weekly work search requirement would be satisfied only
when the total number of points assigned to qualifying work search
activities an individual has completed for the benefit week claimed
equals at least five points (proposed paragraph (f)(1)(ii)); and
<bullet> Each work search activity is assigned a value of one, two,
or three points (proposed paragraph (f)(1)(iii)).
The Department believes these minimum requirements for a State
points-based system are necessary to ensure consistency, transparency,
and equivalency across States. Establishing a points-based system
provides States flexibility in structuring and incentivizing work
search activities while maintaining a consistent baseline nationwide.
The limitation that each work search activity must be assigned a
value of one,
[[Page 72480]]
two, or three points is intended to establish guardrails that prevent
States from assigning disproportionately high or low values to
individual activities in ways that could undermine the consistency or
integrity of the work search requirement.
The Department believes a one-to-three-point range appropriately
balances flexibility and consistency by allowing States to
differentiate among activities based on their relative value while
ensuring that no single activity alone satisfies the weekly
requirement.
Paragraph (f)(2)
Paragraph (f)(2) would provide that, when assigning more than one
point to a qualifying work search activity, States must determine that
the activity either:
<bullet> Connects individuals to specific industries and geographic
locations that need workers; or
<bullet> Has strong evidence for directly leading to reemployment.
These mandatory criteria ensure that activities receiving more than
one point meaningfully promote reemployment and reflect current labor
market needs. For instance, the State may incentivize job search
activities in growth sectors with more plentiful employment options by
assigning additional points to such activities. This approach
encourages individuals to broaden their search and focus job search
efforts on occupations where their skills are most needed.
The Department is particularly interested in comments from States,
industry leaders, and other relevant stakeholders on the points-based
system option proposed in paragraph (f). The Department recognizes that
some States currently include flexibility in how they implement their
work search requirement (i.e., requiring a different number of work
search activities based upon geographic factors such as whether the
individual claiming UC is in an urban or rural area). The Department
welcomes comments on the factors that should be used to allow greater
weighting of activities.
The Department is considering the points-based approach as a
potential flexibility for States and welcomes comments about additional
considerations for ensuring that such a points-based system does not
circumvent the underlying intent of the proposed rule (i.e., a
permanent workaround to avoid requiring five work search activities in
any given week) and whether such a system should be included in the
final rule.
I. Paragraph 604.6(g) Equivalent Labor Force Attachment
Paragraph (g) proposes to establish circumstances under which an
individual may be considered to have an equivalent attachment to the
labor force and therefore is deemed by the State to have satisfied the
State's minimum work search requirement for a week.
The Department recognizes that certain individuals remain
sufficiently attached to the labor force through participation in
approved programs or because of specific employment-related
circumstances such that requiring completion of the minimum weekly work
search requirement may be unnecessary or duplicative. The Department
also recognizes that there may be extenuating circumstances that would
prevent an individual from conducting the required minimum weekly work
search activities while the individual should otherwise be eligible for
UC. This paragraph is intended to preserve consistency with other
Federal UC requirements and maintain existing State practices where
they align with the goal of this proposed rule in facilitating
reemployment. The Department also seeks comments on other circumstances
that are not represented in the draft text but might be in place under
current State law and align with the goals of this proposed regulation.
Paragraph (g)(1)
Paragraph (g)(1) identifies circumstances in which an individual
would be deemed to have met the minimum number of work search
activities required under paragraph (c). The following equivalent labor
force attachment circumstances would meet the minimum work search
requirement under proposed paragraph (c) when the individual is:
<bullet> Enrolled in, and making satisfactory progress in, State-
approved training under 26 U.S.C. 3304(a)(8) (proposed paragraph
(g)(1)(i));
<bullet> Participating in the Self-Employment Assistance (SEA)
program under 26 U.S.C. 3306(t) (proposed paragraph (g)(1)(ii));
<bullet> Participating in the Short-Time Compensation (STC) (also
known as ``Workshare'' or ``Shared Work'') program under 26 U.S.C.
3306(v) by being available for their workweek (proposed paragraph
(g)(1)(iii)); or
<bullet> Participating in a Registered Apprenticeship program
(proposed paragraph (g)(1)(iv)).\4\
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\4\ A Registered Apprenticeship is an industry-driven, high-
quality career pathway where employers train and prepare their
future workforce while giving individuals the opportunity to gain
paid work experience, progressive wages, mentorship, and a portable,
nationally recognized credential.
---------------------------------------------------------------------------
The circumstances referenced in proposed paragraphs (g)(1)(i)
through (iii) are determined by other provisions of Federal law that
provide that the individual cannot be denied for failure to complete
work search when they are participating in State-approved training or
the SEA program or when they are deemed to have met the minimum work
search requirement by being available for their workweek under the STC
program.
The Department further proposes that individuals participating in a
Registered Apprenticeship program, under 29 U.S.C. 50, also be deemed
to have satisfied the minimum work search requirement. Individuals
engaged in a Registered Apprenticeship program are engaged in
activities specifically designed to prepare them for employment in a
particular field. These programs combine on-the-job learning with
related instruction, equipping participants with new skills that will
lead to employment in occupations offering higher wages.
Additionally, at the conclusion of the Registered Apprenticeship
program, individuals may be hired by the company where they completed
their apprenticeship. An individual earning wages during the Registered
Apprenticeship program must, in accordance with State law, report such
wages, which could impact the amount of UC available in the week.
Separate from this monetary impact, requiring apprentices to seek
additional work while participating in the program would interfere with
the intended purpose and goals of the Registered Apprenticeship program
and with the workforce attachment the program fosters. The reasoning
for this exception aligns with similar provisions for individuals
enrolled in State-approved training programs.
Paragraph (g)(2)
Paragraph (g)(2) identifies a specific category of individuals who
would be deemed to have met the minimum work search requirement under
paragraph (c). This provision would apply when an individual is a
member in good standing with their union, that union utilizes a hiring
hall for job referrals, and the individual follows the requirements of
their union regarding contact with the union's hiring hall, provided
the individual must contact their hiring hall at least once a week. The
Department recognizes that for an individual who is
[[Page 72481]]
a member of a union that utilizes a hiring hall for job referrals,
looking for work outside of the hiring hall may result in the
individual violating the terms of their union membership agreement.
For individuals who otherwise contact their union for work but do
not meet the parameters described in paragraph (g)(2), such contact
would qualify as an acceptable work search activity under paragraph
(e)(2), though it would only be sufficient for satisfying one of the
minimum five activities in any given week.
Paragraph (g)(3)
The Department proposes in paragraph (g)(3) to specify limited
circumstances in which a State may deem an individual to have met the
weekly work search requirement because the individual either maintains
clear attachment to the labor force or faces specific conditions that
make conducting work search activities unreasonable or impractical. By
outlining these circumstances directly in the regulation, the
Department aims to ensure national consistency, provide clarity for
States administering UC programs, and appropriately recognize
situations in which individuals should be deemed to have satisfied the
weekly work search requirement for the applicable week.
Paragraph (g)(3) would permit a State to deem an individual to have
met the work search requirement for a week if one of these limited
circumstances applies.
<bullet> The individual has a definite return-to-work date with
their separating employer within 8 weeks of the separation date
(proposed paragraph (g)(3)(i)). If an individual is on a short-term
layoff with a definite return-to-work date from their separating
employer, requiring that individual to nonetheless conduct a work
search may harm the employer by risking the loss of a skilled member of
their workforce if the individual receives and accepts a different
offer of employment. This may result in the individual being required
to accept a less desirable job or risk being found ineligible to
receive UC.
<bullet> The individual is a Federal employee, is unemployed due to
a lapse in Federal appropriations, and is expected to return to work
when the lapse ends (proposed paragraph (g)(3)(ii)). A similar argument
for short-term layoffs applies to Federal employees who are unemployed
due to a lapse in appropriations. In this situation, the employee does
not have a definite return-to-work date--pending congressional action--
but is still considered job-attached and is expected to be recalled to
work after the lapse in appropriations ends.
<bullet> The individual files an initial claim less than 72 hours
prior to the end of the week (proposed paragraph (g)(3)(iii)) and
therefore has insufficient time to both receive notification of the
work search requirement and conduct the associated activities before
filing their first continued claim certification. Generally, an
individual may file an initial claim at any point during a week. If
there is insufficient time for the State to advise the individual of
the work search requirement and for the individual to complete the work
search activities for the week claimed, it creates an unreasonable
burden for the individual. For example, if the individual files their
initial claim with less than three full days remaining in the benefit
week, it may not be reasonable to expect the individual to complete the
minimum work search activities before the end of the week. Likewise, if
the State backdates the individual's initial claim, the individual may
be precluded from meeting the State's minimum work search requirement
for that week.
<bullet> The individual is serving on jury duty (proposed paragraph
(g)(3)(iv)), and the individual's jury duty service precludes the
individual from completing the minimum number of work search
activities. The Department recognizes that under section
202(a)(3)(A)(ii)(I) of EUCA, individuals who are lawfully issued
summons to appear for jury duty may be exempted from seeking work if
State law provides this exception under the Federal-State UC program.
Therefore, a State may deem an individual to have met the State's
minimum work search requirement for a claimed week, if the individual's
jury duty service precludes the individual from meeting the minimum
number of work search activities under proposed paragraph (c). For
example, if the individual is only called for one day of jury duty, the
jury duty might not preclude them from completing the minimum number of
work search activities. States must determine if the jury duty service
precluded the individual from completing the minimum number of work
search activities. The individual must continue to meet all other
eligibility requirements for the week, including being able to work and
available for work under State law.
<bullet> The individual is hospitalized for treatment of an
emergency or life-threatening condition (proposed paragraph (g)(3)(v)),
and the hospitalization precludes the individual from completing the
minimum number of work search activities. Similarly, the Department
recognizes that under section 202(a)(3)(A)(ii)(II) of EUCA, individuals
who are hospitalized for treatment of an emergency or life-threatening
condition may be excepted from work search if the Federal-State UC
program provides for an exception. This rule would implement this
exception where the hospitalization precludes the individual from
completing the minimum number of required work search activities under
proposed paragraph (c) for a claimed week. In these circumstances, the
minimum work search requirement may only be deemed to have been met if
the State determines the hospitalization precludes them from meeting
the requirement. For example, if the individual is hospitalized for one
day and then is discharged and was fully able to look for work either
before or after the hospitalization, the hospitalization might not
preclude them from meeting the minimum number of work search activities
and thus the individual would need to meet the work search requirement
in paragraph (c). The individual must continue to meet all other
eligibility requirements for the week, including being able to work and
available for work under State law.
These proposed provisions are intended to provide employers,
individuals, and States some flexibility while preserving the overall
integrity of the weekly work search requirement. Individuals who are
determined to meet one of the circumstances in paragraph (g)(3) must
continue to meet other applicable State and Federal eligibility
requirements to receive UC for a claimed week. The Department welcomes
public comment on these and other possible circumstances from
stakeholders.
Paragraph (g)(4)(i)
This proposed provision would allow States the flexibility to deem
individuals to have met the work search requirement in this section for
a claimed week when there is a federally declared major disaster as
defined under the Stafford Act, 42 U.S.C. 5122(2). This provision is
only applicable where States have laws that allow them to modify an
individual's work search requirements during major disasters. This
provision is meant to grant States the flexibility to make
modifications to work search requirements based on the circumstances
surrounding disasters. The Department understands that during disasters
work search activities may be difficult or impossible for
[[Page 72482]]
individuals to complete and that businesses in affected areas may be
temporarily closed or unable to accept new employment applications or
new hires. Further, resources that individuals could use to complete
work search activities, such as training providers, placement agencies,
and workforce development organizations, may be impacted as well.
Paragraph (g)(4)(ii)
This proposed provision would cap the amount of time that paragraph
(g)(4)(i) may apply. The proposed rule would cap the period during
which individuals may suspend their work search to no more than 26
weeks following the week in which the disaster period commences to
align the regulation with existing Disaster Unemployment Assistance
program requirements and practices. The Department intentionally uses
the term ``incident period'' in the proposed regulatory text because
that term is defined in the Federal Emergency Management Agency's
regulations at 44 CFR 206.32(f). The Department intends this term to
have the meaning assigned to it in 44 CFR 206.32(f) because federally
declared disasters involve both the State and several Federal agencies.
The Department proposes this duration limitation to provide individuals
affected by federally declared major disasters with appropriate
flexibilities while balancing the goal of the work search requirement,
which is to require active labor market participation for individuals
seeking benefits.
Paragraph (g)(5)
The purpose of requiring an active search for work is to facilitate
reemployment. Proposed paragraph (g)(5) recognizes that an individual
who has accepted a bona fide offer of employment with a definite start
date in the near future is demonstrating that purpose. Once an
individual has accepted such an offer, requiring that individual to
continue searching for other work during the short period before the
new job begins may be unnecessary and create avoidable complications.
For example, if the individual receives and is required to accept
another offer or lose UC eligibility, that may result in the individual
being forced to accept a less desirable job with lower wages and forces
the employer offering the position to search for other candidates.
Furthermore, if the individual receives and refuses an additional offer
of employment, the State may need to adjudicate whether the refusal
affects eligibility, despite the fact that the individual has already
secured employment.
The proposed provision is limited and would apply on a week-by-week
basis. A State may deem an individual to have met the minimum work
search requirement under paragraph (c) for a claimed week only if the
individual has accepted a bona fide offer of employment and the start
date of such employment is within 4 weeks of the week being claimed.
For any claimed week that falls outside of that 4-week period, the
individual would be required to continue to satisfy the applicable
minimum work search requirement under paragraph (c). When the
conditions of paragraph (g)(5) are met for a claimed week, the State
may deem the individual to have met the minimum work search requirement
for the entire week. The State need not impose a separate, partial-week
work search requirement under this paragraph.
For those weeks before the individual qualifies under paragraph
(g)(5), the individual must satisfy the work search requirement through
any qualifying work search activities permitted by the State under
paragraph (e). The Department is setting a timeframe because an
extended period during which an individual is not seeking work is
inconsistent with the principles of the Federal work search
requirement. This provision is intended to provide employers,
individuals, and States a limited level of flexibility while preserving
the overall integrity of the weekly work search requirement.
J. Paragraph 604.6(h) Notification Requirements
Proposed paragraphs (a) and (b) would establish that a State may
not pay UC for a week claimed unless the individual satisfies the
applicable work search requirement under Sec. 604.6 or has an
equivalent labor force attachment as provided in State law, consistent
with paragraph (g). Proposed paragraph (h) sets out the proposed
requirement that States notify individuals of the work search
requirement at certain points during the continued claim certification
process.
Paragraph (h)(1)
Paragraph (h)(1) would require States to provide clear notice to
individuals regarding the pertinent aspects of the work search
requirement for their continued eligibility for UC. Clear communication
about work search requirements is essential to ensuring compliance,
reducing inadvertent eligibility violations, and supporting program
integrity.
Under section 303(a)(1) of the SSA, a State's UC law must provide
for methods of administration that are reasonably calculated to ensure
full payment of UC when due. The Department has determined that section
303(a)(1) of the SSA requires that individuals claiming UC are able to
obtain, complete, and submit information related to their initial and
continued claims, appeals, reemployment services, and any other
available program functions or services. All individuals must have the
opportunity to be informed of and take appropriate action(s) to apply
for UC, maintain their entitlement to UC, and access services without
undue burdens or barriers.
Appendix A to 20 CFR part 602 (Standard for Claim Determination--
Separation Information) requires State laws to include provisions that
will ensure that ``[i]ndividuals who may be entitled to [UC] are
furnished such information as will reasonably afford them an
opportunity to know, establish, and protect their rights under the [UC]
law of such State.'' The Department is proposing to add this work
search notification provision to the existing notifications the State
sends individuals as part of the requirement that States provide
individuals with sufficient information ``to know, establish, and
protect their rights'' to UC. The goal of this provision is to support
individual reemployment, program integrity, transparency, and
accountability.
Under this proposed paragraph, States would be required to provide
enough information to individuals to ensure they are aware of the work
search requirements that apply to the individual's claim. Such notice
would be required to be provided in writing at the time the initial
claim is filed and at any time during the benefit year that such
requirements applicable to the individual substantially change.
The Department recognizes that many States already provide benefit
rights and responsibilities information to individuals through
handbooks, online portals, continued claim certification systems, and
other communications. This provision is intended to ensure that work
search requirements are clearly and consistently communicated through
existing channels or other communication methods reasonably calculated
to ensure awareness.
At a minimum, the notice provided under this paragraph (h) would be
required to include the following information:
<bullet> The acceptable types of work search activities (proposed
paragraph (h)(1)(i));
[[Page 72483]]
<bullet> That a minimum of five qualifying work search activities
are required during each week of unemployment for which UC is claimed
(proposed paragraph (h)(1)(ii));
<bullet> If the State has adopted a points-based system under
paragraph (f), an explanation of that system in plain language
(proposed paragraph (h)(1)(iii));
<bullet> That the individual must report work search activities
each time the individual files a continued claim certification and be
prepared to provide additional documentation of their work search
activities upon request (proposed paragraph (h)(1)(iv)); and
<bullet> That UC will not be paid for any week if the individual
does not complete and report the required work search activities or
demonstrate an equivalent labor force attachment under paragraph (g)
(proposed paragraph (h)(1)(v)).
Paragraph (h)(2)
Paragraph (h)(2) would require the State to notify individuals: (1)
when the State determines that the circumstances under paragraph (g)
apply (i.e., the individual meets an equivalent labor force attachment
provision); and (2) when the individual's circumstances have
substantially changed and different work search requirements now apply.
This individualized notification requirement would only be applicable
when the State has enough information to determine that paragraph (g)
applies to an individual. As such, the Department expects States would
put in place methods of obtaining enough information from individuals
to ascertain whether proposed paragraph (g) applies to the individuals.
The Department proposes this provision to ensure that States make
individuals aware of their situation-specific requirements so that they
may provide the information necessary for the State to accurately apply
paragraph (g), to ensure that individuals understand what is required
of them, and to ensure that individuals are notified when their work
search requirements change.
The Department believes this provision would improve the
individuals' understanding of the State's work search requirements and
reduce procedural denials caused when individuals fail to complete the
required work search activities or fail to keep a record of their
weekly work search activities.
K. Paragraph 604.6(i) Prohibition on Formal and Informal Warnings
Some States have used formal or informal warnings in lieu of
holding an individual accountable for weeks in which the individual
failed to actively seek work, with States oftentimes advising the
Department that this rationale is based on the premise that the
individual was not properly aware of the work search requirement.
Paragraph (i) would state that individuals who do not complete the
minimum number of required work search activities are ineligible for UC
for that week. Under this proposed paragraph, States may not issue
formal or informal warnings in lieu of determining ineligibility when
an individual fails to complete and report the minimum required work
search activities or does not meet the requirements in paragraph (g).
The Department proposes this paragraph to codify its longstanding
legal interpretation that the SSA does not permit States to give
individuals claiming UC a warning--whether formal or informal--when
they fail to meet the statutory requirement to actively seek work for a
claimed week. Section 303(a)(12) of the SSA provides that State law
must require an individual to actively seek work as a condition of
eligibility for each week claimed.
The Department is aware that some States have historically issued
warnings to individuals upon identifying a potential work search
eligibility issue. A State law or policy that permits such warnings,
whether formal or informal, would be inconsistent with this proposed
regulation and would, under this paragraph, be out of conformity with
the SSA and the Federal Unemployment Tax Act. These laws and policies
would need to be changed to conform with this proposed regulation. When
a State determines that an individual did not complete and report the
required work search activities and did not qualify under paragraph (g)
for a claimed week, the State would be required to find the individual
ineligible for that week and establish an overpayment when appropriate.
Recognizing the policy rationale often cited by States to the
Department that individuals are not aware of the work search
requirement, the proposed rule seeks to mitigate such occurrences by
facilitating regular reporting of work search activities before UC is
paid. Additionally, the Department is proposing that States may include
certain circumstances under paragraph (g) allowing for equivalent labor
force attachment such as when an individual files their initial claim
less than 72 hours prior to the benefit week ending date. The proposed
rule also requires that the State provide notification to individuals
when the expectation for their work search activity changes, as
described in paragraph (h).
L. Section 604.7 Conformity and Substantial Compliance
The Department is proposing to redesignate Sec. 604.6 to Sec.
604.7. The Department is proposing to place the work search requirement
in Sec. 604.6 because it would be in addition to the requirements in
Sec. 604.4 (Application--ability to work) and Sec. 604.5
(Application--availability for work). The Department is not proposing
any change to this section; it is simply proposing to redesignate it.
V. Regulatory Analysis and Review
A. Executive Orders 12866 (Regulatory Planning and Review), 13563
(Improving Regulation and Regulatory Review), and 14192 (Unleashing
Prosperity Through Deregulation)
Under Executive Order (E.O.) 12866, the Office of Management and
Budget (OMB)'s Office of Information and Regulatory Affairs (OIRA)
determines whether a regulatory action is significant and, therefore,
subject to the requirements of the E.O. and review by OMB. See 58 FR
51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a
``significant regulatory action'' as an action that is likely to result
in a rule that: (1) has an annual effect on the economy of $100 million
or more, or adversely affects in a material way a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or communities
(also referred to as economically significant); (2) creates serious
inconsistency or otherwise interferes with an action taken or planned
by another agency; (3) materially alters the budgetary impacts of
entitlement grants, user fees, or loan programs, or the rights and
obligations of recipients thereof; or (4) raises novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the E.O. See id. OIRA has determined that
this proposed rule is a ``significant regulatory action'' under section
3(f)(1) of E.O. 12866. Accordingly, this proposal was submitted to OIRA
for review.
E.O. 13563 directs agencies to propose or adopt a regulation only
upon a reasoned determination that its benefits justify its costs; the
regulation is tailored
[[Page 72484]]
to impose the least burden on society, consistent with achieving the
regulatory objectives; and in choosing among alternative regulatory
approaches, the agency has selected those approaches that maximize net
benefits. E.O. 13563 recognizes that some benefits are difficult to
quantify and provides that, where appropriate and permitted by law,
agencies may consider and discuss qualitatively those values that are
difficult or impossible to quantify, including equity, human dignity,
fairness, and distributive impacts.
E.O. 14192, titled ``Unleashing Prosperity Through Deregulation,''
was issued on January 31, 2025. Section 3(a) of E.O. 14192 requires an
agency, unless prohibited by law, to identify at least 10 existing
regulations to be repealed when the agency issues a new regulation. In
furtherance of this requirement, section 3(c) of E.O. 14192 requires
that the ``new incremental costs associated with new regulations shall,
to the extent permitted by law, be offset by the elimination of
existing costs'' associated with prior regulations. A significant
regulatory action (as defined in section 3(f) of E.O. 12866) that would
impose total costs greater than zero is considered an E.O. 14192
regulatory action. This proposed rule, if finalized as proposed, is,
therefore, expected to be an E.O. 14192 regulatory action.
Overview of the Analysis
The Department estimates that this NPRM would result in modest rule
familiarization costs and describes the unquantified costs, transfer
payments, and benefits of the rule. The monetized cost estimates
presented in Exhibit 1 reflect one-time rule familiarization costs for
State UC agencies to review and understand the regulatory changes.
Exhibit 1--Summary of Estimated Monetized Costs of the NPRM
[2025 dollars]
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Undiscounted 10-Year Total................................... $23,799
10-Year Total with 3% Discounting............................ 23,106
10-Year Total with 7% Discounting............................ 22,242
Annualized with 3% Discounting............................... 2,709
Annualized with 7% Discounting............................... 3,167
Perpetuated Annualized Costs with 7% Discounting (2024 1,325
dollars)....................................................
------------------------------------------------------------------------
The Department did not quantify several additional cost categories
(e.g., impacts on existing job search support structures and
organizations, legislative changes, increased administrative activity,
and information technology (IT) system changes and annual maintenance)
and discusses these qualitatively in section V.A.2. The Department also
provides illustrative estimates of the hours individuals may spend
conducting additional work search activities. In addition, the
Department discusses nonquantified transfer payments and benefits in
section V.A.2, including illustrative estimates of their potential
magnitude, and summarizes the analysis in section V.A.3.
The mechanisms associated with benefits of the proposed rule
include increased employment and improved efficiency of labor market
matching, improved accountability, increased employment, improved
policy clarity and consistency, and improved health and well-being
associated with securing employment sooner.
1. Need for Regulation
Federal law requires individuals receiving UC to be able to work,
available for work, and actively seeking work as a condition of
eligibility. 42 U.S.C. 503(a)(12). States have developed differing
standards to enforce this requirement that speak to both the number and
type of required activities, frequency and methods of reporting them.
States range from simply requiring an affirmative statement of
conducting work search activities to requiring only one work search
activity; as well as requiring upwards of five activities in any given
week. States also vary in what they consider to be a qualifying
activity. These inconsistencies can create confusion for individuals,
lead to uneven enforcement when allowable activities are not clearly
defined, and increase the likelihood that otherwise eligible
individuals may fail to meet requirements simply because expectations
are unclear. Additionally, variability in how States notify individuals
of work search requirements can result in individuals engaging in
activities that may not support reemployment or may not satisfy the
State's rules.
Given these challenges, this proposed rule would establish a
national minimum weekly work search standard that provides a clear and
consistent expectation for individuals to be ``actively seeking work''
across the Federal--State UC program. The proposed approach supports
meaningful engagement with the labor market and reflects modern job
search practices, which can involve multi-day or clustered activities
such as interviews, job fairs, or assessments. By requiring individuals
to complete at least five weekly work search activities--with limited
and specified exceptions--and to report such activities prior to
issuing payment, the proposed rule would improve program integrity and
strengthen labor market attachment. The proposed rule also supports an
assurance that individuals are informed of the requirements and have
access to a broader set of qualifying activities.
2. Subject-by-Subject Analysis
In this section, the Department describes all anticipated costs,
transfers, and benefits of the proposed rule, including both quantified
and unquantified impacts. The proposed rule would directly regulate
States by requiring them to revise their UC work search requirements as
a condition of conformity with Federal UC law, and the Department
expects every State operating UC programs to implement the required
changes. Accordingly, this analysis treats resulting downstream effects
on individuals claiming UC, State UC agencies, employers, and other
affected parties as impacts of the proposed rule. Each impact is
described, and quantifiable impacts are estimated while nonquantifiable
impacts are discussed qualitatively.
Unemployed individuals eligible for UC in their State face the same
choices under this proposed rule as they currently do, though some
parameters would change. Such individuals select among: performing more
extensive work search and reporting activities (with the associated
opportunity cost of time and effort) to be eligible for UC; not
engaging in work search and reporting activities and being found
ineligible for UC; or foregoing filing for UC and accepting the best
immediately available job.
i. Costs
In the following sections, the Department presents the costs
estimated to be incurred by relevant stakeholders, including
individuals claiming UC, State UC agencies, employers, and other
affected parties. The quantified costs include costs to State UC
agencies for familiarizing themselves with the regulatory change. The
nonquantifiable costs include the cost to individuals for complying
with the proposed rule; cost to job support structures and
organizations; costs for revising State UC law and the associated
implementation activities; increased administrative activities for some
States; and costs for State IT system changes and annual maintenance.
[[Page 72485]]
a. Quantifiable Costs
1. Rule Familiarization for State UC Agencies
The Department assumed that for State UC agencies, a general and
operations manager and an attorney would review the regulatory change
in the first year. The Department estimated the cost of rule
familiarization by State UC agencies by multiplying the number of
States and territories operating UC (53) \5\ by the amount of time
required to read the new rule (2 hours) and by the sum of the average
hourly compensation of a public-sector general and operations manager
(Standard Occupational Classification (SOC) code: 11-1021) with fringe
benefits included ($116.77) and the sum of the average hourly
compensation of an attorney (SOC code: 23-1011) with fringe benefits
included ($107.74).\6\ The total cost to State UC agencies for time
spent on rule familiarization is approximately $23,799 in labor costs,
undiscounted. Annualized over 10 years, rule familiarization costs are
valued at $2,709 per year at a 3-percent discount rate and $3,167 at a
7-percent discount rate. As rule familiarization is a one-time
activity, this cost is incurred in the first year with no future costs.
---------------------------------------------------------------------------
\5\ Includes the 50 States plus Puerto Rico, Washington DC, and
the U.S. Virgin Islands.
\6\ The overhead rate of 17 percent was sourced from the
Environmental Protection Agency's 2002 ``Wage Rates for Economic
Analyses of the Toxics Release Inventory Program'' memo (<a href="https://www.regulations.gov/document/EPA-HQ-OPPT-2014-0650-0005">https://www.regulations.gov/document/EPA-HQ-OPPT-2014-0650-0005</a>), and the
fringe benefits rate of 68 percent was calculated using the U.S.
Bureau of Labor Statistics (BLS)'s 2025 employment cost index series
CMU3010000000000D, CMU3010000000000P, CMU3020000000000D, and
CMU3020000000000P (<a href="https://data.bls.gov/series-report">https://data.bls.gov/series-report</a>).
---------------------------------------------------------------------------
b. Nonquantifiable Costs
In this section, the Department describes various nonquantifiable
costs of the proposed rule, including cost to individuals for complying
with the proposed rule; cost to job support structures and
organizations; costs for revising State UC law and the associated
implementation activities; increased administrative activities for some
States; and costs for State IT system changes and annual maintenance.
1. Cost of Conducting Additional Work Search Activities
The proposed rule is expected to increase the amount of time that
some individuals claiming UC spend on work search activities per
benefit week claimed. The magnitude of the increase would depend on the
work search requirements in place by the State in which an individual
is filing and the types of activities individuals are completing
already. Because of variation across States, the Department cannot
directly observe the number of work search activities individuals
claiming UC actually complete at baseline (current practice). While
States set minimum work search requirements, States differ in how
requirements are defined (for example, numeric thresholds versus
qualitative standards), whether requirements vary by category of the
individuals claiming UC (for example, those subject to union hiring
hall provisions), and how activities are reported and tracked.
Moreover, actual search behavior may exceed the minimum required
and may vary from week to week. When subject to a weekly minimum
requirement, some individuals who would otherwise have concentrated
more work search activities in one week and fewer in another may
redistribute activities across weeks to satisfy the requirement each
week. To the extent this occurs, the rule could affect the timing of
some work search activities. However, the Department expects this
effect to be limited because many application opportunities are time-
sensitive, and individuals claiming UC generally have incentives to
pursue suitable opportunities when they arise. Deferring such
activities could result in lost job opportunities or delayed
reemployment. For these reasons, creation of a national minimum weekly
work search requirement may not result in a quantifiable increase in
actual activities performed per individual. The Department also lacks
data sufficient to quantify the extent of any shifting across weeks or
any resulting effect on reemployment timing.
In general, the Department assumes that most individuals would
experience an increase in the number of work search activities
performed each week. Such activities take time, and there is an
opportunity cost associated with that time. Opportunity cost refers to
the value of the next best alternative use of a person's time. In this
context, it represents the value of the time that individuals claiming
UC would spend completing additional work search activities instead of
using that time for other purposes. The Department is not able to
estimate the net opportunity cost. A reliable estimate would require
assumptions about baseline work search behavior, the number and type of
additional activities performed, the time required for each activity,
the value of individuals' time, and the extent to which additional work
search activities accelerate reemployment. Because these factors are
not directly observed and may vary substantially across individuals,
States, and labor market conditions, the Department cannot quantify the
net opportunity cost accurately. The Department is seeking public
comments and input on ways to monetize the cost to the individual of
conducting additional work search activities.
The Department developed an illustrative example based on an
assumed average of 30 minutes per additional work search activity,
reflecting variation in the time associated with different types of
activities. Some work search activities like updating a resume may be
completed quickly, while other activities like filling in an employment
application or participating in an interview (including travel and
preparation time) may take significantly longer.
For purposes of these illustrative estimates, the Department
assumes approximately 100 million continued weeks claimed annually,
based on 2025 continued weeks claimed data.\7\ Because individuals may
complete more work search activities than the minimum required by their
State and data on the number of activities actually completed are not
available, the Department uses State work search requirements as a
proxy for baseline work search activity. The Department grouped States
into five categories based on requirements of one to five work search
activities per week. For States that require work search activities but
do not specify a minimum number, the Department assigned a baseline of
one activity per week. For States in which the requirement varies based
on geography or other factors, the Department used the lower applicable
number of activities. The Department allocates continued weeks claimed
across the five scenarios based on baseline work search activity
derived from State requirements and rounds the resulting estimates to
the nearest million.
---------------------------------------------------------------------------
\7\ U.S. Department of Labor, Employment and Training
Administration, ETA 539, ``Weekly Claims and Extended Benefits
Trigger Data'' (2025), <a href="https://oui.doleta.gov/unemploy/DataDownloads.asp">https://oui.doleta.gov/unemploy/DataDownloads.asp</a>.
---------------------------------------------------------------------------
For this purpose, Exhibit 2 estimates the annual additional time
spent on work search activities to be approximately 133.5 million
hours.
[[Page 72486]]
Exhibit 2--Illustrative Hourly Estimates for Additional Work Search Activities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline work Additional Estimated time Illustrative Total hours for
Scenario search work search per activity continued weeks additional work
activities activities (hours) claimed search activities
--------------------------------------------------------------------------------------------------------------------------------------------------------
A................................................................. 1 4 0.5 34,000,000 68,000,000
B................................................................. 2 3 0.5 10,000,000 15,000,000
C................................................................. 3 2 0.5 48,000,000 48,000,000
D................................................................. 4 1 0.5 5,000,000 2,500,000
E................................................................. 5 0 0.5 3,000,000 0
-------------------------------------------------------------------------------------
Total......................................................... .............. .............. .............. 100,000,000 133,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
These scenarios illustrate the potential increase in work search
activities required of individuals claiming UC. These additional hours
of work search are expected to lead to higher levels of employment and
result in the benefits described in section V.A.2.iii below.
Finally, compliance with the requirements of this proposed rule to
report the details of each work search activity prior to payment may
require additional or different reporting activity by individuals
claiming UC. As these requirements augment existing reporting
individuals must do, the Department does not quantify them and expects
them to be minimal. The Department requests comments on these
assumptions and on data or methods that could be used to refine the
inputs.
2. Impacts on Existing Job Search Support Structures and Organizations
The proposed rule is expected to increase work search activities of
individuals claiming UC, which in turn would affect organizations that
provide reemployment assistance, job search support, career counseling,
training, workshops, or job placement services to unemployed workers,
including individuals claiming UC. Many such organizations focus
primarily on helping individuals obtain employment rather than advising
individuals on UC eligibility requirements, and so the primary impact
of this proposed rule for job search support organizations would be the
increase in work search activities causing increased service
utilization. However, some organizations may also serve individuals
claiming UC by providing support in navigating State requirements.
These organizations may therefore need to review, revise, or supplement
materials, workshop content, staff guidance, websites, referral
resources, or other support materials to reflect the updated State laws
that would result from the proposed rule.
There are distinct challenges in monetizing this impact because of
the variability in organizations, support services offered by these
organizations, and work search activities. The Department, therefore,
does not quantify the impact on existing job search support structures
and organization and is seeking public comments on this cost impact
from stakeholders.
3. Revision of State UC Law and Associated Implementation Activities
The Department anticipates that the proposed rule would require all
States to amend State law (inclusive of statutes, regulations,
policies, or administrative procedures). According to unpublished
internal data, as of January 1, 2025, a vast majority of States (85%)
used some type of numerical work search standard, but those standards
varied widely, ranging from one to five activities per week, hybrid
formulations, urban-rural distinctions, and requirements tied to
applications rather than activities. And as of January 1, 2025, nearly
all States defined the work search requirement in statute, as opposed
to only in regulation and/or UC agency policy or procedure. Following
any rule changes, State UC agencies may need to undertake a range of
implementation activities to administer the revised requirements. These
activities could include updating forms, notices, handbooks, websites,
FAQs, slide decks, call center scripts, and other guidance materials;
revising internal procedures and staff instructions; and training
personnel involved in individual assistance and eligibility
adjudication. State UC agencies also may need to revise outreach and
educational materials related to work search obligations and reporting
requirements to help individuals understand and comply with the revised
standards.
The scope, timing, and resource needs associated with this one-time
cost are expected to vary across States depending on existing State
law, administrative structure, communication systems, and the extent to
which current policies already align with the proposed requirements.
Because these implementation activities may occur through a variety of
State legislative, regulatory, and administrative processes and may be
conducted alongside broader system or policy updates, the Department
does not quantify these costs.
4. Increased Administrative Activities for Some States
The Department expects increased administrative activities arising
from States' implementation of the proposed rule applicable to
individuals claiming UC, specifically with respect to assessing whether
a circumstance described under paragraph (g) might apply to the
individual, adjudicating eligibility when an individual fails to report
work search activity (with a downstream potential of also impacting
appeals workload), and monitoring reports of weekly work search
activities to address anomalies or trends in the data that might be
indicative of improper payments. The Department acknowledges that
administrative activities also may increase under the proposed rule for
States that are not currently requiring individuals to report work
search activities as part of the continued claim certification before
releasing payment or for States that are not currently using such
information to combat improper payments. This impact is not readily
quantifiable based on the information available to the Department.
5. State IT System Changes and Annual Maintenance
To implement the proposed rule, some State UC agencies may need to
modify their IT systems to capture, store, and use additional data
elements related to individuals' work search activities. This includes
modifications to continued claim certification channels for individuals
claiming UC (online portals, interactive voice
[[Page 72487]]
response systems, and paper workflows), as well as changes to back-end
eligibility determination and case management systems that support data
validation, adjudication, and audit functions. Depending on the State's
current practices and the flexibility of its existing platform, these
changes could include adding new data fields, updating user interfaces
and scripts, adjusting data retention and retrieval processes, and
enhancing reporting outputs used for program management and oversight.
States that currently collect details only ``upon request'' or rely on
manual processes likely would incur greater development and
implementation effort than States that already collect structured work
search activity information as part of the continued claim
certification.
States making IT changes would also incur costs associated with
testing, deployment, and change management. These activities may
include quality assurance testing across multiple claim types (e.g.,
intrastate, interstate, Unemployment Compensation for Federal
Employees, Unemployment Compensation for Ex-Servicemembers); regression
testing to ensure timely payment and payment accuracy are not adversely
affected; updates to interfaces with other State systems or vendor
products; and training for staff who support individuals claiming UC
and conduct eligibility reviews--both within the State UC agency and as
part of its RESEA program.
In addition, States may face incremental storage needs and
cybersecurity and privacy compliance activities (e.g., updating access
controls, audit logs, and security monitoring) commensurate with the
sensitivity of individual data handled by UC systems. The magnitude and
timing of these costs would vary substantially across States based on
the age and architecture of their UC platforms (including whether the
State operates a modernized integrated benefits system or a legacy
mainframe), the degree of customization required, and whether changes
can be incorporated into planned modernization releases.
Because of the complexity and diversity across State IT systems and
lack of existing cost estimates for these modifications, this cost
category is not quantified. The Department is seeking public comments
about the approximate scale of these costs.
ii. Transfers
Transfer payments are monetary payments from one group to another
that do not affect the total resources available to society (or, if
they do affect total resources, the mechanism is incentives that would
require more extensive inputs to analyze). Transfers are reported
separately from benefits and costs. This proposed rule is expected to
reduce UC outlays. Because decreased payments to individuals are offset
by increases in State UC trust fund balances, these monetary changes
are considered transfers. Due to data limitations, the Department is
not able to develop a definitive estimate of the transfers that would
be attributable to the proposed rule. Instead, the Department provides
an illustrative range based on estimates from existing research. The
Department invites public comments and data that could inform a more
precise estimate of these transfers at the final rule stage.
Research consistently finds that UC recipients who are subject to
work search requirements, or to more stringent requirements, return to
work more quickly than similar unemployed individuals.\8\ Evidence from
State program evaluations shows that both work search requirements and
reemployment services shorten the duration of insured unemployment
spells by accelerating individuals' return to work. These interventions
have proven cost effective due to their low administrative costs
combined with measurable reductions in unemployment duration.\9\
Because shorter durations of insured unemployment generally result in
lower UC payments, this research provides a basis for developing
illustrative estimates of the transfers associated with the proposed
rule.
---------------------------------------------------------------------------
\8\ Christopher J. O'Leary, ``State UI Job Search Rules and
Reemployment Services'' (2006), Monthly Labor Review, vol. 129, no.
6, pp. 27-37, <a href="https://research.upjohn.org/jrnlarticles/3">https://research.upjohn.org/jrnlarticles/3</a>; Marta
Lachowska, Merve Meral, and Stephen A. Woodbury, ``Effects of the
Unemployment Insurance Work Test on Long-Term Employment Outcomes''
(2016), Labour Economics, vol. 41, pp. 246-265.
\9\ Christopher J. O'Leary, ``State UI Job Search Rules and
Reemployment Services'' (2006), Monthly Labor Review, vol. 129, no.
6, pp. 27-37, <a href="https://research.upjohn.org/jrnlarticles/3">https://research.upjohn.org/jrnlarticles/3</a>.
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For this purpose, the Department relies on estimates from Lachowska
et al. (2016), who analyzed long-term outcomes from a randomized
controlled trial of work search requirements for individuals claiming
UC in Washington State over a 9-year follow-up period.\10\ The study
found that, relative to a no-work-test group, individuals subject to a
standard work test received $429 less in UI benefits, while individuals
subject to a modified work test received $484 less. Because the
Washington Alternative Work Search (WAWS) experiment was conducted in
1986-1987, the Department converted these estimates to 2025 dollars
using the consumer price index.\11\ The resulting estimates are $1,216
and $1,372 per individual in 2025 dollars.
---------------------------------------------------------------------------
\10\ Marta Lachowska, Merve Meral, and Stephen A. Woodbury,
``Effects of the Unemployment Insurance Work Test on Long-Term
Employment Outcomes'' (2016), Labour Economics, vol. 41, pp. 246-
265.
\11\ Bureau of Labor Statistics, Consumer Price Index for All
Urban Consumers (CPI-U), U.S. City Average, All Items. The inflation
adjustment factor of 2.834 was calculated by dividing the 2025
annual average CPI-U (321.943) by the 1987 annual average CPI-U
(113.600).
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To provide illustrative estimates of the transfers associated with
the proposed rule, the Department applied these estimates to the 5.3
million Regular UI beneficiaries in 2025,\12\ resulting in an
illustrative annual reduction in UC payments of $6.445 billion to
$7.272 billion. This reduction in UC payments would represent a
transfer: individuals who return to work sooner would receive less in
UC benefits, resulting in a corresponding increase in State UC trust
fund balances rather than a reduction in total resources available to
society.
---------------------------------------------------------------------------
\12\ U.S. Department of Labor, Employment and Training
Administration, Unemployment Insurance Data <a href="https://oui.doleta.gov/unemploy/DataDashboard.asp">https://oui.doleta.gov/unemploy/DataDashboard.asp</a>.
---------------------------------------------------------------------------
These illustrative estimates should be interpreted with caution.
The WAWS experiment compared individuals subject to a work test with
individuals assigned to an ``honor system,'' under which they were
encouraged to search for work but were not required to report their
search efforts. In contrast, individuals claiming UC are currently
required to conduct at least one work search activity per week, and the
proposed rule would increase the required number of work search
activities rather than establish a minimum number of required work
search activities where none previously existed. Therefore, it may not
be reasonable to assume that increasing the number of required work
search activities would produce the full reduction in UI benefits
estimated by Lachowska et al. (2016). Accordingly, the estimates above
are intended to illustrate the potential magnitude of transfers and
should not be interpreted as estimates of the actual transfers that
would result from the proposed rule.
iii. Benefits
In the following sections, the Department describes the expected
benefits of the proposed rule, including both direct and indirect
impacts on individuals claiming UC, State UC agencies, employers, and
the broader economy. These benefits are primarily
[[Page 72488]]
driven by increased employment and faster reemployment resulting from
enhanced work search activity, as well as improvements in program
accountability, administrative consistency, and labor market
functioning. All of these benefits are not readily monetized due to
data limitations and uncertainty regarding behavioral responses.
Consistent with OMB Circular A-4, the Department describes these
benefits qualitatively where robust quantification or monetization is
not feasible.
a. Benefits to Individuals From Increased Employment and Accelerated
Reemployment
As discussed in section V.A.2.ii, the proposed rule is expected to
increase employment and accelerate reemployment among individuals
claiming UC by encouraging more consistent and structured work search
activity. As evidenced in the Lachowska, Meral, and Woodbury (2016)
study discussed earlier, additional work search requirements result in
individuals finding and returning to work sooner.\13\ By shortening the
duration of unemployment spells, the rule may improve labor force
attachment and lead to improved employment outcomes for affected
individuals. Earlier reemployment may provide meaningful benefits to
individuals claiming UC beyond the immediate resumption of earnings.
Individuals who return to work sooner spend less time out of the labor
force and begin receiving wages and any associated employment benefits
earlier than they otherwise would. Reduced time out of work also may
help individuals maintain a more continuous employment history,
preserve workforce skills and professional connections, and accumulate
additional experience that could contribute to future advancement
opportunities and long-term earnings growth.
---------------------------------------------------------------------------
\13\ Marta Lachowska, Merve Meral, and Stephen A. Woodbury,
``Effects of the Unemployment Insurance Work Test on Long-Term
Employment Outcomes'' (2016), Labour Economics, vol. 41, pp. 246-
265.
---------------------------------------------------------------------------
Research suggests that permanent job gains can generate broad
benefits. Bartik (2015) notes that reducing involuntary unemployment
can improve workers' health, well-being, and future earnings, and that
job gains can generate broader economic effects through suppliers and
retailers. Based on estimates of how permanent job gains affect
unemployment and labor force participation, Bartik finds that such
gains can generate additional value equivalent to approximately 10 to
25 percent of the earnings associated with jobs added in the manner
examined in Bartik's study.
Earlier reemployment can generate direct benefits for employers as
well, including filling vacancies faster, and reduced vacancy duration
where increased job search activity expands the pool of available and
engaged applicants. To the extent that employers can fill positions
more quickly or identify better matched candidates, firms may
experience modest productivity gains and reduced disruption associated
with prolonged vacancies. The magnitude of these benefits would depend
in part on labor market conditions. In tighter labor markets, or where
employers would otherwise face difficulty filling positions, the
benefits of faster reemployment and improved labor market matching may
be more pronounced. In weaker labor markets or where vacancies are
already filled quickly, the incremental employer-side benefits of the
rule may be smaller.
While the literature generally finds that more intensive work
search requirements increase reemployment and reduce unemployment
duration, the available evidence is less conclusive regarding the
quality of subsequent employment outcomes. To the extent that more
intensive work search requirements accelerate reemployment, some
individuals may accept employment sooner than they otherwise would
have, which could affect subsequent wages, benefits, job match quality,
or employment stability. In addition, Kuminoff et al. (2015) found that
effects on household well-being vary with the duration of unemployment
and do not have a simple fixed multiplier relationship with changes in
earnings; rather, these effects depend on factors such as the
desirability of available housing, commuting, and job options.\14\ The
Department lacks sufficient evidence to quantify these potential
effects and therefore does not monetize them. Accordingly, the benefits
discussed in this section should not be interpreted as capturing all
potential dimensions of claimant economic security.
---------------------------------------------------------------------------
\14\ Nicolai V. Kuminoff, Todd Schoellman, and Christopher
Timmins, ``Environmental Regulations and the Welfare Effects of Job
Layoffs in the United States: A Spatial Approach'' (2015), Review of
Environmental Economics and Policy, vol. 9, no. 2, pp. 198-218.
---------------------------------------------------------------------------
The proposed rule includes an allowance for certain qualifying work
search activities beyond simply employer contacts, to include
registration and ongoing contact with placement agencies or unions for
the purposes of seeking reemployment. States may also designate
additional activities as satisfying the requirement, such as
``[a]ttending workshops, training, or skill-building educational
events'' (see proposed Sec. 604.6(e)(3)(iii)). Workers engaged in
skill development during periods of unemployment may enter the
workforce with improved qualifications that better align with
employers' needs. Improved alignment between worker skills and job
requirements may contribute to improved hiring outcomes and reduced
employee turnover. Lower turnover may reduce recruitment and training
costs for employers and support greater workforce stability.
b. Improved Accountability
Clear work search requirements, including required reporting prior
to release of payment, also enable States to monitor individual
eligibility for UC and reduce improper payments. Failure to meet work
search requirements is one of the leading causes of UC
overpayments.\15\ Work search errors often occur because individuals do
not provide enough information about their work search efforts for past
weeks as part of audits conducted by States to verify such activities.
This issue underscores the need for reliable reporting systems.
Strengthening work search requirements, including contemporaneous
information submission, helps ensure that individuals claiming UC are
actively seeking employment, thereby improving resource stewardship,
reducing improper payments, and maintaining program integrity.
---------------------------------------------------------------------------
\15\ The Department publishes payment accuracy data for the UC
program on its website. See U.S. Department of Labor, Employment and
Training Administration, ``Unemployment Insurance Payment Accuracy
Datasets,'' 2025 Calendar Year Data xls, Overpayments by Cause tab,
<a href="https://www.dol.gov/agencies/eta/unemployment-insurance-payment-accuracy/data">https://www.dol.gov/agencies/eta/unemployment-insurance-payment-accuracy/data</a> (last accessed Aug. 21, 2026). These data include
improper payment percentages, total dollar amounts, and the top 10
root causes by State.
---------------------------------------------------------------------------
c. Benefits to Broader Economy From Increased Employment and
Accelerated Reemployment
Securing employment sooner (or avoiding unemployment outcomes
before they occur \16\) generates substantial social benefits that
extend well beyond the direct earnings gained
[[Page 72489]]
by workers. When individuals find jobs more quickly, they may reduce
their reliance on UC and public assistance programs, such as food
assistance and housing subsidies, potentially lowering public
expenditures. Earlier returns to work may also generate positive
spillover effects for local economies as increased earnings support
additional consumer spending and economic activity.
---------------------------------------------------------------------------
\16\ Dongil Daniel Keum and Stephan Meier, ``License to Layoff?
Unemployment Insurance and the Moral Cost of Layoffs'' (2024),
Organization Science, vol. 35, no. 3, <a href="https://doi.org/10.1287/orsc.2022.16734">https://doi.org/10.1287/orsc.2022.16734</a>; Daniel D. Keum and Xin Lucy Liu, ``Managerial
Prosocial Preferences and Guilt as an Emotional Barrier to Exit
Decisions'' (2026), Management Science, vol. 72, no. 7, <a href="https://doi.org/10.1287/mnsc.2023.02533">https://doi.org/10.1287/mnsc.2023.02533</a>.
---------------------------------------------------------------------------
In addition to these broader benefits from accelerated
reemployment, employed individuals contribute to tax revenues through
income taxes, payroll taxes, and consumer spending that generates sales
tax revenue. Together, these effects can produce positive feedback
loops that extend beyond individual employment outcomes and contribute
to broader economic activity. Accordingly, the Department considers
below a potential effect of earlier reemployment: additional tax
revenues associated with increased earnings.
The Department developed illustrative estimates of these potential
tax revenue benefits using a rate of 17 percent of those earnings.\17\
The Department applied this rate to the illustrative range of annual
reductions in UC payments calculated in section V.A.2.ii ($6.445
billion to $7.272 billion), which the Department uses as a proxy for
increased earnings, resulting in illustrative estimates of annual tax
revenue benefits ranging from $1.096 billion to $1.236 billion. These
figures are intended to illustrate the potential magnitude of the
benefits rather than estimate the amount of additional tax revenue that
would actually be realized.
---------------------------------------------------------------------------
\17\ The source for the 17 percent input is Aaron Kearsley,
``HHS Standard Values for Regulatory Analysis, 2026'' (March 2026),
Office of the Assistant Secretary for Planning and Evaluation, U.S.
Department of Health and Human Services, <a href="https://aspe.hhs.gov/sites/default/files/documents/2d83af5823915d81871334ee08ad03d9/Standard-RIA-Values-2026.pdf">https://aspe.hhs.gov/sites/default/files/documents/2d83af5823915d81871334ee08ad03d9/Standard-RIA-Values-2026.pdf</a>.
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d. Improved Clarity and Consistency
The proposed rule would establish a more consistent framework for
work search requirements. Harmonizing these expectations would simplify
understanding among individuals claiming UC, reduce confusion regarding
allowable activities, and streamline administrative oversight and
performance monitoring across State systems. Clearer definitions of
qualifying activities would also support more uniform enforcement and
reduce the likelihood that otherwise eligible individuals fail to meet
requirements simply because expectations are unclear. Additionally,
adopting a standardized framework would facilitate better data
collection and analysis, enabling State UC agencies, the Department,
and other policymakers to identify trends and address systemic issues
more effectively.
e. Health Benefits of Securing Employment Sooner
Upon receiving the financial benefits of working, individuals who
return to work could experience positive health benefits. Employment is
recognized as an important factor in individuals' long-term health and
well-being. Existing research indicates obtaining and maintaining
stable employment provides individuals with reliable income and
financial stability, which in turn supports access to safe housing,
nutritious food, and other resources.\18 19\ A literature review
conducted by Rueda et al. (2012) looked at 18 studies of working-aged
adults who were returning to work after a period of unemployment.
Overall, these studies found that returning to work had a positive
effect on the workers' health and well-being. The literature review
found beneficial effects of returning to work in a variety of
populations, times, and settings.\20\
---------------------------------------------------------------------------
\18\ Quratulain Zafar, Muhammad Ali Khan, Asif Zaheer Warsi, and
Lyba Iqbal, ``Economic Strain and Recovery Trajectories in Mental
Health: The Role of Financial Stability in Mental Health Outcomes''
(2024), Review of Applied Management and Social Sciences,7(4), pp.
345-358, <a href="https://doi.org/10.47067/ramss.v7i4.385">https://doi.org/10.47067/ramss.v7i4.385</a>.
\19\ Ryan Gerdes et al., ``Associations Between Employment and
Health Outcomes: A Systematic Review of Reviews'' (2026), Journal of
Occupational Rehabilitation, <a href="https://doi.org/10.1007/s10926-025-10357-5">https://doi.org/10.1007/s10926-025-10357-5</a>.
\20\ Sergio Rueda et al., ``Association of Returning to Work
with Better Health in Working-Aged Adults: A Systematic Review''
(2012), American Journal of Public Health, vol. 102, no. 3, pp. 541-
556, <a href="https://pubmed.ncbi.nlm.nih.gov/22390520/">https://pubmed.ncbi.nlm.nih.gov/22390520/</a>.
---------------------------------------------------------------------------
3. Summary of the Analysis
i. Costs
The Department's monetized cost estimates include one-time rule
familiarization costs for State UC agencies to review and understand
the regulatory changes. The estimated cost to State UC agencies for
time spent on rule familiarization is approximately $23,799 in labor
costs, undiscounted. Annualized over 10 years, rule familiarization
costs are estimated at $2,709 with 3-percent discounting and $3,167
with 7-percent discounting.
The Department also discusses additional cost categories that are
not quantified (e.g., cost to individuals for complying with the
proposed rule; cost to job support structures and organizations; costs
for revising State UC law and the associated implementation activities;
increased administrative activities for some States; and costs for
State IT system changes and annual maintenance) elsewhere in section
V.A.2.i.b. For the cost to individuals, the Department provides
illustrative estimates of the additional hours spent on work search
activities.
ii. Transfers
The proposed rule is expected to result in unquantified transfer
payments through reduced UC outlays, for which the Department provides
illustrative estimates of potential magnitude. Strengthened work search
requirements will shorten the duration of UC receipts through increased
work search participation by UC recipients resulting in recipients
returning to employment more quickly, or through UC recipients being
found ineligible for receipt of benefits due to not completing the
required number of work search activities in a week claimed. Payments
to individuals claiming UC would decrease, with corresponding increases
in State UC trust fund balances. Overall, the time-reallocation effects
of this rule may reduce annual government deficits. Because these
monetary changes represent a redistribution between affected
individuals and State UC trust funds rather than a change in total
societal resources, the Department treats them as transfers and is
seeking public comment to support quantification at the final rule
stage.
iii. Benefits
As discussed in section V.A.2.iii, the proposed rule is expected to
generate several categories of nonquantified benefits primarily through
increased employment and faster reemployment among individuals claiming
UC. By encouraging more consistent and structured work search activity,
the rule is anticipated to shorten the duration of unemployment spells,
resulting in improved labor force attachment and enhanced employment
outcomes. Earlier reemployment may produce broader economic benefits,
including reduced reliance on public assistance programs, increased tax
revenues, and positive spillover effects for local economies. The rule
is also expected to improve program accountability and integrity by
strengthening work search reporting and enabling State agencies to
better monitor eligibility, thereby reducing improper payments. In
addition, establishing a more consistent framework for work search
requirements would improve clarity for individuals. Increased job
search engagement and expanded recognition of skill-building activities
may also improve the efficiency of labor market matching, benefiting
both workers and employers.
[[Page 72490]]
Finally, earlier returns to work are associated with improved
individual health and well-being, including positive mental health
outcomes and increased financial stability.
4. Regulatory Alternatives
The Department considered three alternatives as part of determining
whether to issue this NPRM. These alternatives included: (1) issuing
additional subregulatory guidance to improve work search quality and
providing suggested methods to reduce improper payments due to work
search errors; (2) issuing regulations that mandate universal pre-
payment verification of work search activities that would require
individuals to report work search activities for each benefit week
claimed, and also require the State to independently verify that each
reported activity actually occurred before issuing payment for the
week; and (3) maintaining the status quo.
Alternative One: Issuing Additional Subregulatory Guidance
Despite the issuance of guidance and model legislation, as
explained in detail in Section III.B of this preamble, work search
errors continue to be one of the primary drivers of improper payment
rates across the UC system and the UC improper payment rate remains
above the 10-percent performance target established by the Payment
Integrity Information Act. Significant improvement was made in
addressing work search errors in the year leading up to the March 2020
start of the pandemic. However, Congress enacted legislation to
temporarily waive the work search requirement during the pandemic; once
reinstated, work search errors again increased significantly.
Based on this evidence and the need to update the regulation
setting forth an A&A requirement to reflect subsequent statutory
changes that incorporate a work search requirement, the Department
determined that voluntary guidance and technical assistance were
insufficient to reduce inconsistencies beyond those created by local
labor markets in State-level standards for individuals to actively seek
work.
Therefore, the Department determined that it was necessary to
promulgate a regulation that requires States to take specific actions
to increase participation in the labor market by individuals collecting
UC, including requiring States to include a broader array of acceptable
work search activities in their laws and require the reporting of such
activities prior to releasing payment. This regulatory approach is
necessary to ensure greater consistency, accountability, and
effectiveness in promoting rapid reemployment and maintaining UC
program integrity.
Alternative Two: Issuing Regulations That Require Verification of Work
Search Prior to Payment of UC
The Department considered an alternative approach that would have
required States to verify all individual work search activities prior
to the payment of UC. Under this alternative, States would have been
required to collect, review, and validate documentation associated with
each qualifying work search activity before issuing UC for the week
claimed.
The Department recognizes that verification of work search
activities is an important program integrity tool. However, the
Department determined that a universal, pre-payment verification
framework would be administratively difficult for many States and could
compromise the statutory requirement in section 303(a)(1) of the SSA
that UC be paid ``when due.'' States vary considerably in staffing
levels, system modernization, governance structures, and adjudication
capacity. Many State UC systems are not designed to validate
documentation at scale or distinguish eligibility verification from
quality-control sampling. Universal, pre-payment verification of work
search would require significant IT reprogramming; substantially
increase adjudication workloads and call-center inquiries; and heighten
the risk of delayed UC payments. These issues raise compliance concerns
under section 303(a)(1) of the SSA, which requires that States use
methods of administration reasonably calculated to ensure the full
payment of UC when due.
In evaluating this alternative, the Department also considered the
operational experience of the BAM program. The existing BAM program
requires detailed validation of work search activities through
statistically valid sampling. These investigations often require States
to perform exhaustive fact-finding, contact individuals and employers,
review documents, and verify reemployment activity. BAM investigations
can take several weeks to complete, depending on case complexity. BAM
is intentionally designed as a post-payment quality-control function,
not as an eligibility determination mechanism. Requiring a similar
level of documentation and verification prior to each weekly payment
would effectively duplicate and interfere with the BAM program's
established role, undermine its audit integrity, and impose an
additional administrative layer that States are not equipped to manage
at scale.
The Department further analyzed the tradeoffs between accuracy and
timeliness. Universal, pre-payment verification could increase accuracy
marginally but would significantly impair timeliness. Individuals would
face increased procedural hurdles, and States would experience higher
rates of pending issues, greater numbers of nonmonetary determinations,
increased appeals queues, and delays in benefit delivery. Delayed UC
benefit payments frustrate the program's core statutory purpose of
providing income support to individuals who are unemployed through no
fault of their own. Additionally, employers are not mandated to keep
proof of employment applications, resumes, or outreach from individuals
seeking work with their company, and these verification attempts may
not have the intended effect.
For these reasons, the Department determined that the second
alternative would not provide net benefits. States are required to have
a robust internal quality control program for assessing risk,
evaluating outcomes, and adapting mitigation activities to improve
improper payment risk management strategies--including work search
verifications. Doing this for all work search activities across all
weeks claimed would impose substantial administrative burdens on States
and employers, undermine the timeliness of UC benefit payments, and
create procedural obstacles that are not sufficiently justified by the
integrity gains. Instead, the Department concluded that a weekly
minimum work search requirement, paired with mandating that States
require individuals to report their work search activities each week,
best balances timeliness, integrity, and administrative feasibility.
Alternative Three: Maintaining the Status Quo
Under this no-action alternative, the Department would not issue
the proposed rule, and existing State practices regarding work search
requirements and qualifying activities would remain in place. This
alternative would avoid any implementation or administrative costs
associated with the proposed rule. However, it would also forgo the
anticipated benefits of the proposed rule, including greater clarity
for individuals claiming UC, more consistency across State systems,
improved accountability, and expected
[[Page 72491]]
gains from facilitating reemployment. Because this alternative would
not address the concerns identified in this proposed rule, the
Department has decided against maintaining the status quo.
The Department invites comments on these or other possible
alternatives with the goal of ensuring thorough consideration and
discussion at the final rule stage.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. ch. 6, requires the
Department to evaluate the economic impact of this proposed rule on
small entities. The RFA defines small entities to include small
businesses; small organizations, including not-for-profit
organizations; and small governmental jurisdictions. The Department
must determine whether the rule would impose a significant economic
impact on a substantial number of such small entities. The Department
concludes that this proposed rule would not regulate any small entities
directly, so any regulatory effect on small entities would be indirect.
Accordingly, the head of the Department certifies this proposed rule
would not have a significant economic impact on a substantial number of
small entities within the meaning of the RFA.
C. Paperwork Reduction Act of 1995
The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq.,
requires the Federal Government to minimize the paperwork burden on
affected entities. The PRA requires certain actions before an agency
can adopt or revise a collection of information, including publishing
for public comment a summary of the collection of information and a
brief description of the need for and proposed use of the information.
The Department has determined this proposed rule contains no new
information collection under the provisions of the PRA.
D. Executive Order 13132 (Federalism)
E.O. 13132 aims to guarantee the division of governmental
responsibilities between the Federal Government and the States and to
further the policies of the Unfunded Mandates Reform Act of 1995
(UMRA). Accordingly, E.O. 13132 requires executive departments and
agencies to ensure that the principles of federalism guide them in the
formulation and implementation of policies. Further, agencies must
adhere to constitutional principles, examine the constitutional and
statutory authority supporting a regulation that would limit the
policymaking discretion of the States, and assess the need for such a
regulation. To the extent practicable, agencies must consult State and
local officials before implementing any such regulation.
E.O. 13132 further provides that agencies must implement a
regulation that limits the policymaking discretion of the States only
where there is constitutional and statutory authority for the
regulation and it addresses a problem of national significance. For a
regulation administered by the States, the Federal Government must
grant the States the maximum administrative discretion possible to
avoid intrusive Federal oversight of State administration, and agencies
must adhere to special requirements for a regulation that preempts
State law. E.O. 13132 also sets forth the procedures that agencies must
follow for certain regulations with federalism implications, such as
preparation of a summary impact statement.
The Department reviewed this proposed rule in accordance with E.O.
13132 and determined that the rule may have federalism implications.
However, the Department's unique relationship with the States requires
regular consultation and collaboration with State partners, including
on matters pertaining to the work search requirement in section
303(a)(12) of the SSA. Such engagement with State partners often
relates to their conformity with the existing statute at 42 U.S.C.
503(a)(12) and regulations at 20 CFR part 604, including technical
assistance, in-person convenings, and webinars. These engagements are
critical for ensuring that States understand Department policy and
regulation. The Department will continue consulting and collaborating
with State partners, which the Department views as essential to its
oversight of the UC program.
E. Unfunded Mandates Reform Act of 1995
UMRA (Pub. L. 104-4, codified at 2 U.S.C. 1501 et seq.) requires
Federal agencies to assess a regulation's effects on State, local, and
tribal governments and on the private sector, except to the extent the
regulation incorporates requirements specifically set forth in law.
Title II of UMRA directs agencies to prepare a written statement
assessing the effects of a regulation that includes any Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector of $100 million
or more (adjusted annually for inflation) in a year. A Federal mandate
is any provision in a regulation that imposes an enforceable duty upon
State, local, or tribal governments or upon the private sector, except
as a condition of Federal assistance or a duty arising from
participation in a voluntary Federal program.
This proposed rule, if finalized, does not include any unfunded
Federal mandate that could result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector of
$100 million or more. As a result, the analytical requirements of UMRA
do not apply and the Department has not prepared a statement under
UMRA.
F. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
E.O. 13175 addresses the unique relationship between the Federal
Government and Indian tribal governments. It requires executive
departments and agencies to take certain actions when a regulation has
tribal implications. Required actions include consulting with tribal
governments prior to issuing a regulation with tribal implications and
preparing a tribal impact statement. E.O. 13175 defines a regulation as
having ``tribal implications'' when it has substantial direct effects
on one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.
The Department has reviewed this proposed rule under the terms of
E.O. 13175 and the Department's Tribal Consultation Policy and has
concluded that the proposed changes to the regulatory text would not
have Tribal implications. These proposed changes do not have
substantial direct effects on one or more Indian tribes, the
relationship between the Federal government and Indian tribes, nor the
distribution of power and responsibilities between the Federal
government and Tribal Governments. Therefore, the Department concludes
that the NPRM does not have tribal implications.
List of Subjects in 20 CFR Part 604
Labor, Unemployment compensation.
For the reasons discussed in the preamble, the Department of Labor
proposes to amend chapter V of title 20 of the Code of Federal
Regulations by amending part 604 as follows:
[[Page 72492]]
PART 604--REGULATIONS FOR ELIGIBILITY FOR UNEMPLOYMENT COMPENSATION
0
1. The authority citation for part 604 is revised to read as follows:
Authority: 42 U.S.C. 1302(a); 42 U.S.C. 503(a)(1) and (12); 26
U.S.C. 3306(h); 42 U.S.C. 1320b-7(d); Secretary's Order No. 06-2010
(October 20, 2010).
0
2. Revise Sec. 604.1 to read as follows:
Sec. 604.1 Purpose and scope.
The purpose of this part is to implement the requirement in Federal
UC law that limits a State's payment of UC to individuals who are able
to work, available for work, and actively seeking work. This regulation
applies to all State UC laws and programs.
0
3. Amend Sec. 604.2 by redesignating paragraphs (b) through (h) as
paragraphs (c) through (i) and adding a new paragraph (b) as follows:
Sec. 604.2 Definitions.
* * * * *
(b) Employer contact means a communication by the individual with
an individual employer, including through written, virtual, telephonic,
or in-person means.
* * * * *
Sec. 604.5 [Amended]
0
4. Amend Sec. 604.5 by removing paragraph (h).
Sec. 604.6 [Redesignated as Sec. 604.7]
0
5. Redesignate Sec. 604.6 as Sec. 604.7.
0
6. Add new Sec. 604.6 to read as follows:
Sec. 604.6 Work search requirement.
(a) In general. States must implement a work search requirement in
accordance with this section, except where implementation would
conflict with the work search requirements in part 615 of this chapter.
States may not pay UC for a week during which the individual does not
complete the work search requirement.
(b) Work search requirement. A State may not determine that an
individual is eligible to receive UC for a claimed week unless the
individual completes the required work search activities in accordance
with this section or demonstrates an equivalent labor force attachment
under paragraph (g) of this section for the week for which UC is
claimed.
(c) Minimum number of work search activities. An individual meets
the work search requirement and may receive UC for a claimed week,
provided they are otherwise eligible for UC, only if, for the week in
question:
(1) The individual completes a minimum of five qualifying work
search activities;
(2) In States with a points-based system that meets the criteria in
paragraph (f) of this section, the individual completes qualifying work
search activities with a combined total point value that equals or
exceeds five; or
(3) The individual meets the criteria in paragraph (g) of this
section.
(d) Work search activity reporting. State law must require
individuals to report the details of each work search activity, or the
details of the individual's equivalent labor force attachment under
paragraph (g) of this section, as part of the UC certification process
prior to the payment of UC for the week claimed. States may obtain this
information on a weekly or biweekly basis through their certification
process.
(e) Work search activity. State law must include only those work
search activities that are specific, identifiable, and reasonably
calculated to lead to reemployment, and that are defined by the State
consistent with this paragraph.
(1) State law must not limit what constitutes a qualifying work
search activity to only employer contacts for the purpose of seeking
employment.
(2) State law must include the following work search activities for
the purposes of satisfying the work search requirement in paragraph (b)
of this section:
(i) Employer contacts for the purpose of seeking employment,
including:
(A) Employment application submission;
(B) Job interviews; and
(C) Skill, aptitude, or competency assessments related to
employment with a specific employer, an American Job Center or One
Stop;
(ii) Registration with placement agencies for the purpose of
seeking employment;
(iii) Ongoing contact with placement agencies for the purpose of
seeking employment; and
(iv) Contact with the individual's union for a job referral
regardless of whether the individual satisfies the criteria in
paragraph (g)(2) of this section.
(3) Additional work search activities that a State may designate as
satisfying the work search requirement include:
(i) Attending job fairs or hiring events;
(ii) Utilizing career center or employment services;
(iii) Attending workshops, training, or skill-building educational
events;
(iv) Taking professional assessments or certification exams; and
(v) Other activities that are reasonably calculated to lead to
reemployment, as determined by the State.
(f) Points-based system. (1) A State may adopt a points-based
system to implement the State's work search requirement provided by
paragraph (b) of this section, under which:
(i) Qualifying work search activities, in accordance with paragraph
(e) of this section, are assigned point values by the State;
(ii) The weekly work search requirement is satisfied when the total
number of points assigned to the qualifying work search activities an
individual has completed for the benefit week claimed equals or exceeds
five points; and
(iii) Each work search activity is assigned a value of one, two, or
three points.
(2) When providing that a work search activity will be assigned
more than one point, States must determine that such work search
activity either:
(i) Connects individuals to specific industries and locations that
need workers; or
(ii) Has strong evidence for directly leading to reemployment.
(g) Equivalent labor force attachment. (1) An individual is deemed
to have met the minimum number of work search activities as described
in paragraph (c) of this section when one of the following
circumstances applies:
(i) The individual is enrolled in and making satisfactory progress
in State-approved training under 26 U.S.C. 3304(a)(8);
(ii) The individual is participating in the Self-Employment
Assistance Program under 26 U.S.C. 3306(t);
(iii) The individual is participating in the Short-Time
Compensation Program under 26 U.S.C. 3306(v) by being available for
their workweek; or
(iv) The individual is enrolled in a Registered Apprenticeship
program under 29 U.S.C. 50.
(2) An individual is deemed to have met the minimum number of work
search activities as described in paragraph (c) of this section if they
are a union member who satisfies the following conditions:
(i) The individual is a member in good standing of a union;
(ii) The union the individual is a member of utilizes a hiring hall
for job referrals; and
(iii) The individual follows the requirements of their union
regarding contact with the union's hiring hall, provided the individual
contacts their hiring hall at least once a week.
(3) A State may deem an individual to have met the minimum number
of work
[[Page 72493]]
search activities as described in paragraph (c) of this section for a
benefit week if any of the following circumstances are met:
(i) The individual has a definite return-to-work date with their
separating employer within 8 weeks of the separation date.
(ii) The individual is a Federal employee, is unemployed due to a
lapse in Federal appropriations, and is expected to return to work when
the lapse ends.
(iii) The individual files an initial claim for UC less than 72
hours prior to the benefit week ending date.
(iv) The individual is serving on jury duty, and the individual's
jury duty service precludes the individual from completing the minimum
number of work search activities.
(v) The individual is hospitalized for treatment of an emergency or
life-threatening condition, and the hospitalization precludes the
individual from completing the minimum number of work search
activities.
(4)(i) A State may deem an individual to have met the minimum work
search requirement in paragraph (c) of this section for a claimed week
when the area in which the individual resides or is searching for work
is covered by a federally declared major disaster as defined under 42
U.S.C. 5122(2) and State law provides the authority to modify an
individual's work search requirements during a federally declared major
disaster.
(ii) An individual may only be deemed to have met the work search
requirement under paragraph (g)(4)(i) of this section where the week is
within 26 weeks of the commencement of the incident period.
(5)(i) A State may deem an individual to have met the minimum work
search requirement in paragraph (c) of this section for a week if the
individual accepted a bona fide offer of employment and the start date
for the new employment is within 4 weeks of the week being claimed.
(ii) The individual must meet the work search requirement in
paragraph (b) of this section for each week prior to satisfying the
circumstance in paragraph (g)(5)(i) of this section.
(h) Notification requirements. (1) At the time the initial claim is
filed, and at any other time during the benefit year if the State's
work search requirements substantially change for an individual, States
must provide written notice in a manner reasonably calculated to ensure
awareness of the following:
(i) The acceptable types of work search activities;
(ii) That the individual must complete a minimum of five work
search activities, in accordance with State law, for each claimed week
of UC;
(iii) If the State has a points-based system in place, an
explanation of the system in plain language;
(iv) That the individual must report work search activities each
time they file a continued claim and be prepared to provide
documentation of their work search activities upon request; and
(v) That payment of UC will not be made if the individual does not
complete the work search requirements for the week claimed.
(2) When the State determines that paragraph (g) of this section
applies to an individual or that an individual's circumstances with
respect to paragraph (g) of this section have substantially changed,
the State must notify the individual in writing of the following:
(i) The specific work search requirements that apply to the
individual if paragraph (g) of this section applies; and
(ii) The duration of the applicable circumstance in paragraph (g)
of this section.
(i) Prohibition on formal and informal warnings. Individuals who do
not complete the work search requirement under this section in a
claimed week are ineligible for UC for that week. States may not give
formal or informal warnings to individuals in lieu of determining that
the individual is ineligible for UC for a week for which the individual
has not met the requirements of this section.
Marek Laco,
Acting Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2026-22903 Filed 11-9-26; 8:45 am]
BILLING CODE 4510-FW-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.