Business & Lobbying

Labor Department eyes drug test rule for unemployment pay

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The Trump administration is looking to bring back and broaden a rule that Congress killed last year requiring drug testing for unemployment benefits.

Using the Congressional Review Act (CRA), Republicans in March repealed an Obama-era rule that limited the ability of states to drug test people applying for unemployment pay.

Republicans said the 2016 rule was too narrow because it only allowed states to drug test people whose occupations already regularly required it. That category included airplane pilots, flight crews and air traffic controllers, commercial and public transit drivers and any job requiring an employee to carry a firearm.

Now the Labor Department has signaled it plans to issue a broader rule that will redefine which occupations are those that regularly drug test.

{mosads}In the regulatory agenda, a semiannual roadmap for the administration’s rulemaking plans, the Labor Department warned that, after the repeal of the 2016 rule, “states no longer have authority to drug test unemployment compensation applicants for whom suitable work is only available in occupations that regularly conduct drug testing for unlawful use of controlled substances.”

The department said it will issue a notice of proposed rulemaking that “will identify the occupations that regularly conduct drug testing.”

While liberal advocates aren’t happy with the prospect of a new rule, they say the administration’s move could set an important precedent for issuing regulations even after an action is repealed under the CRA.

“Our perspective all along is this is possible,” said Lisa Gilbert, vice president of legislative affairs at Public Citizen. “People shouldn’t treat the CRA like a scorched earth, ‘we can never regulate again in this space’ dictate.”

Republicans last year used the CRA process to repeal a slew of Obama administration regulations. The 1996 law states that, once a regulation is repealed under the law, agencies are barred from re-issuing the same rule or a “substantially similar” rule in the future without an act of Congress.

With President Trump in the White House, the Republican-controlled Congress used the CRA to toss out 15 regulations — most recently one the independent Consumer Financial Protection Bureau issued to protect consumers’ right to settle disputes with financial institutions in court.

Before 2017, the CRA had only successfully been used once, so the Labor Department’s move on the unemployment rule will break new ground; never before has an agency tried to issue a new rule that’s “substantially different” from a rule scrapped by a CRA resolution.

“It’ll be an interesting test to see what they can create that’s broader that’s not deemed too similar,” Gilbert said.

The Obama-era rule that Congress nixed was a byproduct of the 2012 Middle Class Tax Relief and Job Creation Act.

Congress passed the law as a compromise. It allows states to drug test unemployment applicants who were let go from a job because of unlawful drug use, as well as workers looking for jobs in occupations where applicants and employees are subject to regular drug testing.

George Wentworth, senior counsel for the National Employment Law Project, said the 2016 rule focused on jobs that conduct random drug screenings, not those that test as a condition of pre-employment.

By extending the rule to cover those jobs, Wentworth argued, the Labor Department would be overstepping its authority under the law.

“We think [Labor] already went through a very thorough and thoughtful process in promulgating the previous regulation that didn’t take Congress long to drop a bomb on, and now where are they going to go?” he asked.

“Anything that broadens the categories of unemployed workers beyond what the statute specified could be subject to a legal challenge.”

Doug Holmes, president of Strategic Services on Unemployment and Workers’ Compensation, however, said if people have an expectation of being paid unemployment benefits under the federal statute, they need to make themselves able and available to work — and doing so means passing a drug test.

“This is an insurance program, it’s not public assistance,” he said.

The group, which represents businesses specifically in the areas of unemployment compensation and workers’ compensation, supported the repeal of the original rule.

Holmes said the last regulation was too restrictive in identifying those individuals who could be subject to a drug test and only allowed states to drug test when an individual applied for unemployment benefits, instead of on an ongoing basis.

“An individual has to be available and able to work. If they’re not available and able to work, week by week by week, then they don’t meet the requirements to be paid unemployment compensation benefits,” he said. “If an individual has a significant problem that renders him or her unavailable to work, the appropriate response is to refer them to a place to get help. They should not be paid unemployment benefits.”

As for the expense of drug testing, Holmes said that’s something employers also have to weigh when deciding what their policies will be.

“I’d be surprised to see states broadly rushing to test everyone,” he said. “I think they’ll be careful in how they use the discretion.”

It is not yet known what the Labor Department will ultimately propose or how broad the new rule will be.

In a statement, Labor Department spokesman Eric Holland said only that the agency is “diligently working on a new proposal regarding unemployment compensation drug testing that will be substantially different from the prior rule.”

“When it is ready, we will publish it in the Federal Register for review and comment by the public,” he said.

The National Employment Law Project has warned that expanding the rule to make drug testing a condition of eligibility for unemployment benefits would not only be costly, but also unconstitutional.

“Generally, government-mandated drug testing not based on individualized suspicion is unconstitutional,” and “promotes negative stereotypes of unemployed U.S. workers,” the group said in a policy paper in February.

Only three states — Texas, Mississippi and Wisconsin — have passed laws to allow drug testing for their unemployment insurance programs.

According to the announcement in the regulatory agenda, the Labor Department is hoping to release a proposed rule in June.

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