Relates to the sharing of unemployment insurance information with public entities for certain authorized purposes

Summary of provisions

Section 1 of the bill would amend the heading of Labor Law § 537 to clarify its subject matter by deleting the current heading and replacing it with a new heading that would read "Disclosure of unemployment insurance information."

Section 2 of the bill would amend several paragraphs of Labor Law §537(1). Paragraph a of subdivision 1 is amended to clarify that the information to be disclosed under Section 537 would relate to the state unemployment insurance program. Paragraph b of subdivision 1 is amended to correct a reference to another part of Section 537 and to delete unnecessary language regarding the sharing of information dealing with placement. Paragraph c of subdivision 1 is amended to reorganize subparagraph (i) into subparagraphs (i), (ii), and (iii) to clarify that the provision relates to information acquired from an employer or an individual pursuant to the Department's administration of the unemployment insurance program. Current subparagraph (ii) is deleted because it contains unnecessary language about access to wage reporting information already included within the term "unemployment insurance information" and this section as amended will provide for specific access to unemployment insurance information. Paragraph d of subdivision 1 is amended to clarify that this paragraph relates to the disclosure of unemployment insurance information upon informed consent

to agents or third parties on behalf of an individual or employer. Changes made to language regarding informed consent are intended to clarify that consent, rather than a release, is required, Also, subparagraphs (iv), (v) and (vi) are added to paragraph d of subdivision 1. Subparagraph (iv) provides that a properly executed power of attorney form developed by the Department to authorize an individual to act as an employer representative in matters related to the administration of the unemployment insurance program shall constitute informed consent for purposes of this section. Subparagraph (v) is added to provide that a letter or other written communication from an elected official received on official letterhead or transmitted through an official electronic mail address in connection with providing services to a constituent shall constitute informed consent for the purposes of this section. Subparagraph (vi) is added to provide that a letter or other written communication from an attorney provided on firm letterhead in which the attorney asserts that he or she is representing an employer or individual in a matter related to the Department's implementation of the unemployment insurance program shall constitute informed consent for purposes of this section; for all other matters, the attorney will need to provide an informed consent. Finally, paragraph e of subdivision 1 is deleted since it relates to funding for disclosure of requested unemployment insurance information and the funding provisions are now set forth in a new subdivision 6 of Section 537.

Section 3 of the bill would amend subdivision 2 of section 537 of the Labor Law by renumbering current subdivision 2 as new subdivision 8 and adding a new subdivision 2. The new subdivision requires that the Commissioner report to the appropriate agency of the United States (USDOL) on the effect and administration of the unemployment insurance program in the manner prescribed by such agency and that he or she make unemployment insurance information available, upon request, to any federal, state or local agency entitled to such information under the Social Security Act or any other federal law in the manner prescribed by such federal law or its implementing regulations and 20 CFR Part 603. The new subdivision 2 would also provide that nothing in the subdivision shall prohibit the Department from disclosing to the State Directory of New Hires wage and unemployment compensation information as may be necessary to allow that State Directory to comply with Tax Law § 171-h. Finally, new subdivision 2 would provide that the Department be reimbursed for the cost of providing such information, as required by federal regulation and the Department's grant with the USDOL for the administration of the unemployment insurance program.

Section 4 of the bill would amend Labor Law § 537(3), to change its heading to indicate that the subdivision sets forth exceptions to non-disclosure provisions. Paragraph a of subdivision 3 is amended to clarify that, upon written request, and at his or her sole discretion, the Commissioner may disclose unemployment insurance information for purposes explained in paragraph b of subdivision 3 of Section 537. All disclosures set forth in paragraph b would be subject to three requirements. The first requirement is that disclosure only be made pursuant to the terms of a written agreement between the Department and the requesting entity; that the terms of said agreement be consistent with 20 CFR Pat1 603, a federal rule dealing with confidentiality and

disclosure of state unemployment insurance compensation information, and with any other applicable federal and state laws and regulations; that the terms of said agreement include provisions requiring that unemployment insurance information be disclosed after the requesting entity has demonstrated to the Commissioner's satisfaction that the shared information will be used only for the purpose(s) for which it was requested, will be kept confidential, and will not be disclosed to third parties in individually identifiable form unless express permission to do so has been set out in said agreement; that the requesting agency have security safeguards in place to assure appropriate use and prevent unauthorized disclosure of the shared information; and that the requesting agency monitor, to the Commissioner's satisfaction, compliance with these safeguards. The second requirement is that disclosure only be made subject to provisions requiring reimbursement of costs associated with such disclosure. The third requirement is that re-disclosure of unemployment insurance information to a requesting entity's agent, contractor or subcontractor be allowed solely at the Commissioner's discretion after the requesting entity has shown to the Commissioner's satisfaction that such agent, contractor, or subcontractor will, by separate written agreement, be subject to all limitations on use and disclosure set forth in the written agreement required by subparagraph (i) of subdivision 3 and that compliance by the agent, contractor or subcontractor would be monitored by the requesting entity.

Section 4 of the bill also adds a new paragraph b to subdivision 3 that sets forth an introductory explanation that the Commissioner may disclose unemployment insurance information to specified entities for certain purposes, subject to the three requirements set forth in paragraph a of subdivision 3. Thirteen subparagraphs (i - xiii) would be added to paragraph b to specify entities to which disclosure is permitted for certain specified purposes. These thirteen subparagraphs incorporate provisions authorizing disclosure to certain entities that are currently set forth in paragraphs a through h of subdivision 3, using or deleting portions of existing text therefrom, and adding new text. All requesting entities that presently are permitted disclosure of unemployment insurance information would continue to be permitted disclosure, subject to the conditions on disclosure set forth in Section 537.

* Subparagraph (i) would permit the disclosure of unemployment insurance information to the Chief Administrator of the Courts for the sole purpose of integration of the information into lists of prospective jurors; the information disclosed would consist of the names and addresses of those residing within the State and receiving unemployment insurance benefits and any other information deemed necessary by the Commissioner.

* Subparagraph (ii) would permit the disclosure of certain unemployment insurance information to the secretary of health and human services or the appropriate state agency for the purposes of the National Director of New Hires.

* Subparagraph (iii) would permit the disclosure of certain unemployment insurance information to the secretary of health and

human services or the appropriate state agency for the purposes of carrying out child support enforcement programs.

* Subparagraph (iv) would permit disclosure to the State Directory of New Hires and the Office of Temporary and Disability Assistance to disseminate to support collection units designated by social service districts or their duly authorized agents.

* Subparagraph (v) would permit disclosure to the U.s. Census Bureau for statistical analyses related to population and employment measurements and trends.

* Subparagraph (vi) would permit disclosure to any federal, state or local agency in the investigation or prosecution of fraud relating to public programs, misuse of public funds, or investigation or prosecution of identity theft in connection with the operation of public programs; in response to a judicial order or grand jury subpoena; to any state or local governmental entity for the purpose of public protection, including, but not limited to, disclosure to law enforcement agencies in connection with the investigation or prosecution of alleged criminal conduct; and to public safety agencies in connection with emergency management or response. · Subparagraph (vii) would permit disclosure to any state or U.S. territorial workforce agency, local workforce investment board and its agents, and one stop operating partner receiving funds under the Workforce Investment Act of 1998 for program performance purposes and other purposes authorized by the Commissioner.

* Subparagraph (viii) would permit disclosure to the U.S Department of Labor or its agents, as required by law, or in connection with the requirements imposed as a result of receiving federal administrative funding other than funding for the unemployment insurance program.

* Subparagraph (ix) would permit disclosure to any federal, state, or local governmental entity for evaluation of program performance, as required by federal, state, or local law or regulation, including, but not limited to, customer tracking needed for long-term or longitudinal outcome analysis; financial or other analysis required by federal, state or local law or regulation; preparation of reports required by federal, state or local law or regulation; operation of public programs whenever the commissioner determines that information sharing is needed to improve the quality or delivery of program services or to create operational efficiencies; and for the establishment of a common case-management system with other state or local entities delivering or supporting workforce services for a shared customer base, wherever the Commissioner determines that such common case-management system is needed to foster workforce partnerships, program coordination or inter-agency collaboration, to improve program services, or to create operational efficiencies.

* Subparagraph (x) would permit disclosure of information to the Workers' Compensation Board, the State Insurance Fund and the State Insurance Department in order to determine compliance with coverage of workers' compensation and disability insurance, and, as to the

Workers' Compensation Board, to determine eligibility for workers' compensation benefits.

* Subparagraph (xi) would permit disclosure to the Office of Temporary and Disability Assistance (OTDA) and local social services districts to establish or verify the income and eligibility of applicants for, or recipients of, benefits under state public assistance and care programs, and this information shall not be re-disclosed by OTDA, except to the Department of Health, the Office of Children and Family Services, and local social services districts for purposes of establishing or verifying the income and eligibility of applicants for, or recipients of, benefits under state public assistance and care programs.

* Subparagraph (xii) would permit disclosure to the New York City Comptroller for the purpose of establishing New York City prevailing wage rates.

* Subparagraph (xiii) would permit disclosure to federal, state or local officials when, in the judgment of the Commissioner, such officials have made a showing of need for such information based upon compelling circumstances affecting the health and safety of an individual.

* Subparagraph (xiv) would permit disclosure to the New York State Comptroller for purposes associated with the performance of his or her statutory and constitutional responsibilities related to the administration of the unemployment insurance program.

* Subparagraph (xv) would permit disclosure to Department contractors, subcontractors or agents as the Commissioner deems necessary to carry out its statutory functions; such disclosure must be consistent with the authorized purposes described in Subdivision four of this Section and applicable federal regulations, guidelines, and policies.

Section 5 of the bill would add a new subdivision 6 to Labor Law § 537 to address reimbursement of costs incurred by the Department associated with disclosure of requested unemployment insurance information. As noted above, language contained in this section has been moved from paragraph e of subdivision 1. New subdivision 6 also requires that notwithstanding other provisions of subdivision 6, costs associated with disclosure of unemployment insurance information by the Department pursuant to the terms of Section 537 may be waived if they do not involve more than an incidental amount of staff time and no more than nominal processing costs or where the Department has in place a reciprocal cost agreement or arrangement with the entity to whom the information is disclosed.

Section 6 of the bill would amend Labor Law § 537(7) to require the Department to notify all employers that information obtained from the Department of Taxation and Finance and/or unemployment insurance information collected in connection with the Department's administration of the unemployment insurance program may be used to evaluate program effectiveness or for other official purposes.

Section 7 of the bill would amend paragraph g of subdivision 4 of section 171-h of the Tax Law § 171-h(4)(g) to make it consistent with the revisions of Section 537 proposed in this legislation.

Section 8 of the bill would provide for an immediate effective date.

Existing law

Labor Law § 537 prohibits disclosure of information obtained from employers and claimants in connection with the Department's administration and operation of the unemployment insurance system except under limited circumstances and provided that safeguards are implemented to protect the confidentiality of such information.

Labor Law § 537(1)(a)(i) defines unemployment insurance information as information in the records of the Department pertaining to the administration of Article 18, including information obtained by the Department from employers and employees; also included in this definition is wage reporting information obtained from the Department of Tax and Finance, as well as information in the State Directory of New Hires.

Labor Law § 537(1)(b) treats the use of unemployment information and requires that it be for the exclusive use and information of the Commissioner in the discharge of his or her duties, not be open or used in a court proceeding unless the Commissioner is a party or the proceeding involves the disclosure of information pursuant to subdivision 3, paragraph g. Such information also shall be available to parties to a claim for benefit adjudication and in connection with effecting placement.

Labor Law Sections 537(1)(c) and (d) authorize limited disclosure of unemployment insurance information acquired from an individual or employer. Paragraph c provides for disclosure to a requestor of the requestor's own information upon provision of written authorization to act, while subparagraph (ii) of paragraph c of subdivision 1 also permits limited disclosure of wage reporting information. Paragraph d permits disclosure to an agent or third party based upon informed consent.

Labor Law § 537(1)(e) provides that unemployment insurance grant funds may not be used to pay for the costs of such disclosure.

Labor Law § 537(3)(a) through (g) set out the exceptions to the prohibition on disclosure. Paragraph a permits disclosure under federal law; paragraph b permits disclosure for the purpose of the creation of lists of potential jurors; paragraph c permits disclosure for the National Directory of New Hires; paragraph d permits disclosure for the collection of child support; paragraph e permits disclosure for the State Directory of New Hires; paragraph f permits disclosure for the National Census Bureau; subparagraph (i) of paragraph g permits disclosure of unemployment insurance information to certain federal, state, and local agencies, under the terms of a written agreement in a form determined by the Commissioner and consistent with 20 CFR 603 and other federal regulations and provided that the confidentiality of the information be maintained, except for those purposes for which it was provided to the requesting agency,

and provided that the requesting agency have security safeguards preventing unauthorized disclosure of the information; and subparagraph (ii) of paragraph g, provides that unemployment insurance information may be disclosed in relation to investigation of fraud or misuse of public funds; to certain workforce agencies, local workforce investment boards and their agents, and one-stop operating partners for program performance and other programmatic purposes authorized by the Commissioner, to the US Department of Labor or its agents, as required by law or the requirements of receipt of federal administrative funding, and to state and local economic development agencies where such information is necessary to carry out the statutory functions of such agencies. Re-disclosure of information obtained by such agencies is limited to tabulation and publication in an aggregated statistical form; no individual identifying information may be re-disclosed in the course of the tabulation or publication. Unemployment insurance information also may be shared with Workers' Compensation Board, the State Insurance Fund and the State Insurance Department to determine compliance with the coverage of workers' compensation and disability insurance and eligibility for workers' compensation benefits. Unemployment insurance information also may be disclosed to federal, state, or local law enforcement agencies in accordance with a proper judicial order or grand jury subpoena served upon the Department, and with the Office of Temporary and Disability Assistance or local social services districts to establish or verify public assistance applicant income and eligibility. This subparagraph also permits unemployment insurance information sharing with the Office of Vocational and Educational Services and the Commission for the Blind and Visually Handicapped. Finally, the subparagraph permits disclosure to Department contractors, subcontractors or agents, consistent with authorized purposes and applicable federal regulations, guidelines and policies.

Labor Law § 537(7) requires the Department to notify applicants to, and participants in, employment security and training programs for which the Department has reporting, monitoring, or evaluating responsibilities that information obtained from the Department of Taxation and Finance may be used to evaluate program effectiveness for a period of up to ten years after the later of such application or participation.

Prior legislative history

This is a new bill.

Statement in support

The current language of Labor Law § 537 can be confusing in that the section has been modified in piecemeal fashion as various entities have approached the Department to request access to unemployment insurance information. The current language is, as a result, confusing and hard to follow. Streamlining the provisions that set forth the conditions under which unemployment information may be disclosed while also consolidating or eliminating provisions that are repetitive or redundant will facilitate understanding of this section of the Labor Law. At the same time, this proposed bill will

underscore the importance of maintaining the confidentiality of information shared and will continue to prohibit the use of federal unemployment grant moneys to pay for the costs of disclosing unemployment insurance information, in accordance with federal regulations, while clarifying the requirement that the Department's costs in retrieving and sharing unemployment insurance information be reimbursed except where such disclosure provides the Department with a reciprocal benefit or where such costs are negligible.

Except as permitted under applicable federal law or regulation, or as otherwise authorized by agreement between the Department and the United States Department of Labor, federal unemployment insurance grant funds cannot be used to pay for any of the costs incurred by the Department in processing and handling requests for disclosure of unemployment insurance information made under Section 537 (including start-up costs), or for administering such requests or monitoring compliance with disclosure confidentiality provisions. The costs must be calculated, collected and administered by the Department consistent with federal rules and regulations and paid in advance of disclosure. If the recipient is a public official, the Department may accept payment by way of reimbursement. Failure to collect such payments would put the Department's grant for operation of the unemployment insurance program in jeopardy since the program would be out of compliance with federal regulations. Since the bill expands potential areas of disclosure to include sharing of information that would facilitate program efficiency through common case management systems and other uses that will enhance program performance and efficiency, covering the costs of obtaining such data, should be a small investment in data sharing that will eventually result in savings far larger than the costs.

The provision regarding disclosure to any federal, state or local governmental entity for evaluation of program performance, as required by federal, state, or local law or regulation addresses requests for unemployment insurance information made by numerous agencies at the federal, state, and local level over the past several years. This would include, but not be limited to, customer tracking needed for long-term or longitudinal outcome analysis; financial or other analysis required by federal, state or local law or regulation; preparation of reports required by federal, state or local law or regulation; program operations, where the information is needed to improve service delivery and operational efficiencies; and the establishment of a common case management system with other state or local entities delivering or supporting workforce services for a shared customer base. Access to the information provided under this bill would allow for more meaningful program evaluation, particularly with regard to longitudinal analysis of clients, will address data sharing needs associated with the state's Race to the Top grant, and will facilitate development of shared case management systems by agencies with a common customer base. These efforts foster cooperation among state agencies and support the State's goal of making its agencies more accountable, efficient, and run in a cost-effective manner.

Law enforcement agencies frequently contact the Department to request unemployment insurance information for purposes of various criminal

investigations; due to confidentiality restrictions, the Department cannot always release information in response to these requests. This bill would allow the Department to release unemployment insurance information without the need for service of a judicial order or grand jury subpoena upon a showing of need by the law enforcement agency. At the same time, the bill would authorize the release of unemployment insurance information in connection with the investigation and prosecution of identity theft. This is an area of law enforcement that is of particular interest to the claimants and employers involved with the UI system. The Department often hears of individuals who have given another person's social security numbers to their employers; this misuse of the SSN surfaces when the rightful owner of the SSN tries to claim unemployment insurance and is identified as employed or when the individual is found liable for taxes associated with a UI claim that is not theirs. Current language of Section 537 prohibits the Department from sharing information that would be useful to the investigation and prosecution of such incidents.

The bill also would allow the Department to share information with other officials for uses associated with protection of public safety or where there has been a showing that the information is needed to protect the health and welfare of a particular individual. For example, the Department received a request from a local police department wanting to do a health-and-welfare check on an individual with certain mental health issues who had not contacted his parents for an extended period of time. Efforts to locate him at his residence were unsuccessful as he had been evicted and police wanted to know if he was working so that they could attempt to locate him there. Under current law, the Department was foreclosed from being able to assist the police with this inquiry without specific consent of the employer whose information was being disclosed. This bill would not require such consent under these circumstances.

Changes to the statute allowing additional or broader disclosure of unemployment insurance information to state and local agencies support legitimate governmental needs. At the same time, however, the bill underscores the confidentiality protections that apply to such data sharing and includes specific requirements with regard to protecting such information including restrictions on use and disclosure, use of consent forms, notice to individuals providing information to the UI system, and cost sharing that will facilitate meaningful monitoring of data use.

Lastly, although the bill would no longer specifically authorize disclosure to the Office of Vocational and Educational Services and the Commission for the Blind and Visually Handicapped, these agencies will continue to be able to request disclosure of unemployment insurance information under the broader provisions proposed in this legislation.

Budget implications

Federal regulations do not permit the Department to use federal grant moneys to cover the Department's costs for sharing unemployment insurance information, unless such costs are nominal or there is a

reciprocal benefit to the Department. ·The ability to charge requesting agencies for the costs of processing and handling requests for disclosure of unemployment insurance information and for administration and monitoring of the protection of the confidentiality of such information will defray the costs associated with providing such information and with monitoring compliance with the confidentiality restrictions on such disclosure. Although it is not possible to estimate the cost to State agencies and other entities that may request access to such information, it is expected to be minimal. No fiscal impact on the Department of Labor is anticipated because the Department would be required to be reimbursed for any unemployment insurance information sharing costs.

Effective date

This act shall take effect immediately.