Social Security Act section 303

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Social Security Act §303

PROVISIONS OF STATE LAWS[7]
S . 303. [42 U.S.C. 503] (a) The Secretary of Labor shall make no certification for payment to any State
unless he finds that the law of such State, approved by the Secretary of Labor under the Federal
Unemployment Tax Act[8], includes provision for—
(1) Such methods of administration (including after January 1, 1940, methods relating to the
establishment and maintenance of personnel standards on a merit basis, except that the Secretary
of Labor shall exercise no authority with respect to the selection, tenure of office, and compensation
of any individual employed in accordance with such methods) as are found by the Secretary of
Labor to be reasonably calculated to insure full payment of unemployment compensation when
due[9]; and
(2) Payment of unemployment compensation solely through public employment offices or such
other agencies as the Secretary of Labor may approve; and
(3) Opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for
unemployment compensation are denied; and
(4) The payment of all money received in the unemployment fund of such State (except for
refunds of sums erroneously paid into such fund and except for refunds paid in accordance with the
provisions of section 3305(b) of the Federal Unemployment Tax Act), immediately upon such receipt,
to the Secretary of the Treasury to the credit of the unemployment trust fund established by section
904; and
(5) Expenditure of all money withdrawn from an unemployment fund of such State, in the
payment of unemployment compensation, exclusive of expenses of administration, and for refunds
of sums erroneously paid into such fund and refunds paid in accordance with the provisions of
section 3305(b) of the Federal Unemployment Tax Act[10]: Provided,That an amount equal to the
amount of employee payments in to the unemployment fund of a State may be used in the
payment of cash benefits to individuals with respect to their disability, exclusive of expenses of
administration: Provided further, That the amounts 903(c)(2) or 903(d)(4) may, subject to the
conditions prescribed in such section, be used for expenses incurred by the State for administration
of its unemployment compensation law and public employment offices: Provided further, That
nothing in this paragraph shall be construed to prohibit deducting an amount from unemployment
compensation otherwise payable to an individual and using the amount so deducted to pay for
health insurance, or the withholding of Federal, State, or local individual income tax, if the individual
elected to have such deduction made and such deduction was made under a program approved by
the Secretary of Labor: Provided further, That amounts may be deducted from unemployment
benefits and used to repay overpayments as provided in subsection (g): Provided further, That
amounts may be withdrawn for the payment of short-time compensation under a short-time
compensation program (as defined in section 3306(v)[11] of the Internal Revenue Code of 1986)[12]:
Provided further, That amounts may be withdrawn for the payment of allowances under a selfemployment assistance program (as defined in section 3306(t) of the Internal Revenue Code of
1986[13]); and
(6) The making of such reports, in such form and containing such information, as the Secretary of
Labor may from time to time require, and compliance with such provisions as the Secretary of Labor
may from time to time find necessary to assure the correctness and verification of such reports; and
(7) Making available upon request to any agency of the United States charged with the
administration of public works or assistance through public employment, the name, address,
ordinary occupation and employment status of each recipient of unemployment compensation, and
a statement of such recipient’s rights to further compensation under such law; and
(8) Effective July 1, 1941, the expenditure of all moneys received pursuant to section 302 of this
title solely for the purposes and in the amounts found necessary by the Secretary of Labor for the
proper and efficient administration of such State law; and
(9) Effective July 1, 1941, the replacement, within a reasonable time, of any moneys received
pursuant to section 302 of this title, which, because of any action or contingency, have been lost or
have been expended for purposes other than, or in. amounts in excess of, those found necessary by
the Secretary of Labor for the proper administration of such State law; and
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(10) A requirement that, as a condition of eligibility for regular compensation for any week, any
claimant who has been referred to reemployment services pursuant to the profiling system under
subsection (j)(1)(B) participate in such services or in similar services unless the State agency charged
with the administration of the State law determines—
(A) such claimant has completed such services; or
(B) there is justifiable cause for such claimant’s failure to participate in such services; and[14]
(11)[15](A) At the time the agency determines and erroneous payment from its unemployment
fund was made to an individual due to fraud committed by such individual, the assessment of a
penalty on the individual in an amount of not less than 15 percent of the amount of the erroneous
payment; and
(B) The immediate deposit of all assessments paid pursuant to subparagraph (A) into the
unemployment fund of the State.
(12)[16] A requirement that, as a condition of eligibility for regular compensation for any week, a
claimant must be able to work, available to work, and actively seeking work.
(b) Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State
agency charged with the administration of the State law, finds that in the administration of the law there
is—
(1) a denial, in a substantial number of cases, of unemployment compensation to individuals
entitled thereto under such law; or
(2) a failure to comply substantially with any provision specified in subsection (a);
the Secretary of Labor shall notify such State agency that further payments will not be made to the State
until the Secretary of Labor is satisfied that there is no longer any such denial or failure to comply. Until
he is so satisfied he shall make no further certification to the Secretary of the Treasury with respect to
such State: Provided, That there shall be no finding under clause (1) until the question of entitlement
shall have been decided by the highest judicial authority given jurisdiction under such State law: Provided
further, That any costs may be paid with respect to any claimant by a State and included as costs of
administration of its law.
(c) The Secretary of Labor shall make no certification for payment to any State if he finds, after
reasonable notice and opportunity for hearing to the State agency charged with the administration of
the State law—
(1) that such State does not make its records available to the Railroad Retirement Board, and
furnish to the Railroad Retirement Board at the expense of the Railroad Retirement Board such
copies thereof as the Railroad Retirement Board deems necessary for its purposes;
(2) that such State is failing to afford reasonable cooperation with every agency of the United
States charged with the administration of any unemployment insurance law; or
(3) that any interest required to be paid on advances under title XII of this Act has not been paid
by the date on which such interest is required to be paid or has been paid directly or indirectly (by
an equivalent reduction in State unemployment taxes or otherwise) by such State from amounts in
such State’s unemployment fund, until such interest is properly paid.
(d)(1) The State agency charged with the administration of the State law—
(A) shall disclose, upon request and on a reimbursable basis, to officers and employees of the
Department of Agriculture and to officers or employees of any State supplemental nutrition
assistance program benefits agency any of the following information contained in the records
of such State agency—
(i) wage information,
(ii) whether an individual is receiving, has received, or has made application for,
unemployment compensation, and the amount of any such compensation being received
(or to be received) by such individual,
(iii) the current (or most recent) home address of such individual, and
(iv) whether an individual has refused an offer of employment and, if so, a description of
the employment so offered and the terms, conditions, and rate of pay therefor, and
(B) shall establish such safeguards as are necessary (as determined by the Secretary of Labor
in regulations) to insure that information disclosed under subparagraph (A) is used only for
purposes of determining an individual’s eligibility for benefits, or the amount of benefits, under

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the supplemental nutrition assistance program established under the Food and Nutrition Act of
2008[17].
(2)(A) For purposes of this paragraph, the term “unemployment compensation” means any
unemployment compensation payable under the State law (including amounts payable pursuant to
an agreement under a Federal unemployment compensation law).
(B) The State agency charged with the administration of the State law—
(i) may require each new applicant for unemployment compensation to disclose whether
the applicant owes an uncollected overissuance (as defined in section 13(c)(1) of the Food
and Nutrition Act of 2008[18],
(ii) may notify the State supplemental nutrition assistance program benefits agency to
which the uncollected overissuance is owed that the applicant has been determined to be
eligible for unemployment compensation if the applicant discloses under clause (i) that the
applicant owes an uncollected overissuance and the applicant is determined to be so
eligible,
(iii) may deduct and withhold from any unemployment compensation otherwise payable
to an individual—
(I) the amount specified by the individual to the State agency to be deducted and
withheld under this clause,
(II) the amount (if any) determined pursuant to an agreement submitted to the State
supplemental nutrition assistance program benefits agency under section 13(c)(3)(A)
of the Food and Nutrition Act of 2008, or
(III) any amount otherwise required to be deducted and withheld from the
unemployment compensation pursuant to section 13(c)(3)(B) of such Act, and
(iv) shall pay any amount deducted and withheld under clause (iii) to the appropriate
State supplemental nutrition assistance program benefits agency.
(C) Any amount deducted and withheld under subparagraph (B)(iii) shall for all purposes be
treated as if it were paid to the individual as unemployment compensation and paid by the
individual to the State supplemental nutrition assistance program benefits agency to which the
uncollected overissuance is owed as repayment of the individual’s uncollected overissuance.
(D) A State supplemental nutrition assistance program benefits agency to which an
uncollected overissuance is owed shall reimburse the State agency charged with the
administration of the State unemployment compensation law for the administrative costs
incurred by the State agency under this paragraph that are attributable to repayment of
uncollected overissuance to the State supplemental nutrition assistance program benefits
agency to which the uncollected overissuance is owed.
(3) Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the
State agency charged with the administration of the State law, finds that there is a failure to comply
substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State
agency that further payments will not be made to the State until he is satisfied that there is no
longer any such failure. Until the Secretary of Labor is so satisfied, he shall make no further
certification to the Secretary of the Treasury with respect to such State.
(4) For purposes of this subsection, the term “State supplemental nutrition assistance program
benefits agency” means any agency described in section 3(t)(1) of the Food and Nutrition Act of
2008[19] which administers the supplemental nutrition assistance program established under such
Act.
(e)(1) The State agency charged with the administration of the State law—
(A) shall disclose, upon request and on a reimbursable basis, directly to officers or employees
of any State or local child support enforcement agency any wage information contained in the
records of such State agency, and
(B) shall establish such safeguards as are necessary (as determined by the Secretary of Labor
in regulations) to insure that information disclosed under subparagraph (A) is used only for
purposes of establishing and collecting child support obligations from, and locating, individuals
owing such obligations.
For purposes of this subsection, the term “child support obligations” only includes obligations which are
being enforced pursuant to a plan described in section 454 of this Act which has been approved by the
Secretary of Health and Human Services under part D of title IV of this Act.
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(2)(A) The State agency charged with the administration of the State law—
(i) shall require each new applicant for unemployment compensation to disclose whether
or not such applicant owes child support obligations (as defined in the last sentence of
paragraph (1)),
(ii) shall notify the State or local child support enforcement agency enforcing such
obligations, if any applicant discloses under clause (i) that he owes child support
obligations and he is determined to be eligible for unemployment compensation, that such
applicant has been so determined to be eligible,
(iii) shall deduct and withhold from any unemployment compensation otherwise payable
to an individual—
(I) the amount specified by the individual to the State agency to be deducted and
withheld under this clause,
(II) the amount (if any) determined pursuant to an agreement submitted to the State
agency under section 454(19)(B)(i) of this Act, or
(III) any amount otherwise required to be so deducted and withheld from such
unemployment compensation through legal process (as defined in section 462(e)), and
(iv) shall pay any amount deducted and withheld under clause (iii) to the appropriate
State or local child support enforcement agency.
Any amount deducted and withheld under clause (iii) shall for all purposes be treated as if it were
paid to the individual as unemployment compensation and paid by such individual to the State or
local child support enforcement agency in satisfaction of his child support obligations.
(B) For purposes of this paragraph, the term “unemployment compensation” means any
compensation payable under the State law (including amounts payable pursuant to agreements
under any Federal unemployment compensation law).
(C) Each State or local child support enforcement agency shall reimburse the State agency
charged with the administration of the State unemployment compensation law for the
administrative costs incurred by such State agency under this paragraph which are attributable
to child support obligations being enforced by the State or local child support enforcement
agency.
(3)[20] Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to
the State agency charged with the administration of the State law, finds that there is a failure to
comply substantially with the requirements of paragraph (1) or (2), the Secretary of Labor shall notify
such State agency that further payments will not be made to the State until he is satisfied that there
is no longer any such failure. Until the Secretary of Labor is so satisfied, he shall make no further
certification to the Secretary of the Treasury with respect to such State.
(4) For purposes of this subsection, the term “State or local child support enforcement agency”
means any agency of a State or political subdivision thereof operating pursuant to a plan described
in the last sentence of paragraph (1).
(5) A State or local child support enforcement agency may disclose to any agent of the agency
that is under contract with the agency to carry out the purposes described in paragraph (1)(B) wage
information that is disclosed to an officer or employee of the agency under paragraph (1)(A). Any
agent of a State or local child support agency that receives wage information under this paragraph
shall comply with the safeguards established pursuant to paragraph (1)(B).
(f) The State agency charged with the administration of the State law shall provide that information
shall be requested and exchanged for purposes of income and eligibility verification in accordance with a
State system which meets the requirements of section 1137 of this Act.
(g)(1) A State shall[21] deduct from unemployment benefits otherwise payable to an individual an
amount equal to any overpayment made to such individual under an unemployment benefit program of
the United States or of any other State, and not previously recovered. The amount so deducted shall be
paid to the jurisdiction under whose program such overpayment was made. Any such deduction shall be
made only in accordance with the same procedures relating to notice and opportunity for a hearing as
apply to the recovery of overpayments of regular unemployment compensation paid by such State.
(2) Any State may enter into an agreement with the Secretary of Labor under which—
(A) the State agrees to recover from unemployment benefits otherwise payable to an
individual by such State any overpayments made under an unemployment benefit program of
the United States to such individual and not previously recovered, in accordance with

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paragraph (1), and to pay such amounts recovered to the United States for credit to the
appropriate account, and
(B) the United States agrees to allow the State to recover from unemployment benefits
otherwise payable to an individual under an unemployment benefit program of the United
States any overpayments made by such State to such individual under a State unemployment
benefit program and not previously recovered, in accordance with the same procedures as
apply under paragraph (1).
(3) For purposes of this subsection, “unemployment benefits” means unemployment
compensation, trade adjustment allowances, Federal additional compensation,[22] and other
unemployment assistance.
(h)(1) The State agency charged with the administration of the State law shall, on a reimbursable basis

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—

(A) disclose quarterly, to the Secretary of Health and Human Services, wage and claim
information, as required pursuant to section 453(i)(1), contained in the records of such agency;
(B) ensure that information provided pursuant to subparagraph (A) meets such standards
relating to correctness and verification as the Secretary of Health and Human Services, with the
concurrence of the Secretary of Labor, may find necessary; and
(C) establish such safeguards as the Secretary of Labor determines are necessary to insure
that information disclosed under subparagraph (A) is used only for purposes of subsections (i)
(1), (i)(3), and (j) of section 453.
(2) Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the
State agency charged with the administration of the State law, finds that there is a failure to comply
substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State
agency that further payments will not be made to the State until the Secretary of Labor is satisfied
that there is no longer any such failure. Until the Secretary of Labor is so satisfied, such Secretary
shall make no future certification to the Secretary of the Treasury with respect to the State.
(3) For purposes of this subsection—
(A) the term “wage information” means information regarding wages paid to an individual,
the social security account number of such individual, and the name, address, State, and the
Federal employer identification number of the employer paying such wages to such individual;
and
(B) the term “claim information” means information regarding whether an individual is
receiving, has received, or has made application for, unemployment compensation, the amount
of any such compensation being received (or to be received by such individual), and the
individual’s current (or most recent) home address.
(i)(1) The State agency charged with the administration of the State law—
(A) shall disclose, upon request and on a reimbursable basis, only to officers and employees
of the Department of Housing and Urban Development and to representatives of a public
housing agency, any of the following information contained in the records of such State agency
with respect to individuals applying for or participating in any housing assistance program
administered by the Department who have signed an appropriate consent form approved by
the Secretary of Housing and Urban Development—
(i) wage information, and
(ii) whether an individual is receiving, has received, or has made application for,
unemployment compensation, and the amount of any such compensation being received
(or to be received) by such individual, and
(B) shall establish such safeguards as are necessary (as determined by the Secretary of Labor
in regulations) to ensure that information disclosed under subparagraph (A) is used only for
purposes of determining an individual’s eligibility for benefits, or the amount of benefits, under
a housing assistance program of the Department of Housing and Urban Development.
(2) The Secretary of Labor shall prescribe regulations governing how often and in what form
information may be disclosed under paragraph (1)(A).
(3) Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the
State agency charged with the administration of the State law, finds that there is a failure to comply
substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State
agency that further payments will not be made to the State until he or she is satisfied that there is

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no longer any such failure. Until the Secretary of Labor is so satisfied, he or she shall make no future
certification to the Secretary of the Treasury with respect to such State.
(4) For purposes of this subsection, the term “public housing agency” means any agency
described in section 3(b)(6) of the United States Housing Act of 1937[23].
(j)(1) The State agency charged with the administration of the State law shall establish and utilize a
system of profiling all new claimants for regular compensation that—
(A) identifies which claimants will be likely to exhaust regular compensation and will need job
search assistance services to make a successful transition to new employment;
(B) refers claimants identified pursuant to subparagraph (A) to reemployment services, such
as job search assistance services, available under any State or Federal law;
(C) collects follow-up information relating to the services received by such claimants and the
employment outcomes for such claimants subsequent to receiving such services and utilizes
such information in making identifications pursuant to subparagraph (A); and
(D) meets such other requirements as the Secretary of Labor determines are appropriate.
(2) Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the
State agency charged with the administration of the State law, finds that there is a failure to comply
substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State
agency that further payments will not be made to the State until he is satisfied that there is no
longer any such failure. Until the Secretary of Labor is so satisfied, he shall make no further
certification to the Secretary of the Treasury with respect to such State.
(k)(1) For purposes of subsection (a), the unemployment compensation law of a State must provide—
(A) that if an employer transfers its business to another employer, and both employers are (at
the time of transfer) under substantially common ownership, management, or control, then the
unemployment experience attributable to the transferred business shall also be transferred to
(and combined with the unemployment experience attributable to) the employer to whom such
business is so transferred,
(B) that unemployment experience shall not, by virtue of the transfer of a business, be
transferred to the person acquiring such business if—
(i) such person is not otherwise an employer at the time of such acquisition, and
(ii) the State agency finds that such person acquired the business solely or primarily for
the purpose of obtaining a lower rate of contributions,
(C) that unemployment experience shall (or shall not) be transferred in accordance with such
regulations as the Secretary of Labor may prescribe to ensure that higher rates of contributions
are not avoided through the transfer or acquisition of a business,
(D) that meaningful civil and criminal penalties are imposed with respect to—
(i) persons that knowingly violate or attempt to violate those provisions of the State law
which implement subparagraph (A) or (B) or regulations under subparagraph (C), and
(ii) persons that knowingly advise another person to violate those provisions of the State
law which implement subparagraph (A) or (B) or regulations under subparagraph (C), and
(E) for the establishment of procedures to identify the transfer or acquisition of a business for
purposes of this subsection.
(2) For purposes of this subsection—
(A) the term “unemployment experience”, with respect to any person, refers to such person’s
experience with respect to unemployment or other factors bearing a direct relation to such
person’s unemployment risk;
(B) the term “employer” means an employer as defined under the State law;
(C) the term “business” means a trade or business (or a part thereof);
(D) the term “contributions” has the meaning given such term by section 3306(g) of the
Internal Revenue Code of 1986[24];
(E) the term “knowingly” means having actual knowledge of or acting with deliberate
ignorance of or reckless disregard for the prohibition involved; and
(F) the term “person” has the meaning given such term by section 7701(a)(1) of the Internal
Revenue Code of 1986[25].
(l)[26](1) Nothing in this Act or any other provision of Federal law shall be considered to prevent a
State from enacting legislation to provide for—

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(A) testing an applicant for unemployment compensation for the unlawful use of controlled
substances as a condition for receiving such compensation, if such applicant—
(i) was terminated from employment with the applicant’s most recent employer (as
defined under the State law) because of the unlawful use of controlled substances; or
(ii) is an individual for whom suitable work (as defined under the State law) is only
available in an occupation that regularly conducts drug testing (as determined under
regulations issued by the Secretary of Labor); or
(B) denying such compensation to such applicant on the basis of the result of the testing
conducted by the State under legislation described in subparagraph (A).
(2) For purposes of this subsection—
(A) the term “unemployment compensation” has the meaning given such term in subsection
(d)(2)(A); and
(B) the term “controlled substance” has the meaning given such term in section 102 of the
Controlled Substances Act (21 U.S.C. 802)[27].
(m)[28] In the case of a covered unemployment compensation debt (as defined under section 6402(f)
(4) of the Internal Revenue Code of 1986)[29] that remains uncollected as of the date that is 1 year after
the debt was finally determined to be due and collected, the State to which such debt is owed shall take
action to recover such debt under section 6402(f) of the Internal Revenue Code of 1986.
[7] 

See Vol. II, P.L. 112-40, §251(b), with respect to the mandatory penalty assessment on fraud claims and the
application to Federal payments.
[8]  See Vol. II, P.L. 83-591, §§3301-3311.
[9]  P.L. 91-648, §208(a)(2)(B), transferred to the U.S. Civil Service Commission, effective March 6, 1971, all functions,
powers, and duties of the Secretary of Labor under paragraph (1).
[10]  See Vol. II, P.L. 83-591, §3305(b).
[11]  See Vol. II, P.L. 83-591, §3306(v).
[12]  P.L. 112-96, §2161(b)(2), struck out “the payment of short-time compensation under a plan approved by the
Secretary of Labor” and inserted “the payment of short-time compensation under a short-time compensation
program (as defined in section 3306(v) of the Internal Revenue Code of 1986)”, effective February 22, 2012.
[13]  See Vol. II, P.L. 83-591, §3306(t).
[14]  P.L. 112-40, §208(a)(2)(B), struck out the period and inserted “; and”.
[15]  P.L. 112-40, §251(a)(2), added this new paragraph (11), applicable to erroneous payments established after the
end of the 2–year period beginning October 21,2011. A State may amend its State law to apply such amendments to
erroneous payments established prior to the end of the period described in P.L. 112-40, §251(c)(1).
See Vol. II, P.L. 112-40, §251(b), with respect to the application of Federal Payments.
[16]  P.L. 112-96, §2101(a), added this new paragraph (12), applicable to weeks beginning after the end of the first
session of the State legislature which begins after February 22, 2012.
[17]  P.L. 88-525.
[18]  See Vol. II, .P.L. 88-525. §13(c)(1).
[19]  See Vol. II, P.L. 88-525, §3(t)(1).
See Vol. II, P.L. 88-525, §11(e)(19), with respect to requesting and exchanging information for verifying income and
eligibility for food stamps.
[20]  See Vol. II, P.L. 96-499, §1025, with respect to withholding certification of State unemployment laws.
[21]  P.L. 112-96, §2103(a), struck out “may” and inserted “shall”, applicable to weeks beginning after the end of the
first session of the State legislature which begins after February 22, 2012.
[22]  P.L. 112-96, §2103(b), inserted “Federal additional compensation,”, applicable to weeks beginning after the
end of the first session of the State legislature which begins after February 22, 2012.
[23]  See Vol. II, P.L. 75-412, §3(b).
[24]  See Vol. II, P.L. 83-591, §3306(g).
[25]  See Vol. II, P.L. 83-591, §7701(a)(1).
[26]  P.L. 112-96, §2105, added this new paragraph (l), effective February 22, 2012.
[27]  See Vol. II, P.L. 91-513, §102(6).
[28]  P.L. 113-67, §201(a), added this new subsection (m), effective December 26, 2013.
[29]  See Vol. II, P.L. 83-591, §6402(f)(4).
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