1. Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Friday, July 13, 2012 at 1:00pm ET

2. 2 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Welcome to Workforce 3 One! Welcome to Workforce 3 One!

3. 3 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  To submit a question, type the question in the text field and press your Enter/Return key. ‒ Please enter the name to whom the question is directed.  Your name and your question will appear on your screen, indicating successful submission.  Questions are directly transmitted to presenters—no other participants will see your questions. Submitting Questions: Closed Chat Text Field Gary, where can I find today’s PPT?

4. 4 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Practice In the Chat Room, please type the name of your organization, your location, and how many people are attending with you today.

5. 5 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Access to Webinar Resources WEBINAR RESOURCES: Recordings and transcripts are available within 2 business days after the event.

6. 6 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Welcoming Message Gay Gilbert Administrator Office of Unemployment Insurance

7. 7 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Featured Speakers Presenters  Agnes Wells, Workforce Analyst Office of Unemployment Insurance  Pam Mertens, UI Program Specialist, Office of Unemployment Insurance Moderator  Gay Gilbert, Administrator Office of Unemployment Insurance

8. 8 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  Confidentiality 101  Review of UIPL 19-12  Things to consider  Questions and Answers Agenda/Objectives

9. 9 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Presenter Agnes Wells Workforce Analyst Office of Unemployment Insurance

10. 10 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 UI Data In Demand  States are being approached by third-party entities seeking access to UI wage and claims data –Investigators –Research and academia –Finance  What are states’ responsibilities in protecting confidential UI data?

11. 11 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Confidentiality 101  Section 303(a)(1) of the Social Security Act –The “methods of administration” requirement  We interpret this section to mean that methods of administration must include provision for maintaining the confidentiality of UC information and barring the disclosure of that information  “Identifying particulars”

12. 12 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Then and now  UIPL No. 23-96 (issued May 31, 1996) –Issued in response to agreement between a state and a third party (other than an agent) to allow third party to use state wage records as part of an electronic credit verification process –UIPL advised states that this was an acceptable practice as long as certain conditions were met  This guidance was issued prior to the publication of the confidentiality regulation at 20 CFR Part 603

13. 13 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Then and now  Confidentiality regulation at 20 CFR Part 603 (issued September 27, 2006) –The requirements of 20 CFR Part 603 differ from the pre-regulation requirements for maintaining the confidentiality of claims and wage information –When regulation was published, states were provided a two-year window within which to amend their laws, procedures, and existing agreements to conform to and comply with the provisions of the regulation.  20 CFR Part 603 specifically supersedes UIPL No. 23-96

14. 14 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  A number of states have recently been contacted by private entities seeking access to confidential UC information to facilitate determinations of consumer creditworthiness –These entities are not agents of the individuals or employers whose information is sought –Information would be passed on to lenders and other providers of credit  Private entities propose to access the state wage database or “mirror server” containing only wage data, in real time and with no state review of individual requests  Private entities recognize that lenders must obtain a signed informed consent release from the individuals whose information is sought, and must provide that consent form to the third-party private entity UIPL No. 19-12: What’s it all about?

15. 15 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  UIPL No. 19-12 addresses the application of disclosure requirements to third parties (other than an agent for an individual or employer) in the context of 20 CFR Part 603  States should be aware of potential consequences for individuals whose information is being accessed  States are encouraged to be rigorous in ensuring fairness and accuracy, and should consider risks and benefits when deciding whether to enter into agreements with third-party entities UIPL No. 19-12: What’s it all about?

16. 16 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  Section 603.10 requires the state agency to enter into a written, enforceable agreement when access to confidential UC information is to be granted to a third-party entity  Agreements must include: –Description of the information sought and purpose for which it is sought –Provisions prohibiting unauthorized redisclosure –Provisions for payment of costs –Provisions for safeguarding the information disclosed –Provisions for on-site inspections Agreements

17. 17 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  Section 603.5(d)(2) requires that private entities seeking access to confidential UC information obtain a written, signed informed consent from the individual whose information is sought  Informed consent must be clearly linked to the specific transaction and the purpose for the release of the information  Informed consent must include: –Specific information to be disclosed –Statement that state government files will be accessed –Purpose for which information is sought and a statement that information obtained will be used only for that purpose. Purpose must provide a service or benefit to the individual. –All parties to whom the information may be released Informed Consent

18. 18 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  Private entity’s release of information to the lender(s) named on informed consent form is a permissible redisclosure, per section 603.9(c)(viii)  Any other redisclosure is prohibited  Third-party entities and lenders may retain confidential UC information only for the purpose or purposes designated in the informed consent release  They may not commingle confidential UC information with other data or use confidential UC data to populate their database Prohibition on Redisclosure

19. 19 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  States may not allow private entities unfettered access to their wage database or a “mirror” database.  States must verify informed consent and make a decision to release the data for each transaction. –This is what we mean by a state’s “active participation” and “deliberate, affirmative act” to effectuate each disclosure –Allowing the process to run without state participation would open it up to abuse, and would make auditing more difficult Access to Data

20. 20 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  Informed consent reflects both the originating lender and the third-party entity as recipients of confidential UC data  States are required to audit both entities to verify that they are maintaining the confidentiality of the data and are not redisclosing or commingling the data  States are required to randomly audit “a reasonable number of transactions in light of the total number of transactions processed each month” –Number of transactions audited should be enough to ensure that the inferences made concerning compliance with regulatory requirements are statistically valid  Such audits are complex and required auditors with specialized skills and experience  Costs may be charged to third-party entity or paid from another source, but may not be charged to Title III administrative grant Audit Requirements

21. 21 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  Disclosure of confidential UC information is also governed by the Fair Credit Reporting Act (15 USC 1681) –“A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate” –Failure to comply can result in civil penalties ( 15 USC 1681n and 1681o)  Because states may not be able to guarantee the validity of the data they release, they may be subject to liability  This is one of the risks of such disclosures of confidential UC information Fair Credit Reporting Act

22. 22 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  States’ primary business is administering UI programs  Commercial disclosure of confidential UC information to private third-party entities is not a UC activity –Such activities may not interfere with or delay the efficient administration of state law  Information technology resources are limited –Funded UC technology upgrades or replacement projects take priority over IT projects designed to provide confidential UC information for purposes other than the administration of the UC program Efficient Administration of State UC Law

23. 23 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12  If states generate profit based on an agreement with a private entity, the profits from such an agreement are defined as “program income” and may only be used for UI administration Program Income

24. 24 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Final Thoughts Gay Gilbert Administrator Office of Unemployment Insurance

25. 25 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Please enter your questions into the Chat Room! Question and Answer Period

26. 26 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Resources  20 CFR Part 603 –http://www.gpo.gov/fdsys/pkg/CFR-2012-title20- vol3/pdf/CFR-2012-title20-vol3-part603.pdfhttp://www.gpo.gov/fdsys/pkg/CFR-2012-title20- vol3/pdf/CFR-2012-title20-vol3-part603.pdf  UIPL No. 19-12 –http://wdr.doleta.gov/directives/attach/UIPL/UIPL19- 12.pdfhttp://wdr.doleta.gov/directives/attach/UIPL/UIPL19- 12.pdf  Fair Credit Reporting Act –http://www.ftc.gov/os/statutes/031224fcra.pdfhttp://www.ftc.gov/os/statutes/031224fcra.pdf

27. 27 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Speakers’ Contact Information Agnes Wells  wells.agnes@dol.gov wells.agnes@dol.gov  (202) 693-2996 Pam Mertens  mertens.patricia@dol.gov mertens.patricia@dol.gov  (202) 693-3182 Gay Gilbert  gilbert.gay@dol.gov gilbert.gay@dol.gov  (202) 693-3029

28. 28 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Share Your Ideas with Your Peers! Share your demand-driven strategic plans, models, innovations, resources, and ideas! You have the option to submit content for review by uploading the resource or providing a link to the resource.

29. 29 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 Access to Webinar Resources WEBINAR RESOURCES: Recordings and transcripts are available within 2 business days after the event.

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31. 31 Disclosure of Confidential UC Information to Private Entities: A Review of UIPL No. 19-12 www.workforce3one.org For more information about the Workforce Investment System:  Visit www.careeronestop.orgwww.careeronestop.org  Call 1-877-US2-JOBS