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From November 16, states must hand confidential unemployment records to federal officials on request for oversight and audits. Labor declined commenters' requests to bar immigration-enforcement use, to notify claimants, or to list which data is covered.

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A Labor Department final rule published September 16 and effective November 16, 2026 turns an optional disclosure into a required one: every state unemployment agency must give 'confidential UC information' to a federal official who asks for it for unemployment program oversight and audits. The Labor Department, its inspector general and GAO can ask without explanation; other federal officials must ask in writing, state the use and cite their authority. The department says it is fighting fraud, citing $45.6 billion in potentially fraudulent benefits identified by its inspector general. It did not list which data elements are covered, did not define 'Federal official', declined a proposed ban on immigration-enforcement use, and adds no notice to claimants. It says the rule creates no new uses and no national claims database, and that it does not reach eligibility decisions. States that must change their own laws have until September 16, 2027.

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When you file for unemployment, your state keeps a record of the claim. That record is confidential under federal rules, and until now a state could choose whether to share it with federal officials doing oversight.

From November 16, 2026, it has no choice.

What changes

The rule's new text:

The Department of Labor interprets section 303(a)(1), SSA, as requiring each State UC agency to disclose confidential UC information upon request to a Federal official for purposes of UC program oversight and audits.

The department's own summary: "This final rule takes what States are permitted to do currently, and all States have been doing, and makes it a requirement."

Who can ask:

  • The Labor Department, its Office of Inspector General and GAO can ask without giving reasons, because they "already have separate authority."
  • Any other federal official must ask in writing, say how the data will be used for oversight and audits, limit its use to that "except as required by Federal law," and cite their authority. That requirement was added after public comment.

States that list each required disclosure in their own laws must change them by September 16, 2027.

Why, according to Labor

Fraud. The department cites its inspector general's finding of $45.6 billion in potentially fraudulent benefits in six high-risk areas, and an estimated $191 billion paid improperly during the pandemic, "with a significant portion attributable to fraud." Its inspector general has warned since 2020 that its access "could end at any time" because sharing was optional. The improper payment rate has come down since the pandemic but "remains above the ten percent target," the rule says, without giving the current figure.

What commenters asked for, and did not get

Forty people and groups commented on the 2025 proposal. The final rule declined to:

  • Bar immigration-enforcement use. Commenters asked for a ban. Labor's answer was that the rule's scope is oversight and audits and that it "does not modify the current protections or limitations on use of data that are applicable to required disclosures."
  • List the data covered. "The Department declines to enumerate an exhaustive list of specific data elements required to be disclosed."
  • Notify claimants. There is no notice to people whose records are shared and no way to contest a disclosure.
  • Require encryption, retention limits or written agreements for the Labor Department, its inspector general or GAO.

It also leaves "Federal official" undefined.

What Labor says it does not do

  • It does not expand the categories of information or authorize new uses.
  • It does not reach eligibility decisions or benefit reductions.
  • It creates no national database of claims. If Labor pursues one, it will propose it separately.

It also says this about the future: "The Department is not seeking to supplement its information collections at this time; however, the capacity for the Department to do so in the future is guaranteed by this rulemaking."

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