II 

117TH CONGRESS 

2D SESSION S. 4507 

To provide incentives for States to recover fraudulently paid Federal and 

State unemployment compensation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 12, 2022 

Mr. CRAPO (for himself, Mr. PORTMAN, Mr. BRAUN, Mr. MARSHALL, Mr. 

DAINES, Mrs. BLACKBURN, Mr. THUNE, Mr. CASSIDY, Mr. RISCH, Mr. 

KENNEDY, Mrs. FISCHER, Ms. COLLINS, Mr. LANKFORD, Mr. ROMNEY, 

and Mr. TOOMEY) introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To provide incentives for States to recover fraudulently paid 

Federal and State unemployment compensation, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Chase COVID Unem5 ployment Fraud Act of 2022’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) Throughout the COVID–19 pandemic crimi2 nal organizations, including international cybercrime 

3 rings and opportunistic foreign actors, exploited a 

4 national crisis to steal billions from American tax5 payers. Fraud delayed legitimate payments to unem6 ployed workers and turned thousands of Americans 

7 into unwitting identity theft victims. 

8 (2) The size, scope, and severity of pandemic 

9 unemployment fraud is not fully known. 

10 (3) The Labor Department’s Office of the In11 spector General estimates that at least $163 billion 

12 of the $872.5 billion in Federal-State unemployment 

13 benefits paid during the pandemic could have been 

14 improperly paid, with a significant portion attrib15 utable to fraud. Just over $4 billion of these funds 

16 have been recovered. 

17 (4) The White House has estimated an 18.71 

18 percent improper payment rate in the Federal-State 

19 unemployment insurance program in fiscal year 

20 2021. This estimate does not include improper pay21 ments made in the Pandemic Unemployment Assist22 ance program, nor does it include the period of 

23 greatest fraudulent activity when generous $600 

24 weekly Federal supplements made unemployment a 

25 lucrative target for fraudsters. 


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1 (5) According to the Government Accountability 

2 Office, from March 2020 through October 2021, 145 

3 individuals pleaded guilty to Federal charges of de4 frauding unemployment insurance programs and 

5 Federal charges are pending against 250 individuals. 

6 (6) As of January 2022, the Labor Depart7 ment’s Inspector General reported opening more 

8 than 31,000 investigative matters involving alleged 

9 unemployment fraud and reported that it assisted 

10 other Federal and State agencies in identifying and 

11 recovering more than $565 million in fraudulently 

12 stolen unemployment benefits. 

13 (7) In California, State workforce officials con14 firmed they paid out fraudulent unemployment 

15 claims totaling $11 billion and identified another 

16 $20 billion in claims still under investigation. 

17 (8) The Pandemic Response Accountability 

18 Committee published a report compiling the results 

19 of investigations from 16 State auditors, finding $39 

20 billion in pandemic unemployment fraud. 

21 (9) There is growing evidence that criminal 

22 groups perpetrating unemployment fraud pose a 

23 threat to national security. 

24 (10) According to the Department of Justice 

25 and U.S. Secret Service, a significant amount of 


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1 fraud was driven by known transnational organized 

2 criminal networks, including cartels with origins in 

3 countries including China, Ghana, Nigeria, Romania, 

4 and Russia. 

5 (11) The Department of Justice reports that 

6 the International Organized Crime Intelligence Op7 erations Center has referred a large number of un8 employment fraud cases to the Federal Bureau of 

9 Investigation. 

10 (12) The American people expect Congress to 

11 be an effective steward of taxpayer dollars and vigi12 lant in pursuit and recovery of funds when taxpayer 

13 dollars are improperly paid. 

14 (13) Congress has a responsibility to gain res15 titution for American taxpayers by ensuring aggres16 sive identification, investigation, and prosecution of 

17 criminal fraud in pandemic unemployment pro18 grams. 

19 SEC. 3. RECOVERING FEDERAL FRAUDULENT COVID UNEM20 PLOYMENT COMPENSATION PAYMENTS. 

21 (a) ALLOWING STATES TO RETAIN PERCENTAGE OF

22 OVERPAYMENTS FOR ADMINISTRATION, INFORMATION

23 TECHNOLOGY MODERNIZATION, AND PROGRAM INTEG24 RITY.— 

25 (1) PANDEMIC UNEMPLOYMENT ASSISTANCE.— 


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1 (A) IN GENERAL.—Section 2102 of the 

2 CARES Act (15 U.S.C. 9021) is amended— 

3 (i) by redesignating subsection (h) as 

4 subsection (i); and 

5 (ii) by inserting after subsection (g) 

6 the following: 

7 ‘‘(h) FRAUD AND OVERPAYMENTS.— 

8 ‘‘(1) IN GENERAL.—If an individual knowingly 

9 has made, or caused to be made by another, a false 

10 statement or representation of a material fact, or 

11 knowingly has failed, or caused another to fail, to 

12 disclose a material fact, and as a result of such false 

13 statement or representation or of such nondisclosure 

14 such individual has received an amount of pandemic 

15 unemployment assistance under this section to which 

16 such individual was not entitled, such individual— 

17 ‘‘(A) shall be ineligible for further pan18 demic unemployment assistance under this sec19 tion in accordance with the provisions of the ap20 plicable State unemployment compensation law 

21 relating to fraud in connection with a claim for 

22 unemployment compensation; and 

23 ‘‘(B) shall be subject to prosecution under 

24 section 1001 of title 18, United States Code. 


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1 ‘‘(2) REPAYMENT.—In the case of individuals 

2 who have received amounts of pandemic unemploy3 ment assistance under this section to which they 

4 were not entitled, the State shall require such indi5 viduals to repay the amounts of such pandemic un6 employment assistance to the State agency, except 

7 that the State agency may waive such repayment if 

8 it determines that— 

9 ‘‘(A) the payment of such pandemic unem10 ployment assistance was without fault on the 

11 part of any such individual; and 

12 ‘‘(B) such repayment would be contrary to 

13 equity and good conscience. 

14 ‘‘(3) RECOVERY BY STATE AGENCY.— 

15 ‘‘(A) IN GENERAL.—The State agency 

16 shall recover the amount to be repaid, or any 

17 part thereof, by deductions from any unemploy18 ment compensation payable to such individual 

19 under any State or Federal unemployment com20 pensation law administered by the State agency 

21 or under any other State or Federal law admin22 istered by the State agency which provides for 

23 the payment of any assistance or allowance with 

24 respect to any week of unemployment, during 

25 the 5-year period after the date such individuals 


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1 received the payment of the pandemic unem2 ployment assistance to which they were not en3 titled, in accordance with the same procedures 

4 as apply to the recovery of overpayments of reg5 ular unemployment benefits paid by the State, 

6 except that a State may retain a percentage of 

7 any amounts recovered as described in subpara8 graph (C). 

9 ‘‘(B) OPPORTUNITY FOR HEARING.—No 

10 repayment shall be required, and no deduction 

11 shall be made, until a determination has been 

12 made, notice thereof and an opportunity for a 

13 fair hearing has been given to the individual, 

14 and the determination has become final. 

15 ‘‘(C) RETENTION OF PERCENTAGE OF RE16 COVERED FUNDS.—The State agency may re17 tain 25 percent of any amount recovered from 

18 overpayments of pandemic unemployment as19 sistance that were determined to be made due 

20 to fraud. Amounts so retained by the State 

21 agency shall be used for administration of the 

22 State’s unemployment compensation program 

23 for any of following: 

24 ‘‘(i) Modernizing unemployment com25 pensation systems and information techVerDate Sep 11 2014 23:04 Jul 13, 2022 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4507.IS S4507

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1 nology to improve accuracy of benefit pay2 ments, cybersecurity, and identity 

3 verification and validation of applicants. 

4 ‘‘(ii) Administrative costs incurred by 

5 the State to identify and pursue recovery 

6 of fraudulent overpayments. 

7 ‘‘(iii) Hiring fraud investigators and 

8 prosecutors. 

9 ‘‘(iv) Other program integrity pur10 poses identified by the State and approved 

11 by the Secretary.’’. 

12 (B) CONFORMING AMENDMENT.—Section 

13 2102(d) of such Act (15 U.S.C. 9021(d)) is 

14 amended by striking paragraph (4). 

15 (2) FEDERAL PANDEMIC UNEMPLOYMENT COM16 PENSATION.—Section 2104(f)(3) of such Act (15 

17 U.S.C. 9023(f)(3)) is amended— 

18 (A) in subparagraph (A)— 

19 (i) by striking ‘‘3-year’’ and inserting 

20 ‘‘5-year’’; and 

21 (ii) by inserting ‘‘, except that a State 

22 may retain a percentage of any amounts 

23 recovered as described in subparagraph 

24 (C)’’ before the period at the end; and 

25 (B) by adding at the end the following: 


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1 ‘‘(C) RETENTION OF PERCENTAGE OF RE2 COVERED FUNDS.—The State agency may re3 tain 25 percent of any amount recovered from 

4 overpayments of Federal Pandemic Unemploy5 ment Compensation or Mixed Earner Unem6 ployment Compensation that were determined 

7 to be made due to fraud. Amounts so retained 

8 by the State agency shall be used for adminis9 tration of the State’s unemployment compensa10 tion program for any of following: 

11 ‘‘(i) Modernizing unemployment com12 pensation systems and information tech13 nology to improve accuracy of benefit pay14 ments, cybersecurity, and identity 

15 verification and validation of applicants. 

16 ‘‘(ii) Administrative costs incurred by 

17 the State to identify and pursue recovery 

18 of fraudulent overpayments. 

19 ‘‘(iii) Hiring fraud investigators and 

20 prosecutors. 

21 ‘‘(iv) Other program integrity pur22 poses identified by the State and approved 

23 by the Secretary.’’. 


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1 (3) PANDEMIC EMERGENCY UNEMPLOYMENT

2 COMPENSATION.—Section 2107(e)(3) of such Act 

3 (15 U.S.C. 9025(e)(3)) is amended— 

4 (A) in subparagraph (A)— 

5 (i) by striking ‘‘3-year’’ and inserting 

6 ‘‘5-year’’; and 

7 (ii) by inserting ‘‘, except that a State 

8 may retain a percentage of any amounts 

9 recovered as described in subparagraph 

10 (C)’’ before the period at the end; and 

11 (B) by adding at the end the following: 

12 ‘‘(C) RETENTION OF PERCENTAGE OF RE13 COVERED FUNDS.—The State agency may re14 tain 25 percent of any amount recovered from 

15 overpayments of pandemic emergency unem16 ployment compensation that were determined to 

17 be made due to fraud. Amounts so retained by 

18 the State agency shall be used for administra19 tion of the State’s unemployment compensation 

20 program for any of following: 

21 ‘‘(i) Modernizing unemployment com22 pensation systems and information tech23 nology to improve accuracy of benefit pay24 ments, cybersecurity, and identity 

25 verification and validation of applicants. 


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1 ‘‘(ii) Reimbursement of administrative 

2 costs incurred by the State to identify and 

3 pursue recovery of fraudulent overpay4 ments. 

5 ‘‘(iii) Hiring fraud investigators and 

6 prosecutors. 

7 ‘‘(iv) Other program integrity pur8 poses identified by the State and approved 

9 by the Secretary.’’. 

10 (b) TREATMENT UNDER WITHDRAWAL REQUIRE11 MENTS.—Any amount retained by a State pursuant to sec12 tion 2102(h)(3)(C), section 2104(f)(3)(C), or 

13 2107(e)(3)(C) of the CARES Act, and used for the pur14 poses described therein, shall not be considered to violate 

15 the withdrawal requirements of paragraph (4) or (5) of 

16 section 303(a) of the Social Security Act (42 U.S.C. 

17 503(a)) or paragraph (4) or (5) of section 3304(a) of the 

18 Internal Revenue Code of 1986. 

19 (c) LIMITATION ON RETENTION AUTHORITY.—The 

20 authority of a State to retain any amount pursuant to sec21 tion 2102(h)(3)(C), section 2104(f)(3)(C), and 

22 2107(e)(3)(C) of the CARES Act shall apply only— 

23 (1) with respect to an amount recovered on or 

24 after the date of enactment of this Act; and 


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1 (2) during the 5-year period beginning on the 

2 date on which such amount was received by an indi3 vidual not entitled to such amount. 

4 SEC. 4. PERMISSIBLE USES OF UNEMPLOYMENT FUND FOR 

5 PROGRAM ADMINISTRATION. 

6 (a) WITHDRAWAL STANDARD IN THE INTERNAL

7 REVENUE CODE.—Section 3304(a)(4) of the Internal 

8 Revenue Code of 1986 is amended— 

9 (1) in subparagraph (F), by striking ‘‘and’’ 

10 after the semicolon; 

11 (2) by inserting after subparagraph (G) the fol12 lowing new subparagraphs: 

13 ‘‘(H) an amount, not to exceed 5 percent, 

14 of any overpayment of compensation recovered 

15 by the State (other than an overpayment made 

16 as the result of agency error) may, immediately 

17 following the State’s receipt of such recovered 

18 amount, be deposited in a State fund from 

19 which money may be withdrawn for— 

20 ‘‘(i) the payment of costs of deterring, 

21 detecting, and collecting improper pay22 ments to individuals; 

23 ‘‘(ii) purposes relating to the proper 

24 classification of employees as independent 

25 contractors, implementation of provisions 


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1 of State law implementing section 303(k) 

2 of the Social Security Act, or other provi3 sions of State law relating to employer 

4 fraud or evasion of contributions; 

5 ‘‘(iii) the payment to the Secretary of 

6 the Treasury to the credit of the account 

7 of the State in the Unemployment Trust 

8 Fund; 

9 ‘‘(iv) modernizing the State’s unem10 ployment insurance technology infrastruc11 ture; or 

12 ‘‘(v) otherwise assisting States in im13 proving the timely and accurate adminis14 tration of a State’s unemployment com15 pensation law; and 

16 ‘‘(I) an amount, not to exceed 5 percent, 

17 of any payments of contributions, or payments 

18 in lieu of contributions, that are collected as a 

19 result of an investigation and assessment by the 

20 State agency may, immediately following receipt 

21 of such payments, be deposited in a State fund 

22 from which moneys may be withdrawn for the 

23 purposes specified in subparagraph (H);’’. 

24 (b) DEFINITION OF UNEMPLOYMENT FUND.—Sec25 tion 3306(f) of the Internal Revenue Code of 1986 is 


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1 amended by striking ‘‘and for refunds of sums’’ and all 

2 that follows and inserting ‘‘, except as otherwise provided 

3 in section 3304(a)(4), section 303(a)(5) of the Social Se4 curity Act, or any other provision of Federal unemploy5 ment compensation law.’’. 

6 (c) WITHDRAWAL STANDARD IN SOCIAL SECURITY

7 ACT.—Section 303(a)(5) of the Social Security Act (42 

8 U.S.C. 503(a)(5)) is amended by striking ‘‘and for refunds 

9 of sums’’ and all that follows and inserting ‘‘except as oth10 erwise provided in this section, section 3304(a)(4) of the 

11 Internal Revenue Code of 1986, or any other provisions 

12 of Federal unemployment compensation law; and’’. 

13 (d) IMMEDIATE DEPOSIT REQUIREMENTS IN THE IN14 TERNAL REVENUE CODE.—Section 3304(a)(3) of the In15 ternal Revenue Code of 1986 is amended to read as fol16 lows: 

17 ‘‘(3) all money received in the unemployment 

18 fund shall immediately upon such receipt be paid 

19 over to the Secretary of the Treasury to the credit 

20 of the Unemployment Trust Fund established by 

21 section 904 of the Social Security Act (42 U.S.C. 

22 1104), except for— 

23 ‘‘(A) refunds of sums improperly paid into 

24 such fund; 


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1 ‘‘(B) refunds paid in accordance with the 

2 provisions of section 3305(b); and 

3 ‘‘(C) amounts deposited in a State fund in 

4 accordance with subparagraph (H) or (I) of 

5 paragraph (4);’’. 

6 (e) IMMEDIATE DEPOSIT REQUIREMENT IN SOCIAL

7 SECURITY ACT REQUIREMENT.—Section 303(a)(4) of the 

8 Social Security Act (42 U.S.C. 503(a)(4)) is amended by 

9 striking the parenthetical and inserting ‘‘(except as other10 wise provided in this section, section 3304(a)(3) of the In11 ternal Revenue Code of 1986, or any other provisions of 

12 Federal unemployment compensation law)’’. 

13 (f) APPLICATION TO FEDERAL PAYMENTS.—When 

14 administering any Federal program providing compensa15 tion (as defined in section 3306 of the Internal Revenue 

16 Code of 1986), the State shall use the authority provided 

17 under subparagraphs (H) and (I) of section 3304(a)(4) 

18 of such Code in the same manner as such authority is 

19 used with respect to improper payments made under the 

20 State unemployment compensation law. With respect to 

21 improper Federal payments recovered consistent with the 

22 authority under subparagraphs (H) and (I) of such sec23 tion, the State shall immediately deposit the same percent24 age of the recovered payments into the same State fund 

25 as provided in the State law implementing that section. 


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1 (g) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to overpayments or payments or 

3 contributions (or payments in lieu of contributions) that 

4 are collected as a result of an investigation and assessment 

5 by the State agency after the end of the 2-year period be6 ginning on the date of the enactment of this Act, except 

7 that nothing in this section shall be interpreted to prevent 

8 a State from amending its law before the end of such pe9 riod. 

10 SEC. 5. PREVENTING UNEMPLOYMENT COMPENSATION 

11 FRAUD THROUGH DATA MATCHING, IDEN12 TITY VERIFICATION, AND INCOME 

13 VERIFICATION. 

14 (a) UNEMPLOYMENT COMPENSATION DATA INTEG15 RITY HUB.— 

16 (1) IN GENERAL.—Section 303(a) of the Social 

17 Security Act (42 U.S.C. 503(a)) is amended by add18 ing at the end the following: 

19 ‘‘(13) The State agency charged with adminis20 tration of the State law shall use the system des21 ignated by the Secretary of Labor for cross-match22 ing claimants of unemployment compensation under 

23 State law against any databases in the system to 

24 prevent and detect fraud and improper payments.’’. 


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1 (b) USE OF FRAUD PREVENTION AND DETECTION

2 SYSTEMS IN ADMINISTRATION OF UNEMPLOYMENT COM3 PENSATION PROGRAMS.— 

4 (1) IN GENERAL.—Section 303 of the Social 

5 Security Act (42 U.S.C. 503), as amended by sub6 section (a), is further amended by adding at the end 

7 the following: 

8 ‘‘(n) STATE USE OF FRAUD PREVENTION AND DE9 TECTION SYSTEMS.— 

10 ‘‘(1) IN GENERAL.—The State agency charged 

11 with administration of the State law shall establish 

12 procedures to do the following: 

13 ‘‘(A) NATIONAL DIRECTORY OF NEW

14 HIRES.—Use the National Directory of New 

15 Hires established under section 453(i)— 

16 ‘‘(i) to compare information in such 

17 Directory against information about indi18 viduals claiming unemployment compensa19 tion to identify any such individuals who 

20 may have become employed, in accordance 

21 with any regulations that the Secretary of 

22 Health and Human Services may issue and 

23 consistent with the computer matching 

24 provisions of the Privacy Act of 1974; 


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1 ‘‘(ii) to take timely action to verify 

2 whether the individuals identified pursuant 

3 to clause (i) are employed; and 

4 ‘‘(iii) upon verification pursuant to 

5 clause (ii), to take appropriate action to 

6 suspend or modify unemployment com7 pensation payments, and to initiate recov8 ery of any improper unemployment com9 pensation payments that have been made. 

10 ‘‘(B) STATE INFORMATION DATA EX11 CHANGE SYSTEM.—Use the Department of La12 bor’s State Information Data Exchange System 

13 to facilitate employer responses to requests for 

14 information from State workforce agencies. 

15 ‘‘(C) INCARCERATED INDIVIDUALS.—Seek 

16 information from the Commissioner of Social 

17 Security under sections 202(x)(3)(B)(iv) and 

18 1611(e)(1)(I)(iii), and from such other sources 

19 as the State agency determines appropriate, to 

20 obtain the information necessary to carry out 

21 the provisions of a State law under which an in22 dividual who is confined in a jail, prison, or 

23 other penal institution or correctional facility is 

24 ineligible for unemployment compensation on 


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1 account of such individuals inability to satisfy 

2 the requirement under subsection (a)(12). 

3 ‘‘(D) DECEASED INDIVIDUALS.—Compare 

4 information of individuals claiming unemploy5 ment compensation against the information re6 garding deceased individuals furnished to or 

7 maintained by the Commissioner of Social Se8 curity under section 205(r). 

9 ‘‘(2) ENFORCEMENT.—Whenever the Secretary 

10 of Labor, after reasonable notice and opportunity for 

11 hearing to the State agency charged with the admin12 istration of the State law, finds that the State agen13 cy fails to comply substantially with the require14 ments of paragraph (1), the Secretary of Labor shall 

15 notify such State agency that further payments will 

16 not be made to the State until the Secretary of 

17 Labor is satisfied that there is no longer any such 

18 failure. Until the Secretary of Labor is so satisfied, 

19 such Secretary shall make no future certification to 

20 the Secretary of the Treasury with respect to such 

21 State. 

22 ‘‘(3) UNEMPLOYMENT COMPENSATION.—For 

23 the purposes of this subsection, any reference to un24 employment compensation described in this para25 graph shall be considered to refer to— 


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1 ‘‘(A) regular or extended compensation (as 

2 defined by section 205 of the Federal-State Ex3 tended Unemployment Compensation Act of 

4 1970); 

5 ‘‘(B) unemployment compensation (as de6 fined by section 85(b) of the Internal Revenue 

7 Code of 1986) provided under any program ad8 ministered by a State under an agreement with 

9 the Secretary; and 

10 ‘‘(C) short-time compensation under a 

11 short-time compensation program (as defined in 

12 section 3306(v) of the Internal Revenue Code of 

13 1986).’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall take effect with respect to each State 

16 to weeks of unemployment beginning on or after the ear17 lier of— 

18 (1) the date the State changes its statutes, reg19 ulations, or policies in order to comply with such 

20 amendment; or 

21 (2) October 1, 2024. 

22 SEC. 6. REPORTING UNEMPLOYMENT COMPENSATION 

23 OVERPAYMENTS AND FRAUD. 

24 (a) IN GENERAL.—The Secretary of Labor shall col25 lect data from each State on the amount of overpayment 


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1 recoveries that are waived related to unemployment com2 pensation programs authorized by the CARES Act (15 

3 U.S.C. 9021 et seq.), with a separate accounting for the 

4 pandemic unemployment assistance program, and any un5 employment compensation amounts excluded by each 

6 State from IRS Form 1099–G, Certain Government Pay7 ments, during taxable years 2020 and 2021 due to sus8 pected or confirmed fraud. 

9 (b) REPORT TO CONGRESS.—Not later than 120 days 

10 after the date of enactment of this Act, the Secretary of 

11 Labor shall submit a report to the Committees on Ways 

12 and Means and Oversight and Reform of the House of 

13 Representatives and the Committees on Finance and 

14 Homeland Security and Governmental Affairs of the Sen15 ate that conveys the overpayment data described in sub16 paragraph (a) and includes an estimate of the aggregate 

17 amount of pandemic unemployment compensation over18 payments nationally, including the subset of overpayments 

19 made due to fraud, and total amounts recovered by Fed20 eral or State agencies. Such report shall be updated by 

21 the Secretary not later than 120 days after submission 

22 of the initial report to Congress. 

23 (c) EXPEDITED COLLECTION.—The Secretary of 

24 Labor may waive the requirements of subchapter I of 

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1 ferred to as the ‘‘Paperwork Reduction Act’’) with respect 

2 to the provisions in the amendments made by this Act. 

3 SEC. 7. PROHIBITION ON DEPARTMENT OF LABOR ALLOW4 ING BLANKET WAIVERS OF OVERPAYMENTS. 

5 Upon the date of enactment, the Secretary of Labor 

6 shall be prohibited from issuing guidance that permits 

7 States to use blanket or issue categorical waivers of over8 payment recovery in Federal pandemic unemployment 

9 compensation programs authorized under the CARES Act 

10 (15 U.S.C. 9021 et seq.). The Secretary shall amend or 

11 rescind any guidance as necessary to conform with the 

12 prohibition in the preceding sentence. 

13 SEC. 8. EXTENSION OF EMERGENCY STATE STAFFING 

14 FLEXIBILITY. 

15 If a State modifies its unemployment compensation 

16 law and policies with respect to personnel standards on 

17 a merit basis on an emergency temporary basis as deter18 mined by the Secretary, including for detection, pursuit, 

19 and recovery of fraudulent pandemic unemployment bene20 fits, subject to the succeeding sentence, such modifications 

21 shall be disregarded for the purposes of applying section 

22 303 of the Social Security Act (42 U.S.C. 503) and section 

23 3304 of the Internal Revenue Code of 1986 to such State 

24 law. Such modifications shall apply through December 31, 

25 2023, and may include engaging temporary staff, hiring 


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1 retirees or former employees on a non-competitive basis, 

2 contracting with vendors, and other temporary actions to 

3 identify, investigate, prosecute, and recover fraudulent 

4 pandemic unemployment compensation benefits. 

Æ 


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