Unemployment Insurance Technology Modernization Act of 2021
Bill: H.R.1458 | Sponsor: Rep. Horsford, Steven (D-NV)
Policy area: Labor and Employment

Summary:
Unemployment Insurance Technology Modernization Act of 2021
This bill requires the Department of Labor to study and report on the technology needs of federal and state unemployment compensation programs. Based on this study, Labor must develop, operate, and maintain a modular set of technology capabilities to modernize the delivery of unemployment compensation.
Before the deployment of the technology capabilities to all states, Labor must select at least four states to participate in a pilot program to test the technology capabilities and demonstrate that they meet requirements.
The bill establishes accessibility requirements for filing online unemployment compensation claims. In addition, it prohibits the technology capabilities from relying solely on a high-risk automated decision system to (1) deny a claim for unemployment compensation, (2) reduce the amount of unemployment compensation for which a claimant is eligible, or (3) deny a claimant's right to appeal an unemployment compensation decision.

To modernize the technology for delivering unemployment compensation, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Unemployment Insurance Technology 
Modernization Act of 2021''.

SEC. 2. MODERNIZATION OF TECHNOLOGY FOR DELIVERING UNEMPLOYMENT 
              COMPENSATION.

    (a) Establishment.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this section, the Secretary shall develop, 
        operate, and maintain a modular set of technology capabilities 
        to modernize the delivery of unemployment compensation (in this 
        section referred to as the ``technology capabilities'').
            (2) Purposes.--The purposes of developing the technology 
        capabilities are the following:
                    (A) For such capabilities to be utilized for any 
                Federal administrative function associated with the 
                provision of unemployment compensation.
                    (B) To provide States with modular, open system 
                technology capabilities and shared services to 
                administer their unemployment compensation programs.
            (3) Consultation.--In developing, operating, and 
        maintaining the technology capabilities under paragraph (1), 
        the Secretary shall--
                    (A) coordinate with the Administrator; and
                    (B) consult, design, and conduct usability testing 
                with--
                            (i) current and former claimants;
                            (ii) employers that participate in 
                        unemployment compensation programs;
                            (iii) employees of State workforce 
                        agencies;
                            (iv) experts in technology and user 
                        experience;
                            (v) Federal administrators of unemployment 
                        compensation;
                            (vi) any other potential user of the 
                        technology capabilities; and
                            (vii) subject matter experts as deemed 
                        appropriate by the Secretary.
    (b) Requirements.--
            (1) In general.--The technology capabilities shall--
                    (A) incorporate a modular open systems approach and 
                include modular components for each function necessary 
                to administer an unemployment compensation program, 
                including--
                            (i) receiving, processing, and paying 
                        claims for unemployment compensation, including 
                        disaster benefits;
                            (ii) online claim filing;
                            (iii) the determination of claimant 
                        eligibility;
                            (iv) the collection of unemployment taxes;
                            (v) the submission of employer wage 
                        records;
                            (vi) the appeals and adjudication processes 
                        for claimants and employers;
                            (vii) sharing relevant data among States 
                        and the Secretary; and
                            (viii) any other functionality that 
                        addresses the issues and goals identified 
                        during the pre-development study described in 
                        subsection (c)(1);
                    (B) comply with best practices and standards for 
                privacy and cybersecurity, including digital identity 
                proofing services, identified in consultation with the 
                Director of the National Institute of Standards and 
                Technology (NIST) and the Director of the Cybersecurity 
                and Infrastructure Security Agency (CISA);
                    (C) prioritize end-to-end user experience for 
                claimants, employers, and administrators of 
                unemployment compensation programs;
                    (D) include centralized Federal technology 
                capabilities that allow for the storage, exposure, and 
                exchange of data required by States to administer their 
                unemployment compensation programs (with the respective 
                States retaining possession of such data without regard 
                to the storage, exposure, or exchange of such data in 
                the Federal technology capabilities);
                    (E) provide States with the option to use only some 
                of the modular components of the Federal technology 
                capabilities while continuing to utilize State 
                technology capabilities to store any data required to 
                administer their unemployment compensation program in a 
                State database, provided that the State database meets 
                any guidelines established by the Secretary that enable 
                machine-to-machine interfaces to facilitate 
                communication among States and between such State and 
                the Federal Government;
                    (F) allow States to easily adapt the modular 
                components of the Federal technology capabilities to 
                meet the requirements of their unique unemployment 
                compensation programs;
                    (G) ensure the timely and accurate payment of 
                benefits, including measures to minimize susceptibility 
                to attacks by organized criminal networks seeking to 
                defraud State or Federal unemployment compensation 
                programs; and
                    (H) to the extent practicable, be made available 
                (along with any associated data produced under this 
                section) to support other interagency and 
                intergovernmental activities as appropriate.
            (2) Accessibility requirements for online claim filing.--
        With respect to the online claim filing component described in 
        paragraph (1)(A)(ii), such component shall--
                    (A) ensure that the process of filing initial and 
                continuing claims for unemployment compensation can be 
                readily understood and accomplished by the vast 
                majority of claimants, including individuals with 
                limited English proficiency, individuals with 
                disabilities (in compliance with section 508 of the 
                Rehabilitation Act of 1973 (29 U.S.C. 794d)), older 
                individuals, and individuals with literacy challenges;
                    (B) be available in any language spoken by more 
                than 1 percent of the national population or any 
                State's population (with such translations completed by 
                human translators rather than translation software) and 
                comply with the requirements of the Plain Writing Act 
                of 2010 (5 U.S.C. 301 note);
                    (C) be accessible and optimized for all commonly 
                used desktop computers, tablets, and mobile devices and 
                operating systems such that any features of the online 
                claim filing component (such as the ability to upload 
                documentation) that are available in the desktop 
                version of the online claim filing component are also 
                available in the tablet and mobile versions;
                    (D) allow for electronic submission of 
                documentation required to support a claim, including 
                the ability of claimants to scan or photograph and 
                submit documentation using a tablet or mobile device;
                    (E) be available 24 hours a day, 7 days a week, 
                with the exception of scheduled and emergency 
                maintenance that the State conducts, to the extent 
                practicable, at nonpeak hours;
                    (F) provide self-service account recovery that can 
                be completed online; and
                    (G) deploy multiple methods of communication with 
                claimants, such as short message service (SMS) message, 
                email, postal mail, live chat, or chatbots.
            (3) Requirements regarding high-risk automated decision 
        systems.--
                    (A) In general.--The technology capabilities shall 
                not rely solely on a high-risk automated decision 
                system to deny a claim for unemployment compensation, 
                reduce the amount of unemployment compensation for 
                which a claimant is eligible, or deny the right of a 
                claimant to appeal an unemployment compensation 
                decision.
                    (B) Partial reliance.--
                            (i) In general.--If any of the technology 
                        capabilities rely on a high-risk automated 
                        decision system to determine that a claimant is 
                        ineligible for unemployment compensation, to 
                        reduce the amount of unemployment compensation 
                        for which a claimant is eligible, or to deny 
                        the right of a claimant to appeal an 
                        unemployment compensation decision, the 
                        Secretary shall--
                                    (I) require that an employee of a 
                                State workforce agency review the 
                                determination before--
                                            (aa) the claim for 
                                        unemployment compensation of 
                                        such claimant may be denied;
                                            (bb) the amount of 
                                        unemployment compensation for 
                                        which such claimant is eligible 
                                        may be reduced; or
                                            (cc) the right of such 
                                        claimant to appeal an 
                                        unemployment compensation 
                                        decision may be denied;
                                    (II) consult with experts in the 
                                Federal Government (including the 
                                Director of the National Institute of 
                                Standards and Technology and the 
                                Director of the National Science 
                                Foundation), regarding the potential 
                                benefits and risks of partial reliance 
                                on a high-risk automated decision 
                                system;
                                    (III) prior to utilizing such part 
                                of the technology capabilities that 
                                relies on a high-risk automated 
                                decision system--
                                            (aa) establish clear 
                                        methods to measure the accuracy 
                                        of such part of the technology 
                                        capabilities; and
                                            (bb) ensure that such part 
                                        of the technology capabilities 
                                        minimizes the occurrence of 
                                        biased results based on race, 
                                        gender, ethnicity, disability 
                                        status, income, occupation, or 
                                        other personal characteristics 
                                        as determined by the Secretary, 
                                        and prevents any increase in 
                                        such bias;
                                    (IV) develop algorithmic impact 
                                assessments, incorporating public 
                                feedback and expert agency review, to 
                                proactively assess the necessity of 
                                additional formal policies and 
                                safeguards to mitigate risks; and
                                    (V) establish transparency 
                                requirements that include an annual 
                                public disclosure of any use of a high-
                                risk automated decision system, a plain 
                                language explanation of the decision 
                                making structure of such high-risk 
                                automated decision system, and the 
                                details regarding such use and related 
                                outcomes.
                            (ii) Training.--The Secretary shall 
                        establish best practices for training any 
                        relevant employee of the Department or a State 
                        workforce agency to reduce the impact of 
                        automation bias.
                    (C) Monitoring.--The Secretary shall continuously 
                monitor claim determinations that rely, in part, on the 
                use of a high-risk automated decision system to ensure 
                that biased results based on the characteristics 
                described in subparagraph (B)(i)(III)(bb) do not occur.
    (c) Pre-Development Study and Report.--
            (1) Study.--Prior to the development of the technology 
        capabilities under subsection (a) or the procurement of such 
        technology capabilities under subsection (g), the Secretary, in 
        coordination with the Administrator, shall conduct a study 
        assessing the technology needs of Federal and State 
        unemployment compensation programs. Such study shall consider 
        the following:
                    (A) The Federal and State capabilities that need to 
                be upgraded or replaced to ensure the smooth 
                administration of their respective unemployment 
                compensation programs.
                    (B) How to design and develop a federally 
                maintained system that serves the needs of both the 
                Federal Government and each of the State unemployment 
                compensation programs.
                    (C) The features necessary to effectively respond 
                to rapid changes in volume in times of emergency, 
                including features that enable easy adaptation of, and 
                updates to, such technology capabilities in order to 
                implement new rules or benefits.
                    (D) The features necessary to ensure the technology 
                capabilities have the capacity to handle an increased 
                number of claims during periods of high unemployment.
                    (E) How the technology capabilities can prioritize 
                claimant experience and ensure accessibility, including 
                by soliciting feedback from claimants and claimant 
                representatives during the development process.
                    (F) How the technology capabilities can ensure 
                effective and equitable benefit delivery, including the 
                following:
                            (i) The standardization of data collection 
                        and reporting across States to facilitate 
                        administration and interoperability.
                            (ii) The features that will facilitate 
                        accurate and timely delivery of benefits and 
                        reduce the time from successful unemployment 
                        compensation claim to benefit delivery.
                            (iii) The features that will help to 
                        identify and prevent organized fraud schemes 
                        without causing unreasonable delays for 
                        legitimate claimants or penalizing mistakes.
                            (iv) The appropriate level of ongoing audit 
                        and analysis needed to evaluate the 
                        effectiveness and equitability of benefit 
                        delivery.
                            (v) How privacy-protective data exposure 
                        and exchange between government entities and 
                        privacy-protective public reporting could be 
                        utilized to improve and ensure effective and 
                        equitable benefit delivery.
                    (G) How the technology capabilities can improve the 
                employer experience, including tax payment, the 
                submission of wage information, and the verification of 
                claim information.
                    (H) How the technology capabilities can improve 
                processes for employees of State workforce agencies.
                    (I) The information security measures necessary to 
                protect claimants' personal data while enabling 
                auditing and research, including recommendations for 
                privacy-protective technologies, such as secure multi-
                party computation, that can enable such auditing and 
                research in a manner that does not involve sharing data 
                on individual claimants.
                    (J) How the technology capabilities can improve 
                data sharing among States and the Federal Government 
                with respect to recipiency, benefit levels, timeliness, 
                and accuracy.
                    (K) How the technology capabilities can minimize 
                disparities in unemployment compensation recipiency by 
                race, gender, ethnicity, disability status, income, or 
                occupation, and prevent any increase in such 
                disparities.
                    (L) Potential approaches for development or 
                procurement of the technology capabilities, including, 
                for each approach presented, range estimates for 
                development, implementation, and operational costs, and 
                range estimates of capability delivery schedules.
            (2) Report.--Not later than 4 months after the date of 
        enactment of this section, the Secretary, in coordination with 
        the Administrator, shall submit to Congress a report containing 
        the results of the study conducted under paragraph (1), 
        together with the Department's strategy for development and 
        procurement of the technology capabilities, including any 
        recommendations for such legislation and administrative action 
        as the Secretary determines appropriate.
    (d) Digital Services Team.--
            (1) Establishment.--The Secretary, in coordination with the 
        Administrator, shall establish in the Department a Digital 
        Services Team (in this section referred to as the ``Team'').
            (2) Membership.--The Team shall include--
                    (A) technology experts;
                    (B) user experience experts;
                    (C) an experienced technical team leader with 
                experience in human-centered design and modern software 
                development practices; and
                    (D) any other member deemed appropriate by the 
                Secretary.
            (3) Duties.--The Team shall carry out the following duties:
                    (A) Assist the Secretary in the development, 
                operation, and maintenance of the technology 
                capabilities under subsection (a).
                    (B) After the development and deployment of the 
                technology capabilities under subsection (a) is 
                complete, assist the Secretary in operating and 
                overseeing the maintenance and continued improvement of 
                the technology capabilities, including by providing 
                technological assistance--
                            (i) to State workforce agencies; and
                            (ii) to States seeking to adapt their State 
                        databases to interface with the federally 
                        provided modular and open systems technology 
                        capabilities described in subsection (b)(1)(E).
                    (C) Ensure the Department has sufficient in-house 
                technical expertise and procurement support.
                    (D) Assist the Department with technology needs.
                    (E) Engage in such other activities deemed 
                appropriate by the Secretary.
            (4) Staff and resources.--The Secretary shall ensure that 
        the Team has such staff, resources, and access to information 
        as may be necessary to carry out the duties of the Team.
            (5) Digital services team funding.--Out of any money in the 
        Treasury not otherwise appropriated, there are appropriated to 
        the Secretary $5,000,000 to carry out this subsection. Amounts 
        appropriated under the preceding sentence shall remain 
        available until expended.
    (e) Pilot Program.--Prior to the deployment of the technology 
capabilities to all States, the Secretary shall select not fewer than 4 
States to participate in a pilot program to test the technology 
capabilities and demonstrate that such technology capabilities meet the 
requirements and end-to-end user experience needs established by this 
Act, including those identified in the pre-development study described 
in subsection (c)(1).
    (f) Data Sharing.--To enable the storage, exposure, and exchange of 
data required by States to administer their unemployment compensation 
programs, the Secretary shall--
            (1) establish Computer Matching Agreements in accordance 
        with the Computer Matching and Privacy Protection Act of 1988 
        (5 U.S.C. 552a note) to obtain information necessary to verify 
        a claimant's eligibility for unemployment compensation;
            (2) determine appropriate aggregate data to share on a 
        regular basis with the public through the Data.gov internet 
        website pursuant to the Foundations for Evidence-Based Policy 
        Making Act of 2018 (5 U.S.C. 101 note);
            (3) establish appropriate controls and monitoring to make 
        available only the data necessary for States to administer 
        their unemployment compensation programs; and
            (4) establish a data retention policy for retaining or 
        archiving historical unemployment compensation program data as 
        deemed appropriate.
    (g) Procurement and Contracts With Private Vendors.--If the 
Secretary contracts with a private vendor to procure or develop or 
assist with the development of the technology capabilities under 
subsection (a), the Secretary shall--
            (1) ensure that any agreement with such private vendor 
        stipulates that the resulting technology capabilities and 
        associated research, applications, automated processes, and 
        associated metadata shall be the proprietary information of the 
        Federal Government;
            (2) follow best practices for Government IT procurement to 
        de-risk projects; and
            (3) provide funding based on program outcomes rather than 
        volume.
    (h) Oversight.--
            (1) Oversight.--During and after the development of the 
        technology capabilities under subsection (a), the Secretary 
        shall--
                    (A) respond to requests from Congress for updates 
                on the development of the technology capabilities; and
                    (B) participate in oversight hearings and 
                demonstrations of the technology capabilities as 
                requested by Congress.
            (2) Publicly available status.--Not later than 6 months 
        after the date of enactment of this section, the Secretary 
        shall establish and maintain publicly available content, 
        available on the internet website of the Department, that 
        provides the status of--
                    (A) the technology capabilities being developed 
                under this section;
                    (B) the metrics of success for such development;
                    (C) the results from piloting and testing of such 
                technology capabilities; and
                    (D) deployment of such technology capabilities in 
                each of the States and the Federal Government.
    (i) Technology Capabilities Modernization Funding.--Out of any 
money in the Treasury not otherwise appropriated, there are 
appropriated to the Secretary $500,000,000 to carry out this section 
(other than subsection (d)). Amounts appropriated under the preceding 
sentence shall remain available until expended.
    (j) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the United States Digital Service.
            (2) Automated decision system.--The term ``automated 
        decision system'' means a computational process, including one 
        derived from machine learning, statistics, or other data 
        processing or artificial intelligence techniques, that makes a 
        decision or facilitates human decision making that impacts 
        claimants.
            (3) Automation bias.--The term ``automation bias'' means 
        the tendency for humans to over-rely on the recommendation of 
        an automated decision system, to place overconfidence in such 
        recommendation based on perceived superiority to analog or 
        human processes, or to ignore evidence that would indicate the 
        automated decision system has made an error.
            (4) Claimant.--The term ``claimant'' means a claimant for 
        unemployment compensation.
            (5) Department.--The term ``Department'' means the 
        Department of Labor.
            (6) High-risk automated decision system.--The term ``high-
        risk automated decision system'' means an automated decision 
        system that--
                    (A) poses a significant risk--
                            (i) to the privacy or security of personal 
                        information of claimants; or
                            (ii) of resulting in or contributing to 
                        inaccurate, unfair, biased, or discriminatory 
                        decisions impacting claimants;
                    (B) makes decisions, or facilitates human decision 
                making, based on systematic evaluations of current and 
                historical claimant data, including attempts to analyze 
                or predict sensitive aspects of claimants' lives or 
                characteristics or activities that may affect their 
                eligibility for unemployment compensation, such as 
                their reason for separation from employment, 
                availability for work, work search activities, work 
                performance, economic situation, health, personal 
                preferences, interests, behavior, location, or 
                movements, that--
                            (i) alter legal rights of the claimants; or
                            (ii) otherwise significantly impact the 
                        claimants;
                    (C) involves the personal information of a 
                significant number of claimants regarding race, color, 
                national origin, political opinions, religion, trade 
                union membership, genetic data, biometric data, health, 
                gender, gender identity, sexuality, sexual orientation, 
                disability status, criminal convictions, or arrests; or
                    (D) meets any other criteria deemed appropriate by 
                the Secretary.
            (7) Modular open systems approach.--The term ``modular open 
        systems approach'' means an integrated business and technical 
        strategy that--
                    (A) employs a modular design that uses system 
                interfaces between a system platform and a system 
                component, between system components, or between system 
                platforms;
                    (B) is subjected to verification to ensure system 
                interfaces comply with, if available and suitable, 
                widely supported and consensus-based standards; and
                    (C) uses a system architecture that allows 
                severable system platforms or components at the 
                appropriate level to be incrementally added, removed, 
                or replaced throughout the life cycle of a system 
                platform or component while yielding--
                            (i) significant cost savings or avoidance;
                            (ii) schedule reduction;
                            (iii) opportunities for technical upgrades;
                            (iv) increased interoperability; or
                            (v) other benefits during the sustainment 
                        phase.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (9) Secure multi-party computation.--The term ``secure 
        multi-party computation'' means a computerized system that 
        enables different participating entities in possession of 
        private sets of data to link and aggregate their data sets for 
        the exclusive purpose of performing a finite number of pre-
        approved computations without transferring or otherwise 
        revealing any private data to each other or anyone else.
            (10) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, and the United States Virgin Islands.
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