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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
REVISED
unemployment benefits; requirements; disqualifications; determinations
Purpose
Modifies the requirements that an unemployed individual must meet to be eligible for Unemployment Insurance (UI) benefits. Requires the Department of Economic Security (DES) to cross-check the validity of UI benefit claims against prescribed data sets and allows DES to refer issues of fraud for prosecution.
Background
The federally established UI Benefit Program, administered by DES, provides UI benefits to persons unemployed through no fault of their own. Statute prescribes eligibility requirements relating to the reason for separation from employment, wages earned prior to unemployment and the individual's ability and work search activities (A.R.S. Title 23, Chapter 4).
An unemployed individual is eligible to receive UI benefits with respect to any week only if DES finds that the individual: 1) has registered for work at and has continued to report at the employment office in accordance with the regulations prescribed by DES; 2) has made a claim for UI benefits in accordance with statute; 3) is able to work; 4) is available for work and has engaged in a systemic and sustained effort to obtain work at least four days a week in addition to making at least one job contact per day on four different days of the week; and 5) has been unemployed for a waiting period of one week. An individual is disqualified from UI benefits if DES find the individual has failed without cause to: 1) apply for available suitable work when directed by the employment office or DES; 2) actively engage in seeking work; 3) accept suitable work when offered; or 4) return to the individual's customary self-employment, when directed by DES (A.R.S. §§ 23-771 and 23-776).
A representative designated by DES as a deputy must promptly examine any claim for UI benefits and based on the facts found by the deputy, determine whether the claim is valid. The deputy must promptly notify the claimant of the determination and the reasons for the determination. Unless the claimant files an appeal within 7 calendar days after the delivery of the notification, or within 15 calendar days after notification was mailed, the determination becomes final (A.R.S. § 23-773).
In 2025, the Joint Legislative Budget Committee (JLBC) published a fiscal note on S.B. 1296, an identical measure to S.B. 1036, which estimated that the bill could reduce UI benefits payments by an unknown amount if the modified job search requirements reduced weekly UI claims. Any savings generated by the legislation would accrue to the UI Trust Fund as opposed to the state General Fund (JLBC).
Provisions
Eligibility for Benefits
1. Adds, to the eligibility requirements for UI benefits, that an unemployed individual must actively seek and apply for suitable work and conduct at least five work search actions each week to qualify as actively seeking and applying for suitable work including:
a) submitting resumes to employers;
b) completing job applications and submitting the applications to employers;
c) attending job fairs that are recognized by DES and the unemployed individual's attendance is verifiable by DES;
d) attending interviews with potential employers;
e) attending a DES-approved training program that includes a resume writing session, which counts as one work search action for the week the individual attended the program; and
f) providing a weekly report to DES that details the unemployed individual's work search actions for every week a benefit is sought, if the unemployed individual is applying for a weekly benefit.
2. Removes the requirement that an unemployed individual, to be eligible for UI benefits, must:
a) engage in a systemic and sustained effort to obtain work during at least four days of the week; and
b) make at least one job contact per day on four different days of the week.
Examination and Determination of Claims
3. Prohibits DES, in determining the validity of claims in accordance with statute, from paying benefits for an initial or ongoing claim until the initial claim is cross-checked or an ongoing claim is cross-checked on a weekly basis.
4. Requires the initial or ongoing claims to be cross-checked against the following data sets:
a) the National Association of State Workforce Agencies' Integrity Data Hub;
b) the U.S. Department of Health and Human Services National Directory of New Hires;
c) DES's new hire reporting system;
d) the Arizona Department of Corrections, Rehabilitation and Reentry's inmate data bases or a third-party, commercially available incarceration data network;
e) the Social Security Administration's Prisoner Update Processing System;
f) the Centers for Disease Control and Prevention National Vital Statistics System's death records database;
g)
the Depart of Health Services Bureau of Vital Records death records
database or a
third-party, commercially available death records database; and
h) current employment and income information deliverable simultaneously via verification services from external data sources.
5. Requires DES to make the most effective determination of the potential validity of claims by prioritizing cross-checking the most current data sets, including those from a commercially available third-party database, before cross-checking older data sets.
6. Stipulates that if a cross-check results in information indicating that a claim is ineligible or fraudulent then:
a) that claim may not be paid; and
b) the claimant must be disqualified from receiving benefits and referred for prosecution.
7. Requires DES to examine any initial claim for benefits and confirm its validity before benefits are paid if the initial claim:
a) was submitted electronically through an internet protocol address located outside of Arizona or the United States;
b) references a mailing or residential address for which another current claim was submitted; or
c) is associated with a direct deposit for a bank account already used for another current claim.
8. Allows DES to refer a matter for prosecution if a fraudulent claim was filed.
Disqualifications from Benefits
9. Specifies that an unemployed individual is disqualified from UI benefits if DES finds that the individual has failed without cause to:
a) actively seek and apply for suitable work;
b) accept an offer of suitable work; or
c) accept reemployment for suitable work at the same employer, if offered.
10. Requires an employer to report DES when an individual who was previously employed with the employer:
a) refuses to return to work;
b) refuses to accept an offer of suitable work;
c) fails, without cause, to appear for a scheduled interview; or
d) fails to respond to an offer of employment.
11. Requires DES to allow employers to submit the prescribed report digitally or through email.
12. Requires DES to conduct an independent review of each report from an employer regarding a former employee to determine whether an unemployed individual should be disqualified from receiving UI benefits.
Miscellaneous
13. Makes technical and conforming changes.
14. Becomes effective on the general effective date.
Revisions
· Corrects the fiscal impact statement.
Prepared by Senate Research
February 4, 2026
AN/KP/ci