Section 407(a) of the Social Security Act delegates to the
Secretary of Health, Education, and Welfare the power to prescribe
"standards" for determining what constitutes "unemployment" for
purposes of eligibility for benefits under the Aid to Families with
Dependent Children-Unemployed Fathers (AFDC-UF) program. Pursuant
to § 407(a), the Secretary promulgated a regulation authorizing
participating States, within their discretion, to exclude from the
definition of an unemployed father one
"whose unemployment results from participation in a labor
dispute or who is unemployed by reason of conduct or circumstances
which result or would result in disqualification for unemployment
compensation under the State's unemployment compensation law."
In class actions on behalf of families who were denied AFDC-UF
benefits under a state rule because the fathers' unemployment
resulted from discharges for misconduct, involvement in a strike,
or voluntarily quitting their jobs, the courts below held the
federal regulation invalid as exceeding the Secretary's statutory
authority.
Held: The regulation is a proper exercise of the
Secretary's statutory authority, and is reasonable. Pp.
432 U. S.
424-432.
(a) Since the statute expressly delegated to the Secretary the
power to prescribe standards for determining what constitutes
"unemployment" for purposes of AFDC-UF eligibility, a reviewing
court is not free to set aside the regulation simply because it
would have interpreted the statute in a different manner from the
Secretary, but only if the Secretary exceeded his statutory
authority or the regulation is "arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law." Pp.
432 U. S.
424-426.
(b) By allowing the States to exclude persons who would be
disqualified under the State's unemployment compensation law, the
Secretary has incorporated a well known and widely applied standard
for "unemployment," and exclusion of individuals who are out of
work as a result of their own conduct, and thus disqualified from
state unemployment compensation is consistent with the goal of
Page 432 U. S. 417
AFDC-UF, namely, to aid the families of the involuntarily
unemployed. Pp.
432 U. S.
426-429.
(c) The power to prescribe "standards" for determining what
constitutes "unemployment" gives the Secretary sufficient
flexibility to recognize local options in determining AFDC-UF
eligibility, including the option of denying unemployment
compensation benefits to participants in a labor dispute. While the
congressional purpose was to promote greater uniformity in the
application of the AFDC-UF program, such goal can be met without
imposing identical standards on each State, and hence the
Secretary's approach does not defeat the statute's purpose. Pp.
432 U. S.
429-432.
529 F.2d 514 and 515, reversed.
BLACKMUN, J., delivered the opinion of the Court, in which
BURGER, C.J., and STEWART, POWELL, and REHNQUIST, JJ., joined.
WHITE, J., filed a dissenting opinion, in which BRENNAN, MARSHALL,
and STEVENS, JJ., joined,
post, p.
432 U. S.
432.
MR. JUSTICE BLACKMUN delivered the opinion of the Court.
This case concerns the validity of 45 CFR § 233.100(a)(1)
(1976), [
Footnote 1] a
regulation promulgated by the Secretary of
Page 432 U. S. 418
Health, Education, and Welfare (HEW) pursuant to a delegation of
rulemaking authority in § 407(a) of the Social Security Act, 42
U.S.C. § 607(a). [
Footnote 2]
The issue is whether the regulation is a proper exercise of the
Secretary's statutory authority.
I
The statute is contained in the Social Security Act's Title IV,
which has to do primarily with Aid to Families with Dependent
Children (AFDC). The AFDC program was established by the Act in
1935 to provide welfare payments where children are needy because
of the death, absence, or incapacity of a parent. 42 U.S.C. §
606(a). The original conception of AFDC was to allow widows and
divorced mothers to care for their children at home without having
to go to work, thus eliminating the practice of removing needy
children in situations of that kind to institutions.
See Burns v.
Alcala,
Page 432 U. S. 419
420 U. S. 575,
420 U. S.
581-582 (1975). AFDC was not originally designed to
assist children who are needy simply because the family breadwinner
is unable to find work; it was contemplated that other programs
would alleviate that problem by attacking unemployment directly.
See Carleson v. Remillard, 406 U.
S. 598,
406 U. S. 603
(1972);
King v. Smith, 392 U. S. 309,
392 U. S. 313,
392 U. S.
327-329 (1968). Other parts of the Act encouraged the
establishment of state unemployment compensation programs,
primarily through tax incentives, but the federal role in these
programs is not so great as in AFDC.
See Ohio Bureau of
Employment Services v. Hodory, 431 U.
S. 471 (1977).
Title IV was amended in 1961 to add § 407. Pub.L. 87-31, § 1, 75
Stat. 75. This section established an experimental program
(AFDC-UF) [
Footnote 3] to
provide assistance in some cases where the unemployment of a parent
causes dependent children to be needy. The States were given broad
power to define "unemployment" for purposes of the program and to
determine the relationship of this new program to existing state
unemployment compensation plans. In 1968, the AFDC-UF program was
made permanent, 81 Stat. 882, but the eligibility criteria were
modified to withdraw some of the definitional authority delegated
to the States. The statute now requires a participating State to
provide assistance where a needy child
"has been deprived of parental support or care by reason of the
unemployment (as determined in accordance with standards prescribed
by the Secretary) of his father."
42 U.S.C. § 607(a).
See Philbrook v. Glodgett,
421 U. S. 707,
421 U. S.
709-711 (1975). [
Footnote 4]
Page 432 U. S. 420
Both AFDC and AFDC-UF are cooperative ventures of the Federal
Government and the States. States that elect to participate in
these programs administer them under federal standards and HEW
supervision. Funding is provided from state and federal revenues on
a matching basis.
See, e.g., Shea v. Vialpando,
416 U. S. 251,
416 U. S. 253
(1974);
King v. Smith, 392 U.S. at
392 U. S. 316.
Although every State currently participates in AFDC, only about
half the States participate in the AFDC-UF program. Dept. of HEW,
Public Assistance Statistics, Oct.1976, table 5, p. 9 (1977).
II
The instant case originated in 1971 as a challenge to Rule
200.X.(A)(2) of the Maryland Department of Employment and Social
Services. That Rule denies AFDC-UF benefits to families where the
father is out of work for reasons that disqualify him for state
unemployment insurance compensation. [
Footnote 5]
Page 432 U. S. 421
The original plaintiffs represented two classes of families with
dependent children who were thereby ineligible for AFDC-UF
benefits: one where the father had been discharged for misconduct
(excessive absenteeism), and the other where the father was out of
work because of a strike. The defendants were Maryland officials
having responsibility for the administration of public assistance
grants in the State. A three-judge United States District Court was
convened to consider the claim that Rule 200.X.(A)(2) violated the
Equal Protection Clause of the Fourteenth Amendment. The court
sustained the constitutionality of the state regulation, but went
on to hold it invalid because it was contrary to the federal
regulation prescribing standards for the determination of
unemployment under the AFDC-UF program.
Francis v.
Davidson, 340 F.
Supp. 351 (Md.),
summarily aff'd, 409 U.S. 904 (1972)
(
Francis I). Although HEW did not agree that its
regulation was inconsistent with Rule 200.X.(A)(2), the Solicitor
General, in his memorandum for the United States as
amicus
curiae, filed in
Francis I at this Court's
invitation, 408 U.S. 920 (1972), suggested a summary affirmance in
that case in light of the then-forthcoming revision of the HEW
regulation.
The HEW regulation, as amended, expressly authorizes some state
discretion in defining unemployment. Generally, it requires the
States to consider a person to be unemployed for AFDC-UF purposes
if he works less than 100 hours a month, except for intermittent
employment, and
"except that, at the option of the State, such definition need
not include a father whose unemployment results from participation
in a labor dispute or who is unemployed by reason of conduct or
circumstances which result or would result in disqualification
Page 432 U. S. 422
for unemployment compensation under the State's unemployment
compensation law."
45 CFR §233.100(a)(1) (1976). The Secretary had stated that the
purpose of this amendment was to nullify the effect of
Francis
I by making explicit the HEW policy of allowing the States to
exclude AFDC-UF participants based on the particular reason that
the father was out of work. [
Footnote 6]
Page 432 U. S. 423
After the amended HEW regulation became effective, the defendant
Maryland officials moved that the District Court dissolve its
earlier injunction issued March 16, 1972, after
Francis I
had been decided, against enforcement of Rule 200.X.(A)(2). That
court recognized that "[t]he conflict between the federal and the
Maryland regulation ended after the former was amended," but
nevertheless it denied the motion and continued the injunction on
the ground that the amended federal regulation now was in conflict
with the federal statute.
Francis v.
Davidson, 379 F. Supp.
78, 81 (Md.1974) (
Francis II). First, with regard to
the class of fathers discharged for misconduct, the District Court
stated that these people are necessarily "unemployed," within the
meaning of the statute, and that any contrary regulation is
invalid. Second, the court recognized that it is not clear whether
the statutory term "unemployed" includes persons involved in a
labor dispute. The court held, however, that the HEW regulation was
invalid in this regard because it delegated the question of
coverage to the States without providing a uniform national
standard.
Id. at 81-82.
After this Court dismissed a direct appeal in
Francis
II for want of jurisdiction, 419 U.S. 1042 (1974), appeals
were taken by the state defendants and by the Chamber of Commerce
of the United States, as intervenor, to the United States Court of
Appeals for the Fourth Circuit. There the case was consolidated
with an appeal in a similar case,
Bethea v.
Mason, 384 F.
Supp. 1274 (Md 1974), where a single District Judge had
followed
Francis II in holding the same HEW regulation
invalid insofar as it authorized the State to deny AFDC-UF benefits
to fathers who had voluntarily quit their previous jobs.
The Fourth Circuit affirmed the three appeals in an unpublished
per curiam adopting the respective opinions of the two District
Judges.
See 529 F.2d 514 and 515 (1975). The state
defendants petitioned for certiorari, contending that the
Page 432 U. S. 424
current HEW regulation is authorized by the federal statute and
that the injunction against the state regulation therefore should
be dissolved. [
Footnote 7] The
Solicitor General, at the invitation of the Court, 425 U.S. 969
(1976), filed a memorandum for the United States as
amicus
curiae, supporting the state defendants' position. We granted
certiorari. 429 U.S. 939 (1976).
III
The ultimate question in this case is whether the statutory term
"unemployment" may be interpreted to allow the State to exclude the
three classes of respondents from receiving AFDC-UF benefits. There
can be no doubt that 45 CFR § 233.100(a)(1) (1976) embodies that
interpretation. Thus, the actual issue we must decide is not how
the statutory term should be interpreted, but whether the
Secretary's regulation is proper.
Ordinarily, administrative interpretations of statutory terms
are given important, but not controlling, significance. This was
the Court's approach, for example, when it had under consideration
the question whether the term "wages" in Title II of the Social
Security Act included a backpay award.
Social Security Board v.
Nierotko, 327 U. S. 358,
327 U. S. 369
(1946). [
Footnote 8]
Page 432 U. S. 425
Unlike the statutory term in Title II, however, Congress in §
407(a) expressly delegated to the Secretary the power to prescribe
standards for determining what constitutes "unemployment" for
purposes of AFDC-UF eligibility. In a situation of this kind,
Congress entrust to the Secretary, rather than to the courts, the
primary responsibility for interpreting the statutory term. In
exercising that responsibility, the Secretary adopts regulations
with legislative effect. A reviewing court is not free to set aside
those regulations simply because it would have interpreted the
statute in a different manner.
American Telephone &
Telegraph Co. v. United States, 299 U.
S. 232,
299 U. S.
235-237 (1936). [
Footnote 9]
Page 432 U. S. 426
The regulation at issue in this case is therefore entitled to
more than mere deference or weight. It can be set aside only if the
Secretary exceeded his statutory authority or if the regulation is
"arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law." 5 U.S.C. §§ 706(2)(A), (C). [
Footnote 10]
IV
We turn now to the grounds on which the District Courts and the
Court of Appeals held the regulation invalid, keeping in mind the
narrow scope of review that is indicated in this situation.
These courts held that the Secretary exceeded his statutory
authority to prescribe standards, in the first place, because he
permitted the determination of eligibility to turn in part on the
reason for the father's unemployment. The language of § 407(a) was
thought to make the only relevant consideration that of whether,
not why, the father was out of work:
"'A man out of work because he was discharged for cause by his
employer
is unemployed. There can be no two ways about
that conclusion.' . . . [N]o combination of federal and state
regulations may provide that a father who is unemployed is not
unemployed."
Francis II, 379 F. Supp. at 81, quoting
Francis
I, 340 F. Supp. at 366. And in
Bethea, the court by
like reasoning held that a person who voluntarily quit his job is
to be considered unemployed
Page 432 U. S. 427
within the meaning of the statute. 384 F. Supp. at
1280-1281.
We do not agree that the statutory language is so unambiguous.
The term "unemployment" is often used in a specialized context
where its meaning is other than simply not having a job. For
example, the concept of unemployment is frequently limited to
persons who have some connection with the workforce, that is,
individuals who desire to work and are capable of working, and who,
usually but not always, have held jobs in the past. In addition,
the feature of involuntariness is often linked with unemployment.
Limitations of this nature are found in the definitions used by the
Depart ment of Labor in compiling unemployment statistics.
[
Footnote 11] State
unemployment compensation programs generally confine their benefits
in this manner. [
Footnote
12] Indeed, the other provisions of
Page 432 U. S. 428
§ 407 impose similar limitations, indicating that the AFDC-UF
program was not intended to provide assistance without regard to
the reason a person is out of work. [
Footnote 13]
Thus, we conclude that the statutory term is capable of more
than the tautological definition imposed by the District Judges and
the Court of Appeals. Congress itself must have appreciated that
the meaning of the statutory term was not self-evident, or it would
not have given the Secretary the power to prescribe standards.
Respondents argue, however, that Congress intended that the
Secretary prescribe an "hours-worked" standard for determining
unemployment but did not intend any further additions to the
eligibility criteria specified in other provisions of the statute.
In fact, a minimum hours-worked standard is part of the regulation
at issue in this case, but there is no indication in the statutory
language or legislative history that Congress intended to foreclose
other factors in the determination of what constitutes unemployment
for purposes of the AFDC-UF program.
Of course, the Secretary's statutory authority to prescribe
standards is not unlimited. He could not, for example, adopt a
regulation that bears no relationship to any recognized concept of
unemployment or that would defeat the purpose of the AFDC-UF
program. But the regulation here at issue does not even approach
these limits of the delegated authority. By allowing the States to
exclude persons who would be disqualified under the State's
unemployment compensation law, the Secretary has incorporated a
well known and widely applied standard for "unemployment."
Exclusion of individuals who are out of work as a result of their
own conduct and thus disqualified from state unemployment
compensation
Page 432 U. S. 429
is consistent with the goal of AFDC-UF, namely, to aid the
families of the involuntarily unemployed. [
Footnote 14] On the other hand, state
unemployment benefits are ordinarily available only after a waiting
period and only for a limited number of weeks or months. By
providing benefits during the periods before and after state
unemployment compensation is available, AFDC-UF fills a significant
gap in social insurance coverage. [
Footnote 15] Thus, we cannot say that the Secretary's
regulation defeats the purpose of the AFDC-UF program.
We therefore hold that the HEW regulation, to the extent it
allows the States to determine that persons disqualified under
unemployment compensation laws are not "unemployed" under § 407(a),
is within the statutory authority delegated to the Secretary, and
is reasonable.
V
The second stated reason for the District Judges' and Court of
Appeals' holding that the Secretary's regulation was invalid was
that it permitted the States the option of denying unemployment
compensation benefits to participants in a labor dispute. [
Footnote 16] Although the holding is
not entirely clear to us, it
Page 432 U. S. 430
appears that what was regarded as fatal was the Secretary's
failure to impose sufficient standards to control the States'
decisions under this optional feature. [
Footnote 17] Presumably, the same rationale would
provide an alternative basis for holding the regulation invalid to
the extent it allows States the uncontrolled option of denying
benefits to persons who were discharged for cause or had
voluntarily quit their jobs.
It is clear that a major purpose of the 1968 amendment was to
retract some of the authority previously delegated to the States
under § 407(a).
Philbrook v. Glodgett, 421 U.S. at
421 U. S. 710.
We, however, do not think this shift of authority from the States
to the Secretary required the Secretary to adopt a regulation that
precludes any recognition of local policies. If Congress had
intended such a result, it might have changed the statutory
language from "unemployment (as defined by the State)" to
"unemployment (as defined by the Secretary)." Instead, § 407(a) now
reads "unemployment (as determined in accordance with standards
prescribed by the Secretary)." The power to "determine"
unemployment remains with the States, and we conclude that the
power to prescribe "standards" gives the Secretary sufficient
flexibility to recognize some local options in determining AFDC-UF
eligibility.
The legislative history, we acknowledge, is at some variance
with the statutory language. The effect of the 1968 amendment
Page 432 U. S. 431
is described as to "provide for a uniform definition of
unemployment throughout the United States," and as to "authorize a
Federal definition of unemployment by the Secretary." S.Rep. No.
744, 90th Cong., 1st Sess., 3-4, 160 (1967).
See H.R.Rep.
No. 544, 90th Cong., 1st Sess., 3, 17, 108 (1967); 113 Cong.Rec.
32592 (1967) (remarks of Sen. Long). We do not understand these
comments to mean, however, that the Secretary is prohibited from
allowing the States any options in determining whether or not a
person is "unemployed" for purposes of the AFDC-UF program. First,
the legislative history cannot be read literally in its claim that
the amended statute itself provides a federal definition of
unemployment; at best, the statute delegates to the Secretary the
power to prescribe such a definition. Second, we have no quarrel
with the statements in the legislative history that the Secretary
is
authorized to adopt such a uniform definition; we
simply hold that he is not
required to do so.
Certainly, the congressional purpose was to promote greater
uniformity in the applicability of the AFDC-UF program. But the
goal of greater uniformity can be met without imposing identical
standards on each State. In one case, for example, a State was
permitted to adopt a somewhat more liberal hours-worked test than
the minimum required by the Secretary.
Macias v.
Finch, 324 F.
Supp. 1252 (ND Cal.),
summarily aff'd, 400 U.S. 913
(1970). We conclude, therefore, that the Secretary's approach in
the present case is not contrary to the purpose of the statute.
Our conclusion is reinforced by our understanding of the AFDC-UF
program as involving the concept of cooperative federalism. The
States are free not to participate in the program, and, as we have
noted, only about half of them in fact do so. The congressional
purpose is not served at all in those States where AFDC-UF is
totally unavailable. Accordingly, we should not lightly infer a
congressional intention to preclude the Secretary from recognizing
legitimate local
Page 432 U. S. 432
policies in determining eligibility.
See New York Dept. of
Soc. Services v. Dublino, 413 U. S. 405,
413 U. S.
413-414,
413 U. S.
421-422 (1973).
We therefore hold that 45 CFR § 233.100(a)(1) (1976) adequately
promotes the statutory goal of reducing interstate variations in
the AFDC-UF program. In this respect, the regulation is both
reasonable and within the authority delegated to the Secretary.
The judgment of the Court of Appeals is reversed.
It is so ordered.
[
Footnote 1]
"§ 233.100 Dependent children of unemployed fathers."
"(a)
Requirements for State Plans. If a State wishes to
provide AFDC for children of unemployed fathers, the State plan
under Title IV -- Part A of the Social Security Act must, except as
specified in paragraph (b) of this section:"
"(1) Include a definition of an unemployed father which shall
apply only to families determined to be needy in accordance with
the provisions in § 233.20 of this chapter. Such definition must
include any father who:"
"(i) Is employed less than 100 hours a month; or"
"(ii) Exceeds that standard for a particular month, if his work
is intermittent and the excess is of a temporary nature as
evidenced by the fact that he was under the 100 hour standard for
the prior 2 months and is expected to be under the standard during
the next month;"
"except that, at the option of the State, such definition need
not include a father whose unemployment results from participation
in a labor dispute or who is unemployed by reason of conduct or
circumstances which result or would result in disqualification for
unemployment compensation under the State's unemployment
compensation law."
[
Footnote 2]
"§ 607. Dependent children of unemployed fathers;
definition."
"(a) The term 'dependent child' shall, notwithstanding section
606(a) of this title, include a needy child who meets the
requirements of section 606(a)(2) of this title who has been
deprived of parental support or care by reason of the unemployment
(as determined in accordance with standards prescribed by the
Secretary) of his father, and who is living with any of the
relatives specified in section 606(a)(1) of this title in a place
of residence maintained by one or more of such relatives as his (or
their) own home."
[
Footnote 3]
The program originally was to expire June 30, 1962. It was
extended, however, first for five years, 76 Stat.193, and then to
June 30, 1968, 81 Stat. 94.
[
Footnote 4]
Before the 1968 amendments, § 407(a) referred to "unemployment
(as defined by the State)." 75 Stat. 75. Under the original
statute, the States were also free to decide to what extent receipt
of unemployment compensation would affect eligibility for AFDC-UF
benefits. Section 407(b)(2)(C)(ii) was added and amended in 1968 to
require participating States to deny AFDC-UF benefits
"with respect to any week for which such child's father receives
unemployment compensation under an unemployment compensation law of
a State or of the United States."
§ 302, 82 Stat. 273.
In
Philbrook v. Glodgett, 421 U.S. at
421 U. S. 710
n. 6,
421 U. S. 719,
the Court observed that a purpose of the 1968 amendments was to
eliminate variations in AFDC-UF coverage among the States.
Accordingly, § 407(b)(2)(C)(ii) was held to establish a nationwide
test of eligibility under which only the actual "receipt" of
unemployment compensation would preclude AFDC-UF benefits. Thus,
the States were required to allow persons eligible for both
programs to refuse unemployment compensation and receive AFDC-UF
benefits instead. 421 U.S. at
421 U. S.
713-719.
The effect of the Court's decision in
Philbrook was
counteracted the following year when Congress again amended §
407(b)(2)(C)(ii) to require denial of AFDC-UF benefits where a
father is qualified for unemployment compensation but refuses to
apply for or accept it. Pub.L. 94-566, § 502, 90 Stat. 2688.
[
Footnote 5]
This Rule, which has since been redesignated COMAR
07.02.09.10(A)(2) (1975), provides that AFDC-UF benefits may not be
paid "[t]o meet need due to being disqualified for unemployment
insurance." Maryland's Unemployment Insurance Law specifics various
grounds that disqualify otherwise eligible individuals from
receiving benefits. These grounds include, among others,
voluntarily leaving work without good cause, gross misconduct,
discharge or suspension as a disciplinary measure (temporary
disqualification for not less than one week and for not more than
nine weeks), and certain work stoppages due to labor disputes other
than lockouts. Md.Ann.Code, art. 95A, §§ 6(a), (b), (c), and (e)
(1969).
[
Footnote 6]
The notice of rulemaking read:
"Dependent Children of Unemployed Fathers"
"Notice is hereby given that the regulation set forth in
tentative, alternative form below is proposed by the Administrator,
Social and Rehabilitation Service, with the approval of the
Secretary of Health, Education, and Welfare. Both alternatives
would amend § 233.100(a)(1), which provides a Federal deifinition
of unemployed father under the AFDC program in terms of hours of
work."
"In applying the existing regulation, the Department policy has
been to permit a State, at its option, to use a definition of
unemployed father which imposes additional conditions relating to
the reason for the unemployment,
e.g., the State
definition might exclude a father whose unemployment results from
participation in a labor dispute or who is unemployed by reason of
conduct or circumstances which result or would result in
disqualification for unemployment compensation under the State's
unemployment compensation law. In
Davidson v. Francis, the
U. S. Supreme Court, on October 16, summarily affirmed the judgment
of the district court which held, in effect, that while the
Secretary has broad authority to define an unemployed father for
purposes of section 407 of the Social Security Act, the existing
Federal regulation provides only an hours-of-work test, and thus
prohibits a State from excluding fathers who meet this test but are
disqualified for unemployment compensation."
"Accordingly, the proposed alternative A below would amend the
regulation to make the prior Department policy explicit, by stating
the options which are permitted to the States in defining an
unemployed father. Alternative B, on the other hand, would amend
the regulation to make clear that the hours-of-work test is
intended as the exclusive definition of unemployed father, so that
States may not have definitions which impose added conditions. This
would be a change in Department policy, but would be consistent
with the way that the existing regulation has been interpreted by
the courts."
38 Fed. Reg. 49 (1973). "Alternative A" was eventually adopted.
Id. at 18549.
[
Footnote 7]
The Chamber of Commerce of the United States, as intervenor in
Francis II, also filed a petition for certiorari, No.
75-1182, arguing that federal labor policy prohibits the payment of
welfare benefits to persons involved in labor disputes. Although we
did not act on its petition, the Chamber filed a brief as
respondent-intervenor in the present case. In light of today's
decision, the petition for certiorari in No. 75-1182 is denied.
[
Footnote 8]
The Court there explained:
"Administration, when it interprets a statute so as to make it
apply to particular circumstances, acts as a delegate to the
legislative power. Congress might have declared that 'back pay'
awards under the Labor Act should or should not be treated as
wages. Congress might have delegated to the Social Security Board
to determine what compensation paid by employers to employees
should be treated as wages. Except as such interpretive power may
be included in the agencies' administrative functions, Congress did
neither. An agency may not finally decide the limits of its
statutory power. That is a judicial function. Congress used a well
understood word -- 'wages' -- to indicate the receipts which were
to govern taxes and benefits under the Social Security Act. There
may be borderline payments to employees on which courts would
follow administrative determination as to whether such payments
were or were not wages under the act."
"We conclude, however, that the Board's interpretation of this
statute to exclude back pay goes beyond the boundaries of
administrative routine and the statutory limits."
327 U.S. at
327 U. S. 369
(footnote omitted).
[
Footnote 9]
Legislative, or substantive, regulations are
"issued by an agency pursuant to statutory authority and . . .
implement the statute, as, for example, the proxy rules issued by
the Securities and Exchange Commission. . . . Such rules have the
force and effect of law."
U.S. Dept. of Justice, Attorney General's Manual on the
Administrative Procedure Act 30 n. 3 (1947).
See United States
v. Mersky, 361 U. S. 431,
361 U. S.
437-438 (1960);
Atchison, T. & S. F. R. Co. v.
Scarlett, 300 U. S. 471,
300 U. S. 474
(1937).
By way of contrast, a court is not required to give effect to an
interpretative regulation. Varying degrees of deference are
accorded to administrative interpretations, based on such factors
as the timing and consistency of the agency's position, and the
nature of its expertise.
See General Electric Co. v.
Gilbert, 429 U. S. 125,
429 U. S.
141-145 (1976);
Morton v. Ruiz, 415 U.
S. 199,
415 U. S.
231-237 (1974);
Skidmore v. Swift & Co.,
323 U. S. 134,
323 U. S. 140
(1944).
See generally K. Davis, Administrative Law Treatise §
5.03 (1958 and Supps. 1970, 1976); L. Jaffe, Judicial Control of
Administrative Action 564-565 (1965).
[
Footnote 10]
The other kinds of review provided by the Administrative
Procedure Act are not involved in this case. The constitutionality
and procedural aspects of the regulation, 5 U.S.C. §§ 706(2)(b),
(D), are not at issue at this time. Neither substantial evidence
review nor trial
de novo, §§ 706(2)(E), (F), was available
in this case.
See Camp v. Pitts, 411 U.
S. 138,
411 U. S.
140-142 (1973);
Citizens to Preserve Overton Park v.
Volpe, 401 U. S. 402,
401 U. S.
413-416 (1971).
[
Footnote 11]
"Employed persons are (1) those who worked for pay any time
during the week which includes the 12th day of the month or who
worked unpaid for 15 hours or more in a family-operated enterprise
and (2) those who were temporarily absent from their regular jobs
because of illness, vacation, industrial dispute, or similar
reasons. . . ."
"Unemployed persons are those who did not work during the survey
week, but were available for work except for temporary illness and
had looked for jobs within the preceding 4 weeks. Persons who were
available for work but did not work because they were on layoff or
waiting to start new jobs within the next 30 days are also counted
among the unemployed. . . ."
". . . Persons not in the labor force are those not classified
as employed or unemployed; this group includes persons retired,
those engaged in their own housework, those not working while
attending school, those unable to work because of long-term
illness, those discouraged from seeking work because of personal or
job market factors and those who are voluntarily idle. . . ."
U.S. Dept. of Labor, Monthly Labor Review 91 (Apr.1977).
[
Footnote 12]
"Unemployment insurance programs are designed to provide cash
benefits to regularly employed members of the labor force who
become involuntarily unemployed and who are able and willing to
accept suitable jobs."
Dept. of HEW, Social Security Programs in the United States 54
(1971).
See also Ohio Bureau of Employment Services v.
Hodory, 431 U.S. at
431 U. S. 482,
and
431 U. S. 487
n. 15.
[
Footnote 13]
Among the conditions imposed by § 407(b) are requirements that
the unemployed father have a substantial connection with the
workforce and that he actively seek employment.
See Philbrook
v. Glodgett, 421 U. S. 707,
421 U. S. 710
n. 6 (1975).
[
Footnote 14]
In describing the bill on the floor of the House, a cosponsor
stated that the concern was with the "involuntarily unemployed and
I put the emphasis on the word
involuntarily.'" 107 Cong.Rec.
3767 (1961) (remarks of Cong. Byrnes).
[
Footnote 15]
When President Kennedy proposed the adoption of the AFDC-UF
program in 1961, the only example he gave of the sort of person
that would be covered was one "who has exhausted unemployment
benefits and is not receiving adequate local assistance. . . ."
Message from the President on Economic Recovery and Growth, 107
Cong.Rec. 1679 (1961).
[
Footnote 16]
Although 45 CFR § 233.100(a)(1) (1976) contains a separate
option for States to exclude labor dispute participants from
AFDC-UF, Maryland has incorporated its labor-dispute rule as a
disqualification for unemployment compensation. The labor dispute
provision of the federal regulation, therefore, is not directly at
issue in this case. We attach no significance to the approach
followed by Maryland in this case.
[
Footnote 17]
The
Francis I court initially held that the Secretary
could have left the decision on whether strikers are unemployed up
to each State, but that he had failed to do so in the regulation
then in effect. 340 F. Supp. at 367-368. After the regulation was
so amended, however, the same court held it invalid, 379 F. Supp.
at 81-82, because the Secretary failed to establish "national
standards within which the regulations of each of the states were
to be channelized and confined."
Id. at 82. The extent to
which any significant options in coverage would be tolerated under
this approach is not clear. The court, however, stopped short of
repudiating its previous conclusion that § 407(a) does not require
the Secretary to adopt a "national definition" of unemployment.
379 F. Supp.
at 82.
MR. JUSTICE WHITE, with whom MR. JUSTICE BRENNAN, MR. JUSTICE
MARSHALL, and MR. JUSTICE STEVENS join, dissenting.
The regulation under review in this case, 45 CFR § 233.100(a)(1)
(1976), provides that, for purposes of the AFDC-UF program, the
definition of unemployment need not include, "
at the option of
the State," a father whose unemployment results from a labor
dispute or some conduct that would disqualify him under the State's
unemployment compensation law. (Emphasis added.) The Court today
sustains this regulation notwithstanding its recognition that "a
major purpose of the 1968 amendment was to retract some of the
authority previously delegated to the States under § 407(a)."
Ante at
432 U. S. 430.
The Court reasons, without citation to legislative authority, that
"the goal of greater uniformity can be met without imposing
identical standards on each State."
Ante at
432 U. S. 431.
Contrary to the majority, I do not believe that the legislative
history reflects a congressional intent to achieve merely "greater
uniformity" in the definition of unemployment; the legislative
record plainly reveals that Congress contemplated a federal
definition of unemployment applicable to all States that adopt the
AFDC-UF program. Since I do not believe that the subject regulation
conforms to this
Page 432 U. S. 433
congressional mandate, I would affirm the judgment of the Court
of Appeals.
The Court acknowledges that the legislative history is "at some
variance" with its position.
Ante at
432 U. S. 430.
This understates the case; literally all of the relevant
legislative history repeatedly and unequivocally affirms the strong
congressional objective of creating a federal definition of
unemployment. It is common ground that Congress changed the wording
of § 407(a) from "unemployment (as defined by the State)" to
"unemployment (as determined in accordance with standards
prescribed by the Secretary)" for the express purpose of
"eliminat[ing] the variations in state definitions of
unemployment."
Philbrook v. Glodgett, 421 U.
S. 707,
421 U. S. 719
(1975). But the Court would have us believe that the statute
nevertheless contemplates a regulation leaving it completely within
state discretion whether to cover those not working by reason of
labor disputes or because of discharge for cause.
* In my view, this
is flatly contrary to the
Page 432 U. S. 434
thrust of the legislative history, which bears some
recitation.
In the Senate, most of the work on the 1968 amendments was done
by the Finance Committee. That Committee reported that the bill
would:
"(e) modify the optional unemployed fathers program to provide
for a
uniform definition of unemployment throughout the United
States."
S. Rep No. 744, 90th Cong., 1st Sess., 4 (1967) (emphasis
added).
"A major characteristic of the existing law is the authority
left to the States to define 'unemployment.' The committee believes
that this has worked to the detriment of the program because of the
wide variation in the definitions used by the States. In some
instances, the definitions have been very narrow, so that only a
few people have been helped. In other States, the definitions have
been relatively broad. The committee bill is designed to correct
this situation and to make other improvements in the program."
"The amendments proposed by the committee would authorize
a
Federal definition of unemployment by the Secretary. . .
."
Id. at 160 (emphasis added).
The Ways and Means Committee, which carried the legislation in
the House, adopted the same view:
"Under present law . . . [t]he definition of unemployment is
left up to the individual States. Under the bill . . .
the
definition of unemployment would be made by the Federal
Government."
H.R.Rep. No. 544, 90th Cong., 1st Sess., 17 (1967) (emphasis
added).
See also id. at 3, 108 (using language almost
identical to that adopted by the Senate Finance Committee, S.Rep.
No. 744,
supra at 3-4, 160).
The Undersecretary of HEW, Wilbur J. Cohen, expressed his
Department's view that the new legislation would require a uniform
national standard:
"Today, 22 States have programs to assist [children
Page 432 U. S. 435
who are needy because their fathers are unemployed]. But the
differences between State programs are great. States may define
unemployment as narrowly or broadly as they wish, requiring
substantial previous work experience or no work experience. This
variation in definition of unemployment is shown clearly by three
adjacent Southwestern States, Arizona, Utah, and Colorado. Each of
these States has a population of between 1 and 2 million, yet, in
Arizona, only 19 families of unemployed parents received AFDC in
May, while, during the same month, there were 880 in Utah and 1,600
in Colorado. Arizona's narrow definition of unemployment has kept
its program to a token level."
"The House bill continues to allow States to choose whether they
will include dependent children of unemployed parents under AFDC.
But for the first time, the House will set a
Federal definition
of unemployment. We are in complete agreement that there should be
a Federal definition of unemployment established by the Congress
and the Secretary."
Hearings on H.R. 12080 before the Senate Committee on Finance,
90th Cong., 1st Sess., 268 (1967) (emphasis added). The members of
the Senate Finance Committee expressed no doubt as to the meaning
of the Undersecretary's remarks: "Senator WILLIAMS: I notice you
say you are in complete agreement that there should be a
Federal definition of unemployment."
Id. at 269
(emphasis added).
Finally, after the enactment of the 1968 amendments, the Senate
Finance Committee was unequivocal in summing up the amendments to
the unemployed fathers provisions: "The amendments provide for a
Federal definition of unemployment for States which have
AFDC-UF programs." Senate Committee on Finance, 90th Cong., 2d
Sess., Report on Social Security Amendments of 1967 -- Pub.L. 248,
Brief Summary of Major Provisions and Detailed Comparison with
Page 432 U. S. 436
Prior Law 3 (July 15, 1968) (emphasis added).
See also
id. at 63 ("Unemployment will be defined by the Secretary of
Health, Education, and Welfare"); 113 Cong.Rec. 23054 (1967)
(remarks of Rep. Mills) ("[W]e found . . . that the fact that the
definition of unemployment is left to the States has had
unfortunate results. . . . The Bill would correct this situation");
id. at 32592 (remarks of Sen. Long) ("[T]here would be a
Federal definition of
unemployment'"); id. at
36373-36374 ("[T]he Secretary will prescribe standards for the
determination of what constitutes unemployment. The term is defined
by the States under present law"); Senate Committee on Finance and
House Committee on Ways and Means, 90th Cong., 1st Sess., Report on
Summary of Social Security Amendments of 1967, p. 17 (Comm.Print
1967) ("[T]he Secretary will prescribe standards for the
determination of what constitutes unemployment").
Unlike the majority, I have no doubt that the legislative
history means what it says and confines the regulatory authority of
the Secretary; by amending § 407(a) to place the responsibility for
defining unemployment on the Secretary, Congress intended to
establish "a uniform definition of unemployment throughout the
United States." S.Rep. No. 744,
supra at 4; H.R.Rep. No.
544,
supra at 3. While I agree with the majority that this
Court should defer to any reasonable definition given by the
Secretary to the term "unemployment," I cannot agree, in light of
the legislative history, that the Secretary may simply delegate the
responsibility for defining that term to the States, for in
important respects this would simply return the law to the
situation existing prior to the amendment defining that term to the
States. Here, the Secretary has promulgated a regulation describing
a rather broad category of individuals who may be eligible for
AFDC-UF benefits but has then permitted the States to include or
exclude those individuals from eligibility "at the option of the
State."
Page 432 U. S. 437
Contrary to the obvious intent of Congress, this leaves to state
discretion the coverage of important categories of claimants and
invites the very diversity in coverage that the 1968 amendment was
designed to prevent. I cannot believe that this regulation conforms
to the statutory purpose. Accordingly, I respectfully dissent.
* The Court appears to believe that the statutory language
supports its view that the States are still free to define the
eligibility criteria for AFDC-UF benefits; but the statute provides
that "unemployment" will be "determined in accordance with
standards prescribed by the
Secretary," not the States.
(Emphasis added.) The Court concludes that the statutory language
contemplates that unemployment will be "determined" by the States,
and that only the "standards" will be determined by the Secretary.
The majority suggests that, if Congress had intended for the
Secretary to define unemployment, it would have used the words
"unemployment (as defined by the Secretary)." The Court's
paper-thin distinction between "determining" unemployment and
prescribing "standards" totally escapes me. Moreover, according to
the Court's logic, if Congress had intended the meaning suggested
by the majority, it would have provided that unemployment would be
"determined by the States in accordance with the standards
prescribed by the Secretary"; instead, Congress eliminated all
references to the States. The common sense meaning of the statutory
language is that "unemployment" is to be defined by the Secretary,
and, as we shall see, the statute is susceptible of no other
interpretation when read in the context of the legislative
history.