Unemployment Fraud-is it worth the risk?
Manager, Client Services Training
Mullin’s blog posting from 8/5/10 is one of many stories demonstrating that unemployment
fraud is increasing across the country. The
Department of Labor estimates that $1.57
billion in benefit payments were claimed fraudulently in 2009. (1)
are many definitions of unemployment fraud, but Florida’s is pretty comprehensive. The
Florida Agency for Workforce Development defines Unemployment Compensation Fraud as
any false statement or failure to disclose a material fact, knowingly made for the
purpose of obtaining or preventing payment of benefits contrary to the provisions
of the Unemployment Compensation Law. (2) The
most common types of fraud seen around the country are misinformation on claim forms,
continuing to draw benefits after returning to employment, and failing to look for
work while receiving benefits.
fraud can also be more complex. An example
of this is a story from the Texas Workforce Commission where a group of 12 committed
identity theft and used the stolen identities to submit claims for over $80,000.(3) This
is similar to the story Tammy Mullin posted out of New York involving four men who
used stolen identities to steal over $95,000.
states have responded to the rise in fraud by increasing the severity of punishment
for offenders. All states require benefit
overpayments to be repaid, but they can also assess penalties of up to 100% of the
value of the claim plus interest for repeat offenders (like in Idaho).(4) Beyond
penalties and repayment, States can also bar anyone who has committed unemployment
fraud from receiving future unemployment from one year to as long as six years (like
in Wisconsin).(5) Since
most of the individuals committing fraud are unemployed, monetary penalties and the
denial of future benefits can be extremely damaging.
attempt to mislead the state or provide false information on a claim can lead to criminal
charges. Unemployment Fraud is often
considered a misdemeanor with a sentence of probation. Depending
on the frequency and severity of the theft, it can also be considered a felony with
several years of jail time. Many employers
these days run background checks and will not hire employees with fraud charges of
any kind. That misdemeanor can cause
the loss of a great deal of future income once it becomes public record.
have also taken measures to increase their ability to detect fraud. Every
state’s unemployment program has teams devoted to discovering and investigating fraudulent
claims. The states have a variety of
different ways to uncover unemployment fraud. The
most common method is to audit payroll and benefit claim information submitted from
all state employers to determine if claimants are receiving wages from other sources
that were not reported. States also examine
the claims made to look for multiple claims filed from the same location or with the
same contact information. Every state
also receives tips from the public that can lead to investigation and prosecution.
fraud discoveries occur through the unemployment process itself. TALX helps our clients
and the states avoid unemployment fraud every day by informing the state if someone
is not qualified to receive benefits according to that state’s laws. Unemployment
fraud is a serious problem that costs literally BILLIONS of dollars each year across
the United States. In these tough economic
times, TALX is helping to reduce that number daily.
States Department of Labor 2009 Benefit Accuracy Measurement Data Summary
Agency for Workforce Innovation; http://floridajobs.org/unemployment/uc_bpc_info.html
Workforce Press Release dated 3/15/10 http://www.texasworkforce.org/news/press/2010/031510press.pdf
Department of Labor http://labor.idaho.gov/dnn/Default.aspx?tabid=704#Fraud4
Department of Workforce Development http://www.dwd.state.wi.us/uiben/f-faq.htm
This weblog is sponsored by TALX.
Recommended For You
Unemployment claims anticipated to be filed during this record surge are expected to have a negative impact on SUI tax […]
States can Tap into $1 Billion in Federal Funding to Upgrade Technology and Data Use Unemployment persists even as many […]
The U.S. is Seeing a Spike in Fraudulent Unemployment Claims As of May 14, a report from CNBC tallied up […]
Unemployment Regulations are Changing, and We’re Sharing the Latest With companies scrambling to manage their workforces during the COVID-19 pandemic, […]