During the pandemic, unemployment insurance (UI) benefits fraud has spiked dramatically. This is not surprising given the title wave of federal money and overwhelming number of UI claims filed in the last 6 months...over 50 million UI claims since March 2020 at last count.
The FBI recently issued a press release warning of widespread fraud where criminals are using stolen identities to submit fraudulent unemployment claims. As reported by the New York Times: "Investigators from the Secret Service said they had information implicating a well-organized Nigerian fraud ring, and that stolen information such as social security numbers had allowed the network to file claims on behalf of people who in many cases had not lost their jobs." It was further reported: "Criminals collected as much as $650 million in benefits" from the State of Washington alone, "although the state has already recouped about $350 million with the help of federal law enforcement, according to a spokesman for the State's Employment Security Department." https://www.nytimes.com/2020/07/02/your-money/coronavirus-unemployment-fraud.html
Don't be a victim! Here's how employers can spot and report potential UI fraud.
The fraudulent UI Benefits petitions are for individuals who either remain employed with your company or individuals who have not been employed with the business for several years. The fraudsters collect benefits when the employers fail to oppose the fraudulent petitions.
Therefore, employers must be vigilant. Carefully review UI petitions associated with claims, cross-check the UI petitioner with your personnel records, and regularly check unemployment reports to guard against fraudulent claims. Any failure to be vigilant may allow the criminals to collect UI Benefits on the taxpayers' dime.
Moreover, it is yet to be seen whether unreported fraudulent UI claims will impact employers' UI "experience rating," causing UI tax hikes down the road for your business.
If you suspect UI fraud, the U.S. Department of Labor has provided employers with resources on how to report unemployment fraud in each state here. Many states have also developed their own reporting mechanisms.
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