Three Ways Employers Can Help Prevent Unemployment Insurance Fraud

Unemployment Insurance Fraud

There are billions of extra dollars that U.S. employers must pay every year, due to unemployment insurance fraud. Employer tax rates are also higher as a direct result of fraudulent UI claims.

A North Carolina woman was sentenced to almost five years in prison on charges of stealing $150,000 from the Virginia Employment Commission (VEC) and similar agencies in Indiana and Pennsylvania.

The woman had organized a complex scheme with fake businesses reported to the VEC that each business had wage-earning employees. The woman filed UI claims under the identities of 28 people, stating they had been laid-off. She not only received unemployment insurance benefits for those people, but she had the money direct-deposited into her bank account.

There are three ways employers can help prevent unemployment insurance fraud:

1. Be sure to report new hires and recalled employees to the New Hire Registry. Include the employee’s start date if it’s different than their hire date. (State agencies will cross-reference the New Hire Registry to see if claimants with existing claims are still collecting UI benefits.)

2. Complete a new hire or other wage audit if you get one and return it to your state agency. The agency will check to see if inappropriate benefit payments have been made on the claim. They will prevent any further payment of UI benefits or indicate the amount that has been overpaid so that the claimant must return it to the state.

3. Contact a UI Claims Service or dial the UI fraud hotline, website, or email address for your state.

Unemployment insurance fraud is a reality and can negatively impact entire industries. Working with Industrial U.I. to manage your claims can help prevent UI fraud. Contact us today for more information on our scope of services.