Unemployment Fraud and COVID-19

Unemployment fraud is gripping most of the country right now. Much of the fraud is due to criminals taking advantage of an overwhelmed system. They obtain and use personally identifiable information (PII) to file for unemployment. In other cases, it is someone who returns to work in the same capacity while continuing to receive unemployment checks.  

The Impact

The ramifications of fraud to this magnitude are far reaching. Legitimate claimants are having their funds suspended – sometimes for several weeks – while state offices re-examine the validity of their claim. This is putting untold stress on many across the country.

For employers, the increase in benefit charges already paid out – whether legitimate or fraudulent – will further increase your unemployment insurance tax rates. With over 40 million people filing for unemployment in the last few months, on top of the fraudulent claims, we can assume that it will be costly. The weight of this will not be felt until next year, but is a looming concern for many.

There are some things you can do to protect yourself and your company. 

1. Review your benefit charge statements in detail. 

2. Report suspected fraud to your state agency.3. Stay informed on the current scams. The FBI has recently released a statement on how scammers are obtaining personal information to file false claims. 

4. Look for red flags. One warning sign of fraud is receiving an employment verification from a Dept. of Labor in a different state. 

5.  Know exactly how your unemployment tax rates compare to the highest and lowest rates in your industry, and each state in which you operate. Knowing, is the first step to mitigating costs.

At UC Alternative, we provide free tax rate assessments customized to your company. Click here to learn more about our services and to sign-up for a free rate assessment.

We will keep you apprised of any new information or changes that could impact your unemployment costs. If you have any questions, please do not hesitate to contact me at  301-355-6249 or by email at John.doran@ucalternative.com