Employment Law Report
United States Department of Labor Focuses on Unemployment Insurance Identity Theft
The surge in unemployment claims resulting from the COVID-19 pandemic has been accompanied by an increase in unemployment insurance fraud. In fact, Kentucky took the unprecedented step of temporarily closing its unemployment claim system to address security concerns in connection with the wave of fraudulent unemployment claims. Organized criminal groups and others are using stolen data to fraudulently collect unemployment benefits from multiple state unemployment systems.
The United States Department of Labor (“DOL”) has created a website where victims of unemployment insurance identity theft can learn how and where to report stolen benefits. The website describes how to report the theft of unemployment benefits. In addition, information about other kinds of unemployment fraud and how to report it is available here.
Many victims of unemployment insurance fraud learn that their identity has been used to obtain benefits when they receive correspondence from the state unemployment insurance commission or receive a 1099-G tax form for benefits they did not receive. Anyone affected should report incidents of fraud to the appropriate state workforce department. The DOL website contains a directory that lists where to report fraud in each state. In addition, the DOL recommends that unemployment identity theft that occurred during the COVID-19 pandemic be reported to the United States Department of Justice’s National Center for Disaster Fraud. Reporting to the National Center for Disaster Fraud will notify the DOL’s Office of Inspector General, which is the primary agency responsible for investigating unemployment fraud. The DOL has also issued guidance to states highlighting the importance of identity verification as part of the unemployment claims process to stop fraudulent unemployment claims. That guidance says that when a state concludes that identity theft has occurred, the state should take precautions to protect the rights of the identity theft victim, including ensuring that the victim is not held responsible for any overpayment. States must provide reporting options for people who suspect that their identity has been fraudulently used to file an unemployment claim.
