COVID-19 Resources

Businesses Should Be Aware of Unemployment Compensation Fraud

Written by Warren Averett on June 10, 2020

Fraud and identity theft associated with unemployment compensation claims as a result of the COVID-19 pandemic have recently become an additional burden to employers and state unemployment offices. Due to the overwhelming increase in claim volume and the increase in weekly benefits, employers must be diligent in reviewing their claim notices from their respective state unemployment claims office.

What should employers know about unemployment compensation fraud?

The most common form of fraud that employers are experiencing is a claim notice for an employee who has not had a change in employment status. Some employees have submitted applications with false information in an attempt to obtain unemployment insurance payments, which can result in fraud charges.

While some employees may be filing fraudulent claims in order to receive unemployment benefits, the majority of these claims are due to identity theft, and employers need to contest the claim and discuss any potential identity theft with their state unemployment office.

Even though claims as a result of COVID-19 do not affect an employer’s experience rating, employers should still be diligent in responding to any claims they see as fraudulent on their claims reports from their state agency.

What should you do if you suspect fraud or identity theft concerning unemployment compensation?

Employers should immediately file a protest to the claim stating that it’s fraudulent and that the employee has not filed a claim.

Contact your state Department of Labor and file a fraud report for any claims you see as fraudulent on your Unemployment Compensation Report. Each state now has a department dedicated to Unemployment Compensation fraud; you can find yours here.

Connect with an Advisor

To learn more about how this may impact your organization, reach out to your Warren Averett advisor, or ask a member of our team to reach out to you.

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