Unemployment Benefit Fraud – What Should an Employer Do? | McNees Wallace & Nurick LLC

While legitimate claims for unemployment compensation have increased in the wake of the COVID-19 pandemic, fraudulent claims have also increased. As recently as yesterday, the Maryland Department of Labor announced that the state had detected more than 508,000 new potentially fraudulent unemployment claims since May 1, 2021. Last year, an unemployment fraud program of 650 million dollars rocked Washington state. In April 2021, the Pennsylvania Treasury and Department of Labor and Industry announced that they had clawed back nearly $ 800 million in unemployment benefits targeted by scammers.

Many employers are looking for solutions to widespread unemployment benefit fraud. What to do when a worker reports that a fraudulent claim has been filed on their behalf? Fortunately, some answers are available for employers and workers in Pennsylvania. Several measures must be taken to combat suspicions of fraud.

If an employee suspects that a fraudulent unemployment claim has been made on their behalf, they should:

• Do not accept payments by paper check or debit cards received;
• Monitor their bank account for direct deposit of unemployment benefits (and return any benefits wrongly deposited);
• Immediately report the suspected fraud to the local police department that serves the area where they live;
• Report suspected fraud to the Ministry of Labor and Industry electronically or by phone by following the steps listed here; and
• Report the suspected fraud to their employer.

If an employer suspects that a fraudulent unemployment claim has been filed on behalf of a current or former employee, they should:

• Contact the employee to inform them of the potentially fraudulent claim;
• Check that the worker has not filed the complaint;
• Share this link with affected employees and encourage reporting to the Department of Labor and Industry and the employee’s local police department;
• Investigate whether employee data has been breached if there are multiple fraudulent claims;
• Ensure that only legitimate claims on the weekly unemployment claims report; and
• Report any suspected fraud to the Ministry of Labor and Industry as directed at the link above.

Volumes of jobless claims have yet to regain their pre-pandemic levels. While claims remain high, employers are well advised to remain vigilant and develop an action plan to tackle possible unemployment fraud.