Tips to Handle Unemployment Fraudulent Claims

Recently there has been an increase in unemployment insurance claims being initiated which involve an employee who may not have experienced any lost time with your organization, or who may not have been employed with your organization for several years. 

If your organization receives an unemployment claim for an employee who has not recorded any lost time, it is possible the claim has been fraudulently filed. HR departments of more than one person should communicate all terminations, lay-offs, furloughs, or other leaves between members of the team. This can help mitigate fraudulent claims and hopefully catch them before they are paid.

Another form of fraud that has surfaced comes from employees with reduced hours looking to increase their unemployment benefits by underreporting worked hours. To avoid false reporting, payroll and supervisors/managers should review all timecards for accuracy. Bring any discrepancies to the attention of your employee and offer a chance to correct any genuine errors.

Here is a list of action items for an employer to follow if a questionable claim is received.

• Contact your employee to discuss the claim. Determine if the employee had intended to initiate the claim or if he or she was unaware of the claim.
• If the employee did not initiate a claim, instruct the individual to contact the Unemployment Fraud Division in your state to report the fraudulent claim.

• The Department of Labor has a consolidated list where employers and employees from any state can report fraud.
• Your organization, as the employer, should also contest the claim and include in your response that the claim is fraudulent. Failure to contest the claim may result in your organization being charged for the claim.
• You may also recommend to your employee to consider reviewing all of his or her bank accounts, credit cards, and financial records to determine if other areas have been compromised.
• The employee may also want to consider obtaining identity theft protection. Some employers offer theft protection for their employees through their benefit plans or at a discounted rate.
• The unemployment office may also recommend that the employee file a report with the local police station.

As with all unemployment claims, the employee should work primarily with the unemployment office to resolve the issue, however providing your employee with the initial guidance may assist in resolving the issue and clearing the employee’s account as well as removing the fraudulent claims from your organization’s accounts.