U.S. Sen. James Lankford (R-OK) led several Republican senators last week in urging the U.S. Department of Labor (DOL) to support state unemployment insurance agencies and their efforts to prevent fraud.
Lankford sent a June 18 letter to Acting Secretary for the Department of Labor Julie Su and DOL Assistant Secretary for Employment and Training Administration José Javier Rodríguez to call for more support of states that are working to prevent unemployment insurance fraud and to update burdensome guidance issued by DOL.
“The COVID-19 pandemic proved that the nation’s UI system adapts quickly to support unemployed Americans during periods of exceptional hardship. Due to business closures and stay at home orders, the number of initial claims and continued claims rose quickly at the beginning of the pandemic,” Lankford and the other senators wrote.
As the claims volume increased, the number of fraudulent claims also rose significantly, and states struggled with the burden to detect the fraud.
“The Government Accountability Office (GAO) estimates that between 11 and 15 percent of all pandemic-era UI benefits, or $100-$135 billion, were distributed fraudulently, the letter stated. “Expenditures across the UI system totaled about $878 billion from April 2020 through September 2022, according to the U.S. Department of Labor.”
DOL guidance regarding identity verification permits states to pause benefits to a suspected fraudulent claimant for a week but requires states to resume paying benefits on claims on which payment has already been after a week-long pause. However, “… the constrained timeline imposed by the Department creates administrative, structural, and financial challenges for states in periods where claim volume is high,” the letter said.
The senators noted that if fraud is reduced, states will have greater ability to invest in staff training, information technology systems, and best practices to promote the timely delivery of benefits.
“We look forward to working with you and encourage the Department to prevent fraudulent actors from stealing taxpayer dollars,” the lawmakers concluded.