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The COVID-19 pandemic caused an unprecedented increase in unemployment claims throughout the past two years. While these claims have tapered off, many organizations and individuals are suffering the consequences of insurance fraud. Generally speaking, unemployment insurance fraud refers to intentional withholding of information in order to receive unemployment benefits. Fraudulent claims can involve submitting false information, continuing to collect benefits while ineligible, or collecting full benefits while not reporting wages or income. Throughout the pandemic, there has been an uptick in fraudsters stealing the identity of a real employee and applying for insurance benefits under that person’s name. These fraudsters will often open bank accounts in the stolen name and receive the fraudulent claims. While the Department of Labor is actively trying to block fraudulent claims, employers play an important role in stopping unemployment benefits scams.

Employer’s Role in Combating Fraud

When a worker files an unemployment claim, the former employer is notified by the appropriate state agency. The first and most crucial step in preventing any fraudulent unemployment claims from taking place is to carefully review employee details and compensation information. Fraudulent activity can often be identified during this step of the process. In addition, employers should take the following steps to help combat fraudulent activity and protect their employees:

  • Communicate with employees. According to the Federal Trade Commission, employers should alert their workforce in the event of any fraudulent activity. If an employee is a victim of this type of fraudulent activity, they should report them directly to the organization’s HR department. When reviewing unemployment claims received by the state, HR departments should flag any suspicious claims coming from current employees and alert the individual of any fraudulent activity related to their likeness. HR departments should also promptly report new hires to government agencies to ensure employment data is kept up-to-date.
  • Report fraudulent claims. Each state unemployment benefits agency has their own set of guidelines for reporting fraud. Depending on your state’s guidelines, both the employee and employer may need to submit a fraud report. You can find your state’s guidelines here. Employers should help employees navigate any fraudulent claims and provide pertinent information such as the case number or any documentation concerning the fraudulent claim. If possible, employees and employers should submit their claims online to help speed up the process.
  • Bolster your cybersecurity. Many organizations have adopted a work-from-home or hybrid working schedule for their employees since the start of the COVID-19 pandemic. While this has had its benefits for working individuals across the nation, it’s also presented security challenges for employers. Employers should consistently monitor their cybersecurity efforts as employees continue to access sensitive information from their homes. Instituting a VPN (virtual private network) and continually training employees on best practices will help decrease the risk of fraudulent activity, especially when it comes to unemployment claims.
  • Provide employee resources. Fraudsters use personal information such as social security numbers and dates of birth to file unemployment claims. Because of this, employees are at risk of becoming victims of other fraudulent activities. It’s important that employers relay any resources and information to employees in the event of fraudulent activity. allows employees to report identify theft and helps them navigate recovery. This resource allows employees to place alerts on their credit, access free credit reports and monitor any accounts being opened in their name.

Ensuring Employee Safety

Employers must ensure employee information is protected and kept confidential at all times. Fraudulent unemployment claims and identity theft can have severe consequences on their victims. RiskVersity helps employers mitigate the risk of fraud and ensure employee information is kept safe. If it’s time to increase your security efforts, we’d love to talk to you about your options.

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