Westbank Louisiana News

U.S. Senators Bill Cassidy, M.D. (R-LA), James Lankford (R-OK), Mike Crapo (R-ID), Todd Young (R-IN), and Marsha Blackburn (R-TN) have called on the Department of Labor to revise existing guidance to assist states in combating unemployment insurance fraud.

"We write to advocate for state unemployment insurance (UI) agencies and to support their efforts to prevent fraud. The COVID-19 pandemic proved that the nation’s UI system adapts quickly to support unemployed Americans during periods of exceptional hardship," stated the senators.

The letter highlighted that due to business closures and stay-at-home orders, initial and continued claims surged at the beginning of the pandemic. The Government Accountability Office estimates that between 11% and 15% of all pandemic-era UI benefits, amounting to $100-$135 billion, were distributed fraudulently.

"As the claims volume rose, the burden on states to detect fraud only increased. The number of fraudulent claims skyrocketed as states received more claims," continued the senators.

During the pandemic, Unemployment Insurance Program Letter No. 16-21 was issued by the Department of Labor to emphasize identity verification procedures for states when a claimant's eligibility is questionable. However, this guidance permits only a one-week pause in benefits for suspected fraudulent claimants before requiring states to resume payments on continued claims.

In 1971, a United States Supreme Court ruling mandated that benefits be distributed "at the earliest stage of unemployment as is administratively feasible." This has been interpreted by the Department as requiring payment no later than one week after an issue arises with a claim where payment has already been made.

"Unfortunately, states frequently discover after making payment that a claimant is likely a fraudulent actor," noted the senators. They argued that this timeline creates significant challenges for states during high claim volumes since fraudulent actors often appeal paused payments knowing they will be resumed before an appeal can take place.

The senators urged modifications to UIPL 16-21 and other relevant guidance for better balancing promptness and accuracy in benefit distribution. They believe such changes would allow states greater flexibility in preventing fraudulent payments and enable investments in staff training, information technology systems, and best practices for timely benefit delivery.

"We look forward to working with you and encourage the Department to prevent fraudulent actors from stealing taxpayer dollars," concluded their letter.