Separation issues (unemployment insurance)

* What is unemployment insurance?
* Terms and definitions
* Unemployment insurance
* Unemployment insurance fraud
* Unemployment insurance fraud recovery
* Federal unemployment tax
* State unemployment tax
* Employment taxes
* Payroll taxes
* Unemployment tax wage base
* Unemployment Trust Fund
* State Unemployment Trust Funds
* Employment Security Administration Account
* Extended Unemployment Compensation Account
* Federal Unemployment Account
* Indexing unemployment benefits
* Experience rating
* Refusal of work
* Integrity Data Hub
* Unemployment extension
* Work search activity
* Unemployment insurance overpayments
* Court cases
* Steward Machine Co. v. Collector of Internal Revenue
* Carmichael v. Southern Coal & Coke Company
* Meilink v. Unemployment Reserves Commission of State of California
* Sherbert v. Verner
* Nash v. Florida Industrial Commission
* California Department of Human Resources Development v. Java
* Geduldig v. Aiello
* Ohio Bureau of Employment Services v. Hodory
* New York Telephone Co. v. New York Department of Labor
* Califano v. Westcott
* Thomas v. Review Board of the Indiana Employment Security Division
* United States v. Lee
* Hobbie v. Unemployment Appeals Commission of Florida
* Frazee v. Illinois Department of Employment Security
* Employment Division, Department of Human Resources of Oregon v. Smith
* Unemployment insurance in the states
* Reform proposals related to unemployment insurance
* Unemployment insurance reform activity in the states
* Index of articles about unemployment insurance

What are unemployment insurance overpayments?

Unemployment insurance overpayments refer to benefits paid to individuals that they were not entitled to receive. Overpayment causes include misreported benefit year earnings; inadequate work search activity; separation issues; ability and availability to work issues; base period wage issues; employment service (ES) registration issues; severance, vacation, Social Security, and employer pension pay issues; and dependent allowance issues. Read about unemployment insurance here.

## Contents

* 1 Background
* 2 Overpayment recovery by state
* 2.1 Recovery of fraudulent claims
* 2.2 Recovery of non-fraudulent overpayments
* 3 Reform proposals related to unemployment insurance compensation
* 3.1 Incentivize job search efforts and job acceptance
* 3.2 Require employers to report work refusals
* 3.3 Increase verification and reporting
* 3.4 Require recovery of overpayments
* 4 See also
* 5 External links
* 6 Footnotes

Unemployment insurance

* * *

• Terms and definitions
• Court cases
• Unemployment insurance programs in the states
• Reform proposals related to unemployment insurance
• Reform activity in the states related to unemployment insurance
• Index of articles about unemployment insurance

* * *

Click here for more coverage of unemployment insurance on Ballotpedia

Separation issues, in the context of unemployment insurance, refers to inadequate or inaccurate reporting of a claimant's reason for leaving his or her last job. Overpayments occur when claimants are initially determined to be eligible for unemployment insurance benefits but later information reveals a disqualifying employment separation. The definition of disqualifying separation varies by state. Generally, the term refers to situations where a worker is fired with cause or quits without cause.[1]

Separation issues were one of the nine primary causes of unemployment insurance overpayments the U.S. Department of Labor identified in its 2023 Benefit Accuracy Measurement (BAM) report.

## Background[edit]

Separation issues were the second most common cause of unemployment insurance overpayments in 2023. Errors related to separation issues accounted for about 23.7% of all the overpayments examined in the BAM report. Intentional misreporting of separation circumstances was also the cause of 24.4% of all fraudulent overpayments.[1]

2023 unemployment benefits overpayments by cause

Cause  | Overpayment rate  | Fraud rate  | Agency responsible rate
Benefit Year Earnings | 32.20% | 57.14% | 20.70%
Separation Issues | 23.74% | 24.37% | 40.21%
Work Search | 21.49% | 4.28% | 2.15%
Able+Available | 6.89% | 4.28% | 5.64%
Other Eligibility | 6.36% | 8.52% | 11.24%
Base Period Wage Iss. | 3.48% | 0.05% | 3.21%
Sev./Vac./SSI/Pension | 2.07% | 0.52% | 5.42%
Other Issues | 2.02% | 0.80% | 7.12%
ES Registration | 1.70% | 0.04% | 4.30%
Depend Allowance | 0.05% | 0.00% | 0.01%

## Overpayment recovery by state[edit]

See also: Unemployment insurance fraud recovery

States typically use similar unemployment insurance overpayment recovery methods in cases of both fraudulent and non-fraudulent payments. States primarily use the following overpayment recovery methods:[2]

* Benefits offset - States can deduct overpayment amounts (or a set percentage of overpayments) from future benefits payable to recipients.
* The Treasury Offset Program - A program that allows states to recover overpayments due to fraud and misreported work or earnings from the recipient's federal tax refund.
* State tax offset - States can garnish overpayment amounts from recipients' state tax refunds.
* Direct repayments from overpayment recipients.
* Interception of lottery winnings.
* Denial or suspension of professional licenses for individuals who have not returned overpayments to the state.
* Civil court action to compel repayment in non-fraudulent cases.
* Criminal court action to compel repayment in fraudulent cases.

### Recovery of fraudulent claims[edit]

The U.S. Department of Labor compiles information on each states' unemployment insurance overpayment recovery options in cases of fraud.[2] The following list includes highlights from the department's 2023 data:

* 40 states have laws providing for the recovery of overpayments due to fraud through state tax offset.
* 47 states allow for 100% benefit offset to recover overpayments due to fraud.[3]
* 32 states charge interest on overpayments due to fraud.

The table below outlines each states' overpayment recovery options in cases of fraud:

Recovery of fraudulent claims

State  | Recovery of overpayments through offset  | Monetary assessments  | Max prison time imposed when fraud committed by
| Reduction in weekly benefit amount (WBA)  | Number of years benefit offset limited  | State tax refunds  | Interest charged  | Fines or penalties on claimant  | Fines or penalties on employer  | Claimant  | Employer
AL | 100% | 6 years from date overpayment is final | Yes | 2% per month | 4 x WBA to maximum benefit amount; 15% of overpayment | $50 - $500 | 1 to 20 years under Classes B & C felony charges | 1 year
AK | 100% | No | Yes | No | 50% of each fraud overpayment | Penalty assessed under misdemeanor or felony statutes | 5 years | Penalty assessed under misdemeanor or felony statutes
AZ | 100% | No | Yes[4] | 10% per year | 15% of overpayment | $2,500 | Depends on individual’s record | 6 months
AR | 100% | No | Yes | 10% per year | 50% of overpayment (15% if repaid within 30 days) | $20-$200 | 60 days | 60 days
CA | 100% | 6 years from mailing | Yes | 7% until summary judgment filed; 10% until paid in full | 30% of overpayment | $20,000 | 1 year minimum | 1 year minimum
CO | 100% | No | Yes | No | $25 – $1,000 fine; 65% of overpayment penalty | $25-$1,000[5] | 6 months | 6 months
CT | 100% | 8 years | Yes | 1% per month | 50% 1st offense; 100% subsequent offense | Penalty assessed under misdemeanor or felony statutes | 1 year minimum | 1 year minimum
DE | 100% | 5 years from end of benefit year | Yes | 18% per year | $23 – $57.50 fine; 15% of overpayment | $20-$200 | 60 days | 60 days
DC | 100% | No | Yes[4] | No | Up to $100 fine; 15% of overpayment | $1,000 | 60 days | 6 months
FL | 100% | Commenced within 7 years from date established | No | No, unless and until a civil judgment is entered | 15% of overpayment | $5,000 | 5 years | 5 years
GA | 100% | 7 years from release date of notice of determination and overpayment | Yes | 1% per month | 15% of overpayment | Up to $1,000 for basic fraud; at least $1,000 for multiple counts | 12 months per count | Penalty assessed under misdemeanor or felony statutes
HI | 100% | 2 years from mailing or final appeal decision; after, if individual agrees (percentage up to individual) | No | No | Up to $10,000 fine; 15% of overpayment | Up to $10,000 | 5 years | 1 years
ID | 100% | 8 years from final determination date | Yes[4] | Yes | 25% 1st instance; 50% 2nd instance; 100% 3rd instance and subsequent | $20-$200 and 10 x WBA | Penalty assessed under misdemeanor or felony statutes | Penalty assessed under misdemeanor or felony statutes
IL | 100% | No | Yes[4] | No, unless suit filed and judgment entered; then 9% per year | 15% of overpayment | Up to $500 | 180 days | 180 days
IN | 100% | No | Yes | 0.5% per month | 25% 1st instance; 50% 2nd instance; 100% 3rd instance and subsequent; 15% of overpayment penalty | See note[6] | 6-36 months or 2-8 years | 6-36 months or 2-8 years
IA[7] | N/A | N/A | Yes | No | 15% of overpayment | 50% of tax owed | 10 years | N/A
KS | 100% | No | Yes | 1.5% per month | 25% of overpayment | $20-$200 | 60 days | 60 days
KY | 100% | 10 years from end of applicable BY | Yes | 1.5% per month | Up to $10,000 fine; 15% of overpayment | $500-$10,000 | 1-5 years | 1-5 years
LA | 100% | No | Yes | No | Penalty is greater of $20 or 25% of overpayment balance | $50-$1,000 | 10 years | 30-90 days
ME | 100% | No | Yes | 1% per month | 50% 1st incident, 75% 2nd incident, 100% other incidents | Penalty assessed under misdemeanor or felony statutes | Penalty assessed under misdemeanor or felony statutes | Penalty assessed under misdemeanor or felony statutes
MD | 100% | No | Yes | 1.5% per month | Up to $1,000 fine; 15% of overpayment | Up to $1,000 | 90 days | 90 days
MA | 100% | No | Yes | 1% per month until total interest = 50% of overpayment | $1,000-$10,000 fine; 15% of overpayment | $2,500-$10,000 | 6 months to 5 years | 1 year
MI | 100% | 3 years from overpayment | Yes | Yes | 100% 1st instance; 150% 2nd instance overpayment amount | 100% - 1st instance; 150% - 2nd instance | 1 year | 1 year
MN[8] | N/A | N/A | Yes[4] | 1% per month | 40% of overpayment | Penalty assessed under misdemeanor or felony statutes | 20 years | 20 years
MS | 100% | 5 years from last week overpaid | Yes | 1% per month | $100 - $500 fine; 20% of overpayment | $100-$1,000 | 30 days for each fraudulent week | 6 months
MO | 100% | No; may write off as uncollectible after 5 years of no activity | Yes | No | 25% - 100% of overpayment | 25% - 100% of fraudulent amount | 6 months for each violation | 6 months for each violation
MT | 100% | 5 years; 10 years if lien filed | Yes | Yes | 50% of overpayment | $50-$500 | Depends on recommendation of district attorney or employer | 30 days for each false statement
NE | 100% | 3 years from end of applicable BY | Yes | No | Up to $500 fine; 15% of overpayment | Up to $500 | 90 days for each count | 90 days
NV | 100% | 10 years from date overpayment established | No | Civil judgments only (6% per year) | 15% of overpayment[9] | $2,000 | 10 years | 10 years
NH | 1%-10% | 10 years from date overpayment decision is final | No | 1% per month | Up to $4,000 fine; 20% of overpayment | Up to $100,000 | 15 years | 15 years
NJ | 100% | No | Yes[4] | 5% for CY 2009 | 25% of total overpayment | $100 to $1,000 per offense | Decided by court | 90 days
NM | 100% | No | Yes | No | Up to $100; 25% of overpayment | Up to $10,000 | 30 days | 30 days
NY | 100% | No | Yes[4] | 9% per year (civil action only) | $500; the greater of $100 or 15% of overpayment | $500 | 1 year | 1 year
NC | 100% | No | Yes | No | Up to $200 fine; 15% of overpayment1 | Up to $200 | 2 years | 2 years
ND | 100% | No | Yes[4] | 18% per year | $1,500 fine; 15% of overpayment | $1,000 | 10 years | 30 days
OH | 100% | 6 years from date overpayment is final | Yes | 14% per year | Up to $1,000; 25% of overpayment | Up to $1,000 | 6 months | 6 months
OK | 100% | No | Yes | 1% per month | Up to $500 fine each week after conviction; 25% of overpayment | $50-$500 | 6 months | 90 days
OR | 100% | No | Yes[4] | 1% per month | 15 - 30% of overpayment | $100-$500 | Penalty assessed under misdemeanor or felony statutes | 90 days
PA | 100% | 10 years from date applied for benefits | No | Computed annually based on IRS rate | $500 - $1,500; 15% of overpayment | $100 - $1,500 per offense | 30 days per week illegally claimed | 30 days per offense
RI | 100% | No | Yes | 1.5% per month | Greater of $1,000 or double value of fraud; 15% of overpayment | Greater of $1,000 or double value of fraud | 1 year | 1 year
SC | 100% | No | Yes | No | $50 - $250 fine; 25% of overpayment | $20-$100 | 30 days for each offense or week claimed | 30 days
SD | 100% | No | No | 12% per year | Up to $2,000 fine (higher fine if amount obtained > $200); 50% - 1st instance; 100% - any subsequent instance overpayment amount | $1,000 | 1 or 2 years | 1 or 2 years
TN | 100% | No | No | 1.5% per month | 30% - 1st instance; 50% - any subsequent instance overpayment amount | Penalty assessed under misdemeanor or felony statutes | 1 year minimum | 1 year minimum
TX | 100% | No | No | 1% per month | Up to $4,000 fine; 15% of overpayment | $4,000 | Depends on whether prosecuted as misdemeanor or felony | Penalty assessed under misdemeanor or felony statutes
UT | 100% | No | Yes[4] | No, unless it goes to judgment | Up to $10,000 fine; 100% of overpayment | Up to $20,000 | 15 years | 15 years
VT | 100% | 5 years from determination date | Yes[4] | No | Up to $5,000 fine[10]; 15% of overpayment | Up to $50 | 30 days | 30 days
VA | 100% | No | Yes[4] | No | Up to $2,500; 15% of overpayment | Up to $1,000 | 1 year | 1 year
WA | 100% | No | No | 1% per month | $20 - $250; 15% - 1st instance, 25% - 2nd instance, 50% - any subsequent instance overpayment amount | $20-$250 | 90 days | 90 days
WV | 100% | 10 years from last week overpaid | No | Yes | $100 - $1,000 fine; 20% of overpayment | $20-$200 | 30 days | 30 days
WI | 100% | No | Yes[4] | No | Up to $25,000 fine; 40% – 100% of overpayment depending on facts of fraud | Up to $25,000 | Up to 10 years | Up to 10 years
WY | 100% | No | Yes | No | 20% of overpayment and additional 5% of unpaid balance every 6 months thereafter until paid | $750 | 5 years | 5 years

### Recovery of non-fraudulent overpayments[edit]

The U.S. Department of Labor compiles information on each states' unemployment insurance overpayment recovery options in non-fraudulent cases, including accidental misreporting.[2] The following list features highlights from the department's 2023 data:

* 41 states have laws providing for the recovery of non-fraud overpayments through state tax offset.
* 33 states allow for up to 100% benefit offset to recover non-fraud overpayments, depending on circumstances.
* 39 states can pursue civil action to recover non-fraud overpayments.
* 14 states charge interest on non-fraud overpayments.

The table below outlines each states' overpayment recovery options in cases of non-fraudulent payments:

Recovery of non-fraudulent overpayments

State  | Offset against future benefits  | Number of years benefit offset limited  | Offset with state tax refunds  | Civil action permitted  | Interest assessed
AL | 100% | No | Yes | Yes | No
AK | 100% | No | Yes | No | No
AZ | 50%-100% | No | Yes[4] | No | 10% per year from month after overpayment established
AR | 100% | 4 years from date of final determination | Yes | Yes | 10% annually once final overpayment has force and effect of judgment of Circuit Court
CA | 25% | 6 years from date overpayment notice mailed | Yes | No[11] | No
CO | 25% | No | Yes | Yes | No
CT | 50%; if WBA <$100 then 25% | No; may write off as uncollectible after 8 years | Yes | Yes | No
DE | 50% | 5 years from end of BY | Yes | Yes | No
DC | 100% | No | Yes[4] | Yes | No
FL | 100% | Commenced within 7 years from date overpayment is established | No | Yes | No, unless and until a civil judgment is entered
GA | 50% | 7 years from release date of the notice of determination and overpayment | Yes | Yes | No
HI | 100% | 2 years from date of mailing notice of redetermination or final appeal decision; after, may offset % agreed to by individual | No | Yes | No
ID | 100% | No | Yes | Yes | Yes
IL | 25% | 5 years from date overpayment decision issued | Yes | Yes | No
IN | 100%; if agency error, then 50% | No | Yes | Yes | No
IA | 100% | 10 years from date of last activity | Yes | No | No
KS | 100% | No | Yes | Yes | 1.5% per month if 2 years old
KY | 25% | 5 years from last day of BY | Yes | Yes | No
LA | 100% | No | Yes | Yes | No
ME | 10% of 1st $100 WBA; 50% of rest | No | Yes | No | 1% per month starting 1 year after decision is set up in system
MD | 100% | No | Yes | Yes | No
MA | 100%; 50% if nonfault and individual requests | No | Yes | Yes[12] | No
MI | Up to 20% | 3 years from date of payment | Yes | Yes | Yes, starting 1 year after determination is final
MN | 50% | 6 years from date overpayment is determined | Yes[4] | Yes | No
MS | 100% | 5 years from last day of week overpaid | Yes | Yes | 1% per month on principal balance after 1st full month overpayment established
MO | 100% | No; may write off as uncollectible after 5 years of no activity | Yes | Yes | No
MT | 50%; higher if individual permits | 5 years; must file lien against individual’s real and personal property to extend to 10 years | Yes | No | Yes
NE | Any amount per week and any amount up to MBA | 3 years from end of BYE in which overpaid weeks were paid | Yes | Yes | No
NV | 50% | 5 years from date overpayment established | No | No | No
NH | 1%-10% | 10 years from date overpayment decision is final | No | Yes | 1% per month on principal balance from 1st day of month after decision if not paid within 60 days
NJ | 100% or 50% | No | Yes[4] | Yes | 2% annually 6 months after debt established if no formal payment agreement
NM | 100%; 50% or 75% if request approved | No | Yes | Yes | No
NY | 50% | No | Yes | No | No
NC | 50% | No | Yes | Yes[12] | No
ND | Minimum 50% | No | Yes[4] | Yes | 18% starting 180 days after establishment of overpayment or 180 days from date of final appeal determination
OH | 100% | 3 years from date decision is final | Yes | No | No
OK | 100% | No; except for administrative error, 1 year from expiration of BY current at time overpayment established | Yes; administrative error | Yes; administrative error | 1% per month starting date overpayment determined
OR | 100% | 5 years from week decision became final for nonfault or nonfraud overpayments; no time limit for fault overpayments | "Yes (if fault overpayment)" | Yes | If fault, 1% per month from 1st day of month following 60 days after final decision
PA | 33⅓% (nonfault); 100% (fault) | 4 (nonfault), 7 (fault) years from date of application for benefits | No | Yes | Computed annually based on the IRS rate
RI | 100% | No | Yes | Yes | No
SC | 100% | No | Yes | No | No
SD | 100% | No | No | Yes | 12% per year upon establishment of fault overpayment or 6 months after establishment of nonfault overpayment
TN | 100% | After the expiration of 6 years from overpayment determination | No | Yes | No
TX | 100% | No limit for overpayment absorptions on subsequent BYs | No | Yes | 1% per month from 30 days after served (when becomes judgment)
UT | 50% (nonfault) or 100% (fault) | If nonfault, 3 years from date decision is final; if fault, 8 years from effective date of judgment lien | Yes (fault only) | Yes (fault only) | No, unless it goes to judgment
VT | 100% | 5 years from determination date | Yes[4] | Yes | No
VA | 100%; 50% if administrative error[13] | No | Yes | Yes | No
WA | 50% (up to 100% depending on claimant request) | No | No | Yes | 1% per month (simple interest) after ≥ 2 minimum monthly payments are delinquent
WV | 100% | 5 years from last day of week overpaid | Yes | No | No
WI | 100% | No | Yes[4] | Yes | No
WY | 100% | First 5 years from effective date of claim resulting in overpayment | Yes | Yes | No

## Reform proposals related to unemployment insurance compensation[edit]

This section presents the main approaches to addressing challenges related to unemployment insurance fraud and unemployment insurance overpayments.

If you know of any reform proposals that are missing, email us.

### Incentivize job search efforts and job acceptance[edit]

In his 2019 article "Optimal unemployment insurance with monitoring," economist Ofer Setty proposed that job search efforts and job acceptance among unemployment insurance benefits recipients could be incentivized through monitoring procedures, decreasing a worker's UI benefits the longer they are unemployed, and increasing the taxes unemployed individuals pay once they return to work.[14]

“  | In optimal UI, a risk-neutral planner insures a risk-averse worker against unemployment by setting transfers during unemployment and a wage tax or a subsidy during employment. During unemployment, the worker searches for a job by exerting effort, the level of which is private information. Since the planner cannot observe the job-search effort, the constant benefits that are implied by the first-best allocation would undermine the worker's incentives to search for a job. Therefore, to solve the incentive-insurance trade-off, benefits should continuously decrease during unemployment, and the wage tax upon reemployment should continuously increase.

I include monitoring in this framework as follows. The planner chooses the quality (precision) of the monitoring technology for the unemployed worker. The cost of monitoring increases with the monitoring's precision, which is correlated with the worker's job-search effort. The planner uses the monitoring signal to improve the efficiency of the contract by conditioning future payments and the wage tax not only on the employment outcome but also on the signal's outcome. These future payments create endogenous sanctions and rewards that, together with the monitoring signal, create effective job-search incentives. By exerting job-search effort, the worker increases the probability of a good signal and, consequently, of higher payments.[14][15]

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In their 2015 article "Unemployment Insurance Fraud and Optimal Monitoring," economists David L. Fuller, B. Ravikumar, and Yuzhe Zhang proposed that incentives to report new employment and disincentives to collect unemployment benefits while employed could reduce fraudulent claims. The authors proposed a constant period between verification checks for employment, tax incentives for individuals who promptly reported new employment between verification checks, and unemployment insurance benefits that decreased with the length of unemployment.[16]

“  | The most prevalent incentive problem in the U.S. unemployment insurance system is that individuals collect unemployment benefits while being gainfully employed. We examine a model of optimal unemployment insurance where a worker can conceal his employment status and the Unemployment Insurance authority has a technology to verify his employment status. We find that the optimal interval between consecutive monitoring periods is a constant, independent of history. The optimal employment tax is nonmonotonic, increasing between verifications and decreasing immediately after a verification. The optimal unemployment benefits decline with unemployment duration with sharp declines after each verification.[16][15] | ”

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### Require employers to report work refusals[edit]

See also: Refusal of work

The Foundation for Government Accountability (FGA) published a 2020 paper titled "Reporting Employee Work Rejections," proposing that states require employers to report unemployed workers who refuse job offers.[17]

“  | Individuals aren’t returning to work after being laid off, and are refusing new jobs as well. Instead, they continue to draw taxpayer-funded unemployment insurance benefits. Continuing to collect unemployment after refusing to work is fraud. ...

States should set up simple, easy-to-use processes where employers can report employees who have refused an offer of suitable work.[17][15]

| ”

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### Increase verification and reporting[edit]

The FGA published an article in 2021 titled "Top 10 Examples of Outrageous Unemployment Fraud in 2020—And How to Fix It." The article proposed that state agencies tasked with administering unemployment insurance programs could reduce unemployment insurance fraud by performing increased unemployment insurance verification checks against existing records and reporting their findings to state legislatures.[18]

“  | One typical practice for state unemployment agencies is to cross-reference their claims against the state’s quarterly tax and wage reports, provided by employers. However, rather than simply once per quarter, states should be performing these checks every week, since unemployment claims themselves happen every week.

Further, a cross-reference is only as good as the database it utilizes. Therefore, weekly checks should be made against three important databases: prison records, the National Directory of New Hires, and the NASWA Integrity Data Hub. These are pre-existing databases to which states should already have access.

State legislatures should also require their workforce agencies to report back, at least once per year, about their implementation of and findings from these crosschecks, including overpayments detected and money saved.[18][15]

| ”

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In his 1997 article "Unemployment Insurance Fraud and Optimal Monitoring," U.S. Department of Labor economist Burman Skrable proposed that additional use and publication of unemployment insurance fraud recovery and identification techniques could deter fraudulent claims.[19]

“  | Massive efforts to restructure the UI system's incentives are unlikely. Narrowly defined process improvements, at least to improve benefit payment administration, have had, overall, slight effects on payment accuracy. The most productive avenue remaining might thus be more, and more intelligent, detection and recovery efforts. Students of UI integrity have concluded that much evasive behavior is systematic, and thus liable to detection and deterrence by computerized profiling. They have urged this for increasing employer compliance with tax reporting laws and for screening claimants to focus scrutiny on those persons statistically more likely than average to violate various UI eligibility provisions (Blakemore et al. 1996; Burgess 1992; Burgess and Kingston 1987, p. 256). Such work could build on the profiling systems developed to identify laid-off individuals who are prone to need extensive reemployment assistance and implemented in the past two years. Benefits profiling could use the extensive BQC records. Employer profiling would require each state to mount one-time, if not continuing, random audit programs of employers as was done in Illinois. The targeted selections of workers would help SESAs focus enforcement efforts, information, and job search assistance on workers most likely to need them. Targeted employer audits would increase yield. Both should also provide more effective deterrence if the activity and results are publicized (Kingston, Burgess, and St. Louis 1986, p. 334; Blakemore et al. 1996, p. 22).[19][15] | ”

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### Require recovery of overpayments[edit]

See also: Unemployment insurance fraud recovery

The 2021 FGA paper "Top 10 Examples of Outrageous Unemployment Fraud in 2020—And How to Fix It" also proposed that state legislatures could require state workforce agencies to recover unemployment insurance overpayments and report any cases where recovery was not attempted or impossible.[18]

“  | State lawmakers should also require state workforce agencies to recover all fraud and non-fraud overpayments. Further, state workforce agencies should be required to report and explain to state legislators and the public any cases where they fail or refuse to recover any overpayments, even for allowable reasons such as agency error. Fraud and overpayment recovery should not be optional, since the unemployment tax increases on small businesses that are caused by a leaky unemployment program are also nonoptional.[18][15] | ”

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## See also[edit]

* Unemployment insurance
* Unemployment insurance fraud
* Unemployment insurance fraud recovery
* Unemployment taxes
* Unemployment Trust Fund
* Unemployment filings during the coronavirus (COVID-19) pandemic, 2020-2021
* State government plans to end federal unemployment benefits related to the coronavirus (COVID-19) pandemic, 2021

## External links[edit]

* Search Google News for this topic

## Footnotes[edit]

1. ↑ 1.0 1.1 U.S. Department of Labor, "Benefit Accuracy Measurement State Data Summary Improper Payment Information Act Performance Year 2023," accessed August 22, 2024
2. ↑ 2.0 2.1 2.2 U.S. Department of Labor, "Chapter 6: Overpayments," accessed May 16, 2023
3. ↑ New Hampshire can use 1-10% of benefits to offset overpayments. Minnesota prohibits all benefits payments until overpayments due to fraud are returned, so offsetting is not possible. In Iowa, benefits offsets are only possible if a lien is filed against a person's property or rights to property.
4. ↑ 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 Provision found in non-UI law.
5. ↑ Individual receives 1.5 x benefits due for weeks delayed, thus increasing employer’s experience rate.
6. ↑ 4 The employer is assigned the rate for the year in which the violation occurred and the following 3 years. If employer is already paying the highest rate at the time of the violation, or the increase in the contribution rate described in this table is less than 2%, the employer will pay an additional 2% of the employer’s taxable wages for the year in which the violation occurred and the following 3 years.
7. ↑ Recovery of benefits fraudulently obtained requires a lien be filed against the individual’s property and rights to property, whether real or personal.
8. ↑ Benefit offset not possible since individuals committing fraud are ineligible for benefits until they fully repay the amount owed.
9. ↑ May impose additional penalties: 5% if overpayment >$25 to $1,000; 10% if overpayment >$1,000 to $2,500; 35% if overpayment >$2,500.
10. ↑ If not prosecuted, assessed 1 penalty week for each week of fraud; however if fraud committed within the past 3 calendar years, and fraud committed again, assessed 2 penalty weeks for each week of fraud. Limited to no more than 26 penalty weeks in any BY.
11. ↑ Summary judgment proceedings may be initiated if the claim was based solely on income received as an elected official.
12. ↑ 12.0 12.1 Do not pursue civil action based on policy.
13. ↑ If overpayment due to administrative error an individual is allowed to repay solely by voluntary repayment agreement, and the agency will not resort to any other methods of collection unless the individual breaches the agreement.
14. ↑ 14.0 14.1 Journal of the Econometric Society, "Optimal unemployment insurance with monitoring," May 8, 2019
15. ↑ 15.0 15.1 15.2 15.3 15.4 15.5 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
16. ↑ 16.0 16.1 American Economic Journal: Macroeconomics, "Unemployment Insurance Fraud and Optimal Monitoring," February 2014
17. ↑ 17.0 17.1 Foundation for Government Accountability, "Reporting Employee Work Rejections," accessed July 9, 2021
18. ↑ 18.0 18.1 18.2 18.3 Foundation for Government Accountability, "Top 10 Examples of Outrageous Unemployment Fraud in 2020—And How to Fix It," accessed July 9, 2021
19. ↑ 19.0 19.1 W.E. Upjohn Institute for Employment Research, "Fraud, Abuse, and Errors in the Unemployment Insurance System: Extent, Measurement, and Correction," January 1, 1997

v • e

Unemployment insurance

Terms|

Unemployment insurance • Unemployment insurance fraud • Unemployment insurance fraud recovery • Employment taxes • Federal Unemployment Tax • Unemployment Trust Fund • State Unemployment Trust Funds • Indexing unemployment benefits • Experience rating • Refusal of work • Integrity Data Hub • Unemployment extension • Work search activity

Unemployment insurance programs in the states|

Unemployment insurance programs in the states • Unemployment insurance fraud in the states • History of unemployment insurance fraud in the states

Reform proposals|

Reform proposals related to unemployment insurance • Unemployment insurance reform activity in the states

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