I am somewhat surprised at myself for saying this but a piece of legislation got proposed on May 17th that actually makes sense. The US Department of Labor delivered the Unemployment Compensation Integrity Act draft legislation to Congress on Monday May 17th. The draft legislation, if enacted, will help states fight employer fraud and reduce improper benefit payments.
According to Secretary Solis “The Unemployment Compensation Integrity Act would give states the additional resources and tools they need to guarantee that only those who are eligible for benefits receive them and employers who defraud the system pay their fair share of taxes.”
These resources and tools include:
- Among several provisions, the act would permit states to use up to five percent of recovered unemployment compensation overpayments to deter and detect benefit overpayments.
- It also would allow states to use up to five percent of contributions collected due to employer fraud or tax evasion — including misclassification of employees — to combat these problems.
- Mandates would include requiring states to assess a penalty of not less than 15 percent of the amount overpaid on any overpayments that result from claimant fraud.
- The act also would give employers an incentive to provide timely, accurate and complete information about why their former employees no longer work for them — information that is critical for states to make proper benefit payment decisions.
- Additionally, the act would require employers to report the first day of earnings for new hires to the National Directory of New Hires. This step would help to reduce overpayments due to individuals who return to work but continue to collect unemployment compensation.