By Dave Caldwell
March 24, 2021 Update: If you feel your identity has been stolen as a result of unemployment fraud, the U.S. Department Of Labor has created this new website with steps for Reporting Unemployment Identity Theft.
As millions of Americans file for unemployment due to coronavirus disease 2019 (COVID-19), the government has a stark warning. The increased need and the new opportunity for self-employed individuals to file for unemployment insurance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act has contributed to a fertile environment for fraudsters. As a result, the Department of Labor (DOL) issued a fraud alert for consumers nationwide to be aware of the increased unemployment insurance fraud.
They are having to juggle unprecedented claim volume with the time needed to validate claims -- and quickly deliver benefits.
If you are an employer, understand that a claim is fraudulent if the person filing is:
The Equifax Claims Management team recommends that organizations inform affected employees and encourage them to follow the steps below.
Employees may detect unemployment insurance fraud if they have never filed an unemployment claim but suddenly see emails or actual physical mail from the state unemployment division. They may even receive a tax form, such as a 1099-G. This is an IRS form that the state may file when they have paid unemployment benefits to an employee. It is important the employee report a possible incident of fraud immediately to the appropriate agencies.
The Equifax Workforce Solutions Fraud Guide can be an important resource for you if an employee or former employee reaches out about suspected fraud. It provides valuable links to the appropriate agencies where fraud can be reported.
Workers who find themselves the victim of unemployment insurance fraud can follow the below steps. These steps are for the impacted individual only (not the employer). That's because only the employee will be able to provide the necessary information.
For additional resources about unemployment claims for employers, read Tips for Interpreting the New Unemployment Landscape. Additionally, download a playback of our recent webinar, New Unemployment Claim and SUI Tax Updates - What Employers Need to Know to Prepare.
The information in this blog post is for general guidance and informational purposes and is not intended to convey specific tax or legal advice.