After the Wall Street Journal reported more than $5 billion dollars in unemployment benefit overpayments by states from July 2010 to June 2011, more eyes have been fixated on fraudulent and inaccurate unemployment benefits. The overpayments are a result of many factors, including the fact that no two states have the same regulations or policies in place to determine unemployment benefit eligibility. Those state with complex provisions often have higher errors. The U.S. Department of Labor (DOL) is perhaps the most cognizant of these errors – and is cracking down on mistakes and fraud.
The new online tool is called the Fraud Tips and Leads Gateway and it gives any user the ability to report fraud. Essentially, the DOL is putting power into the hands of the people to help lower fraud and overpayments. It will help states act quickly to investigate tips and leads as well as prosecute fraudulent claims. The DOL is also publishing new, simplified materials that highlight the most common mistakes made by claimants. And for businesses, the materials offer instructions on how to avoid the negative tax implications of wrongful claims.
Said Secretary of Labor Hilda L. Solis. “Too many people don’t know their responsibilities under the program, and too many businesses don’t know what’s at stake for them, especially the tax implications. The tools announced today will help educate consumers and businesses, and ultimately improve the UI system.”
To get these tools into the hands of the public, the department is working with states and through the workforce system to broadly display these materials in public areas and to post them online, says SHRM, the Society for Human Resource Management.
These new resources are expected to help cut down on the billions overpaid, and ultimately help businesses reduce the UI tax rates they pay to the state. The DOL also announced $192 million in grant funds to implement waste-cutting initiatives and improve the UI system. It is expected that these efforts combined will help reduce fraud and overpayments, and potentially save state governments and businesses millions of dollars.
View the DOL map of improper payments by states and find out about the new toolsHERE.
Read the DOL’s fact sheet: “Are You Doing Everything to Protect Your Business from Higher Taxes”.