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3 Things to Know About Unemployment Fraud

Everyone has seen more than a few changes over the past year during the COVID-19 pandemic. Employers have had to change the way they do business, including shutting doors and laying off workers. This widespread increase in unemployment has paved the way for con artists and criminals to make money off unfortunate circumstances. Not only have we seen a rise in unemployment claims, but also unemployment fraud.

What is unemployment fraud?

Unemployment insurance fraud is when someone attempts to receive benefits meant for people who have lost their jobs. Unfortunately, with such an uptick in unemployment claims due to the COVID-19 pandemic, it is no surprise that a few fraudulent claims slip through the system.

Your business could experience unemployment fraud if someone falsely uses the name of a current employee of yours to receive benefits or if the name of someone who has never worked for your attempts to receive benefits. 

Names and personal information are usually gathered from data breaches and other illegal methods. More often than not, a person may not realize they’ve been the victim of this type of fraud until after the fact.

How to prevent unemployment fraud

There are several steps that both employers and employees can take to help prevent any future unemployment insurance fraud. First, your company’s HR department should be prepared to carefully look over any unemployment claim for accuracy. You should also warn employees of the possibility of fraud, so that they can be on the lookout, too.

One of the best things a company can do to prevent fraud is to ensure that its cybersecurity measures are up to date to help stop cyberattacks before they happen.

If you are unsure about what measures to have in place, it’s best to work with a local IT company that can provide you with all the technology and updates you need to keep your data protected. Plus, in the event of a cyberattack, a skilled IT company is more likely to recover your data with little downtime or data loss.

Employees can do a few simple things to protect themselves, as well. Measures like using strong and unique passwords, integrating two-step authentication, and ensuring the safety of their home networks when working remotely can make a big difference in protecting individuals and your business from a data leak.

What to do if you experience unemployment fraud

If you or one of your employees suspects unemployment insurance fraud, you will need to take certain steps to report it to the proper authorities:

  1. Gather as much information as possible. Gather details from the employee and have your HR team look into possible unemployment claims they have received. 
  2. Report the suspected fraud. The employer and employee should both report the fraud to the Federal Trade Commission, the state unemployment benefits agency, and local law enforcement.
  3. Plan for possible fraud and support employees’ efforts to report fraud. Employers should provide general information to their employees to help prevent future fraud and take steps to help employees protect their finances and personal information.

At Integrity HR, we are dedicated to making sure your business and employees are protected on all fronts with our HR consulting services. We can help you prevent future fraud, and in the event of unemployment insurance fraud, we can assist you in your information gathering and reporting of the incident.

If you have questions or need help with unemployment fraud, reach out to our team by calling 877-753-0970 or requesting a meeting with one of our HR consultants.

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about the author: Integrity HR

Integrity HR's human resources blog is filled with expert advice (and sassy commentary) on those everyday employment issues that give business owners and managers HR headaches. From tips on how to retain key employees to how to write your dress code policy, our blog has all the HR resources you need.