U.S. Sen. Bill Cassidy (R-LA) joined a Republican effort to urge the U.S. Department of Labor to support state unemployment insurance agencies and their work to prevent fraud.
Sen. Cassidy, in his role as ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, joined a June 18 letter to the acting and assistant secretaries of the Department of Labor to modify outdated guidance to support states in preventing unemployment insurance fraud.
“The COVID-19 pandemic proved that the nation’s UI system adapts quickly to support unemployed Americans during periods of exceptional hardship. Due to business closures and stay at home orders, the number of initial claims and continued claims rose quickly at the beginning of the pandemic,” the senators wrote.
As the claims volume increased, the number of fraudulent claims also rose significantly, and states struggled with the burden to detect the fraud.
“The Government Accountability Office (GAO) estimates that between 11 and 15 percent of all pandemic-era UI benefits, or $100-$135 billion, were distributed fraudulently, the letter stated. “Expenditures across the UI system totaled about $878 billion from April 2020 through September 2022, according to the U.S. Department of Labor.”
DOL guidance regarding identity verification permits states to pause benefits to a suspected fraudulent claimant for a week but requires states to resume paying benefits on claims on which payment has already been after a week-long pause. However, “… the constrained timeline imposed by the Department creates administrative, structural, and financial challenges for states in periods where claim volume is high,” the letter said.
The senators noted that if fraud is reduced, states will have greater ability to invest in staff training, information technology systems, and best practices to promote the timely delivery of benefits.
The letter was led by U.S. Sen. James Lankford (R-OK) and was also signed by U.S. Sens. Todd Young (R-IN) and Marsha Blackburn (R-TN), among others.
“We look forward to working with you and encourage the Department to prevent fraudulent actors from stealing taxpayer dollars,” the lawmakers concluded.