US Department of Labor announces proposal to combat unemployment fraud

WASHINGTON – The U.S. Department of Labor today announced a Notice of Proposed Rulemaking to crack down on rampant fraud that has riddled unemployment compensation programs across the nation. 

Supporting President Trump’s Executive Order 14243, “Stopping Waste, Fraud, and Abuse by Eliminating Information Silos,” the proposed rule would require the disclosure of state-level UC information to federal officials, including the department’s Office of Inspector General. 

“From recovering over $500 million in fraudulent unemployment insurance payments to clawing back billions in unspent and unusable COVID-era unemployment funds, the Labor Department is laser-focused on restoring integrity to our nation’s unemployment insurance programs and safeguarding Americans’ hard-earned tax dollars,” said Secretary of Labor Lori Chavez-DeRemer. “This commonsense proposal will further help us prevent criminals and fraudsters from ripping off taxpayers. Under the direction of President Trump, we’ll continue doubling down on our efforts to root out waste, fraud, and abuse to put the American Worker First.”

States have faced increasingly sophisticated fraud schemes that reached a peak during the pandemic, exposing the need for enhanced measures to prevent fraud. The department’s inspector general has estimated $191 billion in unemployment insurance benefits may have been improperly paid during the pandemic.

The proposed rule changes the disclosure of UC information from “permissible” to “required” when requested by federal officials for the purposes of oversight and audits. This change will empower agencies, including the department’s Office of Inspector General, to investigate complex, multi-state fraud schemes more effectively; detect vulnerabilities in state UC systems; ensure program funds are administered lawfully; and safeguard UC funds from future fraudulent attacks.

Upon publication in the Federal Register, the Notice of Proposed Rulemaking will be open to public comment for 30 days. The department encourages comments from all interested stakeholders and will consider all comments received before publishing a final rule. 

Learn more about the proposed rule and instructions for submitting comments.

If you suspect wrongdoing involving the Labor Department’s programs or operations, contact the department’s Office of Inspector General hotline at (800) 347-3756 or www.oig.dol.gov/hotlinecontact.htm.