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Help Prevent COVID-19 Unemployment Fraud

May 18, 2020 Alerts

Learn how to stop fraudsters that are filing false claims on behalf of another individual or using false information on their own claims.

At a Glance

  • Due to the rise in unemployment, there has also been a rise in fraudulent unemployment claims.
  • There are steps that employers can take to help prevent fraud, such as sharing information about unemployment fraud with their employees, protecting employee data, and carefully reviewing any unemployment claims.
  • If you suspect a fraudulent claim, contact your state unemployment agency and local police to report it.

Introduction

Due to the recent COVID-19 pandemic, many workers are unemployed or partially unemployed, which has resulted in a massive increase in unemployment claims. Fraudsters are taking advantage of the influx of claims and are filing false claims on behalf of another individual or using false information on their own claims.

Unemployment Fraud is committed by people who claim unemployment benefits they are not entitled to, and who help others claim benefits they are not entitled to.

How To Stop Fraudulent Claims

Both employers and individuals can take steps to stop fraudulent claims.

  1. Notify your employees to report fraudulent filings to their manager or human resources representative. If you receive an unemployment claim for an employee who has not been laid off or terminated notify them as soon as possible.
  2. Notify your human resources representative, or other employees who are handling unemployment claims to be aware the increase in fraudulent claims.
  3. Protect your personal data. Information such as name, birthday and address may be all that is needed to file a fraudulent claim.
  4. If you do receive a fraudulent claim for an employee, contact the state unemployment division, if available the fraud division, and the local police to file a report. The U.S. Department of Labor has resources on how to report claimant fraud available on their

 If an employee is a victim of a fraudulent claim there are important steps that should be taken to minimize the personal impact of identity theft. The Federal Trade Commission (FTC) has a website with dedicated resources to help victims of identity theft. 

In addition, employers should review their state unemployment website notices for any known unemployment fraud scams and share the information with employees. Recently Wisconsin has published information about several scams on their website and Washington has temporarily suspended unemployment payments due to the increase in fraudulent claims.

Next Steps

Paylocity has a variety of resources about our own information security, to learn more see how we are protecting our clients.

In addition, we offer trainings dedicated to how to protect sensitive data, including personal information. We also have training available about security awareness during an emergency. If you have any questions about the trainings we have available and how to access trainings, please reach out to your account manager.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.


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