Wyatt Employment Law Report

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Errors Contributing to Improper Unemployment Benefits Being Paid

By Edwin S. Hopson

The U.S. Department of Labor reported on its website that it has been working with states to identify strategies to prevent overpayments that have become significant.

According to the Department, improper Unemployment Insurance benefit payments have been occurring when:

  1. Recipients continue to claim benefits after returning to work;
  2. Employers or their third party administrators do not submit timely or accurate separation information; and
  3. Claimants fail to register with the state’s Employment Service as required by state law.

The amounts involved are large.  For instance, the error rate according to the Department in the following states involves the amounts set out below for the last three years in the aggregate:

California          6.5%    $1.6 billion

Florida             6.8%    $479 million

Illinois               12.7%  $1.2 billion

Indiana             43%     $1.7 billion

Kentucky         4.3%    $90 million

Louisiana          43.6%  $497 million

Michigan          8.8%    $640 million

Ohio                 16.3%  $866 million

New York        8.2%    $962 million

Texas               12.6%  $1 billion

Earlier this year, the Department states that it intervened with the ten states with the highest registration error rates to focus on the issue.  As a result, progress reportedly is being made, with a 23% reduction in improper payments to people who did not register with employment services agencies, including a more than 35% drop in eight states.