Labor Dept. recognized for battling unemployment insurance fraud

TRENTON –The Department of Labor and Workforce Development reported it received an award for saving an estimated $56 million by preventing an estimated 35,000 people from collecting fraudulent state unemployment insurance payments, thanks to an investigation this year.

The federal Department of Labor’s Office of Unemployment Insurance gave the state agency its “Unemployment Insurance Innovation Award for Integrity” on Oct. 19.

“Our anti-fraud effort has been focused on stopping fraud in Unemployment Insurance before it happens by making sure people do not collect money they are not entitled to get,” LWD Commissioner Harold Wirths said in a statement.

Between April 16 and Sept. 3, the anti-fraud program prevented an estimated 35,000 people from fraudulently collecting unemployment payments after they started a new job, the state Labor Department reported. Before the new program was implemented, the state would not have been able to discover someone was collecting while employed until employers filed quarterly wage and new-hire reports with the LWD, and those reports would not report out-of-state workers.

“Before now, someone could improperly collect Unemployment Insurance for several weeks before they would be found out. Now, we catch them in the first week,” said Ronald Marino, Assistant Commissioner of Income Security at LWD.

If the 35,000 people detected as improper claimants between April and September had been free to collect an average of $400 in weekly Unemployment Insurance for just four weeks each, they would have cost the system $56 million, the Labor Department stated.

LWD reorganized its Fraud and Risk Prevention Unit earlier this year and started a program of cross matching government hiring data to prevent the most common form of Unemployment Insurance fraud: payments to individuals who are no longer entitled to benefits because they went back to work. Labor Dept. recognized for battling unemployment insurance fraud