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Important Unemployment Updates for Employers: Fraudulent Claims and New State Legislations Enacted

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While businesses begin to gradually reopen and the number of unemployment claims continue to decline, there are important developments relative to unemployment The emergence of widespread unemployment fraud and state legislation to provide additional support for both unemployment claimants and employers has been seen 

States nationwide are grappling with sharp rise in the amount of illegitimate unemployment claims being filed using personal information stolen from previous national data breaches.  Massachusetts and Rhode Island have joined many states in the implementation of added security measures for unemployment claimants filing for benefits.  For example, a claimant will be asked to upload a picture of their social security card or the claimant holding his/her drivers license.  This implementation and added layer of security has caused temporary delays in payments of benefits.  In Rhode Island, many claimants have found their benefits claims to be frozen as a result. Individuals who believe their identity is being used to access unemployment benefits should immediately contact their state unemployment fraud line: 

MA – https://www.mass.gov/info-details/report-unemployment-benefits-fraud 

CT – https://www.ctdol.state.ct.us/BPCU/fraud.htm 

RI – http://www.dlt.ri.gov/ui/ReportFraud.htm 

Employers should continue to be vigilant in monitoring their state employer unemployment portal for any suspicious claim activity.  Notifying employees to also be on the lookout for unexpected  unemployment notices and taking appropriate steps to treat these notifications as identity theft is also recommended. State resources are as follows: 

MA – https://www.mass.gov/service-details/identity-theft 

CT- https://portal.ct.gov/AG/Consumer-Issues/Identity-Theft/Identity-Theft 

RI – https://risp.ri.gov/safety/internet/fraud.php 

In other Massachusetts developments, last week, Governor Charlie Baker signed into law unemployment legislation providing the following additional support for both claimants and employers: 

  • Prevention of COVID-19 related unemployment claims affecting employer unemployment experience rating (and associated increased tax cost) 
  • Extension to 30 weeks from 26 weeks of benefits for any week in which a significant rise in unemployment claims (i.e. 100,000 or more in a single week) 
  • Elimination of 50% cap on dependency allowances 
  • 120day grace period for self-insured non-profits to make required unemployment claims payments to the state (the CARES Act provides a 50% reimbursement and there’s been a push to increase the reimbursement to 100%) 

In Connecticut, individuals who have exhausted unemployment benefits have begun receiving letters from the CT DOL indicating potential eligibility for the 13-week unemployment benefit extension known as Pandemic Emergency Unemployment Compensation or PEUC, provided by the CARES act. Individuals with a benefit year that has expirewill first need to file for a second benefit year to see if they are eligible for regular benefits; if not eligible for a second benefit year, they may then be sent a second letter with instructions on how to apply for PEUC benefits.  Individuals whose benefit year has not yet expired, but they have collected all of their benefits, can immediately file a PEUC claim application. 

Employers with PPP loans should ensure that any returntowork offers made to, and subsequently rejected by, furloughed/laid off employees are reported to their respective state unemployment agency within 30 days of the rejection. 

The combination of existing enhanced unemployment benefits under the CARES Act and additional support provided at the state level continues to present ongoing challenges for employers as they look to bring employees back to work.  Looking through these and other scenarios can be a daunting task with a seemingly endless number of practical and legal considerations for employers.  Our HR Advisory team is here to help and will continue to monitor new developments as they arise. 

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