US tells states to deal with unemployment fraud -- or face penalties
Summary
The U.S. Department of Labor has told all states to improve their efforts to stop fraud, waste, and abuse in unemployment insurance programs. States that do not take action may lose parts of their federal funding. The department specifically highlighted problems in states run by Democrats like California, Illinois, and New York.Key Facts
- The Labor Department sent letters to all governors demanding action against fraud in unemployment benefits.
- States could have administrative funds withheld if they fail to address these issues.
- The department pointed to weak oversight, old technology, and poor identity checks as causes of fraud.
- California, Illinois, and New York were mentioned for having notable problems in their programs.
- California’s governor said the state works well to prevent fraud and criticized federal actions.
- The Government Accountability Office estimates 11% to 15% of unemployment funds paid from 2020 to 2023 were lost to fraud.
- The Department of Labor will issue more instructions to states soon.
- Vice President JD Vance leads a team to fight fraud in social programs, and other federal agencies also plan stricter measures.
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