Unemployment Fraud is on the Rise

July 16, 2021

Unemployment Compensation (UC) fraud has increased exponentially with the rollout of the new benefits system.

PA Labor and Industry (L&I) is aware of the increase in fraud and is actively looking at placing additional security measures in place.

The fraudsters are part of organized crime rings worldwide, trying to infiltrate the billions of dollars in stimulus monies earmarked for unemployment.

These fraudsters use personal information they’ve purchased off “the dark web,” which has occurred through previous data breaches, such as Equifax, Adobe, eBay, Marriott International, Yahoo, Target.

If you’re receiving unemployment information for employees actively employed by your business, we’d suggest asking them if they have filed for Unemployment Compensation (UC).

If they did not file for UC, we suggest the following steps to stop the unemployment:

  1. Do NOT assume a claim is fraudulent. If your company never employed the claimant, follow steps 3 &4 below and assume it’s fraudulent. Before completing any of these steps, please ensure you have verified with the claimant that they did open an unemployment claim in the state of PA.
  2. The employee should report the fraud to L&I through this link as identity theft:
    1. Pennsylvania’s Unemployment Compensation (UC) Benefits System (pa.gov)
  3. Complete any fact-finding forms online on the new benefits site and state; the claim is fraudulent.

a. Navigate to the upper left and select “Menu.”

b. Go to “Directory of Services”

c. Select “Unemployment ServiceGo to “Claimants Separation”

d. Scroll Down to “Claimants Separation”

e. Click on “Needs Response”

  • Recommended Response: For the last day worked, enter the date you’re completing the form and select “Still  Working Fulltime.”
  • Within the free form, section type the following, “This claim is fraudulent and was not filed by the claimant.”

4. Most important is that your employees affected by this fraud need to know their information is now vulnerable and being used by fraudsters.

PaySmart is a payroll provider located in Mechanicsburg, Pennsylvania, supporting small businesses in the Central PA region. We are dedicated to helping small businesses take care of their payroll needs. To learn more information about how PaySmart may provide payroll solutions, please contact us at 717-766-1777. Our New Client Concierge is waiting for you!