Are You a Victim of Unemployment Fraud?

Since the beginning of the pandemic, the state of Kansas has experienced historic unemployment levels, leading to overwhelming demand on the state’s 40-year-old unemployment claims processing computer system. Last week alone, over 82,000 unemployment claims were filed in Kansas. Exacerbating the delays in benefits for legitimate claimants has been the unprecedented number of fraudulent unemployment claims, an unintended consequence of the enhanced unemployment benefits contained in last year’s CARES Act. In fact, due to what state legislators call lax security measures, Kansas has the third highest number of fraudulent claims of any state, behind only California and Illinois.

Many Kansans are finding that unemployment claims have been filed—and paid—in their names, despite being currently employed and never having filed a claim. And now they are receiving 1099-G forms from the state indicating that they now owe taxes on benefits they never requested or collected. What recourse do these victims of unemployment fraud have?

The Kansas Department of Labor (KDOL) says the first step is to call its Fraud Hotline at 785-291-6059 to report the fraud. However, media reports indicate that call center staff are overburdened with a high volume of calls, resulting in long hold times. Those experiencing difficulty getting through by phone may wish to file a fraud report on the KDOL website. The KDOL also offers recommendations for several other steps victims of identity theft can take to protect themselves.

Once fraudulent activity has been reported to the KDOL, the department will contact the claimant by email with a police report number. At that point, an unsworn declaration should be filed (click on the second to last bullet to view a link to the Unsworn Declaration) either online or by mail, with the KDOL.

Employers should also report fraudulent activity to the KDOL, though as of yet, there is no clarity on who will be financially responsible for the fraudulent claims. The Kansas State Legislature is reportedly even considering legislation to grant some level of immunity to businesses for fraudulent claims.

OMNI Human Resource Management has prepared an FAQ to address common questions that individuals may have when they are victimized by fraudulent unemployment claims. Click here to download the FAQ. OMNI continues to monitor developments in this arena for our clients and will provide ongoing updates.

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