The Stop Unemployment Fraud Act aims to reduce unemployment insurance fraud through several new requirements for states. The bill requires claimants to verify their identity using government-issued identification plus supporting documents before receiving benefits, and prohibits states from paying claims based solely on a claimant's word. States must also use data-matching systems to cross-check unemployment claims against federal employment records, incarceration databases, and death records to identify ineligible recipients. Additionally, the bill strengthens work-search requirements by mandating that claimants maintain and provide weekly records of their job-seeking activities, which states must verify.
The legislation gives states financial incentives to implement these measures by allowing them to retain up to 5 percent of recovered overpayments and collected contributions for fraud prevention, technology improvements, and unemployment insurance administration. The bill provides states two years from enactment to implement most provisions and requires the Secretary of Labor to issue guidance on verification procedures and work-search standards within 6 to 12 months. States that fail to comply with identity verification or payment timing requirements may face a 5 percent withholding of federal unemployment funds and be required to adopt a corrective action plan.
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