Take These Steps to Help Detect and Prevent UI Fraud

May 1, 2017

Fraud affects everyone – employers, claimants and taxpayers – and drives up the cost of doing business. As employers, you can help save millions of dollars in fraudulent payments that might otherwise go undetected by identifying suspected fraud. In many fraud cases – such as an employee claiming benefits while still working – the employer is on the front line and may be the first to have information that fraud is occurring.

As an employer, you can help detect and prevent fraud by:

  • Reviewing monetary determinations for accuracy.
    • Employers are notified (on Form UIA 1575E) that their UIA account will be charged as shown, unless the employer provides the Agency with information showing the unemployed worker was separated for a reason that would disqualify the unemployed worker from receiving benefits. For example, was the employee ever employed by your organization and, if so, does the person continue to work? Is the separation reason correct?
  • Responding to any fact-finding requests you receive from the UIA.
    • If the Agency needs more information from the employer regarding a claimant’s separation, you may receive Form UIA 1713, Request for Information Relative to Possible Ineligibility or Disqualification.
  • Verifying each worker’s earned income on Form UIA 1136, Statement of Unemployment Benefits Charged or Credited to Employer’s Account.
    • Each week, employers receive a statement of charges and credits that have been made to their accounts. The statement identifies each person receiving unemployment benefits and how much. These statements are a very powerful early detection tool. You can find this in MiWAM under the Benefit Services tab. In addition, it is very important to advise payroll staff (usually the ones most familiar with workers who are also collecting UI benefits) to monitor gross wages reported or NOT reported. In many cases, a company’s payroll information and unemployment reports end up in places other than the hands of appropriate personnel. And in some cases, it may not be an employer who reviews the information, but a payroll company or accountant who handles the books. Regardless, it is important to make sure that appropriate staff receives and timely reviews any documentation from the UIA, especially payroll and unemployment reports, so they can readily identify benefit fraud.

In one recent example, an employer did not review the weekly Form UIA 1136 for a full year. The result – although the employer had a year’s worth of information, he was simultaneously paying wages while being charged for unemployment benefits.

By monitoring the 1136 reports – just like we monitor our personal bank accounts and billing statements – you can help identify suspicious activity early and nip UI fraud in the bud. If you notice charges to your account that you don’t think are correct – contact the UIA immediately.

Remember - a prompt response to any requests for verification of an employee’s earnings or employment status will help prevent improper payment of UI benefits. 

More information about UI fraud is available on the Michigan Unemployment Insurance Agency website. If you suspect fraud, report it to the UIA Fraud Hotline 24 hours a day at 1-855-UI-CRIME or online through your MiWAM account.

Note: This article first appeared in the Summer 2014 issue of the Michigan Employer Advisor and is being reprinted with permission from the Michigan Unemployment Insurance Agency (UIA).