A draft of the Unemployment Compensation Integrity Act of 2010 was delivered to Congress. The U.S. Department of Labor (DOL) announced that the draft legislation would help states fight employer fraud and reduce improper benefit payments. The DOL estimates that this legislation has the potential to save over $1.6 billion over the next decade.
"The Unemployment Compensation Integrity Act would give states the additional resources and tools they need to guarantee that only those who are eligible for benefits receive them and employers who defraud the system pay their fair share of taxes," said Secretary of Labor Hilda L. Solis.
According to the DOL, if enacted this legislation would make several changes including:
- Allowing states to use up to 5 percent of contributions collected due to employer fraud or tax evasion, such as employee misclassification, to protect against these problems
- Giving employers an incentive to provide timely, accurate, and complete information detailing the reasons former employees no longer work at their organization
- Requiring employers to report first day earnings of new hires to the National Directory of New Hires in an effort to detect individuals who return to work but continue to collect unemployment compensation