News Release

Printer-Friendly Version

OPA News Release: [08/10/2005]
Contact Name: David James and Mike Volpe
Phone Number: (202) 693-4676 and (202) 693-3984
Release Number: 05-1462-NAT

U.S. Secretary of Labor Announces Nearly $5 Million in Grants to Prevent State UI Tax Rate Schemes

WASHINGTON—U.S. Secretary of Labor Elaine L. Chao today announced $4.9 million in grants to help states prevent and detect state unemployment insurance tax rate manipulation schemes, known as State Unemployment Tax (SUTA) Dumping.

"To guarantee that unemployment insurance continues to be available to workers during periods of job loss, the system must be safeguarded from corruption," said Secretary Chao. "The detection mechanisms funded by these grants will help eliminate tax manipulation schemes which increase the cost to those employers who play by the rules."

The SUTA Dumping Prevention Act of 2004 required states to enact legislation closing loopholes in their unemployment insurance laws that permitted some employers to pay less than their fair share of state unemployment taxes. It also required states to implement procedures to detect and prevent SUTA Dumping activity.

"These grants support implementation of automated systems that will enable states to target their SUTA Dumping enforcement efforts most effectively," said Assistant Secretary of Labor for Employment and Training Emily Stover DeRocco.

All 53 states and territory workforce agencies were awarded grants for SUTA Dumping detection activities.

For information on unemployment insurance, please visit: http://www.dol.gov/dol/topic/unemployment-insurance/index.htm.