Since inheriting a system in crisis in 2021, the Biden-Harris Administration has moved swiftly to prevent the actions of fraudsters and recover fraudulently paid dollars; one critical step the Administration has taken includes giving access to multi-state data to the Department of Labor’s (Department) Office of Inspector General (OIG) to investigate and refer cases for prosecution. In addition to the initiatives already begun, there's much work that remains to be done to combat and prevent fraud.

The Department has allocated the $2 billion provided under ARPA to strengthen the unemployment system to improve fraud prevention and detection, equity, and timely payments of benefits. We continue to work in close partnership with all state workforce agencies to ensure these improvements are effective and sustainable as part of a full spending plan for the $2 billion that will produce the greatest long-term positive impact.

By June 2023, $1.6 billion of these ARPA funds will have been made available directly to states through prior and new grant opportunities in service of the goals stated above. These funds are vital to achieving transformative improvements to the UI program to help workers, combat fraud, and strengthen state unemployment systems’ program integrity and fraud prevention through the following measures:

  • $380 million in fraud-prevention and overpayment recovery grants, including $140 million in anti-fraud grants already available to states, $200 million in new grants to strengthen identity verification and other recommended and required integrity controls and overpayment recovery activities for preventing identity fraud and to recover taxpayer dollars, and over $40 million in investments to make equitable innovations in identity verification available to states through and the U.S. Postal Service. As a condition of receiving these grants, states agreed to make data readily available to the DOL-OIG for the purposes of both fraud-prevention activity and audits.
  • $600 million to modernize vulnerable state information technology (IT) systems and improve program integrity, countering decades of underinvestment that led to significant fraud and payment errors. These new grants will help states modernize IT systems, move to the cloud, increase their ability to respond to new program requirements and fraud threats, and automate processes (thereby enabling faster responses to fraud), decrease erroneous payments, and more efficiently process claims. 
  • $246 million in “Tiger Team” implementation to help states identify risks and implement fraud-prevention solutions, such as improved identity verification, claims risk scoring, and increasing state usage of the multi-state UI Integrity Data Hub. Almost half of all tailored Tiger Team recommendations directly address program integrity, and other funded process improvements will increase the timeliness and accuracy of payments.  
  •  $100 million for solutions to help states reduce common mistakes and improper payments, such as simplifying difficult-to-complete forms (thereby reducing the number of incorrect submissions that lead to payment errors) and automating repetitive tasks that result in unnecessary staff burden and processing mistakes. 
  • $260 million in equity enhancements that improve payment accuracy. Such enhancements include translating web pages, using plain language, and building more accessible websites for people with disabilities and those who speak languages other than English. These enhancements show that equity and program integrity can go hand in hand by enabling applicants to better understand program requirements and providing more accurate information, ultimately decreasing improper payments.
  • New UI program integrity resources for states in FY2024 Budget: In President Biden’s Budget announced on March 9, 2023, the Administration proposed a package of legislative reforms to more effectively prevent, detect, and recover improper payments. These proposals would require states to use the tools already at their disposal to identify fraud and gives states access to more funding to reduce and recoup fraudulent and other improper payments, including an ability to reinvest 5 percent of recovered fraud into fraud prevention, detection, and recovery. This proposal would also require states to check claims against the National Directory of New Hires and prisoner datasets. 
  • On April 27, 2023, the U.S. Department of Labor announced up to $200 million in available grants to states to strengthen unemployment insurance programs, specifically to help prevent and detect fraud, including promoting best practices for identity verification.

Review a full description of Administration efforts to address fraud in pandemic programs here.