DOL Payments Integrity Reporting Overview

The Payment Integrity Information Act (PIIA) of 2019 (3/02/2020) is the primary Federal statute regarding Payment Integrity reporting for Federal agencies. PIIA requires Federal agencies to identify and reduce improper payments (IP) and report annually on their efforts according to guidance provided by the Office of Management and Budget (OMB).

Improper payments are defined as:

“A payment that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. The term improper payment includes; any payment to an ineligible recipient; any payment for an ineligible good or service; any duplicate payment; any payment for a good or service not received, except for those payments where authorized by law; and any payment that does not authorized by law; and any payment that does not account for credit for applicable discounts.” (M-21-19)

IP may be an overpayment or an underpayment. All payments made due to fraud are IP, but not all IP is fraud – much is simply a paperwork error on the part of a payee or a Federal agency. In many cases a payment may have been proper based on information available to the Federal agency at the time of payment but is later discovered to be improper when further information becomes available later.

Per PIIA, programs found to have either IP >1.5% of total annual outlays and >$10M, or >$100M annually are required to provide annual reporting. This reporting may be found in the Payment Integrity section of DOL’s annual Agency Financial Reports and at PaymentAccuracy.gov. At DOL, two programs are currently reporting:

• Office of Unemployment Insurance (UI) – Federal-State UI Program, and
• Federal Employees’ Compensation Act (FECA) Program

Reporting program payment integrity information and IP estimation plans for UI and PUA can be found at:

• UI Payment Integrity Information
• FECA Sampling & Estimation Plan

Federal-State UI Partnership Program – Payment Integrity Reporting Overview

The UI program is a Federal-state partnership based on Federal law and administered through individual state laws by 53 different state UI agencies (the 53 “state UI agencies” are the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands. Most UI benefits are paid by state programs, administered by states, under state law, using UI tax collections. State UI agencies vary in their organizational structures within state government and infrastructure, such as information technology systems, level of automation, and staffing capacity. While all states must meet certain Federal requirements, state laws also vary in methods and strategies for prevention, detection, and recovery of IP. Additionally, no two states' laws, regulations, and policies specifying UI eligibility conditions are identical, and differences in these conditions influence the potential for error and IP. States with stringent or complex provisions tend to have higher IP rates than those with simpler, more straightforward provisions. ETA uses performance measures to evaluate state UI operations and has established an aggressive FY 2026 goal to reduce the UI improper payment rate to 9.9%.

DOL bases the Federal-State UI improper payment estimates on results of the Benefit Accuracy Measurement (BAM) survey, which examines a nationwide statistically valid sample of payments made in the three largest permanently authorized unemployment compensation programs: State UI program, Unemployment Compensation for Federal Employees (UCFE), and Unemployment Compensation for Ex-service members (UCX). The BAM sample does not include payments made under episodic programs such as Extended Benefits (EB) and Pandemic-response programs.

While fraud is a contributing factor in UI most IP are not due to fraud – occurring because of mistakes made by state UI agencies, UI claimants, and/or the lack of timely or adequate responses from employers. For example, a claimant’s misunderstanding of a state’s UI requirement(s) and/or failure to keep adequate documentation are leading factors contributing to high IP in the UI program. Employers also play an important role in reducing IP by providing timely and accurate responses to the UI agency when the employer receives requests for information regarding an employee’s wages and/or earnings, or the reason for an individual’s separation from employment. More information on UI’s efforts to prevent, detect, and recover IP may be found at PaymentAccuracy.gov and UI Payment Integrity.

DOL is committed to continuing to assess program risks and employ strategies to further reduce IP and fraud in the UC programs and bring the estimated UI improper payment rate into compliance with PIIA.

UI HISTORICAL IP SUMMARY

NOTE: Payment Accuracy Rate plus IP Rate may not equal 100% due to Unknown Payments per M-21-19.

Pandemic Response Unemployment Compensation Program Payment Integrity Reporting

Temporary programs like the Emergency Unemployment Compensation (EUC) program and the UI-related programs created by the Coronavirus Aid, Relief, and Economic Security Act of 2020, including Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), Federal Pandemic Unemployment Compensation (FPUC), and Mixed-Earners Unemployment Compensation (MEUC) programs.

The period of benefits coverage for all pandemic-related UI programs, including PUA, PEUC, FPUC, and MEUC, expired in law on September 6, 2021, though some states stopped offering these benefits prior to that date. States continued to work backlogs, adjudicate and pay benefits, resolve appeals, and determine and collect overpaid benefits under these temporary programs in the current reporting period. Several pandemic-related UI programs report negative outlays, which is due to states’ ongoing overpayment recovery efforts. Since the total outlays for each of the pandemic-related programs were less than $10,000,000, no specific data is reported on PaymentAccuracy.gov for these programs.

The PUA program IP estimation covered payments made over the full span of the PUA program’s existence in law. It determined the estimated PUA IP rate was 18.53%. Since this methodology reflects a one-time review of claims for the full span of the program’s existence and expired in law and no longer active, further payment integrity reporting is neither possible nor appropriate.

Further information may be found in the Payment Integrity section of DOL’s annual Agency Financial Reports and at PaymentAccuracy.gov.

FECA Program – Payment Integrity Reporting Overview

FECA’s improper payments are broken down into 3 categories; medical payments, compensation payments, and rolling 3-year average of adjudicated fraud. The program utilizes a medical bill pay contractor to process claims for reimbursement for services. The bill pay system is automated and coded to process reimbursements based on inputs from providers and staff, which may include mis-keyed data elements. Compensation payments determined to be improper are caused by a lack of available data to support dependency and marital status determinations. Another cause is the program’s inability to access payrate information from payroll service providers and benefit payments being made by other Federal agencies. Adjudicated fraud is determined by the courts, and the program has no control over the amount of restitution awarded each year. However, FECA’s Program Integrity Unit plays an integral role in identifying fraud through different types of audit procedures and collaborates with the OIG community and Department of Justice to pursue civil and criminal charges, whenever appropriate.

In 2025 FECA was successful in prosecution of fraud committed against the FECA program a decade ago and was awarded a significant restitution order by the court. This adjudicated fraud, despite having happened many years ago, is a cause for the FY25 IP rate increase. FECA’s IP reduction target rate for FY26 is 3.05%.

FECA HISTORICAL IP SUMMARY

Last Updated: March 3, 2026