Unemployment Insurance Handbook for Employers (UCB-201-P)
Section 1 - Benefits
PART 8 - Benefit Overpayment Collection & Fraudulent Claims/Penalties
Maintaining the integrity of the unemployment insurance program is an important function which helps ensure benefits are paid only to those who qualify for benefits under the law.
Employers and claimants are educated through informational pamphlets, periodic educational seminars/clinics, one-on-one communications and the internet to explain the unemployment insurance program.
Benefit Overpayment Collection
If benefits are paid erroneously, a claimant will receive a written overpayment decision. This document is a legal document. The appeal period is limited. See Section 3 for appeals information.
The amount of the overpayment may be deducted from benefits that the individual would otherwise be eligible to receive. If the overpayment is not deducted from benefits, and the claimant does not respond to collection letters, the department is authorized to take legal actions including:
- Levy (seizure) of the employee’s wages and bank accounts to the extent allowed by law.
- Issue a civil warrant which becomes a judgment lien against real estate and other property. Like judgments, warrants are public record and may affect credit scores.
- Intercept a state or federal tax refund.
The department uses various procedures and techniques to detect fraud and abuse. A few methods include routine audits of employer payroll records, crossmatching employer payroll records with benefit payments within Wisconsin and with other states, the exchange of information with other agencies, and the investigation of complaints and tips from various sources.
Wisconsin's law provides for penalties and/or criminal prosecution for fraudulent unemployment insurance claims.
A claimant is assessed a benefit reduction, a withholding of future payable benefits, for the intentional concealment of information affecting benefit eligibility. A claimant shall receive a benefit reduction of two, four or eight times the weekly benefit rate for each week of fraud or concealment. This can be in addition to any overpayment which must be repaid. Benefit reductions remain in effect for six years or until satisfied, whichever occurs first.
In addition, the claimant will also be assessed a penalty of 40% of the overpayment amount resulting from the fraud or concealment, which he/she is required to pay out of pocket.
An employer determined to have aided and abetted a claimant in committing an act of concealment or misrepresentation is assessed an administrative penalty.
The penalty assessed is called a forfeiture. The penalty equals the amount of the claimant overpayment.
Examples of aiding and abetting are the banking of hours and/or the falsification of required reports which allows a claimant to fraudulently receive unemployment benefits.
Improperly paid benefits are charged against the employer found guilty of aiding and abetting even if the improperly paid benefits are recovered.
- $500 for each act of concealment that occurred before the first determination issued as of April 6, 2008.
- $1,000 for each act of concealment that occurred after the first $500 level determination.
- $1,500 for each act of concealment that occurred after the first $1,000 level determination.
Any individual who makes a false statement or a misrepresentation to obtain benefits that are payable to another person may be required to repay the improperly obtained benefits. The offender may also be required to pay an additional administrative assessment equal to but not more than 50% of the amount of the benefits obtained.
In addition to administrative forfeitures, criminal penalties (such as fines from $100 to $500 and imprisonment up to 90 days, or both) for each offense can be applied to any person(s) found guilty of:
- Making false statements or representations to obtain unemployment benefits either for himself/herself or any other person.
- Making a false statement or representation in connection with any report or any information duly required by the department,
- Refusing or failing to keep any records or to furnish any report duly required by the department.
The unemployment insurance program is a partnership among employers, claimants and the department. All parties must do their part to deter fraud and abuse. Report suspected or known violations to a fraud specialist.
Updated: March 7, 2018