HR 7847
Stop Unemployment Fraud Act
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Bill overview
The Stop Unemployment Fraud Act aims to reduce unemployment compensation fraud by requiring stricter identity verification procedures for applicants, utilizing data matching systems to identify potential fraud, strengthening work search requirements, and modifying payment processes. It also establishes a framework for states to utilize recovered overpayments to fund fraud prevention and unemployment insurance administration. The bill seeks to ensure that unemployment benefits are only paid to eligible individuals and that those seeking benefits are actively engaging in job search efforts.
Key provisions
- Requires states to implement identity verification procedures for unemployment applicants, including documentation requirements.
- Mandates the use of data matching systems (like the Integrity Data Hub and State Information Data Exchange System) to identify potential fraud.
- Strengthens work search requirements, requiring claimants to actively seek employment and maintain records.
- Prohibits self-attestation as sufficient proof of eligibility for unemployment benefits.
- Establishes a mechanism for states to deposit recovered overpayments into a fund for fraud prevention and administration.
- Requires states to certify their compliance with identity verification and data matching procedures.
- Modifies the ‘pay and chase’ model, requiring payments to be made only after eligibility is confirmed.
- Allows for the use of unemployment fund money for technology upgrades and other administrative costs.
Who is affected
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119th CONGRESS — 2d Session
H. R. 7847
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend title III of the Social Security Act and the Federal Unemployment Tax Act to require identity verification procedures and data matching, to prevent unemployment fraud, and to strengthen work search requirements, and for other purposes.
This Act may be cited as the Stop Unemployment Fraud Act
.
at least one currently valid Federal or State government-issued identification document; and
one or more supporting documents, which may include utility bills, lease agreements, voter registration cards, vehicle registration, insurance documents, or other reliable documents, so long as such documents are—
determined by the State to be sufficient to verify the identity of the claimant; or
approved by the Secretary for such purpose.
Not later than 12 months after the date of enactment of this subsection, the Secretary of Labor shall promulgate regulations governing identity verification procedures for claimants of unemployment compensation used by State agencies. Such regulations shall—
administrative costs, including for technology and cybersecurity systems; and
any other factors the Secretary determines appropriate;
provide due process protections for claimants;
is accurate, current, and reliable; and
does not produce systematic mismatches that unfairly deny or delay the payment of unemployment compensation;
do not result in the flagging, denial, or delay of claims based on the personal characteristics of an individual, including race, color, religion, sex, national origin, age, disability, or political affiliation or belief; and
any other factors the Secretary determines appropriate; and
In this subsection, the term unemployment compensation
has the meaning given the term in subsection (d)(2)(A).
The amendments made by this Act shall apply, with respect to a State, to initial applications for unemployment compensation received by such State on or after the date that is 2 years after the date of enactment of this Act.
by redesignating subsection (f) as subsection (g); and
by inserting after subsection (e) the following:
The State uses the system designated by the Secretary of Labor (or another system at the discretion of the State) for cross-matching claimants of unemployment compensation to prevent and detect fraud and improper payments.
The State has established procedures to do the following:
Use the National Directory of New Hires established under section 453(i) of the Social Security Act—
to compare information in such Directory against information about claimants of unemployment compensation to identify any such individuals who may have become employed;
to take timely action to verify whether the individuals identified pursuant to subparagraph (A) are employed; and
upon making a verification described in clause (ii), to take appropriate action to deny or reduce unemployment compensation payments, and to initiate recovery of any overpayments that have been made.
Use the State Information Data Exchange System (or another system at the discretion of the State) to facilitate employer responses to request for information from the State workforce agencies.
Request information from the Commissioner of Social Security under sections 202(x)(3)(B)(iv) and 1611(e)(1)(I)(iii) of the Social Security Act, or from such other sources as the State agency determines appropriate, to obtain the information necessary to carry out the provisions of a State law under which an individual who is confined in a jail, prison, or other penal institution or correctional facility is ineligible for unemployment compensation on account of such individuals inability to satisfy the requirement under section 303(a)(12) of such Act.
Compare information of individuals claiming unemployment compensation against the information regarding deceased individuals furnished to or maintained by the Commissioner of Social Security under section 205(r) of the Social Security Act.
in subsection (a)(1), by inserting (as described in subsection (n))
after when due
; and
by adding at the end the following:
For the purposes of subsection (a)(1), a payment is due on the date that an individual has established eligibility for a benefit year or period, filed a weekly claim for unemployment compensation (as defined in subsection (d)(2)(A)), and has been determined to have met the requirements of weekly eligibility described in paragraphs (10) and (12) of subsection (a), and any additional requirements pursuant to State law. Such a payment shall be made to the individual after payment is due, and such a payment shall not be made prior to the determination that an individual is eligible to receive such payment, including through the identification verification required under subsection (n)(1).
Not later than 180 days after the date of enactment of the Stop Unemployment Fraud Act, the Secretary of Labor shall promulgate a regulation, for the purposes of carrying out paragraph (1), that establishes maximum time frames for benefit payment following an initial eligibility determination, including standards for periods in which there is a high volume of claims.
Section 303 of the Social Security Act (42 U.S.C. 503) is further amended by adding at the end the following:
Section 303 of the Social Security Act (42 U.S.C. 503) is further amended by adding at the end the following:
The Secretary of Labor shall monitor each State’s compliance with subsection (r).
In the case that the Secretary identifies a State that is not in compliance with subsection (n) or (o), the Secretary may, after reasonable notice and hearing—
withhold 5 percent of the funds appropriated pursuant to section 901(c)(1)(A) for such State; and
implement for the State a corrective action plan to bring the State into compliance with such subsections.
in subsection (a)(12), by striking and actively
and inserting and, subject to subsection (r), actively
; and
by adding at the end the following:
For the purposes of subsection (a)(12), subject to paragraph (2), a claimant of unemployment compensation (as defined in subsection (d)(2)(A)) shall only be considered to be actively seeking work if the individual—
is registered for employment services in such a manner and to such extent as prescribed by the State agency;
maintains a record of such work search, including employers contacted, method of contact, and date contacted; and
provides such record to the State agency each week the individual receives unemployment benefits.
The State shall verify the work search records received pursuant to paragraph (1)(C).
employment service registration; and
verifying work search records.
The amendments made by this section shall apply to claimants who receive regular unemployment compensation beginning on the date that is 2 years after the date of enactment of this Act.
andafter the semicolon;
in subparagraph (G), by adding and
at the end; and
by adding at the end the following:
the payment of costs of deterring, detecting, and preventing improper payments;
purposes related to the proper classification of individuals as being in employment (as defined in section 3306(c) of the Internal Revenue Code of 1986), an independent contract, or as an employer (as defined in section 3306(a) of such Code), and the provisions of State law implementing section 303(k) of the Social Security Act;
Stop Unemployment Fraud Act
are in effect at the time of approval of the State law under this subsection, an amount, not to exceed 5 percent, of any payments of contributions, or payments in lieu of contributions, that are collected as a result of an investigation and assessment by the State agency may, immediately following receipt of such payments, be deposited in a State fund from which moneys may be withdrawn for the purposes specified in subparagraph (H).Section 3306(f) of the Internal Revenue Code of 1986 is amended by striking and for refunds of sums
and all that follows and inserting the following: , except as otherwise provided in section 3304(a)(4), section 303(a)(5) of the Social Security Act, or any other provision of Federal unemployment compensation law.
.
Section 303(a)(5) of the Social Security Act (42 U.S.C. 503(a)(5)) is amended by striking and for refunds of sums
and all that follows and inserting the following: except as otherwise provided in this section, section 3304(a)(4) of the Internal Revenue Code of 1986, or any other provisions of Federal unemployment compensation law; and
.
Section 3304(a)(3) of the Internal Revenue Code of 1986 is amended to read as follows:
refunds of sums improperly paid into such fund;
refunds paid in accordance with the provisions of section 3305(b); and
amounts deposited in a State fund in accordance with subparagraph (H) or (I) of paragraph (4);
Section 303(a)(4) of the Social Security Act (42 U.S.C. 503(a)(4)) is amended by striking (except for refunds of sums erroneously paid into such fund and except for refunds paid in accordance with the provisions of 3305(b) of the Federal Unemployment Tax Act)
and inserting (except as otherwise provided in this section, section 3304(a)(3) of the Internal Revenue Code of 1986, or any other provisions of Federal unemployment compensation law)
.