2. News Room

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DWD Releases New Report Highlighting Advances in Efforts to Combat UI Fraud

MADISON – Vigorous efforts to combat Unemployment Insurance (UI) fraud have intensified in recent years, Department of Workforce Development (DWD) Secretary Amy Pechacek shared with members of the department's Unemployment Insurance Advisory Council (UIAC).

"Over the past five years, more than 30 program integrity projects and activities have been adopted, expanded, and initiated to strengthen the UI program," Pechacek said. "The work does not end there. The department's strong collection program also recovers a considerable portion of overpayments when they do occur."

In addition to joining the National Association of State Workforce Agencies' Integrity Data Hub in 2022, expansion and enhancement of the state's fraud prevention and integrity efforts has involved:

• Authorization security questions;
• Enhanced identity proofing;
• Financial investigative technology;
• LexisNexis fraud detection and data assessment;
• New fraud scans;
• Work search audit enhancement; and
• Worker's Compensation crossmatching.

During 2023, efforts led to more than 2,300 identity theft investigations, more than 700 worker misclassification field investigations, and more than 1,900 worker misclassification tax audits. In 2023, Wisconsin recovered $32.8 million in total overpayments.

"DWD's unemployment insurance program continues to lead the way, with a strong record of outperforming other states in UI program integrity efforts," Pechacek said. "Since 2020, Wisconsin has held known fraud overpayments to less than 2% of total benefit payments."

Wisconsin pioneered the nation's first UI system in 1932, and today the system continues to promote economic stability while supporting an exemplary workforce. Unemployment insurance benefits, funded by employer contributions, provide temporary economic assistance to Wisconsin's eligible workers during times of unemployment.

By contributing to the UI system, Wisconsin employers protect the pool of highly skilled workers and reduce the likelihood that workers affected by a layoff or temporary downturn will take their skills and talents to other states. Wisconsin's UI system benefits from strong collaboration among business and labor groups through the UIAC. DWD appreciates the council's support for its ongoing program integrity initiatives.

The COVID-19 pandemic drove the creation of six federal UI programs and a record volume of claims and benefit payments. From March 15, 2020 through the end of 2021, $7.18 billion in UI benefits was paid to approximately 677,000 claimants. Of those payments, 70% were from federal programs and 30% were from the Wisconsin UI program.

As the impact of the pandemic diminished, in 2023 Wisconsin's historic economic recovery reduced regular benefit payments to $337.6 million with 0.46% of payments identified as fraud overpayments. The positive economic momentum has continued into 2024, with Wisconsin achieving record highs of 3,047,900 in total employment and 3,036,100 in total nonfarm jobs in February, as well as a near record low unemployment rate of 2.9% in April.

Pechacek delivered her report in response to requests from the UIAC for additional context on DWD's fraud prevention, detection, and program integrity efforts. View the 2024 Response to Research Request and the 2024 Fraud Report to the UIAC for more information.

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ABOUT DWD

Wisconsin's Department of Workforce Development efficiently delivers effective and inclusive services to meet Wisconsin's diverse workforce needs now and for the future. The department advocates for and invests in the protection and economic advancement of all Wisconsin workers, employers and job seekers through six divisions – Employment and Training, Vocational Rehabilitation, Unemployment Insurance, Equal Rights, Worker's Compensation and Administrative Services. To keep up with DWD announcements and information, sign up for news releases and follow us on Linkedin, Facebook, Twitter and YouTube.