Fraud and Quality Control

Fraud is a serious crime. Detecting and preventing Unemployment Insurance (UI) fraud is a priority for the Wisconsin Department of Workforce Development (DWD). Claims are audited regularly to ensure benefits were paid according to state and federal law.

Claimants have a duty to provide an accurate and complete response to each inquiry made by DWD in connection with their receipt of benefits. Whenever a claimant conceals or misrepresents any facts relating to their eligibility for benefits, the claimant is ineligible for benefits and may be penalized by DWD.

Some examples of fraud include:

• Purposefully failing to report wages earned while collecting UI.
• Being dishonest about why you are no longer working for a previous employer.
• Saying you are able to and available for work when you are too ill to work, traveling that would prevent you from working, or otherwise unable to or unavailable for work.
• Having someone else complete your weekly claim (unless you have an authorized representative).
• Reporting that you searched for work when you did not make valid work search actions.

To Avoid Committing Fraud

The most important thing is to be honest in all your communications with DWD. If you intentionally make false statements or hide information to gain or maintain UI, you are committing fraud.

Penalties for UI Fraud

If you do not provide correct and complete information on your weekly claim or your initial claim application, DWD may find that you concealed information and your claim is fraudulent. Any UI paid to you because of fraud must be paid back. In addition, Wisconsin law provides for steep penalties and/or criminal prosecution for fraudulent claims.

The penalties for fraud and concealment are severe and may include:

• Benefit Amount Reduction (BAR) – If DWD finds that a claimant intentionally concealed information affecting their eligibility for UI, the claimant is ineligible for future benefits for which they would otherwise be eligible. This is referred to as a benefit amount reduction (BAR).
  • A BAR disallows future UI that would otherwise be allowed to the claimant as a penalty for fraud. The BAR must be completely offset by otherwise eligible UI claims that claimant does not receive or have expired after 6 years before the claimant can receive any UI.
  • A BAR is not an overpayment or a civil penalty. Claimants cannot "repay" the BAR with money out of pocket to obtain UI eligibility.
  • A claimant who commits fraud will have a BAR applied until the amount on the determination is offset with UI benefits they would have received but for the BAR, or 6 years have passed, whichever comes first.
    • This means if you have a BAR, apply for UI before the BAR expires, and are eligible for UI, you will receive a notice that although you are otherwise eligible for benefits, you will not receive payment of UI until you have offset the amount equal to the amount of the BAR (or 6 years have passed).
    • You must file weekly claims for UI and be deemed eligible for UI to satisfy the BAR. If you do not file weekly claims, your BAR will not be reduced (but will expire after 6 years).
  • If a BAR is assessed on your claim, you will be notified in writing. You may view the balance of your BAR on the claimant portal or by calling a claims specialist. You have the right to appeal the BAR if you disagree. Please see Appeals and Petitions for more information.
  • Example: Jane is a seasonal employee who was laid off from a landscaping company November 1, 2019. Jane immediately started working for cash as a housekeeper. Jane filed for UI benefits from her landscaping employer but did not report any of the wages she earned as a housekeeper. When DWD finds that she has concealed this information fraudulently, she receives a determination that she was overpaid benefits. On January 1, 2020, DWD sends her a determination notifying her that she concealed information and was assessed a BAR of $6,600. On November 1, 2020, Jane was again laid off by her landscaping employer. Jane applies for UI and is again determined to be eligible for $370 per week in UI benefits. Jane files her weekly claims and performs 4 work search actions each week to maintain her eligibility but is not hired by another company. Jane will not be paid any of her $370 weekly benefit rate for 17 weeks (after her waiting week) but would receive a partial benefit payment of $310 for the week ending March 8, 2021, when the balance of her BAR is reduced to zero. She may then continue to file weekly claims and be paid her entire $370 weekly benefit rate for the remaining weeks for which she is eligible.
    • Note: If Jane did not file a UI claim, confirm her weekly eligibility, and offset the amount of her BAR's complete balance, Jane would not be eligible to receive any UI benefits until her BAR expires 6 years later on January 1, 2026.
• Civil Penalty – A claimant who conceals information affecting their eligibility for UI must pay a penalty of 40% of the amount of the overpaid UI.
  • If a civil penalty is assessed on your claim, you will be notified in writing. You have the right to appeal the determination that resulted in a civil penalty if you disagree with the finding that you committed fraud. Please see Appeal Rights for more information.
• Criminal Prosecution – A claimant who commits UI fraud may be criminally prosecuted. The potential criminal penalties include court-imposed fines, imprisonment, or both.

In cases involving repeat offenders and/or large fraudulent overpayments, DWD has the legal right to pursue criminal prosecution. DWD works with the appropriate District Attorney or the Department of Justice to file criminal charges against offenders. Criminal penalties are in addition to administrative penalties.

What We Do To Stop Fraud

DWD uses many methods to identify people who have intentionally concealed facts relevant to their eligibility for UI.

A few methods include auditing employer records, comparing UI benefit claims to payroll records in Wisconsin and other states, exchanging information between agencies, and investigating complaints from employers and tips from the public.

To avoid an overpayment and penalties, report your wages in the week the work is performed, not the week you are paid.

Quality Control Program

The Quality Control Program detects and reduces errors and fraud in the UI program. A random sample of claimants are selected each week to be audited. We use the information from the audit to test the accuracy of and improve the UI program.

Selection for an audit does not imply any errors or wrongdoing on your part, or your employer's part. DWD is required by federal law to conduct these audits.

If you are selected for an audit but fail to provide complete and accurate information on the questionnaire, you will not be able to receive UI until you respond.