Recent news reports confirm what an increasingly large number of Washington employers are discovering — unemployment fraud is becoming a serious issue in the wake of the COVID-19 outbreak as criminals seek to take advantage of more generous unemployment benefits and overwhelmed state investigators.
If you are a Washington employer who has discovered that a false unemployment claim has been filed, quick action will help mitigate the damage. These are some steps you can take now:
Take steps to notify your employees of the uptick in fraud and to report fraudulent filings to your HR team promptly. Similarly, make sure your HR team is advised of the issue and takes steps to identify and flag suspicious unemployment claims when they receive notice of such claims from the state.
Review Your IT Security
Filing a fraudulent unemployment claim only requires minimal information: an employee name, employer name, social security number, date of birth and address. Criminals can obtain that information from two sources: (1) a company's IT system or those of its vendors that store employee information or (2) personal information already available on the dark web from past data breaches. Employers should consult with their IT department to confirm that there is no evidence that any databases containing employee information show signs of compromise. If you become aware of a breach of one of your vendors or suspect an internal data security incident, you should reach out to a data security attorney and your insurance broker immediately to determine what steps must be taken to fulfill any legal obligations you may have as a result. Data security legal requirements operate on short timelines, and failure to act can result in substantial legal exposure.
Notify Employees Promptly
If you become aware of an unemployment claim made by an employee who has not been laid off or terminated, promptly notify that employee so that the company and the employee can coordinate their notice to the relevant authorities.
Report Fraud to State and Local Authorities
Work with the employee to promptly notify both the Washington State Employment Security Department and your local police department of the fraud.
- Washington State Employment Security Department: Information on how to file a report with the Employment Security Department can be found here. Initial reports indicate that the Department is overwhelmed and slow to respond to telephone calls. We recommend first submitting an email report to ensure that your report is not unduly delayed. The Employment Security Department has indicated that it will be rolling out additional resources soon to address the increased reports of fraud. These resources should include: (1) a new secure form on the website to submit fraud reports; (2) a template that can be used for bulk reporting if an employer is facing a large volume of fraudulent claims; and (3) an increase in the number of intake agents staffing the fraud hotline.
- Local Police Department: The Seattle Police Department recommends filing an online or non-emergency report of unemployment fraud here. Appropriate fraud reporting will help ensure that the employee's record is corrected, help the employee take steps to further protect their identity, and assist law enforcement in their investigation of fraud schemes.
Employee Steps to Minimize Impact of Identity Theft
The filing of a fraudulent unemployment claim is a sign that an employee’s sensitive personal information is available to criminals. Employers should educate employees about steps they can take to minimize the chance of further harm. These steps include: (1) filing a report with the Federal Trade Commission; (2) notifying the major credit bureaus of the fraud; (3) reviewing your credit report; (4) requesting fraud alerts or a credit freeze; and (5) taking steps to ensure that your social security and other personal information is not used to commit additional fraud, including tax return fraud. For more information, see the Federal Trade Commission’s helpful guidance on this topic.
In an environment where many employers are faced with data security and privacy challenges posed by having a dispersed work force, it may be a good opportunity to obtain a free Cyber Health Assessment to identify easy and budget-friendly ways your business can identify risk areas and take steps to mitigate that risk.