Wyden, Crapo propose legislation to improve nation’s unemployment insurance system

 WASHINGTON (KTVZ) -- Senate Finance Committee Chair Ron Wyden, D-Ore., Ranking Member Mike Crapo, R-Idaho, and 10 Senate cosponsors introduced bipartisan legislation Wednesday that would make key improvements to the nation’s unemployment insurance system. The legislation, titled the Unemployment Insurance Integrity and Accessibility Act, would focus on program administration and integrity to combat fraud and improve access to benefits for eligible workers.

“The Covid-19 pandemic showed that unemployment insurance systems were too often unable to keep up with the needs of American workers and too vulnerable to fraud,” Wyden and Crapo said. “This bipartisan bill will go a long way to making the UI system more accessible to workers who need it and protecting taxpayer dollars by recouping and preventing fraud.”

The original cosponsors of the legislation are: Michael Bennet, D-Colo., James Lankford, R-Okla.,  Sherrod Brown, D-Ohio, John Barrasso, R-Wyo., Gary Peters, D-Mich., Todd Young, R-Ind.,  Sheldon Whitehouse, D-R.I., Jim Risch, R-Idaho, Ben Cardin, D-Md., and Thom Tillis, R-N.C.

A section-by-section outline of the legislation is available here and bill text is available here. A summary is below: 

The Unemployment Insurance Integrity and Accessibility Act

The COVID-19 pandemic revealed that the Unemployment Insurance (UI) program was both difficult for workers to access and vulnerable to fraud. The Unemployment Insurance Integrity and Accessibility Act would prevent future UI fraud and help ensure those who defrauded the system during the pandemic are brought to justice. It would also provide relief for claimants who were overpaid and cannot afford repayment or face other hardships, and take steps to make UI systems more accessible to eligible workers.

Unemployment Insurance Fraud and Overpayment Recovery

• Extends the federal statute of limitations for pandemic unemployment insurance fraud to 10 years (from 5 years under current law).
• Allows states to waive overpayments of pandemic unemployment insurance that have not been recovered as of date of enactment in non-fraud cases where repayment would be contrary to equity and good conscience. States are required to waive these non-fraud overpayments if no overpayment is established by December 31, 2025.
• Allows states to retain 5 percent of recovered overpayments of unemployment compensation and 5 percent of employer unemployment taxes collected as part of a state investigation. States may retain up to 25 percent of overpayment recoveries of fraudulent pandemic unemployment overpayments. Allows states to invest retained funds in improving unemployment insurance administration. 

Unemployment Insurance Program Integrity

• Requires states to crossmatch unemployment compensation claims against the National Directory of New Hires (NDNH) to prevent claimants from collecting UI if they are working.
• Requires states to utilize systems such as the State Information Data Exchange (SIDES) to allow electronic transmission of accurate claim information between employers and states.
• Requires states to use crossmatching systems such as the Integrity Data Hub (IDH) to identify potentially fraudulent unemployment claims.
• Requires states to crossmatch unemployment compensation claims against the Social Security Administration’s prisoner database to prevent fraud.
• Requires the Secretary of Labor to issue regulations to ensure proper implementation of crossmatching requirements.

Unemployment Insurance Administration and Technology

• Implements new access and technology requirements for online claim filing systems and in-person alternatives.
• Requires states to provide guidance to employers to facilitate their eligible workers’ access to benefits.
• Provides for oversight of federal investments into the administration of UI programs.