The U.S. Department of Labor issued a nationwide warning June 17 that states could face penalties if they fail to address fraud, waste, and abuse in their unemployment systems.
In a letter sent to governors in all 50 states and U.S. territories, officials called for improving identity verification, modernizing technology systems, and strengthening oversight of unemployment programs.
DOL said states that fail to implement stronger safeguards risked losing certain federal administrative funding.
According to the agency, weaknesses in state systems allowed significant fraudulent activity and improper payments to occur in recent years.
The warning comes as federal officials continue efforts to recover money lost through pandemic-era unemployment fraud.
On the same day the letter was sent, DOL announced the recovery of more than $512 million in fraudulent unemployment claims, bringing total recoveries to over $1 billion in recent enforcement efforts.
For Connecticut employers, the announcement highlights a challenge that has persisted since the COVID-19 pandemic: identity-based unemployment fraud.
Employers throughout the state have reported receiving unemployment claims filed in the names of active employees, often the result of stolen personal information being used by criminal organizations.
Since March 2020, Connecticut Department of Labor officials say the agency blocked more than 450,000 fraudulent unemployment claims, preventing nearly $5 billion in improper payments.
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