Employers face high unemployment insurance costs due to fraud
Employers in Idaho are confronting higher unemployment insurance costs, which may be due to fraudulent benefits, according to the state’s Department of Labor. The agency is now looking to reclaim more than $20 million in misappropriated benefits that have been acquired through fraud. The prevalence of fraud has caused the state’s unemployment insurance costs to skyrocket, putting pressure on employers, some of whom may not be able to afford further boosts in prices.
Idaho unemployment fund still under pressure
Idaho’s unemployment insurance fund was already strained before the 2008 recession took hold. During the recession, unemployment rose beyond 9%. This forced the state to seek assistance from the federal government. This also caused the state to require employers to funnel more money into the unemployment insurance fund. The rate at which employers are allocating money to the fund is now considered to be at its maximum.
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Department of Labor seek legislative action
The Idaho Department of Labor is looking to institute limits on overpayments for the 2012 Legislative session. The agency seeks to penalize employers who do not report new hires, an initiative that may net $5 million in annual savings for the state’s unemployment insurance. Employers sometimes withhold information from the agency in the hopes of saving money, but this has recently translated into higher unemployment insurance costs. The Department of Labor expects that more than $13 million will be issued due to unemployment insurance claims this year.
Lawmakers unmotivated to tackle the issue
The state Legislature has yet to take any definitive action on the issue of unemployment insurance fraud. Lawmakers had approved a bill that would levy a $25 fine against employers for every failed report to the Department of Labor, but this bill was later recalled because lawmakers believed it was too harsh on employers. Unemployment insurance and fraud may continue to be a significant problem if lawmakers do not find the incentive to take action on the matter.