Unemployment is exceptionally high across the country and has been for several months. The upward trend in the jobless rate seems related to an increase in reports of unemployment fraud over approximately the same period. The Arkansas Division of Workforce Services says that reports of alleged fraudulent activity related to unemployment claims have increased as more people lose their jobs. Comparable governmental bodies in other states have reported a similar uptick.

The ADWS is responsible for enforcing laws against unemployment fraud in Arkansas and takes its responsibilities very seriously. People should understand what unemployment fraud entails and what the penalties can be.

What does unemployment fraud include?

Recently reported unemployment fraud may have included an element of identity theft as people filing fraudulent claims allegedly did so under the names of other people, including those who are not eligible due to retirement or current employment. Unemployment fraud can also involve collecting benefits after returning to work or taking a temporary or part-time job without reporting the hours worked to the ADWS.

How does one avoid unemployment fraud?

If one has a part-time job, one must report the hours that one worked for the week that one is filing for unemployment benefits to the ADWS. One must also report one’s gross income during the week in question even before one receives a paycheck. Someone who applies for unemployment benefits while self-employed must report hours worked and earnings after deductions for any reasonable business expenses.

What are the penalties for unemployment fraud?

In addition to fines and possible imprisonment, a person convicted of unemployment fraud must repay the benefits received with interest. Failure to do so can prevent one from collecting unemployment benefits in the future.

How does ADWS detect possible unemployment fraud?

New Hire Directories at the state and national levels are among the ADWS’ most useful tools for detecting potential fraud. Employers in Arkansas must report any recently hired employees to both directories. This requirement applies to previous employees that the company hires again as well as entirely new hires. The database identifies people who continue to receive unemployment benefits even after getting a new job.