1. 2016 HR FLORIDA CONFERENCE & EXPO

2. Presented By: Robert Austin
2016 HR FLORIDA CONFERENCE & EXPO
Unemployment Fraud in Florida Its Impact on Employers and What You Can Do About It
Presented By: Robert Austin
VP UC Operations, Equifax Workforce Solutions

3. 72% of overpayments are not recovered
UI Overpayments
Improper payments continue to remain high despite continued employer and TPA improvements in process and responses…
Category
7/2014-6/2015
7/2013-6/2014
Overpayments
10.29%
11.16%
Claimant Underpayment
.44%
.41%
Overpayments (net dollars collected)
7.36%
8.46%
7/2014-6/2015
72% of overpayments are not recovered
*Payments reflected in Billions

4. The top 3 categories represent 81% of all overpayments…
Claimants collecting benefits and working at the same time
Lack of enforcement of work search requirements and claimant fraud
Separation data incomplete, inaccurate, or late at the claim level

5. Why does UI Fraud matter to you?
Employers can reduce improper payments by providing the information needed to make an accurate determination of claimant eligibility
Improper payments occur most often due inaccurate or insufficient information provided to the state
Employers pay for fraudulent cases through higher taxes

6. Common Examples of UI Fraud
Claimant returns to work but continues to collect UI benefits without reporting the new job
Not reporting wages during the week the work was performed in order to collect more benefits than allowed
Working a part-time job but not reporting the earnings to collect more benefits than allowed
Performing temporary work while collecting UI benefits, but not reporting the earnings when certifying for benefits
Withholding information or giving false information when filing a UI claim or certifying for benefits.
IMPOSTER CLAIMS

7. Improper vs Imposter Claims
An improper claim is any claim where benefits were paid in error
An imposter claim, is a claim that is filed by a person using the identity of another
According to the FTC, Florida has the highest per capita rate of identity theft of all of the states in the US
Imposter Claims can happen to anyone!
Cora Mann, detective for the North Miami Beach, Police Department
Startled to learn that someone had filed for about $3,000 in unemployment benefits under her name.
Learned of fraud through call to verify employment
"It makes me very angry because I work too hard for whatever I have and what I earn for myself and my family," Mann said.

8. Financial Impact of Imposter Claims
Florida DEO Overpayment Prevention
70,000 cases of fraud caught in 2014 (10.7 % of total claims filed)
Through September of 2015, 60,000 cases caught (15.9% of total claims filed)
The 2015 potential value of those fraudulent claims was $529m
Prevented employers from footing the bill for these fraudulent benefits through higher taxes

9. A Closer Look – A Typical Scenario
Florida employee
Year: 2014
Discovery: 1099G from the State of Florida (received in 2015)
Background
Employer did not research/respond to claim when notified (not UII compliant)
Imposter claimant collected $3,025 (close to the maximum) in charges against the employer SUI
Burden to recover sits with employer
Employer Risk
Identity has been stolen
Burden to challenge income tax assessed on the income and protect identify from further fraud sits with employee
Employee Risk
Impact – The Florida DEO estimates that it takes more than 20+ man hours to clean up a fraudulent claim.

10. Preventing Overpayments
FIREE and Fraud Detection
UI Integrity Requirements
Wage Audits
We’ve talked a bit about Fraud Detection, but there are a few other ways the state works to reduce overpayments that also can help catch impostors. Legislation and guidance from the state agencies puts some of that responsibility on the employer.

11. Focus on Fraud
There’s a financial incentive to focus on fraudulent claims
Florida uses FIREE: Fraud Initiative Rating and Rules Engine as well as additional staff and shared processes
The program was on track to prevent more than $327 million in fraudulent claims from being paid in 2015
Fraud is the #2 source of overpayments, which drive costs up for all employers

12. UI Fraud Legislation-HB 1017
TABLED
A House panel unanimously approved a bill aimed at cracking down on fraud in the unemployment-compensation system stemming from identity theft.
The bill would have given the DEO access to the Florida Department of Highway Safety and Motor Vehicles' database of driver's licenses to validate claims for reemployment assistance and increase penalties for people who fraudulently apply for unemployment benefits.
This bill made it to the Senate Commerce & Tourism committee on 3/11/16, but did not make it past the committee to a vote (no longer active)

13. UI Integrity: Aimed at Addressing Overpayments
The Trade Adjustment Assistance Extension Act of 2011 (TAAEA)
Requires that states prohibit relieving employers of benefit charges to their unemployment tax account when both of the following exist:
UI benefits were improperly paid due to failure to respond timely or adequately to the state’s request for information relating to a claim – Florida has a 20 day deadline.
The employer has established a pattern of failing to respond timely or adequately – Florida legislation does not define a pattern of failure.

14. Components of Compliance RESPOND!
TIMELY
(respond within 20 days of notice the mail date)
ADEQUATE
(answer all of the questions through CONNECT)
COMPLIANT
(avoid pattern of failure)
Pattern of Failure: defined by many states as the greater of two or more instances or two percent or more of claims within the prior year.
*** With no legislatively defined pattern, a good rule of thumb
for Florida employers ***
2 or 2%

15. UI Integrity and Fraud
RESPOND – ensures every claim will be reviewed by the employer, every time
TIMELY – protects employers and potential victims of fraud by identifying it immediately
COMPLETE – Full detail helps detect fraud before payments are released to the impostor

16. Best Practices - RESPOND
Respond to EVERY claim, make it mandatory
TIP: Create separate workflows for voluntary quits and discharges
TIP: Establish job performance metrics based on response requirements for every team member working with unemployment claims

17. Best Practices – BE TIMELY
You have 20 days
TIP: set standards that encourage completion of claims/RFIs in 15 days to stay ahead of the deadline
TIP: Establish job performance metrics for each employee submitting claim responses

18. Best Practices: BE COMPLETE
This is your best opportunity to identify fraud, be thorough and include the right documentation with each response
TIP: Cross check each claim against your HRIS or payroll records
TIP: Have more than one admin with access to CONNECT (to ensure completion if out of office or system down interferes with upload needs).

19. Wage Audits
Routine audit by the state of reported wages for some individuals who filed unemployment claims
For most Florida employers, wage audits are housed in the CONNECT system for completion.
By completing and returning this report, you provide information which can assist the DEO in detecting unemployment overpayments.
Detection and recovery of overpaid benefits can result in credits to your experience rating account.
If income is identified during the audit weeks selected, fraud may be a factor in cases where:
A separated employee is claiming benefits outside of the last day worked
A non-separated employee is claiming benefits
The claimant failed to report their return to work
Someone has made an imposter claim

20. Managing a False Claim Protest the initial claim
Let the state agency know immediately if you receive a claim on an employee who did not file for benefits
Determination and charge documents may come in before the state has determined imposter status, continue to protest
Notify the employee and have them submit a letter and/or the police report detailing the potential fraud as documentation
Protest the initial claim
State calls for additional details will help the state solidify their case
Provide wage audit data in the format requested so the state can determine if wages and benefits are overlapping
Respond to all state calls and/or wage audits

21. Key Takeaways:
“Government benefits fraud was the most common form of reported identity theft in 2014” –FTC Feb 2015
Proper unemployment response to the initial claim can be the first line of defense
Solutions are both people and technology driven
Stay up-to-date with best practices and legislative changes

22. THANK YOU!
QUESTIONS?

23. Resources FOR FLORIDA EMPLOYEES WHO SUSPECT FRAUD
APPENDIX
Resources FOR FLORIDA EMPLOYEES WHO SUSPECT FRAUD

24. Resources for Employees to Address Imposter Claims
Federal and State Websites
Local Reporting
Credit Monitoring
Idtheft.gov
FloridaJobs.org
File a Police Report
Florida’s Imposter Claim Hotline:
Pull credit reports
Sign up for fraud alerts