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What Employers Need to Know about Preventing Unemployment Fraud

What Employers Need to Know about Preventing Unemployment Fraud

A specific form of unemployment fraud has been on the rise during the pandemic. This form of unemployment fraud occurs when scammers collect unemployment benefits to which they aren’t entitled by stealing someone else’s identity. Because many more individuals than usual have filed for unemployment benefits during the pandemic, scammers have had more opportunities to commit fraud.

To guard against identity theft at work, it’s smart to familiarize ourselves with the signs of unemployment fraud scams. At the same time, employers can also take steps to protect themselves and their workers. If you’re an employer, it’s especially important to keep the following tips in mind as the pandemic’s economic effects continue.

1. Look out for Basic Warning Signs

Typically, when someone files for unemployment benefits, the relevant state agency will alert their most recent employer. Pay attention to red flags when you receive such alerts.

Naturally, if you receive an alert that someone who’s still working for you has filed for unemployment, you should take action right away. Don’t immediately assume the employee in question was attempting to commit fraud by filing for unemployment—given recent trends, there’s a strong possibility someone else is trying to steal your worker’s identity.

However, that’s not the only sign of a scam. You might also receive an alert that a former employee who hasn’t worked for your company for several years has filed for unemployment. This could also mean their identity has been stolen.

2. Be Proactive

You should know which state agencies will contact you when workers file unemployment claims. You also need to report new hires proactively to said agencies sooner rather than later. When doing so, all information you provide must be accurate. This will help later if it’s necessary to compare data when suspicious unemployment claims are filed.

3. Optimize Cybersecurity

It’s always a good idea for business owners to audit their cybersecurity measures and make improvements when necessary. Security breaches can threaten a company’s finances, intellectual property, brand reputation, and more.

A security breach could also give scammers access to sensitive employee information, which they can then use to steal identities. Strong cybersecurity practices will minimize the risk of this happening.

4. Teach Employees

Don’t make the mistake of assuming your workers understand that unemployment fraud is on the rise. Many of the pandemic’s other impacts have received substantially more news coverage. There’s a good chance many of your employees are only vaguely aware that unemployment fraud has become more common in recent months.

Coordinate with experts to organize a mandatory company-wide training session designed to teach your employees about unemployment fraud. Your main goal is to ensure they know what they can do on their own to prevent it.

5. Institute New Communication Policies

There are several ways scammers attempt to steal identities. Often, they engage in phishing scams. These typically involve sending e-mails where they masquerade as a representative of a trusted company or institution. For example, a scammer might send an e-mail designed to appear as though it’s an alert from a government agency, asking recipients to click on a link and provide certain valuable information. If the recipient believes the e-mail is legitimate, they may unintentionally be providing a scammer with information that can facilitate unemployment fraud.

While that’s one example of traditional phishing, scammers are adopting new strategies as would-be victims grow more and more familiar with these tactics. Now, some are sending e-mails to targets pretending to be their coworkers. Others may send messages via messaging apps that workers use to coordinate with each other remotely. They might even pretend to be a supervisor requesting login info that would give them access to files containing identifying information. When you receive these types of requests, experts recommend directly contacting the sender another way to confirm it. 

Employers can take this a step further by adjusting their policies accordingly. For example, you could require employees to place a phone call in advance before e-mailing or messaging another worker for sensitive information, letting the recipient know the messages they will receive will be legitimate. You can also review who has access to sensitive information. It may be wise to enforce additional limits, such as allowing only a few high-level workers to have certain access permissions.

Employers can do their part to curb unemployment fraud not only during the pandemic but at all times. If you suspect unemployment fraud has been committed, contact the relevant agencies in your state immediately.