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03/28/2024 09:00 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=10797
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: January 11, 2013 09:15 AM
From: Representative Seth M. Grove
To: All House members
Subject: Unemployment Compensation Fraud Penalties
 
In the near future I intend to introduce legislation which would amend the state Unemployment Compensation Law to increase penalties on claimants who commit willful fraud. According to the U.S. Department of Labor’s Benefit Accuracy Measurement (BAM) program, Pennsylvania had an unemployment fraud rate of 5.22% between July 1, 2011 and June 30, 2012. This rate was nearly double the national average, considerably higher than any of our surrounding states, and resulted in over $158 million in fraudulent payments during that period. We have probably all heard stories from businesses or constituents about instances of blatant fraud occurring in our unemployment system, and I believe this BAM data indicates the severity of our problem.

My legislation amends current law to increase the number of penalty weeks that must be served by a claimant who commits fraud in order to collect benefits. Under current law, a claimant can only be disqualified (in addition to the weeks of improper payment) for a penalty period of up to two weeks. My legislation increases this penalty period to ten weeks, while also increasing monetary penalties for instances of willful fraud.

In addition, this legislation removes the current four year statute of limitations on the imposition of penalty weeks. Current law only allows the Department to impose these penalty weeks for a period of four years after the end of the benefit year in which the fraud was committed. In essence, if a person does not collect unemployment again in the next four years, it is possible that they will never be penalized for the fraud they committed.

My legislation also requires an additional 15% penalty, payable to the UC Trust Fund, on the amount of benefits collected through willful fraud and extends the aforementioned penalty period to 52 weeks for those claimants who are incarcerated and who commit willful fraud to collect benefits while in jail.

Taking into consideration the Commonwealth’s alarmingly high rate of unemployment fraud, as well as the dire financial status of our Unemployment Compensation Trust Fund, we simply cannot afford to condone this type of activity. My legislation is strongly supported by NFIB and the PA Chamber of Business and Industry.

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Introduced as HB403