House Votes to Increase Unemployment Fraud Penalties

By Melissa Daniels | PA Independent

HARRISBURG — Pennsylvania is on its way to cracking down on unemployment fraud.

The House of Representatives unanimously passed a proposal to increase penalties for unemployment fraud. Right now, the state temporarily bans collection for two weeks for those who willfully receive improper payments.

House Bill 403 will increase the penalty from two to 10 weeks, and increase monetary penalties from a $100 to $1,000 range, to a $500 to $1,500 range.

The bill will also erase the statue of limitations for imposing the penalty.

Rep. Seth Grove, R-York, sponsored the bill.

“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,” he wrote to fellow lawmakers in a co-sponsorship memo earlier this year.

In fiscal year 2011-2012, the state made $158 million in fraudulent payments, according to Grove. That’s a rate of 5.2 percent, or nearly twice the national average for instances of improper payments.

Overall, the state made $690 million in unemployment compensation overpayments, according to federal records. That figure includes fraud, clerical errors and other improper payments.

The bill also addresses the issue of prison inmates collecting unemployment. Grove’s bill adds an extra 15 percent penalty and extends the penalty period to a year.

The House also passed an amendment from Rep. Todd Stephens, R-Montgomery putting into law a new practice in the Department of Labor and Industry that cross-checks county inmate records with the state’s unemployment compensation database.

The agency had a similar process for inmates in state prison, but did not begin checking county inmates until January of this year. The state estimates it will save $6 million per every 1,000 claimants identified.

“I appreciate that the administration has taken action, but we must make sure such cross-checking is the law,” Stephens said in a press release.  “There is no excuse for any inmate to receive such benefits.  The taxpayers deserve better.”

Contact Melissa Daniels at melissa@paindependent.com