US tells states to deal with unemployment fraud or face penalties

AP ^ | 06/17/2026 | GEOFF MULVIHILL

[DFG]

The U.S. Labor Department told all 50 states on Wednesday that they need to get serious about fighting fraud and waste in unemployment insurance, or else they won’t get more money for those programs from the federal government.

It’s the latest example of President Donald Trump ’s administration scrutinizing potential theft or misuse in state programs that get funding from Washington. While the letters went to all governors, the public announcement about them focused on issues in three states where Democrats are in charge. That’s been the case for many similar announcements from the Republican administration.

“We are officially putting governors on notice,” Acting Labor Secretary Keith Sonderling said in a statement Wednesday. “The American people will no longer tolerate the blatant waste, fraud, and abuse of their hard-earned tax dollars — no state should allow it either. If states allow it, they will suffer the consequences.”

Labor Department offers few details The Labor Department said Wednesday that poor oversight, outdated technology, weak identity verification and lax controls have “allowed unprecedented fraud to flourish.”

In its announcement, it cited problems in California, Illinois and New York — three states where Democrats are in control.

Government audits of a sample of cases from last year suggested that nearly $1 in $9 in the programs was an overpayment — and that most of those were for reasons other than fraud. They varied by state, but many involved work-search requirements or eligibility disputes after someone left a job.

There also doesn’t appear to be a strong connection between which party governs a state and how much overpayment or fraud there is.

California Gov. Gavin Newsom ’s office blasted the move and criticized “lax regulations and rushed distribution” of unemployment benefits by the first Trump administration during the COVID-19 pandemic.

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TOPICS: Crime/Corruption
KEYWORDS: crime; fraud; keithsonderling; labor; theft; unemployment

[bort]

“There also doesn’t appear to be a strong connection between which party governs a state and how much overpayment or fraud there is.

LOL!!!!!!!!!!!!!!!

[Mashood]

Lets talk “jail time!”.

[buckalfa]

Well duh, needs done, and Trump I hope has the balls to do so. Yet in the absence of specific language in enabling legislation to do so, the threat is merely symbolic.

[Dr. Sivana]

I was laid off in April. It took a month to get the insane ID.ME platform to accept me, largely because it could not recognize an address like “W Main St” vs. “West Main Street” (both official USPS abbreviations)

It now takes 45 minutes to file every week, including the requirement of the address of the recruiter/employer (how many web based recruiters make the address easily available?).

They allow themselves three weeks for processing, but only 48 hours for you to provide yet more documentation (in my case the severance pay, which I have reported but did not give them the actual letter). This all presumes you have a good scanner or are good with a phone camera and can process everything. The actual offices are not available for these purposes, and you cannot get to a human who will do anything.

It is now more than four weeks, and my claim ($320/week, on the low end) is still “pending”.

It is hard enough in AZ, thank you.

[mewzilla]

Looks like most, if not all states, have stopped using humans in offices to assist people with unemployment claims.

Have you called your county/state representatives?

They might be able to sort out the issue for you.

[Dr. Sivana]

It finally got approved today! Now I have to find a new job. A lot of employers are low-balling IT.