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Labor Department Directs States to Address Unemployment Fraud or Face Funding Cuts
The U.S. Department of Labor notified governors Wednesday that states must take immediate steps to reduce fraud, waste and abuse in unemployment insurance programs. States that fail to comply could lose administrative funding. The directive is part of a broader administration effort targeting misuse of federally funded state programs.
The IndependentAudio version
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U.S. Department of Labor notified all state governors Wednesday that they must take immediate steps to combat fraud, waste and abuse in unemployment insurance programs or risk losing administrative funds. The letters cited problems in California, Illinois and New York.
Acting Labor Secretary Keith Sonderling said the administration is putting governors on notice that the public will no longer tolerate misuse of tax dollars in these programs.
A Government Accountability Office review found fraud accounted for 11 to 15 percent of unemployment insurance payments made between April 2020 and May 2023. The period covered eased eligibility rules during the public health emergency. The Labor Department said states will receive additional directives in coming weeks.
It also noted that Vice President JD Vance is overseeing an anti-fraud task force examining social programs. California Gov. Gavin Newsom’s office said the state outperforms others in addressing fraud and blamed earlier distribution problems on the first Trump term.
Other federal agencies have taken similar steps. The Department of Health and Human Services attempted to withhold funds from five Democratic-led states for child care programs but faced a court challenge. The Department of Agriculture has warned states that fail to provide participant data on immigration status for the Supplemental Nutrition Assistance Program.
