Stop Unemployment Fraud Act

Key Points

• Anyone applying for unemployment benefits would need to prove their identity with a government-issued ID plus a second document like a utility bill, lease, or voter registration card. States can no longer rely on self-attestation alone to determine if someone is eligible.
• States must cross-check unemployment claims against databases of newly hired workers, incarcerated individuals, and deceased individuals to catch fraudulent payments before they go out the door.
• The bill ends the 'pay and chase' model where states paid benefits first and recovered overpayments later. Instead, states must confirm a person's eligibility—including identity verification—before sending any money.
• People collecting unemployment must keep a weekly log of their job search—including employers contacted, method of contact, and dates—and submit it to their state agency, which must verify the records.
• States that recover fraudulent overpayments can keep up to 5% of the money to invest in fraud prevention, technology upgrades, and improving administration of their unemployment programs.
• The Department of Labor gains new enforcement power: it can withhold 5% of a state's unemployment administration funding if a state fails to comply with the new identity verification and payment rules, after providing notice and a hearing.