States across the nation have seen a significant surge in unemployment benefit fraud, largely associated with identity theft. There has not been a breach of information stored by the Arizona Department of Economic Security (DES), however, criminals are obtaining individuals’ personal information using phishing scams, previous corporate data breaches, and other tactics and using this stolen information to file for Unemployment Insurance (UI) and Pandemic Unemployment Assistance (PUA) benefits.
UI Fraud Toolkit for Employers
Employers Who Suspect UI Fraud
When any claimant files an initial application for Unemployment Insurance, their previous employer(s) are sent a “Notice to Employer” form (UB-110). In the event a criminal fraudulently applies for UI, a “Notice to Employer” form will still be issued to the employer(s) while the claim is being processed.
- If you have received a “Notice to Employer” form (UB-110) regarding unemployment benefits for a current employee or an employee who has never worked for your company, you are advised to complete the form. If the claimant still works for you full time, check the box for “Still Working Full-time.” If the claimant never worked for you, check the box stating “My records show that the claimant never worked for this firm.”, Then, sign the notice on the bottom of the back page, and return it to DES.
- Additionally, employers should report the suspected fraud using the fraud reporting tool.
Employees Who Suspect UI Fraud
If a current employee receives a Wage Statement, Certificate of Understanding, or Electronic Payment Card for benefits they did not apply for, they may have been a victim of identity theft.
1099s Received Erroneously
If a current employee receives a 1099 for UI or PUA benefits they did not receive, they should use the online 1099 Affidavit at des.az.gov/1099G to report that they:
- Received a 1099 in their name but did not apply for unemployment benefits, or
- Received a 1099 at their address in the name of someone who does not live there.
Individuals who suspect they are victims of identity theft should also monitor their credit report for any other fraudulent activity that may come as a result of identity theft. Learn more.
DES UI Fraud Prevention and Program Integrity
Criminals have infiltrated unemployment systems across the nation and DES staff has taken swift action to protect taxpayer funds and the integrity of our systems by combating fraud while ensuring eligible claimants receive critical assistance. Learn more.
Contact DES
To speak to a DES Unemployment Tax Advocate about UI fraud concerns within your company, please contact us at (602) 542-5954 or by email at UITAdvocate@azdes.gov.
Source: AZ Unemployment Insurance Outreach Newsletter dated February 26, 2021