unemployment fraudThe COVID-19 pandemic brought with it a range of upheaval, from work-from-home orders, to layoffs and/or cut hours, unemployment claims — and the inevitable unemployment fraud. And as companies everywhere continue working their way back to business as usual, the Texas Workforce Commission notes that unemployment fraud remains an issue across the Lone Star State.

Such fraud is more than a moral dilemma. It’s a crime that can have lasting impacts not just on the individual targeted, but on the company they work for, as well. The good news is, a bit of vigilance — and proper steps taken when something feels “off” — can stop such scams in their tracks. Read on for easy, actionable tips aimed at protecting your people and business against unemployment fraud.


How Does Unemployment Fraud Work?
There are two main approaches to unemployment fraud:

  • Phishing Scams involve fraudsters sending out emails or other electronic communication with the intent of capturing personal information such as a person’s date of birth, Social Security number or passwords. Once they have access to such information, they can do virtually whatever they please — including filing for fraudulent unemployment or redirecting legitimate unemployment payments to their own accounts.
  • Fraudulent Unemployment Claims involve a scammer accessing an individual’s personal data — oftentimes by accessing government, retail, financial or organization databases — and using that information to illegally apply for unemployment benefits.

What Should Employers Look Out for?
Because unemployment benefits will go through the employer in some way, shape or form, companies play a crucial role in spotting and stopping unemployment fraud. Here are a few red flags to watch out for — and what to do when you spot them:

  • You Receive Official Notice that a Current Employee is Filing for Unemployment: Unless your employee works part-time and meets specific criteria, current team members should not be eligible for unemployment. This means they are likely being targeted for fraud.
  • An Employee Has Received Information for an Unemployment Claim They Didn’t File: The unemployment insurance process involves inputting data such as one’s Social Security number, birthdate and employer information into a state-run system. As such, it is highly unlikely that the Texas Workforce Commission would send such information to someone whose information was not directly submitted. This is a tell-tale sign that your team member’s information was accessed in some way.
  • You Receive Notice that Someone Who Never Worked for You is Filing for Unemployment: Your company will never be asked to make unemployment payments for someone who did not work for you. In all likelihood, you are being targeted as part of an individual’s unemployment fraud scheme.

What to Do: In all instances, you should respond to the agency with details of the situation — either that the individual still works for you, or that they never did. Then, immediately report the potential fraud online. From there, the Texas Workforce Commission will take steps to lock the application, evaluate the situation and proceed as necessary.


How Can Employers Do Their Part?
As they say, the best defense is a good offense. Educating your team members in the ways of protecting their online data, spotting warning signs such as questionable links and phishing attempts — and in what to do if they believe their data has been breached — is the best way to approach such fraud. Our Unemployment Scams Overview Sheet offers a wealth of information you can cover at your next team meeting — or even download and distribute via email.

Going up against such high-tech scams can feel like a losing battle, but rest assured you have solid support in your corner. If you have questions on any of the above, or if you’re interested in learning more about risk management and business insurance options to keep your company protected, feel free to contact BCH. Our risk advisors are here, and they’re glad to help.