Wisconsin's Push to Combat UI Fraud & Support Re-employment of Claimants Produces Results

Today, the Department of Workforce Development (DWD) presented the 2017 Unemployment Insurance (UI) Fraud Report to members of the Unemployment Insurance Advisory Council (UIAC), covering DWD’s efforts to combat fraud against the UI program in calendar year 2016 and support re-employment of UI claimants. The report shows that the rate of fraud being committed against the UI program dropped by more than a third, while Wisconsin ranked best in the Midwest and second nationally under a federal measure of UI claimant re-employment outcomes.

“Today’s report shows that our efforts to ensure that the UI program supports those who lose their employment through no fault of their own and move quickly to re-employment are working,” DWD Secretary Ray Allen said. “By instituting strong measures to prevent, detect and take action against attempts to defraud the UI system, we are supporting a strong UI Trust Fund, which helps employers who pay UI taxes and claimants who utilize the system properly. Additionally, Wisconsin ranks second nationally at re-employment outcomes for UI recipients, which is a testament to the strong work ethic of Wisconsinites, the continuing improvement of the labor market and our success in developing and connecting där skilled talent to new opportunity.”

Highlights of the 2017 UI Fraud Report include:

  • Total UI benefit payments in 2016 dropped 15.5 percent, while fraudulent payments dropped by 35.3 percent.
  • DWD’s efforts to rapidly reemploy individuals who must rely on UI benefits during a career change are helping to ensure Trust Fund solvency. According to the United States Department of Labor, Wisconsin ranked 2nd among states when measuring the rate of UI claimants who were reemployed in the quarter following a first UI payment.
  • DWD’s efforts to educate claimants and provide free, fast, secure and easy-to-use online services are paying off as non-fraud overpayments dropped by 25 percent in 2016.
  • Wisconsin’s efforts to enforce the state’s worker misclassification laws are helping to level the playing field for Wisconsin employers who participate in the UI program. Since its launch, the program has generated over $1.1 million in UI tax revenue from employers who were previously misclassifying their employees as independent contractors.

The report also highlights DWD’s efforts to modernize its online systems and provide UI claimants and employers convenient and easy-to-use online systems. Since the launch of DWD’s modernized online initial claims system in 2014, 93 percent of UI claimants who begin their initial claim online are able to complete the claim without contacting a claims specialist by phone and four out of every five UI claimants accessed DWD’s online portal at least once in 2016. DWD is moving to retire its 1990s-era automated phone system this year as online claim filing activities gain popularity.

Secretary Allen noted the decline in UI payments and growth of the Trust Fund are due in large part to the success of Wisconsin’s economy under Governor Scott Walker’s leadership. Key economic indicators include:

  • Initial UI claims ended 2016 at their lowest level since 1988. Continuing unemployment claims ended 2016 at their lowest level since 1973.
  • Wisconsin’s labor force participation rate outpaced the national rate and ranked among the best in the United States.
  • After adjusting for inflation, total private sector wages in 2015 grew 5.1%, the best growth since 2001, and average weekly wages in 2015 increased 3.6%, also the best growth since 2001.