The House of Delegates passed a bill in response to millions of dollars of unemployment fraud identified during the covid-19 pandemic.
That fraud occurred nationwide and was attributed to crime organizations that were using stolen identity information to apply for benefits.
Delegates passed the bill on a 92-2 vote. It goes back to the state Senate, which has already voted in favor of the bill.
Senate Bill 543 authorizes the state’s unemployment commissioner to hire supervisory, legal and investigative workers to spearhead inquiries when the unit has reasonable cause to believe fraud has occurred.
The unit of Workforce West Virginia also would be authorized to share information with other federal, state or local enforcement agencies and make criminal referrals to prosecutors. A significant aspect of the policy would be the power to subpoena.
Workforce West Virginia already has employees who perform these investigative duties, but this legislation would make that formal.
Delegate Kayla Young asked House Judiciary Chairman Moore Capito about that today.
“Are we not already doing all this? I mean, doesn’t Workforce already investigate fraud?” asked Young, D-Kanawha.
Capito explained, “Workforce does investigate fraud. I think the purpose of this is to specifically itemize or designate or allow Workforce West Virginia to designate a unit specifically tasked to do this.”
Young spoke in favor of the legislation. “I think this is a good bill. I think we’re mostly doing all this, and it just kind of puts it into a nice package. So I think that’s good. I would hope that in coming years we can fund Workforce West Virginia a little bit more so they can tackle some of this fraud.”
Passage of this bill follows a legislative audit calculating that West Virginia paid out nearly $83 million in fraudulent unemployment claims during the covid-19 pandemic.
The issue arose, in West Virginia and elsewhere, when state agencies across the country were hit by widespread fraud after the pandemic hit in early 2020, causing government orders to halt or slow business activity. Unemployment skyrocketed, with thousands of claims causing strain on the government agencies administering them.
West Virginia’s audit noted that the total number of claims processed by Workforce increased from 52,896 in 2019, the year prior to the pandemic, to 457,399 in 2020.
Workforce’s process was not designed for the onslaught of claims — or for a structure that allowed people to certify their own pandemic unemployment claims.
Soon after the state agency implemented the Pandemic Unemployment Assistance program, it began to identify a high level of fraud as insurance claims were being paid.
The U.S. labor department has said much of the fraud is attributed to organized crime rings that bought identity information stolen in past data breaches. The stolen data is then used to apply for benefits in others’ names.
Once the trend of widespread fraud became clear, Workforce implemented a fraud unit, a cross-match unit and an investigations unit in addition to developing partnerships with various state agencies to cross-match data and to identify bad actors.
The legislative audit noted that Workforce also could have partnered with other state agencies — such as the state Auditor’s Office — to run checks on whether claims filed in the names of state employees were accurate or the Division of Corrections to determine if claims were filed for incarcerated people.