New penalties for unemployment fraud

New rules will take effect on Oct. 21 that require the state to impose fines on fraudsters and raise taxes on employers who are consistently uncooperative in helping determine if benefit claims are legitimate.

State officials said the penalties will be one more deterrent against improper payments, which have been declining.

"Ohio wants to send a clear message to claimants who are considering fraud: Don't do it," said Michael Colbert, director of the Ohio Department of Job and Family Services, in a prepared statement. "We have state-of-the-art fraud detection tools, and we will catch you."

Ohio legislators passed a law in June that imposes new financial penalties on people and businesses responsible for inappropriate payments through the unemployment compensation system. The new law was passed to comply with a federal standard.

Recipients of fraudulent payments already must repay they money they received and they also become ineligible to receive benefits for some period of time. Some fraudsters are brought up on criminal charges.

But starting later this month, Ohioans who fraudulently receive unemployment compensation will be fined 25 percent of the total amount they wrongfully collected,

The state will also start punishing employers who repeatedly do not provide information about their workers that is necessary to determine eligibility for unemployment benefits, said Benjamin Johnson, spokesman for the Department of Job and Family Services. Neglectful employers can face higher taxes.

"We need a quick response from employers to accurately determine eligibility," Johnson said. "For example, you may come to us and say you were laid off, when in truth you were fired for cause -- but if your employer does not respond to our request for information, we never know that."

A common type of fraud involves workers attempting to collect benefits while they are working or after they return to work, the state said. Sometimes, people lie about the reason they were terminated. Workers are not eligible for benefits if they were fired for cause.

State officials said the new penalties hopefully will help reduce Ohio's overpayment rate, which has already been declining, falling to 3.8 percent in 2012 from 4.4 percent in 2011.

"We work very hard to keep overpayments to a minimum, and both of these changes will help us do that," Johnson said.

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