Checks and balances on unemployment benefits will remain in place, Labor Department says

RALEIGH, N.C. (WTVD) -- Recent guidance from the US Department of Labor aims to crack down on unemployment insurance fraud.

In a press release, the Labor Department wrote, "(We) issued targeted guidance and reminders that provide states with details regarding required integrity functions for their regular unemployment compensation programs, as well as those authorized by Pandemic Unemployment Assistance, Federal Pandemic Unemployment Compensation and Pandemic Emergency Unemployment Compensation of the Coronavirus Aid, Relief and Economic Security (CARES) Act."

The move comes amid several states' wish to remove weekly employment certifications and other checks and balances.

Raleigh attorney Charles "Chuck" Monteith spent over 20 years of his career working for North Carolina's Division of Employment Security (DES). Much of his time was spent handling unemployment insurance fraud hearings at the agency. He now works in private practice.

Monteith told ABC11 that North Carolina is not one of the state's looking to do away with certifications.

"I don't think North Carolina is a hotbed currently for unemployment fraud," Monteith said.

The US Department of Labor agrees. It said it was unaware of any fraud cases out of North Carolina related to COVID-19.

Monteith said the state agencies that facilitate unemployment insurance receive a large amount of federal funding to operate. If states do not adhere to federal guidelines, funding could cease and deal a major blow to unemployed residents.

"If they (Department of Labor) find that you're out of compliance for federal law in administering the unemployment program, they can reduce the amount of funding you receive. And no state wants to have a decrease in funding," Monteith added.

The press release states $26 million dollars will be used by the Labor Department's Office of Inspector General to conduct audits, investigations, and other activities to ensure state's are following federal guidelines and abiding by the terms set forth in the CARES Act.

Additionally, Monteith said DES runs social security "cross matches" throughout the year to determine if payees are honest with wages they may be earning while receiving unemployment benefits.

Employers, by law, are required to submit your earnings to the state. If DES finds a beneficiary of unemployment insurance received income that they did not report, that person could be committing unemployment fraud and face civil penalties.
Monteith said DES will send a written notice to the individual, alerting them of the investigation.

"If you've truly committed fraud the best thing you can do is pay the money back right away," Monteith said. "They have the right to prosecute you in state court for each week that you received benefits fraudulently. But my experience has been they care more about getting the money back than they do taking someone to court and charging them with a misdemeanor or felony depending on the amount of benefits received."

However, some North Carolinians do make mistakes.

"if you're just confused and you get mixed up and give the wrong answer...to me that's not fraud. You have to do it knowing that it's wrong. Knowing and doing it so you receive unemployment benefits," Monteith said.

SEE ALSO: Gov. Roy Cooper responds to frustrations as nearly 1 million North Carolinians file for unemployment

Given the "baby stages" Monteith said DES is currently in with pandemic unemployment filings, it will be quite some time before any unemployment insurance fraud would be suspected. Right now, Monteith believes it's too early, based on his experience.

"It's always well after the fact that they catch it. It might be 6 months out. It's not the type of thing that you can instantaneously detect," Monteith said. "I'm sure at some point people will figure out ways to get around the system."

SEE ALSO: 33 million have sought US unemployment aid since coronavirus hit
Copyright © 2020 WTVD-TV. All Rights Reserved.