Unemployment insurance fraudsters return to Kansas in renewed quest for quick cash

TOPEKA — The Kansas Department of Labor said Thursday the state has seen a resurgence in recent weeks in fraudulent attempts to rip off the Unemployment Insurance Trust Fund.

Peter Brady, deputy secretary of the Labor Department, told a joint hearing of the House and Senate Commerce Committees of an increase in suspicious initial claims for benefits ranging from 1,000 to 1,500 per week. That doesn’t compare to the tens of thousands of bribery attempts made early in the pandemic, resulting in an estimated Kansas loss of $700 million in state and federal unemployment benefits to domestic and international scammers.

“The scale is considerably lower, but that’s also an indication that we need to remain vigilant,” Brady said.

He said the installation of sophisticated layers of security had diminished the ability of criminals to tap into the state’s unemployed trust fund. This stopped millions of bot attacks from Africa, Asia, Eastern Europe as well as the United States on the state’s unemployment insurance computer system, it said. -he declares.

In addition, Brady said, renewing the one-week waiting period on unemployment claims gave the Labor Department more time to assess initial claims for potential deception. At the start of the pandemic, the one-week deadline was suspended in an attempt to speed up financial assistance for unemployed people.

Since March 2020, the state Department of Labor has paid out $3.3 billion in regular and supplementary unemployment benefits on 5.2 million weekly claims.

Labor Secretary Amber Shultz told senators and representatives that a lot has changed within the agency and in the economy over the past 22 months to help the state meet the challenges. She said the agency would be better able to tackle an unemployment rate that hit 12% at the start of the pandemic and left 187,000 people out of work at the start of 2020. The US Bureau of Labor Statistics says that Kansas’ unemployment rate fell to 3.3% in December with 50,000 people on the job market.

“I’m not going to sugarcoat – 2021 has been a very, very tough year,” she said. “We’re in a much better place, but we still have a ways to go.”

Rep. Ken Rahjes, a Republican from Agra, said he was grateful to two senior officials for appearing before the committee and addressing shortcomings in the state’s work to transfer unemployment benefits to the Kansans. The work should not be political, he said, because “we have to be a team. The key word is trust. »

Members of the House and Senate Commerce Committee met to gather information about the Kansas Department of Labor’s work to improve the delivery of unemployment benefits in an accurate and timely manner. (Screenshot/Kansas Reflector)

The state’s unemployment trust fund held $671 million at the end of 2021, but that amount would be insufficient to meet the demand for benefits for a year assuming the state falls into a major recession or the pandemic. intensifies. The US Department of Labor’s solvency measure examines three years of extremely high payments by a state, which in Kansas would be 2009 and 2010 during the so-called Great Recession and 2021 amid the COVID-19 pandemic.

Rep. Shawn Tarwater, a Stilwell Republican and chairman of the House Commerce, Labor and Economic Development Committee, said he was angered by the Department of Labor’s process for soliciting bidders for the city’s IT modernization program. the agency. The Republican-led legislature set up a special board to oversee the agency’s work on the contract. The bidders were Accenture of Chicago, FAST Enterprises of Colorado, Sagitec of Minnesota and Tata Consultancy Services of New Jersey.

Tarwater said lawmakers advised the Labor Department to avoid “several companies” and sought to expand the window for bidders to respond to the request for proposals. Negotiations are ongoing at the Labor Department with the successful bidder, but no announcement has been made.

“The RFP was written quite narrowly and appeared to be written for a specific company,” Tarwater said. “I think this company will get this deal.”

Rep. Stephanie Clayton, D-Overland Park, said she was concerned that the Legislative Assembly’s ban on statements about how the agency should evaluate bidders could lead to litigation by a company not selected for the bid. at the IT level at the Ministry of Labour.

Tarwater also said he was disappointed that the Department of Labor did not release an application form by Jan. 1 for people to file complaints about being fired for refusing the company’s warrant to do so. vaccinate against COVID-19 for religious or medical reasons. So far, he said, about 160 cases have been filed with the Labor Department. The agency has 60 days to process complaints before turning the cases over to the attorney general’s office.

“We have 160 unemployed Kansans who shouldn’t be and we’re sitting on our hands,” Tarwater said.

Shultz, the state labor secretary, said the process of assessing complaints from people who work for national corporations, the federal government and health care organizations is time-consuming but may not require the 60 full days. She said some of the complaints were invalid because they were filed by self-employed workers not covered by state law.

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