NOTE: This information is specifically for Unemployment Insurance (UI) fraud. Learn about and report Identity fraud here on this KCC webpage.
Report Unemployment Insurance (UI) Fraud
If you know of anyone collecting unemployment insurance benefits while working, while unable to work or when he or she is not eligible to receive these benefits, please visit this webpage and report them using the Anonymous Tip option.
Examples of UI Claimant Fraud
- Returning to work, but continuing to collect UI benefits without reporting your work wages.
- Not reporting wages during the week that the work was performed.
- Working a temporary or part-time job but not reporting your work and wages.
- Withholding information or providing false information to OUI
- Help others claim benefits that they are not entitled to;
- Withholding information from OUI;
- Reporting inaccurate hours and earnings;
- Collecting benefits based on false or inaccurate information that you provided;
- Claiming benefits while unable or available for work;
- Claiming benefits without looking for work;
- Claiming benefits under the identity of someone else.
Claimants can lower their risk of committing fraud by following these guidelines:
Accurately reporting the reason you are unemployed.Accurately report your reason for separation from your job when you initially file your claim for benefits. After a claim is filed, the separating/most recent employer is sent a Notice of Claim Filing and Request for Separation Information.
Report any wages you have earnedYou must report your gross wages (earnings before taxes and other deductions) for each week you work and claim unemployment benefits, even if you have not actually been paid for the work. This includes part-time or temporary work. OUI utilizes a quarterly wage cross-match system. The cross-match compares benefits paid to wages reported by employers under the same social security number during the same quarter.
Report when you are not able or available to seek or accept workYou must be physically able and available to perform some type of work (even if it is not your regular field of work). Notify OUI if you are not ready, willing, and able to work (e.g., out of the area, on vacation, sick, suffering total disability) while collecting UI benefits. This is self-reported during your weekly certification.
Avoid errors and ensure proper payment of benefitsTo prevent errors that may result in an overpayment, read all of the information in the Rights and Responsibility booklet
Stop claiming unemployment benefits as soon as you begin workingAs soon as you begin working, simply stop filing a weekly claim. Do not wait until you receive your first paycheck.
Actively search for workClaimants are required to conduct an active search for work for each week they claim UI benefits, unless they are exempt. The Kentucky General Assembly enacted changes to the state’s unemployment insurance program during the 2022 regular session through House Bill 4 after overriding Governor Beshear’s veto of the bill. Visit this page on the KCC website to learn about new work search requirements and more than began Jan. 1, 2023.
Know your responsibilities and ask for help
Navigating through the UI system can be confusing. Do not risk losing your benefits because you do not know your rights and responsibilities. If you have a question, UI customer service representatives can help. Contact the UI Call Center at (502) 564-2900. Call center hours have been extended to provide additional help for claimants. To reach the call center, dial (502) 564-2900 between 8 a.m. and 8 p.m. EST Monday through Friday.
Examples of Employer Fraud
- Helping another person file a false claim;
- Paying employees secretly, off the record, or not properly reporting their wages to DEW;
- Not reporting when you hire new employees;
- Reporting incorrect start dates for employees
- Misclassifying workers as independent contractors to avoid paying UI contributions;
- Failing to report, or inaccurately reporting employee wages;
- Paying employees secretly, or off-the-books or under-the-table;
- Shifting workers between employer payrolls to use a lower UI contribution rate;
- Providing false information to prevent a claimant from getting benefits;
- Failing to pay UI taxes;
- Failing to file reports;
Employers can prevent fraud and help strengthen the integrity of the UI program by taking the following actions:
Proper Classification of WorkersFor the purpose of unemployment insurance, an employer must classify its workers as either employees or independent contractors. Employers are required to pay unemployment tax on employees' earnings but not on independent contractors. In the event a worker is misclassified as an independent contractor, taxes will not have been paid and the worker's wages will not have been reported. A wage and liability investigation of the employer would be initiated by OUI to determine proper classification. If misclassification is determined, the employer may be liable for payment of all back taxes, with interest and penalties.
Review Quarterly Statements of Benefit ChargesAt the end of each quarter, most employers receive a copy of all UI benefits charged against their account for that quarter. Please review all benefit charges carefully. Benefit charges will affect your unemployment tax rate at a later date. If you disagree with any of the benefit charges or find any errors, you must protest the charges within 30 days of the date the notice is mailed. You may submit your protest online using Kentucky's Unemployment Insurance Self-Service website located here.
Respond to Notice of Claim Filing and Request for Separation InformationWhen a former employee files for UI benefits, you have the opportunity to supply information to OUI regarding the reason the individual is now unemployed. You must respond to the department within 10 calendar days of receiving the notification in order to prevent a former employee from wrongfully receiving UI benefits.
Provide accurate wage informationProviding OUI with accurate wage information for your workers ensures that individuals are paid the correct amount of UI benefits.
Refrain from engaging in tax manipulation schemes.
Under the experience rating system, employers pay unemployment taxes at rates proportionate with claims activities by their employees. Employers with high unemployment activity pay higher unemployment tax rates, and employers with lower activity pay less. Employers who engage in SUTA Dumping or other tax manipulation schemes to avoid paying their fair share unfairly shift their costs to other employers.