Like states all across the country, Kansas is seeing an increase in reports of unemployment claim fraud due to identify theft. Fraudulent claims are being filed using the names and personal information of people who have not lost their jobs. People are often unaware a claim has been made on their behalf until they receive a determination notice in the mail from KDOL or until their employer receives a notice to verify the employee’s status.
A review of these fraudulent claims indicates that scammers are finding personal information through incidents like credit card data breaches and then using that information to illegally attempt to collect unemployment. These fraudulent attempts are not due to a breach of the KDOL unemployment system or because of anything that you have done. Furthermore, receiving a letter of determination does not mean that benefits were paid; only that a claim was filed with your information.
Unemployment fraud is a felony. It is the willful misrepresentation of information to collect unemployment benefits. Each year, employers pay unemployment taxes which are deposited into the Unemployment Insurance Trust Fund. Unemployment benefits are paid out from this fund to workers who have lost their job through no fault of their own. Employers’ tax rates are affected when workers make claims against their account and the balance of the Trust Fund. KDOL wants to ensure unemployment benefits are not being diverted from the Trust Fund to those who are not eligible. Kansas law provides penalties to claimants and employers who commit fraud.
After submitting a Fraud Report, you will receive an e-mail confirmation. Please be assured, an e-mail confirmation ensures that KDOL will investigate your claim, suspend the fraudulent account if suspicious activity is found and refer the matter over to law enforcement for action – even if you do not hear from KDOL any further.
A fraudulent claim that is created using you or your employee’s personal information, including Social Security Number and date of birth, indicates that personal information is exposed and there is risk of further financial harm. In such cases, we recommend the following steps:
- Contact the Federal Trade Commission
- Place a fraud alert on your credit record with one of the three credit bureaus:
- Contact your financial providers (banks, credit card companies, etc.) to flag irregular transactions.
- Check your Social Security earnings statements online to make sure your reported wages are correct. You can do this with a free, personal my Social Security account
Kansas employers are required to report wages to the Department of Revenue and the Department of Labor for the purposes of withholding tax, unemployment tax, and workers compensation. If an employer intentionally classifies a worker as an independent contractor to avoid paying these taxes, there is help available now because of a new law that protects workers and taxpayers.
Misclassifying employment in Kansas harms workers, the business community and Kansas taxpayers. For more information, visit the Kansas Kansas Department of Revenue website.
Penalties: Intentional misclassification of workers is illegal and constitutes tax and insurance evasion. Employers engaging in this practice may be subject to significant penalties and fines. Kansas law outlines the employer penalties, ranging from monetary fines to criminal charges, for intentionally misclassifying workers. Penalties are determined based on the facts in each case.
There are penalties under both Unemployment and Workers Compensation laws. These penalties are further defined in the statutes below.