Protect Your Business and Employees From Massive Unemployment Fraud in Washington State

May 15, 2020   Print PDF

By Amy Kangas Alexander and Aviva Kamm | Related Practice: Employment

Category: Covid-19

Even in pandemic times, it seems no good deed goes unpunished. Federal and state legislators have tried to ease the financial effects of COVID-19 job losses and business closures with expanded access to unemployment benefits and guaranteed a $600 weekly federal unemployment supplement. And scammers have quickly sought to capture these benefits for themselves.

man sitting in front of computer wearing headphones

Washington’s Employment Security Department (ESD) has seen a dramatic rise in fraudulent unemployment claims in the past several weeks. As a result of the widespread fraud, ESD announced on Thursday, May 14, 2020, that it would delay all unemployment payments for two days in order to validate claims. The way the scheme works is that bad actors use stolen personal data to apply for unemployment benefits, and route benefits payments to their own bank account. Employers receive letters from ESD indicating that a current, or even a longtime former, employee has applied for unemployment benefits. That worker does not get confirmation of any application by mail, and does not receive any benefits. The benefits are paid to the fraudster’s bank account.

Signs your business or employees may be targets or victims of fraud:

    • Employees receive phishing scams asking for Form W-2s to be sent to them. For example, phishers will pose as an Executive, Payroll, or Accounting department employee pretending that they simply can’t access the information because their remote access is temporarily disconnected.
    • Workers typically will not receive notices about their claim status from ESD, but may receive mail about other ESD programs. This non-claims-related mail can be a tip-off that a fraudulent claim has been filed in your name.
    • You receive multiple claims in the same day or week for employees who have not worked for the business for a long time, or for current employees.

How can an employer catch or stop unemployment benefits fraud?

What should employees to do protect themselves from unemployment benefits fraud?

Even if your business has not received any bad claims yet, employers can encourage employees to take steps to protect themselves:

Our firm’s Employment Group can help you write messages to your employees to protect against fraud, to respond to fraud if it happens to you, and to develop a plan if your business has experienced a breach that includes employees’ personal information.