Hawai‘i Awarded $1.25 Million to Combat UI Fraud and Identity Theft

The state Department of Labor and Industrial Relations today announced that it was awarded $1,250,000 from the US Department of Labor to combat fraud in the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs.

The US DOL provided funding to the first 28 of the states and territories to apply and will assist them with administrative expenses incurred from implementing the new identity verification requirement for the PUA program and/or assist with enhancing existing identity verification tools and procedures.

“We quickly acted to obtain this funding as our teams are battling UI fraud on all fronts as we continue to build out the many new programs implemented by Congress last year, particularly the Pandemic Unemployment Assistance (PUA) Program,” said Anne Perreira-Eustaquio, DLIR Director. “We are asking Hawaii residents to be vigilant of their credit information and help us combat the fraudsters who are unlawfully taking funds from the UI program. This is a critical issue that is plaguing labor departments across the United States involving local, state, and even international criminals at times.”  

Since the enactment of the Coronavirus Aid, Relief and Economic Security Act of 2020, state unemployment insurance programs have struggled to balance enormous workloads while simultaneously implementing and administering new programs for workers typically not eligible for benefits.

Amid these challenges, criminal organizations have tested the integrity of individual state unemployment systems, quickly exposing vulnerabilities. In recent months, state unemployment programs have detected significantly more fraudulent attacks while new schemes emerge daily.

The department has issued Form 1099-G that includes the amount of benefits paid and other information to meet federal, state, and personal income tax needs for the tax year. The DLIR has not discovered fraudulent or inaccurate 1099-Gs and notes the following:

• The FPUC program paid eligible claimants up to $10,200,
• The LWA program paid eligible claimants up to $1,800 and no ability to have taxes deducted, and
• PUA benefit amounts are not available in the UI portal. 
• Taxes for PUA claimants, combined PUA/UI claimants, and LWA eligible claimants were not withheld from any benefits received. Individuals who received benefits under these programs are responsible for the payment of any applicable Federal and State income taxes. See Hawaii Tax Information Release NO. 2020-06 (REVISED) at https://files.hawaii.gov/tax/legal/tir/tir20-06_rev.pdf for more information or consult your tax adviser. 

The DLIR encourages workers and employers to report imposter claims by immediately notifying the department by calling (808)-762-5751 or (808)-762-5752 and choosing option 4.

The department does not know how the employee’s information was obtained but they may want to file IRS Form 14039 Identity Theft Affidavit and take steps detailed by the Federal Trade Commission provided to individuals in these situations.

The FTC website can be accessed at the following address:  https://www.consumer.ftc.gov/features/feature-0014-identity-theft.  Among the suggestions found on that FTC website are to place a fraud alert and to freeze your credit by contacting the three credit bureaus listed below:

• Experian.com/help
  888-EXPERIAN (888-397-3742)
• TransUnion.com/credit-help
  888-909-8872
• Equifax.com/personal/credit-report-services
  800-685-1111