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House Bill introduced to help Kansas employers with fraud unemployment claims

Published: Feb. 4, 2021 at 7:28 PM CST
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TOPEKA, Kan. (WIBW) - The Kansas Chamber was among those testifying before the House Appropriations Committee to help employers dealing with fraudulent claims.

House Bill 2195 was introduced to the committee Thursday morning in hopes of helping businesses, non-profits and other organizations in the state being harmed by unemployment benefit payouts to fraudulent accounts.

The Kansas Chamber believes their information shows anywhere from $300 to $600 million in claims payments were basically paid to criminals through the fraudulent unemployment claims from the start of the COVID-19 pandemic.

They support a bill that prevents businesses, non-profits and other organizations from being liable for fraudulent benefits paid to fraudulent accounts from March 15, 2020 through Dec. 31, 2021.

The chamber’s Vice President of Government Affairs Eric Stafford said the state’s unemployment trust fund has paid out more than a billion dollars in unemployment claims during the pandemic.

“I think the level of fraud that we’ve seen in the last few months in Kansas is unprecedented,” he said. “The unemployment trust fund had $1.2 billion from employer taxes that’s stored aside for benefits for individuals who lose their job by no fault of their own and now we’re roughly 125-150 million dollars,”

The bill also provides that employers would not face increased unemployment taxes due to unemployment fraud over the next few years.

Stafford said, “We’re looking for the solution for the business community, protections for the employee community. I just think there’s a lot of uncertainty out there on how this got to the level that it did and how do we move forward.”

13 News received a 32-page document of testimonies from organizations all across Kansas asking for help from fraudulent claims.

Presbyterian Manor of Mid-America, a nonprofit, said the amount for 51 fraudulent claims they’ve had comes out to more than $55,000. Sharpline Converting Inc. said since mid-summer they have had 88 claims and had $31,000 worth of bad claims in one week. City of Andover said nearly half of their employees has had a fraudulent claim made in their name with the potential charges added up to more than a $1.5 million. City of Manhattan said about 50% of the 320 claims they received were fraudulent including 160 plus full-time employees. The potential charge comes out to more than $13,000 for each employee.

(R) Susan Estes, State Representative for District 87, said it’s important to get this handled and have employers taken care of.

“At every turn and every supposedly improvement, they are met with increased frustration and they are desperate. They’re losing their houses, they’re losing their cars and we need to help them,” she said.

Stafford added the chamber is thankful the Kansas Department of Labor shutdown its website to upgrade the system, but it may be too little too late.

KDOL said as of 10:30 a.m. Thursday morning, the new system stopped more than 744,000 fraudulent login attempts.

If the bill passes, it will be effective July 1, 2021.

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