US tells states to deal with unemployment fraud or face penalties
The department said states could lose administrative funds as federal officials cite weak oversight, outdated systems and up to $135 billion in pandemic-era fraud.
- On Wednesday, Acting Labor Secretary Keith Sonderling sent letters to 53 U.S. states and territories demanding immediate action to combat unemployment insurance fraud, threatening to withhold administrative funds for the first time in history.
- Vice President JD Vance's anti-fraud task force is overseeing the initiative, which follows Government Accountability Office estimates that fraud accounted for 11% to 15% of unemployment insurance payouts from April 2020 through May 2023.
- The Labor Department cited poor oversight, outdated technology, and weak identity verification in California, Illinois, and New York as systemic failures allowing unprecedented fraud to flourish in these three states.
- California Gov. Gavin Newsom's office criticized the move, with spokesperson Marissa Saldivar blaming "lax regulations and rushed distribution" of benefits by the first Trump administration during the COVID-19 pandemic.
- The Labor Department will issue further directives in coming weeks as the administration expands enforcement tactics previously used by the Department of Agriculture and the Department of Health and Human Services against state programs.
76 Articles
76 Articles
Department of Labor Says It Wants Immediate Action From Governors on Unemployment Fraud
The Department of Labor issued a demand to governors to tackle unemployment insurance fraud or face penalties, the agency said on June 17. All 50 states and three U.S. territories must immediately deal with any misuse of funds in the unemployment program because lax oversight, outdated systems, identity verification problems, and other issues have “allowed unprecedented fraud to flourish,” the department said in a statement. The move is another …
NEW: Acting Labor Secretary Exposes $135B Fraud, Threatens State Funding Cuts
In a recent podcast interview, Keith Sonderling, the Acting Labor Secretary from the Trump Administration, shed light on a substantial issue plaguing unemployment insurance: fraud. Revealing astonishing figures, he asserted that the administration has uncovered tens of billions of dollars in fraudulent activity, emphasizing a commitment to protecting federal taxpayer dollars. Sonderling, confirmed as the Deputy Secretary of Labor in March 2025 a…
Trump's Acting Labor Secretary Reveals $135 Billion In Fraud, Vows To Cut Off Blue States That Don't Deal With It - The American Tribune.com
Speaking during an interview with podcast host Benny Johnson, Trump Administration Acting Labor Secretary Keith Sonderling explained that the administration has uncovered tens upon tens of billions of dollars worth of fraud, and added that he would be cutting off blue states that don’t get the fraud under control so that federal taxpayers are not endlessly bilked to pay for fraud schemes. As background, Mr. Keith Sonderling was confirmed by the …
Philadelphia advocate sounds alarm over federal threat to unemployment system
A Philadelphia advocate is warning that a proposed federal move to withhold billions in unemployment funding could devastate workers already struggling to stay afloat, particularly in communities of color.
Trump Labor Department Puts Democrat-Run States On Notice Over Unemployment Fraud.
The United States Department of Labor has issued a warning to every U.S. state to address unemployment fraud, threatening to withhold funding for unemployment programs if action is not taken.PULSE POINTS WHAT HAPPENED: The United States Department of Labor has announced that all 50 states must tackle unemployment fraud or lose federal welfare funding. DETAIL: The Labor Department’s announcement was officially addressed to all U.S. governors but …
Trump threatens unemployment funding cuts to states
This article is made possible through Spotlight PA’s partnership with NOTUS, a nonpartisan news organization that covers government and politics with the fresh eyes of early career journalists and the expertise of veteran reporters. The Department of Labor’s historic threat to withhold funding from states’ unemployment insurance programs didn’t quite land with the weight the government apparently intended: Several states told NOTUS they didn’t k…
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