Washington, D.C. The U.S. Department of Labor is warning governors in 53 states and territories that they could lose administrative funding if they do not take stronger action against unemployment insurance fraud, waste, and abuse.
Acting Labor Secretary Keith Sonderling said the department is “putting governors on notice” and is prepared to use funding authority to force changes. The agency highlighted California, New York, and Illinois, all led by Democrats, while arguing that state unemployment systems have allowed excessive improper payments and fraud.
The distinction matters. The Government Accountability Office says unemployment insurance fraud during the pandemic likely totaled between $100 billion and $135 billion from April 2020 through May 2023. However, “improper payments” are not always fraud and can include administrative errors, outdated technology, eligibility mistakes, or overpayments later corrected.
The Guardian reported that the Labor Department did not provide new data proving that Democratic-led states have the highest fraud rates. Federal payment-accuracy data also show some Republican-led states, including Florida, have reported higher improper payment rates than California.
Unemployment fraud remains a documented national problem, but the available evidence does not yet support the broader partisan claim that Democratic governors are uniquely responsible for the highest fraud.
Sources:
- The Guardian – MBFC Rating
- U.S. Department of Labor – Unrated
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