04 Feb Business Organizations Appreciate Lawmakers’ Focus on the State’s Unemployment Insurance System
Topeka, KAN. – The Kansas Chamber, National Federation of Independent Businesses (NFIB), and the Kansas State Council of the Society for Human Resource Management (KS SHRM) today shared their appreciation for the Kansas Legislature’s focus on the state’s fraud-ridden Unemployment Insurance system.
The Kansas House Appropriations Committee and the Kansas House Commerce, Labor and Economic Development Committee on Wednesday and Thursday heard from dozens of businesses and organizations about their experiences in handling the fraudulent claims.
“In the midst of a deadly pandemic, thousands of businesses and their employees across Kansas struggled to access the state’s antiquated UI system to ensure legitimate unemployment claims processed correctly while also dealing with thousands of fraudulent claims,” said Kansas Chamber President and CEO Alan Cobb. “We appreciate the time lawmakers are spending to hear firsthand about these experiences. Their commitment to stopping the fraud and making sure businesses and Kansans are not negatively impacted is reassuring.”
During the two days of committee hearings, school district and state university representatives told lawmakers their organizations each face more than $600,000 in fraudulent claims that must be paid back. Businesses voiced concerns about the looming UI tax increases they face since the trust fund has given out more than $1 billion in benefits during the last 12 months.
KS SHRM Council President David Love said the organization began communicating with the Kansas Department of Labor (KDOL) regarding its concerns about UI fraud as early as last April.
“October seemed to signal the start of a significant increase at which time we notified and requested guidance from KDOL on the increasing concerns and volume of fraudulent claims,” said Love. “Recent testimony from the employer community is shedding light on the very issues we’ve tried to get in front of since the summer months. KS SHRM stands ready to assist with the legislative process to bring much needed reforms and relief to the Kansas UI system to better serve Kansans and Kansas employers.”
Employees are concerned as they have started receiving 1099-G tax statements connected to their pending tax liability for benefits fraudulently filed under their information. The Sunflower State Journal reported this week that after the Kansas Department of Labor implemented fraud protection measures, the agency stopped more than 530,000 fraudulent claims.
NFIB Kansas State Director Dan Murray said the fallout of the ongoing unemployment insurance fraud debacle is punch to the gut of small business owners when they can least afford it.
“In the midst of fighting for the survival of their businesses during this unprecedented pandemic, owners have had to deal with thousands of fraudulent claims, errant tax filings and fearful employees. Now they are staring down the barrel of a gun that will lead to the continued depletion of the UI trust fund and resulting increased UI taxes,” said Murray. “We are pleased that the Kansas legislature has acknowledged this massive disaster and its impact on the backbone of our economy. Our organizations looks forward to working with the lawmakers on legislation that stops the fraud, prevents the collapse of the trust fund, and ensures small business owners and their employees are not held liable for fraudulent claims.”
Kansas lawmakers next will consider several UI reforms including a complete modernization of the IT system as well employer indemnification for fraud claims paid by KDOL.
For more information, contact:
Sherriene Jones-Sontag, Kansas Chamber
Natalie Bright, KS SHRM
Emily Carlson, NFIB
Dan Murray, NFIB Kansas
Posted February 4, 2021