Fraud and Collusion

We refer flagrant cases of fraud to the courts for prosecution. To detect and deter fraud, we depend on cooperation from employers to provide all requested records and information in a timely manner. The law requires employers to provide information when requested. Cooperation with these requests helps control the cost of the unemployment insurance program for all Minnesota employers.

An applicant who receives unemployment benefits by knowingly misrepresenting, misstating, or failing to disclose any necessary information, or who makes false statements, has committed fraud. Applicants determined by the Minnesota Unemployment Insurance (UI) Program to have committed fraud, must repay fraudulently received unemployment benefits, plus an assessed penalty equal to 40 percent of the amount fraudulently obtained, immediately. Interest will be assessed on unpaid balances at a rate of 1.5 percent per month.

An employer who colludes with applicants to receive benefits illegally or who commit fraud to avoid tax will be penalized at least $500, and may also be prosecuted. Collusion is knowingly helping applicants obtain benefits to which they are not entitled. This may involve cash wages or other hidden compensation for services performed. Violations by applicants and employers may be prosecuted as felony theft under the fraud provisions of the Law. You can help prevent fraud by reporting potential violations to us using the online Fraud Report.

Detecting and Recovering Benefit Overpayments

We use various methods to detect benefit overpayments, including a computer cross match to compare quarterly wages reported by employers with payments made to applicants. Auditors verify return-to-work dates and wages reported by applicants, investigate employers’ protests to benefit charges, and follow up on tips from the public.

The UI program keeps records of all benefit overpayments. Detection of overpayments results in reduced charges to employer accounts. Methods used to recover overpayments include:

• Monthly billing statements;
• Deductions from future benefits;
• Liens filed on property;
• Seizing state income and property tax refunds;
• Monthly payment plan agreements;
• Court ordered restitution resulting from criminal prosecutions;
• Garnishment of wages;
• Intervention in workers’ compensation cases; and
• Referral to the Minnesota Collection Enterprise or private collection agency for collection.