New Law to Prevent Unemployment Fraud

With rising unemployment looming over the state the Alabama Department of Industrial Relations estimates that unemployment fraud has increased as well. Unemployment fraud cost the state nearly $15 million in 2011.

However, new legislation seeks to curb this problem. Last month Governor Robert Bently signed into law House Bill 72. This bill increases the penalties against individuals who commit unemployment compensation fraud.

Among the new penalties is a provision to ban persons convicted of unemployment fraud from receiving unemployment benefits for up to 52 weeks for the first offense. Second time offenders will be barred for 102 weeks.

The law also requires full repayment of all benefits fraudulently received before any new benefits can be received.

Prior to this new law persons convicted of fraud often were sentenced to jail time but had their sentences suspended if they repaid the amount fraudulently received.

Governor Bently said that “This legislation sends a clear message to anyone who would defraud the system, and that message is, ‘Don’t do it.’  We have a new set of penalties, and we will use these tools to preserve benefits for the people who need them.”

Representative DeMarco of Homewood Alabama, sponsor of the bill, said that “Committing fraud to obtain unemployment benefits is a serious crime, and its punishment will soon match the serious offense as these provisions go into effect,” Representative DeMarco further stated, “With its passage, the taxpayers and business owners have been given another layer of protection from fraud, and those who seek to steal taxpayer-funded unemployment benefits will be forced to think twice before breaking this law.”

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