Ohio Lawmakers Pass Bill Revising Ohio’s Unemployment Compensation System to Stop Fraud

Ohio lawmakers gave final approval Thursday, on a Republican-backed bill that aims to cut down on unemployment fraud by revising and updating the state’s unemployment compensation system.

Senate Bill (SB) 302, sponsored by State Senators Bill Reineke (R-Tiffin) and Bob Hackett (R-London), looks to tighten the rules for verifying the identity of applicants for unemployment benefits in the state.

The bill will require that the Ohio Department of Job and Family Services (ODJFS) enter into data-sharing agreements with the Department of Taxation, the Department of Rehabilitation and Correction, and the Department of Health to gather related information needed to help determine if an unemployment applicant is eligible and information accurate.

The legislation would require ODJFS to use tax filings to verify employees’ income if employers do not respond to inquiries within 10 days. Reineke said the legislation would also permit ODJFS to access images from the state’s driver’s license database to verify applicants’ identities.

The bill also mandates that if the government offers special federal unemployment benefits in the future as during the pandemic, ODJFS has to create a verification system using state tax information for applicants.

The measures come from recommendations from the state’s Unemployment Compensation Modernization and Improvement Council, as well as an audit conducted by State Auditor Keith Faber‘s office.

According to Reineke, to date, Ohio has lost more than $475 million to fraudulent claims by criminals and $3.3 billion in overpayments. Between the start of COVID-19 and last August, the state has found that it’s paid more than $1 billion in fraudulent claims, mostly for federal COVID-19 unemployment benefits, which had few verification rules.

According to state leaders, while the number of claims, both legitimate and fraudulent, has fallen off as COVID cases have receded, both fraud and obstacles for legitimate filers remain issues today.

“Over the course of the COVID-19 pandemic, an unprecedented number of people needed financial unemployment assistance. This, in turn, put incredible strain on ODJFS’s outdated systems, opening the door for fraud and errors. Senate Bill 302 will ensure that Ohioans get the support they need, but that, at the same time, our taxpayer dollars are not paid out erroneously or leaving the state or country due to fraud,” Reineke said.

Critics of the bill, such as the left-leaning think tank Policy Matters Ohio, say that the legislation does nothing to streamline the process of Ohioans getting their unemployment benefits more efficiently.

“This bill does nothing to improve access for claimants. It consists nearly entirely of either new ways to tighten identity verification procedures or codify in law those that already exist. This is an inadequate and misguided response to the crisis that we have just experienced that is likely to make it more difficult for some legitimate claimants to receive benefits,” Zach Schiller, spokesman for Policy Matter Ohio, said.

Proponents of the bill, such as the Ohio Chambers of Commerce, said that these changes would help assure unemployment benefits are only paid to those who are eligible.

“The Ohio Chamber of Commerce supports SB 302 because the reforms included in it will help stop fraudulent unemployment filings, prevent the misuse of employer tax dollars, and preserve the use of the system to those who are eligible,” Kevin Shimp, general counsel and director of Labor and Legal Affairs for the Ohio Chamber of Commerce, said.

According to ODJFS, they have already taken steps to combat fraud, including contracting outside security firms, bringing in banking and insurance executives as advisors, and have attempted to recover stolen benefits money.

SB 302 passed unanimously in the Ohio Senate and 65-22 in the Ohio House. It now heads to Governor Mike Dewine‘s desk for his signature.

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Hannah Poling is a lead reporter at The Ohio Star and The Star News Network. Follow Hannah on Twitter @HannahPoling1. Email tips to [email protected]
Photo “Bill Reineke” by Bill Reineke. Photo “Bob Hackett” by Senator Bob Hackett. Background Photo “Ohio Statehouse” by tlarrow. CC BY-SA 2.0.


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