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Two grant awards to fund fraud prevention efforts and enforce willful misclassification laws
MADISON – Department of Workforce Development (DWD) Secretary Reggie Newson announced today that Wisconsin has been awarded two federal grants totaling $1 million by the U.S. Department of Labor (DOL) to enhance fraud prevention strategies and increase the detection of companies that purposefully misclassify workers to avoid paying UI taxes, which creates an uneven playing field for the vast majority of UI-covered Wisconsin businesses that follow the law and support the state’s UI Trust Fund.
“As most Wisconsin employers in the state’s UI system comply with the law and pay the required contributions to support the UI Trust Fund, we have a responsibility to identify and take corrective action against instances where an employer intentionally misclassifies workers as independent contractors and avoids paying UI taxes as a result,” Secretary Newson said. “These federal funds will help us develop additional tools to ensure that businesses operate on a level playing field. Additionally, these funds will help us implement data-driven strategies to strengthen our already robust system to detect attempts by individuals to file claims for unemployment benefits fraudulently.”
Highlights of the two grant awards include:
$500,000 to increase the effectiveness and efficiency of the UI program through strategies such as a new partnership with LexisNexis, a national leader in proven identity verification software for the public and private sectors. This software will verify a UI claimant’s identity prior to filing a claim for benefits to prevent payment of UI claims through identity theft.
$500,000 to support ongoing worker misclassification detection and enforcement efforts. The funds will be used to target companies that willfully misclassify their workers to avoid paying UI taxes, worker’s compensation premiums and to avoid compliance with worker protection laws.
The DWD awards are among $39 million in grant funding awarded by the DOL to 43 states, the District of Columbia and Puerto Rico.
To report suspected UI fraud or to report misclassified workers
Information on how to properly classify a worker in Wisconsin
