18 MiMfg Magazine March 2018
Protecting Your Business Against Imposter Claims : Practical Guidance
By Richard Warren • Miller Canfield
In recent years , Michigan employers have noticed a growing and worrying trend — the filing of fraudulent unemployment benefit claims by imposters who have stolen the identities of Michigan workers . Often , employers are unaware that this has occurred until they receive correspondence from the Michigan Unemployment Insurance Agency ( UIA ) indicating that a claim has been filed by a current employee . Sometimes , the imposters minimize the chances of discovery by filing claims asserting that they were temporarily laid off for 45 days or less , which allows them to avoid the UIA ’ s requirement that they physically report to a work center . While these imposter claims do not result in direct payments by the employer to the imposter , they could cause the employer ’ s rating to change , which leads to higher future unemployment insurance charges . The fraudulent unemployment claims also constitute income to the employee in whose name they were filed , which may require the employee in question to pay additional taxes .
To prevent these negative outcomes , employers should follow these practical guidelines :
• Develop and implement a data security plan , which restricts access to employee personnel data to only those employees whose work duties involves using that data
• Employees should be advised — during initial orientation — that they should immediately contact human resources if they receive a notice from the Michigan UIA falsely indicating that they ’ ve filed an unemployment benefits claim
• As part of your data security plan , assign a person or department to
continually monitor unemployment benefit claims , to identify claims filed by current employees , or individuals who never performed work for the company
• Once such claims are identified , the employer should protest the award of benefits and , in that protest , inform the UIA that the claim is fraudulently filed by an imposter . Employers should also report the existence of unemployment benefit fraud at www . Michigan . gov / uia , or via the UI fraud hotline at 855-UI-CRIME
• The company ’ s protest should also request that the claim be frozen or blocked , and seek a credit to its account for any amounts paid out on the imposter claim
• The company should also notify the employee that a fraudulent claim has been filed on his or her behalf . The company should advise the employee that he or she has the right to notify the UIA that the claim is fraudulent , notify a credit agency or make a report to law enforcement . Further , the employee should be directed to the UIA ’ s guidance set forth at www . Michigan . gov / uia
• Finally , employers should educate employees that they may have been the victim of an imposter claim if : ( a ) they receive a request for information from the UIA despite not filing a claim ; ( b ) they receive a letter from the IRS stating that they have failed to report the receipt of unemployment benefits ; ( c ) they attempt to file an unemployment claim and discover that such a claim already exists ; or ( d ) they receive a “ Monetary Determination ” form from the UIA for unemployment benefits even though they have not filed such a claim .
Michigan employers can receive further information about how to combat identity theft at IdentityTheft . gov , a website maintained by the U . S . Federal Trade Commission . Employees who learn that someone has filed a fraudulent unemployment benefit claim on their behalf should immediately take the steps outlined in IRS guidance found at www . irs . gov / newsroom / identity-theft-information-fortaxpayers-and-victims .
Employers with additional questions should consult with qualified legal counsel . 6
Richard Warren is principal with Miller Canfield . He may be reached at 313-496-7932 or warren @ millercanfield . com .
Miller Canfield is an MMA Premium Associate member company and has been a member since 1989 . Visit online : www . millercanfield . com .
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