Senate committee unanimously approves bill to clarify unemployment fraud reporting

The Senate Standing Committee on Economic Development, Tourism and Labor voted 11-0 to report Senate Bill 136, which clarifies where suspected unemployment insurance fraud is reported and how the cabinet coordinates with prosecutors. Secretary Jamie Link said the bill is a "housekeeping bill" to correct prior language so suspected fraud is reported to local or commonwealth's attorneys and the U.S. Department of Labor.

The measure, introduced for the record in committee, amends prior language that named attorneys but omitted the federal DOL from the list of recipients. "The previous bill had us reporting potential fraud to the Justice Public Safety Cabinet. They really don't have any mechanism for investigating fraud," Secretary Jamie Link said, noting the department historically refers cases to county or commonwealth's attorneys and to the U.S. Department of Labor.

During questioning, Senator Howe asked whether the cabinet tracks how often local prosecutors pursue those referrals. Link said he did not have prosecution statistics on hand but offered to provide that information later. Senator Maiden asked whether the state pursues clawback of funds when fraud is proven; Link said fraudulent payments should be reimbursed to the unemployment insurance trust fund and that he would check the precise process with UI staff.

Senator Boswell used the opportunity to flag constituent complaints about unemployment insurance processing delays and adjudication backlogs, saying some residents had gone months with minimal or no payments. Committee members did not amend the bill in committee.

The clerk called the roll and the committee voted 11-0 to report the bill with a favorable recommendation. The committee's record shows the bill "shall pass" and will be forwarded with a favorable expression.

Next steps: the bill was reported out of committee and will proceed through the legislature according to the chamber's normal calendaring rules.