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Date:September 14, 2011
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Louisiana Workforce Commission Cuts Unemployment Payment Errors in Half

System upgrades, a crackdown on fraud and other improvements have resulted in Louisiana cutting its unemployment insurance improper payment rate in half since 2010, the Louisiana Workforce Commission announced today.

The LWC’s focus on effective management of the state’s unemployment program has resulted in Louisiana having the third strongest unemployment trust fund in the country and one of the lowest unemployment insurance tax rates in the country.

“Combating the national problem of improper payment of unemployment insurance benefits is and has been a high priority in Louisiana. As a result, our improvements have been dramatic and put us among the most improved in the country,” LWC Executive Director Curt Eysink said. “We are continuing to identify and implement other best practices and expect our improvement to continue at a rapid pace.”

The U.S. Department of Labor on Wednesday announced it is awarding Louisiana $2.4 million to continue implementing its improvement program as part of a new technical assistance initiative.

Louisiana’s focus on the issue has resulted in dramatic improvements since 2010 in all the major causes of errors in unemployment payments:

- 89 percent improvement in errors associated with claimants having to register for work. These were mostly technical errors associated with the unemployment system failing to recognize that claimants had registered with the LWC’s workforce computer system. These errors are included in federal improper payment rates, but they are not true overpayments as the claimants were eligible for their benefits. The system issue was solved in 2010.

- 43 percent improvement in errors associated with the reasons claimants left their last job. Many of these errors occur when claimants give false or inaccurate information about the reasons for their separation and when employers do not respond with complete, accurate and timely information to LWC notices.

- 38 percent improvement in errors associated with the requirement that claimants actively search for work while claiming benefits. LWC’s heightened focus on reforming the unemployment system into a true re-employment system is contributing to this improvement.

- 19 percent improvement in errors associated with claimants continuing to claim benefits after going back to work. These are overpayments and many of them are fraud. The LWC began an aggressive detection and prosecution program in April that has netted more than 40 arrests with others pending.

“The biggest reason for unemployment insurance overpayments today stems from claimants working while continuing to claim benefits,” Eysink said. “All employers in Louisiana should know that they have the means at their disposal today to almost eliminate these overpayments immediately.”

To do so, employers should:

- Immediately report all new hires and rehires to the state and national directories of new hires. This can be done online.

- Report all separations within three days using LWC’s Notice of Separation, or Form 77. This can be done online.

- Respond completely and on time when the LWC notifies them that a claim has been filed against them.

- Submit complete and accurate wage records on all employees every three months. This can be done online.

The law also is very clear on claimants’ responsibilities. They must accurately give the reason they are not working, they must actively search for work while receiving benefits, and they must immediately report any earnings, even from part-time work and even if they have not yet been paid. Failure to be truthful when claiming benefits is a crime and will be dealt with aggressively.

“We continue to invest in our quality control efforts and to be thorough in identifying sources of errors. That’s a major reason we’ve achieved such dramatic and quick improvement and why I believe we’ll see even more improvement in short order,” Eysink said.

The grant announced Wednesday will be used to expand LWC’s efforts, including paying for technology-based prevention, detection and collection activities, implementing an interstate system for reporting and verifying employment and wage data, adding staff for these improvement efforts and other automation to speed up current processes.

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