Stop Unemployment Fraud Act
Sponsored By: Senator James Lankford
Introduced
Summary
Tighten identity checks and data matching to reduce unemployment insurance fraud. It would also require stronger weekly work-search evidence and let states use a small share of recovered overpayments to improve program operations.
Show full summary
- Claimants would need to show a current Federal or State photo ID plus supporting documents and keep a verified weekly work-search log to receive benefits. States must verify those documents and entries.
- States must use a Labor Department integrity data hub and match against the National Directory of New Hires, death records, and jail records to detect ineligible claimants. The Labor Secretary can withhold 5 percent of certain funds from states that do not comply, and many rules take effect for claims starting 2 years after enactment.
- States may deposit up to 5 percent of recovered overpayments and certain investigation collections into a fund for fraud detection, technology modernization, proper worker classification, and other administration improvements. Employers would use the State Information Data Exchange System or equivalents to respond to information requests.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 0 benefits, 3 costs, 1 mixed.
Stricter ID checks and payment timing
If enacted, States would have to verify claimant identity using at least one current Federal or State ID plus supporting documents. If enacted, payments would only be due after eligibility and weekly requirements (including ID checks) are confirmed. If enacted, a claimant's self-attestation alone would not be enough to prove weekly eligibility. The Labor Secretary would have to issue ID rules within 12 months and payment-timing rules within 180 days. These rules would apply mainly to claims and payment certifications starting two years after enactment.
Weekly work-search and registration rules
If enacted, regular unemployment claimants would need to register for State employment services as required to be 'actively seeking work.' If enacted, claimants would have to keep a weekly work-search record listing employers contacted, how they contacted them, and the date. If enacted, claimants would have to submit that record each week and States would verify it. The Labor Secretary would issue guidance within 6 months and these rules would apply starting two years after enactment.
Federal penalties for noncompliant States
If enacted, the Labor Secretary would monitor State compliance with identity-verification and payment-timing rules. If a State is found not in compliance after notice and hearing, the Secretary could withhold 5 percent of certain federal UI administrative funds and require a corrective action plan. The withholding is tied to failures on the identity and payment-timing requirements in the bill.
States may keep small share of recoveries
If enacted, a State could deposit up to 5 percent of recovered UI overpayments (except those from agency error) into a State fund. If enacted, a State could also deposit up to 5 percent of contributions collected from investigations and assessments into that fund. Money in the fund would be limited to fraud prevention, worker/employer classification work, payments to the Unemployment Trust Fund, UI technology modernization, or improving timely and accurate UI administration. These rules apply to amounts collected after the two-year period beginning on the date of enactment unless a State amends its law sooner.
Sponsors & CoSponsors
Sponsor
James Lankford
OK • R
Cosponsors
Mike Crapo
ID • R
Sponsored 3/5/2026
Bill Cassidy
LA • R
Sponsored 3/5/2026
Steve Daines
MT • R
Sponsored 3/5/2026
Roll Call Votes
No roll call votes available for this bill.
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