Bloomberg Law
March 6, 2023, 10:35 AM

Punching In: GOP Anti-Fraud Plan Guts Unemployment Modernization

Rebecca Rainey
Rebecca Rainey
J. Edward Moreno
J. Edward Moreno

Monday morning musings for workplace watchers.

GOP, Biden Release UI Fraud Plans|EEOC Watching Accommodation Case

Rebecca Rainey: Republican lawmakers and the Biden administration are squaring up over how to tackle the staggering amount of taxpayer dollars lost to unemployment insurance fraud during the pandemic, with both the White House and the GOP unveiling plans to recover some of that money.

The House Ways and Means Committee approved Republican-backed legislation last week aimed at encouraging states to recoup fraudulently obtained unemployment benefits by allowing them to keep a percentage of what they recover and doubling the statute of limitations for going after pandemic-related fraud.

But at the same time, the very bottom of the bill text has language to repeal the $2 billion in funding that Congress set aside for the US Labor Department to modernize the unemployment insurance system.

The renewed attention on the pandemic unemployment insurance programs comes after officials from the DOL’s inspector general’s office, the Government Accountability Office, and the Pandemic Response Accountability Committee told lawmakers that the latest estimates indicate that the amount of relief money lost to fraud during the pandemic could range from $45 billion to at least $191 billion.

The Biden administration used that money for a slew of projects, including launching a new unemployment insurance modernization office, deploying various expert teams to help states shore up their benefits systems, setting up a pilot project to create benefits technology, and doling out grant funding to provide states with resources to update the computer systems that pay out the benefits.

But one former DOL UI official previously lamented to Bloomberg Law that the work the Biden administration has done so far still isn’t enough to prevent the problems that plagued the system during the pandemic.

Yanking back those funds would have the opposite effect on the ability to curb fraud, Brent Parton, head of DOL’s training arm, warned lawmakers in a letter last month. Doing so would “throttle essential, ongoing efforts to strengthen and protect the UI program from fraud,” he said.

And the money is nearly spent anyway. According to to Parton, at least $1.6 billion will have “been made available to states through prior and new grant opportunities” by June of this year.

Shortly after the GOP bill made it through committee, the White House announced its own pandemic anti-fraud proposal. The administration wants another $1.6 billion in funding to beef up the Justice Department’s COVID-19 Fraud Strike Force Teams, plus more cash for agency watchdogs investigating pandemic-related fraud.

Gene Sperling, a senior adviser to the president, said the announcement wasn’t a response to Republican efforts to cancel the funding. In fact, the White House supports some aspects of the GOP UI bill—like allowing states to keep some of the funds they recover—a provision also included in the White House’s plan.

“If you look at the what we’re doing on the civil remedies, that’s a bipartisan issue,” Sperling said during a press call. But “we certainly don’t support and don’t understand at all the logic of why you would get rid of $2 billion essentially going to the states to help modernize and prevent fraud.”

The big picture: Neither the White House nor the GOP’s UI proposal is likely to be adopted in its current form. But there is some common ground between Republicans and Democrats on UI reforms that could provide a path forward, like increasing the statute of limitations to pursue pandemic fraud and allowing states to reinvest recouped money obtained via fraud back into their UI systems.

Read a summary of the GOP proposal. Read the White House proposal.


Jobless Aid System Upgrades Not Enough for Next Recession

DOL’s New Jobless Aid Adviser Targeting Fraud, State Cooperation

Lower US Jobless Claims, High Labor Costs Show Strong Job Market

Job seekers sit inside an unemployment benefits office.
Photographer: Xavier Garcia/Bloomberg via Getty Images

J. Edward Moreno: The US Equal Employment Opportunity Commission is keeping a close eye on an upcoming Supreme Court case that could wipe out a decades-old standard that makes it easy for businesses to deny workers’ religious accommodation requests.

EEOC Vice Chair Jocelyn Samuels, a Democrat, told attendees at a Society for Human Resource Management event last week to “stay tuned” for the agency to weigh in on Groff v. Dejoy, a case involving a Christian letter carrier’s religious objection to delivering packages for Inc. on Sundays.

Former US Postal Service worker Gerald Groff challenged the high court’s 1977 decision in Trans World Airlines, Inc. v. Hardison, which says employers only need to show that a requested accommodation under Title VII of the 1964 Civil Rights Act would impose a minimal, “undue” burden to be able to reject it. The high court agreed to revisit that legal test, with a decision expected in the coming months.

“It’s really important to balance religious liberty and other civil rights in the workplace, and I think the Hardison standard has actually done a pretty good job of that over time,” Samuels said, noting that some courts may have misread the standard.

She said the EEOC will likely weigh in after the ruling comes out, possibly through technical assistance documents. Groff “is one of those cases that I think will have a direct effect on the way in which we do work in the workplace,” Samuels said of the agency.

The US Court of Appeals for the Third Circuit found that exempting Groff from Sunday Amazon deliveries was an undue hardship for USPS because it created workplace tension and made his co-workers carry more than their share of the workload.

Samuels said it’s “important to balance the harm to third parties as part of the determination about whether an accommodation would cause an undue hardship.”

“The area that causes me a little bit of concern, is that the court has not only asked what is the right standard, but should harm to other employees also be part of the calculus in a decision about whether a proposed accommodation would cause an undue hardship,” she said.

Separately, Samuels also quelled concerns about how the EEOC would use employer pay data once the agency starts collecting it.

Democrats on the EEOC have signaled that they’re interested in bringing back a yearly pay data reporting requirement for employers after commissioning a study that found it could help aid the agency’s mission.

The EEOC won’t come after employers based solely on the data they report, Samuels said. Instead, the information could identify cause for further investigation, industrywide patterns, or areas where outreach may be useful, she said.

“We would never hold an employer liable based on the information they submitted in response to a pay data collection instrument alone,” Samuels said. “But it is a red flag of disparities that bear further investigation.”

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.

To contact the reporters on this story: Rebecca Rainey in Washington at; J. Edward Moreno in Washington at

To contact the editors responsible for this story: Laura D. Francis at; Genevieve Douglas at

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