Trump’s Immigration Crackdown Sweeps in Unemployment Benefits

The Trump administration’s recent warning to states about undocumented immigrants tapping into unemployment benefits signals jobless aid is becoming entangled with its broader immigration push, former Labor Department officials say.

Labor Secretary Lori Chavez-DeRemer warned state governors last month that the administration would pull unemployment insurance funding from states that allow undocumented immigrants to access jobless benefits. She encouraged governors to use the Department of Homeland Security’s Systematic Alien Verification for Entitlement, or SAVE, system, which verifies immigration status.

The letter shows where the administration will be looking in future efforts to combat fraud and elevate its immigration agenda, former federal labor officials who worked on unemployment policy say.

“It’s a signal that they’re starting to look into how to use unemployment data to go after immigrants,” said Michele Evermore, who helped lead DOL’s UI modernization office during the Biden administration.

“This is the first shot across the bow,” Evermore said of Chavez-DeRemer’s letter, “but, I think it’s a signal that there’s more to come.”

The attention on undocumented immigrants accessing unemployment benefits—a relatively rare occurrence for which there are already deterrents—shows that the Trump administration is eyeing every opportunity to find and deport people who entered the US without approval.

Chavez-DeRemer’s letter was puzzling, the former Biden DOL officials said, because it’s illegal for states to pay out benefits to undocumented immigrants, and federal immigration law has required states to verify benefit applicants’ immigration status for more than three decades.

A Trump DOL official pushed back on the idea that the administration would use data from the SAVE system for immigration enforcement, noting that the system doesn’t share information provided by state workforce agencies for non-criminal enforcement purposes.

The letter was intended to remind states they must ensure that only eligible workers receive unemployment benefits, the official said.

Data Access

Questions about how the DOL will use the data comes as the administration is embroiled in multiple lawsuits over access to confidential data systems at the DOL and other agencies.

An advocacy group and several union representing federal employees filed a lawsuit against efforts by the Department of Government Efficiency to access information stored at the Labor Department.

The agency also may have broken a data sharing agreement entered into with states, when it shared unemployment insurance claim data stored at the DOL’s independent Office of Inspector General with the Employment and Training Administration, former Labor officials have said.

These moves, coupled with the letter sent by the Labor secretary last month, raised fears about whether the data will be used to advance the Trump administration’s agenda to combat illegal immigration.

“They wouldn’t put this out if it weren’t to signal something, because this isn’t anything new,” Evermore said. She fears that the agency would take the data on how many people failed the SAVE immigration verification and match it with other data, like former employment information, to target workplace raids.

Andrew Stettner, who also worked on unemployment insurance modernization at the DOL during the Biden administration, said that the letter shows the Trump administration’s “anxiety about immigrants accessing government systems.”

There’s a “mismatch between the tone of the letter and the reality in the states,” said Stettner, who is now with the Century Foundation. “They’re saying they’re not doing something they’re already doing.”

Pandemic Fraud

Unemployment insurance fraud skyrocketed during the Covid-19 pandemic when a historic rush of claims overwhelmed outdated state workforce agencies and Congress waived verification requirements for certain programs to get the funds out quickly.

The billions of dollars of estimated fraud that stemmed from the pandemic-era programs alone provides enough reason for the DOL to look at the program with more scrutiny, said Rachel Greszler, a senior research fellow at the Heritage Foundation.

“There’s definitely cause for concern just looking at what happened during the pandemic unemployment insurance programs where it was almost certainly the most widespread fraud and abuse that we’ve ever had in history with a government program,” Greszler said.

Greszler said the letter coincides with Trump’s executive orders directing federal agencies, including the DOL, to ensure federal funds flowing to states don’t “facilitate the subsidization or promotion of illegal immigration.”

Trump issued two directives in February and April instructing federal agencies to take administrative enforcement action against states that fail to take “adequate measures” to stop payments to those ineligible for benefits under the Social Security Act, which includes unemployment benefits.

“We do know that they’re attracting those who are here illegally by providing them with government benefits and services,” Greszler said.

By the Numbers

There are no precise public data on how many undocumented immigrants have tapped into the federal-state unemployment system.

“Other eligibility issues,” a category that includes multiple disqualifying factors like lack of citizenship status and “claiming benefits using a false identity,” accounted for $127 million in incorrectly paid unemployment benefits from July 2023 to June 2024, according to the most recent data available from theEmployment and Training Administration.

That number is less than 3% of the total $4.7 billion in benefits that were paid to ineligible recipients during that time period.

Other public data show that more than 6,800 immigrants applied for benefits last year and were denied due to their legal status. That number has hit 1,800 so far this year.

According to a Labor Department spokesperson, internal agency data show that in the most recent 2024 national improper payment rate data reported to OMB, citizenship issues were responsible for over $500,000 incorrectly paid out in unemployment benefits.