DES Tax Department Blocks Fictitious Employer Schemes and Addresses Misclassification Issues

DES Tax Department Blocks Fictitious Employer Schemes and Addresses Misclassification Issues

By / State News / Tuesday, 27 January 2015 05:00

RALEIGH, N.C. : January  21st, 2015 - The Division of Employment Security (DES) continues its efforts in fighting fraud within the Unemployment Insurance (UI) system.
From April 2013 through November 2014, the DES Tax Department detected 105 fictitious employer schemes through 672 fraudulent unemployment insurance claims. During that time, $2.7 million in fraudulent benefits were paid and the Benefits Integrity Unit is in the process of recouping that amount. Meanwhile, $5.2 million in fraudulent benefits have been blocked.
“We feel these specific fictitious employer schemes have essentially been stopped,” said DES Assistant Secretary Dale Folwell. “We continue to be vigilant when it comes to fighting fraud. It’s not just claimants that fraud the system, it’s also employers and those posing as employers as well.”
During calendar year 2013, North Carolina led the southeastern region of states in the discovery of misclassified workers. Indications are that North Carolina will lead or be near the top of that list for 2014. Efforts are underway to leverage the state’s
GDAC (Government Data Analytics Center) in coordination with sister agencies to further enhance compliance efforts. GDAC is also a partner in fictitious employer efforts and overpayments of benefits, both fraud and non-fraud. “Our Tax Department has a lot to oversee and does so with the high standards and quality reviews that meet or exceed federal standards,” said Folwell. “Whether it’s collecting taxes from over 200,000 employers or identifying fraud, this department doesn’t rest and is always looking for ways to improve their work.”
To better serve the employers who pay unemployment taxes and partner with us to insure proper benefit payments are paid, DES established the Employer Call Center in 2014.
Employers may call (866) 278-3822 to speak to a representative about employer-specific UI issues.
In addition, employers may sign up to receive a new alerts and bulletins notice from the agency by visiting www.ncesc.com.
The DES Tax Department is charged with the collection of unemployment insurance taxes, posting of wage information from employers and compliance with unemployment insurance tax laws. There are currently over 200,000 unemployment insurance employers. This department for many years has consistently passed all U.S. Department of Labor quality reviews with high scores.
Source: North Carolina Division of Employment Security

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