Employment Law Alert – July 14, 2020

    By Labor & Employment

    Employers Grapple with Enhanced Unemployment Comp Issues

    The availability of unemployment benefits for employees who lost their jobs due to the pandemic certainly eased the stress for employees who were furloughed or laid off. The federal $600 per week enhancement of those benefits further helped employees in their time of need. Unfortunately, this availability of substantial unemployment benefits has also caught the attention of cybercriminals who have concocted scams to get their hands on this money.

    Like many cybersecurity scams, cybercriminals first gain access to social security numbers and other personal data. They typically target higher-paid employees who many times are essential and were not even laid off or furloughed. Fraudulent claims are then filed using the personal information of those employees along with directions to deposit payments in the cyber criminal’s account. Eventually, and after payments have begun, the state unemployment agency sends notice to the actual employee and the employer who usually, but not always, recognize the fraud. The appropriate state agency, which in Virginia is the Virginia Employment Commission (VEC), can then be contacted to stop the fraudulent payments. Unfortunately though, given the backlog of claims, the cybercriminals will have already received multiple payments before the payments are stopped.

    The Director of Virginia’s Unemployment Insurance Program, William Walton, was contacted for this article for his thoughts on how employers can protect against the scams his agency is busy investigating. First, he wanted to assure employers that fraudulent claims of this nature will have no effect on the employer’s unemployment tax rate if the scams are brought to the attention of the VEC. To prevent such scams, he recommended that employers and their employees take care to protect against disclosing any confidential information like social security numbers, which are necessary to perpetrate such cyber crimes. He further indicated that employers and employees should pay careful attention to any communications from the VEC that don’t sound quite right, and they should not hesitate to call the VEC Fraud Hotline (800-782-4001) if they detect any malfeasance.

    Another issue employers are facing involves employees who would prefer to remain unemployed receiving enhanced unemployment benefits rather than returning to work when directed to do so by their employer. However, if an employee remains unemployed just for this reason, the employee may be deemed by the VEC to have resigned without good reason or to have refused suitable work, both of which are disqualifying. Accordingly, the employee may be disqualified from receiving any further unemployment compensation when such refusal to return to work is brought to the attention of the VEC. Such cases must be reviewed according to their individual facts, but currently, neither fear of contracting the Covid-19 virus nor being in at at-risk age group is sufficient in Virginia to remain unemployed and continue to be eligible to receive unemployment compensation.


    To help employers deal with issues like the ones described above, William Walton will participate in a workshop as part of the October 28, 2020, special virtual edition of the 36th Annual Employment Law Update. This day-long webinar will have a goal of helping employers deal with a multitude of changes related to new laws and the post-pandemic workplace. In addition to Mr. Walton, a number of other outside speakers, like the new EEOC District Director, Thomas Colclough, and dynamic diversity trainer, Mauricio Velasquez, will join the K&C Employment Law Team to help employers deal with change. Attendees can also earn up to 6 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI) and 5 PPCs towards SHRM-CP or SHRM-SCP. To register for the virtual seminar, click here.

    The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2024.