Harder Leads Bipartisan Bill to Take on EDD Fraud & Recover Lost Money

June 29, 2021
Press Release
Bill is another avenue Rep. Harder is using to fix EDD and support victims of fraud

WASHINGTON — Today, Representative Josh Harder (CA-10) is leading a new bipartisan effort to take on EDD fraud, recover lost funds, and support victims of identity theft alongside Republicans including House Minority Leader Kevin McCarthy (CA-23) and Reps. Michelle Steel (CA-48), Devin Nunes (CA-22), and Darrel Issa (CA-50) . The bipartisan Pandemic Unemployment Assistance Fraud Protection Act will ensure that states recoup billions of dollars of fraudulent Pandemic Unemployment Assistance (PUA) benefits payments, prevent criminals from taking advantage of American taxpayers, and support victims of identity theft. In California alone, EDD has paid out as much as $31 billion in fraudulent claims.


“For over a year now EDD has been a complete disaster riddled with fraud and incompetence., I’m proud to lead a bipartisan effort to recover lost unemployment funds, prevent future fraud, and support the folks who’ve been scammed out of the benefits they deserve,” said Rep. Harder. “Central Valley families deserve a system that works for them, not fraudsters and cheats from out of state. This bill is an important step toward fixing our broken unemployment agency.”


The bill will serve three essential purposes:


1. Recover Funds

  • Requires States a) to submit their plans to recover fraudulent PUA benefits payments to the Secretary of Labor, b) develop an anti-fraud task force, and c) provide to Congress reporting on each States’ recovery plan.
  • Requires the Secretary of Labor to provide monthly reports to Congress regarding any findings developed by the State task forces.
  • Enables the Attorney General to partner with State task forces and State and local law enforcement.
  • Incentivizes States to recoup at least 75% of any fraudulent PUA payments made by the State by December 31, 2022, by imposing a fee on future State Unemployment Insurance payments in the amount of any fraudulent PUA payments have not been recovered by a State.


2. Prevent Fraud

  • Requires States to cross-reference PUA benefits claimants’ information with Federal prison records, state prison records, and E-Verify.
  • Provides that maximum fines and prison penalties for Federal mail and wire fraud will apply to those seeking PUA benefits fraudulently with a falsified or stolen identity.


3. Support Victims of Identity Theft

  • Requires States to establish a fraud hotline through which residents may report 1099-G tax forms that they received if they are victims of COVID-19 related unemployment fraud.
  • Requires States to maintain a database of all claims of incorrect 1099-G forms and regularly transfer this data to the IRS.
  • Requires the Secretary of Labor in consultation with the Secretary of the Treasury to certify to Congress that States have plans in place to assist state residents with incorrect 1099-G tax form claims.
  • Provides that, if an individual receives a 1099-G form incorrectly and files a correction claim with their State, the individual must receive their Federal tax refund payment in full while their claim is adjudicated.