Stop Unemployment Fraud Act
- Bill Number
- H.R. 7847
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-03-05: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-25T08:07:32Z
AI-Generated Summary
Purpose
The Stop Unemployment Fraud Act (H.R. 7847) aims to reduce fraud in state unemployment insurance programs by mandating stricter identity verification, data cross-checking with federal databases, ending "pay first and recover later" practices, prohibiting reliance on self-reported information alone, enhancing work search documentation, and allowing states to use recovered funds for anti-fraud measures.
Key Provisions
- Identity Verification (Sec. 2): States must certify procedures requiring claimants to provide a valid government-issued ID (federal or state) plus supporting documents (e.g., utility bills, leases). The Secretary of Labor must issue regulations within 12 months, covering costs, due process (fair procedures to contest decisions), privacy, cybersecurity, and anti-discrimination safeguards. Applies to initial claims 2 years after enactment.
- Data Matching to Prevent Fraud (Sec. 3): States must use a federal "integrity data hub" or equivalent to cross-check claims against:
- National Directory of New Hires (to detect re-employment).
- State data exchange for employer info.
- Social Security data on incarcerated or deceased individuals.
States must act on matches to deny/reduce benefits and recover overpayments.
- End to "Pay and Chase" and Self-Attestation (Sec. 4): Benefits are due only after eligibility (including ID verification) and weekly requirements are confirmed—no payments before verification. Self-certification alone cannot prove eligibility. Secretary issues timing regulations within 180 days. Applies 2 years after enactment.
- Federal Oversight (Sec. 5): Secretary of Labor monitors state compliance; non-compliant states face 5% fund withholding and corrective plans after notice and hearing.
- Strengthened Work Search (Sec. 6): Claimants must register for job services, keep detailed records (employers contacted, dates, methods), and submit weekly. States verify records. Secretary issues guidance within 6 months. Applies 2 years after enactment.
- Use of Recovered Funds (Sec. 7): States may retain up to 5% of recovered overpayments (non-agency error) or collected employer contributions for anti-fraud efforts, technology upgrades, proper worker classification, or admin improvements. Applies to recoveries 2 years after enactment.
Significant Changes to Existing Law
- Amends Social Security Act §303 (state unemployment admin) and Federal Unemployment Tax Act §3304/3306 (tax credits for compliant states).
- Shifts from flexible/self-attestation systems to mandatory pre-payment verification and data matches—previously optional or post-payment.
- Ends "pay and chase" (paying benefits first, then seeking repayment).
- Adds DOL enforcement tools (monitoring, penalties) and state fund retention (previously, most recoveries went to federal trust fund).
- Ties state tax credit eligibility to new fraud prevention certifications.
Potential Impacts
- Government Agencies: States face higher upfront costs for technology, training, and verification but gain tools to cut fraud losses (e.g., billions during COVID-19). DOL gains oversight role; federal funding at risk for non-compliance.
- Citizens: Legitimate claimants may experience claim delays or documentation burdens but faster fraud detection protects benefits fund. Reduces improper payments, lowering taxpayer costs.
- Employers: Easier reporting via data systems; potential lower taxes from fraud savings.
- No direct impacts on international relations.
Main Stakeholders Affected
- State unemployment agencies: Must implement new systems and face penalties.
- Unemployment claimants: Subject to stricter proof requirements.
- Employers and taxpayers: Benefit from fraud reduction via data sharing and fund protections.
- Federal agencies (Labor Dept., Social Security Admin., Treasury): Provide data/tools and enforce compliance.
Notable Legal, Constitutional, or Political Implications
- Legal: Mandates due process, civil rights compliance (no discrimination by race, age, etc.), and privacy/cyber best practices—reduces lawsuit risks from mismatches/delays.
- Constitutional: Balances fraud prevention with access to benefits; requires "reasonable notice and hearing" for penalties, aligning with due process under 14th Amendment.
- Political: Targets post-pandemic fraud spikes; promotes fiscal responsibility but may spark debate on claimant burdens vs. savings (neutral on partisan intent).
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (16)
Rep. Smith, Adrian [R-NE-3], Rep. Buchanan, Vern [R-FL-16], Rep. Fong, Vince [R-CA-20], Rep. Van Duyne, Beth [R-TX-24], Rep. Feenstra, Randy [R-IA-4], Rep. Miller, Max L. [R-OH-7], Rep. Tenney, Claudia [R-NY-24], Rep. Kelly, Mike [R-PA-16], Rep. Arrington, Jodey C. [R-TX-19], Rep. Moore, Blake D. [R-UT-1], Rep. Moran, Nathaniel [R-TX-1], Rep. Miller, Carol D. [R-WV-1], Rep. Bean, Aaron [R-FL-4], Rep. Yakym, Rudy [R-IN-2], Rep. Estes, Ron [R-KS-4], Rep. Kustoff, David [R-TN-8]
Recent Actions
- 2026-03-05: Referred to the House Committee on Ways and Means.
- 2026-03-05: Introduced in House
- 2026-03-05: Introduced in House
Bill Versions
- Stop Unemployment Fraud Act — issued 2026-03-05 — PDF (15 pages)