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SHAWNEE, Kan. – A Kansas House committee heard testimony Tuesday on a bill to make changes to the state’s unemployment system. Kansas Department of Labor has been dealing with fraudulent claims that forced it to shut down its website for a time late last month.

Heartland Seating only has 18 employees, but in the last few weeks the company got notification that four of them had filed for unemployment, even though they’ve remained open during the pandemic. Most shockingly, one of the fraudulent claims was made in the name of the co-owner of the company, Kathy Peterson’s husband.

“I go to check the mail and it says Brad Peterson has filed for unemployment and I’m like he’s in his office and he better not have quit,” she said.

It’s meant hours of extra work for the small business trying to clear up the fraudulent claim likely perpetrated by hackers or identity thieves, plus the expense of attorneys and accountants. 

The National Federation of Independent Businesses says the impact of the fraud comes when small businesses are struggling to survive during the pandemic and the worst may not be over.  The Kansas Department of Labor said last week it had stopped 240,000 fraudulent claims. But with record unemployment from legitimate claims,  the state’s Unemployed Insurance fund has been depleted. 

“When the fund gets low that’s when employers have to pay higher taxes and frankly right now during the pandemic is the least time that we can afford these tax increases,” Dan Murray, NFIB State Director in Kansas, said.

Murray testified Tuesday before The Committee on Commerce, Labor and Economic Development on behalf of House Bill 2196 that would develop a new unemployment insurance information technology system to prevent future fraud  and stop businesses from being harmed from those claims if they are paid out. 

Wednesday afternoon opponents of the 71-page bill will get their chance to testify. A complete summary of the bill listed on the House website says: Changing provisions of the employment security law, including creation of the unemployment compensation modernization and improvement council, development of a new unemployment insurance information technology system, provision of tax information to claimants, publication of trust fund data, the maximum benefit period, the charging of employer accounts for benefits paid, employer contribution rate determination and schedules, abolishment of the employment security interest assessment fund, crediting of employer accounts for fraudulent or erroneous payments, transfers from the state general fund to the unemployment insurance trust fund for improper benefit payments, changes to the shared work compensation program and other unemployment trust fund provisions.