Employer Unemployment Insurance Fraud
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Overview

Examples of employer UI fraud are:

  • Paying “off the books” or “under the table” wages
  • Intentional misclassification of workers as independent contractors
  • State Unemployment Tax Act (SUTA) dumping – shifting workers between employer payrolls to improperly use a lower contribution rate

Report

We need your help to keep the UI system fair and equitable for everyone. If you are aware of an employer committing fraud, you may report it anonymously by these methods:

Call Our 24-Hour Toll-Free Hotline
1-866-435-1499

Online

Report UI Employer Fraud

Contact our UI Fraud Unit
518-485-2144
Between 8:00 a.m. and 4:00 p.m.

Fax
518-457-0024
518-485-6172

Mail:
New York State Department of Labor
Liability and Determination, Fraud Unit
Building 12, Room 282
State Office Campus
Albany, NY 12240

Misclassification of Workers

Misclassifying workers and paying workers off the books can have a severe impact on workers and employers in industries where the practice prevails. The Department of Labor works together with other state agencies and the Attorney General to stop this practice.

For employers, it creates an unfair economic advantage and imposes higher costs on responsible employers. This makes them less competitive and more likely to be under-bid by businesses that intentionally misclassify workers.

For workers, it affects working conditions by encouraging unscrupulous employers to ignore labor protections, such as wage and hour requirements, and safety and health regulations.

 

learn more about the Misclassification of workers

State Unemployment Tax Act (SUTA) Dumping

Employers and their representatives engage in SUTA dumping.

They do this to get a lower contribution rate than their unemployment experience allows. This is illegal.

Employers who meet either of the following conditions are involved in SUTA dumping if they knowingly attempt to manipulate businesses to get a lower contribution rate:

  • Transferring some or all of their workforce to another business when they own, manage or control at least 10% of both businesses
  • Acquire another business for the sole purpose of getting a lower contribution rate when they were not previously liable for contributions
Penalties

DOL must impose a penalty if you violate this statute. The fine is:

  • 10 percent of your wages subject to contribution in the last completed payroll year or
  • $10,000

You pay the larger amount.

Anyone who advises another person to violate or attempt to violate the statute is subject to a civil penalty of $10,000. Further, any violation of the statute is a Class E felony that can lead to imprisonment.

The New York State Department of Labor has ways to detect SUTA dumping. You may report suspected SUTA dumping in confidence. Call the UI Fraud Control Unit at 518-485-2144, or our confidential 24-hour toll-free fraud number at 1-888-598-2077.