AUGUSTA, Maine — Labor Commissioner Robert Winglass says his agency is gearing up to implement the new law on unemployment fraud, expressing his belief that fraud is worse than many believe.
“I think there are more than perhaps are being credited, more people who are abusing the system,” he said in an interview. “We will soon determine if that is true or not.”
Winglass said the Maine Department of Labor has been working hard to identify those who might be cheating the Unemployment Insurance system. The measure signed by Gov. Paul LePage on Wednesday, he said, gives them additional tools to combat fraud.
“We are going to have more arrows in the quiver as the result of this legislation,” he said. “We haven’t just been sitting back and waiting. We have been on the march here, if you will, towards identifying individuals who have been violating the system big time.”
The legislation takes effect 90 days after the Legislature finally adjourns. One key provision spells out that the criminal offense of theft by deception applies to unemployment fraud, by a worker or an employer. Winglass said the Maine Department of Labor has been prosecuting the cases where it is clear a person intended to cheat the system.
“I think you are going to see more of those in the next few weeks,” he said.
Gov. LePage praised passage of the departmental bill because it is projected to result in some savings to the Unemployment Trust Fund, which pays unemployment benefits. It gets its cash from a tax on employers.
“Our limited resources must be used wisely,” LePage said.
The governor said the state’s management of the unemployment fund has been exemplary and pointed out that Maine was the only state in New England that did not have to borrow from the federal government to provide unemployment insurance in the recent recession.
“Maine’s job creators need to use their resources to invest in growth and expansion to provide good-paying jobs for Mainers,” LePage said.
Matt Schlobohm, executive director of the Maine AFL-CIO, said there simply is not a major problem with fraud in Maine’s unemployment system. He said Maine is ranked fifth lowest in the country for unemployment insurance fraud.
“Should we try to get rid of what little fraud we have? Of course we should,” he said in an interview. “But we should be focusing the major effort on how to find the 100,000 Mainers who want a job a job to go to every day. That should be the focus, not fraud that really is not a problem.”
Schlobohm said it is discouraging that Gov. LePage decided to focus efforts on the “nonproblem” of fraud while not proposing legislation that will help create jobs and put more Mainers back to work.
“We have large-scale unemployment and underemployment and this administration has seen fit not to use the tools that it has to help those Mainers get a job,” he said. “That’s where we need to focus, not on a fraud problem that is so small it’s really hard to call it a problem.”
Sen. Chris Rector, R-Thomaston, co-chairman of the Labor, Commerce, Research and Economic Development Committee, is the sponsor of the measure. He said the Maine Department of Labor has been doing a good job going after both fraud and fixing errors in the system.
“Our goal is to make sure that everyone who is entitled to benefits is receiving benefits and anyone who is not entitled to benefits is not receiving benefits — plain and simple,” he said.
Rector said he wants to “root out” what fraud does exist because it drives up the cost of unemployment taxes for employers. He said many still do not realize that the entire cost of the system is paid by employers in Maine, unlike some other states.
Schlobohm said his concern is that Department of Labor resources he believes could be better spent helping the unemployed find work will be used to find what few cases of fraud that have not been found. He said the rhetoric around unemployment fraud simply does not match the reality.