The S.C. Department of Employment and Workforce released a statement on Monday, Aug. 10, to remind employers and workers that abusing federal relief funding such as Paycheck Protection Program loans could lead to severe consequences.
Among the national, growing fraud trends being monitored is individuals receiving a paycheck from their employer through the PPP program and simultaneously receiving unemployment benefits.
“Double-dipping from these two funding sources is a crime that cannot be accidentally committed,” the DEW notes.
Each week during unemployment claim certification, claimants are specifically and clearly asked if they have earned any wages for that claim week. DEW has access to tools and information that are cross-referenced to verify the accuracy of the claims.
The Paycheck Protection Program (PPP), administered through the Small Business Administration, allowed employers to receive a calculated, forgivable loan if 75% or more of the loan was used to maintain payroll.
“Unfortunately, there are individuals who will take advantage of an event or crisis for monetary gain. Even those whose intentions are charitable and trying to ‘help’ their employees could be participating in fraud, which will be detrimental to both the business and the workers,” the department warns.
Once an investigation confirms that a claimant is receiving both unemployment benefits and a paycheck from their employer, consequences for the individual include:
- unemployment benefits will be withheld
- the individual will be required to repay all unemployment benefits received to date
- the individual is subject to face civil and/or criminal charges
Any employer found to be complicit in this fraud can face penalties and will have their forgivable loan status revoked – meaning they will be required to pay the loan back in full to the lender.
If a worker claimed unemployment insurance before the business received a loan and then when the employer qualified for PPP they retroactively paid the worker for those same weeks, the individual must contact the agency to discuss repayment options in order to avoid criminal charges.
The DEW released the message as an indicator that the agency works to be “a good steward of the state and federal funding entrusted to us to maintain the integrity of the Unemployment Insurance program.” There is additional information about the DEW’s unemployment insurance process during COVID-19 at dew.sc.gov.
Fraud and theft are crimes that are “not something our agency takes lightly or tolerates because it ultimately steals money from our neighbors and friends who are in need of assistance and are eligible for unemployment benefits,” the agency writes.
“We will continue to monitor for this criminal activity in South Carolina and will take action when necessary.”