THE NEW YORK STATE DEPARTMENT OF LABOR COMPLETES STANDARD FEDERAL...

New York State Department of Labor (NYSDOL) Commissioner Roberta Reardon today announced the completion of a standard federal oversight review with the United States Department of Labor (USDOL). The review focused on the administration, security, and payment accuracy of New York's Unemployment Insurance program, including continued coordination between state and federal partners to strengthen program integrity while preserving timely access to benefits.

During the review, NYSDOL outlined safeguards implemented under Governor Kathy Hochul to prevent fraud and reduce improper payments, including stronger identity verification, enhanced fraud screening, greater coordination with law enforcement, and continued modernization of the State's unemployment insurance technology.

"Maintaining a secure, reliable unemployment insurance program is central to our mission and essential to supporting workers and preserving the stability of New York's economy," said New York State Department of Labor Commissioner Roberta Reardon. "Standard oversight and coordination with our federal partners help ensure this vital program serves eligible New Yorkers while protecting public resources. We are proud of the progress New York has made and remain focused on strengthening the system at every level."

During the review, NYSDOL and USDOL discussed New York's ongoing work in the following areas:

Balancing Payment Timeliness and Program Integrity

NYSDOL discussed how federal oversight standards can create tension with federal payment timeliness requirements. USDOL standards call for employer disputes to be resolved before benefits are paid, while federal law requires eligible claims to be paid within established timeframes, even when a dispute remains pending.

As a result, states may be forced to make initial payment decisions before all information related to eligibility, identity verification, suspected fraud, or employer disputes is available. During the review, NYSDOL raised this tension with USDOL and emphasized the need for federal oversight standards to align with payment timeliness requirements. NYSDOL will continue working with its federal partners to preserve timely access to benefits while strengthening states' ability to prevent fraud, resolve eligibility issues, and reduce improper payments.

Reducing Improper Payments Related to Work Search Requirements

Work search documentation remains the largest contributor to New York's reported improper payment rate, consistent with national trends. Improper payments related to work search do not necessarily involve fraud and may result from incomplete documentation, claimant error, or information received after an initial eligibility decision. Because federal law requires eligible claims to be paid within established timeframes, benefits may be issued before all work search information is verified or an employer dispute has been fully resolved.

NYSDOL's work search compliance efforts have helped reduce the improper payment rate by 27%. The Department has also updated its website guidance and has launched text message reminders directly to customers to clarify work search, recordkeeping, and documentation requirements. These measures prevent errors, reduce improper payments, and help eligible New Yorkers avoid overpayments or interruptions in benefits.

Strengthening Fraud Prevention and Identity Verification

Under Governor Hochul, NYSDOL has strengthened New York's unemployment insurance system through more rigorous identity verification, including the use of ID.me, enhanced fraud detection tools, and increased cooperation with law enforcement. These safeguards are designed to prevent fraudulent claims, including those involving stolen identities, from resulting in payments while maintaining timely access for eligible workers.

Despite inaccurate claims that New York is losing approximately $2 million per day to unemployment insurance fraud, the underlying data show that only 0.057% of all claims processed were included in the sample used to produce that annualized estimate. Most of the improper payments identified were tied to administrative or documentation issues, including federally mandated procedures, rather than intentional fraud. NYSDOL's safeguards currently identify 97% of suspected fraudulent activity before payment, and just 0.22% of claims filed during the first half of 2026 were flagged for potential identity fraud.

Advancing Additional Payment Accuracy Reforms

To improve payment accuracy, NYSDOL has adjusted its telephone claim backdating to prioritize more recent claims, reducing the risk of inaccurate payments. Its forthcoming upgrade of the unemployment insurance system will also require more detailed weekly work search reporting, aligning New York with other states and improving payment accuracy.

New Yorkers can learn more about unemployment insurance eligibility, work search requirements, identity verification, and fraud prevention by visiting NYSDOL's website https://dol.ny.gov/unemployment/unemployment-insurance-assistance.