Unemployment insurance system at risk: Snapshot of a troubled partnership

Abstract

The unemployment insurance (UI) system in the United States is in trouble. Millions in tax dollars are going to undeserving claimants due to fraud and, more often, mistakes or poor UI claims management. State administration of UI is suffering from a lack of both financial and human capital. At the same time, too many employers are overpaying unemployment taxes, not only because of fraud and abuse, but also because they have opted out of the system. Additionally, many employers are failing to respond to UI requests for documentation and are choosing not to contest claims, as they believe the system is hopelessly skewed against them.