US Department of Labor demands immediate action from governors on unemployment insurance fraud

News Release 26-780-NAT from DOL, June 17, 2026

WASHINGTON – Acting U.S. Secretary of Labor Keith Sonderling issued formal letters to the governors of 53 U.S. states and territories today, demanding immediate action to combat fraud, waste, and abuse within the unemployment insurance program. 

In the letters, the department announced its intent to crack down on rampant fraud and end mismanagement, improper payments, and corruption within the UI program. Acting Secretary Sonderling notified states that, in partnership with the Office of the Inspector General, the department will use every available enforcement tool—including withholding administrative funds from states for the first time in history—to ensure compliance in protecting UI system integrity and safeguarding taxpayer dollars. 

“We are officially putting governors on notice,” said Acting Secretary Sonderling. “The American people will no longer tolerate the blatant waste, fraud, and abuse of their hard-earned tax dollars — no state should allow it either. If states allow it, they will suffer the consequences. This department is no longer afraid to use every lever available to ensure taxpayer money is protected.” 

Inspector General Anthony D’Esposito added, “The days of excuses are over. States that fail to protect taxpayer dollars should expect consequences. Acting Secretary of Labor Keith Sonderling and I will use every available enforcement tool to demand accountability, recover stolen money, and ensure unemployment benefits only go to eligible Americans.” 

In the letters, Acting Secretary Sonderling, a member of President Trump’s Task Force to Eliminate Fraud, led by Vice President JD Vance, detailed how years of failed oversight, outdated technology, weak identity verification, and lax controls allowed unprecedented fraud to flourish.
Among the most glaring examples: 

California – More than $20 billion in debt to the federal government after years of fraud, improper payments, and mismanagement of its UI system.
New York – Losing an estimated $2 million every day to fraud and improper payments, while posting one of the highest improper payment rates in the nation, exceeding 20%.
Illinois – Improperly paying out more than $320 million in taxpayer funds at a rate of more than 14%, one of the highest improper payment rates in the nation. 

The Department of Labor is committed to rooting out fraud, enforcing UI eligibility requirements, and protecting American taxpayers. States that fail to safeguard these programs jeopardize benefits intended for hardworking Americans who demonstrate a legitimate need for temporary assistance. 

Additional guidance and directives will be issued to the states in the coming weeks.