The U.S. Labor Department warned all 50 states that they must strengthen oversight of unemployment‑insurance systems or risk losing federal administrative funding. Acting Labor Secretary Keith Sonderling said states have allowed “unprecedented fraud” due to outdated technology and weak identity‑verification systems. The announcement singled out California, Illinois, and New York for high improper‑payment rates, though experts note improper payments are not the same as fraud. Democratic governors criticized the move as politically motivated and lacking supporting data.
See "US tells states to deal with unemployment fraud or face penalties", Geoff Mullvihill, AP News, June 17, 2026