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Fraudsters targeting the Colorado unemployment system are now going after unemployed workers and phishing for information like logins and passwords. The Colorado Department of Labor and Employment shared images of some of the scams. (Provided by Colorado Department of Labor and Employment)

It probably came as a shocker when Californians learned that their state had paid out $20 billion in fraudulent unemployment claims as of October since the COVID-19 pandemic began. That’s about the same amount the Golden State has borrowed from the U.S. government to provide benefits when its own unemployment fund ran out of money last year.

By comparison, Colorado paid $30 million in confirmed fraud, labor officials told lawmakers this week. That means the state Department of Labor and Employment investigated suspicious payments and confirmed that amount to be fraudulent. Colorado also borrowed $1 billion from the Feds, which must be paid back (more on this below). 

But that’s $30 million, so far.

Fraudsters targeting the Colorado unemployment system even went after legitimate unemployed workers by phishing for information like logins and passwords. The Colorado Department of Labor and Employment shared images of some of the scams. (Provided by Colorado Department of Labor and Employment)

Unemployment fraud was rampant nationwide since federal relief made it lucrative for thieves to use stolen identities to qualify for a big payout, boosted by the weekly federal supplement of up to $600 plus backdating to February 2020. The pandemic made it easy to get away with it. Oversight was postponed in order to get money out faster to those who needed it.

But Colorado may have been more of a target early on because it had one of the nation’s highest maximum unemployment pay of $618 per week, Daniel Chase, chief of staff at CDLE, told state lawmakers during a Joint Budget Committee hearing on Wednesday. It’s now $700.

That’s nearly triple Mississippi’s maximum of $235 a week.  

Colorado’s labor department moved to high alert by June 2020 and added anti-fraud tools before many other states. It flagged suspicious accounts that, for example, had multiple claims at one address or were coming from out-of-the-country internet connections. The number of fraud triggers has since gone from eight to 60, as of September, and prevented more than $600 million from being paid to suspicious accounts, Chase said.

And thus, Chase said, “We suspect that when all is said and done, Colorado will have fared better than most states as a result of the number of different pieces we put into our system to stop fraud and how early we detected it.”

But, he added, “we are not perfect and we did not stop all fraud.”

The anti-fraud efforts also resulted in thousands of legitimate users being locked out of their accounts. We covered this heavily last year, when at least 7,800 unemployed Coloradans could not access their benefits for weeks due to fraud holds. There are still people waiting for federal benefit payments (see the unemployment update below).

Four cases of fraud

So far, the labor department has referred just four cases to state prosecutors. 

“The reason that the number is low is because our staff has been entirely dedicated to finding the legitimate claimants that are caught up in our fraud detection,” Chase said. “We have just only recently shifted toward criminal prosecutions to begin to claw that money back.”

He expects that number of prosecution referrals will ramp up — as well as the amount paid to fraudsters. The agency also worked with banks and the U.S. Secret Service to seize stolen payments and recover $40 million.

CDLE declined to share information on the four cases because the law enforcement agency they were referred to hasn’t decided whether to prosecute yet.

California, meanwhile, shares its fraud convictions online. Those include an inmate who falsely said his unemployment was due to COVID, a man who received benefits but was employed, and a woman who received $81,682 in Pandemic Unemployment Assistance by using the identities of more than a dozen victims.

The U.S. Department of Labor also has a list of criminal investigations that resulted in arrests, guilty pleas and punishments related to unemployment fraud.

Among them were cases where the accused filed for unemployment in multiple states, including Colorado. Rhode Island resident Francois Parker, for example, said he was a babysitter and falsely claimed he worked in Colorado. He was paid $3,292 from CDLE, in addition to more than $70,000 in claims filed in other states. 

→ Are you a victim of unemployment fraud? >> REPORT IT

Other fraud bits: 

While fraudulent payments are being reported differently by state, a handful have shared how much they lost. These amounts include fraudulent or improper unemployment payments, which means the person was ineligible though it may not be due to ID theft:

  1. California, at $20 billion
  2. Arizona, $4.4 billion 
  3. Michigan, $3.9 billion (auditor’s report)
  4. Ohio, $477 million (plus $3.3 billion in non-fraudulent overpayments)
  5. Florida, $1.9 billion
  6. Texas, $893.5 million, as of May
  7. Kansas, $700 million paid, $2 billion prevented (auditor’s report)
  8. Washington, $640 million (auditor’s report)
  9. Massachusetts, $687 million (recovered $252 million)
  10. Mississippi, $118 million
  11. Rhode Island, $37.6 million as of March 5 
  12. Iowa, $30 million

The U.S. Department of Labor estimated that more than $87 billion in unemployment benefits was “paid improperly, with a significant portion attributable to fraud.” That includes people who failed to look for a job while accepting benefits. It also includes $17 billion paid to filers who used a Social Security number to claim benefits in multiple states or used the identities of deceased people or federal inmates.

The DOL’s Office of Inspector General said its investigations have led to 450 indictments and 130 convictions and to the recovery of $160 million of unemployment fraud. The office worked with other states to recover an additional $565 million in fraudulent benefits. 

“Compared to some of the other states, this is remarkable,” Sen. Chris Hansen, a Denver Democrat on the joint budget committee, said during the hearing. “Colorado is of similar size to Arizona. We are much bigger than Kansas. And we have a fraction of confirmed fraud.” 

A person wearing a mask for his selfie did not pass muster with’s technology. The identity verification company was hired by Colorado to fight unemployment fraud. blocked the fraud using its Face Liveness technology. (Provided by

→ To clamp down on fraud, Colorado rolled out, an ID verification technology that requires unemployed folks to verify themselves with their face, official IDs and other personal data. Since CDLE began requiring applicants to use the service, has verified 381,854 people, or 15% of the 2.6 million attempts.

→ is here to stay. If you’re applying for jobless benefits in Colorado, passing and its face verification is required. That got one person writing to What’s Working miffed. “I don’t agree to allow some company to record my face and voice (and) store that information in cyberspace for seven years where it will very probably be hacked. So, I get nothing,” she wrote in an email. “I bet I’m not the only one.” 

A CDLE spokesperson said they don’t track the refusal data, but staffers who know say “it would probably be in the single digits.” Alternatives are available for people who lack the ability to use the verification technology, but refusing to use it is not a valid reason, officials said.

Paying back $1 billion

Unemployment insurance premiums are inching up in January. If you’re an employer in Colorado, the notice of changes should be arriving in the mail this month. The premiums are paid to the state’s Unemployment Insurance Trust Fund and provide future benefits to employees of those employers who pay into the system.

But if you haven’t heard, the trust fund ran out of money last year and Colorado has since borrowed $1 billion to keep the benefits flowing. For anyone who lived through the Great Recession last decade, you know it’s going to be a rough recovery to fill the trust fund back up and repay the loan.

However, 2022 shouldn’t be as brutal for employers as originally anticipated. That’s because there is no solvency surcharge. Yet.

Let’s back up a bit. When the trust fund ran out of money during the Great Recession and Colorado had to take out a federal loan, businesses saw their insurance premiums jump 200% to 300% as a trust fund insolvency surcharge kicked in. Ultimately, the business community used a bond to get the trust fund back to solvency and get rid of the surcharge. The bond’s surcharge rate to employers was much lower — around 20-25%. The bond was paid off in 2017.

This time around, the state legislature passed Senate Bill 207 last year to suspend the surcharge for two years until 2023. According to labor officials, that’s saving Colorado employers $350 million for the two years. 

But some bills will increase starting in January. The new law also revised the process of replenishing the trust fund. Essentially, starting in January, employers must pay insurance premiums on a worker’s first $17,000, up from $13,600. 

While no surcharge means the trust fund will miss out on collecting $91.7 million next year, the higher wage base should add an additional $79.8 million and continue increasing in the future, according to the law’s legislative fiscal note.

As for the billion-dollar loan? Gov. Jared Polis proposed using up to $500 million of federal recovery funds and another $100 million from the general fund to pay off the federal loan. This must be approved by the legislature. But talk of converting to a bond is just preliminary, said Joe Barela, CDLE’s executive director.

“The interest rates played a factor in the decision to bond rather than to continue to pay on the loan (during the Great Recession),” Barela said during the committee hearing. “And our interest rate from the federal government was zero until September. Now we’re at 2.2% so it’s a fairly low interest rate compared to where the interest rates were in 2010, 11.” 

Employers are still in the dark of what this actually means to their bottom line in the next few years, said Tony Gagliardi, who is Colorado state director for the National Federation of Independent Business.

“There have been no estimates we are aware of as to the impact on employers once the solvency surcharge kicks in. We should be hearing within the next few weeks as to the new UI tax employers will be facing,” he said. But, he added, “there will be an additional increase due to the new wage base of $17,000.”

We’ll be diving deeper into this topic in upcoming weeks. What do you want to know?

Attention business owners & employers: Are your unemployment insurance premiums going up in 2022? Share your stories, concerns and questions about the possible impact on your business in 2022. Email

As is the case every year, employers can protest their new insurance premium rate. >> PROTEST

Colorado new jobless claims lower than 2019 average

Each week since March, the number of first-time jobless claims and the number of Coloradans on unemployment has pretty much declined. 

And the latest data shows that we’re nearly back or below the 2019 average. 

  • Initial unemployment claims for the week ending Nov. 27 were 1,608, compared to the 2019 average week of 1,900.
  • Continued claims, filed by those who are still collecting a benefit payment each week, dropped to 18,843 for the week ending Nov. 20. In 2019, the weekly average was 18,600. 

Here’s the chart:

More unemployment updates: 

  • PUA/PEUC cases getting resolved: The labor department is still fixing pandemic accounts on hold due to fraud, backdating or other issues, as evidenced by the number of payments for federal programs that ended Sept. 4 in Colorado. That includes:
    • 3,031 on Pandemic Unemployment Assistance
    • 8,743 on Pandemic Emergency Unemployment Compensation
    • If you’re still waiting for benefits to clear, the average wait times to speak to a customer service agent is 1 second, as of Thursday. >> Help line: 303-536-5615
  • Pending PUA appeals: Thousands of PUA recipients faced new overpayments in September and the only way around it was to appeal. According to CDLE, 1,042 of the “PUA 90 Day” appeals have been cleared with 732 in the claimant’s favor (so 310 in the department’s favor). Another 620 cases are still pending.  
  • National note: The number of new jobless claims nationwide went up last week, which didn’t surprise too many economists since it had reached a 52-year low in the prior week. But the latest U.S. labor data, released Friday, showed that recovering lost jobs from the pandemic is slow. The U.S. added just 210,000 jobs in November. Economists had expected twice as many.
    • The nation’s unemployment rate fell to 4.2%. Not counted in that number? People who stopped looking for a job in the past four weeks. That was roughly 5.9 million, which is 849,000 more than in February 2020, according to the Bureau of Labor Statistics. Colorado numbers should be out later this month.

Share your story:

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Other business bits, stories

→ How much does it pay? Colorado’s equal-pay law requiring employers to share pay ranges for job openings caught The Wall Street Journal’s attention. The WSJ pointed out that while it helps job seekers determine what jobs might pay, some companies provide ranges so wide, it’s difficult to compare. Walmart, for example, has a pharmacist job that pays between $52,416 to $153,920 a year. >> WSJ

→ Transportation job fair: Colorado Department of Transportation highway maintenance specialists (pays about $19 to $23/hour depending on location) to remove graffiti, dig ditches, plow snow and a number of other duties. CDOT Is holding two job fairs for in-person interviews: in Boulder (1050 Lee Hill Road in Boulder from 9 a.m. to 1 p.m. on Dec. 8) and Pueblo (5615 Wills Blvd. in Pueblo from 10 a.m. to 3 p.m. on Dec. 10) >> BOULDER, PUEBLO

→ CDOT and UBER special: The two have teamed up for December to offer $15 in ride credits as part of a promotion to reduce impaired driving in the state. Use the code HOLIDAYSAFE from now till Jan. 3. There are rules, like the credit can only be used between 5 p.m. to 5 a.m. >> DETAILS

→ Apprenticeships: Colorado Newsline wrote about the state’s new State Apprenticeship Agency, which is still a work in progress. ETA on accepting applications? July 1, 2023. >> Newsline

What’s Working is a Colorado Sun column for readers navigating today’s economy. Read the archive, send a message and don’t miss the next one. Get this free newsletter in your inbox by signing up at

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Tamara writes about businesses, technology and the local economy for The Colorado Sun. She also writes the "What's Working" column, available as a free newsletter at Contact her at,...