New law targets unemployment-insurance fraud

Governor Chris Gregoire yesterday signed into law a measure that will close tax loopholes in the unemployment-insurance system and keep $1 billion a year in federal tax credits for Washington businesses. The new law targets employers who try to manipulate their unemployment tax rate by purchasing, restructuring or merging a business to get a lower rate. Similarly, $1.8 million in the supplemental budget was earmarked to increase efforts to detect and investigate fraud by employers and by unemployment claimants, and to collect unpaid taxes and invalid unemployment payments.  The funding comes from penalties and interest collected from violators over the past year.