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SD legislators hike penalties for jobless fraud

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news Mitchell, 57301
Mitchell South Dakota 120 South Lawler 57301

PIERRE -- People caught fraudulently taking unemployment benefits in South Dakota should face stiffer penalties, the state Senate decided Wednesday.

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The legislation will next land on the desk of Gov. Dennis Daugaard so he can sign it into law.

Senators voted 30-5 for final legislative passage. The House of Representatives had previously approved it 61-5.

Under HB 1055, offenders would face an additional cash penalty equal to 50 percent of the amount they fraudulently collected. The penalty would rise to 100 percent for a subsequent offense.

State law already requires that fraud offenders temporarily lose future eligibility for unemployment benefits and surrender the payments wrongly received.

Sen. Tim Begalka, R-Clear Lake, said Wednesday that workers would be penalized if they were found to have intentionally and blatantly committed fraud to get benefits.

The legislation is supported by the Daugaard administration and was originally recommended by the state unemployment insurance advisory committee.

One of its members, David Owen of Sioux Falls, said at a Senate hearing Tuesday it is "really kind of weird" that South Dakota doesn't already have penalties for unemployment fraud.

Pauline Heier, director for the state Division of Unemployment Insurance, said there were 512 documented cases of fraud in 2012 and the overpayments totaled more than $602,000.

The current legislation would impose small penalties on employers too if they failed to respond promptly or accurately to state Labor Department fraud inquiries.

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