Unemployment Insurance Program Integrity Report, Virginia Employment Commission (December 1, 2025)

Summary

A letter dated December 1, 2025 from Demetrios J. Melis, Commissioner of the Virginia Employment Commission (VEC), to Glenn Youngkin, Governor, and Adam Ebbin, Chair of the Commission on Unemployment Compensation, titled Unemployment Insurance Program Integrity Report. It describes integrity measures and overpayment recovery efforts, and states that work with the Office of the Attorney General Unemployment Compensation Fraud Unit has led to court-ordered restitution of $21,701,100.56. It reports $4,830,476.00 in overpayments paid from October 1, 2023, through September 30, 2024, and $1,695,315,839.00 in overpayments prevented. It also states that as of October 2025 the VEC has approved 105,360 state overpayment waivers in the amount of $336,505,369.00.

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Demetrios J. Melis                                                                                 Post Office Box 26441
Commissioner                                                                                    Richmond, VA 23261-6441

                                                  December 1, 2025



            TO:           The Honorable Glenn Youngkin

                          Governor, Commonwealth of Virginia

                          P.O. Box 1475

                          Richmond, Virginia, 23218


                          The Honorable Adam Ebbin

                          Chair, Commission on Unemployment Compensation

                          Senate of Virginia

                          P.O. Box 396

                          Richmond, Virginia 23218



            FROM:         Demetrios J. Melis, Commissioner
            RE:           Unemployment Insurance Program Integrity Report



            Executive Summary

            Program integrity and enterprise risk management remain top priorities for the VEC. The
            agency has established a formalized Risk Office and a Risk Intelligence and Resilience
            Initiative (RIRI). Through these efforts, the VEC is unifying fraud prevention, IT security,
            and compliance under a coordinated framework to strengthen early detection, information




      (804) 786-3001                                                                     VRC/TDD VA Relay 711
      www.vec.virginia.gov                                                     Equal Opportunity Employer/Program
sharing, and decision-making. In accordance with §60.2 - 612.1(F), the Virginia Employment
Commission shall report by December 1 of each year to the Commission on Unemployment
Compensation, the implementation and enforcement of the provisions of Program Integrity.
Outlined below, please find the agency’s responses.
INTEGRITY MEASURES

Initial claims are verified daily through the Social Security Administration and Integrity Data
Hub (IDH). Weekly Certifications are crossmatched using the National Directory of New Hires
(NDNH) and Prison Data CrossMatch (PUPS). VEC conducts quarterly wage crossmatches
which provide data on new hires quarterly. VEC utilizes its UI technology system, VUIS, to
make comparisons and crossmatch data to detect shared characteristics among claims. All logins
to the VEC database are also authenticated through third party technology platforms for added
security. All suspicious activity or allegations involving UI fraud, waste, abuse, mismanagement,
or misconduct are investigated and reported in accordance with federal requirements. The VEC
reports and coordinates significant cases with the U.S. Department of Labor Office of Inspector
General, consistent with US DOL guidelines.

OVERPAYMENT EFFORTS

The Virginia Employment Commission (VEC) actively pursues multiple strategies to recover
overpaid benefits. Repayment arrangements are negotiated and accepted through various
methods, including cash, checks, and money orders. When applicable, the VEC also offsets
future benefit payments to recover outstanding overpayments—unless the claimant is currently
involved in the appeals process. The recoupment rate ranges from 100 percent of the
overpayment if the claimant was responsible, to 50 percent if the agency was responsible.

In accordance with federal guidelines, the VEC participates in both the Cross Program Offset
Recovery Agreement and the Interstate Reciprocal Offset Recovery Arrangement. Overpayments
may also be recovered through offsets against state income tax refunds and federal tax offsets for
fraudulent overpayments.

Additional recovery efforts include collaboration with state and federal agencies to prosecute
fraud. Enhanced identity verification measures have significantly reduced fraudulent claims
stemming from identity theft. Notably, recent initiatives in partnership with the Commonwealth’s
Office of the Attorney General Unemployment Compensation Fraud Unit have led to
$21,701,100.56 in court-ordered restitution over the past few years.

TYPE AND AMOUNT OF IMPROPER PAYMENTS DETECTED RETROACTIVELY

The total amount of overpayments paid from October 1, 2023, through September 30, 2024, was
$4,830,476.00. These overpayments came from the following issues, with the percentage being
overpaid:
• Work search – 9.991%
• Separations – 31.774%
• Benefit Year Earnings – 15.372%
• Able & Available – 21.128%
• Other Eligibility – 3.215%
• Other Issues – 2.126%

TYPE AND AMOUNT OF IMPROPER PAYMENTS PREVENTED

The total amount of overpayments prevented from being paid was $1,695,315,839.00, which
reflects the value of claims the VEC determined to be ineligible prior to payment through its
established integrity processes. The issue types involved in these overpayments included
separations, work search, able and available, reporting requirements, questionable identity, and
other eligibility issues.
MONIES SAVED IN PREVENTING AND RECOUPING IMPROPER PAYMENTS

The dollar amount of monies saved from preventing improper payments was $1,695,315,839.00
and the dollar amount of monies recouped was $5,219,759.00, for a total of $1,700,535,598.00 in
savings.
NONRECOVERY OF OVERPAYMENTS

The waiver legislation was updated in 2024 under SB536. This legislation amended §60.2-619
and 60.2-633 to allow the VEC to waive the requirement that an overpayment be repaid if certain
conditions were met. The conditions were (i) the overpayment was made due to no fault on the
part of the individual receiving benefits and (ii) requiring repayment would be contrary to
fairness and good conscience. As of October 2025, the VEC has approved 105,360 state
overpayment waivers in the amount of $336,505,369.00 and federal waivers in the amount of
$19,052,457.40.
Thank you for your continued partnership and support of the VEC. Please do not hesitate to
contact me at demetrios.melis@vec.virginia.gov or (804) 786-3001 with any questions.
                                                     Sincerely,




                                                     Demetrios J. Melis

                                                     Commissioner


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