Be on the lookout for those who take advantage of the generosity of the system.

More than 24,000 people currently receive unemployment benefits in Maine each week. For many of our friends and neighbors who have lost jobs during the economic downturn, the program has been a lifeline that has helped put food on the table or pay the mortgage while they looked for their next job. And while unemployment is paid directly to individuals, the program often serves as an economic stabilizer to entire communities where layoffs are concentrated.

State unemployment benefits are funded from insurance premiums paid by Maine employers based on a portion of earnings for each worker they hire. Since the start of the recession, additional federally funded benefits have been available to some claimants who have run out of all weeks available to them under the state program. To qualify for any unemployment benefits, a worker must have lost his job through no fault of his own, be actively seeking work and physically/mentally able to accept work.

Regrettably, there are also people who are taking advantage of the generosity of the system. This is threatening the ability of the program to remain solvent for the long term and ultimately undermining the ability of employers to add jobs and improve the economic climate of our state.

Each week, workers are required to attest that they have been available and engaged in a work search. Most claimants, in my opinion, are meeting their requirements and are legitimately qualified to receive unemployment benefits. But the numbers also show that there are a significant number of claimants who fail to meet their obligations and, at worst, are committing outright fraud.

Unemployment fraud occurs when someone misrepresents their eligibility for benefits. It may be the claimant who falsely reports that he has been looking for work, or it could occur when an individual returns to work and doesn’t report those earnings in order to collect unemployment benefits. Whatever the case, fraud detection measures in place at the Maine Department of Labor identified several million dollars in fraud and overpayments in 2010 alone. There were also likely many more instances that went undetected during that time. That is about to change.

The Maine Department of Labor is energizing efforts to improve an existing crossmatch capability with the Social Security Administration and the Department of Health and Human Services’ new hire database. This enables fraud detection earlier in order to minimize the number of overpayments that do occur. Maine Department of Labor staff are also working to build new partnerships with the Department of Corrections, as well as law enforcement officials to further improve the agency’s ability to weed out illegal claim activity.

One area of particular challenge is the practice of people “working under the table” for wages while collecting an unemployment check. This type of fraud involves both the worker and an employer, and both are being held accountable. The employer benefits by avoiding payroll taxes, unemployment insurance and workers’ compensation costs, allowing them an unfair competitive advantage over other businesses that play by the rules. The unscrupulous employee benefits not only by the unemployment check, but by also avoiding taxes as well. The underground economy shifts the burden on the rest of us to pay the bill.

More needs to be done to improve recovery of fraudulent payments so that unemployment claims can be satisfied. Starting this fall, additional staff resources will be dedicated to investigating and responding to fraud allegations, while other employees will beef up efforts to collect on past due amounts.

In addition to increased efforts on the part of the state to address the problem, I am calling on employers to help do their part to prevent unemployment insurance fraud. Maine state law requires all employers to report new employees to the Department of Health and Human Services’ new hire system within seven days of hire. The Maine Department of Labor uses that new hire information to identify individuals who continue to file for unemployment benefits after returning to work. The sooner employers report new hires, the faster fraud in the unemployment system can be detected and payments stopped. The DHHS new hire hot line is 800-845-5808. Employers should also report instances of unemployment claimants refusing offers to work by calling (207) 621-5100.

All of us ultimately pay the price for unemployment fraud. Overpayment costs lead to higher unemployment premiums for Maine employers, making it more expensive for job creators to add to their work force and creating a long-term drag on the state’s economy. Fraud weakens the integrity of the unemployment program, putting benefits at risk for those who legitimately need them following the unfortunate loss of a job.

This is a problem that requires everyone to take action. I encourage vigilance; be on the lookout for violators and report them to the unemployment tip line. Meanwhile, if any reader is currently violating the rules or is even considering doing so — my advice is to stop immediately. The consequence of not heeding this and other warnings is certain to be unpleasant.

Robert Winglass is the commissioner of the Maine Department of Labor.