State Reports Success in Catching All Fraudulent Claims from Washington Fruit Company Workers

State officials have confirmed they detected and blocked all fraudulent benefit claims submitted by employees at a Washington fruit company, following concerns raised by Republican lawmakers about potential misuse of the state’s paid family and medical leave program.

The Employment Security Department (ESD) acknowledged on January 15 that it received “a small number” of false claims for paid family and medical leave benefits from workers at Douglas Fruit Company and Douglas Ag Services, based in Pasco. However, the department emphasized that none of these fraudulent claims resulted in payments.

“None of those claims were paid,” wrote ESD Commissioner Cami Feek in a letter addressing concerns from GOP legislative leaders. Feek noted that while the company had flagged potential issues, the department’s existing internal controls would have identified the fraudulent applications regardless.

The matter came to light after Senate Republican Leader John Braun and House Republican Leader Drew Stokesbary sent a letter to Feek on January 9, alleging that an investigation in October had uncovered “a pattern of brazen fraud” at the company. The Republican lawmakers claimed many employees were collecting leave payments while continuing to work.

Douglas Fruit Company reportedly expressed concern that some employees were not only working while receiving benefits but also paying third parties to file applications on their behalf. Feek clarified that while the department doesn’t recommend paying others to prepare benefit applications, such arrangements aren’t illegal.

The commissioner also explained that receiving benefits while working isn’t necessarily fraudulent. “For example, an employee can collect benefits for hours spent at medical appointments during a work day,” Feek said, highlighting the nuanced nature of legitimate claims versus fraudulent ones.

Washington’s paid family and medical leave program includes multiple safeguards against fraud. Workers must provide identification and supporting documentation for their claims, and employers have opportunities to contest applications they believe are fraudulent. The department denied 8,300 claims last year due to insufficient documentation.

Since the program’s inception in 2020, ESD has confirmed only 83 cases of fraudulent claims, suggesting a relatively low rate of confirmed fraud compared to the overall volume of applications processed.

The controversy unfolds against a backdrop of financial challenges for the program, which ran a $158 million deficit last year. While the state collected approximately $2 billion through a 1.13% tax on gross wages, it paid out $2.1 billion in benefits. Program administration added another $84 million in costs.

To address the shortfall, the payroll tax will increase to 1.2% next year, reaching the maximum rate allowed under current law. Without structural changes to the program, ESD projections indicate the deficit could grow substantially, potentially reaching $992 million by 2029.

Washington’s paid family and medical leave program allows eligible workers to receive up to 90% of their wages for as long as 12 weeks. Most beneficiaries use the program for medical or maternity leave, caring for family members, or bonding with a new child.

Neither Republican leader provided immediate comment on the commissioner’s response to their allegations. The exchange highlights ongoing tensions surrounding social benefit programs and their vulnerability to fraud, even as state officials maintain that their systems are effectively identifying and preventing improper payments.