This bill introduces significant reforms to unemployment compensation programs to combat fraud and improper payments. It mandates that state agencies establish rigorous identity verification procedures for unemployment claimants, requiring at least one government-issued identification and supporting documents. The Secretary of Labor is tasked with developing regulations for these procedures, ensuring due process, accuracy, and protection against discrimination. To further prevent fraud, the legislation requires states to utilize various data matching systems . These include an integrity data hub, the National Directory of New Hires to identify claimants who have become employed, and information from the Social Security Administration to detect incarcerated or deceased individuals receiving benefits. The bill shifts the payment model by prohibiting the "pay and chase" approach, ensuring that unemployment compensation is only paid after eligibility, including identity, has been fully verified. It explicitly states that a claimant's self-attestation alone is insufficient to prove eligibility for benefits. Furthermore, the legislation strengthens work search requirements , defining "actively seeking work" to include registering for employment services, maintaining detailed records, and submitting these records weekly for state verification. States that fail to comply with these new identity verification and payment timing requirements may face monitoring by the Secretary of Labor, potential withholding of federal funds, and corrective action plans. Finally, the bill allows states to retain up to five percent of recovered overpayments and certain collected contributions to fund fraud prevention, technology modernization, and improved program administration.