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A quiet but significant change to Connecticut’s unemployment fraud laws is moving through the state legislature. Senate Bill 347 (S.B. 347), raised by the Labor and Public Employees Committee, would raise the dollar threshold for felony-level unemployment compensation fraud from $500 to $2,000.

Under the bill, anyone who knowingly makes false statements or fails to disclose material facts to obtain, increase, prevent, or decrease unemployment benefits would face:

• A Class A misdemeanor (up to 1 year in jail and a $2,000 fine) if the fraudulent amount is $2,000 or less.
• A Class D felony (up to 5 years in prison and a $5,000 fine) only if the amount exceeds $2,000.

The change would take effect October 1, 2026, if passed.

Connecticut’s existing statute (C.G.S. § 31-273(f)) has used the $500 felony cutoff for years.

The threshold has meant that relatively modest overpayments — sometimes the result of honest mistakes, paperwork errors, or minor misrepresentations — could trigger felony charges, a permanent criminal record, and long-term barriers to employment and housing.

Proponents, including legal aid groups and the ACLU of Connecticut, argue the update modernizes the law to reflect inflation and prevents overly punitive outcomes for low-level cases and call it a “commonsense” reform that aligns penalties more closely with similar theft statutes.

The bill received a Joint Favorable vote in the Labor and Public Employees Committee (9-4) and was tabled for the Senate calendar on March 19, 2026. On April 8, 2026, it was transmitted to the Judiciary Committee for further review. No amendments have been filed, and the Office of Fiscal Analysis says the change would have minimal fiscal impact on the state.

The bill arrives against the backdrop of massive pandemic-era unemployment fraud nationwide. While Connecticut’s proposal is focused on individual claimants (not organized rings), some critics of similar past measures have argued that raising thresholds effectively “condones” fraud and could reduce deterrence.

A nearly identical proposal in 2024 drew that exact concern from one Judiciary Committee member, State Rep. Craig Fishbein, who called it "too lenient."

Supporters counter that prosecutors still have discretion, civil remedies remain strong, and felony records for $600 or $1,200 overpayments create lifelong consequences that far outweigh the harm in many cases.

The bill now sits in the Judiciary Committee. If it advances, it would need floor votes in both the Senate and House before reaching Gov. Ned Lamont’s desk. Given the democrat supermajority in Hartford, the measure has a realistic path forward.

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