The state's new unemployment law has hundreds of people losing their benefits because they have not been following the rules and looking for work.
Every week, the state audits 1,000 people to see if they are looking for jobs as required under state law to keep unemployment benefits. Of the 6,100 audits completed so far, 400 people have failed and lost their benefits.
Once they follow they law, they can get their benefits back.
"It's not necessarily fraud that we're talking about. It has more to do with people don't know that this is a requirement. That's why when people find out they aren't in compliance, they get back on board very quickly," said Jeff Hentschel, with the Tennessee Department of Labor.
So far, those audits have saved more than $100,000, and the state could collect millions in overpayments to unemployed workers next year. More than 35,000 unemployment checks went out to people who were not supposed to get them.
Now, the Department of Labor is working with the IRS to deduct that money from those people's tax returns in April 2013.
It's all very important to businesses who pay into the unemployment system to make sure people aren't gaming the system.
"Employers want to pay into the trust fund. They want their employees who get laid off to have that money. But they get very frustrated with those who are milking the system," said Jim Brown, Tennessee director for the National Federation of Independent Business.
One other change has been made to the system to prevent people from collecting unemployment checks while in jail.
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