Unemployment benefits fraud is what happens when someone provides misreported, unreported or false information to the Employment Development Department (EDD) in order to collect unemployment insurance (UI) benefits. UI fraud is illegal. There is more than one serious penalty for unemployment fraud. Continue reading this page to find out more about examples of unemployment benefits fraud, the penalties for unemployment benefits fraud and how you can report someone you think is committing UI fraud.
Learn About Examples of Unemployment Insurance Fraud
Unemployment benefits fraud can occur when someone is opening a new UI claim, reopening a UI claim or during the verification process. To avoid UI fraud, you must follow the requirements set by law. You could face a number of serious penalties if you make a false claim. Examples of unemployment benefits fraud could include the following:
- You give false information or withhold required information when making your UI claim or certifying UI benefits
- You work a part-time job without reporting your income
- You do not report earnings during the week you performed work
- You get a new job, but continue to claim benefits without reporting your earnings
- You perform temporary work while claiming UI but do not report your earnings
- You file a claim for disability insurance for a non-existent illness or injury or you help another person file a false claim
To read more about incidents that are considered committing UI fraud, download our guide.
Other types of unemployment benefits fraud could include: using another person’s name or Social Security Number to file an application or allowing someone else to use your ID and Social Security Number to file a UI claim. UI benefits fraud also includes cashing another person’s UI benefits payments and working without reporting hours and earnings. You can also face serious penalties for unemployment benefits fraud if you assist someone else who is making a fraudulent UI benefit claim. Additionally, you are guilty of unemployment benefits fraud if you are not telling the truth about your effort to find work, your enrollment in job training or if you turned down a job offer without reporting that you did so.
Learn About Unemployment Insurance Fraud Penalties
You face serious penalties for unemployment benefits fraud if you are caught in the act by state authorities. Unemployment insurance fraud penalties include:
- Losing the opportunity to apply for or collect UI benefits in the future.
- A possible jail or prison sentence.
- Repaying back the benefits you were not entitled to, as well as paying penalties and fines.
- Foregoing future income tax refunds.
Every person who claims and collects UI benefits is responsible for making sure he or she follows the instructions and requirements, by law. If you think you may have inadvertently committed UI fraud, then you should contact the EDD immediately.
Learn How to Avoid Committing Unemployment Benefits Fraud
Oftentimes, beneficiaries do not even know they are committing a type of UI fraud. To avoid committing UI fraud and the risk of facing penalties for UI benefits fraud, follow these tips:
- You should always report your gross salary; this is your total income before any deductions are made
- Report your earnings during the week that you were working, not the week in which you got paid
- Report all work for which you earn income; this includes temporary work, part-time work and self-employment
- You should keep a detailed record of your hours worked and your daily earnings if the weeks listed on your payroll are different from those on your Continued Claim Form (DE 4581); remember, the certification weeks on your DE 4581 form always commence on a Sunday and end on a Saturday, and keeping a personal record will stop you from getting confused and making errors which may seem to be benefits fraud
To learn more about unemployment benefits fraud, download our comprehensive guide.
Learn How to Report Someone Committing Unemployment Insurance Fraud
If you are wondering how to report unemployment insurance fraud, first of all, you need to be sure that you have enough information to support your fraud claims. To report unemployment insurance fraud , you should visit the EDD website or call the toll-free number. All UI benefit fraud allegations are taken very seriously. Your call will remain anonymous, if you wish. You will need to provide information about the name and address of the person you are reporting, his or her Social Security Number, the age or date of birth, the type of fraud he or she is committing, when the person began committing UI benefits fraud, when and how the person collects benefits payments, where payments are cashed and a current employer, if applicable.
In the prevention and detection of UI benefits fraud, the EDD takes many measures. To avoid unemployment insurance fraud, EDD workers ask claimants for several qualifying pieces of information and contacting previous employers when a new claim is filed. Benefits fraud is also detected by the EDD by means of cutting-edge technology, data-matching strategies and electronic monitoring.
Download our free guide to review more information about how to avoid UI benefits fraud.