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Making False Statements to Obtain Unemployment Benefits

Making False Statements to Obtain Unemployment Benefits

Losing a job can be really stressful. You may be tempted to stretch the truth a little to get unemployment benefits. But making false statements to get unemployment is fraud. It can lead to serious penalties,, so its important to give accurate info when applying for benefits.

What Counts as Fraud

There are a few common ways people commit fraud to get unemployment:

  • Lying about the reason for job loss. Saying you were laid off when you really quit or were fired for cause.
  • Not reporting or underreporting earnings if you work part-time or temporary while on unemployment.
  • Saying you are able and available to work full-time when you are not.
  • Allowing someone else to file a claim in your name.
  • Filing claims in multiple states for the same time period.

Even little white lies or omissions can be considered fraud. The unemployment office wants complete and accurate facts to decide if you qualify for benefits.

Penalties for Unemployment Fraud

The penalties for unemployment fraud depend on how much money was overpaid. You may have to repay the amounts received improperly, plus a penalty up to 30% in some states. Some other potential consequences include:

  • Losing future unemployment benefits for up to one year
  • Facing criminal charges – unemployment fraud over $500 is a felony in most states
  • Jail time – up to 5 years for larger fraud amounts
  • Probation and community service
  • Fines of $100 to $5000

The unemployment agency will send you a Notice of Determination if they suspect fraud. You have the right to appeal if you disagree with their findings. Honest mistakes can happen – be sure to explain your situation if you get such a notice.

How to Avoid Unemployment Fraud

Follow these tips to avoid problems:

  • Report all work and earnings if you do any part-time or temporary work.
  • Certify your status honestly every week or biweekly as required.
  • Keep detailed records of job search activities.
  • Notify the agency if you return to work, become unavailable for work, or change addresses.
  • Ask for help from the agency if unsure about reporting requirements.

The unemployment process can be confusing. If you are not sure if you should report something, discuss it with the agency. They can help explain the rules and what information they need. Small mistakes can often be fixed if caught early.

Defenses Against Unemployment Fraud Charges

If accused of unemployment fraud, possible defenses include:

  • Lack of intent – The prosecution must prove you knowingly provided false information. Honest mistakes are not fraud.
  • Confusion or misunderstanding – The rules can be complex. Demonstrate you were unclear versus intentionally deceitful.
  • Disability – A mental disability or disorder may have contributed to false statements or failure to report accurately.
  • Duress – You may have been coerced or under pressure from an abusive partner or family member.

An attorney can help raise these defenses and negotiate reduced penalties if charged with unemployment fraud.

Avoiding Fraud as an Employer

Employers also have responsibilities when it comes to unemployment claims:

  • Provide accurate reason for job separation when requested.
  • Respond to agency requests for information in a timely manner.
  • Understand which former employees may qualify for benefits.
  • Appeal determinations if you believe a former employee does not qualify.
  • Report any suspected fraudulent activity.

Employers pay taxes into the unemployment system, so they have an interest in ensuring only valid claims are approved. But they should be careful about incorrectly alleging fraud just to try to avoid charges. That can carry penalties too.

Unemployment Fraud Is Serious

Unemployment fraud steals money from systems designed to help people in need. With penalties like repayment, fines, and even jail time, it just isn’t worth it. Be honest up front when applying. If issues come up later, work with the agency to resolve them. And if you’re wrongly accused, consult a lawyer to protect your rights. Being accused of fraud can be scary and overwhelming. But there are ways to defend yourself and move forward.


NOLO Legal Encyclopedia – Unemployment Benefits Fraud FAQ

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