Hello and thank you for entrusting me to answer your question.

First, you should know that the EDD classifies overpayments of UE benefits as either fraudulent or non-fraudulent.

A fraudulent overpayment occurs when a claimant knowingly gives false information or withholds information and receive benefits that they should not have received. Withholding or giving false information to obtain unemployment insurance benefits is a potentially criminal offense. Specifically, California Unemployment Insurance Code 2101 states:

"It is a violation of this chapter to willfully make a false statement or representation, to knowingly fail to disclose a material fact, or to use a false name, false social security number, or other false identification to obtain, increase, reduce, or defeat any benefit or payment..."

With a fraudulent overpayment, the claimant is assessed a penalty in the amount of 30% of the amount of the overpayment and a false statement disqualification of 5 to 23 weeks. Fraud overpayments and penalties must be repaid.

In a circumstance such as yours, it would be very hard to argue that the overpayment of benefits was not the result of an intentional and knowing false representation, since you were working and clearly knew that you should have reported your income. Thus, it would likely be regarded as fraud.

Typically, the very best thing to do is come clean, admit to the wrongdoing, and take responsibility. You will have to pay the money back, likely along with the 30% penalty, but criminal charges may not be filed if you are up front, generally speaking.

At the EDD's discretion, they will refer the matter to the District Attorney, who will ultimately decide whether this matter is one worth prosecuting. Even if they did decide to prosecute, there are "first time offender" plea deals that will allow an individual in your circumstance to avoid jail time and, potentially, any criminal record whatsoever.

I realize that this is not all great news, but nonetheless, I hope that you appreciate receiving accurate information regarding your situation. I certainly understand where you are coming from and am sympathetic to your circumstance.

My absolute greatest concern is that you are satisfied with the answer I provide, so please do not hesitate to contact me with follow-up questions. Also, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Thank you for your reply.

Typically the best way to report an overpayment in this circumstance is to admit to the overpayment in response to the audit. An individual in your circumstance can include a letter to the EDD along with your audit response explaining that an overpayment has occurred and the reasons why your income was misrepresented.

Alternatively, an individual in your circumstance can also call the fraud/overpayment hotline here: 1-800-229-6297

I cannot predict how this will affect your job, as an employer has the discretion to maintain or terminate the employment relationship at any time and for any reason. Certain licenses have affirmative reporting requirements for any sort of administrative disciplinary action or criminal conviction. An individual in your circumstance may be required to report this matter to your state licensing board, depending upon the particular reporting requirements of the board.

Again, my number one goal is that you are satisfied with my answer. If you still require further clarification, I am happy to continue assisting you.

Hello again--no problem whatsoever about the additional question. No, an employee does not have a legal obligation to inform their employer that they are being penalized by the EDD and/or being criminally charged with fraud (again, the criminal charges are unlikely) absent a contractual agreement requiring such disclosure in their employment contract.

I hope this helps.

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Best regards.

No problem. Have an enjoyable rest of the day and we will talk in the future if the need arises.

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