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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 117361
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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what is the penalty for collecting unemployment benefits while

Resolved Question:

what is the penalty for collecting unemployment benefits while working in the state of new york?
Submitted: 6 years ago.
Category: Legal
Expert:  Law Educator, Esq. replied 6 years ago.
Under NY law Sec. 594. Reduction of benefits for false statement. A claimant who has willfully made a false statement or representation to obtain any benefit under the provisions of this article shall forfeit benefits for at least the first four but not more than the first eighty effective days following discovery of such offense for which he otherwise would have been entitled to receive benefits. Such penalty shall apply only once with respect to each such offense.

Additionally, you will have to repay the money you received. Under NY law § 470.4 Overpaid unemployment insurance benefits

The Commissioner of Labor shall, as provided for in section 18 of the State Finance Law, waive the assessment of interest and late charges on debts owed which occurred as a result of overpayment of unemployment insurance benefits.

§ 470.5 Setoff against unemployment insurance benefits

Established and outstanding overpaid unemployment insurance benefits shall be collected from a claimant's weekly benefit award as a setoff.

Priority of liquidation. In the event that more than one overpayment is established against an individual claimant, setoff amounts will be debited to such overpayments in chronological order.

Willful overpayment. A setoff of 100 percent of the weekly benefit amount will apply to one or more established and outstanding overpayments attributable to an individual claimant so long as at least one of such overpayments is determined to have been willful.

Non-willful overpayment. A setoff of 50 percent of the weekly benefit amount will apply to one or more established and outstanding overpayments attributable to an individual claimant so long as none of such overpayments are determined to have been willful"

Additionally, besides loss of benefits you can be charged with larceny and depending on the amount of benefits you received you can be charged as a misdemeanor with up to 1 year in jail or a felony with up to 5 years in jail.

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Customer: replied 6 years ago.

Would you recommend that I call the State Dept of Labor and report this and set up a payment plan right away with them to avoid legal action? The overpayment was during 2 freelance positions (1 both was for 6 months and the other for 4 months). I've received a 1099-G for the amount to be included in tax filings and have just taken a full-time, permanent position (which does not begin for another 3 weeks) in which I have stopped collecting. I'm not sure if I should just proceed as normal and when doing my taxes supply this to my accountant as normal OR then if I should contact Dept of Labor and inform them of this and try to set something up with them asap to repay.

Expert:  Law Educator, Esq. replied 6 years ago.
NO, you should not have any contact with the department of labor at all. Anything you say to them they can use against you if the DA decides to prosecute. What you should do is obtain a local unemployment law attorney to represent you and to negotiate a settlement on your behalf with the department of labor because anything they say in negotiation cannot be used against you in any court. Yes, an attorney may cost you about $1000 or $1500 to do this, but in the long run because it protects your rights the money spent is well worth it as it protects you in case they want to charge you (and NY has a very aggressive system to prosecute unemployment fraud).
Customer: replied 6 years ago.
Thank you for your advice. I'm really scared about this. I didn't realize this was not allowed - I understand it's "unemployment" but as it kept getting extended I thought the money was for me due to it not being full-time work. Do you think this could mean jail time? I just got an amazing job and start in 3 weeks. I'm terrified of what this means and how quickly this will all come about - I just received a letter a few weeks ago extending it again. I'm no longer collecting though as no need. Also, due to the multiple questions, I will be sure to add to the deposit here - I apologize for all the questions.
Expert:  Law Educator, Esq. replied 6 years ago.
It is possible that you could get a felony conviction, as far as actual jail v. probation, generally a first offender is probation. This is why you need an attorney involved as soon as possible to negotiate a resolution and repayment. Of course, as you may have heard this statement, "ignorance of the law is no excuse," which means just because you did not know it was illegal to collect unemployment while working does not mean you are not liable for violating the law.
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