Fraud and Penalties: What You Need to Know
Collecting Unemployment Insurance (UI) benefits based on false, misreported, or unreported information to the EDD is considered fraud. UI claimants are legally responsible to follow the requirements set by state law. If you commit UI fraud, you could face serious penalties and consequences.
Penalties
UI fraud penalties can include:
- Prosecution by government authorities.
- Possible jail or prison sentences.
- Repaying the UI benefits collected, plus penalties and fines.
- Loss of future income tax refunds.
- Losing eligibility to collect UI benefits in the future.
Report Fraud
If you think someone is committing UI fraud, notify the EDD immediately using Ask EDD or call the EDD Fraud Tip Hot-Line at 1-800-229-6297 (anonymous calls are accepted). For more information, review How to Report Unemployment Insurance Fraud (DE 2370) (PDF).
Information for Claimants
- Returning to work but continuing to collect UI benefits without reporting your work and wages.
- Not reporting wages during the week that the work was performed.
- Working a temporary or part-time job but not reporting your work and wages.
- Withholding information or providing false information to the EDD.
Information for Employers
Help minimize your UI costs, avoid higher UI taxes, and prevent overpayment of UI benefits by providing us with accurate information.
- Helping another person file a false claim.
- Paying employees secretly, off the record, or not properly reporting their wages to the EDD.
- Not reporting when you hire new employees.
- Reporting incorrect start dates.
- How to Protect Your Business from Higher Unemployment Insurance (UI) Taxes (YouTube)
- Protect Your Business from Higher Taxes: Help Prevent Improper Payment of UI Benefits
- Managing Unemployment Insurance Costs (DE 4527) (PDF)
- The EDD Actively Prosecutes Fraud
- Identify Theft Prevention
- FAQs – Fraud for Employers
Identity Theft and Imposter Claims
Identity theft is a growing problem affecting millions of people and their livelihoods. UI identity theft occurs when you use someone else’s personal identifying information to file a UI imposter claim and illegally obtain UI benefits.
If you think that someone has filed a UI claim in your name, visit Reporting Fraud
You can also call our toll-free Fraud Hotline at 1-800-229-6297.
For more information about protecting yourself from identity theft, visit Identity Theft Prevention and review the California Attorney General’s Identity Theft Information Sheets.
When an identity thief files an imposter claim for one of your employees, it can increase your UI tax rates. It is important for us to partner to protect your employees and the integrity of the UI program.
For more information on preventing, identifying, and reporting identity theft, visit Identity Theft Prevention.