Fraud and Penalties: What You Need to Know
Fraud can occur in many forms, from intended criminal activity to someone providing inaccurate or incomplete information that leads to collecting unemployment, disability, or paid family leave benefits the individual was not eligible to receive.
Both benefit recipients and employers can avoid serious costs and consequences by learning more about their roles and responsibilities when it comes to providing required information for collecting benefits or reporting employee data.
Here are some common examples of fraud that may surprise you:
- You return to work but continue to collect Unemployment Insurance (UI) benefits without reporting the work and wages to the EDD.
- You work a temporary or part-time job but do not report your earnings, so you are collecting more UI benefits than you are allowed.
- You withhold information or give false information when filing a UI claim or certifying for benefits.
- You file a Disability Insurance (DI) claim for an injury or illness that does not exist or help another person file a false claim.
- You pay your employees under the table and don’t report the wages to the EDD.
- You do not report when you hire new employees or you report incorrect start dates.
Fraud Detection: The EDD conducts cross-matches with several data sources and when we find instances of someone collecting benefits he or she was not eligible to receive, an overpayment is established. Overpayments due to fraud are subject to penalties including denial of benefits, and paying back any amount the claimant was not entitled to receive. Overpayments can also result in higher taxes for employers whose annual contributions pay for unemployment benefits for their former workers.
If you think someone is committing fraud against one of EDD's programs, notify the EDD immediately on Ask EDD: Reporting Fraud.
The Annual Fraud Reports document the Department's fraud deterrence and detection activities.
The EDD is dedicated to detecting, deterring, and preventing any occurrence of fraud in our programs. Here is a list of recent fraud convictions detected by the EDD.
Information for Individuals Collecting UI, DI, or PFL Benefits
Claimants who knowingly collect benefits based on false or inaccurate information that was intentionally provided when filing a claim or certifying for ongoing benefits are committing fraud. Such action is punishable by law and violators could face a number of serious penalties. This information will help you avoid such consequences.
Avoid Fraud and Penalties in the UI Program
Avoid Fraud and Penalties in the DI and PFL Programs
Information for Employers to Avoid Higher UI Taxes
Information for employers on how they can minimize their UI costs, avoid higher UI taxes and prevent overpayment of UI benefit payments.
Employers and Physicians/Practitioners can also help the EDD control fraud in the DI and PFL programs, and minimize unfair business practices that can harm business competition.
- Report Suspected Fraud
- Fraud in the DI and PFL Programs
- Employer Payroll Tax Fraud
- Joint Enforcement Strike Force (JESF)
- Help Us Fight Fraud (DE 2370)
- Paying Cash Wages "Under the Table"...Is It Really Worth the Risk? (DE 573CA)
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Identity Theft and Imposter Claims
Identity theft is a growing problem affecting millions of people and their livelihoods. Identity theft in the UI program can occur when someone uses another person’s personal identifying information to file a UI “imposter claim” and illegally obtain UI benefits.
Information for Employees About Imposter Claims
If you suspect that someone has filed a fraudulent UI claim in your name, the fastest and most secure way to report fraud to the EDD is online. You may also call the EDD’s toll-free Fraud Hotline at 1-855-327-7055. If you are unable to reach a representative, we encourage you to file a report online.
Information for Employers About Imposter Claims
When an identity thief files an imposter claim for one of your employees, it can increase your UI tax rates. This is why it is vital for employers to partner with the EDD in its efforts to protect your employees and the integrity of the UI program. For more information on preventing, identifying, and reporting identity theft, visit the EDD’s Identity Theft Prevention page.
- Report Fraud: If you suspect a potential imposter claim, immediately report it online (recommended) or call the EDD’s toll-free Fraud Hotline at 1-855-327-7055.
- UI Fraud FAQs
- EDD Actively Prosecutes Fraud – Recent Fraud Convictions