People aren’t responding to California’s unemployment fraud crackdown. What happens next?
Most of the 1.4 million people asked last year to prove they properly received federally-funded unemployment benefits have not responded to the state’s request and could eventually face penalties and repayments.
The state first sought the information in November. In some cases, it said, it could seek a potential repayment of all benefits received.
It talked about penalties. The state’s Employment Development Department, which manages the unemployment program, said it would add a 30% penalty “if we determine that you intentionally gave false information or withheld information to receive benefits.”
So far, about 280,000 people have responded. Of those, about 90% were found eligible for the benefits. The others will see further reminders about the importance of the federal requirement. They’re being given time to appeal and submit further documentation.
Confused? Here’s some EDD advice
EDD has been notifying those who have to submit the information by sending texts, emails and by using the unemployment insurance online homepage to notify claimants.
The agency is aware that people may not be checking their UI Online accounts or may have missed emails, so If someone doesn’t respond by a due date, they’ll get a follow-up notice in the mail.
If they don’t respond to that notice, they could be deemed ineligible for the benefits they were paid. They would have the chance to appeal, but could have to pay back what they’ve received if they don’t qualify for a waiver.
The Department is working to help people understand what they’re supposed to do, and what sort of documents meet the need with updates on its Pandemic Unemployment Assistance webpage.
Those who were not notified have already provided proof of employment or were not subject to the requirement.
Do I need to show EDD proof?
PUA was the federal program that provided unemployment benefits to people who traditionally did not qualify for such regular state-provided unemployment insurance aid, such as independent contractors and small business owners. The PUA program ended last fall.
About 2.9 million Californians received PUA benefits. At first, federal law said EDD only needed to get documentation from PUA recipients when they wanted to get more in weekly benefits than the minimum of $167.
People who didn’t seek an increase did not have to provide any documentation verifying their income or any other proof of work.
The PUA program, though, became the target of massive fraud, and estimates are that scammers received as much as $20 billion from such schemes.
The federal government has tried to combat the problem by seeking more proof from beneficiaries that they had worked, or had planned to work, before getting payments as they had indicated in their PUA application.
PUA, as well as regular state benefits, is intended to be a partial wage-replacement. That’s why the claimant has to have had earnings or a plan to start earnings before the start of their claim.
How do I submit proof?
That means people who received PUA benefits on a 2020 claim after December 27, 2020 or filed a new claim after that date have to provide EDD with documentation.
The material must show that they had worked, were self-employed, or had planned to work or be self-employed at some point in the calendar year before and up to the start of their claim.
Proof can be a tax return, business license, business receipt or invoice, W-2 form or pay stub. EDD will also accept proof of plans for employment or self-employment, perhaps a letter from a prospective employer with the date the work was to begin.
Proof of self-employment could include a business license, state or federal employer identification numbers, written business plans or lease agreements.
In addition, the federal government recently added three new reasons recipients could be eligible for PUA benefits:
▪ Your hours were reduced or you were laid off as a direct result of the COVID-19 public health emergency. “If you were previously denied benefits for one or more weeks under the PUA program, you will receive a message in your UI Online account with instructions on how to complete the PUA reassessment,” EDD says.
▪ You were denied because you refused to return to work or accept an offer of work at a worksite that was not complying with COVID-19 safety standards.
▪ You were a school employee and were fully or partially unemployed because of changes in your usual work schedule directly caused by COVID-19.
This story was originally published January 26, 2022 at 5:00 AM with the headline "People aren’t responding to California’s unemployment fraud crackdown. What happens next?."
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