What Is Considered Unemployment Fraud Under California Law?
The law criminalizes anyone defrauding California’s unemployment insurance system, whether they are an employee or an employer. California’s unemployment program is run by the state’s Employment Development Department (EDD), so unemployment fraud is commonly referred to as EDD fraud. In a joint program with the federal government, employers fund EDD through tax payments. If you end up unemployed through no fault of your own, you as an employee can tap into the EDD system for weekly payments.
Eligibility for EDD Benefits Varies
Because unemployment fraud in California usually involves people who are not eligible to receive benefits taking them anyway, it’s essential to understand who can legally participate in the EDD system. If you have been employed within the past 18 months, you will likely have a valid claim if you become unemployed or if your hours are cut below full-time.
Once you qualify for benefits, you must actively seek work to remain eligible for continuing weekly payments. You also must be ready to return to work immediately. If you meet all of these conditions, you can generally receive EDD benefits.
While unemployment insurance is typically reserved for those out of work through no fault of their own, EDD will allow some people who were fired or quit to receive benefits if they meet specific criteria. Eligibility for EDD is determined on a case-by-case basis.
Unemployment Fraud Involves Ineligible Persons
Both individuals and employers can commit EDD fraud. For individuals, it is illegal to make false claims for EDD benefits. Claiming that you are eligible when you know you are not is unlawful. It is also prohibited to hide your actual employment status or identification to increase your chances of receiving benefits.
For example, you must be unemployed to receive an EDD check. If you find a job but continue to say you are unemployed to keep receiving money, you have committed unemployment fraud. It is also considered EDD fraud to obscure who you actually are by submitting a false identity or personal information to the department or to lie and create a bogus application or interview history to prove you are looking for work.
Employers can commit EDD fraud by attempting to avoid their full tax contributions. This can be achieved by falsely stating an employee was terminated or that their salary is lower than what the company actually pays them. Because the tax bill is calculated based on payroll, a fraudulently lower amount of employees or wages can reduce a business’ contributions.
Penalties for California EDD Fraud
The punishments you face for an unemployment insurance fraud conviction vary based on the amount of the fraud and the facts of the case. If the amount of money you fraudulently obtained is $950 or less, insurance fraud is always a misdemeanor in California. The maximum penalties include up to six months in county jail and a $1,000 fine.
If you received an amount greater than $950 due to your scheme, you could face a misdemeanor or a felony charge. Misdemeanor fraud involving more than $950 can lead to a year in county jail and a fine of up to $10,000. Felony unemployment insurance fraud carries prison sentences of either two, three, or five years. Additionally, you can be fined the greater of $50,000 or double the amount defrauded.
Unemployment insurance fraud investigations in Irvine, California, can have severe outcomes. If you’ve been arrested, the skilled defense attorneys at Chambers Law Firm can help you fight for your freedom. Contact us today at 714-760-4088 or dchambers@clfca.com to schedule a free initial consultation with an experienced member of our legal team.
