Unemployment insurance and independent contractor work, unreported to EDD

[jessica zuric]

California, USA.

I have been working as an IC briefly while collecting unemployment, and I have not reported my earnings. I want to tell EDD without criminal consequences. I did not know what I was doing was incorrect and wrong, and now that I know I feel very guilty and want to make right. What should I do?

I have been collecting unemployment while briefly working as an IC and earning money, thinking it was not illegal. I make a certain amount every two weeks from unemployment, and made a total of $3000 from IC work. I signed a W9 with my SNN and timesheets at the company. He did not report the earnings on the bimonthly unemployment web certification that asks if you earned any money. I want to pay it back without any legal consequences. On the next unemployment web certification, should I report the full amount of $3000? Should I claim a partial amount on each certification so as not to raise any questions? Should I contact EDD and tell them, or would that be worse? Should I not do anything at all? What are the chances I will be prosecuted? What will the EDD do if they find out, even if he tells unemployment every week that he has made a portion of $3000 until the whole $3000 if spoken for? What are the chances of getting audited? Will they make me pay the amount of $3000 back, or will they just stop my unemployment benefits? If they make me pay it back, can I do so on a payment plan? I can't afford an attorney. I would appreciate any advice.

 

[commentator]

Okay you put this under the wrong topic. Don't be surprised if someone tells you you're going straight to jail have not been charged with, and may not have committed any crimes. You do not need an attorney AT THIS POINT.

 

[commentator]

Now, lets get to the bigger issues addressed here. First of all, what do you mean about your employer not putting the amount you worked in the place for them to fill out bi-weekly forms? Are you filing partial unemployment claims through your employer? Did you work for this same employer as an IC that you are laid off from?

If this has happened, your employer is committing the fraud, not necessarily you. But of course, no matter what the situation, you should immediately call the unemployment system, and ask a living human being about this.

Do NOT just assume you can put down an amount you made working at this point and this will cover you.

What will happen is that if you report on your bi-weekly certification that yes, you did do work, and were paid $3000, or half of it, or whatever, what it will do is stop your claim until an investigation is begun.

You may as well stop NOW filing those bi-weekly forms and get on the phone and begin discussing this situation at once with someone. Hopefully they will tell you exactly how to begin the process of investigation that will determine if you are overpaid, and if so how much you are overpaid by, and how it will affect your claim.

If you decide to just let it go, what will happen is that even if they do not find out some other way, which may very well happen, it will cross match with your state and federal income taxes at the end of the year, and there will be money earned there (not through unemployment,) during the time that you were supposedly drawing...anyhow, it will come out eventually, and at that time, it will be much harder to straighten out, will look much more like you had the studied intention to commit fraud, and like you might be a good candidate to make an example of and actually refer for prosecution to the D.A. At that time, you would yes, definitely need a lawyer.

The unemployment office will actually have to determine which weeks you performed the work, what type of work it was, and whether you intentionally committed fraud by not reporting it. It will also have to do with how long it has been since you did this work, and who you did it for, as I said. Your availability for other work may be an issue. See why the agency has to be the one to sort it all out?

Do not file for any more benefits until this is resolved. DO NOT ask your employer (I suspect it is the same person who laid you off, and is now paying you as an IC. Please clear this up for me!) about this. But your employer does not understand how the system works and cannot either get you forgiven or penalized for fraud. You were supposed to honestly answer the question "Did you work?" in whatever form it is stated on your bi-weekly form. If you had worked as a IC, you should have called them immediately before filing and asked about it. Or you could have written the total amount down the week you worked it (doesn't matter when you were paid, it's when you did the work) so you didn't do the right thing. But you can plead confusion at this point. Further on down the line, when they catch you, there's no doing that. It gets more and more fraudulent.

So call them as soon as you can. It may be too late today, but call tomorrow. DO NOT procrastinate, and do not file any more bi weekly claim forms until you do this. If your employer is filing the forms for you, don't let him. DO NOT SIGN THEM. Let the system work on this, begin an investigation, take care of it.

But do not panic. You will have a very very long investigative process before you are anywhere near being charged with fraud, even if that were to happen. And the sooner you deal with it, the less likely you are to have it happen. Remember, they are not interested in prosecuting everyone who commits fraud. They are more interested in getting their money that has been paid in error back. If you cooperate with that, you should be fine.

 

[jessica zuric]

Now, lets get to the bigger issues addressed here. First of all, what do you mean about your employer not putting the amount you worked in the place for them to fill out bi-weekly forms? Are you filing partial unemployment claims through your employer? Did you work for this same employer as an IC that you are laid off from?

If this has happened, your employer is committing the fraud, not necessarily you. But of course, no matter what the situation, you should immediately call the unemployment system, and ask a living human being about this.

Do NOT just assume you can put down an amount you made working at this point and this will cover you.

What will happen is that if you report on your bi-weekly certification that yes, you did do work, and were paid $3000, or half of it, or whatever, what it will do is stop your claim until an investigation is begun.

You may as well stop NOW filing those bi-weekly forms and get on the phone and begin discussing this situation at once with someone. Hopefully they will tell you exactly how to begin the process of investigation that will determine if you are overpaid, and if so how much you are overpaid by, and how it will affect your claim.

If you decide to just let it go, what will happen is that even if they do not find out some other way, which may very well happen, it will cross match with your state and federal income taxes at the end of the year, and there will be money earned there (not through unemployment,) during the time that you were supposedly drawing...anyhow, it will come out eventually, and at that time, it will be much harder to straighten out, will look much more like you had the studied intention to commit fraud, and like you might be a good candidate to make an example of and actually refer for prosecution to the D.A. At that time, you would yes, definitely need a lawyer.

The unemployment office will actually have to determine which weeks you performed the work, what type of work it was, and whether you intentionally committed fraud by not reporting it. It will also have to do with how long it has been since you did this work, and who you did it for, as I said. Your availability for other work may be an issue. See why the agency has to be the one to sort it all out?

Do not file for any more benefits until this is resolved. DO NOT ask your employer (I suspect it is the same person who laid you off, and is now paying you as an IC. Please clear this up for me!) about this. But your employer does not understand how the system works and cannot either get you forgiven or penalized for fraud. You were supposed to honestly answer the question "Did you work?" in whatever form it is stated on your bi-weekly form. If you had worked as a IC, you should have called them immediately before filing and asked about it. Or you could have written the total amount down the week you worked it (doesn't matter when you were paid, it's when you did the work) so you didn't do the right thing. But you can plead confusion at this point. Further on down the line, when they catch you, there's no doing that. It gets more and more fraudulent.

So call them as soon as you can. It may be too late today, but call tomorrow. DO NOT procrastinate, and do not file any more bi weekly claim forms until you do this. If your employer is filing the forms for you, don't let him. DO NOT SIGN THEM. Let the system work on this, begin an investigation, take care of it.

But do not panic. You will have a very very long investigative process before you are anywhere near being charged with fraud, even if that were to happen. And the sooner you deal with it, the less likely you are to have it happen. Remember, they are not interested in prosecuting everyone who commits fraud. They are more interested in getting their money that has been paid in error back. If you cooperate with that, you should be fine.

In regards to your first statement, it is not the employer who did not report the amount of work and payment. It was me - I did not put the amount worked and my payment on the EDD web certification that I fill out every two weeks asking if I worked or earned any money.

What I want to do is, on my next web certification, state the full amount that I have made as an independent contractor, to be forthcoming and honest. I don't want to let it go - I want to tell them what I have made and let them do with that information what they may, whether that means that I have to pay them back, or they stop my benefits, or both. I just don't want any criminal charges. I did not realize what I was doing was incorrect and I want to make right.

To clarify, it is NOT the same company from whom I was laid off from. This is an entirely different company. For this new company, I worked as an independent contractor for a total of 7 days, dispersed through the last 3 months, so starting in April. I have been collecting unemployment since the end of February. The company I am doing independent contractor work for is NOT filling out any forms for me.

I know someone that did the same thing, whom I spoke with today - she worked as an independent contractor while on unemployment, did not realize she shouldn't be doing so, and then reported the total amount she earned over the course of four months (it was a LOT of money, over $10,000, which is not even CLOSE to what I made), and EDD just discontinued her unemployment. This was in 2013, and she filed and paid all of her taxes in the beginning of 2014 for the 2013 year. She has not heard anything since.

I am trying not to panic. I just want to do the right thing. Thank you for talking to me. Given the information I just shared with you, what do you think?

 

[commentator]

Okay, re read what I said, okay? If you want to do it that way, report the $3000 on your bi-weekly certification, it will just put a stop on your claim. You will not receive any more money. You will not be able to submit any more claim forms. They will perhaps send you a notification that you need to contact them about an issue pertaining to your claim, or maybe they won't. But if you do not contact them at this time, you will be getting into fraud deeper. You can't just tell them on one claim form, then run away by not filing any more. This is not correctly reporting what happened. It is you trying to commit fraud and then get out of it by pretending to fix it, when you haven't.

What you need to do is discuss this with the unemployment system. Tell them you did not report your I.C. work during the week you worked it. Each time you send in a certification which asked "Did you work?" and you put no, when you did, it was a lie. But the time to fix this is right now. It will not be serious fraud, no charges, no crime. You tell them, it gets fixed.

Do not waste your time sending in that bi-weekly certification telling the unemployment system you made $3000, which incidentally will just be another lie, because you did not make $3000 in the week you're talking about, you made it in several different weeks, all through this claim. It should have been reported, as I said on the weeks it was worked, not on one grand swoop at the end of when you were drawing all together.

Unlike food stamps and welfare programs, the unemployment office doesn't care about how much money you have on hand, it's based on what you have worked for wages during each of the individual weeks in which you received weekly benefits. And it is to be reported when worked, gross wages, (even if you have to estimate) not when you are paid, not net wages.

A day worked here, on one week, a day worked there on another week, if reported correctly, would probably not have stopped your claim, you would not have been overpaid, and it would have kept you clear and honest and not worried about charges and such bullcrap now.

And the situation is quite fixable right now. Why should you just walk away? That's not the way the system is set up to work. You may not actually be overpaid at all. With you reporting it now, they may not determine any penalties, even with you reporting it a couple of months later.

What you need to do is figure up exactly what days you worked, how much you made in each unemployment calendar week (an unemployment reporting week is Sunday through Saturday, regardless of when you were paid for the work) Have this record on hand WHEN YOU CALL THEM AND DISCUSS THIS WITH THEM!!!!! DID I MAKE THIS CLEAR TO YOU????????

Your friend, whom you discussed this with, may have gotten away with U.I. fraud. What happened is that when she turned in that she had made $4000 on one weekly certification, and then stopped filing, the system assumed she had gone back to work. It is possible, especially several years ago, that the system actually didn't catch her. Those cross matching systems improve all the time. Just because she didn't get caught yet doesn't mean she got away with it.

And you know what? If she discussed this with you, she's probably discussed this with others. All you'd have to do is call the fraud hot line which I'm sure they have, and report her, and even now, they could investigate, and probably would. She's overpaid, and she did not report it herself, (correctly) and did not try to fix it the right way...which was still unemployment fraud. Which COULD lead to charges being filed against her.

And all she'd have to do to get you in trouble is call and report what you've done, and you'd get investigated, and as I said, what you are thinking of doing is fraud, reporting all the money in one fell swoop and then stopping your claim may get you by on the short term....or it may not. How long do you want to worry and anguish about this issue? For years in the future, or get it taken care of right now, quickly, without the danger of your being prosecuted for it????

Re-read my post. It's not an opinion question "what do you think?" You don't need people on the internet to guess what you should do. You need to do what I am telling you to do. I can't tell you how much you'll be overpaid.

Sometimes if you are overpaid and can't pay the money back because you're not working, or because you're very poor, they will waive the money, or wait until you draw again sometime in the future.

No one can say exactly what will happen in your case. All I can tell you, from literally YEARS of experience in unemployment is that you are not in danger of having charges pressed against you for this if you call them now, you probably have not been overpaid as much as you think, maybe very little, and you are one of many many many people who have done this. They are going to be able to fix the problem right now, and you won't have to worry about it any more.

And the next time you are laid off, read the material and report your side jobs correctly, in the week you worked them, and you won't have this problem again.