Unemployment Overpayment by California

[sandyclaus]

Allow me to clarify some of these issues (coming from a California resident).

While the employer pays the UI premiums, they do so through deductions from the paychecks of their employees. It is not 100% employer paid.

As for the reasoning behind why OP was told he had to repay the benefits he received, OP says he was fired. That is usually a reason for benefits to be paid (if you quit voluntarily, you do not qualify). However, just because you were fired does not immediately entitle you to benefits. The REASONS why you were fired have everything to do with it. If you were fired FOR CAUSE (i.e., for employee misconduct, failure to perform your job as required, excessive absences, etc.), then you may not be able to collect UI benefits.

Benefits were paid initially because UI's initial findings were that OP qualified. But once that happens, the employer is notified that benefits are being paid out of the employer's UI account. In some instances, where the employer does not agree with the decision to pay UI benefits, the employer can challenge the claim, and then the case goes before the Administrative Law Judge to make a final determination as to whether or not benefits are justified. At that hearing, both the employee and the employer are present and are heard as to why they feel that benefits should or should not be paid.

It definitely sounds to me like OP was fired for cause, and after the hearing before the ALJ, it was ultimately decided that OP's actions caused his termination (for whatever reasons). In all fairness, they did warn OP that if the decision was not in his favor, he would have to repay the benefits they found he was not entitled to receive.

OP, it does not matter whether or not the benefits you received have been spent. It was decided that you must repay them. You can be denied future UI benefits if you have an outstanding overpayment balance, or they can deduct the amounts you owe from those future benefits. They can also take the money from any state tax refund you would receive.

 

[cbg]

I think you are confusing UI with SDI. UI IS 100% employer funded. I just reviewed the EDD website - I found multiple references to UI being employer funded and not a single reference to employee contributions. SDI, on the other hand, is funded by employee deduction.

Please provide backup to your contention that UI in CA is in any way funded by anything but employer contributions.

 

[commentator]

Okay, you were approved on the initial decision. This was very quickly after you filed the claim. Yes, it's not uncommon for the unemployment system to approve initially and then to deny in the hearing. You began to get checks from unemployment. You were then denied in the hearing decision (appeal). Because you were denied, you are not getting any more checks, and those you have gotten are subject to repayment. But this kind of overpayment is not considered overpayment due to FRAUD, you didn't certify for unemployment illegally or try to defraud the department to get these checks.

But they will still say you are overpaid. This amount you have received will remain on your account until it is dealt with. It will very likely not be collected upon aggressively, though in some states, with the monetary situations getting very tight, they've stepped up these collections somewhat.

If you say, by asking for a waiver, (since this is a no fault overpayment, and you are probably unemployed and not in too great a financial condition) that you are not able to repay this money, you may receive it. This request for a waiver will be done by communicating with the overpayment unit that sent you this notice of overpayment. I suggest you do this immediately. This is your only recourse. You can't sue them, take them to court, write your congressman or anything else. The system is clearly defined, this is the way it works.

They will take VERY detailed income information from you. This is the only time in the unemployment system that they ever do this. If they determine that you are a trust fund baby, that your wife has an excellent job, that you have lots of other resources, they'll not agree to waive the overpayment. It will stay on your unemplolyment record. But if you are determined to be genuinely low income, they'll probably grant you a waiver, which means this amount will be done away with all together, they won't hold it on your record and take your state tax refund or anything.

Usually they garnish wages, aggressively pursue the repayment through the courts only when fraud is involved. Denial of benefits due to a decision usually just gets the overpayment sitting on your record until you apply again or receive money that the state can get hold of.

Everything the others here have said about how the unemployment system works is generally correct. You did not pay it in, it was assessed from your employer through the U.i. tax system in your state. Because all tax paying employers in the state provide this detailed information to the unemployment system by federal law, the state system has always maintained a detailed record of how much this employer and every other employer you have worked in the state has paid in covered wages to you, and they have all been taxed accordingly. When you become unemployed through no fault of your own, the state system looks at your wages, determines eligibility and pays you a certain percentage of your past wages as unemployment benefits.

You didn't pay it in. It is not yours to have based on need or circumstances. In CA, not even a tiny percentage of unemployment tax is deducted for wages. In fact, there are very few states that do deduct this tiny percentage. In all states, the vast majority of your unemployment benefits come from the employers taxes.

I spent some time in my work history dealing with overpayments. It is a bit tough that people can be denied and find themselves overpaid after filing for it and receiving it in good faith, with a decision that first said they were eligible for it, and after they've already spent the money. But the whole purpose of unemployment insurance in the first place was to give people something immediate to live on and to put a little of their money back into the system for groceries and necessities. And actually, it is sort of like a real good low interest loan you've received from the state unemployment system. Now you MAY not even have to repay it. So don't be too indignant.

 

[pattytx]

It's possible that CA may work the same way as MD, with whom I have had personal experience.

Following an employer appeal, my appeal, and final determination, my eligibility was reversed. I was still unemployed, requested, and received a waiver. However, as I previously stated, this was only a postponement of the repayment obligation; it did not dismiss the obligation to repay altogether.

 

[CourtClerk]

Allow me to clarify some of these issues (coming from a California resident).

While the employer pays the UI premiums, they do so through deductions from the paychecks of their employees. It is not 100% employer paid.

Let me clarify from another California resident...

From your very first sentence, you can't be MORE wrong... which makes the rest of our post probably inaccurate. So, go find your paycheck and find the deduction for unemployment. Can't? That's because what you see is SDI which is DISABILITY. Paid to the same people for a completely different purpose.

 

[commentator]

Usually they tend to give a reprieve as in you don't have to pay it back right now, even if you didn't respond to the communication about an overpayment at all, as many people do not. They just lie low, and in many cases, especially in the past, they were never actively pursued.

But it does lie there on your record for a while. Six years is the statue of limitations on it in this particular state.Remember that person we had way back when whose husband had an overpayment several years before and they couldn't get a state business license until he'd paid it back? They can also take state tax refunds or lottery winnings if you happen to hit it big. Hint: don't play the lottery until you've paid your overpayment back.

A waiver based on income is generally available and done by most state overpayment units. It appears that the appeal process is fairly broad in CA. Sometimes at the discretion of the appeals tribunal,they can make the overpayment go away entirely. But these circumstances are usually pretty grim. In good times, these things have been more common. CA is one of the states where they've always been fairly lenient with folks. Now so many of these states are in financial trouble (CA being a glowing example)and they've become a lot more aggressive in their collection efforts.

 

[davew128]

Allow me to clarify some of these issues (coming from a California resident).

While the employer pays the UI premiums, they do so through deductions from the paychecks of their employees. It is not 100% employer paid.

Well, your 100% wrong. Other than that....