Unemployment compensation is cash benefits paid to you by your state agency if you have lost your job. The money is meant to replace part of your former income. You must notify your state unemployment agency if you perform any work during a week you are claiming benefits for. The claiming and receiving of benefits you are not entitled to because you were working is considered fraud. Each state has specific penalties for unemployment fraud, but the exact nature varies by area.
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Denial of Current and Future Benefits
You may be unable to draw benefits on your current claim and to make a legitimate claim in the future if you are found guilty of fraud. The length of time you are barred from receiving benefits depends on your state. Maryland, for example, does not allow a claimant who committed fraud to receive unemployment until a year after the date the fraud occurred, but New York has a penalty system based on the number of offences. Each week a New York claimant conceals employment or makes a statement indicating he was not employed is a separate offence. A minimum of four days is removed from the person's current total claim period available for each offence. The sanction continues to cover any claims made during the next two years after the date of the last offence.
Repayment and Interest
You are required to repay benefits you were not entitled to. The repayment of the compensation typically must be completed for you to regain eligibility for unemployment. Some states add additional interest to the benefit payment total and use collection methods to recover the money, like wage garnishment and the interception of your state tax refunds. The percentage of interest depends on the laws of the state, the level of fraud committed and the amount of money you received as a result.
Fines may apply for the collection of unemployment benefits while working. The fines you incur depend on your state's penalty system and the amount of money you received. Wisconsin, for instance, subjects claimants to a fine of at least £65 for each week of fraudulently claimed benefits, but in New Jersey, you can face a fine of £6,500 for receiving more than £130 in fraudulent benefits.
Your state may pursue criminal charges for unemployment benefit theft; the sentences depend on the amount of benefits you received. New Jersey has jail sentences ranging from three to five years for theft of more than £325 in benefits, while Maryland imposes a sentence not to exceed 90 days for all fraudulent claims. Arkansas views benefit theft over £130 as a Class D felony, punishable by up to six years in prison.
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- Maryland Department of Labor, Licensing and Regulation: Unemployment Insurance FAQ
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- State of New Jersey: Unemployment Insurance Fraud
- Arkansas Department of Workforce Services: Fraud Warning