EDD Overpayment & Penalty in California (file, receive, claim, qualify)

[KnightsoftheRound]

In advanced, I want to thank all for helping me out in this stressful situation with the EDD.


My Situation:


This was the first time in my life using Unemployment Benefits. I began UI benefits due to my medical job going out of business. I received the proper forms from the job before it went under and I collected unemployment from Late November 2017 to May 2018 all while looking for work. I filed my claims Online. State is California.


During the weeks of 04/29-05/05 & 05/06-05/12 I had a primary job I was looking to get lets call that company "Med 1" and also inquired with a super low chance back up lets call that company "Med 2" that I really had no expectations for.


On May 3rd I ended up getting a 2 day orientation which totaled 16hrs week & a 3 day test evaluation which totaled 36hrs week interest back from Med 2 that I didn't expect to go anywhere because I heard Med 2 was super strict with the testing, but I went with the motions.


In the medical field I have a license so orientation/testing isn't "work" nor is it "training" it's a display of your medical skills you've already acquired via your license. If you fail any of the skills or documentation tests not only do you not get the job. Also in my experience you are not paid for the display of your skills & abilities.



For the last UI claim on May 13th, I just added the Med 1 Job I originally inquired during the weeks of 04/29-05/05 & 05/06-05/12. I didn't add Med 2 because it wasn't "work", at least in the traditional sense. My orientation testing & evaluation didn't extend 40hrs or more each week, in which 40hrs is full-time to my knowledge being in the workforce since I was 17 1/2 years old (I am in my 30s). I also didn't get any money or any paychecks during those weeks either.


On May 14th I learned I passed the evaluation/tests with Med 2, I was surprised & began my official "Work/On Duty" schedule same day. I got the job, so in my logic & understanding, that marked the day I knew I needed to find out how to cancel the UI benefits since I now knew I had the Job and "work" was about to begin.



This is where it got confusing for me because while EDD has detailed instructions on how to begin & maintain UI benefits, they're vague on how to officially cancel the benefits nor do they provide any types of examples on when its appropriate to begin cancellation besides finding "work", in which I now had "work".


I got access to my first paycheck from the job on 5/21.


I thought the next UI claim on May 27th would be the cancel claim that I introduced my new employment with Med 2, or that there would be some kind of step by step cancellation process, maybe even some kind of cancel button where I could load the information about Med 2 but there were no options for that when I looked on my account online.



Then I found the EDD pamphlet, read the canceling or stopping your claim part & I followed the instructions word for word on the EDD pamphlet that when you are no longer in need of UI benefits simply stop certifying. I did find those instructions to be a bit odd as that would mean there would be no record of a cancellation or no documentation on the claimants new job that made them stop certifying. I believed EDD has its reasons, so I no longer filed any claims of looking for work and I thought that was that. I still had $1,245.00 left in the claim balance, and I was never inclined to intentionally commit fraud or intentionally withhold information to continue taking once I began "work".


So I truly believed that I did the whole cancellation of the UI Benefits the right way and resumed a work-life balance.


The Call Before the Interview:


I get a letter June 18th from EDD talking about an interview on June 21st. I'm wondering to myself "What is this?!" So I called EDD before the interview to find out what the letter was about.



Come to find out that EDD considers orientation and the testing I experienced to be "work" that I should have reported it. I had no idea.



The conversation with the EDD representative triggered me to do some deep research into my paycheck history, and to my discovery I did get compensated for the orientation & testing. I assumed all this time that the 1st paycheck I got was me getting paid for my first week of work from 5/14 and that I got caught up in the middle of the bi-weekly pay period.



This caught me by surprise as we have a time card system at work to verify. I dug deeper finding a way into being able to search the time cards and I discovered all my time cards verified, by my employer and I except the time card of the orientation/testing which is only verified by my employer but not verified by me the status says pending. Of course it says pending, I never got this time card to know I would get paid.

So with the help of the EDD representative the flood of revelation sank in, I seen the mistake & my natural guess was that this is going to be an overpayment issue regarding my last claim.



The Interview:



I was half asleep when I picked up the phone (Not a Morning Person), and I began to discuss the situation but before I could go into any great detail the interviewer came at me like I was some criminal mastermind. All I could say was I didn't know, and that it was my first time using UI Benefits and I got confused and misunderstood how to cancel and that I didn't know I until very recently thanks to calling beforehand that I got paid for orientation/testing. That I fully understand the situation and was sorry that my mistake inconvenienced the EDD and that I will pay the overpayment back but I didn't intentionally do this. She ended the interview in a passive-aggressive manner saying that she has everything she needs from me, it depends on what my job says they observe as full time status, I will get a notice of determination in the mail and concluded with congratulation for finding work...


Notice of Overpayment Letter:


SSN: ***-**-*** Benefit Year Began:11/26/17 Total Amount Due: $669.50 Overpayment Amount: $515 Penalty Amount: $154.50 Amount Waived: $00 Date Mailed: 06/29/18



An overpayment in the amount of $669.50 has been charged to your account in connection with a claim for unemployment insurance. Benefits were paid before it was known that you had earnings over $25.99.



The overpayment is for the weeks ending:



05/12/18 $354 05/05/18 $161



Your overpayment includes a penalty added in accordance with section 1375.1 of the unemployment insurance code which provides that when an individual has been overpaid benefits either because wilful false statements were made or relevant information was withheld, a penalty equal to 30% of the overpayment amount must be assessed.


Notice of Determination Letter:


You are not eligible to receive benefits under California unemployment insurance code 1279 beginning 04/29/18 and ending 05/05/18 (01 weeks).


You earned $215.97 from Med 2 for the week (s) ending 05/05/18. Therefore, you are not entitled to full weekly benefits. Section 1279 provides - the first $25 or 25% (Whichever is greater) of your total earnings for the week in which you worked is not counted in determining your benefit entitlement for that week. The amount remaining is deductible from your weekly benefit amount.


You are not eligible to receive benefits under California unemployment insurance code 1279 beginning 05/06/18 and ending 05/12/18 (01 weeks).


You earned $472.09 from Med 2 for the week (s) ending 05/12/18. Therefore, you are not entitled to full weekly benefits. Section 1279 provides - the first $25 or 25% (Whichever is greater) of your total earnings for the week in which you worked is not counted in determining your benefit entitlement for that week. The amount remaining is deductible from your weekly benefit amount.


You are not eligible to receive benefits under California unemployment insurance code section 1257A beginning 06/24/18 until you have filed for each of 06 weeks in which you are otherwise eligible for benefits.


When you claimed benefits for the week (s) ending 05/05/18 & 05/12/18, you declared you had no work or earnings. After considering available information, the department finds that you do not meet the legal requirements for payment of full benefits. Section 1257A provides - An individual is disqualified if he willfully makes a false statement or withholds relevant information to obtain benefits. Section 1260D provides - An individual disqualified under section 1257A is ineligible for benefits from 5 to 15 weeks if benefits were paid as a result of the misstatement or omission. He or she must submit a continued claim form to the field office to cover each week and meet all eligibility requirements. No benefits are payable for three years from the original effective date of this disqualification unless it is satisfied at an earlier date and you are otherwise eligible. The repayment of any overpayment does not remove the disqualification.


Mentally where I am at with it all:


It's truly been a big misunderstanding on my part, a combination of hit and miss variables bypassing my logic along with too many unpleasant surprises.


I happily want to pay back the overpayment of the last bi-weekly claim ASAP. I didn't mean for any of this to happen intentionally & thanks to the call before the interview to the EDD I've come to realize that my misunderstanding and ignorance has inconvenienced the EDD system.


I will happily pay for any inconvenience fees to the EDD as well to make this right, the financial aspect of the penalties made sense and I was willing to pay it but rumor has it that the penalties are not for compensating a systematic inconvenience but to label you a fraud towards a later criminal prosecution. Is that true?


This will most likely be the first and last time I use UI benefits, none of this has sat well with me I feel like I'm in a guilt until proven innocent situation, I know I didn't intend for any of this to happen but that is not what they see. A very frustrating position to be in. I know there are real baddies working the EDD system, who take after they got their first paycheck, go all out to create fictitious businesses to take thousands, do identity theft to take millions. So I do empathize why the EDD interviewer came at me sideways.


I need advice and guidance on what to do next.


I am torn between the feeling to just pay w/ penalties to move on & focus on my life & getting all the way back on my feet, but I am leaning more towards the feeling to appeal and endure the extra time into this to remove this defamation to my character.


I do have my worries...


If I appeal could it actually make matters worse than just paying?


And If I did decide to pay w/ penalties do I have to keep looking over my shoulder for the rest of my life of possible EDD prosecution? Can paying w/ penalties come back to haunt me in any legal way? Are there any statute of limitations for EDD to pursue criminal charges post pay w/ penalties? I looked all over the forum and I cannot find any years later Aftermath stories of people paying w/ penalties.


You all are up to date, facts, feelings, worries and all. Thank you.

[KnightsoftheRound]

I also wanted to know if I HAVE to do either one or the other (pay w/ penalties or appeal)?



Or do I have the option to pay off the Overpayment Amount: $515 now to get that over with, and then appeal the penalties?


Being able to pay off the Overpayment Amount: $515 now to get that over with, and then appeal the penalties (if this is an option) would be the overall best decision I would pursue because not only will they have the overpayment back but will also give me clear focus on the appeal regarding solely the penalties. This option (if possible) also doesn't give a judge the impression that I was trying to wiggle my way out of everything (overpayment and penalty), that I did right by my overpayment, paid it, and that the only reason I appealed was to only protect my character.


Because at the end of the day, if the penalties weren't trying to label me a fraud, I would have paid it. If the penalties were about compensating a systematic inconvenience, I would have paid it, but unfortunately the penalties are attempting to classify the actions of my ignorance triggered by many different variables as something that I simply didn't intend.

[Rabrrita]

Way too much to read so lets cut to the chase. During the weeks of the "orientation" did you tell unemployment that you were involved in something that prevented you from qualifying any time for that week (Question 2)? And, did you report the hours you worked for an employer even if there was no wages (question 6)?

[Chyvan]

I couldn't read through it all.

You can pay

OR

You appeal. Part of your story will excuse the 30% ramp up and penalty weeks, but you do owe for money you should have never received.

Submit, "the determination date mm/dd/yy is wrong. I want an appeal hearing scheduled."

be TESTED is one thing, but you better stop using words that sound like you were working. Anyway, you did get paid for you testing. You really do owe that. I think you just need to get rid of the "punishment" aspect.

[Ariadne22]

Originally Posted by KnightsoftheRound

rumor has it that the penalties are not for compensating a systematic inconvenience but to label you a fraud towards a later criminal prosecution. Is that true?

Only in cases of egregious offenses. Yours isn't.

Originally Posted by KnightsoftheRound

I am torn between the feeling to just pay w/ penalties to move on & focus on my life & getting all the way back on my feet, but I am leaning more towards the feeling to appeal and endure the extra time into this to remove this defamation to my character.

Overpayment penalty is not defamation of character. In your case, it was an oversight

Originally Posted by KnightsoftheRound

If I appeal could it actually make matters worse than just paying?

In CA, it often pays to appeal. There is precedent for waiving penalties when error is committed unintentionally out of simple negligence or an innocent mistake. You would still need to repay the actual overpayment.

"Under PB216, it “held the claimant was not subject to disqualification
under section 1257(a) of the code where he fails to reveal complete info
because of a simple error” (Benefit Decision: 5904 & 6387)."
**************
In precedent decision p-b-224 the appeal board held that neither simple negligence nor innocent mistake can support a change of willful omission or commission of an act.
A claimant is entitled to a presumption of innocence.
https://www.city-data.com/forum/38527904-post76.html
*************
*****
"Under PB418, it is declared that “actual knowledge of falsity is a
necessary element in benefit preclusion cases under the above statute, the
legislature has chosen to provide a shield for those claimants” whose
“unfamiliarity with fine points of law, innocently exposes them to
forfeiture of unemployment insurance benefits”.

False statement decisions, including the above, here:

California Unemployment Insurance Appeals Board - Precedent Decisions E-M

You should be successful on appeal in getting the monetary and dq penalties lifted citing the above precedents. CA ALJs are generally very claimant-friendly.

Originally Posted by KnightsoftheRound

And If I did decide to pay w/ penalties do I have to keep looking over my shoulder for the rest of my life of possible EDD prosecution? Can paying w/ penalties come back to haunt me in any legal way? Are there any statute of limitations for EDD to pursue criminal charges post pay w/ penalties?

No, No, possibly. In your case, a statute for criminal prosecution is irrelevant.

[KnightsoftheRound]

I do apologize for the length of the post. I noticed a common theme in the forum where people weren't being holistic with their situation which lead to days of back and forth question asking that took days to get the full view of the situation.

I provided the situation in its entirety, organized, and in chronological order. Also if one wanted to CTRL+F they could easily find categories: My Situation, The Call Before the Interview, The Interview, Notice of Overpayment Letter, Notice of Determination Letter, Mentally where I am at with it all. For the convenience of reference, and to enable the best advice possible.

To: Rabrrita


Thank you for getting back with me. To answer your questions


1. During the weeks of the "orientation" did I tell unemployment that I was involved in something that prevented me from qualifying any time for that week?

I was still looking for work while I was doing the "Testing", during those weeks I got fed up looking for work one job by one job so I did a type of shotgun process with 2 companies (Med 1 & Med 2) until I landed a job. I reported only Med 1 but not Med 2. Med 1 was the one I really wanted, but Med 2 ended up moving unexpectedly fast and hired me due to my test performance.

Once I knew I had a job, I seriously thought the claim after my first paycheck would be the claim I would introduced Med 2 and cancel UI benefits as they would know why I didn't need the benefits anymore. It didn't occur to me at all that I would get paid for Testing (which seems to be EDDs main issue).

In retrospect after talking with an EDD representative, I seen the double edge sword, if I failed the tests didn't get the job and never got paid for Med 2 EDD wouldn't care and would have been satisfied with the claim on Med 1 and if I passed the tests got the job and ended up getting paid for it EDD would find this to be an overpayment as well as withholding information of my job search activities. I've been kicking myself in the butt over and over as to how this bypassed my logic.

I thought the testing wasn't a paid process. As I said in the call before the interview I discovered that I did end up getting paid for testing. I never approved the time card, so I had no idea I was getting paid for the 2 week testing at Med 2.

2. Did I report the hours I worked for an employer even if there was no wages? This whole situation has thrown me into a cognitive dissonance about the word "Work/Worked" between the law's definition and the layman's definition. I answered No for this because in my logic "testing" (yes with paper tests and display of skills) isn't work, its the prerequisite in order to obtain work. In retrospect from my ignorance to the EDD representatives enlightenment I should have answered Yes.

To: Chyvan

I appreciate you for your reply.

So it a black and white situation? There is no way for me to pay the over-payment amount itself now, and appeal the penalties? I have to either pay w/ penalties, or appeal?

If I appeal could is there a possibility that it can actually make matters worse for my situation than just paying w/ penalties?

And If I did decide to pay w/ penalties do I have to keep looking over my shoulder for the rest of my life of possible EDD prosecution?

Can paying w/ penalties come back to haunt me in any legal way?

Are there any statute of limitations for EDD to pursue criminal charges post pay w/ penalties?

To: Chyvan & Rabrrita

Thank you so much, I really appreciate the time you are taking to answer and guide me though this.

[KnightsoftheRound]

To: Ariadne22

Wow! Thank you, I am very grateful that you took the time to review my situation in its entirety. I appreciate not only the reassurance to resolve but also your break down and detail. Thank you.

[Chyvan]

I can't read your typing. You've got to condense this stuff down. It's TOO LONG. This issue isn't that hard.

You thought you were being "tested." Great. That explains why you didn't report that you worked, and the wages and hours to go with it. However, you did get PAID for it. At that moment, you knew it was work. Your credibility would have been much greater had you used "ask EDD" and told them you need to amend your claim form for that period. However, EDD contacted you first, and put you through the ringer.

Now, just APPEAL.

What you did wasn't fraud, and you aren't required to pay or endure any penalties because there was no intent.

Now, shrink your story down to "I was TESTED. In all my past attempts to get a job, I was never paid for being TESTED. I got paid this time. Maybe it was because they decided to hire me. EDD contacted me about the unreported wages before I could get in contact with EDD to amend the claim form to reflect that I was unexpectedly paid."

It's a winner story, and it's pretty much the truth, and hope you are believed. This isn't that hard. Now, get the appeal REQUEST submitted, "the determination dated mm/dd/yy is wrong. I want an appeal hearing scheduled."

In the alternate, you can pay everything EDD asks, and EDD will then continue to throw the book at other claimants that do stupid stuff and never listen to the plausibility of a claimant's circumstances and the cycle will continue to repeat.

[KnightsoftheRound]

To Chyvan:


Thank you very much. I appreciate it. I will begin filling out the appeal form and mail it in as soon as possible under certified mail to keep record that I sent it within the 30 days.


Another Question: I ended up getting 2 appeal forms. One for the notice of determination, and another one for the notice of overpayment. Do I fill out 1 appeal form for the notice of determination, or do I need to fill out 2 appeal forms for the notice of determination and notice of overpayment to overcome the penalties?

[Chyvan]

Originally Posted by KnightsoftheRound

Thank you very much. I appreciate it. I will begin filling out the appeal form and mail it in as soon as possible under certified mail to keep record that I sent it within the 30 days.

I'm pretty sure you can file the appeal online or fax it and save the confirmation page. It's just as good as a certified mailing, and is cheaper and easier especially if you a combo printer that does it all right in your house.

Originally Posted by KnightsoftheRound

Another Question: I ended up getting 2 appeal forms. One for the notice of determination, and another one for the notice of overpayment. Do I fill out 1 appeal form for the notice of determination, or do I need to fill out 2 appeal forms for the notice of determination and notice of overpayment to overcome the penalties?

Do them both. Never pass up a chance to appeal. If you made a mistake, you won't get a second chance.

There is no risk to appealing. The worst that happens is that it stays the same. Your goal is to remove the "fraud" label, remove the 30% monetary penalty, and make sure there are no penalty weeks to serve if you end up on UI again. You just never know even though you seem to think you'll never need UI again.