UNEMPLOYMENT INSURANCE - OVERPAYMENTS

A recent consultation revealed the following. Claimant was terminated due to lay off and filed for unemployment benefits. Claimant received several weeks of benefits. Employer filed objection and during investigation, Claimant did not respond to investigation because Claimant found new employment. This was a mistake because the Department of Labor, having no evidence to the contrary, decided that Employer's objection would be granted and penalized Claimant. Even though the amount in dispute is small, Claimant must have a hearing to eliminate not only the overpayment but the additional penalties involved. This is from a handbook on representing yourself in an unemployment insurance hearing from MFY Legal Services which works in concert with community organizations to provide free civil legal assistance to those in greatest need:

"You are not obligated to refund overpayments if you accepted them in good faith (you believed you were entitled to the benefits), you did not make any false statements, AND you did not willfully conceal any pertinent fact in connection with your claim for benefits. New York Labor Law § 597.

You can be required to refund overpayments if you made a false statement of fact in connection with your claim for benefits, even if the false statement was inadvertent. For example, you could be required to refund benefits if you made an incorrect statement about the amount of your base period earnings and weeks of employment, even if it was an accident. A.B. 257,498; and A-750-2106.

If you made a statement that was an “error of law,” but was not a false statement of fact you cannot be required to refund the benefits. For example, if you reported a total lack of employment, but it is later determined that you were doing activities that actually constituted employment, your statement may not be a false statement of fact if an ordinary person would not have considered him/herself employed under those circumstances and you in fact did not realize that your activities were 'employment.' See Claim of Valvo, 57 N.Y.2d 116, 440 N.E.2d 780, 454 N.Y.S.2d 695 (1982).

If the false statement was made inadvertently (i.e., you did not know it was false), the DOL will collect the overpayment by collecting 50% of your future benefits. 12 NYCRR § 470.5"