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  • Writer's pictureDavid Manes

Unemployment Overpayments

If you receive a Notice of Determination finding an unemployment overpayment, you must appeal this determination within 15 days. Without an appeal, you are effectively agreeing with the determination, almost if you had plead guilty, and now are submit to punishments including but not limited to full repayment of unemployment overpayment, a punitive payment of additional penalty weeks you never collected, disqualification from future benefits, liens placed on houses and social security, interest, fees, as well as a civil judgment and  criminal prosecution.

Overpaid unemployment requires you appeal promptly and contact an experienced unemployment lawyer. Overpayment of unemployment and unemployment fraud is a serious offence, but you wouldn’t know it from the non-threatening and complicated documents you receive.

Application for unemployment benefits represents a legally binding document. At any time within the statute of limitations, 6 years, the Unemployment Compensation Service Center may conduct an investigation and even years later mail you a letter regarding saying that you are in fault overpayment of unemployment benefits.

 If you’ve received a unemployment overpayment letter you may be wondering what you have to do. Do you have to pay this amount back? What if you don’t pay it back or can’t pay it back? Can they take you to court to collect it? Can they place a lien on your house? What if it was a mistake? Can they increase the amount I owe using penalty weeks? Will I be prosecuted for unemployment overpayment fraud?

Let’s start at the beginning, what is the definition of fault overpayment?

While there is no precise statutory definition of “fault” overypayment, there is case law for guidance. Courts have consistently interpreted the meaning to  be conduct designed to improperly and intentionally mislead the unemployment authorities is sufficient to establish a fault overpayment.

Think back, did you make any statements on the unemployment application, the interview with the unemployment representative, or during the unemployment appeal hearing which could be construed as misleading or a falsehood? We represent clients who innocently marked the wrong box and are now facing massive penalties. For example, if you were terminated or quit and instead checked the box for lack of work, you may ultimately be audited and an unemployment overpayment investigation will be triggered.

How and why did the Unemployment Overpayment Department investigate me?

Pennsylvania  has a team put together to investigate unemployment fraud. We have learned that there has been political pressure placed of the Unemployment Department because of (1) general dislike of the unemployment system, (2) media reporting of abuse and fraud, and (3) the unemployment fund chronically underfunded.

They often compare public records, tax records, statements from the employer, statements from individuals, and compare that to anything you have said or done with applying for or receiving unemployment benefits. 

Am I fault or non-fault and what are the penalties? 

The key to what your rights, duties, and obligations are depend on whether the unemployment overpayment is considered a fault overpayment or a non-fault overpayment.

Non-fault overpayments typically occur when you receive benefits initially and the employer wins following an appeal or when an employee mistakenly receives benefits and has not misrepresented or concealed material facts. When an non-fault overpayment occurs and you don’t return the benefits you received, the overpayment will be deducted your future UC benefits. Additionally, the deduction cannot exceed 33% of your weekly benefits.

Fault overpayments, among other penalties, require you to repay the benefits received. If you do not pay the amount of the overpayment in full within 15 days, interest on the overpayment will begin to accrue. A lien can also be filed against you for the overpayment and the overpayment can also be deducted from future benefits. In addition to obligation to repay with penalty, Pennsylvania Unemployment Department is empowered to seek criminal penalties and jail time of up to 30 days for each check obtained if the receipt of UC benefits is considered fraudulent. You only get a criminal record if you end up getting convicted. The decision to prosecute is at the sole discretion of the director of the unemployment agency.

If you have more questions on the penalty for unemployment overpayment and unemployment overpayment fraud, consult our unemployment lawyers immediately.

Can I self-disclose unemployment fraud?

Yes. The chances of no prosecution or prosecution with a more lenient result are far greater if a person self-reports and has the money to pay back on-the-spot or through a repayment plan. It is best to have an unemployment attorney to help handle the self-reporting to make sure that there are no misrepresentations when you file — such as, your disclosure being construed as confession to fraud.

What is the most common question?

“I got a letter saying that I received an  overpayment in the amount $3,000. I worked briefly and didn’t report it to unemployment. They are currently demanding repayment. What happens next am I going to jail? Do I have penalty weeks? Do I have to pay a fine? Can I just ignore them?”

If this has occurred you should consult with an unemployment lawyer so that they can make a judgement call on the nature of the overpayment. The more severe the offense the more penalties and fines will be attached.

The absolute, hands down, worst possible thing to do is ignore the Notice of Determination.

If you let the 15 day appeal window lapse you will have basically consented to the UC Service Center’s determination. Your only remedy would be to seek review in a Pennsylvania Commonwealth Court. Assuming you have not let this period lapse, if the unemployment lawyer determines you should appeal then you will proceed to an unemployment appeal hearing. Because of the low odds of overturning an unemployment appeal hearing, this substantively your last chance. From this unemployment hearing you may now be stuck with major penalties as well as a record that the UC Service Center may use to seek criminal penalties.

Should you contact an unemployment attorney?

If you are experiencing any of the issues we have discussed, you are best advised to seek unemployment legal counsel.  If you have any questions please call or e-mail our unemployment lawyers immediately. The best advice we can offer is that you head off unemployment problems before the decision becomes final. That will mean an investment in an unemployment lawyer that will substantially pay off to avoid the substantial civil and criminal penalties that are possible.

Don’t hesitate, talk to an attorney: (412) 626-5626 or

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What type of legal help do you need? If you are not sure, call us at 412-626-5626

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