What's happening
This bill increases civil penalties for wilful false statements by claimants or employers regarding unemployment benefits, replacing prior benefit forfeiture penalties.
Why it matters
Shifts penalties from benefit forfeiture to civil fines. Instead of losing future unemployment benefits as a penalty for willful false statements, claimants and employers will now face monetary civil penalties, making the consequences more immediate and potentially significant.
Expands liability to employers. The bill explicitly subjects employers, not just claimants, to penalties for willfully providing false information to avoid paying or providing benefits, aiming to deter both parties from fraudulent practices.
Standardizes penalty amounts and broadens enforcement. Penalties are set at the greater of $100 or 15% of the overpaid/avoided benefit, and these penalties apply to both state and federal unemployment programs, possibly increasing collections and deterrence across a broader range of cases.
Clarifies and strengthens collection procedures. The bill details how final determinations of fraud lead to civil judgments, including specific notification requirements and language about the long-term consequences of such judgments (like wage garnishment and credit impact), potentially increasing the seriousness with which claimants and employers view compliance.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Unemployment insurance claimants
The bill would eliminate benefit-forfeiture penalties for newly determined willful false statements while retaining repayment obligations and civil penalties.
Employers
Employers that willfully make false statements to avoid paying benefits would face a civil penalty of $100 or 15 percent of the total benefit, whichever is greater.
New York State Department of Labor
The department would administer the new employer penalties and the transition rules preserving previously determined benefit-forfeiture penalties.
Headline styles
Increase Unemployment Fraud Penalties
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to labor
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.448
- Referred to labor
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4992
2019-2020 Regular Sessions
IN SENATE
April 3, 2019
Introduced by Sen. RAMOS -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to penalties for wilful false statements for unemployment purposes
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 594 of the labor law, as amended by section 16 of part O of chapter 57 of the laws of 2013, is amended to read as follows:
§ 594. [Reduction and recovery] Recovery of benefits and penalties for wilful false statement. (1) A claimant or employer who has wilfully made a false statement or representation to obtain or avoid any benefit under the provisions of this article shall [forfeit benefits for at least the first four but not more than the first eighty effective days following discovery of such offense for which he or she otherwise would have been entitled to receive benefits. Such penalty shall apply only once with respect to each such offense.
(2) For the purpose of subdivision four of section five hundred ninety of this article, the claimant shall be deemed to have received benefits for such forfeited effective days.
(3) The penalty provided in this section shall not be confined to a single benefit year but shall no longer apply in whole or in part after the expiration of two years from the date of the final determination. Such two-year period shall be tolled during the time period a claimant has an appeal pending.
(4)] be subject to the penalties set forth in this section.
(2) A claimant shall refund all moneys received because of such false statement or representation and pay a civil penalty in an amount equal to the greater of one hundred dollars or fifteen percent of the total overpaid benefits determined pursuant to this section. An employer who wilfully made a false statement or representation to avoid payment of any benefit under the provisions of this article shall pay a civil
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11055-02-9
S. 4992 2
penalty in an amount equal to the greater of one hundred dollars or fifteen percent of the total benefit determined pursuant to this section. The penalties collected hereunder shall be deposited in the fund. The penalties assessed under this subdivision shall apply and be assessed for any benefits paid under federal unemployment and extended unemployment programs administered by the department in the same manner as provided in this article. The penalties in this section shall be in addition to any penalties imposed under this chapter or any state or federal criminal statute. No penalties or interest assessed pursuant to this section may be deducted or withheld from benefits.
[(5)] (3) (a) Upon a determination based upon a willful false statement or representation becoming final through exhaustion of appeal rights or failure to exhaust hearing rights, the commissioner may recover the amount found to be due by commencing a civil action, or by filing with the county clerk of the county where the claimant resides the final determination of the commissioner or the final decision by an administrative law judge, the appeal board, or a court containing the amount found to be due including interest and civil penalty. The commissioner may only make such a filing with the county clerk when:
(i) The claimant has responded to requests for information prior to a determination and such requests for information notified the claimant of his or her rights to a fair hearing as well as the potential consequences of an investigation and final determination under this section including the notice required by subparagraph (iii) of paragraph (b) of this subdivision. Additionally if the claimant requested a fair hearing or appeal subsequent to a determination, that the claimant was present either in person or through electronic means at such hearing, or subsequent appeal from which a final determination was rendered;
(ii) The commissioner has made efforts to collect on such final determination; and
(iii) The commissioner has sent a notice, in accordance with paragraph (b) of this subdivision, of intent to docket such final determination by first class or certified mail, return receipt requested, ten days prior to the docketing of such determination.
(b) The notice required in subparagraph (iii) of paragraph (a) of this subdivision shall include the following:
(i) That the commissioner intends to docket a final determination against such claimant as a judgment;
(ii) The total amount to be docketed; and
(iii) Conspicuous language that reads as follows: "Once entered, a judgment is good and can be used against you for twenty years, and your money, including a portion of your paycheck and/or bank account, may be taken. Also, a judgment will hurt your credit score and can affect your ability to rent a home, find a job, or take out a loan."
§ 2. Section one of this act shall apply to all false statements and representations determined on or after the effective date of this act and all forfeited effective days determined prior to such effective date shall remain in full force and effect for two years from the expiration of the initial determination. For purposes of applying such forfeited benefits, each effective day shall be considered twenty-five percent of a claimaint's weekly benefit rate.
§ 3. This act shall take effect on the sixtieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to penal- ties for wilful false statements for unemployment purposes
Purpose
This bill eliminates "forfeit day" penalties, which are penalties assessed if a claimant willfully makes a false statement or misrepresen- tation to receive unemployment insurance benefits, and establishes a civil penalty for employers who willfully make a false statement or misrepresentation in order to avoid the payment of benefits.
Summary of provisions
Section 1 of the bill amends section 594 of the labor law to eliminate forfeit day penalties from being assessed on claimants who are found to have willfully made false statements or misrepresentations in order to receive unemployment insurance benefits. It further establishes a civil penalty for employers who willfully make a false statement or misrepre- sentation in order to avoid the payment of benefits.
Section 2 of the bill provides that forfeit day penalties assessed prior to the effective date are enforceable until two years from the expira- tion of the initial determination.
Section 3 of the bill sets forth the effective date.
Justification
Claimants who are found by the New York State Department of Labor to have willfully made a false statement or misrepresentation are currently subject to two penalties. First, they must pay back any improperly received benefits, and in addition, are subject to a monetary penalty equal to one-hundred dollars or fifteen percent of the overpayment, whichever is higher. The U.S. Department of Labor mandates this penalty. The second penalty is a "forfeit day" penalty, which is a day or days in the future in which the claimant cannot receive unemployment insurance benefits.
This double penalty structure is burdensome on claimants, especially considering that sometimes claimants found to have willfully made a false statement or misrepresentation fit into more of a grey area. For example, one claimant who is not a native English speaker, selected "lack of work" instead of "firing" for the reason for his separation - although he was fully honest with the investigator, due to his initial selection he was determined to have made a willful misrepresentation.
The Executive proposed eliminating forfeit day penalties in the in Part P of ELFA of the Executive proposed budget for Fiscal Year 2019-2020.
In contrast, there is no penalty for employers who willfully make false statements or misrepresentations in order to avoid the payment of bene- fits. A false statement made by an employer can delay or even prevent an unemployment insurance claimant from receiving benefits that are right- fully owed. For example, one claimant was initially denied benefits because she had missed the first day of a hearing, and on that day her employer submitted papers showing repeated warnings of her firing. The claimant's benefits were then cut off. When the claimant returned with representation, the claimant submitted originals showing that the employer-submitted documents were altered and the original decision was reversed. A penalty of fifteen percent of the benefits determined are owed to the claimant would deter this kind of fraudulent conduct that affects especially vulnerable out of work individuals.
Legislative history
This is a new bill.
Fiscal implications
None.
Effective date
This act shall take effect sixty days after it is to become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.