Do I need to report class action lawsuit payment with 'wages' portion to EDD during certification?

congrats on the settlement! pretty sure u only need to report actual work income not lawsuit stuff. i got a small settlement last yr (not employment related tho) and didnt report it, nobody said anything

You absolutely need to report the portion classified as 'wages' when you certify. EDD considers this as income for the week you received it, even though it's from a settlement. The 'penalties' portion doesn't count as wages and doesn't need to be reported. If you don't report the wages portion, you risk an overpayment determination later, especially since it's going to be reported to the IRS with taxes already withheld. Better safe than sorry!

I went through this EXACT situation in 2024! Had a settlement with wages + penalties breakdown. I called EDD to ask and spent THREE DAYS trying to get through. When I finally did, they confirmed I needed to report ONLY the wages portion during certification for the week I received it. My benefit was reduced that week but then went back to normal. BTW if you're struggling to reach someone at EDD about this, I used this service called Claimyr that got me through to an agent in about 20 minutes after days of failed attempts. They have a demo video at https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km that shows how it works. The site is claimyr.com. Totally worth it to get a definitive answer directly from EDD.

The key distinction is whether the settlement payment compensates you for wages you would have earned (back pay) or if it's punitive damages against the employer. From what you've described, it sounds like they've already made this distinction for you by labeling part as 'wages.' Report the wages portion on your certification for the week you received it. For the question about whether you received any income, select 'Yes' and then select 'Other' as the type of income. There should be a space to explain - just write 'settlement wages.' You'll likely see a reduction in benefits for that week based on their partial benefits calculation. For every dollar you earn over $25, they reduce your weekly benefit by a dollar.

my brothers friend got a settlement last year and didnt report it and then EDD found out somehow and he got hit with overpayment + penalties... not worth the risk just report the wages part and be done with it!!

This whole system is RIDICULOUS!!! Why can't EDD just publish CLEAR GUIDELINES about what counts as income?? I swear they make it confusing on purpose so they can hit people with overpayments later. I had to report jury duty pay last month and the rep I talked to couldn't even tell me if I should report the travel reimbursement portion!!! I ended up reporting all of it just to be safe but probably got underpaid that week. The whole system is designed to confuse us!

Here's what I recommend for your certification: 1. For the week you received the settlement, answer 'Yes' to receiving income 2. Select 'Other' for income type 3. In the explanation box, put 'Settlement wages' 4. Enter the amount from the 'wages' portion only ($3,800) 5. Don't include the penalties portion ($5,200) Your benefit will be reduced that week according to the partial benefits formula. For every dollar over $25 you earn, your benefit is reduced by $1. So if your weekly benefit amount is $450, and you report $3,800, you would receive $0 for that week (but it won't affect future weeks).