EDD reporting requirements for class action settlement money - will this affect my benefits?

i got money from a class action 2 yrs ago and didnt report it. nobody ever said anything to me. pretty sure its not counted as wages

You absolutely need to report this. Class action settlements are considered income by the EDD when determining UI eligibility. When you certify, there's a question asking if you received "other income" - settlement money falls under this category. Since you've already certified for this period, you should contact EDD immediately to report this omission. You can submit a correction by calling them or by uploading a message through your UI Online account. Failing to report income can result in an overpayment determination, possible penalties, and potentially a false statement disqualification that could affect your claim for weeks. Better to be proactive about fixing this than having them discover it later.

This is actually a bit complicated. Not all settlement money is treated the same by EDD. It depends on what the settlement was FOR: 1. If the settlement was for lost wages/back pay - YES, you need to report it as income for the week you received it 2. If the settlement was for damages (emotional distress, punitive damages, etc.) - NO, you don't report it Since yours was for unpaid overtime, that's considered wage replacement, so you should report it. The best way to handle this since you've already certified is to call EDD and explain that you need to correct your certification. You can also submit a message through UI Online explaining the situation. Don't panic though - honest mistakes happen, and it's much better to self-report than have them discover it later during an audit.

OMG im in the exact same boat!!! got money from a wage lawsuit against my old job (restaurant) and I STILL haven't figured out if i needed to report it!!! been so stressed because i can't get through to anyone at EDD to ask!!! tried calling probably 50 times over the past two weeks and keep getting the "we're experiencing high call volume" message and then it hangs up on me!!!! so frustrating!!!!!!

My brother got a settlement check and didn't report it and then 8 months later EDD came after him for overpayment plus penalties. They said he committed fraud by not reporting income. He's still dealing with the appeal process. Just saying, better safe than sorry.

Just to clarify something important that people often mix up: The rules for EDD reporting are different from IRS tax reporting. A settlement might be taxable income for federal/state taxes but NOT count as income for EDD purposes, or vice versa. In your case, since it's back wages (overtime pay), it counts for both. When you call EDD, make sure you specifically mention it's a class action settlement for unpaid wages. The representative will know how to properly code this in your certification correction.

The most important thing is whether the settlement affects your WEEKLY claim amount. EDD cares about income on a week-by-week basis. So if you received the settlement check during a week you certified for, you need to report it for THAT week. It won't affect other weeks. Don't overcomplicate this - just report it for the specific week you got the money.

Thank you everyone for all the advice! I called EDD this morning (took forever to get through but I finally did) and explained the situation. The rep confirmed I need to report the settlement since it was for unpaid wages. She helped me submit a correction to my certification for the week I received the check. My weekly benefit will be reduced for that one week because of the additional income, but the rest of my claim is unaffected. Such a relief to have this handled properly!

Great job getting this resolved! For anyone else reading this thread, I want to emphasize that the key distinction is what the settlement was FOR. If it's for lost wages, back pay, or unpaid overtime (like in Sean's case), it needs to be reported to EDD. If it's for other damages like pain and suffering or punitive damages, it typically doesn't count as income for UI purposes. When in doubt, always call EDD - they'd rather you ask than find out later you didn't report something you should have. The phone wait times are brutal but it's worth it to get the right answer for your specific situation.

This is such a helpful thread! I'm dealing with something similar - got a settlement from a wage theft case against my previous employer but it was only $650. Based on what everyone's saying here, it sounds like I should report it since it was for unpaid wages, even though it's a smaller amount. The distinction between wage-related settlements vs other types of damages really clarifies things. I was initially thinking any legal settlement would be exempt, but now I understand it depends on what the settlement compensates for. Going to call EDD tomorrow to report it properly. Thanks Sean for sharing your experience and everyone else for the detailed explanations!

This is such an informative discussion! I'm new to dealing with unemployment benefits and had no idea there were different rules for different types of settlements. I always assumed any money from a lawsuit would be separate from UI benefits. The breakdown about wage-related settlements vs. other damages is really eye-opening. It makes sense that if you're getting compensated for wages you should have been paid originally, EDD would treat that differently than, say, a settlement for emotional distress. Sean, thanks for sharing your experience and following up with the resolution - that gives me confidence that EDD is reasonable when you're upfront about these situations. Definitely saving this thread as a reference!

Just wanted to add something that might help others in similar situations - I work at a legal aid clinic and we see this question come up a lot. One thing to keep in mind is that class action settlements often come with documentation that explains what the payment is for. Look for language like "back wages," "unpaid overtime," or "wage restitution" - these are clear indicators that it should be reported to EDD. If the settlement notice uses terms like "general damages" or doesn't specify wage-related compensation, it might fall into a different category. Also, some larger class action settlements are structured as separate payments - part for wages and part for other damages. In those cases, only the wage portion needs to be reported. When in doubt, bringing that settlement documentation with you when you call EDD can help the representative give you the most accurate guidance for your specific situation.

This thread has been incredibly educational! I'm currently on UI benefits and had been wondering about this exact scenario since I have a small pending class action settlement from a previous employer. Reading through everyone's experiences and advice has really clarified the key distinction between wage-related settlements (which need to be reported) versus other types of damages. Sean, thank you for sharing your full journey from initial confusion to getting it properly resolved with EDD - it's reassuring to see that being proactive and honest worked out well for you. The advice about checking the settlement documentation for specific language like "back wages" or "unpaid overtime" is something I'll definitely keep in mind. It's clear that the amount doesn't matter as much as what the settlement represents. Really appreciate this community for breaking down these complex UI rules in such a helpful way!

This entire thread has been so helpful! I'm dealing with a similar situation but mine's a bit different - I received a settlement from a class action lawsuit against a healthcare company where I used to work as a medical assistant. The settlement was for "unpaid meal break premiums" - basically they weren't giving us proper meal breaks and had to pay compensation for that. Based on everything I've read here, it sounds like this would count as wage-related income that I need to report to EDD, right? The settlement notice specifically mentions it's for "premium pay violations" under California labor law. I'm scheduled to certify this weekend and the check arrived yesterday, so I want to make sure I handle this correctly from the start. Really appreciate how everyone has shared their experiences and broken down the key distinctions - it's made this so much clearer for those of us trying to navigate these situations!

I'm new to this community and currently on UI benefits myself. This whole discussion has been incredibly eye-opening! I had no idea there were such important distinctions between different types of settlement money. The key takeaway for me is that it's not about whether the money came from a lawsuit, but rather what the settlement is compensating FOR. Wage-related settlements (overtime, back pay, meal break premiums, etc.) need to be reported to EDD, while non-wage damages typically don't. Sean, thank you for sharing your complete experience and following up with the resolution - it's really reassuring to see that EDD was reasonable when you proactively reported the issue. For anyone else reading this thread, it seems like the most important thing is to look at the settlement documentation carefully and when in doubt, call EDD to ask. The phone wait times might be brutal, but it's definitely worth getting the right guidance rather than guessing. This community is amazing for breaking down these complex UI rules in such practical terms!

This thread is exactly what I needed to read! I'm currently on UI and just received notice that I'll be getting a settlement from a class action suit against my former employer (a big retail chain) for unpaid wages and overtime violations. The settlement amount is around $2,300 and based on everything discussed here, it's clear I need to report this since it's wage-related compensation. What I'm wondering is - do I need to report it when I actually receive the physical check, or when I get the settlement notice? The notice says checks will be mailed "within 30-45 days" but doesn't give an exact date. I want to make sure I report it for the correct week when I certify. Sean's experience really gives me confidence that being upfront with EDD from the start is the right approach, even if it means reduced benefits for one week. Thanks everyone for such detailed explanations - this community is incredibly helpful for navigating these complex situations!