NYS Department of Labor caught me lying on unemployment - what happens next?
I made a huge mistake and didn't report some cash work I did while collecting unemployment benefits last year. NYS Department of Labor just sent me a notice saying they're investigating my claim for fraud. I'm terrified about what's going to happen. The notice mentions potential criminal charges and having to pay everything back with penalties. Has anyone been through this before? What should I expect and do I need a lawyer?
18 comments
Join the conversation
Dylan Wright
This is serious but not necessarily the end of the world. NYS Department of Labor fraud investigations can result in overpayment demands, penalties up to 15% of the fraudulent amount, and disqualification from future benefits. Criminal charges are possible but usually reserved for large-scale fraud. You have appeal rights and should respond to their investigation promptly with documentation.
0 coins
Fatima Al-Mazrouei
•Thank you for the info. The amount they're claiming is about $2,800 in overpayments. Should I try to pay it back immediately or wait for the investigation to finish?
0 coins
NebulaKnight
oh no this happened to my brother in law last year! He had to pay back like $4000 plus penalties but no criminal charges. Just be honest with them about what happened and cooperate fully
0 coins
Fatima Al-Mazrouei
•Did he have to pay it all at once or could he set up a payment plan?
0 coins
NebulaKnight
•they let him do monthly payments i think it was like $200 a month
0 coins
Sofia Ramirez
The key is responding to their investigation honestly and completely. NYS Department of Labor will want documentation of the work you did and when. They may offer a waiver hearing where you can explain circumstances. For the phone contact issues during this process, I had success with Claimyr (claimyr.com) when I needed to speak with an actual agent quickly. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works.
0 coins
Fatima Al-Mazrouei
•I'll check that out, thanks. I've been trying to call NYS Department of Labor for days but keep getting hung up on.
0 coins
Dmitry Popov
DONT PANIC but take this seriously. The fraud unit doesn't mess around but they're also reasonable if you cooperate. Document everything you can remember about the work dates and earnings. If it was truly accidental they might reduce penalties.
0 coins
Ava Rodriguez
Similar thing happened to me a few years ago - forgot to report some freelance work. Ended up paying back $1,500 plus a $225 penalty. No criminal charges but I was disqualified from collecting UI for 6 months. Just be completely honest about what happened and why.
0 coins
Fatima Al-Mazrouei
•Did you have to go to a hearing or was it all handled through paperwork?
0 coins
Ava Rodriguez
•They offered me a phone hearing but I waived it and just accepted responsibility. Made the process faster.
0 coins
Diego Vargas
I went through something similar two years ago. The investigation process took about 6 weeks for me. Here's what I learned: 1) Respond to everything they send you promptly and completely, 2) Gather all records of the unreported work (pay stubs, bank deposits, etc.), 3) Write a clear explanation of why you didn't report it initially. In my case, I genuinely misunderstood the reporting requirements for odd jobs under $100. They still made me pay back $3,200 plus penalties, but no criminal charges. The worst part was the stress of waiting, but being proactive and honest helped. You might also want to consult with an employment attorney for a consultation - many offer free 30-minute consultations for cases like this.
0 coins
Christopher Morgan
•This is really helpful advice, thank you @Diego Vargas. The 6-week timeline gives me some perspective on what to expect. I'm definitely going to gather all my records like you suggested. Did you end up needing that employment attorney consultation, or were you able to handle it on your own? I'm trying to figure out if it's worth the cost since the amount involved is relatively small.
0 coins
Jasmine Hernandez
•I actually did get a free consultation with an employment attorney and it was really worth it, even for a smaller amount. They helped me understand my rights and gave me specific language to use in my written response that I think made a difference. The attorney explained that how you frame your explanation can really impact whether they treat it as willful fraud vs. an honest mistake. For $2,800 like @Fatima Al-Mazrouei mentioned, I d'definitely recommend at least getting that free consultation - it s'basically insurance to make sure you handle this the right way from the start.
0 coins
Chloe Taylor
I work for a legal aid organization and see these cases regularly. A few key points: 1) NYS Department of Labor distinguishes between "willful" fraud and "non-willful" overpayments - your explanation matters a lot here. 2) For amounts under $5,000, they rarely pursue criminal charges unless there's a clear pattern of deception. 3) You can request a payment plan if you can't afford the full amount at once. 4) The 15% penalty mentioned is accurate, but they sometimes waive it for first-time offenders who cooperate fully. 5) Most importantly - respond within the deadline they give you (usually 10 days) or they'll make a determination without your input. Document everything and consider it a learning experience rather than the end of the world.
0 coins
Isabella Silva
•This is incredibly helpful information, thank you @Chloe Taylor. The distinction between "willful" vs "non-willful" fraud is something I hadn't really understood before. In my case, I honestly just didn't realize I needed to report the cash work since it was only occasional odd jobs helping a neighbor with their small business. I definitely want to emphasize in my response that it wasn't intentional deception. The 10-day deadline is also crucial info - I need to make sure I don't miss that window. It's reassuring to hear that criminal charges are rare for amounts like mine, especially for first-time situations. I really appreciate everyone sharing their experiences here - it's helping me feel less panicked about the whole situation.
0 coins
Jamal Harris
•@Chloe Taylor this is exactly the kind of expert insight I was hoping to find here. The willful "vs" non-willful "distinction" you mentioned really gives me hope since my situation was genuinely a misunderstanding about reporting requirements. I had no idea there was only a 10-day response window - that s'critical information that could save someone s'case. One quick question: when you say document "everything, what" specific types of documentation should I prioritize gathering? I have some text messages with the person I did work for and bank deposit records, but I m'wondering if there are other types of evidence that would be particularly helpful in demonstrating this was an honest mistake rather than intentional fraud.
0 coins
Zainab Ismail
•@Chloe Taylor thank you so much for breaking this down - the willful vs non-willful distinction is huge! I m'in a similar boat where I genuinely didn t'understand the reporting requirements. Quick question: if they do offer a waiver hearing, is it better to take it or just accept their initial determination? I m'worried about making things worse but also want to make sure I get a fair shake. Also, do you know if having a clean record with no prior unemployment issues helps with getting penalty waivers?
0 coins