What happens if I collect unemployment while working at NYS Department of Labor - caught working while claiming?

You need to stop this immediately and contact NYS Department of Labor to report the unreported income. This is considered fraud and the consequences can be severe. You'll likely face an overpayment notice requiring you to pay back all benefits received while working, plus penalties and interest. In worst cases, it can result in criminal charges for unemployment fraud.

The sooner you report this the better it will look for you. NYS Department of Labor does cross-match employment records with other state agencies and the IRS. Even cash jobs can be discovered through various means. You should be able to work part-time while on unemployment as long as you report it properly on your weekly claims - they just reduce your benefits accordingly.

I had a friend who got caught doing the same thing last year. NYS Department of Labor hit her with a huge overpayment notice - she had to pay back like $4000 plus penalties. They also disqualified her from receiving any future benefits for a year. The good news is she didn't get arrested but it was a nightmare dealing with all the paperwork and payment plans.

If you're having trouble reaching NYS Department of Labor to report this (their phone lines are always busy), you might want to try claimyr.com - they help people get through to actual agents. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. In a situation like this where you need to speak to someone urgently about unreported income, it might be worth it to get through faster than waiting on hold for hours.

The unemployment system is so confusing honestly!! I almost made the same mistake when I started a little side gig. Had no idea you could work part time and still get benefits. They really don't explain this stuff clearly anywhere.

To answer your original question more specifically: if NYS Department of Labor discovers unreported work, you'll receive an overpayment notice demanding repayment of all benefits received during the period you were working. They'll also likely impose a penalty (usually 15% of the overpayment amount) and could disqualify you from benefits for up to a year. In severe cases with intentional fraud, they can refer the case for criminal prosecution, though this is typically reserved for larger amounts or repeat offenders.

I went through something similar a few months ago. The anxiety is terrible, but you really need to act fast. When I called to report my unreported earnings, the representative was actually pretty understanding since I was being proactive about it. They set up a payment plan for the overpayment that was manageable - around $50 a month. The key is calling them yourself before they discover it through their auditing process. It shows good faith and they're more likely to work with you on repayment terms. Don't let the fear paralyze you - the longer you wait, the worse it could get.