What happens if you collect unemployment while working - NYS Department of Labor consequences?

You need to stop filing immediately and report the work to NYS Department of Labor right away. Working while collecting unemployment isn't automatically fraud - it depends on whether you reported it properly and stayed under the earnings limit. In NY, you can earn up to $504 per week (in 2025) and still collect partial benefits, but you MUST report all work and earnings on your weekly claim. The fact that it was under the table doesn't matter - you still needed to report it. Call NYS Department of Labor immediately to correct your claims.

this happened to my brother last year and it was a nightmare. they made him pay back like $3000 and he got hit with penalties too. but he had been working full time for months without reporting anything so your situation might not be as bad since it was just part time

NYS Department of Labor can detect unreported work through several methods - wage records from employers, tax filings, and database matching with other agencies. If they determine you committed fraud, consequences can include: repayment of all benefits received, penalties of up to 50% of the overpayment amount, disqualification from future benefits for up to one year, and in severe cases criminal prosecution. However, if this was an honest mistake and you self-report quickly, they may be more lenient. You should contact NYS Department of Labor immediately at 1-888-209-8124 and explain the situation. Be prepared to provide documentation of your work dates and earnings.

The WORST part about this whole system is how they don't make it clear what you're supposed to do! Like seriously, they should have better information about partial work and reporting requirements right there when you file your weekly claim. Instead we're all just guessing and then getting in trouble for doing it wrong.

To clarify the process: when you report work on your weekly claim, NYS Department of Labor will reduce your benefits but not eliminate them entirely if you're under the earnings threshold. For every $1 you earn over $504, your benefits are reduced by $1. If you earn less than $504, you can still receive partial unemployment benefits. The key is ALWAYS reporting the work, regardless of how little you earned or whether it was cash/under the table. Unreported work is what gets you in trouble, not the work itself.

I went through something similar about 8 months ago. I had picked up some freelance work and forgot to report it on two weekly claims - nothing intentional, just completely slipped my mind. When I realized my mistake, I called NYS Department of Labor right away and explained what happened. The representative was actually pretty understanding since I was being proactive about it. They had me fill out some forms to correct the claims, and I did have to pay back the overpayment (about $800 in my case), but there were no penalties since I self-reported. The whole process took about 6 weeks to resolve. The key thing is being honest and getting ahead of it before they discover it themselves through their cross-referencing systems.

I'm in a very similar situation and have been losing sleep over this! Reading through everyone's responses here has been incredibly helpful. I've been collecting unemployment for about 8 weeks but started doing some gig work (DoorDash) about 3 weeks ago - maybe 10-15 hours per week earning around $200-300 weekly. I also didn't report it because I wasn't sure if gig work counted the same as regular employment. Based on what everyone is saying here, it sounds like I need to call NYS Department of Labor immediately and self-report this before they find out through their systems. Has anyone dealt specifically with gig work/1099 income while on unemployment? I'm hoping since I'm under that $504 threshold I might still be eligible for partial benefits if I report it correctly going forward.

I work as a benefits counselor and deal with these situations regularly. The most important thing to understand is that NYS Department of Labor distinguishes between intentional fraud and honest mistakes. Since you're proactively seeking information and seem genuinely concerned about doing the right thing, that works in your favor. When you call to self-report, be prepared with specific details: exact dates worked, total hours, and gross earnings (before any deductions). They'll likely ask you to complete a "Report of Employment" form and may request documentation like pay stubs or a letter from your employer confirming the work dates and earnings. The fact that it was under-the-table cash work doesn't change your obligation to report it, but since you earned relatively little over just 6 weeks, the financial impact should be manageable. Most importantly, continue to be honest in all your dealings with them - this initial mistake doesn't have to derail your entire unemployment claim if handled properly.

I went through this exact same thing about a year ago and can tell you that self-reporting is absolutely the way to go. I had been doing some cash landscaping work for about a month while collecting benefits and didn't report it because I thought since it was cash and only a few days here and there, it didn't matter. Boy was I wrong! When I finally called NYS Department of Labor to report it myself (after reading horror stories online about people getting caught), the agent actually thanked me for being honest and said it made a huge difference that I came forward voluntarily. I had to pay back about $1,200 in overpayments, but there were zero penalties because I self-reported. The agent told me that if they had discovered it through their database matching first, I would have faced a 25% penalty on top of repayment. The whole process took about 2 months to fully resolve, but it was such a relief to get it sorted out properly. Jessica, please don't wait - call them first thing Monday and be completely honest about everything. Your situation sounds very similar to mine and you'll likely be fine if you handle it proactively.

I'm seeing a lot of helpful advice here, but wanted to add one more important point - when you call NYS Department of Labor to self-report, make sure you ask them to put a note in your file that you voluntarily disclosed this information. This creates a paper trail that shows your good faith effort to correct the mistake. Also, if you're having trouble getting through on the phone (which is unfortunately common), you might want to try calling right when they open at 8 AM or during lunch hours when call volume is sometimes lower. I had success reaching them around 12:30 PM when I needed to make corrections to my claim last year. The wait was still about 45 minutes, but at least I got through! Don't give up if you can't reach them immediately - this is definitely worth the effort to resolve properly.

I've been following this thread closely as someone who went through a similar situation recently, and I want to emphasize something that hasn't been mentioned yet - when you call NYS Department of Labor, be prepared that they might temporarily suspend your benefits while they investigate and process the correction. This happened to me when I self-reported unreported work from 4 weeks prior. The suspension lasted about 3 weeks while they reviewed everything, calculated the overpayment, and updated my claim. It was stressful not receiving benefits during that time, but once everything was resolved, my benefits resumed and I just had to set up a repayment plan for the overpayment amount. The agent explained this is standard procedure to prevent further overpayments while they sort things out. Just wanted to give you a heads up so you're not caught off guard if this happens - it doesn't mean you're in more trouble, it's just part of their process for correcting claims. Having some emergency funds set aside if possible might help during that gap period.