What to do if unemployment found out about my part-time earnings?

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What to do if unemployment found out about my part-time earnings?

I was laid off 8 months ago and have been collecting unemployment. I started working on a consultant basis part-time 4 months ago (not on payroll) and did not claim the money paid. Unemployment has found out and has sent me a letter requesting earnings verification. What should I do? I have 1 week left on my initial claim and am still working only part-time as an independent contractor.

Asked on January 5, 2012 under Employment Labor Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Legally, what you *have* to do is to notify unemployment of your earnings and be prepared to return some (or all--it depends on how much you made) of the unemployment compensation for the period you were working; you may also have to pay fines or penalties. What you have been doing is unemployment fraud;it is irrelevant whether you were on payroll or paid as an independent contractor/consultant--you may not receive unemployment compensation while earning an income, unless that income is very low, below your state's threshold.

If you come "clean," you will take an economic hit, but should not face criminal liability, and may be able to negotiate a better settlement. However, if you try to hide your  earnings and they discover it, you will face greater economic penalties and potentially criminal liability, too.

Given what is at stake, you are advised to consult with an attorney with unemployment insurance experience.


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