R994. Workforce Services, Workforce Information
and Payment Services.
R994-405. Ineligibility for Benefits.
R994-405-501. Fraud - General Definition.
The Department relies primarily on
information provided by the claimant when paying unemployment insurance
benefits. Fraud penalties do not apply
if the overpayment was the result of an inadvertent error. Fraud requires a willful misrepresentation
or concealment of information for the purpose of obtaining unemployment
benefits. The absence of an admission
or direct proof of intent to defraud does not prevent a finding of fraud.
R994-405-502. Elements of Fraud.
The elements necessary to establish
an intentional misrepresentation, sufficient to constitute fraud are:
Materiality is established when a
claimant makes false statements or fails to provide accurate information for
the purpose of obtaining waiting week credit or any benefit payment to which he
is not entitled. Benefits received by
fraud may include an amount as small as $1 over the amount a claimant was
entitled to receive.
A claimant must have known or should
have known the information submitted to the Department was incorrect or that he
failed to provide information required by the Department. He does NOT have to know that the
information will result in a denial of benefits or a reduction in the benefit
amount. Knowledge is established when a
claimant recklessly makes representations knowing he has insufficient
information upon which to base such representations. A claimant has an obligation to read material provided by the
Department or to ask a Department representative when he has a question about
what information to report.
A claimant must have made the false
statement or deliberate omission for the purpose of obtaining benefits. Willfulness is established when a claimant
files claims or other documents containing false statements, responses or
deliberate omissions. If a claimant
delegates the responsibility to personally provide information or allows access
to his or her Personal Identification Number (PIN) so that someone else may
file a telephone claim, the claimant is responsible for the information
provided or omitted by the other person, even if the claimant had no advance
knowledge that the information provided was false or important information was
R994-405-503. Evidence and Burden of Proof.
Prior Knowledge of Ineligibility by the Department.
If the Department has sufficient
evidence to assess a disqualification prior to paying benefits, a fraud
disqualification shall not be assessed even if the documents submitted by the
claimant contain false statements or deliberate omissions. However, non-fraud overpayments may be
established under the law regarding fault and non-fault overpayments in
Subsections 35A-4-406(4)(b) and 35A-4-406(5)(a), respectively.
Initial Burden of Proof.
Fraud may not be presumed whenever
false information has been provided or material information omitted and
benefits overpaid. The Department has
the burden of proof, which is the responsibility to establish all the elements
Standard of Proof.
The elements of fraud must be
established by a preponderance of the evidence. There does not have to be an admission or direct proof of intent.
R994-405-504. Disqualification and Penalty.
Penalty Cannot Be Modified.
The Department has no authority to
reduce or otherwise modify the period of disqualification or the monetary
penalties imposed by statute.
Week of Fraud.
A "week of fraud" shall
include each week any benefits have been paid due to fraud.
Overpayment and Penalty.
For any fraud decision where the
initial fraud determination was issued on or before June 30, 2004, the claimant
shall repay to the division an overpayment which is equal to the amount of the
benefits actually received. In
addition, a claimant shall be required to repay, as a civil penalty, the amount
of benefits received as a direct result of fraud. "Benefits actually received" means the benefits paid or
constructively paid by the Department.
Constructively paid refers to benefits used to reduce or off-set an
overpayment or used as a payment to the Office of Recovery Services for child
support obligations or other payments as required by law.
(4) For all fraud decisions where
the initial department determination is issued on or after July 1, 2004, the
claimant shall repay to the division the overpayment and, as a civil penalty,
an amount equal to the overpayment. The
overpayment in this subparagraph is the amount of benefits the claimant
received by direct reason of fraud.
Criminal prosecution of fraud may be
pursued as provided by Subsection 35A-4-104(1) in addition to the
Overpayments established under
Subsection 35A-4-405(5) will be collected in accordance with Subsection
35A-4-406(4)(b) and Section R994-406-404 or by civil action or warrant as
provided by Subsections 35A-4-305(3) and 35A-4-305(5), respectively. The Department may use unemployment
insurance benefits payable for weeks prior to the penalty period to reduce
R994-405-506. Future Eligibility.
A claimant shall be ineligible for
unemployment benefits or waiting week credit following a disqualification for
fraud until any overpayment established in conjunction with the disqualification
has been satisfied in full. Any
overpayment established under Subsection 35A-4-405(5) may NOT be satisfied by
deductions from benefit checks for weeks claimed after the penalty period ends,
as a claimant is precluded from receiving any future benefits or waiting week
credit as long as there is an outstanding fraud overpayment. However, a claimant may be permitted to file
a new claim to preserve a particular benefit year. An overpayment shall be considered satisfied as of the beginning
of the week during which the cash payment or credit card payment is received by
the Department or in the case of payment by personal check, the beginning of
the week during which the check is honored by the bank. Benefits will be allowed as of the effective
date of a new claim if a claimant repays the outstanding fraud overpayment and
penalty within seven days of the date the notice of the outstanding overpayment
Depending on the issue, a
disqualification could result in a denial of benefits for one week, a specific
number of weeks or an indefinite number of weeks. A disqualifying separation results in an indefinite denial,
continuing until the claimant has returned to work and earned six times his or
her weekly benefit amount. The
disqualification applicable to the reason for the underlying denial determines
the amount of the fraud penalties and disqualification periods in each case.
Failure to Report Reason for Separation. A claimant who was discharged for disqualifying conduct reports
the separation as a layoff and receives benefits. Each benefit check received is paid due to the original false
statements, even though the claimant may subsequently answer the Department's
weekly questions correctly. Therefore,
all benefits received would be "due to fraud." The fraud penalties and disqualification
periods would, therefore, apply to all weeks benefits were received.
Failure to Report Earnings.
The fraud overpayment and penalty,
where the initial department fraud determination was issued on or before June
30, 2004, is calculated as in the following example: The claimant has a weekly benefit amount of $100 and reports no
earnings when there was $50 in reportable earnings for the week at issue. The Act provides a claimant may earn up to
30% of his or her weekly benefit amount with no deduction. After considering the 30% factor in the
present example, the claimant was overpaid in the amount of $20. If the elements of fraud were established,
all benefits paid for a disqualified week would be established as an
overpayment. The claimant would also be
liable to repay, as a civil penalty, the $20 received by direct reason of
fraud. Therefore, in this example, the
claimant would be liable for a total overpayment of $120, an amount that would
have to repaid in its entirety before the claimant would be eligible for any
further waiting week credit or unemployment benefits. The claimant would also be subject to a 13-week penalty period. If the initial department fraud determination
was issued on or after July 1, 2004, the overpayment would be $20 and the
penalty would be $20 for a total due of $40.]
KEY: unemployment compensation, employment,
employee's rights, employee termination
of Continuation June 27, 2002