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

UPDATED: Jan 5, 2012

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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