False Statement

Often, when the EDD sends you a Notice of Determination finding that you are ineligible for unemployment benefits, the notice will say that the EDD has also decided that you made a “willful false statement” to the EDD, or “withheld a material fact” in your application or certification forms “to obtain benefits.”

What does this notice mean? The EDD is saying that it thinks that you lied so you could get unemployment benefits. This decision is serious, and can have harsh consequences, so you should try to get it reversed by filing an appeal. If you do not appeal, the EDD will likely try to make you pay back the money it gave you and make you pay an additional penalty. EDD’s false statement determination will also make it difficult for you to get unemployment benefits the next time you become unemployed, so it’s often worth it to appeal to try to get the determination reversed.

Some common reasons why EDD might think you made a false statement include:

• The EDD thinks you did not tell the EDD about money you earned during the time when you were certifying for benefits.
• Your employer told the EDD that you stopped working for one reason, and you told the EDD that you stopped working for a different reason.

But the EDD might not be right. Over half of people who appeal a false statement determination get the decision reversed. If you just made a simple mistake without meaning to tell a lie, the EDD should not have decided that you made a “willful false statement.” Sometimes, the EDD even accuses people of making a “willful false statement” when they have been telling the truth! The best way to correct a mistake by the EDD is to file an appeal.

There are multiple penalties that come with a “false statement” determination by EDD. For example, if the determination is not reversed on appeal, you likely will not be able to access benefits for a number of weeks the next time you apply. If you also received a Notice of Overpayment, the false statement means you will have to pay a penalty, on top of paying back the benefits EDD thinks you were overpaid. Also, when EDD decides you made a false statement, it will no longer consider your financial situation when deciding whether or not you have to pay back any overpaid benefits. We explain all these potential consequences in more detail below, as well as provide resources for you to immediately appeal the determination against you.

An EDD decision that you have made a willful false statement can cause a lot of problems for you in the future. Usually, in addition to the EDD making you pay back any money the EDD thinks you were overpaid (the overpayment), the EDD will apply between two and fifteen “penalty weeks” to your EDD account. These “penalty weeks” will stay on your account for three years from the date of the notice informing you of the “penalty weeks.” If you try to apply for benefits when you have penalty weeks, the EDD will not pay you for each penalty week, even though for that week, you would otherwise have been eligible to receive benefits.

If you are no longer receiving benefits right now, these penalty weeks might not seem so important, but false statement penalty weeks could be very damaging if you become unemployed in the next three years.

Length of Time and Other Important Information

• The exact number of weeks you will have to certify before you are paid benefits will depend on whether you were paid benefits because of the false statement, and the number of “false statements” the EDD decides you made. You may have to “serve” anywhere between 2 to 15 weeks.
• You will only start “serving” your penalty weeks when you have an active UI claim and would otherwise be able to receive benefits.
• The EDD can apply the false statement penalty weeks to a future UI claim for up to three years after the date they sent you the false statement decision.

For these reasons, it’s extremely important to appeal an EDD decision that you made a false statement as soon as you can, even if you’re not sure exactly what “false statement” the EDD is talking about. You can find detailed information on the entire appeals process from start to finish here: Appeal a Notice of Determination or Notice of Overpayment: How to Protect Your Unemployment Insurance Benefits.

You Will Have to Pay Back More Money to EDD

If you have been sent a Notice of Overpayment, where the EDD has decided that you were overpaid benefits and owe money back, then a “false statement” decision will increase the amount of money you owe. This additional financial penalty is 30% of the total amount of benefits you were overpaid, on top of the overpayment itself. So, for example, if the EDD claims they overpaid you $5,000 in benefits and the EDD has also decided you made a “false statement”, the total amount you will owe is $6,500 – the original $5,000, plus 30% ($1,500).

You Will Not Be Able to Ask for a Waiver of the Overpayment

When the EDD decides that you have been overpaid, normally there is a process where you can ask for a “waiver” of the overpayment. This is usually possible if you can show that it would be a financial hardship for you to pay back the amount you were overpaid. If you’re successful in asking for a waiver, it will allow you to avoid paying back possibly thousands of dollars of benefits that you needed in a time of struggle. However, for you to get a waiver, the overpayment can’t have been caused by fraud, and you must have been paid the benefits “through no fault of your own.” If EDD makes a “false statement” decision against you, that means that the EDD thinks that the overpayment was your “fault,” and you will not be able to apply for a waiver, meaning you’ll have to pay back the overpaid amount, plus any penalties.

You can find more information about what a Notice of Overpayment means and how you can address it here: Unemployment Insurance: Overpayments

When you appeal, you’ll get to have a hearing before a judge, where you can explain what happened and make arguments as to why EDD’s decision was wrong. When you are at your hearing and answering the judge’s questions, there are some common explanations for why the EDD would think you gave them a false statement. These can be used to argue that the EDD was wrong when it found that you made a false statement or failed to provide EDD with important information. Here are some common defenses you could use:

1. You actually told the truth! You provided all required information, but the EDD (or an EDD representative) misunderstood what you told them. Here are some tips:
   • If you can provide a straightforward and logical explanation for why the EDD misunderstood what you told them, what you say at the hearing (in legal terms, this is called your testimony) should be enough to convince the judge to overturn EDD’s decision.
   • It may be that the EDD got wrong information from another source (for example, from your former employer), and when the EDD compared the two sets of information they received, the EDD decided you were lying. If you can prove that the other information the EDD received is wrong, the judge at your hearing is more likely to decide that your version of what happened is the truth.

Any hard evidence that backs up your explanation (for example, documents like pay stubs, emails, or screenshots of text messages) will also be helpful.

2. You tried to tell the truth! You did your best, under the circumstances, to provide all the information the EDD said it needed. Here are some tips:
   • If you did make a mistake at some point, either in your application or certification forms, you will want to explain that it was an honest mistake, and you were not trying to lie or hide information from the EDD.
   • If you tried to make sure you were filling out the EDD’s forms correctly, tell the judge what steps you took to try to do everything properly. Maybe you called the EDD and got advice from one of their representatives? Or tried to call, but could not get a representative on the line? Maybe you asked a friend, a family member, or a former employer for help and got their advice? Explaining the actions you took to the judge will help show that you were not intentionally lying to the EDD, and any errors were just mistakes.

3. You were originally found eligible by the EDD, and so you thought you were doing everything correctly.
   • If you were found eligible at the beginning of your claim, and no one from the EDD followed up with you to ask further questions about your application, or informed you there was an issue with your claim, then this would show that you had a good faith belief that you were eligible (even if technically you were not), and you were not trying to deceive the EDD.

In the end, it’s still possible that the judge at your hearing will rule against you, and decide that you did make a willful false statement to the EDD or failed to report a material fact. If you still disagree with the judge’s decision, you have the right to appeal that decision to the next level, which is the Board at the CUIAB. For more information on how to appeal an Administrative Law Judge’s decision to the Board, please see here: How to Appeal an Administrative Law Judge’s Decision to the CUIAB Board