17 Jul 2020

What is Unemployment Fraud

Unemployment Fraud and COVID-19 in Texas


An Unemplyment Insurance Application Form Being Filled Out Due To The Coronavirus Pandemic

Unemployment fraud in Texas is considered to be misrepresenting your employment status and claiming that you are looking for work when you are not. During the COVID-19 pandemic, the United States has seen an unprecedented number of unemployment claims.

Fraudulent claims for unemployment compensation may seem insignificant. However, the Department of Labor takes it quite seriously. If you have been accused of unemployment benefits fraud, call a Houston employment lawyer to assess your case immediately. 

Unemployment Insurance Fraud and the Texas Workforce Commission

According to the Texas Workforce Commission, “You commit fraud if you knowingly provide false or misleading information or withhold relevant information for yourself or another person, to obtain or increase benefits.”

This form of fraud is punishable by law at misdemeanor and felony levels. If the TWC accuses you of unemployment benefits fraud, you could face serious penalties. The TWC warns the following: 

  • Failure to adhere to the rules of unemployment insurance can result in serious consequences. 
  • You must respond truthfully and fully to all TWC inquiries. 
  • Texas routinely prosecutes unemployment fraud at the felony level. 

What Is an Unemployment Benefits Program? 

An unemployment benefits program provides people with an income when they are unable to find work, are out of work because of factors beyond their control or have been laid off. Every state has its own version of unemployment insurance that is run in conjunction with the federal government. 

In Texas, the TWC evaluates unemployment benefits claims based on past wages, job separation, and ongoing eligibility. To receive benefits, you must meet the requirements of each area. The TWC calculates your benefits according to your taxable wages earned in Texas and reported by employers. 

For a payable claim, you must meet the following requirements: 

  • You have wages in more than one of the four base period calendar quarters. 
  • Your base period wages are at least 37 times the amount of your weekly benefit. 
  • When you qualified for benefits on a prior claim, you must have earned six times your new benefit amount since that time. 

Examples of Unemployment Fraud 

Many unemployment insurance fraud occurs after a worker intentionally makes false statements to the TWC or misrepresents their situation to obtain unemployment benefits. Lies, misrepresentations, and other intentional actions that lead to payments when you are technically ineligible can result in fraud charges. Here are a few examples of how people commonly commit this crime. 

  • False information or identity theft. Some people attempt to obtain unemployment benefits through applications that contain false information. 
  • Employer fraud. Employers can also commit unemployment fraud by misclassifying workers, failing to report paid wages, or providing false information about workers who would be eligible. 
  • Misrepresenting employment efforts. To receive unemployment insurance benefits, you must actively seek employment. Please note that work search requirements are suspended during the pandemic. 
  • Failure to report employment. Some people who apply for benefits find a job. When this happens, they are meant to report their employment and wages to the TWC. Failure to do so is unemployment fraud. 

What Are the Penalties of Unemployment Fraud? 

People who commit unemployment fraud in Texas may face both civil and criminal penalties. Oftentimes, a civil penalty involves a fine. On the other hand, a criminal penalty can include fines, probation, incarceration, and more.

According to the TWC, when you commit unemployment fraud, you must pay back the benefits you were not entitled to receive as well as a 15 percent penalty on the benefits you received fraudulently. Additionally, you could face penalties that include: 

  • Criminal prosecution by the state or federal government
  • Possible jail or prison sentences 
  • Fines 
  • Loss of the remaining benefits on your claim 

Additionally, you are not eligible for future benefits after the first incident of fraud. For instance, if you did not report your earnings for 10 weeks, you are not eligible for the benefits received from the first week of unemployment fraud through the end of your claim. 

Legal Defense Against Unemployment Benefits Fraud Charges 

In any criminal case, the type of legal defense available to you will vary with your circumstances. This is also true of unemployment insurance fraud cases. However, with a Houston employment lawyer to advocate on your behalf, you may find a strong legal defense against unemployment fraud. 

  • Lack of criminal intent. You cannot accidentally commit unemployment fraud. A conviction requires intentional misrepresentation to fraudulently receive payments. For instance, mistakenly underreporting your prior income in the confusion of a pandemic is not necessarily enough to commit fraud. 
  • Lack of evidence. The state has the responsibility to present evidence that proves beyond a reasonable doubt that the accused has committed a crime. Sometimes, in unemployment fraud cases, the evidence simply is not present. If they cannot prove their case, you may not be found guilty.

Your Houston Employment Lawyer 

When the state accuses you of unemployment fraud, you need a Houston employment lawyer to advocate for you. At the Craighead Law Firm, we listen to you and help you get what you deserve. We are top-rated Houston employment lawyers because we fight for our clients to receive all types of damages. 

While unemployment insurance fraud may not seem like a significant crime, you should speak to an experienced employment lawyer when you face charges. Let us fight for you, and like our other clients, you’ll be happy that you did.