Unemployment Insurance Code § 2101 UIC – Unemployment Insurance Fraud

Under California Unemployment Insurance Code § 2101, it is a criminal offense to make a false statement, fail to disclose a material fact, or use false identification to alter any benefit or payment.

Unemployment insurance fraud can be prosecuted as either a felony or a misdemeanor.

This is sometimes also referred to as “EDD fraud.”

The entire text of the law reads as follows:

UIC 2101.  (a) It is a violation of this chapter to willfully make a false statement or representation, to knowingly fail to disclose a material fact, or to use a false name, false social security number, or other false identification to obtain, increase, reduce, or defeat any benefit or payment, whether for the maker or for any other person, under any of the following statutes administered by the department:
(1) The provisions of this division.
(2) The provisions of any unemployment insurance law of the federal government.
(3) The provisions of any training allowance law of the federal government.
(4) The provisions of any trade readjustment allowance law of the federal government.
(5) The provisions of any other allowance law of the federal government.

(b) Nothing in this section shall be construed to preclude the applicability of Section 470 of the Penal Code to any acts or omissions which violate this section.

Legal Analysis

California Unemployment Insurance Code 2101 UIC makes it a crime to either:

• willfully make a false statement or representation;
• knowingly fail to disclose a material fact; and/or
• use a false identification

in order to:

• obtain,
• increase,
• decrease, or
• stop

unemployment insurance benefits.

Note that the person lying does not have to be the beneficiary of the payments in order to be convicted under UIC 2101.¹

Example: Mark feels bad for his friend Sam who was just laid off from his job. Without telling Sam, Mark doctors Sam’s unemployment insurance application to indicate that Sam’s former salary was $1,000 higher than it actually was.

Here, Mark could be convicted of violating UIC 2101 for willfully making a false statement to increase Sam’s UI benefits.

Unemployment insurance fraud is a wobbler in California. As a misdemeanor, unemployment insurance fraud penalties include:

• up to 1 year in county jail, and/or
• up to $20,000 in fines.

As a felony, unemployment insurance fraud penalties include a California State Prison term of:

• 16 months,
• 2 years, or
• 3 years.

The court can also impose a $20,000 fine in addition to – or instead of – incarceration.² Plus, defendants may be required to reimburse the unemployment insurer for any wrongfully paid benefits.

1. Can employers be guilty of unemployment insurance fraud?

Yes. California’s unemployment insurance fraud laws apply both to employees and employers. Examples of EDD fraud committed by an employer include:

• intentionally lying about why a former employee was terminated or how much the employee earned for the purpose of not contributing to the unemployment insurance program, or
• knowingly withhold deductions from employees and purposely not paying them to the Employment Development Department.

2. What are some examples of unemployment insurance fraud?

• Applying for unemployment insurance benefits even though you are still employed full-time
• Falsely claiming that you are diligently looking for work while receiving unemployment insurance
• Falsely claiming in your unemployment insurance application about you were laid off when in truth you were fired for cause
• Cashing another person’s unemployment insurance check
• Falsely impersonating someone on your application

3. How do I report unemployment insurance fraud in California?

Phone the EDD Fraud Hotline at 1-800-229-6297 or report the fraud online.

See our related article on California forgery laws (PC 470).

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Legal References