New York’s Labor Department Wants Your Unemployment Benefits Back (2024)

One unemployment recipient couldn’t read the application instructions in her native language and didn’t realize she had to report part-time working hours. Another got too much money due to a government miscalculation. A third, who has a physical disability, certified that she was available to work remotely from a hospital bed.

All three committed fraud in the eyes of the New York state Department of Labor, which has tried to claw back unemployment benefits from each of them — and hundreds of thousands of others.

No state pursues unemployment overpayment cases as zealously as New York. The state reported that it had overpaid state-funded benefits to the tune of $425 million between 2020 and 2023 — and found nearly two-thirds of that amount to be fraudulent. That’s a higher share than any other state, and five times the national average, according to data analyzed by labor researchers at the Cornell Industrial and Labor Relations School. When their claims are found fraudulent, unemployment recipients are forced to repay their benefits, even when it could send them into financial ruin.

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Many didn’t know they were committing fraud in the first place. States can forgive the obligation to return certain overpayments if they find that recipients have not “willfully misrepresented” their cases, but how they make that determination varies. Many states have a definition of the phrase that requires them to prove a claimant knew they were making false statements. New York has no statutory definition at all, so its labor investigators don’t have to consider whether recipients made an honest mistake in applying for benefits.

“You can have committed fraud, according to the court, even if you believe the information you gave to be true,” said Ciara Farrel, an attorney with the New York Legal Assistance Group.

Legal advocates argue that the Department of Labor takes a punitive approach to overpayment cases under Commissioner Roberta Reardon, who has ignored calls to issue a concrete definition of fraud. Claimants can appeal the department’s rulings to the five-member Unemployment Insurance Appeals Board, but advocates say that the board most often takes an aggressive, prosecutorial approach that presumes individuals to be at fault.

Nicole Salk, an attorney with Legal Services NYC, described the Labor Department’s mindset bluntly: “Wherever you can find a way not to pay the benefits, don’t pay them. Whenever you can recover an overpayment, recover it.”

“You can have committed fraud, according to the court, even if you believe the information you gave to be true.”

—Ciara Farrel, New York Legal Assistance Group

New York is strict with the waiver even in cases where it won’t see the money it claws back. President Joe Biden’s administration has encouraged states to forgive erroneous payments made in the chaos of the pandemic, which pushed record numbers onto unemployment rolls. Nearby states like Massachusetts and Connecticut forgave 28 percent and 19 percent of state and federal cases from 2020 to November 2023, respectively. Deep red Texas forgave 34 percent.

New York forgave just three percent. Most of the cases — totaling over $1.8 billion, across the four years — are repayments of expanded pandemic-era benefits, which go straight to the federal government.

“Even though there’s not a fiscal impact in a great many of these waivers,” said Anjana Malhotra, a senior attorney with the National Center for Law and Economic Justice, the Labor Department operates like “a private insurance agency that presumes that the claimant is at fault.”

A Department of Labor spokesperson said the department is in ongoing discussions with advocates on the issue of overpayments. “We follow the law as written and as it has been interpreted by the courts and the Unemployment Insurance Appeals Board,” they added.

When the Unemployment Insurance Appeals Board determined that Hameeda Bano had committed fraud, she found it “completely baffling.”

Bano, a single mother from Pakistan who lives in Flushing, Queens, doesn’t speak much English. After losing two teaching jobs at separate childcare centers during the pandemic, she filled out an English language application for unemployment benefits to the best of her ability. The Labor Department does not publish applications in Urdu or Pashto, the languages she speaks, but she managed to get approved.

There were no Urdu or Pashto instructions on the department’s website, either, nor phone operators who could speak either language. So Bano enlisted a neighbor to help her undertake the weekly process of proving her eligibility. (The Labor Department spokesperson said the department will provide a translation of any vital document using a vendor when asked.)

Shortly after Bano got her first round of benefits, one of the childcare centers offered her a few hours of work a week. She didn’t certify those hours to the Labor Department because her neighbor had told her not to report part-time work, she told New York Focus in an interview translated by her English-speaking son, Waleed. The benefits helped keep her financially afloat during a time when she lived “hand-to-mouth,” with little savings and while supporting Waleed through college.

“Even if I don’t have a roof over my head, I’m not going to ask for unemployment benefits ever again.”

—Hameeda Bano

A year and a half later, after she had returned to full-time work and ended her benefits, she came home to a notice from the Labor Department. It was seeking nearly $30,000 in overpayments and penalties for fraudulently misreporting her hours.

“That number just caused me a lot of anxiety, a lot of stress, disturbed my sleep patterns,” Bano said. “It really took a toll on my mental health.”

Waleed helped her appeal the decision. After six months of hearings, an administrative law judge found Bano did not “willfully misrepresent” the number of hours she worked, because she did not understand the English-language instructions. With the fraud determination reversed, the Department of Labor waived the overpayment based on financial hardship.

She breathed a sigh of relief. But it was too soon. The commissioner’s office challenged her case before the appeals board, which overturned the judge’s decision.

“We are not persuaded by the claimant’s testimony,” wrote board member Michael Greason in his decision. “Each week’s certification referred to the handbook and advised the claimant that she was required to read it.”

The question Bano failed to answer accurately was written “in plain language,” he added.

Unlike many states, New York does not explicitly define willful misrepresentation in its statute. Instead, Labor Department employees have used decades of case law from the appeals board and longstanding norms to guide decisions.

“Where there’s no definition of fault, that’s where these more conservative and anti-claimant perspectives have crept in to deny folks who should be eligible for waivers for repayment recoupment,” Malhotra said.

The Labor Department has found fraud even in cases where the department itself was responsible for the error.

In one recent case, Labor Department employees prescribed too much federal pandemic assistance after confusing an applicant’s gross and net income.

Over six months later, the state realized the error and tried to claw back $10,000 in overpayments. The applicant, who asked to go by her initials, MS, applied for a hardship waiver. The department denied her, saying her retirement savings were too high to qualify for forgiveness — a threshold that the federal government leaves up to states to decide.

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“Basically I would’ve had to take money out of my retirement that I of course had carefully saved for and calculated to have enough to retire on,” MS told New York Focus.

When MS enlisted the help of legal advocates, the department incorrectly found in a second review of her case that she had misrepresented her income — a move that would have stopped her waiver dead in its tracks.

“The whole situation was just like one disaster after another,” MS said.

It wasn’t until the advocates directly contacted the department’s Deputy General Counsel Laura Campion that the department rescinded the fraud determination and finally approved the waiver.

“There are hundreds if not thousands of [people like MS] throughout the state that give up,” said Victor Brito, a Legal Services paralegal who worked on the case. “They say, ‘I don’t have time to go to these hearings. I don’t have time to call this advocate and wait for them to call me back.’”

New York’s Labor Department Wants Your Unemployment Benefits Back (3)

DOL Commissioner Roberta Reardon (red jacket, left) with Governor Kathy Hochul at a Women's Equality Day event in Albany on August 26, 2022. | Mike Groll / Office of Governor Kathy Hochul

Alarmed by the flood of benefit clawbacks, a group of legal advocates began meeting regularly with Labor Department representatives. At one meeting, Reardon, the Labor Department commissioner, assured the group that language access rights, inclusivity, and equity were important to her, attendees said.

Her words rang hollow. Advocates have urged Reardon to direct her staff to take a more lenient approach to overpayment cases and to issue a formal definition of fault. She has not done so.

“If they have a commissioner who really cares about workers, they’re gonna make policy that’s pro-worker,” Salk said.

Farrell urged the importance of training unemployment program staff, whom she said are often unaware of regulations that have been on the books for nearly a decade. “We’ve had people testify on the record with no idea of what the language access rights or laws, both state and federal, are,” Farrell said.

Another change in direction could come from Governor Kathy Hochul, who appoints the members of the UI Appeals Board — three of whom are serving on expired terms and are slated to be reappointed or replaced this session.

“There are hundreds if not thousands throughout the state that give up.”

—Victor Brito, Legal Services NYC

A bill proposed by state Senator Brad Hoylman-Sigal would also offer relief by creating a waiver program to forgive state unemployment. (The federal waiver pushed by Biden can only be used for the expanded pandemic-era programs, not regular state benefits.) The bill would also establish a concrete definition of unemployment fraud, and it would direct the Labor Department to evaluate whether clawing back benefits would be against “equity and good conscience.”

“I think it would set off a cascade shift in the state appeals board rulings, and it would result in a much more humanitarian and lenient approach,” Malhotra said.

The bill was first proposed last year, when it passed the Assembly but did not get a floor vote in the Senate. According to Hoylman-Sigal, there was a “lack of advocacy,” and neither lawmakers nor advocates prioritized the issue.

The bill wouldn’t retroactively help people like Bano, whose case has been closed. A legal advocacy coalition has filed a civil rights complaint with the federal Department of Labor on her behalf, arguing that she and two other claimants were denied equal access to federally mandated benefits because they do not speak English.

Regardless of the outcome, Bano said she’ll never look at the government program the same way.

“One thing is for certain, I don’t want anything to do with them,” she said. “Even if I don’t have a roof over my head, I’m not going to ask for unemployment benefits ever again.”

New York’s Labor Department Wants Your Unemployment Benefits Back (2024)

FAQs

Can NYS take back unemployment? ›

New York State also has what is called a "right of offset." If you do not pay back benefits that were overpaid to you, we can seize any payments New York State may owe you.

Does NYS unemployment contact your employer? ›

We will review your Monetary Determination based on the proof you submit. We may contact your base period employer(s) to verify the wages paid to you in that time. If your benefit rate changes, we will mail you a revised Monetary Determination.

How to get back pay from unemployment ny? ›

If you have not received the back payments after 3 weeks, you can let us know by calling us at 888-209-6851. If you cannot reach us by phone you can send a message through the secure messaging system in your online account.

What can disqualify you from unemployment benefits in ny? ›

Voluntary Quit and Misconduct.

You have not subsequently worked and earned at least 10 times your weekly benefit rate. A disqualification for the above reasons lasts until you work and earn at least 10 times your weekly benefit rate. Self-employment does not count.

Can a benefit overpayment be written off? ›

The DWP can agree to waiver (write off) the overpayment. However this will usually only be done in exceptional circ*mstances where recovery action will result in severe welfare issues for you or your family. The DWP will also look into the circ*mstances of the overpayment.

Can you collect NYS unemployment if you quit your job? ›

You may be denied benefits if you: Were fired because you violated a company policy, rule or procedure, such as absenteeism or insubordination. Quit your job without good cause, such as a compelling personal reason.

Can an employer deny unemployment in NY? ›

Firstly, if you quit your job without good cause, or if you lost your job because of misconduct, your employer can lawfully disqualify you from receiving unemployment benefits.

What does returned to work mean in NY unemployment? ›

If, after you return to your job, you work fewer than 4 days per week and earn less than $504 per week, you may be eligible to continue receiving some unemployment benefits. For every day that you work in a given week, your unemployment benefit for that week is reduced by 25%.

Do employers usually respond to unemployment claims? ›

With the passing of the Unemployment Insurance Integrity Act in 2011, employers are required to respond to unemployment claims in a “timely and adequate matter.” That means promptly verifying facts stated in the claim, including the dates of employment, employee wages or salary, and the reason for the separation.

What is the maximum unemployment benefit in NY? ›

The maximum weekly benefit rate is $504. The first week of unemployment after they file a claim is a waiting week for which no benefits are paid.

How long can you collect unemployment in NY? ›

You can get up to 26 weeks of benefits while you are unemployed. A typical range of weekly UI benefits, depending on past wages, is about $100-$500 per week. Income from unemployment benefits is taxable on your federal and state tax returns.

What happens after 26 weeks of unemployment in NY? ›

Once you've exhausted those weeks, the New York Department of Labor (NYDOL) explains: “If you remain unemployed or become unemployed during the week immediately following the end of your benefit year, you must file a new claim immediately following the end of your benefit year.”

What is considered misconduct for unemployment in NY? ›

Misconduct for purposes of unemployment compensation is defined as "willful and wanton disregard of the employer's interest." (In re Wlos, 839 N.Y.S. 2d 330 (NYAD 2007)). Just because you did not get along with your boss is not enough for a finding of misconduct.

What if I refuse a job offer while on unemployment NY? ›

Section 593.2 of the Unemployment Insurance Law provides for a disqualification from benefits if a claimant, "without good cause, refuses to accept an offer of employment for which he is reasonably fitted by training and experience, including employment not subject to this article..."

Can you work while on unemployment NY? ›

A: Yes. Under NYS DOL's new partial unemployment system, ten hours of work in a week - regardless of the total days worked - is equivalent to less than one day worked for certification purposes, as long as you do not earn more than $504 in gross pay (excluding earnings from self-employment) for those ten hours worked.

Can I reopen my unemployment claim ny? ›

If your benefit year has not ended and you have not received 104 days of benefits (this equals 26 weeks of benefits) and it has been at least one week since the last week you claimed benefits, you may reopen your claim. To reopen your claim, simply start claiming weekly benefits again.

How to appeal unemployment in ny? ›

If you disagree with the decision of the administrative law judge, you can appeal to the Unemployment Insurance Appeal Board (UIAB). File your appeal in writing, within 20 days of the administrative law judge decision. The UIAB will send you a "Notice of Receipt of Appeal" with your Appeal Board case number.

What happens if you don't pay back a ssi overpayment? ›

SSA can withhold all of your Social Security benefits to repay the overpayment. However, unless there is fraud involved, they will usually let you pay it back in smaller amounts. You will have to pay back at least $10.00 a month. SSA tries to get the money back within 3 years.

How long does a false statement penalty week last? ›

Thus, a false statement disqualification that resulted in payment of benefits may be assessed for as few as five, but not more than 15 weeks.

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