Unemployment – Colorado abusing overpayment penalty
Update Note: In a March 25 decision the Colorado Industrial Claims Appeals Office issued a “precedential decision” finding that what we state below as to penalties is correct. However, the Benefit Payment Control section is still making demands for the wrong penalty percentage.
The Colorado Department of Labor and Employment (CDLE), Benefit Payment Control section, is wrongly and unlawfully assessing a 65% penalty against every person whom CDLE determines received benefits as a result of a false representation or failure to disclose a material fact with intent to obtain or increase a benefit.
The penalty provision appears in statute, at C.R.S. §8-81-101. The penalty for overpayment as a result of willful misrepresentation was amended by House Bill 1124 in 2013. The Bill raised the penalty from 50% to 65%. The revised penalty was only to be imposed upon improper payments received after the effective date of the new Act. The new Act became law effective August 7, 2013. However, Colorado has been demanding the 65% penalty against everyone it decides should be penalized, no matter when benefits were received. This is against the clear language of House Bill 1124, and probably unconstitutional. It is discouraging that a State agency would so misuse its power.
What lessons are there for the unemployed?
a) If you have been charged 65%, fight it. If you have paid a 65% penalty, you are probably entitled to a refund.
b) be careful with your claims
i) Always report your other wage income while getting benefits.
ii) If you are getting any money for being on call, CDLE considers the on call hours to be hours of work.
iii) If you are confused how to report wages from part time work, ask CDLE. People paid gratuities, or paid on an uneven schedule, often get confused how to report. People who take retirement funds from a plan their employer subsidized must be careful how they report earnings. Make a record of who you speak to at CDLE and the date, because the collectors at Benefit Payment Control will act like no one ever spoke to you. If possible, go to a workforce center and ask your questions in person.
c) If the amount CDLE asks you to repay exceeds $10,000.00, always see a lawyer. $10,000.00 seems to be the level at which they will consider criminal charges for fraud.
d) Anytime CDLE wants you to pay a penalty it means they think you have made an intentional misrepresentation.
e) Penalties for misrepresentation are not just money. Penalties include disqualifying you from future unemployment – four weeks disqualified from future benefits for every one week of wrongful benefits received. If you feel you did nothing wrong, this penalty might make a fight worthwhile.