BILL ANALYSIS �
AB 2362
Page 1
Date of Hearing: April 23, 2014
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
AB 2362 (Grove) - As Amended: April 21, 2014
SUBJECT : Unemployment Insurance Fraud
SUMMARY : Permits the Employment Development Department (EDD)
to apply sanctions for Unemployment Insurance (UI) fraud based
on both federal and state criminal convictions. Specifically,
this bill :
1)Requires EDD to deny UI benefits for one year to any person
convicted of fraud in a federal court if the charges were
based on UI fraud.
2)Requires EDD to deny UI benefits for one year to any person
convicted of forgery, grand theft, or false claims under the
California Penal Code if the charges were based on UI fraud.
3)Requires California courts to report any conviction for
forgery, grand theft, or false claims based on UI fraud to
EDD.
EXISTING LAW :
1)Makes it a crime to commit UI fraud. UI fraud includes making
a willful false statement, knowingly withholding a material
fact, using a false name or social security number, or using a
fake identification to obtain UI benefits.
2)Imposes penalties of up to one-year of confinement in either a
county jail or state prison and a fine of up to $20,000 for UI
fraud.
3)Specifies that individuals convicted of UI fraud may not
receive UI benefits for one year.
4)Requires EDD to suspend UI benefits for any person charged
with UI fraud.
FISCAL EFFECT : Undetermined
COMMENTS :
AB 2362
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1)Purpose . According to the author, if an unemployed worker is
prosecuted for UI benefit fraud under a federal or state law
other than Unemployment Insurance Code Section 2101, the
52-week benefit forfeiture provision that is imposed for
convictions under Section 2101 does not apply. AB 2362 seeks
to apply consistency by imposing the same 52-week forfeiture
penalty against an individual convicted of UI benefit fraud
regardless of the federal or state code section used to
prosecute the individual. EDD indicates that it is relatively
common for prosecutors to charge UI fraud based on the Penal
Code sections included in this bill instead of using Section
2101. This results in some of those convicted of UI fraud
being subject to UI benefit forfeiture and some not, based on
whether the violations were charged under the Penal Code or
the Unemployment Insurance Code.
2)UI Fraud . Knowingly collecting UI benefits based on
intentionally providing false or inaccurate information when
the claim was filed, is UI fraud. Common examples of UI
fraud include:
a. An individual returns to work but continues to
collect UI benefits without reporting the work and
wages.
b. An individual works a part-time job but does not
report his or her earnings to the state, thereby
collecting more benefits than he or she is allowed.
c. An individual performs temporary work while
collecting UI benefits, but does not report the earnings
when certifying for benefits bi-weekly.
d. An individual withholds information or gives false
information to the EDD.
UI fraud is punishable under both state and federal law and
subject to serious penalties including:
a. Prosecution by government authorities
b. Possible jail or prison sentences
c. Repaying the UI benefits collected, plus penalties
and fines
d. Forfeiting future income tax refunds
e. Losing the eligibility to collect UI benefits in
the future
AB 2362
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REGISTERED SUPPORT / OPPOSITION :
Support
Associated Builders and Contractors of California
California Chamber of Commerce
California Farm Bureau Federation
California Manufacturers and Technology Association
California Restaurant Association
National Federation of Independent Businesses
Opposition
None received
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086