Article 4. Overpayments of California Unemployment Insurance Code >> Division 1. >> Part 1. >> Chapter 5. >> Article 4.
Any person who is overpaid any amount of benefits under this
part is liable for the amount overpaid unless any of the following is
(a) (1) The overpayment was not due to fraud, misrepresentation or
willful nondisclosure on the part of the recipient, and (2) the
overpayment was received without fault on the part of the recipient,
and its recovery would be against equity and good conscience.
(b) The person who received the overpayment cooperates with the
department in an investigation that results in the assessment of a
penalty under Section 1144 or the prosecution or other action taken
to impose a penalty pursuant to Section 2121.
(c) The department determines that it is in the interest of
justice to waive all or part of the liability established under this
section because the overpayment was a direct result of inducement,
solicitation, or coercion on the part of the employer.
If the director finds that an individual has been overpaid
unemployment compensation benefits because he or she willfully, for
the purpose of obtaining unemployment compensation benefits, either
made a false statement or representation, with actual knowledge of
the falsity thereof, or withheld a material fact, the director shall
assess against the individual an amount equal to 30 percent of the
overpayment amount. Assessments collected under this section shall be
deposited in the following manner:
(a) For penalty assessments established prior to October 22, 2013,
100 percent of the overpayment penalty amount in the Benefit Audit
(b) For penalty assessments established on or after October 22,
2013, as follows:
(1) 50 percent of the overpayment penalty amount in the
Unemployment Trust Fund.
(2) 50 percent of the overpayment penalty amount in the Benefit
No determination of overpayment shall be based upon the
disallowance by the Workmen's Compensation Appeals Board of a claim
of lien filed under subdivision (g) of Section 4903 of the Labor
Code, or the allowance of such lien for less than the amount claimed
as a lien, or upon the approval by the said appeals board of a
compromise and release agreement providing for the allowance of such
lien in an amount less than the amount claimed as a lien.
Any claim of lien filed with the Workmen's Compensation
Appeals Board under the provisions of Section 4903 of the Labor Code
shall be fully discharged and satisfied by payment of the amount of
such lien allowed by the said appeals board under the provisions of
Section 4904 of said code or the amount specified in any compromise
and release agreement filed and approved by the said appeals board
pursuant to Sections 5000 through 5004 of said code.
The director shall find that an individual has been
overpaid unemployment benefits where the individual was an elected
official and the individual's unemployment insurance claim was based
on income solely derived from his or her employment as an elected
official. An individual who is liable pursuant to this section shall
not be eligible for waiver of the overpayment pursuant to Section
1375. In the event of an unemployment insurance claim based on more
than one source of income, if the base period of a new claim includes
any wage credits earned as an elected official pursuant to Section
634.5, the individual shall be liable for any amount of unemployment
insurance benefits overpaid as a result of a recomputation to remove
the base period wage credits earned as an elected official. In that
event, the provisions of Section 1375 shall not apply to this section
with respect to the wage credits earned as an elected official.
The Director of Employment Development shall determine the
amount of the overpayment and any assessment authorized under Section
1375.1 and shall notify the liable person of the basis of the
overpayment determination. In the absence of fraud,
misrepresentation, or willful nondisclosure, notice of the
overpayment determination shall be mailed or personally served within
the latest of the following periods:
(a) Not later than one year after the close of the benefit year in
which the overpayment was made.
(b) Not later than six months after the date a backpay award was
(a) Within 30 days from the date of mailing or serving of the
notice of overpayment, the person affected may file an appeal to an
administrative law judge. The director shall be an interested party
to any such appeal. The administrative law judge, after affording
reasonable opportunity for a fair hearing, shall, unless the appeal
is withdrawn, affirm, reverse, modify, or set aside the findings set
forth in the notice of overpayment. The party and the director shall
be notified of the administrative law judge's decision, together with
his or her reasons therefor, which shall be final unless within 30
days from the date of notification or mailing of the decision a
further appeal is initiated to the appeals board pursuant to Section
1336. The 30-day period for an appeal to the administrative law judge
or to the appeals board may be extended for good cause.
(b) "Good cause," as used in this section, shall include, but not
be limited to, mistake, inadvertence, surprise, or excusable neglect.
(c) This section shall become operative on July 1, 2015.
The Appeals Board shall review an appeal from an overpayment
determination as provided in Sections 1336 and 1337 and determine
what amount, if any, shall be recovered.
The director, subject to this article, may do any or all of
the following in the recovery of overpayments of unemployment
(a) File a civil action against the liable person for the recovery
of the amount of the overpayment within one year after any of the
following, or, in cases where the individual has been overpaid
benefits due to fraud, misrepresentation, or nondisclosure as
described in Section 1375.1, or where the director has found an
overpayment pursuant to Section 1375.7, within three years of any of
(1) The mailing or personal service of the notice of overpayment
determination if the person affected does not file an appeal to an
administrative law judge.
(2) The mailing of the decision of the administrative law judge if
the person affected does not initiate a further appeal to the
(3) The date of the decision of the appeals board.
(b) Initiate proceedings for a summary judgment against the liable
person. However, this subdivision applies only where the director
has found, pursuant to Section 1375, that the overpayment may not be
waived because it was due to fraud, misrepresentation, or willful
nondisclosure on the part of the recipient or where the director has
found an overpayment pursuant to Section 1375.7. The director may,
not later than three years after the overpayment became final, file
with the clerk of the proper court in the county from which the
overpayment of benefits was paid or in the county in which the
claimant resides, a certificate containing all of the following:
(1) The amount due, including any assessment made under Section
1375.1, plus interest from the date that the initial determination of
overpayment was made pursuant to Section 1376.
(2) A statement that the director has complied with all the
provisions of this article prior to the filing of the certificate.
(3) A request that judgment be entered against the liable person
in the amount set forth in the certificate.
The clerk, immediately upon the filing of the certificate, shall
enter a judgment for the State of California against the liable
person in the amount set forth in the certificate.
For the purposes of this subdivision only, an overpayment is final
and due and payable after any of the following:
(A) The liable person has not filed an appeal pursuant to Section
(B) The liable person has filed an appeal to the administrative
law judge and a decision of an administrative law judge has become
(C) The liable person has filed an appeal to the appeals board and
the decision of the appeals board has become final because the
liable person has not sought judicial review within the six-month
period provided by Section 410.
(c) Reduce or vacate a summary judgment by filing a certificate to
that effect with the clerk of the proper court.
(d) Offset the amount of the overpayment received by the liable
person against any amount of benefits to which he or she may become
entitled under this division within six years of the date of the
mailing or personal service of the notice of overpayment
An abstract of judgment obtained pursuant to subdivision
(a) or (b) of Section 1379, or a copy thereof, may be recorded with
the county recorder of any county. From the time of recording, the
judgment shall constitute a lien against all real or personal
property of the liable person in that county owned by the liable
person at the time, or which the liable person may afterwards, but
before the lien expires, acquire. The lien shall have the force,
effect, and priority of a judgment lien and shall continue for 10
years from the time of recording of the abstract of judgment obtained
pursuant to subdivision (a) or (b) of Section 1379, unless sooner
released or otherwise discharged.
The lien may, within 10 years from the date of recording of the
abstract of judgment or within 10 years from the date of the last
extension of the lien in the manner provided in this section, be
extended by recording a new abstract in the office of the county
recorder of any county. From the date of such recording, the lien
shall be extended for 10 years unless sooner released or otherwise
Execution shall issue upon such a judgment upon request of the
director in the same manner as execution may issue upon other
judgments. Sales shall be held under such execution as prescribed in
the Code of Civil Procedure. In all proceedings under this section,
the director or his or her authorized agents may act on behalf of the
(a) If an abstract has been recorded as provided in Section
1379.5, and the lien, including any interest, costs, and penalty,
has been satisfied in full, the department shall, pursuant to Section
724.050 of the Code of Civil Procedure do all of the following:
(1) File an acknowledgment of satisfaction of judgment with the
(2) Serve an acknowledgment of satisfaction of judgment on the
claimant. Service shall be made personally or by mail.
(3) Record an acknowledgment of satisfaction of judgment in the
office of the county recorder where the abstract of judgment is
(b) If an acknowledgment of satisfaction of judgment is recorded,
the cost of recording is an obligation of the claimant and may be
collected from the claimant in any manner provided by law for the
collection of benefit overpayments.
(c) If payment is made by check, any action specified in
subdivision (a) shall not be required until the check has been paid
by the financial institution upon which it was drawn.
No person shall be liable for the amount of benefits received
where the benefits were paid pursuant to an administrative law judge'
s decision which affirmed an initial determination or in accordance
with a final decision of the appeals board, regardless of any further
appeal. An employer's experience rating account shall not be charged
with any benefits erroneously or unlawfully paid, except as provided
in Section 1026 or 1144.
The director shall enforce collection of any judgment
obtained by the director under subdivision (a) or (b) of Section
1379. Amounts collected under this section shall be deposited in the
fund from which the overpayment was made, except that the amounts
collected to offset the costs of collections shall be deposited in
the Unemployment Administration Fund and the amounts collected
pursuant to Section 1375.1 shall be deposited as specified in that
No person shall be liable for the amount of benefits received
for any period for which the person also received an award or
settlement of backpay resulting from an action or grievance for
wrongful discharge, if the amount of the backpay award or settlement
was reduced by the amount of benefits received pursuant to this part.
When the amount of the backpay award or settlement was reduced by
the amount of benefits received, the employer shall pay to the
Unemployment Fund an amount equal to the amount subtracted from the
backpay award or settlement for benefits received by the person in
order to reimburse the fund. When an individual has been awarded or
receives backpay, the amount of the backpay shall constitute wages
paid in the period for which it is awarded.
A mediator or arbitrator who is a party to the backpay award or
settlement shall, within 30 days of the settlement, report to the
department the name and address of the employer, the amount of
benefits by which the award or settlement was reduced, and the name
and social security number of the person who received the award or
Notwithstanding any other provision of law to the contrary,
the Franchise Tax Board shall aid the department in the recovery of
overpayments of unemployment compensation benefits pursuant to
Section 1379 for up to six years after the date of the mailing or
personal service of the notice of overpayment determination.
Amounts collected by the Controller for benefit overpayment
accounts, pursuant to Section 12419.2 of the Government Code, shall
be deposited in the fund from which the overpayment was made, except
that the amounts collected to offset the costs of collections shall
be deposited in the Unemployment Administration Fund.