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 applicable:
  (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 Fund.
  (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 Audit Fund.

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 made.

(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 compensation benefits:
  (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 the following:
  (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 appeals board.
  (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 1377.
  (B) The liable person has filed an appeal to the administrative law judge and a decision of an administrative law judge has become final.
  (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 determination.

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 discharged. 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 state.

(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 court.
  (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 recorded.
  (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 section.

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 settlement.

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.