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Employment Development Department
Employment Development Department

FAQs - Benefit Audits

The Employment Development Department (EDD) conducts a variety of Unemployment Insurance (UI) benefit audits to ensure the integrity of the UI Program, protect the solvency of the UI Trust Fund, and  help employers control their UI tax rate.

Benefit audits are conducted by the EDD on a daily, weekly, and quarterly basis by crossmatching information provided by employers against information provided by claimants using the following methods:

If the EDD determines that a claimant collected UI benefits they were not eligible to receive, an overpayment will be established along with any applicable penalties.

Important: If you are aware of claimants who may be committing fraud, call the EDD’s Fraud Hotline at 1-800-229-6297.

Completing Benefit Audit Forms

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The goal of the EDD benefit audits is to ensure that claimants properly report all work and earnings to the EDD and that employers’ reserve accounts are correctly charged.

Keep in mind: the EDD is not auditing employer records, only the information provided by claimants. Therefore, it is important to respond within 10 days of receiving any requests for information to help prevent overpayments.

The four audits are independent of each other and allow the EDD to detect fraud and improper payments using both state and national databases.

By completing the forms timely and accurately, you help the EDD determine if proper payments were made to the claimant. If improper payments were made, a credit can be given to an employer’s account when an overpayment is established.

If a form is not completed correctly, it requires additional review, which means we may request additional information and you may need to check your records a second time.

Complete the audit by marking the appropriate box. Be sure to sign, date, and return the audit to the address shown on the form within 10 days. If you do not return the audit, you may receive a duplicate audit requesting the same information.

If another person has worked for you using the same Social Security number, or your employee’s name does not match the name on the form, list the name of your employee in the appropriate box and return the completed audit to the EDD.

Return the audit form even if the claimant did not work for you. Be sure to mark the appropriate box, sign, date, and return the audit to the address shown on the form within 10 days. If you do not return the audit, you may receive a duplicate audit requesting the same information.

If another person has worked for you using the same Social Security number, or your employee’s name does not match the name on the form, list the name of your employee in the appropriate box and return the completed audit to the EDD.

Return it as soon as possible. We still need the information and will act upon it when the audit is received.

The law requires claimants to report weekly earnings during the calendar week when earned. Claimants are paid UI benefits on a weekly basis, and the earnings they report for the week affect the benefits paid to them. In order to conduct our audit, we need you to supply the information in the same weekly format. The UI benefit week usually begins on Sunday and ends on Saturday.

Please mail the completed forms back to EDD. The return address is printed at the bottom of the benefit audit forms.

In addition to unreported earnings, UI fraud can also include the following issues:

  • Job Separations: claimants indicate being laid off due to a lack of work when they actually quit, were fired, or omitted the separation information.

    Note: ”Laid Off/Lack of Work/Reduction in Force” means your business slowed down and you did not have any work for the individual to do.

  • Job Refusals: Claimants refuse work and fail to inform the EDD.
  • Availability: Claimants are not available for work due to transportation restrictions, school, incarceration, self–employment, etc.
  • Ability: Claimants are physically unable to work due to a temporary or permanent disability.
  • Identity Theft: An imposter uses an identity not his or her own to claim UI benefits.

When an audit finds that an overpayment exists and/or fraud has occurred, an administrative decision is issued to the claimant. The claimant has the right to appeal and is given 30 days to request a timely hearing before an Administrative Law Judge if he or she disagrees with the result of the decision.

Claimants found to have fraudulently claimed benefits are liable to repay any resulting overpayment, plus a 30 percent penalty, and they are penalized for up to 23 weeks of future benefits. The number of penalty weeks is determined by several factors, including the amount and number of weeks of overpayment. Unpaid penalty weeks can only be served by claiming otherwise eligible weeks of UI benefits. Penalty weeks remain in effect for three years after the decision is issued. Serving penalty weeks does not reduce the overpayment.

In certain fraud cases, the EDD’s Investigation Division pursues criminal convictions. In these situations, an investigator may request additional evidence, such as copies of payroll checks.