Miscellaneous MI 45
A. Claimant False Statement
This Section discusses the elements of a claimant false statement and when to assess a disqualification.
- Elements of a False Statement
A false statement (FS) disqualification is appropriate when the claimant has either given false information or withheld material information in order to obtain unemployment benefits.
Unemployment Insurance Code Section 1257(a) provides an individual is disqualified for unemployment benefits if:
He or she wilfully, 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 in order to obtain any unemployment compensation benefits under this division.
Thus, the elements of a false statement disqualification are:
- The claimant either made a false statement or representation, or withheld a material fact
- With actual knowledge of the falsity
- For the purpose of obtaining benefits.
If any one of these elements is missing, the interviewer may not assess a false statement disqualification. A discussion of the individual elements follows.
a. False Statement or Representation, or Withholding a Material Fact
"False" is defined in McBride v. People (126 Col. 277, 248 P.2d 725), a 1952 Colorado Supreme Court Decision, as: False "denotes an intentional, deliberate, and wilful untruth, something beyond mere inaccuracy."
"False" should be construed to mean "intentionally or wilfully untrue."
"False" may mean untrue or it may mean designedly untrue, implying an intention to deceive. When applied to the representations of one inducing an act to another’s injury, it implies a purpose to deceive.
A false statement or representation may be made orally or in writing, and may be a positive statement as well as silence or concealment of a material fact.
In P-B-436, the claimant filed a Claimant Missing Check Incident Report in which she stated that she had not received, lost after receipt, endorsed, or authorized another to endorse check #23746493 issued on June 30 for the weeks ending June 18 and June 25. She also signed an Affidavit for Issuance of Replacement Check for this check. The claimant was issued a replacement check on August 26 which she endorsed and cashed on September 7. It was subsequently discovered that check #23746493 had been endorsed and cashed on July 6. The claimant admitted that she had endorsed both checks, but could offer no explanation for applying for duplicate benefits. The claimant was issued a determination disqualifying her for benefits on the grounds that she had made a false statement in failing to disclose that she had previously received and cashed the original check. In its decision, the Board stated:
At the time she applied for duplicate benefits, the claimant provided the department with incorrect information. She explained that at the time of making the application she could not recall having received and cashed the original check and her records, upon which she relied, were not accurate.
In providing information to the department for the purpose of obtaining benefits, the claimant had an obligation to know the accuracy of that information. By certifying as true, information which was untrue, but of which she had no present recollection, the claimant made a wilful false statement. Accordingly, she is disqualified for benefits under section 1257(a) of the code. (Emphasis added.)
In addition to being false, the information, or lack thereof, must be material (essential, relevant, or pertinent) to the decision before it may be used as a basis for disqualification. "Material" information is only that information which has a bearing on the claimant’s eligibility for benefits. In P-B-72, the Appeals Board defined "materiality" in terms of both the claimant’s belief and in terms of what the claimant should have known. In this case the claimant failed to report a job offer on her continued claim form. Concerning the propriety of the false statement disqualification, the Board held:
In order for the department to properly perform its statutory duty of determining a claimant’s eligibility for benefits it must have in its possession all of the facts which reasonably bear upon that eligibility. While in a particular case, as here, the fact withheld may not, as a matter of law, affect the ultimate outcome, it is only after careful consideration of that fact, together with the other facts in the case, that a proper determination can be made. To hold otherwise would, in effect, allow a claimant to determine his own eligibility for benefits based upon his opinion of what is material and what is not. . . . As to the materiality of the information withheld, it is our opinion that the application of Section 1257(a) is not dependent upon whether the information withheld would have necessarily resulted in ineligibility or disqualification for benefits under other appropriate sections of the code. It is sufficient that the claimant believed, or should have known, that the facts withheld would raise a question as to her entitlement to benefits. (Emphasis added.)
b. False Statement is Wilful
In determining wilfulness, the Appeals Board often cites the following Court cases: People v. Calvert: "To do a thing wilfully is to do it knowingly.";
Helme v. Great Western Milling Co.: "Conscious; knowing; done with stubborn purpose but not malice"; and
People v. Sheldon: "After indulging in this mental process, if an act is done as the result of it, it is a wilful act."
In P-B-347, the Board addressed the claimant’s contention that she "just forgot" she had worked and had earnings in the week in question when she completed her claim card and certified for benefits. In its decision, the Board stated:
In our opinion, however, it is inherently improbable that the claimant, within the few intervening days between the time she performed the work in question and the time she completed and filed her certification for benefits, could have temporarily forgotten such an important and material fact as a day of work and the receipt of wages during a period of unemployment. Accordingly, we must conclude that the claimant knowingly and, therefore, wilfully failed to report a material fact to the department for the purpose of obtaining benefits. Consequently, she is subject to disqualification. . . . (Emphasis added.)
In P-B-474, the Board stated:
To knowingly give incorrect information to the department for the purpose of claiming unemployment benefits is to "wilfully" make a "false statement" within the meaning of section 1257(a) of the code.
In summary, to hold that a claimant’s statement, or withholding of information, was a wilful action, the interviewer must establish that the action was:
- Conscious and knowing, as opposed to an innocent error, and
- Voluntary and purposeful, as opposed to accidental.
c. Actual Knowledge of the Falsity
"Actual knowledge of the falsity" refers to the claimant’s knowledge of the truth of the answer which he or she is giving to the department, or, the claimant’s knowledge that the information he or she is withholding is material to his or her eligibility for benefits.
In P-B-436 and P-B-474, the Board cited Wishnick v. Frye, a California Appellate court case, to define "actual knowledge":
Knowledge of a falsity may be established by a showing either the declarant had actual knowledge of the falsity, lacked an honest belief in its truth, or made the statement carelessly or recklessly in a manner not warranted by the information available to the declarant. (Emphasis added.)
d. For the Purpose of Obtaining Benefits
Before a disqualification can be assessed, the interviewer must establish that the false statement or representation, or withholding of material facts was made for the purpose of obtaining benefits. For example, if a claimant provides misinformation on his or her work application when registering for work, the information is not given for the purpose of obtaining unemployment benefits and a disqualification cannot be assessed. However, information provided by the claimant on an unemployment insurance claim form is for the purpose of obtaining benefits and any misstatement or withholding of information is subject to disqualification.
- Assessing the Disqualification:
The severity of the false statement disqualification will depend upon whether or not benefits have been paid and the number of incidences of false statement or withholding of information.
a. No Benefits Paid
Unemployment Insurance Code, Section 1260(c), provides:
An individual disqualified under subdivision (a) of Section 1257, under a determination transmitted to him or her by the department, and who was not paid any benefit amount as a result of his or her false statement or representation, is ineligible to receive unemployment compensation benefits for two weeks commencing with the week in which the determination is mailed to or personally served upon him or her, or any subsequent week, for which he or she is first otherwise in all respects eligible for unemployment compensation benefits and for not more than 13 subsequent weeks for which he or she is otherwise in all respects eligible for unemployment compensation benefits. No disqualification under this subdivision shall be applied to any week if all or any portion of the week is beyond the three-year period next succeeding the date of the mailing or personal service of the determination. This subdivision shall not apply to an individual convicted under Section 2101.
Thus, a false statement that did not result in the payment of benefits may be assessed for as few as two, but not more than 15 weeks. The actual number of weeks assessed is dependent upon the number of incidences of false statement or withholding of information.
NOTE: A waiting period week is considered as benefits NOT paid.
b. Benefits Paid
Unemployment Insurance Code section 1260(d), provides:
An individual disqualified under subsection (a) of Section 1257, under a determination transmitted to him or her by the department, and who was paid any benefit amount as a result of his or her false statement or representation, is ineligible to receive unemployment compensation benefits for five weeks commencing with the week in which the determination is mailed to or personally served upon him or her, or any subsequent week, for which he or she is first otherwise in all respects eligible for unemployment compensation benefits and for not more than 10 subsequent weeks for which he or she is otherwise in all respects eligible for unemployment compensation benefits. No disqualification under this subdivision shall be applied to any week if all or any portion of the week is beyond the three-year period next succeeding the date of the mailing or personal service of the determination. This subdivision shall not apply to an individual convicted under Section 2101.
Thus, a false statement disqualification that resulted in payment of benefits may be assessed for as few as five, but not more than 15 weeks. The actual number of weeks assessed is dependent upon the number of incidences of false statement or withholding of information.
c. Voluntary Disclosure
When a claimant voluntarily discloses a prior wilful false statement, assess the minimum false statement penalty of two weeks if the benefit check for the week(s) in question has not been cashed. If, prior to the voluntary disclosure, the claimant cashed the benefit check for the week(s) in question, assess a minimum false statement penalty of five weeks.
For these minimum penalties to apply:
- The disclosure must be made not more than six months after the false statement. If more than one false statement is involved, the date of the earliest false statement will determine the disclosure date.
- The disclosure must be made before the department is aware of the possibility of the false statement and before the department has taken any action to investigate the false statement.
- Successive Disqualifications
Unemployment Insurance Code Section 1261 provides:
When successive disqualifications under Section 1257(a) and 1257(b) occur, the director may extend the period of ineligibility provided for in Section 1260 for an additional period not to exceed eight additional weeks under Section 1261.
For purposes of Section 1261, the Appeals Board, in P-B-69, referred to "successive disqualifications" as the claimant’s repeated disqualifying actions rather than disqualifying periods resulting therefrom. A disqualifying act is the claimant’s misstatement or withholding of information, or refusal of suitable work.
Successive disqualifying acts are any second or subsequent claimant misstatements, withholdings of information or refusals of suitable work. The disqualifying acts need not be restricted to a single period of time nor for a specific number of weeks. If the claimant has one or more disqualifying decision(s) on the current or previous claims, apply the provisions of Section 1261.
Note: To be considered as a prior disqualification for SD purposes the Determination Notice (DE 1080) must have been issued to the claimant at least 10 days prior to the commission of the subsequent act. This time lapse ensures that the claimant was aware of the penalty yet committed another disqualifying act knowing that a more severe penalty would be assessed. The SD disqualification begins the Sunday of the week the DE 1080 is mailed the same as the FS disq. The claimant will not begin serving the SD until the FS weeks assessed are served.
The claimant returned to work and did not report this to the Department. The claimant certified for benefits for the next two weeks and did not report the work or the wages. During the determination interview the Department determined that the claimant had made two misstatements, one for each week that he certified that he had not worked and had no earnings. The Department also found that the claimant had three prior Unemployment Insurance claims and on each claim the claimant had returned to work and not disclosed the work and wages during the last two weeks of each claim. In this case the claimant would be assessed the false statement disqualification for the two current false statements and would also be subject to a successive disqualification under Section 1261.
- False Statements Under Section 1263(b)
Unemployment Insurance Code Section 1263 (b) provides:
Any individual convicted under Section 2101 by any court of competent jurisdiction of wilfully making a false statement or knowingly failing to disclose a material fact to obtain or increase any benefit or payment . . . shall . . . be ineligible to receive unemployment compensation or extended duration benefits or federal-state extended benefits for the week in which the criminal complaint was filed, or any subsequent week, for which he is first otherwise in all respects eligible for unemployment compensation or extended duration benefits or federal-state extended benefits and for 14 subsequent weeks for which he is otherwise in all respects eligible for unemployment compensation or extended duration benefits or federal-state extended benefits. No disqualification under this subdivision shall be applied to any week if all of any portion of the week is beyond the three-year period next succeeding the date of the filing of the criminal complaint.
NOTE: Successive disqualifications are not applicable to Section 1263 false statement disqualifications.
B. Employer False Statement
Unemployment Insurance Code Section 1142 provides:
(a) If the director finds that any employer or any employee, officer, or agent of any employer, in submitting facts concerning the termination of a claimant’s employment pursuant to Section 1030,1327, 3654, 3701, 4654, or 4701, willfully makes a false statement or representation or willfully fails to report a material fact concerning such termination, the director shall assess a penalty against the employer in an amount not less than 2 nor more than 10 times the weekly benefit amount of such claimant.
(b) If the director finds that any employer or any employee, officer, or agent of any employer, in submitting a written statement concerning the reasonable assurance, as defined in subdivision (g) of Section 1253.3, of a claimant’s reemployment, as required by subdivisions (b), (c), and (i) of Section 1253.3, willfully makes a false statement or representation or willfully fails to report a material fact concerning the reasonable assurance of that employment, the director shall assess a penalty against the employer in an amount not less than two nor more than 10 times the weekly benefit amount of that claimant.
(c) Penalties collected under this section shall be deposited in the contingent fund.
In some respects, the conditions under which an assessment for employer false statement apply are similar to conditions under which a claimant false statement disqualification is imposed:
- The false statement, misrepresentation or withholding of facts must have been willful, and
- The false statement, misrepresentation or withholding must be material to the issue.
However, employer false statement differs from claimant false statement in that:
- There is no requirement to show intent to deceive, and
- The false statement must have been made in relation to a separation issue or the reasonable assurance of reemployment.
If any one of the above conditions is missing, an assessment for employer false statement cannot be made.
- The False Statement is Willful
"Willful" has been defined by the department, the Board and the courts as including the elements of knowledge, deliberation, consciousness and stubborn purpose.
In Diagnostic Data Inc. v. CUIAB (1973), a California Appellate Court decision, the court found than an "intent to deceive" requirement was not implied in code Section 1142. Therefore, there is no requirement that the false statement be made for the purpose of obtaining relief of the cost of UI benefits paid.
In P-R-338, the Board distinguished between submission of employer information wherein wilfulness was not shown in the initial employer response, but the later response by the same employer was clearly a wilful misstatement. In this case, the claimant called his employer and suggested that a replacement be obtained as he was not returning to work. He neither mentioned that he was ill nor requested a leave of absence. He later filed an unemployment insurance claim saying he was laid off for lack of work. In response to the claim notice, the employer stated the claimant had quit to attend school. In its determination the department held the claimant disqualified under Section 1256 and 1257(a). It also mailed a Notice of Potential Charge to Reserve Account to the employer. The notice informed the employer that the claimant had credibly established he had not quit to attend school, was not in school, nor planning to go to school. In response, the employer reiterated its assertion that the claimant quit to attend school.
In the appeal hearing it was established that the claimant had stopped working the same day as two other employees, one of whom was planning to attend school. The supervisor has reported the separation to the bookkeeper who had inadvertently switched identities of the employees when submitting information to the agent. In holding there was a lack of wilfulness in the initial erroneous claim response, the Board stated:
The evidence of record in this case indicated the agent’s statement . . . resulted from a simple error by the bookkeeper. . . . When he prepared his erroneous report there was no occasion for consideration and reflection; it was not done with conscious or stubborn purpose . . . the agent was not aware that the report was erroneous when they performed their part in the chain of circumstances which resulted in the submission of false information to the department initially . . .
However, with respect to the employer’s reiteration of the same information in response to the DE 3802 pointing out the conflict, the Board stated:
. . . [W]e are concerned with the effect of events which took place after the agent received the notice of potential charge . . . . The department gave the agent and the employer ten days within which to investigate and to submit the correct information. The agent made only a minimal attempt to investigate by contacting the employer’s president who could not now recall such attempt . . .
Instead of using the opportunity given by the notice . . . to correct the earlier false statement, the agent . . . reiterated, in effect, the same false statement. This series of acts, and omissions amounted to a wilful false representation and wilful withholding of material facts . . . . (Emphasis added.)
- The False Statement is Material
The false statement must be material (essential, relevant, or pertinent) to the decision before it may be used as basis for a penalty assessment.
In P-R-29, the Board considered a case wherein the employer reported only what he thought were material facts. In this case the claimant was laid off due to lack of work. She was told she would be recalled before long, but was not given a recall date. Some weeks later the employer contacted the claimant requesting current address information preparatory to calling her back to work, the claimant informed the employer she was going East on a family emergency. The employer considered this response a voluntary leaving. In responding to a subsequent Interstate Notice of Claim Filed, the employer stated:
(Quit) - said she had to go back East because of an emergency in the family. She did not say in the letter how long she would be gone or what the emergency was. I called her home number several times but there was no answer. Under the circumstances we request that our reserve account not be charged.
While the employer indicated on the form that the last day worked was April 7, no mention was made of the fact that the claimant had first been laid off due to lack of work.
The Board refuted the employer’s contention that its communication was neither false nor materially omitted information because the employment relationship was not actually severed until receipt of the claimant letter. In affirming the false statement penalty, the Board stated:
One objective of the legislature in enacting Section  was to insure prompt payment of benefits to eligible claimants. Experience had shown that payment of benefits was often delayed because inaccurate or erroneous information was furnished to the department by some employers or their agents. Although this legislation was primarily directed toward the unscrupulous employer, it was also intended to place a greater responsibility upon all employers to report all material facts relating to termination of a claimant’s employment . . . . It is not expected nor is it desirable that the employer speculate about what may be material facts. The employer is required simply to state the facts in its possession which may affect a claimant’s eligibility for benefits.
- The False Statement is in Connection with a Separation Issue or a Reasonable Assurance Issue
Employer information regarding availability, trade dispute, suitable work, wages, etc., cannot be the basis for an employer false statement penalty.
Additionally, preclaim notices cannot be used to assess an employer false statement penalty since they are not in response to a claim notice as specified in Section 1142 (DE 1101CZ, DE 1545 or Notice of Filing of Extended Duration or Federal-State Extended benefit claim).
a. Untimely Protest
An untimely employer response concerning a claimant’s separation can be the basis for assessment of a false statement penalty. The Board considered such a case in P-T-407 and stated:
The Penalty for wilfully making a false statement or misrepresentation or wilfully failing to report a material fact was of necessity changed to a cash assessment instead of a charge against the employer’s reserve in order that the penalty would apply equally to all such employers. Therefore, the assessment is not limited to only those situations wherein the employer is entitled to a ruling under Section 1030 or 3701 of the code. (Emphasis added.)
b. False Statement Need Not be Written if the Statement is in Connection with a Separation Issue
In P-T-411 the Board made it evident that an employer misstatement in connection with a separation issue can be made either orally or in writing. It may occur either in initial or in subsequent writings, discussions, or telephone calls:
[I]t is evident that where an employer responds to a notice of new or additional claim and submits facts either orally or in writing concerning the termination of a claimant’s employment, those facts are submitted pursuant to Section 1327, 3654, or 4654 for the purposes of Section 1142 of the code. This is true regardless of the fact that such submission is beyond the time limit to be in conformance with the requirements that entitle the employer to a ruling . . . . (Emphasis in original.)
All employer false statements that are connected with a reasonable assurance issue under 1142(b) must have been submitted to the department in writing for the employer to be assessed an employer false statement.
c. Agent’s Acts are Binding on the Employer
In P-R-339 the claimant was discharged by the branch manager because of his driving record. His immediate supervisor was aware of the reasons for separation. When later called by the main office regarding the reason for separation, he responded that the claimant left to go to school. His reasons for doing so were because the claimant had once expressed a desire to continue his education and the supervisor thought this reason would look better on the claimant’s employment record. The supervisor was unaware this information would be used for unemployment insurance purposes. When the UI claim was filed, the main office advised its tax representative that the claimant had quit to return to school and the agent in turn reported the information to the department. In its decision the Board stated:
Unquestionably a false statement was submitted to the department in this matter . . . . The person from whom it originated . . . made it with the knowledge it was false . . . . Apparently, the employer’s main office and its representative did not know that the statement was false when they relayed it to the department.
The fact that the employee with whom the false statement originated did not realize it might be used in connection with unemployment insurance matters is not material . . . .
In the present case, the false statement submitted to the department is traceable directly to an employee of this employer and was made within the scope of his employment . . . and the act of its employee must be imputed to the employer.
Accordingly, should an employer contend that false information was submitted by an individual who did not have the authority to do so, the burden is on the employer to show that:
- It had an established procedure for responding to claim notices, and
- Such procedure was knowingly violated by the individual submitting the response.
If the employer can clearly establish both of these conditions were present, it would not be held responsible.
The principles in P-R-339 also apply to employers and employer agents when providing facts on the reasonable assurance of reemployment of claimants pursuant to UI Code Section 1142(b).
A vocational education teacher at the local high school receives written reasonable assurance before the end of each term. The notice advises the claimant his reemployment is subject to enrollment, and if a minimum number of students do not enroll, his classes may be cancelled. He has worked regularly each term. The school district provides this information to its agent. In response to the claim filed by the employee, the employer agent submits a written protest stating the claimant has reasonable assurance to return to work in the next term. At the determination interview, the agent provides no new information.
The employer willfully made a false statement to the employer’s agent concerning the reasonable assurance of reemployment. Employers know or reasonably should know that an assignment contingent on enrollment does not constitute reasonable assurance as provided in Section 1253.3(g).
- Withholding of Information
Occasionally, an employer’s misstatement will involve an error of omission, i.e., failure to respond with all information in the employer’s possession so as to give a false picture of events leading to the separation.
In P-R-343 the claimant filed a claim in Nevada against California earnings. The employer, who was a base period employer, responded with information that the claimant quit on May 31 to return to Reno. The claimant responded to the department’s request for information stating that he was laid off for lack of work on July 2. And, as of the time of layoff he had not decided whether to return to Reno but might have mentioned it or the general manager might have assumed he would return there. When questioned further by the department, the employer responded "We now find that the claimant did work six days in June and was laid off as stated." The employer denied any intent to deceive and contended the original response was made by someone no longer with the firm and unavailable for questioning. In its decision the Board stated:
It is clear from the evidence that payroll records and other information were available to the employer but were not investigated by the employer until after receipt of the department’s letter . . . . We must conclude that had the employer searched those records, it would have discovered that the claimant was employed subsequent to May 31 . . . and that he was actually laid off for lack of work. Whether or not the manager had actual knowledge of these facts, it was the obligation of the employer to see to it that all the facts in its possession were submitted to the department so that the department could perform its statutory duty . . . . We therefore conclude the employer wilfully made a false statement concerning the termination of the claimant’s employment . . .