Penalties; liability for benefit overpayment.

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A. Whoever makes a false statement or representation knowing it to be false or knowingly fails to disclose a material fact, to obtain or increase any benefit or other payment under the Unemployment Compensation Law either for that person or for any other person, shall be punished by a fine of not more than one hundred dollars ($100) or by imprisonment for not longer than thirty days or by both such fine and imprisonment, and each such false statement or misrepresentation or failure to disclose a material fact shall constitute a separate offense. In any case where, after notice and an opportunity to be heard, any person is found by the secretary to have so obtained or increased the amount of any benefit for the person, the person shall, in addition to other penalties provided herein, forfeit all benefit rights under the Unemployment Compensation Law for a period of not more than one year from and after such determination.

B. In addition to the penalty pursuant to Subsection A of this section, whoever makes a false statement or representation knowing it to be false or knowingly fails to disclose a material fact to obtain or increase any benefit or other payment under the Unemployment Compensation Law, either for that person or for any other person, shall be required to pay a civil penalty of twenty-five percent of the amount of overpaid benefits, collected in the manner provided in Subsection B of Section 51-1-36 NMSA 1978. The penalty shall be distributed as follows:

(1) fifteen percent of the amount of overpaid benefits shall be distributed to the fund; and

(2) ten percent of the amount of overpaid benefits shall be distributed to the employment security department fund created pursuant to Subsection B of Section 51-1-34 NMSA 1978.

C. Any employing unit or any officer or agent of an employing unit or any other person who makes a false statement or representation knowing it to be false or who knowingly fails to disclose a material fact, to prevent or reduce the payment of benefits to any individual entitled thereto, or to avoid becoming or remaining subject hereto or to avoid or reduce any contribution or other payment required from an employing unit under the Unemployment Compensation Law or who willfully fails or refuses to make any such contributions or other payment or to furnish any reports required hereunder or to produce or permit the inspection or copying of records as required hereunder, shall be punished by a fine of not more than one hundred dollars ($100) or by imprisonment for not longer than thirty days or by both such fine and imprisonment, and each such false statement or representation or failure to disclose a material fact and each day of such failure or refusal may constitute a separate offense.

D. In addition to the penalty pursuant to Subsection C of this section, any employing unit or officer or agent of an employing unit that makes a false statement or representation knowing it to be false or that knowingly fails to disclose a material fact to prevent or reduce the payment of benefits to any individual entitled to benefits under the Unemployment Compensation Law shall be required to pay a civil penalty in an amount not to exceed ten thousand dollars ($10,000), as determined by rule established by the department. The penalty shall be collected in a manner provided in Subsection B of Section 51-1-36 NMSA 1978 and distributed to the fund.

E. Any person who willfully violates any provision of the Unemployment Compensation Law or any rule or regulation thereunder, the violation of which is made unlawful or the observance of which is required under the terms of the Unemployment Compensation Law and for which a penalty is neither prescribed herein nor provided by any other applicable statute, shall be punished by a fine of not more than one hundred dollars ($100) or by imprisonment for not longer than thirty days or by both such fine and imprisonment, and each day such violation continues shall be deemed to be a separate offense.

F. Notwithstanding any other provision of the Unemployment Compensation Law, if any individual claiming benefits or waiting period credits, in connection with such claim, makes any false statement or representation, in writing or otherwise, knowing it to be false or knowingly fails to disclose any material fact in order to obtain or increase the amount of a benefit payment, such claim shall not constitute a valid claim for benefits in any amount or for waiting period credits but shall be void and of no effect for all purposes. The entire amount of the benefits obtained by means of such claim shall be, in addition to any other penalties provided herein, subject to recoupment by deduction from the claimant's future benefits or they may be recovered as provided for the collection of past due contributions in Subsection B of Section 51-1-36 NMSA 1978.

G. Any person who, by reason of the nondisclosure or misrepresentation by the person or by another of a material fact (irrespective of whether such nondisclosure or misrepresentation was known or fraudulent), has received any sum as benefits under the Unemployment Compensation Law, while any conditions for the receipt of benefits imposed by the Unemployment Compensation Law were not fulfilled in the person's case and any person who receives any sum as benefits while the person knows or should know that the person is not entitled to such benefits because the person has received a notice of denial or disqualification or has received a monetary eligibility notice showing erroneous base period employers and wages, shall, in the discretion of the secretary and notwithstanding any action brought pursuant to Subsection A of this section, either be liable to have such sum deducted from any future benefits payable to the person under the Unemployment Compensation Law or be liable to repay to the department for the unemployment compensation fund a sum equal to the amount so received by the person, and such sum shall be collectible in the manner provided in Subsection B of Section 51-1-36 NMSA 1978 for the collection of past-due contributions.

H. Any person who has received benefits as a result of a determination or decision of the department or any court that the person was eligible and not disqualified for such benefits and such determination or decision is subsequently modified or reversed by a final decision as provided in Section 51-1-8 NMSA 1978, or who has received benefits as a result of administrative error or for any other reason while conditions for the receipt of benefits imposed by the Unemployment Compensation Law were not fulfilled in the person's case or while the person was disqualified from receiving benefits, irrespective of whether such overpayment of benefits was due to any fault of the person claiming benefits, shall, as determined by the secretary or the secretary's authorized delegate, either be liable to have such sum deducted from any future benefits payable to the person under the Unemployment Compensation Law at a rate to be determined by the secretary but not less than fifty percent of the weekly benefit amount payable to the person, or be liable to repay to the department, for the unemployment compensation fund or for credit to the appropriate reimbursable account, a sum equal to the amount of benefits received by the person for which the person was not eligible or for which the person was disqualified or that was otherwise overpaid to the person; provided, that for the purposes of this subsection, no determination or decision establishing an overpayment of benefits shall be issued by the department against any person for failure to meet the eligibility conditions of Paragraph (3) of Subsection A of Section 51-1-5 NMSA 1978 more than one year after payment of benefits has been made, unless such condition of eligibility has been appealed or otherwise contested within such year.

I. Any amount of benefits for which a person is determined to be overpaid pursuant to this section may be collected in the manner provided in Subsection B of Section 51-1-36 NMSA 1978 for the collection of past-due contributions, notwithstanding that the person from whom the overpayment is to be collected has been assessed a penalty pursuant to Subsections A through E of this section.

J. A person shall be liable to repay the amount of benefits received for any period for which the person also received an award or settlement of back pay resulting from an action or grievance concerning a discharge unless the amount of the back pay award or settlement was reduced by the amount of benefits received during the period. The individual shall furnish the division with a signed copy of the award or settlement agreement that sets forth the person's name, the name of the employer, the period of time covered by the award or settlement and the amount by which the award or settlement was so reduced.

History: Laws 1936 (S.S.), ch. 1, § 16; 1941 Comp., § 57-819; 1953 Comp., § 59-9-19; Laws 1953, ch. 121, § 8; 1961, ch. 162, § 1; 1979, ch. 280, § 41; 1980, ch. 50, § 3; 1985, ch. 31, § 5; 1987, ch. 63, § 4; 1993, ch. 209, § 5; 2013, ch. 132, § 3.

ANNOTATIONS

Cross references. — For unemployment compensation fund, see 51-1-19 NMSA 1978.

The 2013 amendment, effective July 1, 2013, authorized the workforce solutions department to recover benefits after a decision allowing benefits has been modified or reversed; provided a civil penalty for fraudulently obtaining or increasing benefits or preventing or reducing the payment of benefits; added Subsection B; in Subsection C, after "each day of such failure or refusal", deleted "shall" and added "may"; added Subsection D; in Subsection F, in the first sentence, after "Unemployment Compensation Law", deleted "including the provisions of Subsection J of Section 51-1-8 NMSA 1978"; in Paragraph H, at the beginning of the sentence, deleted "Except as provided in Subsection J of Section 51-1-8 NMSA 1978"; and in Subsection I, after "Subsections A", deleted "B and C" and added "through E".

The 1993 amendment, effective April 5, 1993, substituted "Subsection J" for "Subsection I" in the first sentences of Subsections D and F, and added Subsection H.

Recovery of overpayments of unemployment compensation benefits is mandatory and equitable estoppel is not a defense in an action to recover the overpayments. Millar v. New Mexico Dep't of Workforce Solutions, 2013-NMCA-055, 304 P.3d 427, cert. denied, 2013-NMCERT-004.

Unemployment benefits are a property interest protected by due process. — New Mexico's Unemployment Compensation Law, 51-1-1 to 51-1-59 NMSA 1978, creates a constitutionally protected property interest in unemployment benefits. N.M. Dep't of Workforce Solutions v. Gardu o, 2016-NMSC-002, rev'g 2014-NMCA-050, 324 P.3d 377.

Where employee was initially determined to be eligible for unemployment benefits and where she continued to receive benefits during the appeal process, but was unaware that her employer had appealed the award of unemployment benefits because she did not receive notice of the appeal until the department of workforce solutions sent a notice of hearing 130 days after the initial determination of eligibility, the late notice did violate due process because employee was not deprived of an opportunity to be heard, the late notice did not prevent employee from participating in the appeal, and when employee was initially determined to be eligible for benefits, she was given notice of the potential consequences that she may have to pay back benefits to which she was not entitled. N.M. Dep't of Workforce Solutions v. Gardu o, 2016-NMSC-002, rev'g 2014-NMCA-050, 324 P.3d 377.

Recovery of overpayments is mandatory. — Where the employee began receiving unemployment compensation benefits on December 19, 2009; the employer appealed the award of benefits on January 21, 2010; the employee did not learn of the appeal until the department of workforce solutions sent a notice of hearing on June 4, 2010; at the hearing on June 16, 2010, the department determined that the employee was disqualified from benefits due to misconduct at work; the department's appeals tribunal upheld the decision on January 7, 2011; and the department sent the employee an overpayment notice demanding the refund of the unemployment compensation payments the employee received from December 19, 2009 through the end of April 2010, the employee was liable to repay the payments because the department had no discretion to forego recovery of overpayments and the doctrine of equitable estoppel was not a valid defense. Millar v. New Mexico Dep't of Workforce Solutions, 2013-NMCA-055, 304 P.3d 427, cert. denied, 2013-NMCERT-004.

Where the department of workforce solutions initially determined that the employee was eligible for unemployment compensation benefits and paid benefits to the employee; the employer appealed and the department determined that the employee was disqualified from benefits because the employee had been terminated for misconduct; the department sought to recover the overpayment of benefits it had paid the employee; and the district court held that the department was precluded from recovering the overpayments because it had violated federal and state timeliness standards for processing appeals and was equitably estopped from pursuing recovery of the overpayments against the employee, the timeliness requirements of 20 C.F.R. §§650.1 to 650.4 and 51-1-8 NMSA 1978 and the doctrine of equitable estoppel did not preclude the department from recovering the overpayments after the employee had been disqualified for benefits. New Mexico Dep't of Workforce Solutions v. Garduno, 2014-NMCA-050, cert. granted, 2014-NMCERT-003.

Overpayment claim procedures must provide procedural due process. — Where an initial determination awarding unemployment benefits is made in favor of the claimant and payment of benefits has begun, due process requires that the recipient be afforded notice and an opportunity to be heard prior to stopping payment of benefits. New Mexico Dep't of Workforce Solutions v. Garduno, 2014-NMCA-050, cert. granted, 2014-NMCERT-003.

Violation of due process precluded recovery of overpayment of benefits. — Where the department of workforce solutions initially determined that the employee was entitled to unemployment benefits and began paying benefits to the employee; the employer appealed the determination on March 26, 2010; the department did not inform the employee of the appeal until it sent a notice of hearing on August 3, 2010, setting a hearing which began on August 19, 2010; and the department determined that the employee was disqualified from benefits because the employee had been terminated for misconduct and sought to recover the overpayment of benefits that had been paid to the employee, the department was preclude from collecting the overpayment of benefits because the department's overpayment claims process violated the employee's due process right to timely notice of the employer's appeal and a meaningful opportunity to be heard. New Mexico Dep't of Workforce Solutions v. Garduno, 2014-NMCA-050, cert. granted, 2014-NMCERT-003.

No state statute of limitation ran against a claim by the New Mexico department of labor alleging that a debtor wrongfully collected unemployment compensation benefits while employed by failing to disclose her employment. New Mexico Dep't of Labor v. Valdez, 136 Bankr. 874 (Bankr. D.N.M. 1992).

Falsely obtaining unemployment benefits deemed petty misdemeanor. — When Section 30-1-6C NMSA 1978 is read together with this section, it is clear that the crime of falsely obtaining unemployment benefits is a petty misdemeanor, for which the statute of limitations is two years (now one year) under Section 30-1-8F NMSA 1978 (now 30-1-8D NMSA 1978). Robinson v. Short, 1979-NMSC-099, 93 N.M. 610, 603 P.2d 720.

Where claimant misrepresents amount that he earned, the commission (now department) should deduct the total amount of the benefits received from any future payments made or should otherwise recover the same. 1944 Op. Att'y Gen. No. 44-4577.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 76 Am. Jur. 2d Unemployment Compensation §§ 196, 197, 209, 223, 224.

Reductions to back pay awards under Title VII of Civil Rights Act of 1964 (42 USCS §§ 2000e et seq.), 135 A.L.R. Fed. 1

81 C.J.S. Social Security and Public Welfare §§ 251, 252, 272, 278, 297, 298.


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