2013 -- S 0776 SUBSTITUTE A

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LC01696/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYMENT SECURITY--

FRAUD AND ABUSE

     Introduced By: Senators Ciccone, Lombardi, E O`Neill, Bates, and Felag

     Date Introduced: March 13, 2013

     Referred To: Senate Labor

(Governor)

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 28-42-62.1 and 28-42-68 of the General Laws in Chapter 28-42

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entitled "Employment Security - General Provisions" are hereby amended to read as follows:

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     28-42-62.1. Fraud and abuse. -- (a) (1) It shall be unlawful to do any of the following:

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      (A) Make or cause to be made any knowingly false or fraudulent material statement or

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material representation for the purpose of obtaining or denying any benefits;

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      (B) Present or cause to be presented any knowingly false or fraudulent written or oral

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material statement in support of, or in opposition to, any claim for benefits or petition regarding

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the continuation, termination or modification of benefits;

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      (C) Knowingly assist, aid and abet, solicit, or conspire with any person who engages in

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an unlawful act under this section;

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      (D) Willfully misrepresent or fail to disclose any material fact in order to avoid or reduce

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any contribution or other payment required of an employing unit under chapters 42 -- 44 of this

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title;

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      (E) Willfully fail to report or provide false or misleading information regarding

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ownership changes as required by regulations promulgated by the department.

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      (F) Willfully make or require any deduction from wages to pay all or any portion of the

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contributions required from employers, or try to induce any individual to waive any right under

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chapters 42-44 of this title.

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      (2) For purposes of this section, "statement" includes, but is not limited to, any

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endorsement of a benefit check, application for registration, oral or written statement or report,

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proof of unemployment, or other documentation offered as proof of, or the absence of,

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entitlement to benefits or the amount of benefits.

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      (3) If it is determined that any person concealed or knowingly failed to disclose that

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which is required by law to be revealed, knowingly gave or used perjured testimony or false

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evidence, knowingly made a false statement of fact, participated in the creation or presentation of

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evidence which he knows to be false, or otherwise engaged in conduct in violation of this section,

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that person shall be guilty of a misdemeanor and subject in criminal proceedings to a fine and/or

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penalty not exceeding one thousand dollars ($1,000), or double the value of the fraud, whichever

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is greater, or by imprisonment up to one year in state prison, or both.

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     (4) Beginning October 1, 2013, whenever the director establishes that an erroneous

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payment was made to an individual due to fraud committed by the individual, that individual will

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be assessed a penalty equal to fifteen percent (15%) of the amount of the erroneous payment. All

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penalties assessed and collected under this subsection shall be immediately deposited into the

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employment security fund.

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      (b) The director, in consultation with the attorney general, shall establish a form to give

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notice that the endorsement of a benefit check sent pursuant to chapter 44 of this title is the

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endorser's affirmation that he or she is qualified to receive benefits under the employment

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security act. The notice shall be sent to all individuals who are presently receiving benefits and

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given to those who file claims for benefits in the future.

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     28-42-68. Recovery of erroneously paid benefits. -- (a) Any individual who, by reason

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of a mistake or misrepresentation made by himself, herself, or another, has received any sum as

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benefits under chapters 42 -- 44 of this title, in any week in which any condition for the receipt of

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the benefits imposed by those chapters was not fulfilled by him or her, or with respect to any

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week in which he or she was disqualified from receiving those benefits, shall in the discretion of

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the director be liable to have that sum deducted from any future benefits payable to him or her

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under those chapters, or shall be liable to repay to the director for the employment security fund a

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sum equal to the amount so received, plus, if the benefits were received as a result of

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misrepresentation or fraud by the recipient, interest on the benefits at the rate set forth in section

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28-43-15. That sum shall be collectible in the manner provided in section 28-43-18 for the

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collection of past due contributions. All interest received pursuant to this subsection shall be

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credited to the unemployment security interest fund created by section 28-42-75.

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     (b) The department, by agreement with another state or the United States, as required by

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42 USC 503(g), may recover any overpayment of benefits paid to any individual under the laws

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of this state or of another state or under an unemployment benefit program of the United States.

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Any overpayments subject to this subsection may be deducted from any future benefits payable to

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the individual under the laws of this state or of another state or under an unemployment program

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of the United States.

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     (c) Beginning October 1, 2013, whenever the director establishes that an erroneous

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payment was made to an individual due to fraud committed by the individual, that individual will

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be assessed a penalty equal to fifteen percent (15%) of the amount of the erroneous payment. All

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penalties assessed and collected under this subsection shall be immediately deposited into the

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employment security fund.

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      (b)(d) There shall be no recovery of payments from any person who, in the judgment of

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the director, is without fault on his or her part and where, in the judgment of the director, that

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recovery would defeat the purpose of chapters 42 -- 44 of this title.

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     SECTION 2. Section 28-44-40 of the General Laws in Chapter 28-44 entitled

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"Employment Security - Benefits" is hereby amended to read as follows:

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     28-44-40. Payment of benefits pending appeal. -- (a) If an appeal is filed by an

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employer, benefits shall be paid to an eligible claimant until that employer's appeal is finally

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determined. If the employer's appeal is finally sustained, no further benefits shall be paid to the

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claimant during any remaining portion of the disqualification period. Any benefits paid or

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payable to that claimant shall not be recoverable in any manner.

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     (b) If, beginning on or after October 1, 2013, the director establishes that an erroneous

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payment was made to an individual due to fraud committed by the individual for overpayments

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and those overpayments are eligible to be recovered, that individual shall also be liable to pay

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penalties required under subsection 28-42-68(c) for those erroneous payments.

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     SECTION 3. This act shall take effect on October 1, 2013.

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LC01696/SUB A

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYMENT SECURITY--

FRAUD AND ABUSE

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     This act would assess a penalty equal to fifteen percent (15%) of the amount of any

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erroneous payment made to an individual that was due to fraud committed by the individual.

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     This act would take effect on October 1, 2013.

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LC01696/SUB A

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