| Benefit Audit Information |
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| The Investigations Unit |
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The Investigations Unit of the Employment Department investigates any unemployment insurance claim with an indication of fraud.
We obtain fraud cases from two main sources:
• Quarterly audits of unemployment insurance claims
• Tips from employers and others
The purpose of these audits is to ensure the integrity of the Unemployment Insurance system. This helps maintain the solvency of the Unemployment Insurance Trust Fund and controls or reduces employer taxes. If you are aware of a claimant committing fraud on their claim, please contact one of our Local Investigators or send an email to our Fraud Hotline. The Investigations Unit can also be contacted toll-free at 1-877-668-3204.
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| Why Sent? -- Quarterly Audits |
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The Investigations Unit performs audits of unemployment insurance (UI) claims each quarter. This audit compares weekly claims for UI against the quarterly wages reported by employers. If the wages reported by an employer appear to overlap weeks claimed without reported earnings, the Investigations Unit conducts an audit.
We are not auditing your records. We are auditing claimants to see if they reported all work and earnings correctly to ensure proper payment of unemployment insurance benefits and to ensure that your account is charged correctly. If the claimant was not entitled to benefits, we don't want your account to be charged.
Even though you provided total gross wages for the period of our audit when you sent in your quarterly tax report, that report is based on when the wages were paid. We need to know when the wages were earned because this is what the claimant is required to report on a weekly basis.
The audit consists of sending employers a request for a weekly breakdown of wages earned by the individual in question. If a discrepancy is found, the claimant is notified and asked to respond.
But, what if you’re not an Oregon employer or the claimant doesn't live in Oregon? When the claimant worked for you, the claimant had an Oregon unemployment claim. Since Oregon was paying the benefits, we need to know what the claimant earned in any state during the period on the Benefits Earnings Audit form. Claimants do not have to be living in Oregon while claiming. As long as they had some wages earned in Oregon during the base period on which their claim is based, they can have an Oregon claim.
When claimants misrepresent their earnings while claiming, we issue an administrative decision. It lists the audit results and establishes an overpayment, which the claimant must repay. We may also impose additional penalties.
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| Why Complete the Form? |
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The Employment Department generally mails out 10,000 to 15,000 Benefits Earnings Audit forms each quarter. If a form is not completed correctly, it requires additional review. This means you could be called for additional information and you would need to go to your records a second time for the information we need. By filling out the Benefits Earnings Audit form completely and in a timely manner you help the Department determine if proper payment was made to the employee and if improper payment was made a credit can be given to a taxpaying employer's account.
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| Not My Employee |
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Return the Benefits Earnings Audit form even if the claimant did not work for you during the time period listed. Please look above the calendar portion of the letter and check the box if the individual did not work for you during the period listed. If you don't return the form, you will continue to receive duplicates periodically while we strive to verify. If another person has worked for you while using this Social Security Number, please call us toll-free at 1-877-668-3204. Identity theft may have occurred.
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| Should I Return it Late? |
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Yes. We still need the information and will act upon it even if the case is closed. Return it as soon as possible.
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| Why Weekly Information? |
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The law requires claimants to report weekly earnings during the calendar week when earned. Claimants are paid weekly on the basis of earnings they report. In order to conduct our audit, we need you to supply the information in the same weekly format.The law requires claimants to report weekly earnings during the calendar week when earned. Claimants are paid weekly on the basis of earnings they report for the prior week. In order to conduct our audit, we need you to supply the information in the same weekly format.
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| How to Respond |
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Please mail the forms back to us. Do not fax the forms. An optical scanner reads the bar code at the top of the form. It will not read faxed forms.
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| Other Fraud Issues |
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In addition to unreported earnings, Unemployment Insurance fraud can also include the following issues;
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Job separations: where claimants indicate being laid off due to a lack of work when actually quit or fired.
Note: “Laid Off/Lack of Work/Reduction in Force” means the employer’s business slowed down and the employer did not have any work for the individual to do.
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Job refusals: where claimants refuse work and fail to inform the Employment Department.
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Availability: where claimants are not available for work due to transportation restrictions, school, incarceration, self-employment, child care, etc.
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Ability: where claimants are physically unable to work due to a temporary or permanent disability.
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Identity theft.
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| Administrative Decisions |
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When an audit finds that an overpayment exists and/or fraud has occurred, an administrative decision is issued to all the "interested parties". "Interested parties" include the claimant and any employers who the claimant worked for during a week where fraud was committed. Administrative decisions allow interested parties 20 days to request a hearing before a Referee if they disagree with the result.
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| Penalties for Fraud |
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Claimants found to have fraudulently claimed benefits are liable to repay any resulting overpayment, plus interest. In addition they are penalized for up to 26 weeks of future benefits. The number of penalty weeks is determined by several factors, including the amount of overpayment. Penalty weeks can be served only by claiming otherwise eligible weeks. 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 Investigations Unit pursues criminal convictions. In these situations, an Investigator may request additional evidence, such as copies of payroll checks, etc.
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| Completing the Audit Form |
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Someone familiar with the payroll records should complete the Benefits Earnings Audit form (BPC1). For each week listed, indicate the number of hours the employee worked in that week and the gross wages paid for those hours worked.
"Gross Wages Earned" = Hours Worked x Rate of Pay. If the claimant was paid at a piece rate, or by commission, then report the amount earned in that specific week. Enter "NONE" if the employee did not work during the week.
If the employee was paid on bi-weekly, monthly, or an irregular schedule, please provide a breakdown of when the wages were earned. If this is not possible, then indicate the total hours worked in each week. The goal is to get a weekly breakdown of the claimant's earnings. See specific pay types below for more information.
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| Dates of Work |
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Enter the dates of work the person actually (physically) worked for you as an employee. Enter the day hired as the first day this employee physically began working.
List the “First day worked” as the first day the person ever worked for you, not the first day on the calendar we provided.
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| Weeks/Shifts/Hours |
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Weekly Instructions
When you file your quarterly tax forms, you report wages by quarters based on when you paid. Claimants report weekly when they earn the money, not when paid. You may have other pay periods, but we need you to break earnings down to a weekly basis so we can verify if they were reported accurately when claimed.
We need a weekly record of work hours and gross earnings, not just the bi-weekly, monthly, etc. pay data. The entries on the Benefits Earnings Audit form should indicate when the person “earned” the money, not when paid. Holiday pay and vacation pay should be included. Refer below for other types of pay.
Enter the earnings for your employee for a period of one week at a time. Attaching your payroll records doesn’t provide the information we need. We need to be able to put the work and earnings in the seven-day period our weeks run (Sunday 12 midnight through Saturday 12 midnight). If your weeks do not run the same, please include a daily breakdown.
Different Week
Our week ends Saturday midnight. What if your week doesn’t’ end on Saturday? Take the hours/earnings from different pay periods and fit them to the Sunday-Saturday week. For example: If the pay period ends on Wednesday, show SUN, MON, TUES, WED from one pay period and add it to THURS, FRI, SAT from the next pay period. Enter this total in the appropriate calendar week.
If your payroll does not coincide with our weeks, please use one of these two methods for providing the information:
1. Calculate the hours worked and earnings by computing gross earnings per our week as listed on the Benefits Earnings Audit form. (This is the preferred method for providing the requested information.)
2. If the method for providing work/earnings listed in Item 1 cannot easily be done, please prorate the claimant's gross earnings by arriving at claimant's average earnings per day and multiplying that by the number of days worked in the week we have listed.
Night Shift
The Unemployment Insurance week ends at midnight each Saturday. Therefore, if a worker begins a night shift on Saturday night and finishes on Sunday morning, the earnings must be separated into two different weeks. Include the hours worked on Saturday (until 12am) with one week and the hours after midnight in the next week.
Hours Unknown
You should have a record of hours worked because the Employment Department, among other agencies, requires reporting of hours worked. However, if you are unable to report hours at this time, please provide the gross earnings per week (when earned, not when paid) and explain that you could not provide hours.
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| Types of Pay |
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Daily Pay
If you keep daily time records, you can determine what to put on the Benefits Earnings Audit form by adding hours/earnings from the daily time records and fitting them to the calendar week. We realize this can be time consuming. If necessary, you may send copies of clearly marked daily time records and the Employment Department will complete the weekly entries. If you can make the calculation, we appreciate it.
If you do not keep daily time records of time worked, and have only the amounts earned by a pay period, pro-rate the earnings in order to allocate them to a week of work. Provide any information you do have to the Employment Department in the form of computer printouts or notations on a separate piece of paper. Click Tax Auditor for help from your local Tax Auditor.
Bi-Weekly Pay
Enter the amount of wages earned in each individual week. Entering two-week wage totals every other week on the Benefits Earnings Audit form may give a false indication that the claimant was incorrectly paid benefits. This often results in requests for detailed payroll documentation and can cause more work for you.
It’s important to break down the work and pay to week to week increments. Why? While claiming Unemployment Insurance, claimants report wages when earned, not when payment is received. We pay benefits weekly, so we need to look at earnings and issues on a weekly basis. For instance, did the claimant work over 40 hours? Did the claimant earn over his/her weekly benefit amount? Was the claimant available for full and part time work? Also, the employee may not work the same shift and make the same amount of money each week. In such cases, dividing the pay period in two is not accurate.
Use your daily time records. Add the hours and earnings for each Sunday through Saturday week and enter the total for each week.
If you do not keep daily time records of time worked, and have only the amounts earned by a pay period, pro-rate the earnings in order to allocate them to a week of work. Also note the dates included in the pay periods and the gross earnings amount for each of those periods. For example:
Sept 4/Sept 17 = $405.20
Sept 18/Oct 1 = $623.02
Semi-Monthly Pay
Use your daily time records. Add the hours and earnings for each Sunday through Saturday week and enter the total for each week.
If you do not keep daily time records of time worked, and have only the amounts earned by a pay period, pro-rate the earnings in order to allocate them to a week of work. Also note the dates included in the pay periods and the gross earnings amount for each of those periods. For example:
May 1-15 = $623.00
May 16-31 = $784.00
Monthly Pay
Use your daily time records. Add the hours and earnings for each Sunday through Saturday week and enter the total for each week.
If you do not keep daily time records of time worked, and have only the amounts earned by a pay period, pro-rate the earnings in order to allocate them to a week of work. Also note the gross earnings amount for each monthly pay period. Please include the dates, showing when each ended. For example:
May 1-31 = $1,453.02
June 1-30 = $1,326.07
Click Monthly Example to see how the instructions are applied to an example of the Benefits Earnings Audit form.
Contract Pay
If you pay on a contract basis, provide the total dollar amount of the contract and the beginning and ending dates of the work performed. For example: “Coached football from August 7, 2006 through November 17, 2006 for a total of $1,800.”
Severance Pay
Do not report severance pay if this individual is permanently separated from your employment, as this is a settling of accounts. The same is true if you “cash out” accrued vacation to someone who is permanently separated from employment. Report the pay if the worker had to perform some service, such as remaining available for recall, or meet some other requirement to receive the pay. Please note the last day actually worked.
Vacation or Holiday Pay
Report vacation or holiday pay if the person was still your employee. Do not report it If the individual was permanently separated from your employment and this is a settling of accounts (e.g. “cash out” accrued vacation at severance).
Sick Pay
Report sick pay if the person was still your employee. Identify the part that was sick pay. If you pay out all or part of the sick leave upon severance from your employment, do not report such amount.
Commission Pay
If an employee is paid on a commission basis, please indicate the time period when the work was done to receive the commission. If you don’t have exact records of how many hours were worked each week enter your best estimate of how many hours the employee worked each week and what portion of the commissions were earned in each week.
Pay may be commission only. Like other earnings, commissions need to be allocated to the Sunday through Saturday week. Payments are to be reported for the week in which they are earned, NOT when they are paid. Use sales records or other means to determine what period is covered by the commission payment. If you cannot determine a weekly allocation, give the Employment Department the information you have, especially the start date or initial contact. For example:
Commission payments earned:
May 1-15= $625.00
May 16-31= $317.00
Pay may be commissions plus wages. Add commissions to wages by using sales records or other means to determine what period is covered by a commission payment. As closely as possible, allocate the payments to the week in which they were earned. Then add the weekly commissions to the weekly wage amounts and show the total per week. Make a note on the Benefits Earnings Audit form so that the Employment Department will know that commissions were included.
Tips
If an employee received a base salary and tips, please indicate the total amount of the earnings for the week. Tips must be allocated to the week they were earned, just like wages.
If daily records are kept of the tips the person received, add those amounts to the Sunday through Saturday week along with the other earnings. If records of tips were not kept on a daily basis, you will need to assign them to the week in which you believe they were earned and provide any information you do have to the Employment Department. For example:
Tips for May 1-15 = $112.50
May 16-31 = $95.00
Bonuses
If an employee received a bonus, please indicate the time period the bonus covered and what basis was used to determine the bonus.
Bonuses for production or performance must be included in earnings. They should be allocated over the entire period covered by the bonus. If you are not sure in which week a bonus should be included, tell the Employment Department the amount of the bonus and what period it covered. For example:
Jan 1 to Dec 31, $500
OR Oct 15 to Dec 15, $100
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| Separations from Work |
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If the Benefits Earnings Audit form asks about a separation from work (e.g. quit, fired), please indicate (circle) the cause for separation. This can be just a brief explanation. Also note the date of separation.
• Fired does not mean Laid Off/Lack of Work/Reduction in Force. Fired is when the person was willing to continue working but was not allowed to do so.
• Quit is when the person could have continued to work but chose not to continue.
• Laid Off/Lack of Work/Reduction in Force means the employer’s business slowed down and the employer did not have any work for the individual to do.
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| Missed Work Opportunities |
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If the employee missed an opportunity to work during any week, please indicate that on the Benefits Earnings Audit form or on a separate page. Provide the date the work was refused and the date(s) of the missed period of work.
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| Comments |
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Comments may include additional information not easily provided elsewhere on the Benefits Earnings Audit form. Do you need to explain something further? Are there Other Fraud Issues such as availability, refusals of work, self-employment, etc.? Let us know so we can investigate. You are our best source of information.
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| Examples |
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Basic Example
We need exact information. If you don’t have daily time records, explain how you calculated and accounted for earnings and hours.
In the example below, the claimant worked often, but not regularly. The gross earnings were based on $8.50 per hour.
• Calculate the hours worked each day
• Enter the total number of hours worked for the week and multiply the hourly pay rate by the number of hours worked during the week to get gross earnings
• $8.50 (hourly rate) X 32 (hours) = $272
• Indicate the type of payment per Pay Type key
Monthly Example
In the example below, the employer pays a monthly salary. The employer completed the form using the following steps:
1. Take the individual’s gross earnings for the monthly payroll period and multiply by 12, then divide by 52 to get the weekly gross earnings.
2. If the hours are unknown for each week, calculate hours worked per week by taking the total hours worked in the month and multiply by 12, then divide by 52.
3. Enter gross earnings and hours for each week worked on the form.
Monthly salary is $2,600.00. Weekly gross earnings are $2,600.00 times 12, which is $31,2000, divided by 52, which is $600 per week. In this example only two weeks were claimed during that month.
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