(a) Any employee who fails to submit the report on earnings from
employment or self-employment under Sec. 702.285 or, who knowingly and
willingly omits or understates any part of such earnings, shall upon a
determination by the district director forfeit all right to compensation
with respect to any period during which the employee was required to
file such a report. The employee must return the completed report on
earnings (even where he or she reports no earnings) within thirty (30)
days of the date of receipt; this period may be extended for good cause,
by the district director, in determining whether a violation of this
requirement has occurred.
(b) Any employer or carrier who believes that a violation of
paragraph (a) of this section has occurred may file a charge with the
district director. The allegation shall be accompanied by evidence which
includes a copy of the report, with proof of service requesting the
information from the employee and clearly stating the dates for which
the employee was required to report income. Where the employer/carrier
is alleging an omission or understatement of earnings, it shall, in
addition, present evidence of earnings by the employee during that
period, including copies of checks, affidavits from employers who paid
the employee earnings, receipts of income from self-employment or any
other evidence showing earnings not reported or underreported for the
period in question. Where the district director finds the evidence
sufficient to support the charge he or she shall convene an informal
conference as described in subpart C and shall issue a compensation
order affiming or denying the charge and setting forth the amount of
compensation
for the specified period. If there is a conflict over any issue relating
to this matter any party may request a formal hearing before an
Administrative Law Judge as described in subpart C.
(c) Compensation forfeited under paragraph (b) of this section, if
already paid, shall be recovered by a deduction from the compensation
payable to the employee if any, on such schedule as determined by the
district director. The district director's discretion in such cases
extends only to rescheduling repayment by crediting future compensation
and not to whether and in what amounts compensation is forfeited. For
this purpose, the district director shall consider the employee's
essential expenses for living, income from whatever source, and assets,
including cash, savings and checking accounts, stocks, bonds, and other
securities.
[50 FR 400, Jan. 3, 1985]
