Can They Take My Whole Check if I Owe the Department of Labor?

by Diana Wicks - Updated September 26, 2017

Sometimes an overpayment of unemployment benefits may occur out of no fault of your own or due to an error in the system. A claimant owes the Department of Labor money if the department determines that the claimant has unemployment insurance overpayments. Intentional unemployment insurance fraud is a felony, but if you owe the department of labor unintentionally, you have a chance to pay what you owe. There are different methods used by the DOL to recoup the amount owed by claimants.

Hearing

Before the department of labor recoups the debt owed by a claimant, it will notify the claimant. A hearing is held to provide you with the opportunity to be notified about the specific amount owed and the various methods you may use to pay back the money owed. These hearings may also be used to determine whether a claimant knowingly engaged in unemployment benefit fraud. Claimants also have a chance to appeal the decision arrived at in the hearing.

Voluntary Repayment

If you owe the DOL, you have the option of voluntarily paying the sum. This is the ideal situation, and the DOL will not take your whole check if you comply with voluntary payment. You may pay the owed amount as a lump sum, where you pay the amount all at once in full. This method is especially applicable for a claimant who is not receiving unemployment benefits anymore and has a source of income he can use to pay the overpayment owed to the DOL.

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Monthly Payment Plan

If you are still claiming unemployment benefits and the DOL establishes you have overpayments, you may request for a monthly payment plan. In this plan, the DOL will not necessarily take away all your unemployment check but will make weekly deductions from your gross unemployment benefits amount. However, if the amount of your unemployment benefits is lower than the amount you owe, you will not have any unemployment benefits left. Therefore, in this case, they can take your whole check for unemployment benefits because your entire unemployment insurance check will be used to cover the premium and any interest incurred on the overpayment principal.

Wage Garnishment

The DOL will resort to wage garnishment if you fail to pay overpayments voluntarily or for non-compliance with the monthly plan. Wage garnishment involves the DOL making deductions from your employment paycheck once you get a job. The DOL will request your employer to divert an amount from your paycheck toward paying the overpayments you owe. The amount deducted from your wages is determined by Title III of the Consumer Credit Protection Act. The amount of wages that can be garnished by the DOL is 25 percent of your disposable earnings, not the whole check. Disposable income is the amount left after deductions such as state taxes and social security. Remember that wage garnishment is a court order that will remain in place until all the overpayment you owe is fully paid.

About the Author

Diana Wicks is a Canadian residing in Vancouver. She began writing in 2004 while still a student at Lincoln School of Journalism, in the city of London. She has worked as Chief Editor of Business Chronicle, an online magazine based in London. Wicks holds a Bachelor of Arts (Honors) in journalism and a Master of Business Administration from the London School of Economics.

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