Lawmakers: CT must slow unemployment clawbacks
Lamont: Labor department to show flexibility in cases of ‘inadvertent error’
Connecticut lawmakers pressured the state Department of Labor Thursday to ease up on its efforts to recover overpayments issued on claims for unemployment compensation.
The department is demanding return payments from some people who made claims and received money, in cases where the Department of Labor subsequently determined money was awarded to people who did not actually qualify for those amounts during the COVID-19 pandemic.
Speaking Thursday in Hartford, state Sen. Julie Kushner, D-Danbury, urged people affected to contact their state legislators to pressure Gov. Ned Lamont’s administration to ratchet back collections. She and other lawmakers, including state Rep. Robyn Porter, D-New Haven, also advised people to contact the Connecticut Legal Services non
profit for possible assistance if needed.
Kushner and Porter are co-chairs of the General Assembly’s Labor and Public Employes Committee.
The issue arose this week after a story in The CT Mirror that the state had 30,000 overpayment cases totaling $8.7 million this past spring, and a subsequent Hearst CTInsider column calling for the state to back off from clawing back the money.
Asked Thursday afternoon by Hearst Connecticut about the Department of Labor’s response, Lamont indicated he expected the department to show flexibility in instances of “inadvertent error” in his words. He noted the example of people who received back pay from employers under the federal Paycheck Protection Program after having claimed unemployment benefits for the same period of time.
“If there are people that filed for unemployment and then they also got PPP money, I think there’s ways that we can mediate that without causing a lot of distress,” Lamont said Thursday.
The overpayments happened for several reasons: mistakes made by claimants in the crush of the pandemic economic crisis, as the federal government rolled out six separate benefits programs, all with little notice; outright fraud that was later caught; successful challenges by employers that were made after the department issued payments; and errors by the department, which was operating during the pandemic with a 40-yearold computer system and did not have a functioning call center for people to ask questions.
In the 18 months from the start of the coronavisis crisis to Sept. 15, the Department of Labor paid out $9.7 billion in state and federal unemployment benefits to Connecticut residents. That compares with about $900 million in a typical 18-month period.
“As we have since the beginning of the pandemic, CTDOL continues to work closely with our state and federal partners,” stated Department of Labor spokesperson Juliet Manalan, in response to a Hearst Connecticut Media on the legislators’ press conference. “We couldn’t agree more that this pandemic has damaged our workforce and our business community; it’s one of the reasons we applaud Governor Lamont’s decision to ensure that the Connecticut workforce had access to all the federal benefits available and right up to the federal deadline for eligibility. All labor agencies are required to follow state and federal law when it comes to administering unemployment programs and stewarding the Trust Fund; we report on that data frequently.”
For instances of fraudulent claims of unemployment or identity theft, Kushner said “we have no mercy for those folks” and backed Department of Labor’s efforts to recover those payments.
Kushner said the Department of Labor needs to make clearer to people receiving clawback letters that they can request a waiver, in addition to any other formal appeal process that is available. Kushner later clarified she was still learning herself about any formal mechanisms for waivers.
Kushner said the Department of Labor has shown responsiveness in the past in resolving cases that legislators have called to the attention of its staff.
But throughout the pandemic, many people have complained on social media of difficulties getting their Department of Labor questions or disputes addressed in a timely manner.
Sen. Jorge Cabrera, D-Hamden, said he has received notices from multiple constituents the past few days who have received Department of Labor demands for repayment of tens of thousands of dollars, after filing claims in what Cabrera called a “chaotic” stretch for the department last year. Lamont ordered limitations or outright closures on many categories of business establishments, triggering mass layoffs.
Workers making the lowest wages should be the immediate priority, Kushner said, given the choices some had to make between caring for kids at home during school closures. She said that policy should extend to people who might not have qualified for unemployment outside the context of the pandemic emergency.
“In some cases these are large amounts of money that they are now being asked to repay,” Kushner said, in comments webcast on CT-N. “There are procedures for waivers to be given in the case of overpayment, but unfortunately too many people are not aware of this. It is not clear when you get a bill from the Department of Labor that there are mechanisms in place that you can get a waiver.”
Porter, the co-chair of the labor committee, said she is mindful of the issue in the context of the unemployment trust fund which the state is trying to replenish. Employers are responsible for paying into the trust fund through assessments but the state and federal governments have paid in some backstop money.
Porter said House Speaker Matt Ritter, DHartford, assured her the state has “the resources to address this.”
“I’m appalled that we even have to be standing here talking about repayment of overpayments during a time when it was a result of pandemic that still persists,” Porter said Thursday. “We do know the devil is in the details, and we need to make sure we know what we are talking about and if we make demands, they are demands that can be met legally.”