States are being sued for trying to “claw back” pandemic unemployment benefits
States are being sued for trying to “claw back” pandemic unemployment benefits
Kathryn Tapia was laid off in March 2020 from a day care center in Harlingen, Texas. So she applied for unemployment benefits.
“I started receiving payments, everything was going fine,” she said.
Tapia was one of the 2.5 million Texans who applied for unemployment in the first three months of the pandemic. That’s somewhere between 10 and 20 times the number in an average year.
“Then, all of a sudden — I want to say maybe around September or so — I started receiving letters of overpayment,” she said.
The Texas Workforce Commission said she wasn’t unemployed. It said that she had a job in North Carolina. And in South Carolina. And one in Delaware.
According to state records, Tapia is one of a quarter-million Texans who were sent an overpayment notice due to an ID theft issue.
During the pandemic, many people lost their jobs and were offered unemployment benefits. The Texas Workforce Commission has sent out more than 1 million overpayment notices since the pandemic began, and it wants that money back.
Advocates for people who receive the notices argue that the state is being overly aggressive and is often wrong in its fraud detection — which means Texas has joined a growing number of states being sued over its unemployment system.
David Mauch, of Texas RioGrande Legal Aid, is suing the state. He said the Texas Workforce Commission, or TWC, is kicking people off unemployment without due process, and that breaks the law.
“The law is very clear that the TWC — before it determines someone has been overpaid — needs to consult that person and get their response,” he said.
Texas tried to get money back from 1.5 million people between 2020 and 2021, and half a million Texans have appealed. The state also tried to seize the federal tax returns of 31,000 residents.
Texas isn’t the only state being sued over its practices. Rhode Island, Michigan and Maryland have also been sued.
Michele Evermore oversees unemployment insurance modernization for the U.S. Department of Labor. Her office offered guidance on when states can waive overpayments of pandemic unemployment dollars.
“We’re trying to identify scenarios in which the state made a mistake, and people got overpaid. But it wasn’t their fault. The money is long gone. And we should really try to hold some of these people harmless when they’ve made innocent errors,” she said.
But between March 2020 and June 2021, Texas rejected overpayment waivers about 90% of the time.
The Texas Workforce Commission doesn’t comment on pending litigation. In a written statement, TWC said that it “remains committed to taking all necessary steps to ensure the integrity of the unemployment compensation program by preventing and eliminating fraud, waste, and abuse, while protecting Texans from having fraudulent claims paid using their stolen identities. “
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