Thursday, May 13, 2021
May 13, 2021

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Overpayment mess at Washington’s unemployment agency gets help from National Guard

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The National Guard has been called in again to help Washington dig out from under a pandemic-related backlog in its unemployment system — but some worker advocates criticized the move as inadequate.

Starting Monday, 50 National Guard troops will bolster efforts by the state Employment Security Department to contact tens of thousands of Washingtonians hit with overpayment notices for jobless benefits paid during the pandemic, the ESD announced Thursday.

It will be the second time Gov. Jay Inslee has deployed National Guard troops to help the ESD. In June, Inslee ordered them to help with a deluge of pandemic-related jobless claims and delays caused by last spring’s unemployment fraud scheme.

The latest deployment, which had no end date as of Thursday, marks a push by the ESD to cope with yet another pandemic-related controversy: the overpayment of jobless benefits.

Two weeks ago, acting ESD Commissioner Cami Feek told state lawmakers the agency had identified about 55,000 claimants who might have to repay jobless benefits because questions had arisen about their eligibility.

Some of those claimants are being asked to repay many thousands of dollars in fiercely worded notices that threaten them with court action, garnished wages, and liens against their property if benefits aren’t repaid.

“If you don’t repay the full amount or we don’t receive a payment … by Mar 30 2021, we will start legal action against you in superior court,” reads one such notice received last week by a Tacoma-area claimant who was asked to repay nearly $18,000 in benefits she received last year.

The letter, which was shared with The Seattle Times, warns that once legal action begins, “a lien will be placed on all of your real and personal property,” and adds that the agency may garnish the claimant’s wages, bank accounts and “other property held for you by a third party or obtained through a forced sheriff’s sale.”

The woman, who requested anonymity to protect her family’s privacy, said the issue was resolved this week – but only after she spent three months trying to contact the ESD and worrying about being taken to court. “It kept me up at night,” she said.

ESD spokesperson Nick Demerice confirmed this week that the agency is not taking claimants to court or initiating other legal actions over overpayment notices arising from jobless claims filed during the pandemic.

Agency officials have also stressed that, in many cases, claimants won’t owe any money to the ESD. Some overpayment notices were sent because claimants didn’t respond to ESD requests for information to confirm their eligibility for state or federal jobless benefits.

In those cases, the claimant may be able to resolve the overpayment issues by providing the ESD with the requested information, such as documents to verify identity. For questions over identity, in particular, “as long as they are who they say they are, we can get them resolved and their overpayment will go away,” Demerice said. “But we actually need them to take proactive steps to do that.”

Because thousands of claimants weren’t taking those steps – often because they may not have seen the notices in their ESD accounts online or may not have understood the notices’ sometimes-confusing wording – agency staff are now trying to contact tens of thousands of claimants to clear up overpayment issues.

The 50 National Guard troops will assist in those outreach efforts, Demerice said.

But some worker advocates said that, a year into the pandemic, the ESD shouldn’t need to rely on the National Guard. The agency “should be hiring trained permanent staff to handle all claims in a timely manner, as the law requires,” said John Tirpak, executive director of the Seattle- and Spokane-based Unemployment Law Project, which represents workers in unemployment disputes. “This problem has been in the open for a long time. Taking action like this is too little, too late.”

ESD’s overpayment process has also been criticized as too heavy-handed at a time when many claimants are under heavy financial and emotional stress from the pandemic.

“Sure, it is better if [the ESD doesn’t] actually go to collections,” said Sage Wilson, a spokesperson for the worker advocacy group Working Washington. “But since they aren’t waiving overpayments, and are still threatening collections, and aren’t telling claimants they won’t be taken to collections, it’s like someone with a gun to your head telling you after the robbery that there weren’t any bullets in the chamber.”

And critics and claimants have long complained of hourslong waits to reach ESD staff about overpayment or other issues.

Demerice said the agency is training new staff, is giving claimants more time to respond to agency requests, and has updated information about overpayments on its website.

The ESD is also trying to “suppress” some collections letters in its automated system, but that requires complicated software upgrades, Demerice said.

In the meantime, the agency will stop sending so-called pre-lien notices that threaten legal action.

But Demerice also emphasized that some claimants may in fact owe money to the government. That could happen if, for example, claimants’ work documentation doesn’t ultimately confirm benefit eligibility – although those claimants can arrange payment plans with the ESD and may be eligible for overpayment waivers. Demerice also emphasized that any claimants who receive overpayment should contact the ESD collections unit.

ESD’s overpayment challenges come as the state is still seeing historically high numbers of new jobless claims despite steady improvement in the job market.

Washingtonians filed 11,699 new, or “initial,” claims last week, a 0.5% decrease from the previous week, ESD reported Thursday.

It was the smallest number of new claims since the start of the pandemic in March 2020 – and a welcome sign of improvement in a job market that has been battered for roughly a year by COVID-19 and related business restrictions.

Still, new claims were nearly double the number filed the same week last year, which indicated continued anxiety and pessimism among some employers, economists said.

“The fact that we are still seeing nearly twice the number of unemployment insurance applications today relative to last year speaks to the continuing fragility of the local economy,” said Anneliese Vance-Sherman, an ESD regional labor economist who covers the Seattle area. “The still-elevated number of claims tells me that businesses are continuing to struggle.”

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