U.S. Department of Labor Issues Guidance to States to Permit Greater Flexibility for Waiving Recovery of Certain Unemployment Insurance Overpayments

WASHINGTON, May 6 -- The U.S. Department of Labor's Employment and Training Administration issued the following news release on May 5, 2021:

The U.S. Department of Labor's Employment and Training Administration today issued an Unemployment Insurance Program Letter that provides states with guidance on addressing unemployment insurance benefit overpayments established by states for programs authorized by the Coronavirus Aid, Relief, and Economic Security Act. An overpayment occurs when a state finds an individual received a payment or payments to which they are not entitled.

The guidance includes the following updates on the CARES Act unemployment benefit programs:

* States may choose to waive recovery of overpayments under certain circumstances when an individual is not at fault. This includes circumstances when the state initially found the individual eligible for unemployment benefits during a given week but the individual received payments from the wrong CARES Act unemployment benefit program.

* Participating states must generally refund payments recovered prior to this guidance's issuance if the state determines the individual meets the waiver provisions. The department recognizes it may take participating states up to a year to process any applicable refunds.

* In cases where individuals collected CARES Act benefits fraudulently, states must assess monetary penalties in addition to requiring repayments. Individuals who defrauded the program may also face criminal prosecution.

"Amid the pandemic, state Unemployment Insurance programs did the best they could in the face of unprecedented demand as millions of Americans filed claims for benefits," said Principal Deputy Assistant Secretary for Employment and Training Suzi LeVine. "That demand, coupled with systems stretched beyond their capacity, led to widespread overpayments in benefits."

"In many cases, individuals received payments for which they may not have been eligible through no fault of their own," LeVine added. "The guidance issued today by the U.S. Department of Labor will help states address this important issue, providing them with greater flexibility to forgo recovery of improper payments from honest workers who continue to struggle and direction in handling cases where real fraud exists."

The unemployment insurance program is a federal-state partnership, with states responsible for accepting, processing, and paying claims. Direct all eligibility questions to state employment agencies.

Unemployment Insurance Program Letter: https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=6830