Missouri legislators question whether labor department reneged on unemployment deal
When the Missouri House signed off on legislation last month forgiving almost $109 million worth of unemployment benefits mistakenly paid out last year, GOP leaders said they had worked out an agreement with Gov. Mike Parson’s administration.
After months of efforts to claw back the money from Missourians who the state incorrectly authorized to receive payments, the Missouri Department of Labor and Industrial Relations agreed to pause its aggressive collection actions.
“They agreed they would call off the dogs,” the bill’s sponsor, state Rep. J. Eggleston, said during a committee hearing in the Senate last month.
“They would no longer be hassling citizens,” he continued. “They would pause any collection efforts on the federal repayments, and on the state portion, they would do so on a case-by-case basis, in small, affordable payments, as long as citizens are making contact and not just throwing the letter away and disregarding the department.”
But over the last week, Eggleston, R-Maysville, said legislators are once again hearing from constituents facing threats from the state.
While Eggleston said it remains unclear how widespread the issue is, “that would certainly go against the agreement we had with the department.”
Caught in the middle are people like Barbara Dupuis.
A bus driver for a St. Louis-area school district, Dupuis was approved for unemployment benefits by the state last year when she was out of work because of COVID-19 shutdowns.
She started getting letters threatening to garnish her wages in the fall, saying she had been paid by mistake. She filed an appeal last year, but on April 1 received a letter saying the state was intercepting her income tax refund.
“It’s frightening,” she said, “because you don’t know, are they going to take your money? Are they not?”
The Independent spoke to several Missourians who’ve been contacted in recent weeks by the department. One, who asked not to be named publicly, provided a letter she received on April 2 notifying her that the state was seeking a lien against her property until her debt of roughly $11,000 was paid in full.
She also shared a voicemail from the state’s division of employment security where she is advised that the fact that she has filed an appeal does not mean collection action will cease.
Missouri began paying hundreds of thousands of new unemployment claims last spring as businesses shed workers because of the COVID-19 economic slowdown. In addition to regular state benefits, which pay a maximum of $320 per week, the federal CARES Act created new programs that expanded who was eligible and provided supplements to regular payments.
In the deluge of unemployment filings, the state mistakenly authorized payment to many Missourians who didn’t qualify.
During a House Budget Committee hearing on Feb. 2, Department of Labor and Industrial Relations Director Anna Hui said most of the overpayments were due to mistakes, not fraud.
The U.S. Department of Labor told states that overpayments could be forgiven “if the payment was without fault on the part of the individual and such repayment would be contrary to equity and good conscience.”
But Parson made it clear that he believed the money should be repaid.
Lawmakers quickly cried foul, saying Missourians shouldn’t be forced to suffer because of mistakes that state regulators made.
The House-approved bill would allow the department to waive repayment of federal benefits, though it did not extend to state benefits.
Additionally, the department agreed to cease aggressive collection action in exchange for the House removing an emergency clause that would have made the legislation go into effect immediately.
With constituents once again reaching out to lawmakers about collection actions, Eggleston said he has asked the department for an explanation.
The department did not respond to requests for comment by The Independent. But Eggleston said he was told the state began sending out collection letters to Missourians without first checking to see if they’d filed an appeal.
“We were told that they were working through the claims and sending out nasty letters before they went through appeals to see if those same people had appealed and therefore shouldn’t be getting nasty letters,” he said. “So now you’ve got people who are being harassed about possibly losing their house or some of their paycheck.”
Eggleston said the department has promised to provide lawmakers with a report on the situation this week.
“I’m concerned,” he said. “If this was just one or two and it was an accidental oversight, then I can understand it and let it go. If this was another batch of several hundred people they are hassling, then they aren’t taking the agreement they made with us seriously.”
Dupuis said she regrets ever applying for help in the first place.
“I will never file for another unemployment benefit,” she said, “no matter what the reason is.”
Missouri Independent is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a public charity.