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Labor Department encourages more flexibility on unemployment overpayments

New guidance expands circumstances under which states may drop efforts to recover federal unemployment pay from workers who were later deemed ineligible or received more money than they should have.

Michele Evermore is a deputy director at the Labor Department.Caroline Brehman/Associated Press

The Biden administration is giving more leeway to states to waive overpayments of federal jobless benefits made during the pandemic, a move that may provide relief to some of the 383,000 people in Massachusetts facing $2.6 billion of possible repayments.

The Labor Department on Monday issued more-detailed guidance on when states may drop efforts to recover federal unemployment pay from workers who were later deemed ineligible or received more money than they should have. The expanded criteria cover federal programs including Pandemic Unemployment Assistance, which was created by Congress in 2020 for workers who lost their jobs because of COVID-19 but didn’t qualify for traditional state unemployment benefits.


The DUA routinely made overpayments prior to the pandemic. But the money on the line now — often $20,000 or more — is much larger than in the past. That’s because federal payments boosted benefits, and because it took the state a long time to recheck eligibility on the mountain of pandemic unemployment claims as required by the feds in a bid to uncover fraud.

The Labor Department previously set limited conditions for blanket, or large-group, waivers. They involved payments that were higher than they should have been because they were made from the wrong unemployment program or used an incorrect minimum benefit.

After hearing from state unemployment agencies and its regional offices, the Labor Department is broadening the circumstances to include a range of other mistakes in assessing eligibility and calculating benefits. For example, if an individual responded “no” on a claims form to being able and available for work, but the state paid the claim nonetheless, that overpayment can be dropped.

Left unchanged were requirements that waivers go only to people who weren’t at fault for the overpayment and for whom being forced to repay the money would go against what is known as “equity and good conscience.”


The Labor Department also said states could propose additional scenarios for waivers that it would review. In addition, it is encouraging states to stop notifying people of an overpayment until they have determined whether a waiver is warranted or repayment will be sought.

“That is going to save a lot of headaches,” said Michele Evermore, a deputy director at the Labor Department.

Evermore noted that states aren’t obligated to follow the federal guidelines, and could be more ― or less ― generous when it comes to waivers.

The Massachusetts Department of Unemployment Assistance didn’t indicate whether the agency’scurrent policies would change, saying it will “carefully review the guidance that was just issued, to determine whether these additional flexibilities can provide relief for the most significant factors driving PUA overpayments.”

The DUA has said it has dropped on appeal or waived $1.8 billion in overpayments.

The new guidance will probably have only a marginal impact on Massachusetts overpayments, according to Rory MacAneney, an attorney at Community Legal Aid.

That’s because the Labor Department “doesn’t actually get to the core issue with our state workforce agency, and that’s their interpretation of what is against ‘equity and good conscience,’ “ she said in an e-mail. “Most folks would think that it would be against equity and good conscience to require someone to repay benefits that were overpaid because of DUA’s negligence or error, or its deliberate decision not to request information from employers until 6 months after claimants already received benefits. But not DUA.”


Hannah Tanabe, an attorney at Greater Boston Legal Services, said the Legislature should still pass a bill, sponsored by Representative Joan Meschino, that would broaden the definition of equity and good conscience.

“It’s abundantly clear that [the Labor Department changes] doesn’t obviate the need for our waiver reform bill,” she said.

Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.