Two legislative leaders have asked the state to pause the collection of about $2.6 billion in unemployment overpayments until the end of July.
Senator Patricia Jehlen and Representative Josh Cutler, Democrats who co-chair the Joint Committee on Labor and Workforce Development, sent a letter to state Labor Secretary Rosalin Acosta on Friday asking the Department of Unemployment Assistance to hold off on seeking nonfraudulent overpayments after the Labor Department recently issued new guidance on waivers that could provide relief to some of the 383,000 claimants.
“This pause will ensure that we in the Legislature and our partners in Washington have sufficient time to respond to the facts on the ground,” wrote Jehlen and Cutler.
The Massachusetts DUA administers federal unemployment benefits, and during the pandemic it routinely made overpayments to workers who were later deemed ineligible or received more money than they should have. Because the state wanted to get the money out quickly, mistakes were likely made by both DUA and claimants. The state must now recover those overpayments, and not only has the process been frustrating and confusing for claimants, but many are unable to pay back the thousands of dollars they owe because they have spent it.
In their letter, Jehlen, who is from Somerville, and Cutler, who is from Duxbury, suggest the DUA notify people that their overpayment balance has not changed, but they are under no obligation to pay until August. That is similar to how the federal Department of Education paused student loan payments during the past 22 months.
The legislators also urged the state to use the new flexible guidance from the federal Labor Department to extend waivers to more people.
“Reducing the ongoing economic turmoil that repayment will cause for many in the Commonwealth should be a priority for the department,” they wrote.
A spokesperson from the DUA did not respond to requests for comment. The DUA has said collection is currently taking place on a voluntary basis.
As part of a COVID-19 response package, the House and Senate recently passed legislation for a $1 million public information campaign to notify claimants of their rights and the extension of the appeal deadline. It also calls for the DUA to produce a detailed report on overpayment data by March 1. The bill is on the governor’s desk.
Shirley Leung is a Business columnist. She can be reached at firstname.lastname@example.org.