The Bulletin

Virginia says it accidentally overpaid 35,000 workers receiving unemployment insurance

By: - May 12, 2020 3:25 pm

Virginia’s state flag flies in Richmond. (Ned Oliver/ Virginia Mercury)

The good news: After waiting weeks for the state to set up an online system to allow self-employed workers to collect pandemic assistance through the CARES Act, people began receiving their first checks last week.

The bad news: Just over 35,000 of them were overpaid between $600 and $1,200 — money the state says will be deducted from future checks.

The Virginia Employment Commission sent an email notifying recipients of the error on Sunday, four days after their first checks or direct deposits were sent.

“The VEC wants to acknowledge this agency mistake and advise that we will recoup this money,” the email said, explaining that the over payments would be deducted from the next two checks “as necessary.”

Self-employed workers and independent contractors — a category that ranges from Uber drivers to freelancers — are not eligible for unemployment benefits under the traditional unemployment insurance program, which is funded by payroll taxes traditional employers pay but self-employed workers don’t.

To change that, Congress created a special pandemic unemployment assistance program through the CARES Act, which President Donald Trump signed on March 27. It authorized traditional benefits calculated based on past earnings along with a temporary emergency increase of $600 a week.

As in other states, there was a delay before applications from self-employed workers could be processed because Virginia had to set up a new online portal to accept the claims. The system went live on April 18. Last week, Northam’s chief workforce adviser, Meghan Healy, said the first payments were delivered on May 6.

Virginia has paid out $328M in unemployment benefits, but some workers are still waiting for checks

As with the traditional system, those first checks included back pay to cover the time period during which applications were pending. But the Employment Commission now says it miscalculated and accidentally included $600 payments for either one or two weeks prior to April 4 that shouldn’t have been covered.

So far, no one is being asked to return the money because it can be deducted from future payments, but some recipients expressed frustration at the confusion.

A spokeswoman for the Employment Commission, Joyce Fogg, said that so far $57.9 million has been paid out in pandemic unemployment assistance and another $1.1 billion has been paid in Federal Pandemic Unemployment Compensation (the extra $600-a-week benefit.) She did not respond to a request for the total number of applications received so far from self-employed workers and how many have been approved.

The state’s unemployment insurance program has struggled to keep up with the more than half-million total applications filed to date, but more than 370,000 people are now receiving weekly benefits, according to a report issued Thursday.

People with questions or problems filling out the long and confusing application online continue to face long waits getting help through the commission’s call centers and online chat portals. Some applicants report that they are often disconnected before hearing from a representative.

Healy said at a news conference Monday that the state has brought two new call centers online. “We’re working as hard as we can to make sure everyone gets their benefits,” she said.

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Ned Oliver
Ned Oliver

Ned, a Lexington native, has been a fulltime journalist since 2008, beginning at The News-Gazette in Lexington, and including stints at the Berkshire Eagle, in Berkshire County, Mass., and the Times-Dispatch and Style Weekly in Richmond. He is a graduate of Bard College at Simon’s Rock, in Great Barrington, Mass. He was named Virginia's outstanding journalist for 2020 by the Virginia Press Association.