Gov. Kay Ivey is asking the Alabama Department of Labor for solutions after AL.com reported Thursday that the state is requiring Alabamians to repay thousands of dollars in pandemic unemployment and is often years behind in hearing their appeals.
“We have asked (Labor) Secretary (Fitzgerald) Washington to provide us with solutions to resolve this concerning situation, as well as the outrageous backlog,” Gina Maiola, a spokesperson for the governor, told AL.com on Thursday.
Maiola stated the governor was not consulted about the department’s efforts to recover the money from workers.
Last year, many Alabamians received letters in the mail saying they owed the state thousands of dollars, often as much as $15,000 or $20,000, after the department found they were overpaid unemployment benefits during the pandemic.
During COVID-19 the federal government gave money to states for $600 weekly unemployment payments. One in four Americans were on unemployment during the pandemic, according to The Century Foundation.
The department said that it would consider making changes following Ivey’s message on Friday.
“The department is currently looking whether to expand the use of allowed waivers pursuant to federal guidance,” said Joseph Ammons, general counsel for the Department of Labor.
Overpayments are often the result of errors on the part of the applicant, the department or an employer. Mistakes occurred due to high demand for help during the crisis caused by COVID-19, eventually resulting in states like Alabama flagging many people’s unemployment benefits as incorrect and overpaid.
Until the department reviews an overpayment decision through an appeal, the overpayment is not final. However the state has been unable to keep up with appeals, Legal Services Alabama claimed in a lawsuit filed earlier this year against the state labor secretary.
The lawsuit asks Judge James Anderson to order state Labor Secretary Washington to pick up the pace and improve department processes. Judge Anderson is now considering whether Secretary Washington is protected from a lawsuit by sovereign immunity.
Michael Forton, legal services policy director, said he would like the department to fix its backlogged process instead of spending resources collecting overpayments from workers.
“They shouldn’t be trying to collect any overpayments until they can process everything and provide a meaningful appeal structure,” he told AL.com Friday.
Some other states have offered forgiveness for pandemic overpayments by requesting federal waivers to offer blanket forgiveness, but Alabama has not. If someone appeals an overpayment and they win, a waiver is not needed to have the debt erased, according to Forton.
But Alabama is further behind other states in reviewing appeals. In 2021, Alabama’s average appeals were pending 566 days, whereas in Kansas, appeals were resolved on average in 15 days.
Forton said if the department does start allowing more waivers it will be “revolutionary” and a “huge success” for Alabamians.
“ADOL currently waives overpayments in the case of agency or employer error, and offers payment plans to those claimants with overpayments that are not waived,” said Ammons.
According to federal data, the state overpaid $146 million dollars in unemployment in 2020 and 2021. Alabama waived over a million dollars of overpayments for 295 people in 2020 and 2021, according to the department, and it expects waivers for another $2,943,042 in benefits in the future.
In her message, Maiola stated Ivey’s disapproval of taking the money back.
“At the end of the day, the agency approved and paid out the claims. If a mistake is made by the government, people should not have to pay the price for something that was no fault of their own.”
