Some Missourians Facing Unemployment Overpayments Are Appealing — And Winning
Sandra Griffin was hesitant about filing for unemployment after the pandemic hit.
The 63-year-old St. Louis resident wasn’t used to the state’s online unemployment platform, and she called a few times over the summer to make sure she was doing it right. Every time, she said, she was met with reassurances.
“As soon as the deposits started arriving, I figured I was good to go,” said the artist, who works in St. Louis schools. “It was cause for celebration.”
But months later, in mid-December, she got a message from the Missouri Department of Labor saying she had to pay it all back — nearly $8,000.
Griffin is one of more than 46,000 people who have received letters from the state saying they were mistakenly overpaid last year. Some state lawmakers and legal groups are encouraging anyone who received overpayment letters to file an appeal.
It’s unclear how many people have done that so far. The Missouri Department of Labor did not respond to multiple requests for comment about the appeals process.
Earlier this month, Labor Director Anna Hui said the state has a duty to collect the nearly $150 million it overpaid people last year because a state law requires it. However, she also said 80% of the money is from new federal unemployment programs, and the federal relief package from December gave states the ability to allow people to keep overpayments.
Hui and Gov. Mike Parson have the power to forgive the federal portion of overpayments; however, Parson has dug in his heels on the issue. He said it needs to be repaid one way or another, though he also said he’s open to seeing what lawmakers propose.
For now, Hui said people need to call and set up no-interest payment plans. If they refuse or don’t contact the department, she said they could potentially have their wages garnished.
“Unless and until the individual engages with us to establish a payment plan the debt remains on the books,” she said during a House committee meeting.
‘Huge weight off of my chest’
Griffin is appealing her overpayment determination, but her hearing isn’t for another six months.
She doesn’t have to pay anything now, but she’s still wondering how she ended up in this position in the first place.
“If it’s not my fault then why am I being held responsible? Whose fault is it and why aren’t they being held responsible?” she said.
Normally, she counts on summer school to make most of her income. With no clear plan for schools to reopen, her employer encouraged her to file for unemployment benefits. But a state law doesn’t allow people who work in schools to collect benefits during summer vacation if there is a "reasonable assurance" they will be rehired in the fall.
But Griffin works for an outside arts organization, not the school district.
Some people who filed for appeals over the summer have shown the process can work. Larissa White, a 27-year-old resident of Ballwin, won her appeal earlier this month.
The state said she voluntarily left an acting job, making her ineligible for more than $8,000 she collected while she was out of work. But she was able to show proof of her employment history during the hearing, and the payroll company disputing her claim didn’t show up.
Within about a week, the state told White she won the appeal and didn’t have to repay the money.
“It was a huge weight off of my chest,” she said. “I mean, this has been a year of my life almost spent with this. So to know that it has paid off. It's indescribable how relieving it is.”
But she can’t fully relax yet. Her new determination could be challenged again within 30 days. If that happens, she worries she’ll be back to where she started.
“I just want to get out of this moment and wash my hands of them, say ‘good riddance’ and move on with my life,” White said.
A legislative fix
Missouri is one of 10 states that, by law, does not allow for forgiveness of unemployment benefits overpayments. But a bipartisan group of six state representatives are trying to change that.
They’ve introduced several bills that would keep the state from collecting federal overpayments when they don't involve fraud. Hui has said that's about 97% of the cases.
Rep. Jered Taylor, R-Republic, worries that fighting appeals from tens of thousands of people will be costly to the state.
“I think we are going to spend a lot of resources going after the federal portion when we can waive it. The feds have given us the permission and the ability to to waive these,” he said.
The Department of Labor spent about $4 million to process more than 23,000 appeals between October 2019 and September 2020, according to documents supplied by the department to Taylor and other representatives. It did not include figures for the rest of the calendar year.
The department said some federal administrative funding is available to state agencies to process the appeals. If the state collected all the money it overpaid last year, nearly $40 million would go back to the state trust while more than $108 million would go to the U.S. Department of the Treasury.
Taylor is hoping the department eases up on collection while legislation moves toward a vote. But he’s urging his constituents to either appeal or work out a minimal payment plan. He suggests as little as $5 a month.
“What I don't want is, I don't want the department to just start taking their taxes at the end of the year. Or I don't want them to start garnishing wages. I don't want liens to be placed on houses. I mean, I've seen that letters from the department saying that those things are going to happen,” Taylor said.
‘Going full in on the appeals’
Some lawyers are hopeful about the legislation, but they’re not banking on it for their clients.
Michelle Faron has been getting around five calls a day about overpayments. She’s an associate attorney at Kirkwood-based employment law firm McMichael, Logan, Schaeffer and Gilpin.
She’s trying to help clients appeal their eligibility determination, as well as the overpayments. But due to a backlog, she’s only been able to schedule hearings for clients who filed appeals over the summer.
“I’ve talked to so many people who say they call at 7 a.m. right when it opens, and they're on hold for about three hours before it will hang up on them, and they have to call again,” she said. “I'm talking to people who are saying that they're getting mixed messages on how to file these appeals — and it's just a mess.”
Several legal groups are offering pro bono help, including the Volunteer Lawyers and Accountants for the Arts. That group helped White, the actor from Ballwin, with her appeal.
Due to the volume of cases, the group recently started working with a team of lawyers at St. Louis-based law firm Bryan Cave Leighton Paisner.
The Volunteer Lawyers Program at Legal Services of Eastern Missouri is offering free help to people who fall below 125% of the federal poverty guidelines.
The most common legal advice is for everyone in these situations to appeal.
“We're going full in on the appeals because we can't take a wait-and-see approach,” said Jim Guest, director of the Volunteer Lawyers Program. “Because if things go badly, and our clients haven't done what they need to do, they're going to be out of options.”
Guest said clients told him they already spent the money on food, housing and other basic necessities. He argues that’s exactly what stimulus money should be spent on.
“I am hopeful that the state recognizes that it doesn't make sense to try to go after money that's already been spent, that no one's asking for from the federal government. And these aren't bad people. These are not thieves who have taken money that doesn't belong to them,” he said.
He’s encouraged that his team has won every appeal so far. There's no word yet on some cases, though.
Other people will wait months to get a hearing.
This story was updated to include the number of overpayment appeals filed between October 2019 and September 2020 and the cost associated with them.
Follow Corinne on Twitter: @corinnesusan