Business & Economy

Huge labor department printing mistake results in data breach

Michael Harrington, commissioner of the Vermont Department of Labor, says about 180,000 of the 1099 forms it mailed Friday have to be reissued. File photo by Glenn Russell/VTDigger

The Vermont Department of Labor will reissue about 180,000 of the 1099 tax forms mailed to unemployment insurance recipients Friday. Some of the forms contain the wrong person’s private information, including names, addresses and Social Security numbers.

Labor Commissioner Michael Harrington said Monday the department started receiving calls earlier in the day from benefits claimants who said their tax forms contained other people’s information. He couldn’t estimate how many people were affected, though he said he expects to have more details in the coming days.

The labor department will mail out postage-paid, pre-addressed envelopes so 1099s with the wrong information can be returned, Harrington said. He asked people who see mismatched information on the address line — such as their address with someone else’s name — not to open the mailing. People who open it to discover the information inside is incorrect should keep the 1099 and await further instructions, he said.

Harrington said he believes that the printing problems are limited to the labor department’s lost wage assistance program and the short-term supplemental benefits program, but all 180,000 1099s due to claimants this year will be reprinted “out of an abundance of caution.” 

The labor department has also sent out 1099s for a prepaid $1,200 benefit that went to many Vermonters in the spring and to Vermonters on the pandemic unemployment assistance program or PUA, for the self-employed. Because some Vermonters used more than one of the unemployment insurance programs, some were due to receive more than one 1099.

“Recognizing there is potential for the release of confidential and personal information, the department is already in contact with the attorney general’s office in accordance with state statute,” Harrington said.

The department normally sends about 6,000 1099 forms each year, Harrington said.

The mistake involving personal information is not the first for the labor department during the heightened activity of the Covid-19 pandemic. A mistake in May caused some Vermont employers to receive the Social Security numbers of unemployment claimants who did not work for them. That mistake happened on March 30 as part of a 5,667-piece mailing notifying employers that individuals had filed claims. It took the labor department until May 14 to tell claimants that their Social Security numbers might have gone to the wrong place.

The department has 45 days under the law to notify individuals who are affected by the data disclosure. 

This time, Harrington set up a call with reporters on the same day the labor department learned of the problems with the 1099 forms.

“It’s early, and I didn’t expect to have all the answers here today,” but the department wanted to get answers about the incident out to the public as quickly as possible, Harrington said.

He said he didn’t know how much the recall and reprinting would cost. The department is also going to check the newly printed 1099s to make sure the information inside matches the benefit amount and the mailing address, he said — an enormous task, he acknowledged.  

“There really isn’t a cost that’s too big when we’re talking about protecting someone’s personal information. We will do what we need to do to make sure we’ve done everything we can to fix the issue,” Harrington said.

Harrington said the mistake happened at one or more of the state agencies that the Department of Labor was working with to get the large mailing out. Maximus, the Virginia-based contractor that is helping the labor department with an unusually high workload, was not involved.

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