The federal government is asking the Vermont Department of Labor to re-process what may be the bulk of unemployment benefit claims filed in the state over the past year or risk violating federal law — a request Vermont’s labor commissioner calls “unconscionable.”
Since March 2020, Vermont’s labor department hasn’t heeded key eligibility requirements as it adjudicates benefit claims, wrote Jim Garner, a U.S. Department of Labor official, in a letter April 1 to Vermont Commissioner of Labor Michael Harrington. Those requirements include claimants’ ableness and availability for work, and whether they refused a job offer before filing a claim.
Garner said the oversight “presents a substantial compliance issue under federal law.”
The labor department must go back and re-adjudicate the past claims, Garner wrote, or risk losing eligibility under three federal benefit programs: Pandemic Emergency Unemployment Compensation, Federal Pandemic Unemployment Compensation and Mixed Earner Unemployment Compensation.
Vermont’s labor department initially stripped some requirements from its process for evaluating claims last spring, so benefits wouldn’t come to a grinding halt as claims rose 18-fold in the pandemic’s early weeks. The department stopped sending the bulk of claims to adjudication entirely, too, as it transitioned to an online filing system and struggled to keep up with the surge of new claims.
Necessitated by the pandemic, Gov. Phil Scott’s state of emergency barred workers who would otherwise have been classified as “able and available” to work from finding employment, Harrington wrote in an April 9 response letter to the U.S. labor department.
Thanks to a dearth of federal funding, the labor department was “massively ill-equipped” to handle the pandemic-induced recession, Harrington said. The state had to “take quick and decisive steps to relieve the pressure on the system,” he said.
Now, the labor department and advocates for laid-off workers are panning the federal directive.
Forcing the labor department to revisit thousands of claims would put Vermont’s already overwhelmed unemployment insurance system under even more of a backlog, they say, and prevent Vermonters from getting benefits in the meantime.
“The fact that USDOL would suggest that a state revisit the eligibility of thousands of individuals who, through no fault of their own, were paid benefits, potentially placing those individuals in a significant overpayment status, is unconscionable,” Harrington said in the letter. Overpayments occur when a claimant is asked to pay benefits back to the state that the labor department believes were distributed by mistake.
Harrington asked the federal agency to reverse course and “absolve the state from the obligation of redetermining eligibility for prior claims.”
On top of the labor department’s other challenges during the pandemic — which include two data breaches, a surge in fraudulent benefit claims and an ailing, 50-year-old computer mainframe — the directive would cause “a mess” for claimants as well as the department, said Kelli Kazmarski, a Vermont Legal Aid staff lawyer who represents UI claimants in court cases.
Like Harrington, Kazmarski fears a mass re-adjudication of claims could result in Vermonters facing a slew of overpayment notices from the labor department.
“I feel like our Department of Labor did the right thing” by lifting the eligibility requirements, Kazmarski said. “They were trying to get money out the door to people as fast as they could — people who were desperate for these funds.”
Other states’ labor departments have also been hit with the federal order that they re-adjudicate claims, Kazmarski told VTDigger. Vermont Legal Aid is in the process of organizing a response to the cross-state orders with legal aid foundations in other states, she said.
The Vermont Department of Labor is unsure of the precise number of claims it would have to re-process if the federal directive is upheld. It is working to determine that number with the federal agency, a spokesperson for the department told VTDigger in an email Wednesday.
But Garner’s letter alleges that all benefits programs in the state aside from Pandemic Unemployment Assistance fell short of the federally required compliance measures and would thus be eligible for re-adjudication.
Vermont’s congressional delegation has slammed the federal directive, too.
In a letter to U.S. Labor Secretary Marty Walsh last week, Sen. Patrick Leahy, D-Vt., Sen. Bernie Sanders, I-Vt., and Rep. Peter Welch, D-Vt., requested that Walsh’s agency reverse the order.
“As a matter of practicability, your department’s order will cripple the functioning of Vermont’s unemployment system, with no benefit for constituents or the Department,” the congressional delegation said.
The U.S. Department of Labor did not immediately return a request for comment Wednesday evening.
