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

Virginia says it accidentally overpaid 35,000 workers receiving unemployment insurance
(Source: 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 overpayments 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.

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.

The Virginia Mercury is a new, nonpartisan, nonprofit news organization covering Virginia government and policy.