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PA Dept of Labor admits it overcharged unemployed Pennsylvanians $ millions
(link) https://www.post-gazette.com/business/career-workplace/2021/07/10/pennsylvania-Department-of-Labor-overcharged-unemployed-millions-of-dollars-jobs-workers-spotlight/stories/202107100035
July 10, 2021
HARRISBURG — Just one day after Spotlight PA contacted the Department of Labor and Industry with a list of questions about a serious error that overcharged unemployed Pennsylvanians millions of dollars in interest for a decade, the agency announced Friday it will issue refunds to roughly 250,000 people.
Each year, interest accrues on money people owe to the department because, for various reasons, the state overpaid their unemployment benefits. A Spotlight PA investigation found the Department of Labor and Industry, from 2006 to 2016, did not use interest rates set annually by the state revenue department, which ranged between 3% and 8%.
The agency instead charged a fixed, 9% interest rate, because it failed to adjust the number annually in the computer system that processes payments. The department said this was an oversight following a 2005 legal change.
During that time, the state collected millions of dollars in inflated interest charges from hundreds of thousands of unknowing Pennsylvanians. The state made a rough estimate Friday, in response to questions from Spotlight PA, that it owes at least $14 million, saying this amounts to less than $50 for most people.
But former employees at the Department of Labor and Industry tasked with assessing the mistake have for months told Spotlight PA that the agency owes much more money.
According to internal emails and datasets reviewed by Spotlight PA, records obtained from the department through Right-to-Know requests, and corroborative interviews with former labor employees, the state learned about the mistake in late 2016, referring to it as the “interest rate problem.”
Three former employees who began working on the issue in early 2017 told Spotlight PA they were instructed to keep it confidential during the years of aftermath. The employees said numerous refunds were worth more than $500, not $50, and often several thousands of dollars. The highest refund, one said, exceeded $11,000.
Each year, interest accrues on money people owe to the department because, for various reasons, the state overpaid their unemployment benefits. A Spotlight PA investigation found the Department of Labor and Industry, from 2006 to 2016, did not use interest rates set annually by the state revenue department, which ranged between 3% and 8%.
The agency instead charged a fixed, 9% interest rate, because it failed to adjust the number annually in the computer system that processes payments. The department said this was an oversight following a 2005 legal change.
During that time, the state collected millions of dollars in inflated interest charges from hundreds of thousands of unknowing Pennsylvanians. The state made a rough estimate Friday, in response to questions from Spotlight PA, that it owes at least $14 million, saying this amounts to less than $50 for most people.
But former employees at the Department of Labor and Industry tasked with assessing the mistake have for months told Spotlight PA that the agency owes much more money.
According to internal emails and datasets reviewed by Spotlight PA, records obtained from the department through Right-to-Know requests, and corroborative interviews with former labor employees, the state learned about the mistake in late 2016, referring to it as the “interest rate problem.”
Three former employees who began working on the issue in early 2017 told Spotlight PA they were instructed to keep it confidential during the years of aftermath. The employees said numerous refunds were worth more than $500, not $50, and often several thousands of dollars. The highest refund, one said, exceeded $11,000.
- more at link -
Spotlight has been hound-dogging this story for several months and investigators are speaking with former PA-Dept of Labor employees who are now on the record. It's a very big deal, unemployed Pennsylvanians have been overcharged for more than 10 years. Thank you Spotlight!
