Democrats in the state Assembly are backing legislation that would forgive unemployment overpayments made to workers during the height of the COVID-19 pandemic.

A.6666 passed the Assembly 96-50 with Assemblymen Andrew Goodell, R-Jamestown, and Joe Giglio, R-Gowanda, both voting against. Companion legislation (S.6169) did not move out of committee before the end of the legislative session, but the legislation could make another appearance on the legislative agenda in the 2023 state legislative session. During debate earlier this year, Goodell argued the legislation hurts businesses that are already paying increased unemployment insurance bills.

“I appreciate the sponsor’s desire to help people who are paying workers compensation benefits for which they were not entitled to to avoid having to repay any of them,” Goodell said. “I find it hard to understand how it is a person could claim unemployment benefits, receive those unemployment benefits without being eligible for them and still do so in good faith. If you accurately and correctly fill out the unemployment application there shouldn’t be any overpayment. So what this bill says is if somehow you got more money than you were entitled to and you didn’t call the Labor Department and say ‘Hey, wait a minute, you guys are sending me too much money’ and instead spent it, that’s OK. The problem is, though, that when the people who weren’t entitled to that money don’t repay, somebody has to repay it, and do you want to know who that somebody is? It’s the innocent employer who did nothing wrong whatsoever. It’s the innocent employer who saw their business virtually destroyed by government edict when they were shut down and laying off their employees at a time when they still had as much work as they could possibly do.”

The bill states workers won’t be held liable for overpayments of state or federal unemployment benefits, as permitted under federal law, as long as the overpayment was not due to fraud or caused by the worker, and as long as the recovery of the additional money would be against equity and good conscience. The state labor commission will be required to notify the claimant when an overpayment has occurred and inform the claimant of his or her right to request a waiver. If the waiver is denied, the state labor commissioner would also be required to notify the worker of their right to ask for an adjustment of a proposed repayment schedule.

According to the U.S. Department of Labor, New York paid out $70 billion in unemployment benefits in 2020, including roughly $115 million in overpayments, while other states across the country paid a combined $2.9 billion in overpayments. The federal government has allowed states to waive repayments of benefits, including Pandemic Unemployment Assistance benefits, that weren’t caused by workers.

Under current New York state law, state unemployment benefits later determined to have been overpaid cannot be recovered from workers as long as the worker received the benefits in good faith, did not make a false statement or representation, and did not willfully conceal any pertinent fact in connection with his or her claim. Data from the U.S. Department of Labor shows that as of March 1, 2021, the state has not granted any waivers for overpayments throughout the duration of the pandemic and has continued to recover a total of $93.4 million in overpaid benefits during 2020.

“The essence of this bill was to really recognize that people during this time were really navigating a very complicated, complex and outdated unemployment insurance system and people were just trying to figure out how to survive, how to get money in their pockets for their families during this time,” said Assemblywoman Latoya Joyner, D-Bronx and sponsor of the bill. “People lost jobs. and this was a tragic time for both workers and businesses. There were a lot of different programs that were being rolled out during this time and many people were just scrambling to figure out how to survive and provide for their families. It’s punitive now to go after these people and ask them, ‘We need you to pay this money back’ especially because the federal government is not asking us for this money back.”

Goodell said it’s important not to consider A.6666 in a vacuum. He said the state’s decisions during COVID-19 have created an unemployment mess for businesses now, including for Goodell’s law firm that has seen its unemployment insurance rate increase to 9.75% despite not laying off employees during the pandemic. The state is also facing a $9 billion shortfall in its unemployment insurance fund after taking out federal loans to pay unemployment insurance claims during the pandemic, with some of that loaned money ending up being paid in excess of what was claimed by some workers.

“So what’s the right solution?” Goodell asked. “The right solution is for us as a legislature to say we recognize that we the government shut you down against your will, so we the government will cover your extra unemployment expenses. Is that what we’ve done in this legislature? No. We’ve done the opposite. We haven’t anted up one dollar to pay back that $9 billion in unemployment expenses faced by our employers.”

The state Department of Labor has told small businesses it would charge them an additional fee to pay off the unemployment insurance loan, with the increased fee starting Sept. 1.