Employment Security sets collection record

The Employment Security Department collected a record $45 million in overpaid unemployment benefits in 2006, an increase of nine percent compared to 2005.

Employment Security Commissioner Karen Lee said that new funding provided by the 2006 legislature allowed the department to hire additional staff and employ new technology to improve its overpayment detection and collection efforts.

“Unemployment benefits are meant to help people make ends meet if they lose their jobs through no fault of their own,” said Lee. “Not everyone who is unemployed is eligible for these benefits, and we are making it a priority to reclaim money that should not have been paid out.”

Most overpayments happen because people return to work and do not report all of their earnings while they collect benefits, or they are unavailable to work during a week in which they collected benefits, or there is a dispute over why they are no longer working. When Employment Security discovers these problems, the recipients must repay the money that they received.

If there is a question about whether a person is eligible, the department is required by law to conditionally pay benefits until a decision is made. If the person ultimately is ruled ineligible for benefits, he must pay them back.

Some overpayments also are caused by errors on employers’ quarterly reports or errors by the department. In those cases, the claimant does not have to repay the overpayment.

Lee also noted that her department improved its efficiency at collecting unemployment benefits. In 2005, Employment Security collected $19.45 for every dollar it spent on collection efforts. In 2006, the ratio improved by nearly seven percent, to $20.94 for every dollar spent. The industry standard for private collection agencies is about three dollars collected for every dollar spent.

In addition to stepping up its collection efforts, Employment Security also focused on detecting and preventing unemployment fraud. In 2006, the department uncovered $16.7 million that was paid and prevented another $9.8 million from being paid out to people who were trying to collect unearned unemployment benefits. Some of the $16.7 million has been collected and is included in the $45 million figure; the remainder is being actively pursued.

Lee said that employers can help reduce fraud by filing accurate tax and wage reports and by responding to notices from Employment Security, particularly those related to the reason a worker left the job.

Employers are required to report all new employees to the Department of Social and Health Services within 20 days of hire. Proper reporting reduces unemployment and workers’ compensation fraud and helps the state collect child support. Employers can report new hires on the internet at www1.dshs.wa.gov/newhire/ or by calling 800-562-0479, option 3.