COMMENTARY: State should back off pandemic aid recipients

Last month, the Review-Journal reported that recipients of federal pandemic unemployment assistance programs were surprised by efforts by state unemployment officials to collect purported overpayments. Instead of subjecting these individuals to appeals, hearings and court proceedings, the state should do right by taking more reasonable steps.

First, as the article generally referenced, people can apply to have the overpayments waived. Importantly, though, the federal government announced in February 2021 that states are “strongly encouraged” to waive PUA overpayments. The federal government told the states that pursuing these overpayments from persons who did not commit fraud “creates an extraordinary hardship on working families.” Thus, the state should more strategically and more diligently waive non-fraud, non-fault overpayments.

Instead of essentially serving as a collection agent for the federal government, collecting money the federal government itself has “strongly encouraged” be waived, Nevada should waive these overpayments. Doing so would not only allow the state to allocate its resources and attention to its oft-mentioned backlog of pending claims and appeals, but would allow it to focus on fraudsters who intentionally gamed the system.

To date, there have been no reports of arrests and prosecutions for these fraudsters, and the statute of limitation will soon expire. Meanwhile, entrepreneurs and small businesses who received PUA payments face years of hearings, appeals and court proceedings as the state pursues them to collect overpayments.

These collection efforts also have little to no actual benefit to Nevadans. There has been no showing, for example, that any of the money collected will go into the state’s unemployment insurance trust fund or that Nevada businesses will pay lower unemployment insurance premiums as a result.

Next, the Legislature should insist on greater transparency and accountability concerning the requests for waivers mentioned in the article. For example, lawmakers should enact statutory language requiring the Nevada Department of Employment, Training and Rehabilitation to report quarterly to the Legislature the number of people who have applied for waivers, the disposition of such waivers and the reason given for any denials. For some time now, there have been several mentions of waivers that will be issued, but scant indication that any have actually been issued.

Finally, there should be more robust reviews of decisions on PUA appeals and hearings to ensure conformity with federal guidance and applicable laws. Internal audit processes within DETR, and audits at the state’s executive and legislative branches, can provide reviews to verify whether claimants received timely, accurate and procedurally sound outcomes. Courts in Nevada hearing appeals of PUA cases have recently begun remanding hearings back to DETR based on procedural defects that could have been avoided, thereby saving claimants the time, aggravation and expense of litigation.

DETR risks still being mired in the past crisis by the time the next one emerges. If predictions of a recession are even moderately accurate, it will not be long before unemployment in Nevada increases, along with applications for unemployment benefits. To be better prepared, the state should use its resources and the guidance offered to waive non-fraud overpayments, prosecute bad actors and otherwise free scores of entrepreneurs to rebuild their businesses and their lives following the pandemic — without unnecessary hearings, appeals and court proceedings.

The state has a chance to now do right by these people whose businesses were shut down — and it should immediately do so.

Terry Johnson served as the director of DETR from 2005-2007, as the director of the Nevada Department of Business &Industry from 2010-2012 and as a member of the Nevada Gaming Control Board from 2012-2021.