BATON ROUGE, La. – The Louisiana Workforce Commission may have paid more than $405 million last year in unemployment benefits to people who were not eligible based on their income, according to the Louisiana Legislative Auditor.
The flood of applicants during the COVID-19 pandemic and legislation that gave employers extra time to submit their wage reports made it harder to verify applicants' reported income, the Workforce Commission said.
The LLA analyzed wages employers reported from January 2020 through last September. During that time, the LWC paid out almost $6.9 billion in state and federal benefits to more than 694,000 people.
The LLA said it identified 97,585 people who received benefits despite being employed for all three months of a quarter. They received a total of almost $405.4 million.
The increase in the number of applications for unemployment benefits during the COVID-19 pandemic led to a backlog of documentation from former and/or current employers of applicants, causing delays in LWC’s ability to work through the documentation, the Workforce Commission said. Between March 21 and April 18 of last year, almost 440,000 new unemployment claims were filed, compared with almost 104,000 during all of 2019.
Act 243 of last year’s regular session delayed employers’ quarterly reporting of employee wages for the second quarter from July 31, 2020, to September 15, 2020, limiting LWC’s ability to verify unemployment benefit eligibility, officials said. Major identity theft schemes seeking to take advantage of federal pandemic-specific benefits programs caused the LWC to turn its attention away from other types of fraud, officials said.
The LWC is continuing its efforts to investigate potential overpayments and determine whether applicants committed deliberate fraud or unintentionally understated their wages while estimating earnings. Applicants who committed deliberate fraud are subject to an additional 25% penalty on top of repayment.
“My administration continues to work diligently to detect and investigate potential unreported earnings fraud,” LWC Secretary Ava Dejoie wrote in her response to the report.