Businesses throughout the city have been boarded up for weeks, and public officials face constant questions about when that will change. (Michael Isaac Stein/The Lens)

The Louisiana Workforce Commission on Thursday acknowledged that it mistakenly sent overpayment notices to thousands of people receiving unemployment benefits this month. The agency is working to fix the issue, after incorrectly telling some 7,600 clients they would have to pay back thousands of dollars in overpaid benefits. 

NOLA-based singer/songwriter Lynn Drury was just one of the people who received such a notice. She was playing regularly at live music venues before the COVID-19 pandemic forced those clubs and bars to shut down most live music offerings. 

“I had about three weekly gigs in New Orleans,” along with occasional festivals and out-of-town tour dates, Drury told The Lens. “That was my regular income as a musician up until March 13.” 

Like many musicians faced with the sudden loss of their primary sources of revenue, Drury sought support from the state.  

“I have rent and I have a car note,” she told us. “The bills don’t stop when your work stops.” 

The CARES Act passed by the U.S. Congress in late March added as much as $600 a week in federal benefits to unemployed clients to Louisiana’s own benefit payments, at $247 a week, among the lowest in the country. It also allowed states to provide Pandemic Unemployment Assistance to independent contractors: “gig workers” and others like Drury who might not have qualified for such benefits otherwise. But the added benefit expired at the end of July. Some unemployed workers have been able to access a $300 weekly supplement under an executive order by President Donald Trump. But that will soon run out as well

Drury made her claim, effective March 29, and she received thousands in unemployment benefits between late April and late July — money that helped her keep her head above water amid the economic upheaval of the pandemic. 

‘You were not eligible’ 

But a Sept. 10 letter from LWC made her feel like that lifeline had been ripped away. 

“The information that we have shows you were not eligible in $9,600.00 in Federal Pandemic Unemployment Compensation (FPUC) benefits,” the letter read.  

It indicated the overpayment determination was linked to stimulus funding received through another program, likely the stimulus checks of up to $1,200 per individual. A New York Times analysis of the effort reported that such stimulus funding, while not taxable, would count as income for the purpose of eligibility determinations.  

The $9,600 overpayment note came “in addition to the overpayment notice you will receive/have received for the other program benefits,” the LWC letter continued. 

Sure enough, Drury soon received a second notification about overpayments, this one telling her to return her state benefits. Her state benefits — which are based on prior income — were calculated from payments she received from appearances on the TV show “NCIS: New Orleans.” 

The state benefits based on that TV work were just a few dollars each week. 

“I basically was getting $609 a week for that 16 weeks,” of which $600 came from the feds, Drury recalled. 

Even accounting for taxes withheld from her benefit payments, the musician suddenly found herself in debt to the State of Louisiana, to the tune of roughly $11,000. 

“I appealed online,” Drury said. “Now I have a questionnaire to fill out — I guess it’s a request for a waiver of overpayment, basically asking me did I know that I was not eligible when I applied.” 

She told us the notices last week left her badly stressed. 

“I was just rocked with anxiety,” she said. “I was just worried. I couldn’t sleep. I spent Thursday, Friday trying to figure out [what happened].” 

 Misery loves company 

Drury said she couldn’t get anyone at the LWC to help her with the situation, and she couldn’t get to the office earlier this week due to state agency closures during Hurricane Sally. 

She turned to friends and colleagues for advice, and quickly found she was far from alone. She found a Facebook group for people looking for tips navigating the state’s unemployment services. About 2,000 people have joined it. 

The man who helps moderate that group, Dan Ruch, is another musician and schoolteacher in New Orleans. He’s had to lean on unemployment benefits, too, amid business closures. 

“I absolutely would not have been able to stay above water without those benefits,” he said. 

Ruch said the Louisiana Workforce Commission was not very helpful in explaining the process to him. 

“I started doing my own research and reading up on all the statutes and laws,” he said, “and found myself in a position to be able to help other people.” 

Ruch said he knows of at least 20 people in the group who were getting overpayment notices like Drury’s. He suspected many of those clients may have been placed into the wrong benefits category — eligible for federal PUA benefits, for instance, but not for standard state benefits. Others may have been initially determined to be eligible but later found to have a disqualifying circumstance, such as income derived solely from temp work. 

‘We apologize for any confusion’ 

Thursday morning, Ruch noticed an announcement from LWC that may put the issue to rest, for most, if not all, of the clients.

“The Louisiana Workforce Commission (LWC) is aware of approximately 7,600 Unemployment Insurance overpayment notices that were generated on September 9-10, 2020,” the statement read. “LWC is working with the vendor to correct this technical issue. We apologize for any confusion.” 

“These individuals are those that primarily applied for benefits on March 29 and March 30 of 2020,” said LWC Secretary Ava Dejoie, who heads the agency. “What occurred there was that their benefit eligibility period, their base period, was calculated on the wrong base period.” 

Eligibility for unemployment benefits is determined in part on the basis of income received each quarter of the year. Every three months, LWC re-determines eligibility for each client with the aid of privately-developed software purchased by the state.

The fact that the applicants submitted applications on the cusp of two quarters of the year apparently caused a glitch in the software analysis, and they were flagged as being ineligible for benefits.

“Claims filed 1/5/2020-4/4/2020 use the base period 10/1/2018-9/30/2019,” Michael Key with LWC’s media relations department noted in an email. “Claims filed 4/5/2020-7/4/2020 use the base period 1/1/2019-12/31/2019…. Claims filed the week of 3/29/2020 used the 4/5/2020 base period in error.”

That error led to some 7,600 applicants receiving the erroneous overpayment notes. 

“These people were caught in a unique situation where they had two days of the previous quarter, in a week ending with a quarter change,” Dejoie said. “It was compounded by the fact that, in that particular week, we had 97,000 people filing for unemployment.” 

Those huge numbers for weekly applications meant less time for staffers to check over applications manually and a greater risk for clients to be flagged for overpayment. And it was only after the mistaken notices were sent out that LWC realized there was a problem. 

Dejoie said it’s not clear yet how many of the 7,600 clients affected will have to repay anything at all — some may yet have disqualifying circumstances, for instance. But it’s clear by now that the notices, and the amounts referenced therein for potential clawbacks, were way off base. 

“What we are doing for all of these individuals is to work with them. knowing that initial eligibility was determined incorrectly and that was through no fault of their own, to rectify that situation,” Dejoie told us. 

Huge demand for help 

It’s clear that the vast demand in Louisiana for unemployment benefits remains at near-record levels, and responding to that demand has been a huge challenge for LWC staff. 

“Just from the sheer dollar-number standpoint, in all of last year we paid out $153 million to 100,000 individuals,” Dejoie explained. “In any given week, we would have 1,600 new claimants and between 14,000 and 16,000 continued appointments. 

She said now, as the COVID-19 crisis winds on, the state is seeing “well over 100,000 new claimants and over 400,000 continued claimants” a week. 

“We’ve paid out, from March 22 to September 11, over $6 billion,” Dejoie said. 

Logistically, LWC is hard-pressed to meet that sort of demand. Given the complexities of state and federal unemployment laws, it takes a great deal of time to train personnel to properly analyze, process and adjudicate claims and appeals, even with the help of vendor software. 

“There are folks in unemployment insurance — our senior managers, our bureau chiefs, as well as other staff, that have been doing this for years,” Dejoie said, “and [who] know our computer systems, know unemployment insurance. But that only comes with doing it for a significant period of time and being intimately involved with every single aspect of operations. 

She told us adjudication staff, qualified to investigate most questions or concerns with benefit claims, can take up to four years to train. 

Relief, for now 

The challenges are readily apparent to many clients and applicants. 

“I could give you a whole list of errors that I think the Louisiana Workforce Commission has committed, throughout this whole ordeal,” Ruch said. “Yes, they have a tremendous task before them, I’m not going to downplay that.” 

Still, Ruch calls the overpayment notices the most egregious error the LWC could have committed. 

“To send people letters that say they owe $12,000 or more back, and then tell certain individuals who managed to get connected to the right [representative at LWC] that no, that was an error, don’t worry about it — Well, that’s not acceptable,” he told us. 

For her part, Drury told The Lens Thursday afternoon that she has already received notice from LWC that her overpayment balance is now zero — quite a bit less expensive than $11,000. 

“They’re swamped, I get it,” Drury told us. “It is a relief.” 

But she’s still trying to work with LWC to get a redetermination for herself, hoping that they will consider her song royalties and payments for TV guest appearances as qualifying income for better benefits. 

It’s been an aggravating low note for this talented musician, wrangling with the unemployment system. But she still needs that support: An upcoming show in Fairhope, Ala. was just canceled due to Hurricane Sally, after all. And that was one of the few opportunities she’s had recently to perform for a live audience anywhere close to one of the world’s great music towns. 

“The musicians and the service industry workers are the backbone of New Orleans,” Drury said, “the culture bearers, the ones who make everything go and make the tourists happy. And it just feels like that we’re being left behind right now.” 

 Tom Wright is a contributing writer for The Lens, formerly serving as an editor, producer and host of our weekly podcast, Behind The Lens. He is also a former client of unemployment services offered by the Louisiana Workforce Commission.