Kan. enforces nation’s most draconian penalty for unemployment ‘fraud’ | #employeefraud | #recruitment | #corporatesecurity

[ad_1]

Spirit AeroSystems employee Michelle Tran discovered after furloughed during the COVID-19 pandemic that she had inadvertently accepted years ago unemployment benefits she wasn't entitled to receive. She paid back the money with interest, but is banned from getting jobless assistance for five years under Kansas law. (Submitted by Michelle Tran to Kansas Reflector)
Spirit AeroSystems employee Michelle Tran discovered after furloughed during the COVID-19 pandemic that she had inadvertently accepted years ago unemployment benefits she wasn’t entitled to receive. She paid back the money with interest, but is banned from getting jobless assistance for five years under Kansas law. (Submitted by Michelle Tran to Kansas Reflector)

By TIM CARPENTER
Kansas Reflector

TOPEKA
— Spirit AeroSystems production worker Michelle Tran was a victim of
mass layoffs in March as aircraft manufacturing shuddered under a
coronavirus-induced meltdown.

This
single parent of three children ranging in ages from 10 to 22,
including a son with autism, was cast into the social safety net along
with more than 200,000 other Kansans deemed nonessential features of the
workforce. She sought jobless benefits along with her peers, but her
application was red-flagged by the Kansas Department of Labor. The
agency concluded she accepted a week of excessive state assistance three
years ago when she was last out of work.

Tran
said she hadn’t received prior notice of that allegation but pulled
money from savings to pay nearly $1,000 in principal and interest. Once
the labor department had the money, she said, she was banned from the
Kansas program for five years to comply with the nation’s toughest state
law penalizing people accused of defrauding the unemployment system. It
left her broke and sleeping on a friend’s couch.

“I
lost my apartment. I lost my car. No job,” Tran said. “What they’ve
done is wrong. How the hell, at a time like this, can you take what
little we have?”

The
state’s labor department says Tran is among 7,000 people carrying the
burden of a five-year fraud ban, and at least 400 of those individuals
have filed claims for unemployment assistance amid the pandemic.

From left, House Speaker Ron Ryckman and House Majority Leader Dan Hawkins say they are willing to consider a less severe sanction for unintended errors. (Nick Krug for Kansas Reflector)
From left, House Speaker Ron Ryckman and House Majority Leader Dan Hawkins say they are willing to consider a less severe sanction for unintended errors. (Nick Krug for Kansas Reflector)

Nation’s toughest

Based
on a 50-state analysis of unemployment law, the sanction in Kansas is
out of step with most states in terms of the duration of penalties for
providing false information or failing to disclose part-time income or
returning to full-time work while still cashing unemployment checks.
More than 40 states punish misconduct with prohibitions of one year or
less, although the type of exceptions vary widely depending on repayment
of the money or status as a repeat offender.

Kansas
House Majority Leader Dan Hawkins, a Republican from Wichita, said he
would be loathe to diminish the penalty for anyone perpetrating criminal
fraud against the state. He said he would be interested in studying
options for creating wiggle room in the statute to deal with nuanced
cases in which a person had no intent to defraud the unemployment trust
fund.

“There are cases like that,” Hawkins said. 

Colorado
imposes a four-week ban for every week a person accepted ill-gotten
aid, placing that state in a category of 20 other states with penalties
of less than one year. Across the United States, the sanction amounts to
one week in South Dakota and Arizona and two weeks in Connecticut and
Massachusetts. There’s a seven-week ban in Illinois that includes a
two-week moratorium for each subsequent instance of misconduct.
Arkansas’ system blocks cheaters for 13 weeks, plus three weeks for
every week of bogus benefits claimed.

Oklahoma, Iowa and Montana disqualify false applicants for 52 weeks, which reflects the law in two-dozen states.

Hawaii
applies a two-year moratorium on people who try to take advantage of
jobless benefits. No state exacts a first offense penalty of three or
four years. Kansas stands alone in terms of the price paid by folks
categorized as welfare cheaters.

5-year hammer

The
2013 Kansas Legislature expanded the penalty for unemployment fraud
from one year to five years. The measure, House Bill 2105, was signed by
Republican Gov. Sam Brownback during a period in which the Kansas
Chamber, other business lobbying organizations and major employers
worked with legislative and executive branches of state government eager
to tighten welfare assistance.

The
bill sent to Brownback was opposed primarily by Democrats dramatically
outnumbered by Republicans in the House and Senate. The statute cleared
the House 89-31 and the Senate 27-12. The package saved the state $50
million annually in payments to the unemployed by unilaterally removing
the equivalent of 18% of people eligible for unemployment insurance
benefits at that time.The maximum jobless benefit period was slashed
from 26 weeks to 16 weeks — a law temporarily reverted to the 26-week
model this spring by state lawmakers to take advantage of supplemental
federal funding for the unemployed.

The
2013 legislation also raised taxes on businesses by $90 million to
strengthen the unemployment trust fund that was saved from insolvency
during the recession by borrowing hundreds of millions of dollars from
the federal government.

“We
want to make sure that fund is healthy. Unfortunately, everybody has to
pay,” Sen. Julia Lynn, a Republican from Olathe and chairwoman of the
Senate Commerce Committee, said at the time.

Ramifications
of the bill’s major structural reforms were the focus of news coverage,
which infrequently noted the new five-year penalty for falsely taking
unemployment benefits.

The
Brownback administration was lauded by the right and denounced by the
left for riding this wave of welfare reform bills. Brownback, who now
works in the administration of President Donald Trump as an
international ambassador of religious freedom, was keen to advance his
view that President Lyndon Johnson’s “Great Society” programs were a
failure. He blamed welfare programs for exacerbating the breakdown of
family structure and for perpetuating generational poverty.

The
GOP governor relied on executive orders and legislative action from
2011 to 2018 to shape public policy to his belief that Kansans could
lift themselves out of poverty. In addition to the unemployment benefits
overhaul, he was responsible for blocking Medicaid expansion, raising
the state’s sales tax on food and cutting Temporary Assistance for Needy
Families from the federal five-year maximum to 24 months.

‘Bad precedent’

Ahead
of the COVID-19 pandemic, the Kansas Department of Labor, on behalf of
Democratic Gov. Laura Kelly, introduced a House bill that would have
modified the 2013 law. The idea of the agency’s bill was for the state
to roll back the punishment of people found to have made false
statements to obtain or increase unemployment benefits — if those
individuals repaid the state for excess benefits plus penalty and
interest.

Kelly said intentional criminal acts must be punished, but people shouldn’t pay such a heavy price for mistakes.

“There
is fraud that goes on. In fact, we’re seeing an uptick in identity
theft right now within our unemployment system, where people are
applying for benefits under someone else’s name,” Kelly said. “For
people who, you know, it’s just a sinister move on their part, not only
should they be denied benefits for five years, they probably ought to be
paying other consequences. When you talk about people for whom it was
an honest mistake. … I think we really need to be dealing with that on a
case-by-case basis and not do blanket punishment.”

The
bill introduced by the Kelly administration in February was shelved by
the GOP-led House commerce committee, and it was killed off in May.

The 2020 Kansas Legislature rebuffed an attempt in the House to revise a state law blocking anyone from receiving unemployment benefits for five years if accused of intentional or inadvertent fraud of the system. (Nick Krug for Kansas Reflector)
The 2020 Kansas Legislature rebuffed an attempt in the House to revise a state law blocking anyone from receiving unemployment benefits for five years if accused of intentional or inadvertent fraud of the system. (Nick Krug for Kansas Reflector)

During
the final hours of the 2020 special session in June, which was called
by the governor to deal with COVID-19 oversight issues, House Democrats
took a different tact. Rep. Jarrod Ousley, D-Merriam, proposed an
amendment that would have removed the lockout if improper benefits were
repaid. His amendment also sought to waive all repayment penalties
throughout the pandemic.

“In
this time of crisis,” Ousley said, “households are getting broken and
we’ve got an anticipated second wave coming. Folks are still getting
locked out for five years.”

The
GOP majority in the House rejected his proposal on a voice vote, action
taken after the amendment was denounced by the House commerce committee
chairman.

Rep.
Sean Tarwater, the Stilwell Republican who chairs the House Commerce,
Labor and Economic Development Committee, said Ousley’s amendment was a
misguided attempt to reward Kansans who “mysteriously accepted money for
several weeks after they got their jobs and just forgot to let the
state know.”

“On
the surface this amendment seems OK,” Tarwater said. “This is a bad
precedent to reduce it or waive it just because of a disease. These
people still committed a crime, and they know what the penalty was, and
it’s now time to pay the price.”

The fraud label

Rep.
Stephanie Yeager, D-Wichita, said Tarwater lacked a necessary
understanding of how easy it was for a person to assume unemployment
checks sent to them by the labor department had been accurately
calculated.

For
proof, she said, look no further than her husband, James, who works in
the notoriously cyclical Wichita aviation manufacturing. He was laid off
during 2014 and took unemployment benefits for several months before
returning to work. He followed KDOL advice on handling the transition
back to a job, Yeager said. 

“He
wasn’t aware there was an issue until he got a letter in the mail about
attending a hearing,” she said. “They slapped a label on him: Fraud. Do
you know what his sin was? He got paid an extra week. We paid it back
and he was still banned for five years. It’s insulting for somebody like
my husband.”

Sen.
David Haley, a Democrat from Kansas City, Kansas, said Kansas statute
failed to differentiate between cases of blatant criminal fraud and
instances in which lack of communication by the state or beneficiaries
led to an overpayment subsequently corrected. The state should abandon
the five-year experiment and return to a penalty more in line with
comparable states, he said.

“It
should never have been implemented,” Haley said. “It takes us, Kansas,
to the very bottom of the swamp to protect special interests against
people who disproportionately need help.”

Kansas
House Speaker Ron Ryckman, R-Olathe, said he wouldn’t welcome mercy to a
hardened criminal but would be open to considering a less-severe
sanction for mistakes attributed to out-of-work Kansans.

“We
do not want somebody banned for unintended error,” Ryckman said. “If
you falsify documents and get caught, I still think you should be
subject to the ban.”

Tim Carpenter has reported on Kansas for 35 years. He covered the Capitol for 16 years at the Topeka Capital-Journal and previously worked for the Lawrence Journal-World and United Press International.

[ad_2]

Click here for the original source and author.

Leave a Reply

Your email address will not be published. Required fields are marked *