 Good morning, everyone. This is the Vermont House Commerce and Economic Development Committee. We're meeting this morning to further our discussion on a draft draft bill that represent Emily cornheiser brought to us dealing with penalty weeks. In the previous we had asked Kelly Kazmarski to, from Vermont legal aid to, to have a discussion with us we never made it to her to have that discussion so she has come to visit with us again this morning we appreciate you taking time to be with us Kelly, but we do want to hear what what you've seen in this issue of penalty weeks for the unemployment insurance system. Thank you and good morning, Chairman and committee. And thank you for the opportunity to address the committee at legal aid we support representative cornheiser's bill. In particular the elements related to the penalty week provisions. One thing that we at legal aid have been communicating with the department about for some time now. And we believe that the department's current position based on the federal guidance that states that when a person is serving a penalty weeks, they cannot receive the pandemic unemployment assistance. That's obviously disadvantaged and seriously hurt many Vermonters during this pandemic. I have multiple stories of clients who had an assessment of penalty weeks and an overpayment from the past sometimes as many as 10 years ago. In many many of those cases the overpayment was paid back to the department years ago, whether by payment plans, whether by income tax refunds. So the overpayment itself has long been repaid fast forward to the pandemic, and people have to in a sense pay again, because they are being forced to serve penalty weeks. In many cases, because of the benefits that people are losing through the service of the penalty weeks they wind up paying several times the amount of the original overpayment. And for many of these folks, the original overpayment was caused, not by fraud, but by some sort of mistake that they for whatever reason then never appealed the finding of misrepresentation. I have lots of stories that I'd be happy to tell you I know our time is limited. I also have several clients who would love an opportunity to address the committee directly if that's something that the committee would like to do to hear from constituents. I would love to talk in more detail about any aspect of this penalty week issue but I guess I'd love to also hear if you have specific questions. I'm afraid I could just go on rattling about on this issue and I'd rather address specific questions that you all might have. Okay, Jim. Thank you, Mr. Chairman. Kelly with respect to the, the numbers of people that you said made claims where the you know they're paying penalties multiple times do you have any solid numbers on the number of cases that you've dealt with or in general. Well, I can tell you, at this point I think I have right now about six stories that I, we just quickly put together as a team last night. I, I know I have several others in my own caseload examples of people who who really felt that there was some sort of misunderstanding or mistake that happened in the past that led to the penalty weeks that they just never appealed. I don't have actual numbers for you, I could probably do a search through our legal aid database to at least give you some numbers of the cases that we have dealt with but of course there are lots of folks who are also struggling with these issues who don't make it to legal aid so you know if you'd like I could certainly come up with some hard concrete numbers for you. Yeah, I'd appreciate it and I think it'd be a good idea to have Cameron Wood here to, or if you could reach out to him he might be able to give you more solid numbers. Sure. That's just a suggestion. Well, I believe that that they did bring us numbers when we started to discuss have discussions on penalty weeks and I think it was upwards of 300 people that were. The penalty weeks during that period. Right. Yes, remember now. And the department, of course, in that group, I mean, I am sure that there are some cases out there of legitimate situations where fraud was part of the picture. But of course there there have to be cases and that number that the department was using of 300 plus is really all of the cases that fit into this category. The cases that I'm speaking about are in particular those where we at legal aid believe that in fact, there really wasn't intentional misrepresentation or failure to disclose in other words there wasn't fraud underlying the penalty week findings, but really just some mistake and for whatever reason that was not addressed in the past so my subset of cases would be a little smaller than what the department talks about as the penalty week cases. Okay, thank you. Tom, you're muted. I'm just curious in the cases that where people were penalized twice seemingly penalized twice years later. Was that an error on the part of the department or was that is that part of the rules are part of the part of the law. It's actually the, I think it's more accurately described as the way the law plays out it's not an error. I can give you an example. A client was on a seasonal layoff had a medical event called back to work and asked the employer to work around the cardiac rehab the employer asked for a letter from his doctor, and the doctor said he should complete rehab before going back to work. This sort of misunderstanding about exactly when he should return to work led to a misrepresentation finding and an overpayment of $3656 plus a 15% penalty of $549 plus nine penalty weeks. The money was entirely paid back by 2019, and he served four penalty weeks before the virus hit, had to finish the remaining five penalty weeks after losing his job due to coven. So in addition so he paid back $4205 by 2019, which was the overpayment plus the 15% penalty. He had lost four previous weeks of benefits worth about $1400. And then during coven. He lost five weeks of PUC plus his weekly benefit amount for a total of $3,000 plus 1750 and his weekly benefit amount so he we figured that he has paid back the $4205 which was the original overpayment plus the penalty. In addition to the 2150 in his weekly benefit amount he would have received plus 3000 in PUC for so for a $3,656 overpayment this client has effectively paid $9,355. And add to that the stress that this client has had to deal with because during the pandemic of course, he's not been able to find any work so we, we really believe that there might actually be a constitutional challenge to this scheme, because of the provision of the Vermont Constitution, I'm talking the state constitution about a prohibition against excessive fines. We have not researched this yet, but this is just something that's come up in discussions it really. And again I've got, I've got other fact patterns I can, I can send it I'd be happy to send an email that details these numbers because I know it's a lot to just throw these numbers at you but it's, it's really unfair, the way this has impacted this and many people who, again, they really did not commit fraud and there has not, I'm sorry I'm kind of skipping around here but another issue for me in watching testimony with the department has been the way the department characterizes the fact finding interviews that take place before the determinations are issued. The department discusses those as fair hearings in which due process is protected and claimants are afforded due process. But these are really, this is not the case these are not fair hearings claims adjudicator sends a notice and says I'm going to call you at this time. If the claimant is available gets that notice and picks up the phone great then they're involved in an interview process which often has in the notes a company that are later given to the claimant the notes are wrong. They have mistakes, they're incomplete. So the, I question the effectiveness of the claims adjudicators but then on top of that many times the claimant never gets the notice, for whatever reason, doesn't participate in the fact finding interview, and the adjudicator then just makes a decision based on the information available to him or her that is not a fair hearing during which the claimant has been given an opportunity to be heard. And that's when the finding of fraud is made, which usually requires a clear and convincing finding and usually a higher standard of evidence and in other contexts when you're talking about fraud. And so we have many examples where a finding of fraud was made, and the claimant didn't even appear sometimes didn't realize that the fact finding interview was taking place, sometimes had a tech issue and couldn't get a call. We have a serious issue with the process by which people are found to have allegedly committed fraud. And it really, it unfairly penalizes people by forcing them to pay back as in that example, at least twice sometimes more than that the amount of the overpayment itself. Excuse me. Thank you. I'm sorry that was kind of a long winded answer to your question. Stephanie. Thank you. Couple questions about your experience. Once the these people have reached the end of their rope and they contacted from out legal aid. I think I suspect some of these people the ones are also contacting their legislators. Yes. And so what has been your experience in getting these problems resolved with the Department of Labor. Have you had success. In some cases, yes. I, I feel that the folks at the Department of Labor are genuinely trying to help us we have established kind of a system with the general counsel Dirk Anderson. So when we, we have a few advocates at legal aid who are working on unemployment cases and we as a team will get together and discuss our caseload and then oftentimes we reach a point it's, it happens frequently, where, as you know I'm sure when your constituents contact you it's just impossible to tell what's happening with a particular claim. So in those instances we emailed Dirk, and he often is able to push through claims that are stuck for some administrative error or whatever the issue might be. Or he's able to at least get back and tell us you know what the issues are. So I feel that the department, the people for the most part at the department at least the people that I've been working with have been very responsive. At this point though we also are getting a little frustrated with the fact that, as a whole the department still hasn't seen to figured out these issues I mean we're six months into this or more. And we still have folks who are stuck in adjudications who have not had their initial claim, you know, their initial application even responded to yet. You know, sometimes for a couple of months and it's, it's getting frustrating so I guess I would like to distinguish between the people at the department who I feel are genuinely trying to help as much as they can, versus the systems and the agency itself which really needs to step it up and even do better than it is so it's frustrating, as you know for the claimants. Sure certainly and I think there's also a large portion of our population who know that they can contact a legislator or contact Vermont legal aid and then those who don't understand that they have a resource. That's right. That's absolutely right. As well. Okay thank you. Charlie. Kelly I'm sorry I was late dealing with the work issue but you've been working how I just want to ask you a few questions how long have you been involved with claimants in this process. How long have you been in this line of work. Probably about three years or so I've, I've, I think I started doing unemployment cases, three, three and a half years ago something like that. For a good chunk of time before COVID hit. All right great so that's that's what I had hoped because trying to distinguish between what it was like pre COVID and what it's like now in COVID because of the volume. Is your experience different before we had this volume of claims and it is now. Absolutely, significantly different. I, first of all, I was really the only person at legal aid doing any unemployment work so I was it, and I was able to develop nice relationships with the folks over at Labor and when I had a case come in I could just call them up and we would talk and we would get things out I would get documents. That is obviously not possible anymore so that's been a huge change and a problem because there's no, you know these. These cases are unique well they're not unique their administrative cases so there's not like an opposing council on the other side that you can contact and work out issues with. And because of the volume. That has changed dramatically. And we did not have issues with people having delays, not getting responses not getting hearings that simply wasn't an issue if you appealed a decision within a few days you'd get a response hearing was usually easily scheduled within two or three weeks. We now have folks. We have a list that we're developing of several folks who requested an appeal and it's been well over 30 days. And as you may know by statute hearings are supposed to be held within 30 days of a request when an appeal is requested and and it's not happening. So, there's been significant changes in in certainly in the process and in the reactions from our clients the dissatisfaction the frustration the stress levels of not getting benefits. It used to be a pleasure to do unemployment work because people so quickly we're getting benefits as opposed to some other benefit programs. I used to enjoy the fact that I could tell my clients don't worry they're they're good you're going to get paid quickly. I can't tell them that anymore and people are in major stress about the lack of income and the delays in in the system. Okay, and some of us just certainly a function of volume and each case one of these cases is complicated. Previous to this with the issue of penalty where we see you're able to reach some kind of resolution. I think is what I hear you saying more easily because there's just that lack of volume. I'm wondering if, because what we're looking at is giving the commissioner that flexibility of delaying any kind of penalty weeks. It doesn't make them wave totally but defers them during this crisis so for that standpoint is that going to help meet the needs of your clients. I think it would help tremendously I mean I know one of the issues I was watching testimony the last time when I think Cameron would and Commissioner Harrington were involved and they were we there was a discussion about the potential of making that retroactive and the implications that that might. If that would be the best situation of course for Vermonters we have many people who are in just dire straits whether it's facing foreclosure and I know that there's assistance available out there but we have clients with significant debt, and if, if the deferment is retroactive that would significantly help our clients but even if it weren't that would be an improvement. Interestingly I was researching this morning in New York State they have done a similar. They have a similar situation there where they have essentially deferred they don't have penalty weeks they have what they call forfeit days. If a person is found to have misrepresented or falsely reported information, they're assessed forfeit days and for each day a claimant loses 25% of the benefits for that week. Up to four days so up to 100% per week so if you have five days for example you would lose 100% of your benefits the first week and only 25% of your benefits the second week. I think there's a limit to the number of days that can be imposed for a certain case. It's up to the discretion of the Commissioner or the, I think he's called the director in New York State. The governor in May signed an executive order, temporarily suspending the application of forfeit days to current UI claims, and that was in effect from May 14 till June 13. And then in June, the legislature actually enacted legislation, so that they by statute suspended the forfeiture days until the end of the coven 19 state of emergency. And in in New York that's going now at least until October 4. So New York State has figured out a way to defer these penalties. And you know because they felt it was important and I guess, I would say the same for Vermonters, people desperately need money right now and it's not like normal times where you could go out and just find another job instead of going on unemployment. We are still in crisis we still have not enough jobs for people who need them, and there's still the health issues for people who can't go out and and and look for work. So it would help tremendously, I think to defer these. What I also like about the legislative proposed legislation is that it gives the commissioner the option to waive penalty weeks so that for those cases where a person can show that it was just a mistake, for example, that led to the overpayment way back when the commissioner could decide to say okay, yes, I'm going to waive those. And that we think that's a great idea. Thank you. Thank you. More questions for Kelly, Zach. Kelly for the part of the legislation asked for that the penalty weeks go away after three years. I'm trying to find language that would also. Since we're deferring for the, the time that COVID is taking place, right? Does, does, would the three years be extended to also include the exemptions during COVID I'm trying to find that language. Hmm. I think the idea was to create sort of a statute of limitations for the penalty weeks in a sense so that. Yeah, so that they would, I'm not sure. So are you suggesting then that if there's a deferment that the, the time period actually be also extended for. Yeah, so if it's, I mean, I agree with the statute of limitations. I don't know if three or six years makes sense. Um, you know, I think that it should probably be on par with whatever the statute of limitation is on criminal fraud cases, not having to do with the state. But yeah, I think if, if we're creating an exemption during COVID that there should be the, the, the disqualification or that statute of limitations reflects that exemption period. I couldn't see the language in the bill to do that as well. It looks like Damian has his hand up Mike so maybe he can answer that question. Yep. Yeah, so there, there isn't an extension on the expiration of penalties to reflect any period of deferment or suspension as they called it in New York. One, one thing to keep in mind here is, is it's probably best not to think of this as a statute of limitations. Because the statute of limitations is a limitation on the state's ability to pursue a penalty. So for example, the state has a limitation on when it can pursue a fraud penalty. If it discovers it too long after the fact it's or if it too, if too much time has passed since the fraud occurred the state can no longer pursue the penalty. What this is, is basically a time limitation on the application of the penalty, which is similar to, for example, when you were to impose like a lean on a court order or something like that you only have so many years to collect it and then it goes away. And so this is something that you face in back when I was in private practice and did landlord tenant work. This was something where at a certain point. You are trying to collect a court court ordered award after a certain number of years you can no longer collect it because it's just, it's lapsed at a certain point so this is more similar to that. And the idea basically being that, and I can't remember the time periods for that but whatever you haven't gotten after X number of years is just written off at that point. And so that that's kind of the idea here, where it's however many penalty weeks haven't been served after the way it's written now three years but whatever. If you move this bill forward whatever the committee and the legislature sets, that would just be written off at that point so for example if I had 26 penalty weeks assessed which is the maximum. And I'd served 18 by the end of three years, the remaining eight would just be written off at that point, and that that's what it basically does. It doesn't prevent the state from trying to collect or trying to impose the penalty. There is different language in the statute that limits the state's ability to pursue a fraud determination. So I can send that to the committee later on I don't have that right in front of me. That would be helpful Damien. Yeah. Kelly the I had two other questions one was, do you are any of your clients still experiencing, or do you have any clients that have still have unused penalty weeks or is pretty much every everybody's, they do. You're right that for the most part I believe at this point most of the clients. Well, certainly many have served the penalty week so this is really sort of a retroactive issue if you will and they are now receiving. But I know that there definitely are some people for still an issue and they're still not in current receive benefits. I guess it's, you know, I would think when we talked to the commissioner earlier this year about this he said that by the time we go through this most of the people that had penalty weeks will serve them because of just the time period and so then it brings up, you know that the question of well if they were able to make it through without this, and they've served their penalties and it's done then why not just leave it as it is. So the intent is with this, the way the bill is written right now is this, this, so somebody could commit fraud right now intentional fraud, and they will immediately be able to continue to receive their benefits unemployment. And there is no penalty for them and if this goes on for two or three years, they'll never have to serve their penalty weeks. So I'm afraid that a lot of that, while the intent is to help those that that were wrongfully used to fraud. I think in the end, this legislation is going to actually actually help out those that do commit intentional fraud to get away with it without any real repercussions. I'm concerned about that and I'm concerned about the application of law and fraud in general, that this is a white collar crime essentially these are people that are trying to defraud the state and there is no real way to prosecute them I think that's federally we're not allowed to actually prosecute them in a court so this is our only means of actually having any sort of repercussion for somebody that does something wrong but meanwhile if you're, you're a blue collar worker that's, you know, that's that commits fraud you could go to jail for a year. You know against a business so it's, it doesn't feel like a fair application of the law if we create, if we create more exemptions and we also allow for the commissioner to just wave people's punishment entirely. I think the, there's some broad overreach on this legislation. I don't think it's going to cause a lot of bureaucracy to go back, and I don't even know if we legally can give PUA money to, I mean I don't know what we can do. Can we go back and give PUA money to people, six months afterwards. I don't know. I would like something more specific to try to address those people and I don't know what that is but this is this is pretty big. This changes quite a bit. I definitely understand your concerns, I guess I would say in response that I first of all, I know the department talked a lot about the, the person who defrauded the state of $100,000 through unemployment benefits. And obviously we can all agree that person, you know, deserves to be punished for what they did no doubt. But I think that is really an outlier. And I, I think that I feel, I feel sorry for Vermonters that there seems to be this presumption that claimants are trying to commit fraud. I really don't think that that's the case based on my experience with the people that I've talked to in the last three and a half years of doing unemployment work. I can think of two people out of hundreds and hundreds of people that I've talked to where I thought, yeah, they might have committed fraud. I mean, people I can honestly say no, it was not fraud, it was a mistake. It was whatever it's they were stressed they had too much going on they didn't pay attention to the rules they just didn't bother to find out what they should have done. That's not fraud though that's fraud involves intent so I guess I would just say I understand your concern and I don't know if there would be some way to tailor the legislation so that it could address your concerns about sort of giving you know the the ability to just, you know, conduct fraud right now and still get their benefits. I see your point, but I just think in reality it's not something that's that actually I just don't believe it's happening that much. So, I don't know how to. I mean, I guess the other point that I would raise is that there is a provision in the in the statutes that allows a general civil penalty to be assessed for anyone who violates any of the unemployment rules. This is 21 vsa 1373. I mean, maybe that's a tool that could somehow be used instead of penalty weeks, you know, to, you know, really uses a stick to dissuade people from committing fraud. It's just a thought it was, you know, again it's out there 21 vsa 1373 general civil penalty that if there's no other penalty assessed that an administrative penalty of up to $5,000 can be assessed so that's it that's a thought, but I see your point I guess I would just say that I don't believe that Vermonters are trying to commit fraud to the degree that many state agencies seem to be concerned about. I think right now anyone receiving UI during this COVID crisis. If they're committing fraud they won't be found out right away. Unless an investigation happens or somebody sends some information in, if they are found, I believe they would be cut off from their benefits number one. And number two, the agency will go after them to get the money back. So there is, there is that Damien, I know you have your hand up. I think you want to weigh in on this little bit. I wanted to point out, and I think Kelly left this out is that the current statute that has the provides for the imposition of penalty weeks states that in the event that the person is not prosecuted under section 1368 which is a false statement to obtain additional penalties and penalty provided in section 1373 which is the $5,000 administrative penalty is not imposed, then the person shall be disqualified and shall not be entitled to receive benefits. In other words, they're going to get penalty weeks up to 26. So the penalty weeks are provided in the event the department doesn't pursue the civil penalty for false representation to increase the amount of benefits. So that these these two penalties are on the books. I don't know the extent to which the department uses the penalty under 1368 and 1373. And if they, if they are using it I don't know how they draw that line I just wanted to point out that the statute right now basically says penalty weeks are only imposed. If they don't come after you for the $5,000 administrative penalty for the intentional false statement to increase your benefits. Thanks Damien. So just for Lynn gets on, takes the floor. I am. I just want people to realize that number one we're under, we're under the gun to get. I really want to get something out on penalty weeks. And I think the committee does too. I don't know that we can really weigh in on. On the aspect of, you know, after three years, they go away six years, but that's that's a longer discussion, a longer policy issue that we really need to take a lot take much more time on. I'm not sure that you know what we have we may have to may think about doing a whole overhaul of that. I think that what we're doing does capture the people that are woefully committing fraud, wanting to defraud the trust fund and take inspiration people that are making mistakes. That's, that's a longer term I think what what I really like us to focus on right now is penalty weeks during the pandemic, and is there a way that we can craft language that that would automatically defer those penalty weeks for anyone during any type of pandemic so that it stays on the books so this doesn't happen again if, if we ever get into a situation where people businesses are told to close their doors people are set home, and there's, and they need the money. That's, that's how I would like to see it. I'm not sure where the committee is there but the penalty week thing is something that we really need to look at next year. So, Lynn. Okay, thank you. Kelly, I sympathize with your, your circumstances with your clients. As an employer who's been dealing with this whole thing with pandemic was unemployment. The few times, maybe it was, I don't know I've had appeals maybe once or twice out of 40 something years but the few times it seemed like it took a long time to get to the final decision anyway I mean it's not quick I mean you would just go on and on and on. I'm not sure what the statute says for time limits but it was not quick it seemed like the person left sometimes voluntarily, sometimes not so much but it was a, it was a drawn out process. But the things that have happened since then. I feel like it's a deep dark hole that everything goes into. I mean I used to be able to call up and ask questions and what should I do about this and persons going to be right. They departed and they would tell me how to fill up the paperwork so it was done properly etc. And if I had a question or some issue I could call them up and somebody would talk to them I have tried really hard during the past four months not to go and abuse my position on this committee, working on these issues. It's, I've written letters, I've had pages and you know, whole full page of all sorts of people who worked for us over the past 10 years it seems like on this list. Some of which should be there some of which shouldn't be there I did get, I did get something from the department that said that someone wasn't entitled to something it turned out this was someone who I thought was entitled to it. And sent me a thing with a credit on it I don't know exactly how that works. But I wrote him a letter and said, you know, I don't think they're defrauding you I don't think there's any problem with this you know why are you taking this away. And I'm not even sure how they took it away or where this person stands because I haven't heard anything back that was well over a month ago. They were confused by the way I filled out the paperwork, you know, but it was clearly not clearly not intended to go in. So it's really a deep dark hole. And I appreciate what you're trying to do because I think the employers are the last people that they're really able to communicate with, not just your clients, you know, and most of us didn't do this willingly because this was the only way we could survive in many cases. But as far as I sort of look at these penalty weeks. I don't agree that I mean I agree probably 90% 99% of the people don't try to defraud it, but I don't agree that there are no Vermonters defrauding it. I, you're right. I mean just the embezzlement incidents we've had in the past 10 years probably indicate there's people out there looking to get whatever they can. Sure. It's just a shame that one that that spoils it for everyone you know so yeah. Yeah, yeah, and I do think the federal laws do rules do require them to be vigilant, more than a lot of other agencies about certainly more than my more tenant laws are concerned. I think they're they're charged with being vigilant so that they do not create fraud and quite frankly, you know when when someone defraudes something like the UI fund, we all pay as employers. It has an impact on everybody because it really even if it's not that much. So my, my gut feeling is that I'd like to keep something in there for penalty weeks I don't know if it should be, you know, forgiven. I think that's got a lot been out doing it for a long time that's, you know, maybe they should be. That's my point of view. Absolutely I understand what you're saying and, and you know one idea and again as chairman marquette said, maybe some issues are going to have to be dealt with with more consideration later on and and one idea, you know maybe the adjudication process needs to change so that there is in fact a fair hearing when the issue of fraud comes up. So that in fact claimants are afforded due process I mean, maybe that's another way to look at this that that creates of course another administrative burden for the department to kind of create a process here that is more fair than the one in place because I really, that's one of my, my biggest issues with the current process is that this adjudication system. It really is. It's, it's not working right now. For some people, it, I think is working well and I think there are some adjudicators who understand the law who really do take their job seriously and do a good job but I don't think there's enough training I don't think the adjudicators are. The process is just not where it should be for that to be considered a true fair hearing so maybe that's another way to to look at it because I you're right of course there are people out there who are bad actors. I think it's a small number of people and I think they're ruining it for the majority who are just trying to get by and not defraud the state. Thank you. Thank you, Mr. Chairman. Kelly thanks for your testimony today I sent you a message in the chat now I hope you take a look at it and give me a call. Thank you. And to Zach, his question about P away benefits and whether or not they would be repaid retroactively. You know I can speak and anecdotally that you know I have at least three people that contacted me and were able to get those monies to them. And that's all I have to say. Thanks. And certainly that there are definitely clients I mean the Department of Labor deals with retroactive claims all the time and is is routinely awarding retroactive benefits. So that the concept of doing that is not an issue and I know people who were denied PUA for whatever reason have gone through appeals and it's been approved and they were retroactively awarded PUA so I don't think that there is a problem in and of itself with awarding PUA retroactively. I could see there being an issue with the state creating a new system that didn't exist when PUA came into effect so Representative Watson I see I understand your concerns about whether it's even possible to do this and I don't know if Damien might have more information about that but I know that retro claims are dealt with all the time so yeah I'm thinking that we're looking at a probably a different issue than claimants who through adjudication were found that they should have gotten the benefits and so they do receive them where in this case right now the way the law the statute is on our books they were not eligible for it so I think that's that's a to me a significant difference and I really worry about at least at least for the PUA not looking backwards and I don't know what that would mean of course for those people it's just so hard to look backwards on it right now so I'm thinking looking forward would be would be our best bet and I do worry about the department's ability to be able to to be able to go back and look at that and given the issues that you're outlining right now with the adjudication process I just don't think that it's wise for us to put more pressure on a department that's having such a difficult time as it is but I do Damien I do have a question though Kelly brought up a good point that after 30 days if they have not been through adjudication I'm not sure what happens after that and I'm wondering if the governor put out an executive order that that suspended that those 30 days in the process not not sure I completely understand the question the governor did have an order earlier on I don't think it was actually an executive order but which basically because the department was so backlogged the state front of the money or front of the portion but I don't know what happens after 30 days if claims still hasn't been determined but I can look into it for you I think that would be something we should look at I don't know what happens if they haven't had hurt if their claims haven't been heard after 30 days and if that hasn't been been suspended for during this COVID time I'm just wondering where we're at Kelly may maybe you can as I understand it the the statutes require that when a person makes an application for unemployment benefits the department must respond with a determination promptly so I don't think there is actually a number of days specified by which they must make the initial determination the 30 day limit that I was talking about earlier was by statute when a person requests an appeal the hearing is supposed to occur within 30 days and that is not happening in all cases right now so yeah but then I'd like to know what happens after the 30 days if that hasn't gone through does the claimant automatically win their appeal no they just wait for the hearing to be held right now that's what's happening and why do we have 30 days then it seems like there should be a penalty on the department if they can't if they can't do it and I have a list of at least 10 people that we put together last night who have been waiting more than 30 days so I don't know maybe it's 8 and we are in touch with the department I should say that we do pass those on to Dirk Anderson so they are and again I think it is a function of just the system is overwhelmed and they are going to get to them as quickly as they can but the statutes is 30 days so I don't know it's one thing it's another yes but now you know we might need to take some sort of more you know a stronger action to insist that they comply with the 30 day yeah my understanding is that they are hiring more people for adjudication but I think like in all things they need to be trained and much more well trained in terms of the initial claims so unfortunately it's the times we're in right now Damien I was going to say under section 13 48a it specifically provides that the hearing has to be held within 30 days the next provision that addresses it beyond that and then says prompt notice of the decision has to be given within 30 days any sort of automatic action if the hearing isn't held within 30 days and then beyond that it just basically provides that within 30 days after the initial appeal is heard you can appeal to the full employment security board and then within 30 days after that you can appeal to the Supreme Court but you're otherwise limited there and that there's no you know there's no sort of trigger to push those appeals to be held more quickly I think my understanding is that in normal times there is review by the federal department of labor to see that claims are being heard promptly and determined promptly and that's something that the state department of labor is judged by the federal department of labor on but with the current volume of claims and so forth I don't know that there's any real standard for them to follow because I think across the country the various UI employment security departments and divisions are struggling just to keep their heads above water but the number of claims coming in so I don't know what options we have or what the practical impact would be with respect to those I'm sure if we had some some kind of a you know there's a penalty against the department or the claimant claim would be found in favor of the claimant that they would probably have been an executive order to suspend that during this time anyway and I mean I think we all can understand that it still doesn't help those people that are trying to get unemployment get unemployment so it's kind of a double edged sword yeah the problem with making an automatic payout that I can see is that under federal law and state law the department is is required to recover amounts that were improperly paid to a claimant so if you pay out the money to someone who is unemployed and they're later determined not to be eligible you're then basically having to go after them to get that repayment and we potentially start a very similar process to the issue that we've been discussing this morning with Kelly here where now you have someone who's an overpayment and then there's a question of wasn't an intentional misrepresentation and we're back down that road and so they're even if we're forcing the department's hands here to get the benefits out there's a potential that it just creates more complications on the other end because the departments required to go after those amounts under both state and federal law so I'm not sure what the solution is in the interim I know the governor paid out those amounts it was with the understanding that in some cases the amounts might be wrongly paid out but the state wasn't going to go after those amounts I would think in the case where the state didn't perform their duties in the allowable amount of time that that fault would fall on them and not the claimant and so they may later find that not in favor of the claimant and go after the money but I don't believe that they could assess penalty weeks because it wasn't the claimant's fault that they received the money yeah if you could they would still have to get back the overpayment if maybe you know while you get your month or so off before bills start coming into you for drafting if you could just start taking a look at the issues that we're bringing up and just kind of give us a little report back on what we might be able to do when we come back in January it'd be real helpful yeah I can start putting together some some information on what we might be able to do with other states have done that'd be great any other questions for Kelly so I guess thank you Kelly and it was a very good conversation I guess committee I want to get a feel for where everybody's at are you I'm really wanting to save some of this for January when we come back because those are really deeper discussions on penalty weeks and the length and looking at all of that but I think the issue at hand for us right now is can we get something out just dealing with suspending penalty weeks during a pandemic is everybody good with that yeah okay I see thumbs and heads bobbing so like would that be retroactive or is this just I mean I'm thinking going forward I'd love to do it retroactive I just don't think the department has a capacity to do it and so Kelly the department keeps talking about only something like a hundred and some odd cases of that are currently still stuck and then I think you mentioned 300 cases going back a few months where people were not getting paid and I mean because if this were just a deferment of the penalty weeks that were retroactive would sure it's obviously going to take some administrative work to make that happen but it's not like a determination has to be made in each one of those cases so it's I understand there is some administrative burden but I think because the department is already used to processing retroactive claims and that it's really more of a math issue when the weeks are just deferred it's not like any judgment needs to be involved with the department but it's still there I don't think it is as big of an administrative burden or at least that's my opinion as it may first appear I think the department does have capability of doing this and I don't think it would take too much for them to process 300 and some odd claims of people who were serving penalty weeks during the pandemic but I would think that's the question I would make, you know, to clarify when you say defer you mean that it would not be eliminated it would just be held off until after the pandemic period and seems to I can't find the language for whatever this bill is or whatever that they mean I assume we'll give us some language but Is there a cost figure to this that we're talking about? But it'll be a cost to the trust fund. Yeah, yeah. It seemed like I remember we had a cost mentioned somewhere, but I can't remember. Is that true? I don't think so. I don't think so. Well, it might be nice to know what that is. And it seems like that should be calculable, like a finite amount that, yeah, it seems like that should be something not too difficult to figure out. It's gonna depend on what each claimants is what their weekly amount is supposed to be. So it's gonna, it'll take time to understand what that is, but I don't see it as being a huge amount considering the amount of money that's coming out of the trust fund now. Thank you. So the PUA is a whole different issue. I don't know, or I don't think we can go back on the PUA, but at least if we can get them the benefits that they should have gotten while they were serving their penalty. But yeah. And I don't know how that's gonna work either. We're gonna have to have some discussions with the department. I'm wondering because those people have served their penalty weeks, they're gone for the one. So how do we make that retroactive if they've served them? I guess they'd have to be reinstated and sort of like the serving of it is mooted out in effect. They're gonna get the payments and then they had the penalty weeks would be added back on, I guess. That's a good question. And I don't know if we legally can do that. Well, New York state has managed to defer this service. Yeah, but I don't know if they've deferred weeks that have already been served. So it's kind of like you had a penalty, you served it, but now we're gonna give you the penalty back again. I don't know. That does seem problematic, yeah. That's a good point, yes. Maybe Damien can take a look at that and give us some thoughts, Charlie. You muted. Yeah, I was just gonna say that we're not talking about deferring repayment for overpayment situations. We're talking about deferring just the penalty weeks. Right, right. Now, yeah, and that's another issue I think we talked about it last time, last week. There may be a mechanism where a certain percentage of someone's weekly benefit would be taken to pay back any monies that they owe so that they are making payments, but it's not gonna be grabbed from them all at once. Right, exactly, right. That's a great idea. In social security overpayments, for example, when someone is on SSI, because that's considered like subsistence income, a minimum necessary for survival, the most social security can recoup is 10% of that benefit when someone has been overpaid. And I think unemployment benefits are at least somewhat analogous. They are necessary for basic living. So that would be a good idea as well to limit the amount to be withheld. And I think probably, I mean, I think the 10% makes a lot of sense to me. I don't know about the committee, but we can start there and work up or work down. Stephanie. I wanted to ask Kelly if there had already been some cases where there were resolve within the Department of Labor and what they had decided to do about these penalty weeks. And perhaps we could use that as a model. Already worked on these cases and they've been resolved in some sort of precedent that already been determined within the department. I'm actually not aware of a case involving penalty weeks that the department was willing to or was able to resolve. Those cases, if they have resolved has just been a factor of the expiration of the penalty weeks and the benefits then have started to flow. Sometimes there's been a glitch and the benefits that should have been paid after service of penalty weeks weren't kicking in for some reason and the department has been good about getting those through. But I'm not aware of any case where, for example, anecdotally, where we were able to negotiate, for example, a resolution over the penalty weeks. And as I understand it, the department's really right now not able to do that. That would be one of the things that Representative Kornheiser's proposal would empower the department to wave or reduce so that they could take some action. But I don't know of any case, the only response I've ever had from the department on these issues as well, they've only got a few more weeks to serve, they'll start, regular UI will start to kick in in just a couple of weeks. And usually time goes by because it just takes too long to talk to anybody and then they do start to kick in eventually and at least the client has some income at that point. So we really haven't been able to resolve this. We thought way back that we were going to and it seemed like there was some room before that federal guidance came out and the commissioner said that he could not sign the letter that came from the committees. So we really haven't had any success, unfortunately. Okay, thank you. I guess I was under the impression that you had already worked some of these cases through with the Department of Labor and... The cases where there have been errors that we have been able to identify, they were able to, I'm trying to think of a specific example like misreports of wages or I don't know where social security number, sort of administrative glitches that have come up. When the issue has been this person serving penalty weeks, the department's response has been, there's nothing we can do. Thank you. There's no ability for the commissioner to waive penalty weeks at this point. Damian have a question or comment? I'm sorry, I didn't realize my hand was stuck. Okay. Sorry about that, no questions or comments. Okay, I think, so do you have a pretty good flavor of where we'd like to go? If you can craft something, language that would automatically defer penalty weeks during any type of pandemic that we've gone through. So it's an emergency or a pandemic emergency. I think we've got to be careful that it would only have to be during a time where businesses are ordered to shut down, where people are losing their jobs because of those issues, where we would defer those penalty weeks. Would something work where it's basically as starting from the effective date of the bill through the whenever the governor lifts the state of emergency? Penalty weeks are just deferred until the calendar week after he lifts the state of emergency. Yeah, but I want to leave something on the books. You want to leave something on the books. That lives with this. So if something happens like this again, and Lord knows how long, that people aren't going through this same issue again, that they'll be taken care of, at least with unemployment benefits. So that they can take a little stress off their lives during things like this. Okay, but the other changes that were proposed in Representative Korn-Heiser's amendment, giving the commissioner the authority to suspend or waive penalty weeks and then the three-year expiration, you want to hold off on those at this point? I think those are bigger conversations that we should have in January. And actually even looking at the adjudication process and some of the things that Kelly has brought up. And I think we're going to be spending a lot of time with you in the next few days. So I think I'm wondering if, I believe committee that we're going to get S352 and S353. And so if we do get those today, we'll begin looking at those tomorrow. And I'm just wondering if that can be a vehicle for our UI stuff as well. Not just this, but the other UI pieces that we piece we were looking at. You mean the part with the trust fund? Yes, yep. Congratulations. Maybe we can put it all in one bill and not have to separate it out. Anything else anyone wants to bring up on this? Any more questions for Kelly, comments? Everybody happy with the direction that we're going on going on this? So I just want to clarify something. So if we put something in there that says during a state of emergency declared by the governor, the results in the economic shutdown then penalty weeks will be deferred until the end of that. That doesn't give the commissioner any discretion to waive it if there isn't a pandemic or isn't a state of emergency. Correct. I think that unless the committee wants to put something like that in right now, I'm just thinking that's probably a conversation that we have when we talk about penalty weeks and the commissioner's abilities unless you all want to see that in there. I'm just not sure about the, this is not a typical occurrence, right? We're not going to see, hopefully in our lifetimes, this type of thing occur again. And do we need to address just the situation now or anticipated situations going forward? And that's the only reason why I bring it up. Could we refer directly to COVID? We did this at Worker's Comp and we referred specifically to the emergency under COVID-19. Maybe that would be able to address Charlie's concerns. Well, so the immediate piece would be there's already language and representative Kornheiser's proposed amendment that would defer them until after the current state of emergency, the COVID-19 state of emergency. And I'll modify that because that included the reimposition of penalty weeks and payment of back benefits. So obviously that's going to need to change to go in the direction that the committee is going in at this point. But so that's already there. I think what the chair is talking about is putting something else on the book that would also automatically suspend the application of penalty weeks during a period where the governor has declared a state of emergency that includes the ordered closure of businesses during that state of emergency. It wouldn't be the application. It would be a deferment of penalty weeks. Right, so the... They couldn't apply penalty. It's not that they can't assess penalty weeks. They can't apply them. Right, so it would defer the actual application of them to, or the, not the imposition, but the application basically. So if you had 20 penalty weeks on your record, you'd still have those when the state of emergency lifted. It's just during that state of emergency with the closure of businesses. And I think that's a two-part thing because for example, sometimes the governor declares a state of emergency in relation to flooding, but businesses aren't closing and laying off people. So, and it's, so you've got something that's very temporary there and we don't wanna have people claiming, well, you couldn't do penalty weeks that week because there was a flood in Chittenden County. But this is different because the governor declared a state of emergency and then with a denim six ordered the closure of a significant portion of businesses across the state which resulted in the spike in unemployment that we're all familiar with. And so I think that's probably the two-part test and I'll work on some language on that over the weekend so that we have it for next week when the committee is ready to start moving language. And I imagine that this could just be combined with the other UI trust fund issue there. So whenever I hear from the department on their proposed language on that, but it sounds like those are the two things. And at this point, the commissioner's discretion to suspend their way of the benefits, you're gonna hold off on that. And definitely it sounds like the committee is holding off on this. I almost called it the statute of limitation representative Watson, you've got it in my head now but the sort of expiration date on the penalty weeks. And then that'll be something that I look into for next term along with some of the potential ways to address or require the department to address claims more quickly. Thank you. I think that we ought to try to, I agree with what Damien just said. I think we should try to keep it as simple as possible for now. We don't have a lot of time. I mean, we're almost halfway through September. We're supposed to be done by the end of September. I just wanna remind everybody that when I was first two, it was first two years it took us two years plus a summer study committee to finally come up with a grand bargain. This is a complicated subject. We're gonna have a much better idea where the trust fund stands in January. We're gonna have a much better idea where this pandemic exists. Hopefully seeing light at the end of the tunnel in January. I mean, it's just a lot of work to do anything with these federal regulations. And a lot of these PUA issues and other issues, the federal government could still come after this money in two years. I mean, that's what they do. They are very, very oriented toward fraud detection and risk averse. And they could do, even if we go and try to do something it may not be what the feds want. And so we have to be careful because so much of the money is tied up with federal money and so much of the rules and regulations are tied up with federal rules. So we have to be really careful before we start doing all kinds of stuff that may not work. And in fairness to the folks over at labor, I early on in this back in March and April I was talking with Dirk Anderson and I know that within the department there was a strong desire of course to try to help Vermonters, but they were getting so much pressure from the feds exactly like you're saying that if you give out $1 that should not have been given out there will basically be hell to pay that we're gonna come after you for that. And so that was very discouraging I think for the folks at our Department of Labor, the type of warnings and ominous messaging they were getting from the feds. So I do understand that pressure is definitely on them which is unfortunate but there it is. Yeah, okay. So with that I think Damien has everything he needs and you'll find out you'll research the retroactivity benefits and that type of thing. I think it's gonna be pretty difficult for us to do but we'll wait to hear back from you on that committee we are on the floor at two. I imagine the rules will be suspended so we take up the budget. So there will be our section that's in the budget is the $100 million that we're putting towards recovery and other things. So I just want Charlie and Jean to be prepared in case questions arise. All right. See Charlie's doing his rocky thing. And also if there's any comments that any committee member wants to make on our section of the budget if there's anything that comes up and you wanna weigh in, feel free to weigh in. Don't hold anything back. I think we've done a pretty good job on this next amount of money that we're putting out and anything that you wanna weigh in on would be great. Zach? Mike, did they keep everything that we asked for or did they make any changes? No changes. Well, right on. So Kelly, thanks again. Thanks again for- Thank you all.