Muncie McNamara, Former Head of Kentucky Unemployment Office, Dead at 39 Tuesday, Mar 9 2021 

Muncie McNamara testifying before the Kentucky state legislature on July 30, 2020.

Muncie McNamara, an attorney and former executive director of Kentucky’s Office of Unemployment Insurance in the early months of the pandemic, was found dead over the weekend at age 39.

An obituary posted Monday night says McNamara died “after a battle with chronic depression.” Bardstown police chief Kim Kraezig told WDRB the cause of death appears to be self-inflicted.

McNamara died in Bardstown, where he lived with his wife Audrey Haydon and their two daughters.

According to the obituary, McNamara was a big Washington Nationals fan and loving father who had recently enjoyed introducing his daughter to his own favorite childhood books during a nightly bedtime ritual. The obituary also says McNamara’s time at home with his family after the birth of his youngest daughter in August was “a precious gift they will all treasure forever.”

McNamara was born in St. Louis, Missouri. He attended law school in Washington D.C. where he met Haydon, and the two moved to Kentucky in 2011.

McNamara was hired by Gov. Andy Beshear’s administration in January 2020 to run the Office of Unemployment Insurance.

McNamara took over the unemployment office when it had been depleted and left unprepared for the crush of claims to come. He was on the job for just under three months when the coronavirus struck and kicked off an unemployment crisis that would leave many thousands of people struggling without income.

Behind the scenes, McNamara had raised concerns about appointments to the unemployment insurance commission and other moves taken by the administration during the early days of the unemployment crisis. McNamara was quietly fired the first week of May, a week that brought over 69,000 new unemployment insurance claims.

He challenged his firing, arguing to the Kentucky Personnel Board that he was fired because of a medical condition, and for calling attention to ethical concerns within the unemployment insurance office.

Later that year, McNamara testified before the Kentucky legislature’s Joint Committee on Economic Development and Workforce Investment, where he told lawmakers about decisions made by his overseers in the Beshear administration. McNamara claimed the decisions contributed to monthslong delays and violated federal rules in the process.

Many of McNamara’s concerns were borne out in a report from the Kentucky Public Auditors office in February.

Robyn Smith represented McNamara during his personnel dispute and has years of experience practicing law inside the unemployment insurance system.

Smith said McNamara was a talented administrative lawyer with an eye for processes, standards and procedures. Smith said that’s what McNamara was trying to bring to the unemployment office when he was fired.

“He wanted to have everything to where somebody coming in (to the unemployment office) could know what the rules were, and expect to be treated the same as the person who had been there right before them,” Smith said, while adding that uniformity was lacking in the unemployment system prior to McNamara’s tenure.

Beyond that, Smith said McNamara was a “likeable guy” who respected and cared for the staff of the unemployment office during his time there.

Even as his personnel dispute dragged on, Smith said McNamara wanted to talk to the public and the General Assembly about the dedicated staff of the unemployment office. “He wanted to make sure that whatever came out of this, that the staff wasn’t vilified.”

McNamara’s death comes as the Kentucky legal community, like much of the country, is struggling with despair and mental health issues.

The President of the Kentucky State Bar Association wrote to its 19,000 members in January urging Kentucky lawyers to take care of their well being and look out for each other after four members committed suicide over the holiday season.

McNamara is the third lawyer Smith knew personally who has died by apparent suicide since Christmas. “The one thing that people I know all have in common is how much they do care and caring is what makes them vulnerable,” Smith said.

“When you’re an attorney you carry on your shoulders everybody’s problems and when Muncie was executive director, for example, he carried the thousands, tens of thousands of Kentucky working families problems that he was responsible for solving.”

The suicide prevention hotline is available 24/7 at 1-800-273-TALK or through an online chat.

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Bill To Forgive Some Unemployment Overpayment Debt Clears House Wednesday, Mar 3 2021 

A bipartisan bill that would allow the state to forgive the debt of Kentuckians who were overpaid in state unemployment insurance through no fault of their own passed the state House of Representatives unanimously Tuesday.

If passed, House Bill 468 would allow the Labor Cabinet to waive overpayment debt if the debt wasn’t the fault of the recipient or if collecting the debt would be “contrary to equity and good conscience.”

Kentucky is one of ten states without a statute allowing debt from overpayment of unemployment benefits to be forgiven. 

Republican legislators first announced plans in October to file a bill preventing the state from universally clawing back overpayment debt. The announcement followed a KyCIR investigation which found that Kentuckians who stayed home to self-quarantine at the start of the pandemic were getting billed to repay unemployment benefits, even though Gov. Andy Beshear said they’d be eligible for the money.

The state has made thousands of payments during the pandemic that were later deemed improper, including people who were self-quarantining and substitute teachers who were newly eligible for unemployment benefits.

Beshear sought permission from the federal government last year to waive the debts, but a federal act allowing waivers didn’t apply to Kentucky because the state didn’t have a law on the books allowing it.

The bill will move to the Senate for consideration.

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Auditor: We Don’t Know How Much Kentucky Owes In Unemployment Benefits Tuesday, Dec 22 2020 

The Office of Unemployment Insurance is unable to determine how much money the state owes in unresolved unemployment claims, according to a report from Kentucky Auditor of Public Accounts Mike Harmon released Tuesday.

Since the start of the coronavirus pandemic in March, many thousands of unemployment claims have gone unresolved for months. The resulting backlog has frustrated the Office of Unemployment Insurance and kept much needed financial support out of the pockets of unemployed Kentuckians.

Now, that backlog has also prevented Kentucky from conducting a full and accurate audit of the unemployment insurance trust fund. Harmon said it is “imperative” that the unemployment office address the lack of reliable data, especially as the General Assembly starts work on a new budget in January.

Harmon said the gap is worrisome for unemployed Kentuckians, state government, and businesses who pay taxes to replenish the unemployment trust fund.

“You’ve got multiple people that are being impacted by this: The people who are expecting unemployment who, to this date, several thousands of people that have not received the unemployment that they are due,” Harmon said in an interview. “You’ve got that, you’ve got the business aspect (the prospect of higher taxes on employers) and then certainly you’ve got the General Assembly trying to craft next year’s budget.”

The Office of Unemployment Insurance did not immediately respond to requests for comment and for the most recent number of unresolved claims.

The findings are part of the auditor’s annual financial report for the fiscal year ending on June 30. The annual report is based on financial statements provided by the Finance and Administration Cabinet, which are then audited by the auditor’s office. Auditors were able to report an “unmodified” or clean audit of every state account except the unemployment compensation trust fund, which received a “qualified” report, meaning auditors were unable to provide documentation to back up certain financial claims.

“In this particular case, the biggest concern is that they really did not know how much was still owed to claimants. We received multiple different numbers, it was kind of all over the board,” Harmon said. “The numbers ran everywhere from hundreds of millions to a couple billion (dollars).”

Harmon said the sheer volume of claims and new unemployment programs overwhelmed the unemployment office.

The office also “eliminated key internal controls” to expedite benefit payments but had a significant backlog of unprocessed claims at the end of the fiscal year, Harmon said in an opinion letter to the Finance and Administration Cabinet.

“Management was unable to provide a reasonable or reliable estimate of the financial statement impact of this backlog of claims,” the letter said. “Because of this, we were unable to obtain sufficient appropriate audit evidence to conclude that the accounts payable balance in the unemployment compensation fund was free of material misstatement.”

The Kentucky Center for Investigative Reporting has documented the unemployment office’s hurried steps to make payments quickly as the pandemic shut down businesses in the spring. The unemployment office broke federal unemployment rules in the chaos, and made improper payments. Many people are saddled with debt to the unemployment office for benefits they already spent during the pandemic, and Gov. Andy Beshear since told unemployed people to save their money, in case they need to pay benefits back. Beshear has said inconsistent guidance from the federal government led to much of the confusion.

The auditors annual report says the unemployment compensation fund has a net position deficit of $18 million and the total fund balance decreased by $797.8 million for the 2020 fiscal year.

The report says that, as of June 30, the unemployment office owed at least $511.5 million based on claims filed before the end of the fiscal year, and paid through November 17. The amount owed in unpaid claims filed before June 30 that remained unpaid “could not be reasonably estimated due to system limitations and not being able to determine payment amounts of unprocessed claims,” according to the annual report.

States have to continue paying unemployment claims even if those funds are depleted, and Kentucky has been approved for a loan from the federal government amounting to $350 million per month through February 2021. 

The report also presents a picture of Kentucky’s overall fiscal health. The coronavirus pandemic has severely dented revenues for state and local governments, leading the Commonwealth to decrease its revenue forecasts for the fiscal year. Actual revenues, however, overshot those estimates by $578 million.

Contact Jared Bennett at

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How Kentucky Missed Out On A $90 Million Unemployment Upgrade Monday, Nov 30 2020 

After the 2008 recession revealed the weaknesses of the nation’s unemployment insurance systems, most states got to work upgrading their technology.

The need for such an overhaul was obvious, and the reason the federal government set aside $7 billion in 2009 to modernize the nation’s unemployment systems.

Forty states took the free money. But Kentucky left it on the table. 

The commonwealth missed out on a cool $90 million back then. But experts say the failure to bring Kentucky’s unemployment insurance system into the 21st century is costing Kentucky to this day.

A task force appointed by then-Gov. Steve Beshear prioritized stabilizing the struggling unemployment insurance trust fund over improving the old infrastructure. It scheduled incremental tax increases on businesses, cut benefits and delayed major system upgrades until the state’s fiscal situation improved.

In January, Gov. Andy Beshear — Steve Beshear’s son — began taking steps to replace the technology. But the state was still using a program that predates the personal computer when the coronavirus ushered in a new employment crisis.

Delays were likely inevitable regardless of the technology as Kentucky dealt with unprecedented numbers of new claims, but those seeking help to get through the pandemic dealt with crashing websites, frustrating tech issues and outdated information in the application that the state conceded was difficult to bring up to date. Delayed claims mean a worker without income to support their family. It also means fewer federal unemployment dollars circulating in Kentucky’s economy.

“Especially what we’ve seen now during this pandemic is that states with terrible systems that couldn’t get people through, they lost out on a lot of federal money,” said Michele Evermore, a policy expert at the National Employment Law Project and a member of President-elect Joe Biden’s transition team. “All for the sake of pinching pennies between recessions.”

Already, signs point towards another cost-cutting approach. Kentucky’s largely Republican legislature wants to insulate businesses from tax increases, and Beshear has already committed spending upwards of $300 million of federal CARES Act funding to pay down the $865 million federal loan Kentucky required in June.

Kevin Kinnaird, a spokesperson for the Kentucky Labor Cabinet, said the Office of Unemployment Insurance’s legislative priorities include investing in the current “archaic” system “to be more efficient and responsive to unemployed Kentuckians” as well as increasing the number of staff.

“The problem is we keep prioritizing keeping business taxes low at the expense of dislocated workers and our economy when we hit hard times,” said Jason Bailey, executive director of the Kentucky Center for Economic Policy. 

Policymakers often keep unemployment insurance systems out of sight, out of mind during good times, when fewer people are exposed to its flaws, he said. Recessions put unemployment insurance in the spotlight and provide the best opportunity for policymakers to invest in improvements. 

“My fear,” Bailey said, “is that they are going to go the other direction.”

The Recession

The Great Recession put so many Kentuckians out of work by 2009 that the state needed a $972 million loan from the federal government to keep paying unemployment claims.

Nearly every state required such a loan. They had until 2012 to pay it off, or the federal government would automatically increase business wage taxes.

In Kentucky, this meant taxes would increase on businesses by .3% every year after 2012.

At the same time, states were running unemployment systems on technology that predated the personal computer. Old policies left many workers without unemployment benefits, should they lose their job.

So the American Recovery and Reinvestment Act provided states with $90 million each if they adopted reforms to cover more part-time, seasonal workers and anyone leaving a job for a compelling personal reason, such as domestic violence or a family move.

The incentives could be used to pay benefits or to cover administrative costs — such as modernizing the technology powering the unemployment program.

Then-governor Steve Beshear put the decision to a task force chaired by Helen Mountjoy, who was Secretary of the Kentucky Secretary of Education and Workforce Development, the cabinet that housed the unemployment office until this year. Other members included Sen. David Givens, (R-Greensburg); David Meyer, a vice president of UPS; representatives from the Kentucky Chamber of Commerce and labor unions; and Larry Roberts, who was director of the Kentucky State Building and Construction Trades Council.

Roberts would become Kentucky’s Labor Cabinet Secretary in 2013 under the elder Beshear. Andy Beshear named him to the post again this year — and the Labor Cabinet took reins of the unemployment office during the pandemic.

Roberts declined to be interviewed through a spokesperson, who said the secretary was “dedicated to ensuring Kentucky’s Office of Unemployment Insurance is being responsive to Kentuckians in need during this pandemic.”

The task force met 11 times before its final opinion was turned into legislation, passed by the general assembly and signed by Steve Beshear.

The task force made 17 recommendations, including reducing benefits from 68% of lost wages to 62% and establishing a week-long delay between approval and the first payment. The waiting week is supposed to save money by avoiding paying benefits too soon, allowing time for documents to be mailed and staff to manually calculate benefits.

As for the federal incentives, the task force concluded even though the money would more than cover the technology upgrade, the long-term costs of policies expanding coverage outweighed the immediate $90 million reward.

Sen. Givens said focusing on steps the task force didn’t make, such as the modernization efforts, was “inappropriate.” The goal, he said, was bringing the unemployment insurance trust fund to solvency through a plan that businesses, conservative politicians and labor activists could agree to.

“It was a very very lengthy, educational process, followed by a very thorough and rigorous negotiation between competing interests,” Givens said.

What’s Happening Now

This year’s pandemic in 2020 found Kentucky’s unemployment insurance system still lagging behind other states in both technology and unemployment funding.

Kentucky’s Office of Unemployment Insurance reports over 75,000 claims are outstanding. More than 600 claims are from people who have been trying to collect unemployment insurance benefits since March.

And the state covered far fewer unemployed people than the national average: Only 19% of unemployed people in Kentucky were covered by unemployment insurance because the rest had exhausted their benefits, left the workforce or worked a part time or contract job that didn’t qualify.

Coverage increased when the pandemic hit, as Kentucky adopted many of the changes recommended by the federal government.

Gov. Andy Beshear waived the waiting week nearly immediately to get money to claimants as quickly as possible. And some of the same changes first proposed in 2009 were included in emergency legislation Kentucky passed in March in order to unlock federal unemployment funding in the CARES Act.

The unemployment office has not followed through on all those upgrades, however.

For example, the 2009 task force passed on incentives that required adopting the “alternative base period,” which uses earnings from a worker’s most recent economic quarter to determine eligibility. Currently, a worker’s most recent earnings often aren’t counted.

Lawmakers gave the unemployment office the option to use this alternative base period when it passed Senate Bill 150, but Kinnaird, the Labor Cabinet spokesperson, said the unemployment office has not implemented the policy.

The emergency legislation also gave the unemployment office permission to establish a program to cover reduced hours with unemployment benefits, another recession-era reform that would allow employees to keep more people on the payroll. The CARES Act committed the federal government to fund up to half the costs of creating this program.

The office drew up regulations under the Education and Workforce Development Cabinet, but the plans were scrapped once the Labor Cabinet took over.

Kinnaird said “the statutory scheme is not in place to provide the framework or authorization for this program” because the federal government required a permanent program rather than a temporary one set up by emergency legislation.

Givens, who is now in Republican leadership, said he would not support making major changes to the unemployment program right now, though he agreed the system is “obviously antiquated.”

The legislature recognized this in 2018 when it created a separate fund to divert a portion of unemployment taxes into and save up for an eventual technology upgrade. The fund has five years to raise $60 million, according to the statute. By the end of 2019, the state had saved $16 million.

Givens said one of his priorities is to protect people who were approved for unemployment insurance only to be deemed retroactively ineligible and sent an overpayment bill. As the Kentucky Center for Investigative Reporting found, many in Kentucky applied for unemployment benefits after Beshear said those who “self-quarantined” for fear of the coronavirus would be eligible. The state later backtracked, sticking those who had self-quarantined with overpayment debt, and blamed shifting guidance from the federal government for the mistaken payments.

The state has already requested a waiver from the federal government to forgive this debt, and Kinnaird from the Labor Cabinet said they have not received a response to the request. Givens said he is waiting to see if the waiver is approved before pursuing a legislative fix.

“We have a lot of needs right now and one of those most important needs is to keep people employed,” Givens said.

Dan Borsch, who owns the Old Louisville Tavern and Burger Boy Diner, said he’s concerned about future tax increases when uncertainty is at an all-time high.

“I want to say it’s not make or break but who knows exactly how much business is going to come back and how fixed costs are going to be six months from now,” Borscht said. “It all adds up.”

Borsch said the unemployment system is clearly outdated and needlessly adversarial, pitting employers against their employees. And since Kentucky made contract and gig-economy workers eligible for unemployment benefits, Borsch said businesses like his with traditional employees foot the bill for companies like Uber that don’t pay unemployment taxes.

“I’m concerned that it is going to be a large expense going forward,” Borsch said, “and it’s just frustrating that we don’t have a better system.”

Bailey of the Kentucky Center for Economy Policy says the unemployment taxes paid by Kentucky businesses are already historically low, but he worries the current recession will usher in another round of benefit cuts without addressing the holes in the unemployment system.

“What we should be doing in this next legislative session is learning the lessons from this and putting in the improvements that are needed for next time,” Bailey said. “This is not our last pandemic, and it’s not our last recession. One way or the other, more problems are coming.”

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Substitute Teachers Given Unemployment Now Face Overpayment Debt Thursday, Nov 12 2020 

Leonard Sanderson was scheduled to start a long-term substitute teaching assignment on March 16, the day Jefferson County Public Schools closed to deal with the first wave of the coronavirus.

Sanderson, 67, has taught part-time since January 2017 to supplement the income he receives on social security and another part-time gig enrolling people in health insurance plans. Both jobs dried up as the coronavirus hit.

Courtesy of Leonard Sanderson

Leonard Sanderson has been a substitute teacher at JCPS since 2017.

Between the sudden loss of steady income and the deadly virus outside his door, Sanderson spent much of March feeling anxious and confined, and each day he watched Gov. Andy Beshear’s briefings. On March 25, he learned some good news: Beshear was extending unemployment insurance to substitute teachers like him.

The Kentucky Office of Unemployment Insurance deemed him eligible a few days later, and he was paid from the end of April until June 23 — when the checks stopped without warning.

A few weeks later, Sanderson learned he owed $952 to the state of Kentucky for unemployment benefits he had apparently been ineligible to receive.

 “If I wasn’t qualified, why did I get it?” Sanderson said. “Who manages that? Should I have cut it off?”

Sanderson was caught in a trap many other substitute teachers found themselves entangled in during the pandemic. Education professionals can’t claim unemployment during the summer break that started in Louisville on May 31, a caveat the state doesn’t appear to have made clear when it extended benefits to substitute teachers. Subs who continued to file for unemployment after summer break began are now expected to repay anything the state paid in error.

When asked about the error in August, Beshear told WHAS he thought the message was sent to substitute teachers but couldn’t say when and he didn’t specify by whom. A spokesperson from the Kentucky Labor Cabinet provided KyCIR with a link to guidance posted on the state website, which says seasonal workers like substitute teachers are ineligible for unemployment benefits during a scheduled break if they have “reasonable assurance” that work will continue. It is unclear when this guidance was issued and whether it was shared with those filing unemployment claims.

Substitute teachers are just one group of workers caught unawares by unemployment overpayment debt. Those who self-quarantined and filed for unemployment after Beshear said they’d be eligible were later assessed overpayment debt. Beshear said at his daily briefing on October 29 after a KyCIR investigation that people who “self-quarantined” to avoid catching the virus at work were eligible when they filed claims in March. But guidance from the federal government became more stringent as the pandemic stretched on, he said, and Kentucky is bound by federal law to pursue the overpayments even as his administration is seeking the Department of Labor’s permission to forgive the debts.

The federal Department of Labor says its guidance never changed and, in fact, Kentucky had violated several unemployment insurance policies in its rush to pay benefits.  A spokesperson for the Department of Labor said in an email that, in response to questions from states, the Department of Labor provided guidance on existing provisions related to substitute teachers eligibility on May 15.

The plight of Jefferson County Public School substitute teachers provide the clearest example yet of how errors, mixed messages and overlapping authority in the unemployment system has left workers on the hook to repay hundreds or thousands of needed dollars.

Meanwhile, the unemployment office in August threatened Sanderson with civil action  in August unless he ponies up $160 a month to repay money he’s long since spent.

‘There’s a crack’

Sanderson sounds pretty unflappable over the phone, even as he uses words like “anguish” and “ballistic” to describe the ordeals of the past few months. He’s slow to assign blame and says he has a “cool mind” that handles stress well.

Still, he doesn’t think it’s fair that he has to pay back money the state mistakenly paid him. Sanderson already spent a few lean months relying on savings and social security until he landed some insurance work in September.

“I don’t want to sit and say that it’s somebody’s fault,” Sanderson said. “But obviously there’s a mishap here. There’s a crack, and it’s a big crack.”

Just how many substitute teachers have fallen through that same crack is unclear. KyCIR spoke with at least 18 JCPS substitute teachers whose claims have been investigated by the unemployment office.

When an unemployment claim is filed with the state, the unemployment office reaches out to the employer to check that the claimant is in fact unemployed through no fault of their own. JCPS says it has answered 2,215 unemployment claims since February 2020.

In response to questions about unemployment, JCPS spokesperson Mark Hebert sent the JCPS’s pre-pandemic substitute teacher’s handbook, which states that employees are “not eligible to receive unemployment compensation during an established and customary vacation period or holiday recess.”

Hebert said the district doesn’t know how many substitute teachers filed for unemployment over the summer.

Now that school is back in session, even substitute teachers that aren’t currently working in classrooms aren’t technically unemployed, according to the state’s logic, because there is work available. But in practice, schools are now in non-traditional instruction and JCPS needs fewer subs than normal. Hebert said there are other opportunities for subs to work, including custodial or distribution jobs. They can also sign up to help students with non-traditional instruction (NTI) at designated “learning hubs,” he said.

Like Sanderson, many JCPS substitute teachers are semi-retired, at an age where they are particularly vulnerable to COVID-19. Teaching is just one of several tenuous streams of income that, together, keep their household budgets afloat. Springtime is normally a busy time for substitute teachers but JCPS was closed this year, denying many an important last chance to save for summer.

Most of Christine Granberry-Higdon’s expenses are covered by what she receives from social security and her husband’s 401k, but not all of them. She worked as an aide in Jefferson County Public Schools for 16 years before retiring. She takes on long-term sub roles now to make it easier to care for her husband, a stroke survivor with type 2 diabetes. When schools shut down in March, she filed for unemployment.

She received one payment in April, only to have her benefits mysteriously stop until June 17. By that time substitute teachers were supposed to be ineligible, but she got paid for about six weeks. That income mostly went towards her husband’s medical supplies. When that money wasn’t coming in, Granberry-Higdon’s husband had to ration insulin and insulin pumps.

In August, the unemployment office said she was overpaid about $3,600. Granberry-Higdon didn’t get a chance to appeal before the 15-day window closed.

She paid off all but $210 of that original bill, but when she logs onto the unemployment system website, her account inexplicably says she owes $7,413, far more than what she was allegedly overpaid.

An Uphill Battle

The unemployment office hears appeals from those billed for overpayments. Both the employer and the former employee give testimony and both sides are entitled to a lawyer, but most unemployed people don’t bring one.

Substitutes from JCPS come up against the law firm Wyatt, Tarrant & Combs, which the district keeps on retainer to handle legal matters including unemployment hearings at a cost to taxpayers of $175 per hour.

Most unemployed people won’t have a lawyer during this process. JCPS teachers who have been through the first level of appeals try to stem the knowledge gap with shared advice on social media.

Consistently, some teachers say, JCPS lawyers argue that substitute teachers were not unemployed because school was on a break, and that work will pick up in the fall. Four that spoke to KyCIR felt like the appeals officer favored JCPS.

Sanderson still decided to fight back, and found a lawyer.

For him, the issue is simple. Somebody made a mistake. But it wasn’t him, or the other substitute teachers in his shoes.

“I’m generally a principled-type guy, but I’m also pretty much about common sense and I don’t think this thing is fair,” Sanderson said.

Devon Skeens, Sanderson’s attorney, argued at his appeal hearing that since substitute teachers weren’t ever eligible before Beshear’s executive order, that order should be the ruling document — not the existing rules for permanent teachers that bar benefits when school isn’t in session. 

But the appeals officer maintained that Sanderson was ineligible for benefits received after May 31. Sanderson has filed another appeal before the unemployment commission and is waiting on that decision.

Regardless of who is at fault, Skeens says it is ultimately vulnerable Kentucky workers who will pay the price. “This is where the rubber meets the road between the citizenry and their government,” Skeens said.

Beshear said last month that people who are overpaid in unemployment benefits to “save that money, because we may need to ask for it back.” Saving was not an option for Sanderson. Most of the money he received through unemployment went towards fixing a broken-down car in June.

“Believe me, I wasn’t out squandering the money, buying this and buying that,” Sanderson said.

Contact Jared Bennett at

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Gov. Beshear: Save Unemployment Money In Case Of Overpayment Debt Monday, Oct 19 2020 

At the daily coronavirus briefing on Monday, Gov. Andy Beshear acknowledged that Kentucky mistakenly overpaid people who requested unemployment benefits — and advised recipients to save that money if they’re notified of an investigation because the state may eventually ask for it back.

“We ask people, obviously, to save that money,” Beshear said while under quarantine at the Governor’s mansion.

As the pandemic stretches on, many Kentuckians who received unemployment insurance payments are learning the unemployment office deemed them, retroactively, ineligible. As KyCIR reported last week, many filed their unemployment claims after Beshear said his administration was expanding coverage to people who were afraid of catching the virus at work — only to be disqualified months later because the state said they took a “voluntary leave of absence.” 

[READ: Gov. Beshear Offered ‘Self-Quarantine’ Unemployment. Now State Is Backtracking — And Billing]

People who owe overpayment debts to state and federal unemployment agencies may be forced into a payment plan, face civil action or have future benefits docked to pay down the debt.

Beshear said the state will handle the overpayments issue eventually, but that the state’s top priority right now is to resolve the over 90,000 unemployment claims that were filed but haven’t been processed.

In the meantime, Beshear said people who think they may have been overpaid should watch their emails for an overpayment notice and save the money they’ve received. 

Beshear said the state will get to the overpayments issue eventually. 

“People who believe they are overpaid should wait for an overpayment determination before repaying,” Beshear said. “Claimants should watch their email for overpayment notices because the appeal period is limited.” Claimants have 15 days to file an appeal one they are notified of an overpayment.

Other states are also clawing back unemployment overpayments, as Beshear noted on Monday, but Kentucky’s unemployment office has been especially harried in its response to the pandemic. In May, the state fired its newly installed director of unemployment insurance at a time when no state had a larger share of its workforce on unemployment than Kentucky. The system required a $865 million loan from the federal government in June to bolster the unemployment insurance trust fund.

KyCIR reported in August that Kentucky’s unemployment office had violated federal rules by automatically approving self employed or independent contractors who applied for unemployment, likely creating overpayments like the ones addressed by Beshear on Monday. Kentucky entered into a corrective action plan with the federal Department of Labor that includes pursuing overpayment debts that stem from the state’s mishandling of unemployment claims.

Beshear’s office previously told KyCIR the overpayments for people who self-quarantined over a reasonable fear of catching COVID-19 at work were the result of shifting policies from the federal government.

A spokesperson for the Department of Labor, however, said in a statement that guidance alluded to by the governor’s office “did not change any policies, but clarified operating guidance based on state questions.”

Kevin Kinnaird, an information specialist at the Kentucky Labor Cabinet, said that the federal government’s guidance did in fact change. 

“Whether you call it changing or clarifying, the Department of Labor’s position shifted,” Kinnaird said in an emailed response to the federal government’s assertion.

“The state disagrees with the tightening of eligibility in the midst of a pandemic and global recession, when millions are struggling, and Kentucky will join other states to request flexibility to waive overpayments for Kentuckians who are self-quarantining during this pandemic to protect their health or reduce exposure for a loved one at higher risk,” Kinniard said.

Most states allow their respective unemployment agencies to waive overpayment debts when the claimant is not at fault. Kentucky is one of just 10 states without such a provision in state law.

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Gov. Beshear Offered ‘Self-Quarantine’ Unemployment. Now State Is Backtracking — And Billing Wednesday, Oct 14 2020 

Tracey Hayes was working as a retail merchandiser in March, arranging products on store shelves around Glasgow to promote sales, when she decided she couldn’t risk exposing her mother to the coronavirus or handle child care for her two children by herself.

Hayes had been watching Gov. Andy Beshear’s daily coronavirus briefings, and she was sure Team Kentucky would have her back.

“I watched him everyday. He said, ‘Healthy at home,’” Hayes said. “So I was healthy at home.” 

Hayes stopped working, cared for her children and mother and avoided adding to Kentucky’s mounting number of coronavirus cases. She filed an unemployment insurance claim on March 27. For eight weeks, she received $112 weekly in unemployment, plus the extra $600 payment established in the CARES Act.

But in May, the unemployment office called to say they were investigating her claim. 

“I remember pulling over into the parking lot of a church. At that point I was shaking. I couldn’t drive,” Hayes said. 

Soon after, she got a bill ordering her to pay back every cent she’d received.

Hayes told the state she was just doing what Beshear had instructed. Their response was, essentially, that Beshear never told anyone what to do. Despite what she heard the governor say during his daily briefings and what she read in his executive orders, Hayes simply wasn’t eligible.

The governor’s office did not respond to a request for comment.

Hayes is one of many people who received unemployment benefits in Kentucky during the coronavirus pandemic and are now learning they were retroactively deemed ineligible. Not only does this cut people off from unemployment for crucial months during the pandemic, many of those found ineligible now owe a debt to the state or federal government that could mean their tax refunds or other money get garnished.

The number of people affected is unclear because the unemployment office didn’t respond to KyCIR’s questions, including how many recipients were later deemed ineligible. 

Kentucky’s unemployment system is under immense pressure during the pandemic: By May, Kentucky had the largest share of its workforce on unemployment benefits in the country, and the state’s unemployment insurance trust fund required an $865 million loan from the federal government to stay afloat over the summer. 

Several unemployment insurance lawyers told KyCIR they are hearing from more people who were denied eligibility than ever before, and many of them self-quarantined. The unemployment office approved their claim and started issuing payments, only to reassess after the fact and find those workers ineligible.

Hayes has challenged the practice in a lawsuit filed in the Monroe County Circuit Court. The eventual ruling on that case could extend to others who self-quarantined based on what she heard the governor say at his briefings.

The unemployment office has not yet responded to a request for comment submitted on October 6. That same day, Labor Cabinet attorney Amy Cubbage stepped to the podium during Beshear’s briefing to talk about the new, $400-weekly federal unemployment program. This time, Kentuckians watching heard a different message about who was eligible: “Unfortunately, fear of getting COVID is not enough to qualify.”

The Appeals Process

[/media-credit] Tracy Hayes

When the coronavirus made its way to Kentucky, Hayes was working for two companies: Driveline Retail Merchandising and SPAR Field Services.

She traveled to as many as three crowded stores a day.

She remembers building a barrier of shopping carts to try to keep customers six feet away from her and her coworker as they set up display stands of cosmetics, coloring books and CBD products.

Driveline paid her $10 an hour. It didn’t seem worth it.

“I just thought I was playing Russian roulette for, like, makeup,” Hayes said.

Both of her employers had signaled they would support workers who decided to stay home: An administrator at SPAR Field Services sent an email to employees that explicitly said workers would be eligible for unemployment, should they decide they needed to stay home.

Driveline CEO Randy Wilson sent a company wide email on March 22 saying the company would support employees with any decisions they made for the health and welfare of their families. Hayes worked her last shift on March 24 and emailed human resources to say she didn’t feel safe coming into work.

At that time, Beshear was talking about unemployment insurance almost daily at his coronavirus briefings. On March 25, the governor told Kentucky he had some good news: The state was expanding unemployment insurance to new categories of people, including contract workers, substitute teachers and “anyone who has had to leave their job because of quarantine.”

“This means that so many of you who are out there, who were worried, are now able to file, and we want you to,” Beshear said. While he spoke, viewers saw a slide which said people were eligible for unemployment if they were leaving their job due to a “reasonable risk of exposure (self-quarantine).”

Hayes thought this sounded like her, so she filed an unemployment claim on March 27. She could only put one employer in the application portal, so she listed Driveline. She sent an email to the unemployment insurance assistance account to follow up and explain her situation, but she got back a form response.

The state approved Hayes for about the same amount she’d be making if she was working full time, but much of that went towards childcare and supporting her mother.

The unemployment office began investigating her claim after it contacted her employer, as it always does to confirm that claimants lost their jobs through no fault of their own.

Driveline told the unemployment office that Hayes wasn’t fired and there was work available, according to an email from Driveline’s human resources contractor. The state worker told Hayes that meant she wasn’t eligible for the unemployment benefits she had already been receiving for eight weeks. The payments would stop immediately.

Driveline, headquartered in Coppell, Texas, has not responded to multiple calls for comment. Its human resources contractor, Trion Solutions, did not respond to an emailed request for comment.

Not every decision results in an appeal, but data suggests more claimants have been filing appeals as the pandemic stretches on. Appeals climbed 129% between May and August, according to data from the Department of Labor.

Employers often challenge claims because sending too many workers to the unemployment office can result in higher taxes in the next fiscal year. The Beshear administration removed some of that pressure in March by charging all UI claims straight to the unemployment insurance trust fund instead of individual companies’ accounts. But some companies still oppose claims.

Stephanie David worked at United Collections Bureau, a collections firm based in Indiana, when the pandemic hit.

She remembers working elbow-to-elbow and sharing computers with her coworkers. As businesses closed one after the other, David said her coworkers took bets on when their office would close. 

But the office stayed open. Human resources told employees that if they didn’t feel comfortable coming into work, they could stay home and wouldn’t be penalized. David lives with her mother and sister, and all three of them suffer from chronic conditions that make them especially vulnerable to the virus. 

David was told she could apply for unemployment benefits in Kentucky, where she lives, or Indiana, where she worked. She chose Kentucky and filed on March 29.

David was approved, and started getting payments. But in July, she learned her claim was under investigation because she left work voluntarily. The unemployment office considered David ineligible.

She appealed that decision and a hearing before the unemployment office was set for September 16. Her ailing grandmother was receiving end-of-life care at the time, and her heart rate plummeted a few minutes before the scheduled hearing. David was busy calling family members and arranging last goodbyes, and she called into the hearing late. She wasn’t allowed to present her case.

Now, David owes $2,592 to Kentucky and the federal government. 

Kentucky is evaluating her for federal unemployment benefits, but David may not qualify since the state believes she left work voluntarily. Even if David is found eligible for federal unemployment, the state will withhold 25% of her future benefits to pay her new “overpayment” debt.

It will be weeks before the first checks arrive. David doesn’t think that’s fair. 

“I’m thinking, how many more weeks can I go without any money?” David said. “We’re barely making it right now.”

A Reasonable Risk

Hayes was scheduled for her appeal on June 29, a phone hearing where she could make her case before a referee from the unemployment office.

Unlike most workers who appeal unemployment decisions, Hayes found an unemployment law attorney to represent her during the process: Robyn Smith, who at times has taken an adversarial role towards the unemployment system. She’s filed lawsuits challenging the unemployment system’s actions that have made it all the way to the Kentucky Supreme Court.

People come before the unemployment system at a low point in their lives, Smith says. Even if they win, they face weeks without any income.

“That starts people down a spiral. They’re not in a strong place, they’re making decisions that they don’t have any confidence in,” Smith said.

The unemployment office usually sides with employers when it finds workers ineligible for unemployment benefits. In 2019, the office issued 11,902 rulings on appealed eligibility claims in 2019, according to an annual report on the unemployment insurance trust fund. In cases where claimants were found ineligible for unemployment and appealed, the office ruled in favor of the claimant in 32 percent of its decisions.

Smith argued Hayes was following guidance from the unemployment office that said workers could self-quarantine if there was a reasonable risk of exposure in the workplace.

An executive order issued March 25 says that people were eligible for unemployment benefits if they left work due to a “reasonable risk of exposure (self-quarantine).” An employer handbook prepared by the unemployment office in April says that “if the employer and employee disagree about what is considered reasonable accommodations, those UI claims will have to be decided by a UI staff member on a case-by-case basis.”

Driveline’s representative never mentioned any accommodations made to keep workers safe at the appeals hearing, according to a recording of the proceedings. They simply said it was Hayes’ decision to stay home from work. When asked if she could think of any reason other than COVID-19 that Hayes wasn’t working, Driveline’s representative said no.

In her closing statement, Smith said that the coronavirus forced Hayes’ to lose work “by the fact that no reasonable employee in Ms. Hayes’ position would continue to expose herself to a germ that could have killed her mother.”

Driveline’s representative did not give a closing statement. They hung up before the hearing was over.

The referee determined that Hayes was on a voluntary leave of absence —  and thus, ineligible for the benefits she had already received. The evidence presented in this case establishes that the claimant was on a leave of absence from March 22, 2020, through June 15,” the referee wrote in a decision mailed to Hayes in July. “The employment relationship continues while the claimant is on a leave of absence.”

The unemployment office sent Hayes a bill for $896 in overpaid benefits and a request for at least $75 a month from Hayes, who had no income. Since she also collected the extra $600 in weekly federal unemployment payments, Hayes also owes nearly $4,200 to the federal government. Kentucky is bound by law to pursue this debt to the federal government.

James Maxson, an unemployment insurance lawyer, says he regularly hears from workers like Hayes — and he said the unemployment system is generally designed to say no to claimants. 

Maxson served as in-house counsel of Kentucky’s Office of Unemployment Insurance from 2008 until 2016. 

Maxson said pressure on the unemployment insurance trust fund may be leading Kentucky to reject the claims of people like Hayes, who were previously approved for state-based unemployment insurance, and shift them to federally paid benefits like the Pandemic Unemployment Assistance (PUA) program created by the CARES Act.

“It seems to me that some people who seem like they do have legitimate claims for unemployment benefits are being denied,” Maxson said,  “but kind of dangled the promise of PUA as a plan B.” The unemployment office did not respond to questions about this allegation.

PUA is paid by the federal government, but is usually less money than state aid and has more stringent requirements for what counts as unemployment directly tied to COVID-19.

The Commission 

Hayes had another chance to appeal the unemployment office’s decision by bringing her case before the Unemployment Insurance Commission.

The three-person commission is tasked with reviewing decisions made by the lower appeals process. They don’t hear new evidence, and instead review the facts of the previous hearing to determine if the unemployment office implemented its own regulations fairly. Dondra Meredith became the commission’s chairperson over the summer.

Meredith worked previously as a lawyer with the unemployment office. Muncie McNamara, Kentucky’s ex-unemployment director, objected to Meredith’s appointment because he said her experience gave her firsthand knowledge of the administration’s intentions for unemployment insurance, and the commission’s chairperson is supposed to be an independent arbiter of Kentucky’s policy.

Before he was fired in May, McNamara was told in writing to stop commenting on appointments to the unemployment commission, according to a written reprimand obtained through an open records request.

Meredith’s name didn’t appear on a recent commission decision; the state didn’t respond to questions about the commission’s current makeup. Meredith is a deputy executive director with the Education and Workforce Development Cabinet, according to a state salary database.

But when Hayes’ case came before the commission, Meredith as the chairperson issued her decision alone as the only attendee that day. Meredith maintained the decision made by the unemployment office’s referee on August 24 and decided in favor of Driveline.

In arguing against Hayes’ unemployment benefits, Meredith wrote that Hayes’ claim that she was following the governors order was “unfounded.”

The governor’s executive order says “all citizens of Kentucky are encouraged to take all feasible measures to engage in appropriate social distancing to prevent the spread of the disease,” Meredith wrote. However, “the order does not ‘direct’ any action by private sector essential employers or essential workers.”

Having lost the original decision, the appeal and before the unemployment commission, Hayes filed a lawsuit on September 13 against Driveline, the Kentucky unemployment office and unemployment commission, Labor Secretary Larry Roberts and Lt. Gov. Jacqueline Coleman as secretary of the Education and Workforce Development cabinet.

Hayes’ appeal alleges the unemployment office and commission are deliberately blaming  workers “for workplace safety circumstances they do not choose and cannot control.”

On October 4, Hayes was approved for pandemic unemployment assistance, a different federal benefit, that would retroactively cover four weeks in June and July when she was unemployed but did not receive benefits. Hayes will still pursue her case against the unemployment system to settle the matter for the potentially thousands of others in her situation.

Judge David Williams in the Monroe Circuit Court will hear motions in this case on October 15.

Hayes, meanwhile, is back at work for Driveline and SPAR Services. She doesn’t feel any safer, she says. Barren County, where most of Hayes’ work is located, has seen over 860 cases of the virus. “I don’t have the luxury to worry about safety now,” Hayes said.

Hayes says she doesn’t watch Beshear’s briefings anymore.

The post Gov. Beshear Offered ‘Self-Quarantine’ Unemployment. Now State Is Backtracking — And Billing appeared first on Kentucky Center for Investigative Reporting.

State Violated Federal Rules In Rush To Pay Some Unemployment Benefits Thursday, Aug 20 2020 


By late April, Kentucky’s unemployment insurance office was handling more than a hundred thousand claims a week, and Gov. Andy Beshear was urging anyone who was out of work to apply during his daily briefings.

He said the state was doing everything in its power to swiftly get money to people who lost work due to the coronavirus.

In its haste to help cash-strapped Kentuckians, however, Kentucky’s unemployment office took shortcuts that violated unemployment policies and drew criticism from federal officials in Washington, according to emails obtained by KyCIR through a public records request.


Kentucky Violated Federal Rules In Rush To Pay Some Unemployment Benefits Thursday, Aug 20 2020 

By late April, Kentucky’s unemployment insurance office was handling more than a hundred thousand claims a week, and Gov. Andy Beshear was urging anyone who was out of work to apply during his daily briefings.

He said the state was doing everything in its power to swiftly get money to people who lost work due to the coronavirus.

In its haste to help cash-strapped Kentuckians, however, Kentucky’s unemployment office took shortcuts that violated unemployment policies and drew criticism from federal officials in Washington, according to emails obtained by the Kentucky Center for Investigative Reporting through a public records request.

The U.S. Department of Labor, which oversees unemployment insurance, had gotten wind that Kentucky was mishandling payments to independent contractors and self-employed workers by automatically approving applicants for the state’s minimum weekly amount, plus the $600-a-week in extra federal money offered in response to the pandemic.

That got benefits out the door faster, but at a cost: The state was likely underpaying some workers while violating the CARES Act, which required states to determine how much money workers were eligible to receive before starting payments.

“Hoping that’s not the case,” wrote Gay Gilbert, the U.S. Department of Labor’s administrator of unemployment insurance in an email sent on April 20 to Kentucky’s executive director of unemployment, Muncie McNamara. “[B]ut can you confirm?”

McNamara responded three hours later to Gilbert’s email to confirm: yes, Kentucky had indeed been automatically providing applicants with the minimum payments. But in his email, McNamara attributed much of the confusion to Gilbert’s agency.

McNamara wrote that Kentucky’s leadership was frustrated with the lack of timely guidance from the federal government, which he described as “more of an obstacle.”

“Frankly, I feel like Kentucky is being punished for acting quickly, as we were encouraged to do,” McNamara wrote in his email. McNamara was quietly fired two weeks later, as KyCIR reported last month

Marjorie Arnold, chief of staff at the Kentucky Labor Cabinet, which now oversees the unemployment office, said in an email that McNamara’s correspondence with Gilbert “[does] not represent the Kentucky Labor Cabinet’s position with respect to the U.S. Department of Labor, but are representative of the type of unprofessional behavior that was exhibited on a regular basis.”

“As with any emergency program, federal guidance evolved over time, and as issues arose, the Office of Unemployment Assistance worked diligently with U.S. Department of Labor personnel to implement guidance as it was provided,” Arnold said.

McNamara said his supervisor at the unemployment office was aware of the tone and content of the email. He added that he was fired without cause.

A spokesperson for the Department of Labor said that many states had issues implementing the new unemployment policies, and that it is working to make sure states follow federal law.

Kentucky Problems

In the week before Gilbert’s email, Kentucky’s unemployment agency handled just over 103,000 initial unemployment claims.

The agency was scrambling to keep up with the influx of claims by adding staff to operate phone lines and answer questions. Congress had weeks earlier authorized the Pandemic Unemployment Assistance program, which allocated unemployment funds for state agencies to distribute to newly unemployed independent contractors and self-employed workers who lost work due to the coronavirus pandemic.

It was the states responsibility to calculate how much money such workers were eligible for based on previous earnings. The best way to do that would be to use earnings statements from tax filings. However, the deadline to file taxes was pushed back to July, so states like Kentucky didn’t always have the documents they’d need to quickly calculate eligibility and start paying benefits.

Kentucky’s solution was to approve every claimant for the minimum benefit, initially set at $180 a week, plus the additional $600 payment also authorized by the CARES Act.

“We decided it best to pay the minimum and the $600 to eligible PUA recipients so we could give them assistance as quickly as possible,” McNamara wrote to Gilbert.

This could result in underpayments, where the state paid unemployed workers less than they were entitled to, but McNamara wrote that if the agency later determined the individual was eligible for more money, the state would pay them in arrears and “make them whole.”

In a later email, Gilbert raised another issue with Kentucky’s administration of the federal unemployment program that could pose a more serious problem for people receiving benefits. The payments to independent workers were only supposed to be available to those whose unemployment was directly tied to COVID-19. Under federal guidelines, those workers were supposed to certify that the COVID-19 related conditions that led to their unemployment persisted for every week they filed a claim.

Gilbert attached a notice sent to people receiving benefits from Kentucky’s unemployment office that showed the state wasn’t asking people to certify their unemployment situation on a weekly basis, as required.

A spokesperson for the federal Department of Labor said it is working with states to correct policy violations such as these, but that states “may also be required to take specific corrective actions that may require reconsidering claims that may have been improperly determined as eligible for payment.”

Kentuckians who receive unemployment payments that are reconsidered and later determined to be improper will have to pay that money back. The state can collect on unemployment overpayment debts by withholding future benefits or even taking recipients to court.

Marjorie Arnold of the Kentucky Labor Cabinet said that Kentucky is “obliged to attempt to recover improperly paid benefits in accordance with federal and state law.”


In his emails to the federal Department of Labor, McNamara said he was frustrated, and this frustration was shared by other officials in Kentucky’s unemployment office.

McNamara said the federal Labor department was slow to provide guidance, or at times gave guidance that conflicted with earlier policies. For example, McNamara said the federal government had initially set Kentucky’s minimum weekly benefit amount for independent contractors at $180, only to lower that amount to $174 in later guidance. “These may seem like minor things but given the volume of claims we have this represents a tremendous amount of money,” McNamara wrote.

The issues were compounded by the fact that neighboring states were moving slower than Kentucky. Indiana didn’t start accepting claims from self-employed workers and independent contractors until April 24, nearly a month after Kentucky. McNamara thought Kentucky was bearing the cost of that delay.

“As a result of their tardiness, people who live in Indiana and might be an independent contractor or self-employed doing business on both sides of the river are applying for PUA benefits in Kentucky, because we are making payments and Indiana isn’t,” McNamara wrote to Gilbert.

‘Extremely Concerned’

When Gilbert responded two weeks later, the federal unemployment administrator was conciliatory. “Having been in your seat as a state UI director, I understand why there is sometimes frustration and tension when our system is asked to quickly ramp up new and complex programs,” Gilbert wrote on May 4.

However, Gilbert said that the federal government was “extremely concerned” that Kentucky and other states were not implementing unemployment programs properly. Gilbert wrote that states needed to make sure payments were going to eligible claimants and not just simply make payments and determine eligibility later.

McNamara never got a chance to respond, however. He was fired the next day, and emails show interim unemployment director Stefanie Ebbens Kingsley scheduled a call with Gilbert to talk about the issues with Kentucky’s unemployment process.

When McNamara was invited to testify before a legislative committee last month about the state’s unemployment office, he mentioned that Kentucky’s rush to pay unemployment benefits resulted in errors that delayed claims for months at a time. He also said they were clearing holds on unemployment claims in bulk, without investigating the claims individually, until the federal government ordered them to stop.

The post Kentucky Violated Federal Rules In Rush To Pay Some Unemployment Benefits appeared first on Kentucky Center for Investigative Reporting.

In Kentucky, Unemployment Checks Are Docked For Old State Debts Thursday, Aug 6 2020 


Kimberly Iacono lost her job when the Bardstown Cracker Barrel closed its dining room in March.

Kentucky’s unemployment office approved her benefits but deemed her eligible for only $114 a week from the state, far less than she’d normally take home in tips as a server. Iacono has seen that modest check reduced even further because the Kentucky Office of Unemployment Insurance says she owes them $6,570. 

The office alleges she was overpaid eight years ago, and they docked her checks during the pandemic to begin reducing that debt. At one point, they asked Iacono to pay them $600 a month. Iacono was shocked. 


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