Florida, other states should act to minimize fraud in jobless aid, feds say

More care should be taken to certify applicants’ eligibility and wages, an inspector general for the U.S. Department of Labor says.
A U.S. Department of Labor assistant inspector general said this week that states should take more steps to make sure that Pandemic Unemployment Assistance, which was created to help displaced independent contractors and gig workers like rideshare drivers, is not paid to fraudulent applicants. (AP Photo/Jeff Chiu, 2013)
A U.S. Department of Labor assistant inspector general said this week that states should take more steps to make sure that Pandemic Unemployment Assistance, which was created to help displaced independent contractors and gig workers like rideshare drivers, is not paid to fraudulent applicants. (AP Photo/Jeff Chiu, 2013)
Published May 27, 2020|Updated May 28, 2020

Florida has been slower than other states to pay pandemic unemployment assistance to gig workers, but a report Wednesday warned of a different risk:

Paying too fast, and to the wrong people.

“States need to implement measures,” such as requiring applicants to better document their earnings, “to establish and maintain integrity” in the new federal Pandemic Unemployment Assistance program, U.S. Department of Labor assistant inspector general Elliot Lewis wrote in a memo.

The report cites no examples of fraud, but said the risk within the $110 billion national program is significant.

Relying solely on the word of applicants “without evidence of eligibility and wages" makes the program “highly vulnerable to improper payments and fraud” and “presents substantial risks of the likelihood of loss of millions of taxpayer dollars,” Lewis said.

Congress created the Pandemic Unemployment Assistance program in late March as part of the $2.2 trillion CARES pandemic assistance law.

The goal was to provide $600 a week to displaced workers who had not previously been eligible for state unemployment benefits, including gig workers like Uber drivers, independent contractors, the self-employed and members of the clergy.

Related: Gig workers have changed Florida's workforce. The federal response to the pandemic is beginning to reflect that.

But the money is paid through the states, and Florida has lagged behind many other states when it comes to paying Pandemic Unemployment Assistance.

It took Tallahassee officials weeks to set up a separate system to handle the applications. Since then, independent contractors say the application process for them is just as a flawed and balky as the state’s regular unemployment program for regular workers.

Applicants interviewed by the Tampa Bay Times described a frustrating process: First they said they had to apply for state benefits even though they weren’t eligible for help from the state because they had not paid into the unemployment insurance program.

Only after the state officially declares them ineligible for the state aid does the website let them apply for the new federal benefits, they said.

As of Tuesday, the state said it had paid $49.1 million in Pandemic Unemployment Assistance to 90,020 Floridians. That’s less than a 10th of the 1 million displaced workers who have received a total of $3.5 billion in all types of unemployment aid.

The amount Florida has paid out also is less than what states with smaller populations — among them Maryland, Colorado and New Jersey — paid out weeks ago.

Related: Florida lags in paying Pandemic Unemployment Assistance

The Department of Economic Opportunity “appreciates the comments from the U.S. Department of Labor Office of Inspector General and will take those into account as we continue to administer Pandemic Unemployment Assistance,” agency press secretary Paige Landrum said in an email Wednesday.

Meanwhile, in a case that may or may not be related to the Pandemic Unemployment Assistance program, a Pasco County man who did not apply for any unemployment benefits has begun receiving checks in the mail.

Follow trends affecting the local economy

Follow trends affecting the local economy

Subscribe to our free Business by the Bay newsletter

We’ll break down the latest business and consumer news and insights you need to know every Wednesday.

You’re all signed up!

Want more of our free, weekly newsletters in your inbox? Let’s get started.

Explore all your options

And he’s worried.

“I can’t see any reason why I would receive money,” said John Dermody, 61, of Hudson. “How do I turn this money back in?”

Dermody, who has continued working as facilities manager for Draper Laboratory in St. Petersburg during the pandemic, said he was mailed two paper checks from the state Department of Economic Opportunity last week.

He applied for unemployment benefits during a brief period between jobs 16 years ago, but not since. The checks totaled about $860 and do not indicate which unemployment program is the source of the money. He has not cashed them, and when he has tried to call the state’s toll-free number listed on the checks, he can’t get through.

“We will be happy to look into Mr. Dermody’s account,” Landrum said.

Dermody said he’s worried that someone might be using his name to seek unauthorized payments. Last year, he said, someone using his name got his bank to mail a new credit card to an address on Florida’s East Coast.

He also wants the money to go to the people who need it.

“It’s a shame that this is all happening,” he said. “Eighty percent of the people are probably good, law-abiding people. But it’s that other 20 percent that’s going to try to take advantage of the situation.”

Times staff writer Zachary T. Sampson contributed to this report.

• • •

Unemployment benefits: More information

For more information about receiving Pandemic Unemployment Assistance in Florida, click here. For information about state unemployment benefits in general, click here.

• • •

Tampa Bay Times coronavirus coverage

GET THE DAYSTARTER MORNING UPDATE: Sign up to receive the most up-to-date information, six days a week

WHAT’S OPEN?: This list includes local establishments doing business in various ways.

LOCAL RESTAURANTS: The updated database of Tampa Bay restaurants open for dine-in or takeout

UNEMPLOYMENT Q&A: We answer your questions about Florida unemployment benefits

BRIGHT SPOTS IN DARK TIMES: The world is hard right now, but there’s still good news out there

LISTEN TO THE CORONAVIRUS PODCAST: New episodes every week, including interviews with experts and reporters

HAVE YOU LOST SOMEONE YOU LOVE TO COVID-19?: Help us remember them

HAVE A TIP?: Send us confidential news tips

We’re working hard to bring you the latest news on the coronavirus in Florida. This effort takes a lot of resources to gather and update. If you haven’t already subscribed, please consider buying a print or digital subscription.