Update: State lawmaker calling for DWD transparency, ‘culture change’ as reports rise of unemployment debt

MADISON, Wis. — A Republican state lawmaker is calling for more transparency and a ‘change of culture’ from Wisconsin’s Department of Workforce Development as reports rise of people receiving bills from the state, often charging the receiver thousands for overpaid unemployment benefits.

In multiple reports, News 3 Investigates and other media outlets have reported people receiving tens of thousands in bills, due to filing mistakes the state blames on the claimants. A N3I report this week found these bills could cost claimants hundreds a month, and warrants for unpaid debt are on track to double this year from both 2019 and 2020.

“I have a 21-year-old constituent right now, a single mother, who they claim owes $10,000 in overpayment. They have a lien on her property already,” Rep. Barbara Dittrich (R-Oconomowoc) told News 3 Investigates. “I have constituents being told they owe thousands of dollars in overpayments, and they in fact don’t. They’re just trying to get straightened out with DWD. And they can’t get a hold of anyone, or they can’t figure out how to use the system, or there are glitches with it. And no one will help them when they get ahold of the DWD.”

News 3 Investigates has heard from several in similar predicaments, who say they are unable to figure out where the error is and say the state is at fault for not having a clearer system and better communication.

The DWD has encouraged claimants to contact collections specialists to work out payment plans, and cite policies implemented in March that allow greater flexibility. However, the agency’s own guidance for payment plans allows only up to three years to pay off the largest debts–guidance that the DWD says supervisors can adjust based on a claimant’s ability to pay.

Waivers are available to those who have gotten overpayments due to a state error, but for the overwhelming majority, the DWD is blaming filers for the error.

After a year where unemployment skyrocketed and people ended up with extra federal unemployment benefits and months away from work due to the economy or health and safety concerns, bills for overpayments are far higher than they have commonly been in the past, employment attorneys say.

“Flexibilities have been further expanded since the pandemic began, including extending temporary payment plans for up to six months,” a spokesperson said in an email in response to an earlier report. “[Payment plan] listed amounts are guidelines to help determine which policy applies and provide for flexibility in negotiating payment plans within the guidelines.”

When Rep. Dittrich was asked whether the Republican-led legislature should have sent more funding and resources to the DWD to help them address the higher-than-ever demand, she said it was a culture problem, not financial.

“It’s a culture problem–not a money problem, not a computer problem at that department,” she insisted. “It’s a culture problem.”

She added that more leniency for debt may not be the solution, saying there needed first to be more information on the issues driving the rise in bills.

Join investigative reporter Naomi Kowles on For the Record this Sunday, August 15 for more on the overpaid unemployment benefits situation.