For the first time ever, the Pennsylvania Department of Labor and Industry will be offering amnesty for individuals or businesses who owe money to the unemployment compensation fund.
Department spokeswoman Sarah Goulet said currently about $613 million is owed to the fund.
“It works out to be 130,000 individual claimants who are eligible to participate in amnesty and the over payments that are due there are about $356 million,” she said, “and there’s about 50,000 employers who need to pay into the state’s UC trust fund through UC tax, and they owe $256 million.”
There are several ways a person or business ends up owing money to the UC fund. One way is through outright fraud, or what’s referred to as a fault overpayment. That’s where a claimant has purposely misrepresented themselves. Fault overpayments accrue interest and penalties, so during the amnesty period someone who owes an at-fault fee must pay the principle but only half of the penalties and interest.
There are also non-fault overpayments, which occur through an application mistake on the part of the applicant or business.
“For example, a real common non-fault overpayment is where someone assumes that when they start a new job, they are eligible to continue to receive benefits until they get their first paycheck, when in fact it’s the first day you start your new job you’re no longer eligible for payment,” Goulet said.
During the amnesty period, those who owe non-fault overpayments are only required to pay back half of what they owe and will not be charged interest or penalties.
Another category is businesses that owe money.
“There are sometimes misrepresentation by someone who’s taking care of their taxes for them, or it may be they simply don’t understand what they have to do,” Goulet said, “so that’s part of this campaign as well, educating people on what you need to do to avoid having an overpayment whether you’re a claimant or an employer.”
Goulet said this gives those who owe money a chance to clean up their credit record and no longer have the overpayment hanging over them. The amnesty is being offered as a way to recoup costs that may otherwise be obtained after an investigation and prosecution, which is an added expense for the department.
“And it’s one that you don’t want to necessarily take on based on not a large sum of money being owed, and some of these overpayments are not particularly high dollar amounts, so it’s an opportunity for us to recoup that money for the fund, but not go through the great expense that prosecution or investigation would take,” Goulet said.
The amnesty kicked off Friday at the Carnegie Library of Pittsburgh East Liberty, though the official amnesty period is June 1 through August 31. Payments can be made through a dedicated website, or a toll-free number. Those currently under an investigation for an overpayment are not eligible for amnesty.