Department of Labor admits it overcharged unemployed Pennsylvanians millions of dollars
HARRISBURG — Just one day after Spotlight PA contacted the Department of Labor and Industry with a list of questions about a serious error that overcharged unemployed Pennsylvanians millions of dollars in interest for a decade, the agency announced Friday it will issue refunds.
Each year, interest accrues on money people owe to the department because, for various reasons, the state overpaid their unemployment benefits. A Spotlight PA investigation found the Department of Labor and Industry, from 2006 to 2016, did not use interest rates set annually by the state Revenue Department, which ranged between 3% and 8%.
The agency instead charged a fixed, 9% interest rate, because it failed to adjust the number annually in the computer system that processes payments. The department said this was an oversight after a 2005 legal change.
In its response to questions from Spotlight PA, the department on Friday said 250,000 people “were affected by the interest overcharge” and estimated that it owes at least $14 million in refunds, which it said amounts to less than $50 for most people.
Read more: https://www.spotlightpa.org/news/2021/07/pa-department-of-labor-unemployment-claims-overpayment-interest/