Unemployment benefits are something many people rely on, especially in a down economy. But a 10 On Your Side investigation reveals that Virginia has overpaid unemployment benefits by nearly $500 million over the last three years.
According to the U.S. Department of Labor, Virginia overpaid unemployment benefits by 17.77%, the sixth highest total in the country.
The numbers came as a surprise to Sun Station owner Betty West. We spoke to West earlier this month, when she noticed an additional tax on her business.
10 On Your Side learned that the tax is to help the Commonwealth repay money it borrowed from the federal government to cover unemployment benefits.
On average small businesses are paying an extra $21 per employee.
West was angry to find out the Commonwealth overpaid so much in unemployment benefits.
"It's not the dollar amount, it's unfair to businesses having to pay for people on unemployment who shouldn't be getting the checks," she said.
The Virginia Employment Commission, which distributes unemployment benefits, points to a combination of people not actively searching for work, having a job but still collecting benefits, or not accurately reporting how they left their last job for the overpayment.
VEC Unemployment Insurance Director Bill Walton said states have different requirements for people collecting unemployment benefits, and it’s not necessarily fair to compare them.
"Up until this current year, Pennsylvania didn't even require a work search to receive benefits,” Walton said. “So when you compare states, you're not always comparing apples to apples. There are different laws that are unique to the states."
Walton said that the additional tax for businesses like Sun Station would likely be in place, even if the Commonwealth didn't have problems overpaying unemployment benefits.
He added the VEC works hard to recover any overpayment of benefits.
The VEC is also taking steps to hold people collecting benefits more accountable, which Walton believes will help bring down overpayment numbers.
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