State mistakenly tells San Antonio man to pay back $4,000 in overpaid unemployment benefits

KSAT 12 Defenders investigation finds he only owed $500

SAN ANTONIO – San Antonio resident Kelvin Taylor lost his job in May when the coronavirus pandemic forced his company to lay off workers.

Taylor did what hundreds of thousands of Texans have done this year: he applied for and got unemployment benefits. But within months, he got something else from the state: a notice he had to pay a lot of that money back, amounting to thousands of dollars.

“It’s a little over $4,000. My initial reaction was shock,” Taylor said. “It’s not like I used this money just to play with. It was to take care of me while I was going through this pandemic.”

Who wouldn’t be surprised to find out they owed that much money to the State of Texas after receiving unemployment benefits for two and a half months.

Taylor thought he had done everything right when he applied for benefits the day after his company laid him off.

“We became unemployed on May 8,” Taylor said. “I couldn’t file on that date. So the very next day I did.”

Taylor applied online and soon learned he would be receiving $506 per week, plus the $600 federal unemployment benefit from the U.S. Department of Labor.

In addition, Taylor’s former company received funding from the Small Business Administration through the CARES Act’s Paycheck Protection Program. The company would continue to pay Taylor his full salary until that money ran out.

Taylor said he got three checks and reported it as income to the Texas Workforce Commission.

“And then when (the checks) stopped, I started reporting zero earnings because I was looking for work,” Taylor said. “I was still out of work and they were sending the funds.”

Those unemployment payments continued until the end of July, when the Texas Workforce Commission notified Taylor his unemployment claim was found to be invalid and his benefits were being cut off. He would also have to pay back the more that $4,000 in benefits he already received.

“This is just not fair because you cannot pay people all of this money and then wait two to three months to say, ‘Oh, well, we’ve done our investigation and we found that your claim was not valid. So we want this money back,’” Taylor said.

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Documents sent to Taylor by the state said an investigation determined that he was not unemployed on the date he applied for benefits. That made no sense to Taylor until he noticed something: the state records showed he applied for benefits on May 3 instead of May 9.

“They showed that I applied on May 3rd and it looks like maybe that’s a clerical error. I’m not sure, but I know for a fact that you cannot apply for unemployment if you’re still working that day,” Taylor said. “If I was working today and let’s say my company lays me off today, I can’t go into the system and put that as my last day of work was today, because they’re going to say, well, you’re still technically working and the system would not allow you. You have to wait until the following day.”

Taylor immediately filed an appeal and tried repeatedly to reach someone at TWC.

“I’ve been trying to call them. No one picks up. No one answers the phone,” Taylor said. “That’s the most frustrating thing is that it’s been months since this pandemic started and the over overrunning of calls coming into TWC. By now, you should have a system in place to where people can get in contact with you.”

Taylor said when someone from TWC finally returned his call, they couldn’t help. It was an administrative assistant and she told Taylor it would be awhile before someone could hear his appeal.

“They haven’t given me any other information other than someone would contact you within eight to 14 weeks. And that was it,” Taylor said. “But in the meantime, continue to make your payments until we can look at your appeal.”

Frustrated, Taylor contacted the KSAT Defenders who reached out to a spokesperson for TWC.

Due to privacy issues, TWC said it couldn’t comment specifically on Taylor’s case but said they would look into the issue quickly. The next day, Taylor got a call from TWC. He learned a review of his case found he was overpaid but he owed a lot less than $4,000.

“Now, they still showed that I owed $500, but I see where that mistake came from and that was a mistake on my end so I’m okay with that,” Taylor said.

In addition to having the wrong date listed on his application for benefits, it appears some of the confusion stems from those P.P.P. loan paychecks Taylor got those first few weeks after being laid off.

While he reported the income and didn’t expect to be paid unemployment benefits those weeks, he said there wasn’t an easy way to explain that situation when he applied.

“The first question they ask you is, did you physically work? No, but I did earn some money and I’m reporting it,” Taylor said. “But at the same time, if you click no, it doesn’t give you the option to put the hours and earnings. So it reports as if you didn’t work. So they send you money.”

According to Cisco Gamez, a media and public relations specialist with the Texas Workforce Commission, mistakes happen but they are fairly uncommon.

In an email responding to questions from the Defenders, Gamez said, “Occasionally, TWC will make a mistake but based on past audits from the Department of Labor, for 2019 it was 4.1%. Texas' overpayment rate is the fourth lowest in the United States and the absolute lowest among large states. TWC itself was responsible for 0.406% of improper payments based on the US Department of Labor 2019 audit.”

When it comes to paying out unemployment benefits, Gamez said the state is required to send out those payments at the earliest stage of unemployment which the US Department of Labor has determined is approximately 21 days after a claim is filed.

Gamez wrote: “Meeting the prompt payment standards set by the US Department of Labor means that all state unemployment insurance agencies, not just TWC, must make eligibility determinations and benefit payment decisions before some relevant information which could change the original pay decision has been received. Unfortunately, that means that subsequent information received by TWC changes the outcome of the initial decision which results in an overpayment of benefits. All states struggle with reducing overpayments because of the burden they place on claimants. But in the end, TWC must comply with the benefit payment timeliness requirements prescribed in law and the resulting overpayments that are caused.”

While it’s unclear exactly what caused Taylor’s claim to be invalidated, he hopes the state figures it out so others won’t have to go through what he had to and that they improve communications with the people they serve.

“It’s been months now and they should have some system in place. And now on top of that, I have to wait eight to 14 weeks to hear something, you know, and don’t even know what the decision is going to be. That’s just unacceptable,” Taylor said. “I was just glad that you guys got involved in it. I can breathe a sigh of relief now.”

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About the Authors:

Tim Gerber is an investigative reporter and anchor on the KSAT Defenders team.

Dale Keller is senior news photographer at KSAT-12.