SENATE BILL REPORT

SB 6568

BYSenators Lee and Smitherman; by request of Employment Security Department

Revising provisions for unemployment compensation overpayments.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):January 31, 1990; February 1, 1990

Majority Report:     Do pass.

     Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McDonald, McMullen, Matson, Murray, Saling, Smitherman, West, Williams.

Senate Staff:Forrest Bathurst (786-7429)

                February 12, 1990

AS PASSED SENATE, FEBRUARY 10, 1990

BACKGROUND:

The Department of Employment Security is requesting statutory changes that more clearly define public policy regarding unemployment benefit overpayments and permits the department to place financial sanctions on individuals that fail to make arrangements for the reimbursement of overpayments.

SUMMARY:

The Commissioner of the Department of Employment Security is empowered to issue a redetermination of benefit allowance at any time if a claimant receives a back pay award or settlement, or in cases where there is fraud, misrepresentation, or willful nondisclosure.

Claimants receiving back pay awards or settlements from former employers for the same period in which they received unemployment benefits shall not be liable for the reimbursement of unemployment overpayments if their back pay awards or settlements are reduced by the amount of unemployment overpayments.

An employer who is party to a back pay award or settlement shall report to the Department of Employment Security within 30 days the amount that a back pay award or settlement is reduced, or, the name, social security number, and amount of the back pay settlement or award paid to the former employee.

Employers reducing the back pay or settlement awards of former employees are required to pay into the unemployment compensation fund that portion of the back pay awards or settlements withheld from the former employee.

The Department of Employment Security shall impose an interest penalty of 1 percent per month on the outstanding balance of overpayment amounts owed by individuals if they fail to repay or make satisfactory repayment terms with the department.  Interest shall accrue immediately in cases where a claimant is disqualified for misrepresentation, and in all other cases only after the claimant has missed two or more monthly payments partially or in full.

Funds accruing from interest penalties are earmarked for the administration of overpayment and collection activities within the Department of Employment Security.

Appropriation:  none

Revenue:   yes

Fiscal Note:    available

Senate Committee - Testified:   Clif Finch, Association of Washington Business