EDD agrees to cancel an estimated 5,000 Notices of Overpayment

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Photo credit: The HD Post

STATEWIDE – The California Employment Development Department (EDD) and Center for Workers’ Rights (CWR) reached an agreement, Friday, that the department will cancel late Notices of Overpayment. The agreement is expected to affect more than 5,000 claimants who received notification that a repayment was owed more than one year after the end of their benefits. 

Under CWR and EDD’s new agreement, EDD will stop issuing Notices of Overpayment after the statutory deadline.

California Unemployment Insurance Code Section 1376 says the statutory deadline is:

  • Not later than one year after the close of the benefit year in which the overpayment was made.
  • Not later than six months after the date a backpay award was made.

EDD is canceling late notices already issued. In addition, they agreed to refund any amounts a claimant paid in response to a late notice. 

This is the second agreement with EDD submitted for court approval in Center for Workers’ Rights v. EDD case.

In July 2021, the first agreement made changes in how EDD processes unemployment insurance claims. Conditional payments are now provided to claimants in continuing claims status.

Pandemic Response

In the class action lawsuit complaint, CWR described the increased need for assistance accessing unemployment insurance (UI) benefits during the COVID-19 pandemic.

“In February 2020, CWR received 166 total calls from workers. In May 2020, CWR received 2,858 calls from workers, 73% of whom had recently lost work and needed to access UI benefits,” states the court filing.

The complaint states that EDD’s prolonged delays in providing payment to UI claimants in continuing claims status violate the Social Security Act. 

According to the representing law firm Altshuler Berzon LLP, Social Security Act 42 U.S.C. §503(a)(1) requires state unemployment insurance programs to maintain “methods of administration … reasonably calculated to insure full payment of unemployment compensation when due.” 

EDD agreed to provide conditional payment to unemployment insurance claimants in continuing claims status when:

  • EDD has failed to make a determination regarding the claimant’s eligibility;
  • By the end of the week following the week that EDD first became aware of the eligibility issue.  

RELATED: Work Sharing provides employers alternative to layoffs amid 61,000 unemployment insurance claim filings

The agreement also required EDD to immediately pay conditional UI benefits to unemployed Californians — many who had been waiting months. As a result, more than 590,000 claimants received payments totaling more than $711 million.

Notification of Overpayment

CWR provided guidance in a Facebook post to determine if a late Notification of Overpayment will be canceled.

The organization says to add 52 weeks to the start date of the benefits listed on Notice of Overpayment. If the mailing date of the notice is beyond that date, the overpayment will be canceled.

EDD agrees to cancel an estimated 5,000 Notices of Overpayments
Photo credit: Facebook.com/Center for Workers’ Rights

CWR is a non-profit organization based in Sacramento that serves low-wage workers across California. They assist in helping workers initiate proceedings to recover wages before the Division of Labor Standards Enforcement, provide individualized consultations on workplace rights, conduct outreach to workers in low-wage industries, and help workers in accessing benefits programs, including UI.

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