Unemployment Insurance Program Integrity Report, Virginia Employment Commission (December 1, 2024)

Summary

This December 1, 2024 Unemployment Insurance Program Integrity Report is a letter from Demetrios J. Melis, Commissioner of the Virginia Employment Commission (VEC), to Adam Ebbin, Chairman of the Commission on Unemployment Compensation. It states that overpayments paid from April 1, 2023, through March 31, 2024 totaled $47,173,041, and that overpayments prevented from being paid totaled $1,689,563,754.95. It reports $20,511,889.22 in restitution ordered over the past few years. As of December 2024, the VEC has processed 138,677 overpayment waiver applications, and 97,359 overpayment waivers have been approved for a total of $317,652,229.00.

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Full text

Demetrios J. Melis                                                                                  Post Office Box 26441
Commissioner                                                                                    Richmond, VA 23261-6441


                                                 December 1, 2024



           TO:           The Honorable Adam Ebbin, Chairman, Commission on Unemployment
                         Compensation

           FROM:         Demetrios J. Melis, Commissioner

           RE:           Unemployment Insurance Program Integrity Report


           Executive Summary

           The Virginia Employment Commission shall report by December 1 of each year to the
           Commission on Unemployment Compensation, the implementation and enforcement of the
           provisions of 60.2 -612.1(F) Program Integrity. This letter serves to meet that requirement.

           INTEGRITY MEASURES

           The VEC continues to employ robust measures to ensure program integrity and detect potential
           fraud. Initial claims are verified daily through the Social Security Administration and the
           Integrity Data Hub (IDH). Weekly certifications are cross-matched with the National Directory of
           New Hires (NDNH) and Prison Data Cross-Match (PUPS). Additionally, the VEC conducts
           quarterly wage cross-matches to identify data on new hires. Using its advanced UI technology
           system, VUIS, the VEC performs comprehensive data comparisons and cross-matches to
           identify shared characteristics among claims.

           To enhance security, all logins to the VEC database are authenticated through third-party
           technology platforms. Furthermore, when the VEC identifies or receives credible allegations of
           UI fraud, waste, abuse, mismanagement, or misconduct, significant cases are promptly
           reported to the Department of Labor’s Office of Inspector General, in accordance with
           established guidelines.

           OVERPAYMENT EFFORTS

           The VEC continues to actively engage in comprehensive overpayment recovery efforts.
           Repayments are negotiated and accepted through multiple methods, including cash, checks, or


     (804) 786-3001                                                                   VRC/TDD VA Relay 711
     www.vec.virginia.gov                                                   Equal Opportunity Employer/Program
Page 2



money orders. Additionally, the VEC offsets future benefits to recover outstanding
overpayments, except when a claimant is involved in the appeals process. Recoupment rates
are determined by fault: 100 percent of the overpayment is recouped when the claimant is at
fault, and 50 percent when the agency is at fault.

The VEC participates in the Cross Program Offset Recovery Agreement and the Interstate
Reciprocal Offset Recovery Arrangement in accordance with federal guidelines. Overpayments
may also be recovered through offsets from state income tax refunds. Collaborative efforts with
state and federal agencies, including prosecutions, have proven to be effective in recovering
losses.

Enhanced identity verification measures have significantly reduced identity theft-related fraud
claims, which often result in improper payments. Additionally, the VEC’s partnership with the
Commonwealth’s Office of the Attorney General Unemployment Compensation Fraud Unit has
led to substantial recovery of fraudulent overpayments. These efforts have resulted in a total of
$20,511,889.22 in restitution ordered over the past few years.

TYPE AND AMOUNT OF IMPROPER PAYMENTS DETECTED RETROACTIVELY

The total amount of overpayments paid from April 1, 2023, through March 31, 2024, was
$47,173,041. These overpayments came from the following issues, with the percentages being
the percent of dollars overpaid:

   •     Work search – 31.731%
   •     Separations – 29.189%
   •     Benefit Year Earnings – 18.214%
   •     Able & Available – 3.405%
   •     Other Eligibility – 16.213%
   •     Other Issues – 1.248%


TYPE AND AMOUNT OF IMPROPER PAYMENTS PREVENTED
The total amount of overpayments that were prevented from being paid was
$1,689,563,754.95. The issue types involved in these overpayments included separations, work
search, able and available, reporting requirements, questionable identity, and other eligibility
issues.

MONIES SAVED IN PRVENTING AND RECOUPING IMPROPER PAYMENTS

In 2024, the dollar amount of overpayments that were prevented from being paid was
$1,689,563,754.95.
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NONRECOVERY OF OVERPAYMENTS

Overpayment waiver legislation was updated during the 2024 General Assembly session.
Legislation amended §60.2-619 and 60.2-633 to allow the VEC to continue to waive the
requirement that an overpayment be repaid through July 1, 2028, if certain conditions are met.
The conditions are (i) the overpayment was made due to no fault on the part of the individual
receiving benefits, and (ii) requiring repayment would be contrary to fairness and good
conscience. As of December 2024, the VEC has processed 138,677 overpayment waiver
applications and 97,359 overpayment waivers have been approved, for a total of
$317,652,229.00. In addition to the state UI benefits waivers, there was a federal blanket
waiver program. The VEC has approved 11,706 federal waivers, for a total of $18,909,597.40.

Please do not hesitate to contact me at demetrios.melis@vec.virginia.gov or (804) 786-3001
with any questions.

                                                   Sincerely,



                                                   Demetrios J. Melis
                                                   Commissioner


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