Getting unemployment benefits wasn’t simple for Lisa Holt.
Holt, the owner of Main Street Barber Shop in Clovis, said she tried a few different avenues to get benefits after her store was forced to close because of state coronavirus restrictions. But as a sole proprietor, she got no traction until the state’s system for self-employed workers went live in late April.
“We went a month and a half with no money,” she said.
But the complications weren’t over. Holt was recently notified by the New Mexico Department of Workforce Solutions that she needed to pay back more than $2,000 of that money. The overpayment stemmed from a miscommunication regarding whether the department was using gross or net income to calculate benefits. The notice came just as her store was preparing to reopen.
“That’s money that we were living off of,” Holt said. “We didn’t choose not to go to work.”
Holt isn’t alone. Several thousand self-employed New Mexicans have been notified that they received more benefits than they should have, and have been asked to submit additional information or repay benefits, as first reported by the Santa Fe Reporter and confirmed by Workforce Solutions Secretary Bill McCamley.
McCamley attributed the mix-up to federal guidelines that changed after the state launched its benefits program.
“We know people are frustrated, and we know people are angry,” he said. “But we are working very, very hard, and our staff are treating everyone with respect and dignity.”
McCamley said New Mexico, which announced its benefits program for self-employed residents April 22, was one of the first states in the country to launch such a program.
“We recognized that workers across the state needed benefits,” he said.
But this caused problems once the federal government clarified its requirements.
There are those like Holt, with discrepancies in their listed income totals. Additionally, the program originally allowed applicants to use their 2018 or 2019 tax documents to participate. But the state later received word that only 2019 would count as a benefit year.
“The rules of the game were changed on us,” McCamley said.
New Mexicans with benefits based on 2018 returns now have 21 days to file their 2019 returns and resubmit their documents to the state.
As of Tuesday, McCamley said 2,928 New Mexicans had not yet uploaded their 2019 tax documents. McCamley did not provide information about how much money is owed by recipients.
To remedy the situation, the department initially sent out a number of auto-generated letters – the same type mandated by the U.S. Department of Labor when fraud is suspected. Earlier this week McCamley’s department issued an apology for using those letters, and said the state is trying to let people know about the mix-up in a less threatening way.
As these instances generally don’t qualify as intentional fraud, McCamley said the department has switched to emails rather than form letters to avoid scaring people and to help clarify the situation.
“We apologize to all of the people who got this letter and got very frustrated and got very stressed out,” McCamley said.