State settles pandemic overpayment class-action lawsuit

Yahoo

26-02-2025

Feb. 25—Previously shuttling around Albuquerque residents as an Uber and Lyft driver, Yohanna Gerges found himself without passengers when the COVID-19 pandemic hit in 2020. Left without a regular income, Gerges filed for unemployment with the New Mexico Department of Workforce Solutions in April 2020.
He didn't expect he'd be told by the state to pay back $13,432 of that claim.
But now, following a January settlement from a class-action lawsuit filed against the state over its pandemic-era overpayments, Gerges and tens of thousands of other New Mexicans are no longer expected to pay the department back, and those who already reimbursed the state could potentially get refunded.
Getting to this point
Like others amid the pandemic, Gerges went to the New Mexico Department of Workforce Solutions, or DWS, to find a temporary solution while the world adapted to a new life.
While Gerges found difficulties in filing because of what he said was a faulty system, he eventually received a claim of $461 a week.
But months later, DWS said it had given Gerges too much money and asked him to repay it, as the state agency did for thousands of other New Mexicans as well. Overpayments totaled $250 million, according to DWS.
Gerges joined four other workers in March 2023 in filing suit against the state. Less than two years later, the state and the five plaintiffs agreed to a settlement. The settlement states that New Mexicans who received unemployment insurance claims under the Coronavirus Aid, Relief and Economic Security, or CARES, Act aren't responsible for the overpayments.
Additionally, the settlement found that anyone who reimbursed the state could qualify for refunds.
"The New Mexico Department of Workforce Solutions reevaluated overpayments for claimants who were paid incorrectly due to the unprecedented expansion of benefits and rapidly changing rules during the pandemic," said DWS Cabinet Secretary Sarita Nair.
The department has waived $100 million in blanket waivers, which forgive repayment obligations for some people, and will make individual waiver requests available so those affected can apply.
The key difference is that individual waivers require claimants to apply and demonstrate eligibility on a case-by-case basis, while blanket waivers apply automatically to a qualifying group based on a single set of facts, according to DWS.
More than 36,000 individuals will soon receive information on how to make an individual waiver request that they can apply for, according to the department.
"This waiver provides much-needed relief to individuals who were overpaid pandemic benefits through no fault of their own," Nair said.
Due to the number of overpayments, it may take DWS several months to complete the process, according to DWS.
Frustration and a lack of communication
During the height of the COVID-19 pandemic, thousands of people were out of work in New Mexico and filed claims with the New Mexico Department of Workforce Solutions to receive unemployment benefits.
With the flood of unemployment applications, the department awarded more benefits than permitted by the programs, according to the complaint against the department. So in February 2021, it started issuing notices to the public that they needed to pay back the money.
Gerges said the website and the department made it hard for anyone to reach out for information.
"You try to call and reach anyone in the department and their lines were always either busy or on hold," Gerges said. "If somebody picked up, you'd be lucky if they knew what needed to be done."
Before he was asked to reimburse overpayments, Gerges said the department cut his weekly payments in half and did not provide an explanation or a chance to appeal. Then DWS asked him to repay money.
"They were taking money back without adjudication, without letting me appeal, without letting me contest, without trying to explain to me," Gerges said.
Stephanie Welch, workers' rights director with the New Mexico Center on Law and Poverty, which represented those who filed the class-action lawsuit against DWS, called the settlement a "major step toward addressing the challenges faced by workers during the pandemic." Ives & Flores also represented the plaintiffs.
"New Mexicans who lost their jobs through no fault of their own deserve to make ends meet, and they should not be burdened by circumstances beyond their control," Welch said.