RICHMOND, Va. (WRIC) — Virginians waiting for unemployment benefits could get an unexpected check from the Virginia Employment Commission.
Thousands of workers who filed for benefits, but whose applications are in the agency’s deep backlog waiting for review and approval, will begin receiving payments before the determination process for eligibility is complete.
While those payments will be welcomed by unemployed workers across the state, some people who receive payments will have to repay those funds if their application for unemployment benefits is ultimately not approved when their application is reviewed.
Virginia Governor Ralph Northam announced today temporary changes to the state’s unemployment insurance program aimed to help workers and businesses. The changes included in Executive Order 74 help, “mitigate a potential rise in the UI experience rating tax for businesses by holding them harmless for lay-offs that occurred during the pandemic.”
The order also directs the VEC “to begin automatically distributing UI benefits to unemployed Virginians who have been held in the agency’s determination process,” according to a press release from the Governor’s office.
Megan Healy, chief workforce advisor to the governor, said that there are currently about 110,000 people waiting on unemployment benefit approval, including 70,000 people waiting for processing and another 40,000 people whose accounts have been marked for review.
She said that about 80% of people who file for unemployment benefits ultimately qualify for the program. For the workers waiting on a hearing with the VEC to determine their benefit eligibility, the waiting period for a hearing is about eight to ten weeks.
Healy says that if a worker is determined to ineligible for unemployment benefits through the traditional state program, the VEC will work with the individual to see if they quality for other programs such as the Pandemic Unemployment Assistance program (PUA), which helps gig workers, the self employed, independent contractors and others.
With this temporary change to the process, if payments are made to someone who doesn’t quality for unemployment benefits once their application has been reviewed, the VEC will work with them on a repayment plan for the funds.
“Since the start of this pandemic, the Commonwealth has distributed more than $9.7 billion in benefits to hundreds of thousands of Virginians, helping them get through these hard times,” said Governor Northam in a press release. “I am proud of what the Virginia Employment Commission has been able to accomplish, but there is still unprecedented need. In the face of federal inaction, these changes will put more of our unemployment insurance funding into the hands of unemployed workers and small business owners who desperately need it.”
At the start of 2020, Virginia had about $1.4 billion in its Unemployment Insurance Trust, according to Healy. Businesses pay into the trust through employment taxes, and those funds are used to pay workers who qualify for unemployment benefits through the Virginia Employment Commission.
The volume of unemployed workers drained the state’s trust in early October and the state has borrowed $110 million from the federal government to continue paying unemployment benefits, Healy explained.
With the new year approaching, Virginia businesses will find out soon how much they’ll be paying in employment taxes in 2021. Those funds will help rebuild the state’s Unemployment Insurance Trust.
Gov. Northam’s Executive Order 74, “Requires that the VEC not penalize businesses for lay-offs that occurred during the pandemic from April through June 2020.
“This will prevent Virginia’s struggling businesses from having to devote critical resources to higher state payroll taxes,” the announcement said. “These steps are particularly critical for small businesses and the retail, food, and lodging industries.”
Healy said that businesses will receive a letter soon notifying them of their 2021 tax rate.
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