More Than $21 Million In Wrongful Unemployment Benefits Paid To Wyoming Workers During COVID

According to an analysis by the Government Accountability Office, more than $21 million in wrongful unemployment benefits were distributed to Wyoming workers during the Covid pandemic.

Clair McFarland

June 15, 20224 min read

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(Cowboy State Daily Staff)

By Clair McFarland, Cowboy State Daily

The value of improper payouts of federal unemployment money in Wyoming doubled during the COVID-19 pandemic, as did the total amount paid, when access to unemployment payments grew under the CARES Act.

About $12.76 million in federal unemployment funds was paid improperly in Wyoming in fiscal year 2020 and the state logged about $8.28 million in improper payments in 2021, according to U.S. Department of Labor statistics.  

The pandemic figure is roughly double the wrongful payments made in the prior two fiscal years, 2018 and 2019, which totaled about $5.7 and $5 million in improper unemployment payments respectively.  

However, the spike in wrongful payments is proportionate to the total distribution, which also nearly doubled during the pandemic years. 

Wyoming distributed a total of about $51 million in fiscal year 2018 and $46 million in 2019 in federal unemployment funds, compared with $91 million and $86 million in 2020 and 2021.  

National Picture Dire 

Nationally, the government waste picture is far more dire than in Wyoming.  

Improper unemployment payouts nationwide skyrocketed from $8 billion (9.2% of the total funded) in fiscal year 2020 to $78.1 billion (18.9% of the year’s total) in 2021, according to Department of Labor statistics.  

The department has attributed improper payouts historically to misreporting among claimants. For example, claimants sometimes return to work and fail to report their earnings.  

But during the pandemic, increased identity theft was a large contributor to the waste, according to an analysis of DOL numbers by the congressional Government Accountability Office (GAO).  

Wyoming’s leading cause of improperly paid unemployment benefits  from 2018-2021 was continued payments to workers who failed to register for referrals to work or reemployment services.   

GAO is a government watchdog that reviews federal expenses and recommends congressional remedies for public funds waste and misuse.  

If unemployment program waste is not addressed, the programs may fail to serve the workers who need them and inaction “may undermine public confidence in the responsible stewardship of government funds,” GAO said in its report.  

More Out There 

The reported billions in misapplied funds is only part of the picture.  

“States have also struggled with incomplete reporting of billions of dollars in identified overpayments,” said the GAO in its report, adding that “total (unemployment insurance) improper payments are not known partly because DOL has not yet reported estimates for certain pandemic (unemployment) programs.” 

Other Western States Fare Better 

At 11.78%, Wyoming had a greater ratio of improper payouts from 2018-2021 than surrounding states Idaho, Utah, Montana and South Dakota, all of which reported less than 10% in misapplied funds for the three-year period.   

However, southern neighbor Colorado failed miserably compared to Wyoming, landing itself in DOL’s severe category at 27% improper payouts.  

Virginia fared the worst, at 38%, and Hawaii did the best, at 5.11% improper payments reported.  

The DOL, however, warned researchers to exercise caution in comparing states, since the many states interpret their varying fraud laws with differing levels of strictness across the nation.  

Claims Shot Up Too 

It was in the final three months of fiscal year 2020 that additional unemployment programs were introduced under a national stimulus package, the CARES Act. Congress approved another unemployment balm, the Continued Assistance to Unemployed Worker Act of 2020, that December.  

Initial and continued unemployment claims in Wyoming skyrocketed in 2020 by about 900%, according to a chart by the state’s Department of Workforce Services.  

Many business sectors struggled in 2020 when, citing concerns over hospital crowding and viral spread, Wyoming imposed gathering limits, business closures, and other restrictions. 

Initial unemployment claims rose from about 1,500 claims monthly in 2019 to 20,000 monthly in mid-2020, but the requests leveled off somewhat at between 4,000 and 6,000 monthly throughout the first half of 2021.  

The claims bottomed out in the 1,000 per-month range last summer when Wyoming withdrew from three different COVID-19 unemployment programs.  

The Department of Workforce Services did not respond by midday Wednesday to a voicemail and an email requesting additional comment.  

Wyoming Bailed Early 

Wyoming participated in pandemic-era unemployment programs, but the state withdrew from them about three months early in June 2021.  

Weekly claims for initial assistance dropped immediately after Wyoming’s withdrawal from pandemic payouts, according to another Workforce Services chart.  

In May 2021, Gov. Mark Gordon announced that Wyoming was withdrawing from the programs early because businesses throughout the state struggled with workforce shortages. 

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Clair McFarland

Crime and Courts Reporter