Workers shocked at accusations of fraud

The first half of 2020 was a massive struggle for casino employees around the United States and the world, as casinos shutdown as the COVID-19 pandemic grew to critical levels. And now, just as many are finally getting back on their financial feet, casino workers in Mississippi are hearing from Mississippi Department of Employment Security (MDES), telling them that they were overpaid unemployment benefits and must pay them back.

Worse yet, the MDES has said that most of these workers violated state law and committed unemployment fraud.

BJ Smith, a pit boss at Treasure Bay Casino in Biloxi, was among dozens at his casino who received a letter from MDES, and he only received it the same day as the deadline to appeal. He told the Sun Herald that he is fine with repaying any money that he should not have received, he just is upset that he is being accused of fraud.

“If I owe you the money, fine. Don’t put me in as fraudulent,” he said.

The letter said that any week of unemployment overpayment that is “determined to be fraudulent” will come with a 20% fine. Smith was overpaid by around $1,000 and was told he owes a $167 penalty.

Discrepancies were because of timing of tip reporting

Both Smith and Treasure Bay general manager Susan Varnes said that there was no intent to deceive the government. The discrepancies were the result of the timing of their paychecks. Those affected filed their unemployment claims using the amount of their base pay. They had not yet received the pay stub for their tips. Thus, MDES sees that they made more money than they claimed they had, which is where the overpayment comes from.

“For instance, individuals were required to report earnings on Sunday nights to MDES and may have reported their base wages only because they did not know until the following week what their tip wages were,” Varnes explained. “If a tipped individual is audited week to week, the amounts will most certainly not align.”

She added that the unemployment claims process was quite confusing for many first-time filers.

Varnes offered to work with MDES to work everything out, but the offer seems to have fallen on deaf ears.

All MDES said to the Sun Herald in response was, “Under current Mississippi law, when a person receives unemployment insurance benefits, and they are later found to be ineligible or disqualified for any reason, they are required to repay the State of Mississippi the full amount of UI benefits they received.”

Those who received an overpayment must pay the excess back, MDES added, not mentioning penalties. People can work out a payment plan if they can’t pay everything back at once, but then they have to pay 1% interest every month on the remaining balance.

An independent audit determined that the overpayments weren’t caught earlier because MDES staffers were overwhelmed with claims and just couldn’t keep up with everything. Because of the unusual circumstances of the pandemic, some rules and requirements for filing were waived, resulting in an even larger number of claims than MDES expected.

A normal first-time unemployment claim volume in Mississippi was 1,000 per week before the pandemic. In the first two months of the pandemic, over 45,000 workers filed unemployment claims.

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