Provides that any claimant who has received certain unemployment benefits to which they were not entitled shall not be held liable for the amounts overpaid provided certain conditions exist; directs the department of labor to provide claimants who have previously been denied waivers with applications for individual waivers; repeals certain provisions of law relating thereto.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9578
SPONSOR: Bronson TITLE OF BILL:
An act to amend the labor law, in relation to the recovery of overpay-
ments of unemployment benefits; to direct the department of labor to
provide claimants who have previously been denied waivers with applica-
tions for individual waivers; and to repeal certain provisions of such
law relating thereto
PURPOSE:
The purpose of this bill is to require the Commissioner of Labor to
waive certain overpayments of unemployment benefits that have occurred
during the COVID-l9 pandemic, in addition to certain overpayments going
forward.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill would establish that a claimant shall not be
held liable for overpayments of state or federal unemployment benefits,
as permitted under federal law, provided that the overpayment was not
due to fraud or fault on the part of the claimant and the recovery of
such overpayment would be against equity and good conscience. The
Commissioner of Labor would also be required to notify the claimant when
an overpayment has occurred and inform the claimant of his or her right
to request a waiver. Upon any denial of a waiver request, the Commis-
sioner would also be required to notify the claimant of his or her right
to request an adjustment to the repayment schedule.
Section two of the bill would repeal subdivision 4 of section 597 of the
Labor Law which sets forth the current limits for overpayments of bene-
fits.
Section three of the bill would establish the effective date.
JUSTIFICATION:
Overpayments of unemployment insurance benefits have become a signif-
icant problem for both claimants and state unemployment agencies
throughout the country in the wake of major job losses caused by the
COVID-19 pandemic. According to the U.S. Department of Labor, New York
paid out approximately $70 billion in unemployment benefits in 2020
including roughly $115 million in overpayments, while other states
across the country paid a combined $2.9 billion in overpayments. To
address these concerns, the federal government has allowed states to
waive repayments of benefits, including Pandemic Unemployment Assistance
benefits, that are found to be without fault on the part of the claimant
and when such repayment would be contrary to equity and good conscience.
Under current New York State law, state unemployment benefits which are
later determined to have been overpaid cannot be recovered from the
claimant as long as the claimant received the benefits in good faith,
did not make a false statement or representation, and did not willfully
conceal any pertinent fact in connection with his or her claim. However,
despite these requirements, data from the U. S. Department of Labor
shows that as of March 1, 2021, the State has not granted any waivers
for overpayments throughout the duration of the pandemic, and yet has
continued to recover a total of $93.4 million in overpaid benefits
during 2020.
The enormous rise in unemployment claims during the COVID-19 pandemic
has only exacerbated the ongoing issues with the New York State unem-
ployment system and the overpayment of benefits. Amid the confusion of
businesses closing, people losing their jobs, and navigating the
outdated and complex UI system, it is reasonable to understand how some
individuals might have made honest mistakes and unintentional errors on
their unemployment applications, with no intent to defraud the system.
And yet, as our economy moves forward to recover from the impacts of the
pandemic, many of these claimants are now being asked to pay back debts
and penalties that they never knew had incurred in the first place. To
address these inequities, this bill would allow claimants that have been
overpaid benefits to which they were not entitled during the COVID-19
pandemic to apply for a waiver to have these overpayments forgiven.
Going forward, claimants would also not be held liable for overpayments
of state or federal unemployment benefits, as permitted under federal
law, provided that the overpayment was not due to fraud or fault on the
part of the claimant and the recovery of such overpayment would be
against equity and good conscience.
LEGISLATIVE HISTORY:
A.6666 of 2021-2022 (Joyner): Passed Assembly
A.3647 of 2023-2024 (Joyner): Enacting Clause Stricken
A.8928 of 2024 (Bronson): Died in Ways and Means
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately and shall be deemed to have been
in full force and effect on and after March 9, 2020.
STATE OF NEW YORK
________________________________________________________________________
9578
IN ASSEMBLY
January 21, 2026
___________
Introduced by M. of A. BRONSON -- read once and referred to the Commit-
tee on Labor
AN ACT to amend the labor law, in relation to the recovery of overpay-
ments of unemployment benefits; to direct the department of labor to
provide claimants who have previously been denied waivers with appli-
cations for individual waivers; and to repeal certain provisions of
such law relating thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The labor law is amended by adding a new section 594-a to
2 read as follows:
3 § 594-a. Recovery of overpayments. (1) Definitions. For the purposes
4 of this section:
5 (a) "Without fault" means the claimant did not, with the intent to
6 receive benefits, intentionally supply false information or knowingly
7 omit information, which directly resulted in the department issuing
8 benefits to which the claimant knew they were not entitled;
9 (b) "Final determination" means thirty days after appeal rights have
10 been exhausted or abandoned.
11 (c) "Willful misrepresentation" or "willful false statement" means an
12 intentional, knowing, or deliberately false representation from the
13 claimant to the department, made in order to obtain unemployment insur-
14 ance benefits. "Knowing" for the purposes of this paragraph means having
15 actual knowledge.
16 (2) Notwithstanding any provision of section five hundred ninety-four
17 of this title to the contrary, any claimant who has received benefits
18 under the provisions of this article on or after January twenty-seventh,
19 two thousand twenty, to which they were not entitled shall not be held
20 liable for the amounts overpaid provided that all of the following
21 conditions exist:
22 (a) Such overpayment was not due to a willful false statement or
23 misrepresentation;
24 (b) Such overpayment was received without fault on the part of the
25 claimant; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01904-01-5
A. 9578 2
1 (c) The recovery of such overpayment would be against equity and good
2 conscience.
3 (3) When determining whether an overpayment was received without fault
4 on the part of the claimant, the commissioner shall consider the follow-
5 ing factors:
6 (a) The nature and cause of such overpayment and the capacity of the
7 claimant to recognize the error resulting in such overpayment;
8 (b) Whether the claimant knew or reasonably should have known that
9 such claimant was not lawfully entitled to receive such benefits;
10 (c) Whether the benefits were received or retained because of the
11 claimant's good faith reliance on an administrative or departmental
12 error; and
13 (d) Whether the claimant willfully reported or failed to report infor-
14 mation which resulted in such overpayment.
15 (4) (a) There shall be a presumption that the claimant is without
16 fault if:
17 (i) the department provided conflicting, changing, or confusing infor-
18 mation or instructions;
19 (ii) the department took more than six months to implement a federal
20 law regarding proof of eligibility from claimants;
21 (iii) the claimant was unable to reach the department despite their
22 best efforts to inquire or clarify information the individual needed to
23 provide due to language, education, literacy, disability or similar
24 barriers;
25 (iv) the claimant was unable to understand the department's notices or
26 directives due to language, education, literacy, disability or other
27 similar barriers;
28 (v) the claimant chose a reason for separation which is legally incor-
29 rect, though reasonable for the claimant to have selected under the
30 circumstances; or
31 (vi) the claimant had assistance in filing a claim, certifying, or
32 otherwise responding to the department and the claimant's assistant did
33 not confirm required information with the claimant or misunderstood such
34 information provided by the claimant, resulting in inaccurate informa-
35 tion being submitted without the claimant's knowledge.
36 (b) There shall be a presumption that the payment of benefits is with-
37 out fault if the overpayment was due to agency error or mistake or the
38 employer provided incorrect or untimely information. Receipt or
39 possession of the claimants' unemployment insurance handbook shall not
40 create a presumption that the claimant was on notice of the handbook's
41 contents nor shall receipt or possession of the handbook be used against
42 the claimant on points of fact or law.
43 (5) Recovery of any overpayment would be against equity and good
44 conscience if:
45 (a) recovery would cause financial hardship to the person from whom
46 recovery is sought;
47 (b) the recipient of the overpayment can show, regardless of their
48 financial situation, that repayment would cause them to relinquish a
49 valuable right or change their position for the worse, including, but
50 not limited to, signing a lease, taking out a loan, or declining other
51 state or federal assistance in reliance on receipt of unemployment
52 insurance benefits;
53 (c) the individual or their household receives social security income,
54 supplemental security income, social security disability, medicaid,
55 medicare, free or reduced public school lunch, FIP, temporary assist-
56 ance, supplemental nutrition assistance program benefits, nutrition
A. 9578 3
1 benefits provided as part of the special supplemental nutrition program
2 for women, infants and children (WIC), home energy assistance program
3 benefits, senior citizen rent increase exemption, disability rent
4 increase exemption, rental subsidy pursuant to federal or state law, is
5 at or below four hundred percent of the federal poverty guidelines or
6 living in project-based subsidized housing or any substantially equiv-
7 alent successor programs to the aforementioned benefits programs;
8 (d) the individual used the unemployment benefits to meet their ordi-
9 nary living expenses, including, but not limited to, food, rent, medical
10 costs or insurance, dental bills or insurance, school loans, school
11 fees, utilities, child care, mortgage payments, transportation, purchase
12 or maintenance of a car or equipment needed for employment or self-em-
13 ployment, or operating expenses for self-employment; or
14 (e) there is any other reason for which recovery of the overpayment
15 would be against equity and good conscience under the circumstances.
16 (6) (a) In the event that a new determination by the commissioner or a
17 decision by a referee, the appeal board, or a court results in a
18 decrease or denial of any benefits previously allowed, or at any other
19 time it has been determined that an overpayment has occurred, the claim-
20 ant shall be notified in writing, by mail or electronically, within
21 fifteen days of such determination or decision of such claimant's right
22 to appeal such determination or decision and to request a waiver of
23 recovery of such overpayment. Such notice shall include, but shall not
24 be limited to:
25 (i) The total amount of such overpayment and the cause of such over-
26 payment;
27 (ii) The schedule of repayment for such amounts overpaid;
28 (iii) The means by which the commissioner is entitled to collect or
29 recover such overpayment;
30 (iv) An explanation of the claimant's right to appeal such determi-
31 nation or decision in accordance with the provisions of this article and
32 any rules and regulations promulgated thereunder;
33 (v) An explanation of the standards by which a claimant shall not be
34 found liable for the amounts overpaid, as set forth in this section;
35 (vi) The process by which the claimant may request and obtain a waiver
36 of recovery of such overpayment, including a copy of the waiver applica-
37 tion; and
38 (vii) the amount that is waived and the reason why any or all of the
39 overpayment was not waived.
40 (b) The commissioner shall review each waiver request in a manner
41 consistent with this section to determine whether the claimant shall be
42 held liable for any amounts overpaid. Any claimant who is found not to
43 be liable for any amounts overpaid shall be entitled to receive a full
44 waiver of such overpayment and any previously imposed penalties on such
45 overpayment must be rescinded accordingly.
46 (c) (i) Any claimant who disagrees with a determination regarding a
47 waiver may request a hearing within sixty days of receipt of the deter-
48 mination.
49 (ii) Claimants shall have all appeals rights as provided under title
50 eight of this article, except that referees may extend the time fixed
51 for requesting a hearing upon good cause shown.
52 (iii) When a determination is made that the claimant was at fault, the
53 referee and unemployment insurance appeals board shall review the deter-
54 mination of fault and any willful misrepresentations de novo.
55 (d) The department shall within thirty days of the effective date of
56 this section develop and implement a process by which claimants may
A. 9578 4
1 request and obtain an individual waiver application by phone, fax, mail,
2 and through the department's two-way communication system. The applica-
3 tion shall be made available to all claimants without regard to a deter-
4 mination of fault or willfulness in the receipt of the claimant's over-
5 payment.
6 (e) All notifications shall be translated into the twelve most common-
7 ly spoken languages in the state.
8 (f) Any funds recouped or repaid prior to the granting of a waiver
9 under this section shall be returned to the claimant as provided under
10 subdivision five of this section.
11 (7) (a) Upon the denial of any waiver request, or upon any other
12 determination by the commissioner or a decision by a referee, the appeal
13 board, or a court that a claimant shall be held liable for any overpay-
14 ment, the claimant shall be notified in writing, by mail or electron-
15 ically, within fifteen days of such determination or decision. Such
16 notice shall set forth the reason for such denial, if applicable, and
17 such claimant's right to request an adjustment to such claimant's repay-
18 ment schedule.
19 (b) Where a waiver is denied, the claimant shall be offered a repay-
20 ment plan to pay down the amount owed over a period of time no less than
21 three years. The repayment plan shall be based on the claimant's ability
22 to repay. After such three year repayment period, the department shall
23 write off any further overpayment debt remaining on the claim. Nothing
24 in this section shall impede the ability of the department to discharge
25 or waive any overpayment.
26 (c) The commissioner shall grant an adjustment to the claimant's
27 repayment schedule if at any time the claimant is able to demonstrate
28 that there has been a change in such claimant's financial condition
29 which warrants such adjustment. The department shall notify claimants
30 of the ability to seek a modified repayment plan in writing upon the
31 claimant's entry into a repayment plan.
32 § 2. Subdivision 4 of section 597 of the labor law is REPEALED.
33 § 3. Paragraph (c) of subdivision 1 of section 600 of the labor law,
34 as amended by section 19 of part O of chapter 57 of the laws of 2013, is
35 amended to read as follows:
36 (c) If, at the time benefits are payable, it has not been established
37 that the claimant will be receiving such pension, retirement or retired
38 pay, annuity or other payment, benefits due shall be paid without a
39 reduction, subject to review within the period and under the conditions
40 as provided in [subdivisions] subdivision three [and four] of section
41 five hundred ninety-seven with respect to retroactive payment of remun-
42 eration.
43 § 4. Within 30 days of the effective date of this act, the Commis-
44 sioner of Labor shall seek a review of this act by the United States
45 Department of Labor to determine the effect of this act on the ability
46 of New York State to receive a cap and/or waiver on the reduction of tax
47 credits, otherwise known as the Benefit Cost Rate (BCR) penalty, pursu-
48 ant to section 3302 of the Federal Unemployment Tax Act and 20 CFR
49 606.20. As part of the request to review the act, the Commissioner shall
50 ask the USDOL how the provisions of this act that allow for the waiver
51 of the overpayments of Federal unemployment or assistance benefits,
52 alone, including Pandemic Unemployment Assistance, Pandemic Emergency
53 Unemployment Compensation and Federal Pandemic Unemployment Compensation
54 shall effect the ability of New York State to receive a cap and/or waiv-
55 er on the reduction of tax credits, otherwise known as the Benefit Cost
56 Rate (BCR) penalty, pursuant to section 3302 of the Federal Unemployment
A. 9578 5
1 Tax Act and 20 CFR 606.20. Within one week of the receipt of the USDOL's
2 review, the Commissioner shall certify that this act will or will not
3 prevent a cap and/or waiver of the BCR penalty and provide such certif-
4 ication along with a copy of the USDOL's response to a request for such
5 review to the Assembly and Senate Labor Committee chairs. As part of
6 this certification, the Commissioner shall state whether or not the
7 provisions of this act that allow for the waiver of the overpayments of
8 Federal unemployment or assistance benefits, alone, including Pandemic
9 Unemployment Assistance, Pandemic Emergency Unemployment Compensation
10 and Federal Pandemic Unemployment Compensation will or will not prevent
11 a cap and/or waiver of the BCR penalty. The Commissioner shall seek such
12 review as of January 15 of each successive year until the sooner of the
13 Commissioner certifying that this act will not prevent a cap and/or
14 waiver of the BCR penalty or the State unemployment insurance trust fund
15 becomes solvent.
16 § 5. This act shall take effect immediately provided, however that
17 sections one, two and three shall take effect upon the certification by
18 the Commissioner of Labor that this act will not prevent a cap and/or
19 waiver of the BCR penalty and shall be deemed to have been in full force
20 and effect on and after March 9, 2020. If the Commissioner certifies
21 that the provisions of this act that allow for the waiver of the over-
22 payments of Federal unemployment or assistance benefits including
23 Pandemic Unemployment Assistance, Pandemic Emergency Unemployment
24 Compensation and Federal Pandemic Unemployment Compensation will not
25 prevent a cap and/or waiver of the BCR penalty, those provisions shall
26 take effect immediately and shall be deemed to have been in full force
27 and effect on and after March 9, 2020. In the event that the Commission-
28 er certifies that all provisions of this act will prevent a cap and/or
29 waiver of the BCR penalty, the provisions of this act shall take effect
30 upon the solvency of the State unemployment compensation trust fund and
31 shall be deemed to have been in full force and effect on and after March
32 9, 2020. The Commissioner of Labor shall notify the legislative bill
33 drafting commission upon the Commissioner's certification as required by
34 this section in order that the commission may maintain an accurate and
35 timely effective data base of the official text of the laws of the state
36 of New York in furtherance of effectuating the provisions of section 44
37 of the legislative law and section 70-b of the public officers law.
