Gov. Beshear Offered ‘Self-Quarantine’ Unemployment. Now State Is Backtracking — And Billing
Tracey Hayes was working as a retail merchandiser in March, arranging products on store shelves around Glasgow to promote sales, when she decided she couldn’t risk exposing her mother to the coronavirus or handle child care for her two children by herself.
Hayes had been watching Gov. Andy Beshear’s daily coronavirus briefings, and she was sure Team Kentucky would have her back.
“I watched him everyday. He said, ‘Healthy at home,’” Hayes said. “So I was healthy at home.”
Hayes stopped working, cared for her children and mother and avoided adding to Kentucky’s mounting number of coronavirus cases. She filed an unemployment insurance claim on March 27. For eight weeks, she received $112 weekly in unemployment, plus the extra $600 payment established in the CARES Act.
But in May, the unemployment office called to say they were investigating her claim.
“I remember pulling over into the parking lot of a church. At that point I was shaking. I couldn’t drive,” Hayes said.
Soon after, she got a bill ordering her to pay back every cent she’d received.
Hayes told the state she was just doing what Beshear had instructed. Their response was, essentially, that Beshear never told anyone what to do. Despite what she heard the governor say during his daily briefings and what she read in his executive orders, Hayes simply wasn’t eligible.
The governor’s office did not respond to a request for comment.
Hayes is one of many people who received unemployment benefits in Kentucky during the coronavirus pandemic and are now learning they were retroactively deemed ineligible. Not only does this cut people off from unemployment for crucial months during the pandemic, many of those found ineligible now owe a debt to the state or federal government that could mean their tax refunds or other money get garnished.
The number of people affected is unclear because the unemployment office didn’t respond to KyCIR’s questions, including how many recipients were later deemed ineligible.
Kentucky’s unemployment system is under immense pressure during the pandemic: By May, Kentucky had the largest share of its workforce on unemployment benefits in the country, and the state’s unemployment insurance trust fund required an $865 million loan from the federal government to stay afloat over the summer.
Several unemployment insurance lawyers told KyCIR they are hearing from more people who were denied eligibility than ever before, and many of them self-quarantined. The unemployment office approved their claim and started issuing payments, only to reassess after the fact and find those workers ineligible.
Hayes has challenged the practice in a lawsuit filed in the Monroe County Circuit Court. The eventual ruling on that case could extend to others who self-quarantined based on what she heard the governor say at his briefings.
The unemployment office has not yet responded to a request for comment submitted on October 6. That same day, Labor Cabinet attorney Amy Cubbage stepped to the podium during Beshear’s briefing to talk about the new, $400-weekly federal unemployment program. This time, Kentuckians watching heard a different message about who was eligible: “Unfortunately, fear of getting COVID is not enough to qualify.”
The Appeals Process
When the coronavirus made its way to Kentucky, Hayes was working for two companies: Driveline Retail Merchandising and SPAR Field Services.
She traveled to as many as three crowded stores a day.
She remembers building a barrier of shopping carts to try to keep customers six feet away from her and her coworker as they set up display stands of cosmetics, coloring books and CBD products.
Driveline paid her $10 an hour. It didn’t seem worth it.
“I just thought I was playing Russian roulette for, like, makeup,” Hayes said.
Both of her employers had signaled they would support workers who decided to stay home: An administrator at SPAR Field Services sent an email to employees that explicitly said workers would be eligible for unemployment, should they decide they needed to stay home.
Driveline CEO Randy Wilson sent a company wide email on March 22 saying the company would support employees with any decisions they made for the health and welfare of their families. Hayes worked her last shift on March 24 and emailed human resources to say she didn’t feel safe coming into work.
At that time, Beshear was talking about unemployment insurance almost daily at his coronavirus briefings. On March 25, the governor told Kentucky he had some good news: The state was expanding unemployment insurance to new categories of people, including contract workers, substitute teachers and “anyone who has had to leave their job because of quarantine.”
“This means that so many of you who are out there, who were worried, are now able to file, and we want you to,” Beshear said. While he spoke, viewers saw a slide which said people were eligible for unemployment if they were leaving their job due to a “reasonable risk of exposure (self-quarantine).”
Hayes thought this sounded like her, so she filed an unemployment claim on March 27. She could only put one employer in the application portal, so she listed Driveline. She sent an email to the unemployment insurance assistance account to follow up and explain her situation, but she got back a form response.
The state approved Hayes for about the same amount she’d be making if she was working full time, but much of that went towards childcare and supporting her mother.
The unemployment office began investigating her claim after it contacted her employer, as it always does to confirm that claimants lost their jobs through no fault of their own.
Driveline told the unemployment office that Hayes wasn’t fired and there was work available, according to an email from Driveline’s human resources contractor. The state worker told Hayes that meant she wasn’t eligible for the unemployment benefits she had already been receiving for eight weeks. The payments would stop immediately.
Driveline, headquartered in Coppell, Texas, has not responded to multiple calls for comment. Its human resources contractor, Trion Solutions, did not respond to an emailed request for comment.
Not every decision results in an appeal, but data suggests more claimants have been filing appeals as the pandemic stretches on. Appeals climbed 129% between May and August, according to data from the Department of Labor.
Employers often challenge claims because sending too many workers to the unemployment office can result in higher taxes in the next fiscal year. The Beshear administration removed some of that pressure in March by charging all UI claims straight to the unemployment insurance trust fund instead of individual companies’ accounts. But some companies still oppose claims.
Stephanie David worked at United Collections Bureau, a collections firm based in Indiana, when the pandemic hit.
She remembers working elbow-to-elbow and sharing computers with her coworkers. As businesses closed one after the other, David said her coworkers took bets on when their office would close.
But the office stayed open. Human resources told employees that if they didn’t feel comfortable coming into work, they could stay home and wouldn’t be penalized. David lives with her mother and sister, and all three of them suffer from chronic conditions that make them especially vulnerable to the virus.
David was told she could apply for unemployment benefits in Kentucky, where she lives, or Indiana, where she worked. She chose Kentucky and filed on March 29.
David was approved, and started getting payments. But in July, she learned her claim was under investigation because she left work voluntarily. The unemployment office considered David ineligible.
She appealed that decision and a hearing before the unemployment office was set for September 16. Her ailing grandmother was receiving end-of-life care at the time, and her heart rate plummeted a few minutes before the scheduled hearing. David was busy calling family members and arranging last goodbyes, and she called into the hearing late. She wasn’t allowed to present her case.
Now, David owes $2,592 to Kentucky and the federal government.
Kentucky is evaluating her for federal unemployment benefits, but David may not qualify since the state believes she left work voluntarily. Even if David is found eligible for federal unemployment, the state will withhold 25% of her future benefits to pay her new “overpayment” debt.
It will be weeks before the first checks arrive. David doesn’t think that’s fair.
“I’m thinking, how many more weeks can I go without any money?” David said. “We’re barely making it right now.”
A Reasonable Risk
Hayes was scheduled for her appeal on June 29, a phone hearing where she could make her case before a referee from the unemployment office.
Unlike most workers who appeal unemployment decisions, Hayes found an unemployment law attorney to represent her during the process: Robyn Smith, who at times has taken an adversarial role towards the unemployment system. She’s filed lawsuits challenging the unemployment system’s actions that have made it all the way to the Kentucky Supreme Court.
People come before the unemployment system at a low point in their lives, Smith says. Even if they win, they face weeks without any income.
“That starts people down a spiral. They’re not in a strong place, they’re making decisions that they don’t have any confidence in,” Smith said.
The unemployment office usually sides with employers when it finds workers ineligible for unemployment benefits. In 2019, the office issued 11,902 rulings on appealed eligibility claims in 2019, according to an annual report on the unemployment insurance trust fund. In cases where claimants were found ineligible for unemployment and appealed, the office ruled in favor of the claimant in 32 percent of its decisions.
Smith argued Hayes was following guidance from the unemployment office that said workers could self-quarantine if there was a reasonable risk of exposure in the workplace.
An executive order issued March 25 says that people were eligible for unemployment benefits if they left work due to a “reasonable risk of exposure (self-quarantine).” An employer handbook prepared by the unemployment office in April says that “if the employer and employee disagree about what is considered reasonable accommodations, those UI claims will have to be decided by a UI staff member on a case-by-case basis.”
Driveline’s representative never mentioned any accommodations made to keep workers safe at the appeals hearing, according to a recording of the proceedings. They simply said it was Hayes’ decision to stay home from work. When asked if she could think of any reason other than COVID-19 that Hayes wasn’t working, Driveline’s representative said no.
In her closing statement, Smith said that the coronavirus forced Hayes’ to lose work “by the fact that no reasonable employee in Ms. Hayes’ position would continue to expose herself to a germ that could have killed her mother.”
Driveline’s representative did not give a closing statement. They hung up before the hearing was over.
The referee determined that Hayes was on a voluntary leave of absence — and thus, ineligible for the benefits she had already received. The evidence presented in this case establishes that the claimant was on a leave of absence from March 22, 2020, through June 15,” the referee wrote in a decision mailed to Hayes in July. “The employment relationship continues while the claimant is on a leave of absence.”
The unemployment office sent Hayes a bill for $896 in overpaid benefits and a request for at least $75 a month from Hayes, who had no income. Since she also collected the extra $600 in weekly federal unemployment payments, Hayes also owes nearly $4,200 to the federal government. Kentucky is bound by law to pursue this debt to the federal government.
James Maxson, an unemployment insurance lawyer, says he regularly hears from workers like Hayes — and he said the unemployment system is generally designed to say no to claimants.
Maxson served as in-house counsel of Kentucky’s Office of Unemployment Insurance from 2008 until 2016.
Maxson said pressure on the unemployment insurance trust fund may be leading Kentucky to reject the claims of people like Hayes, who were previously approved for state-based unemployment insurance, and shift them to federally paid benefits like the Pandemic Unemployment Assistance (PUA) program created by the CARES Act.
“It seems to me that some people who seem like they do have legitimate claims for unemployment benefits are being denied,” Maxson said, “but kind of dangled the promise of PUA as a plan B.” The unemployment office did not respond to questions about this allegation.
PUA is paid by the federal government, but is usually less money than state aid and has more stringent requirements for what counts as unemployment directly tied to COVID-19.
Hayes had another chance to appeal the unemployment office’s decision by bringing her case before the Unemployment Insurance Commission.
The three-person commission is tasked with reviewing decisions made by the lower appeals process. They don’t hear new evidence, and instead review the facts of the previous hearing to determine if the unemployment office implemented its own regulations fairly. Dondra Meredith became the commission’s chairperson over the summer.
Meredith worked previously as a lawyer with the unemployment office. Muncie McNamara, Kentucky’s ex-unemployment director, objected to Meredith’s appointment because he said her experience gave her firsthand knowledge of the administration’s intentions for unemployment insurance, and the commission’s chairperson is supposed to be an independent arbiter of Kentucky’s policy.
Before he was fired in May, McNamara was told in writing to stop commenting on appointments to the unemployment commission, according to a written reprimand obtained through an open records request.
Meredith’s name didn’t appear on a recent commission decision; the state didn’t respond to questions about the commission’s current makeup. Meredith is a deputy executive director with the Education and Workforce Development Cabinet, according to a state salary database.
But when Hayes’ case came before the commission, Meredith as the chairperson issued her decision alone as the only attendee that day. Meredith maintained the decision made by the unemployment office’s referee on August 24 and decided in favor of Driveline.
In arguing against Hayes’ unemployment benefits, Meredith wrote that Hayes’ claim that she was following the governors order was “unfounded.”
The governor’s executive order says “all citizens of Kentucky are encouraged to take all feasible measures to engage in appropriate social distancing to prevent the spread of the disease,” Meredith wrote. However, “the order does not ‘direct’ any action by private sector essential employers or essential workers.”
Having lost the original decision, the appeal and before the unemployment commission, Hayes filed a lawsuit on September 13 against Driveline, the Kentucky unemployment office and unemployment commission, Labor Secretary Larry Roberts and Lt. Gov. Jacqueline Coleman as secretary of the Education and Workforce Development cabinet.
Hayes’ appeal alleges the unemployment office and commission are deliberately blaming workers “for workplace safety circumstances they do not choose and cannot control.”
On October 4, Hayes was approved for pandemic unemployment assistance, a different federal benefit, that would retroactively cover four weeks in June and July when she was unemployed but did not receive benefits. Hayes will still pursue her case against the unemployment system to settle the matter for the potentially thousands of others in her situation.
Judge David Williams in the Monroe Circuit Court will hear motions in this case on October 15.
Hayes, meanwhile, is back at work for Driveline and SPAR Services. She doesn’t feel any safer, she says. Barren County, where most of Hayes’ work is located, has seen over 860 cases of the virus. “I don’t have the luxury to worry about safety now,” Hayes said.
Hayes says she doesn’t watch Beshear’s briefings anymore.