There have been more than 20,000 potentially fraudulent unemployment claims out of the 65,000 initial claims filed at the Guam Department of Labor since May, Director David Dell'Isola told senators on Monday.
It was the Legislature's fifth oversight hearing on Guam Labor's administration of the federal Pandemic Unemployment Assistance program. Dell'Isola provided an update on the delays and challenges caused by the high rate of fraudulent claims but also reported the agency will send 70 notices of benefit overpayments – along with instructions on how to return the money. He also noted they have received 105 appeal requests from people whose unemployment claims were denied.
"Just since July, our daily claim fraud rate is 80% fraud, 20% (legitimate) claims," Dell'Isola told senators led by Sen. Régine Biscoe Lee, chairwoman of the labor committee.
With such massive potentially fraudulent claims, legitimate claims have been caught in the net, resulting in delayed payments.
There's no estimate available on amounts that should have gone to COVID-displaced workers, but instead may have been sent to those who filed fraudulent claims.
The U.S. Department of Labor will be providing Guam Labor with an additional $210,000 so the agency can further address fraudulent claims and overpayments, Dell'Isola said.
Dell'Isola also said federal law enforcement agencies will launch initiatives to address money mules, who are either voluntarily or involuntarily moving illicit proceeds from COVID-19-related crimes.
Many of the 70 cases of overpayments fall under three major categories, Dell'isola said:
- those who got paid funds from the Paycheck Protection Program only after they already filed for and got their PUA aid;
- those who erroneously filed their weekly earnings; and
- those who were displaced from work, but not because of the COVID-19 pandemic.
"Once these things go out, you're going to have some people get angry because they were laid off, not because they were let go because of COVID," Dell'Isola told senators, who have been receiving concerns about the PUA process.
He said Guam Labor is just implementing a federal program, which has strict guidelines as to who should receive PUA benefits.
Senators at the hearing acknowledged Dell'Isola and Guam Labor's efforts in getting the unemployment benefits into the hands of those who need them, following federal rules and guidelines.
'Right to appeal'
Everybody has "the right to appeal," Dell'Isola said regarding the 105 requests from those whose unemployment applications were denied.
These appeals are being scheduled for a hearing, which will be held after the Pandemic Condition of Readiness 1 is lifted, he said.
Senators relayed their constituents' concerns about the PUA system rejecting peoples' second round of unemployment claims, as a result of the second lockdown starting in August.
"It was not a quick and easy fix," Dell'Isola said, adding that claimants should be able to see the errors addressed.
To date, nearly 30,000 of Guam's workers who were laid off, furloughed or got work hour cuts directly because of COVID-19 have received over $350 million in unemployment benefits inclusive of taxes.
Claims filed through Aug. 10
More will receive their unemployment benefits next week as a result of this week's batching of cleared claims filed through Aug. 10, Dell'Isola said.
The current batch of payments, at $26.1 million, covers cleared claims filed through July 29.
Some 25,000 displaced workers who receive at least $100 a week in PUA will also be eligible to receive an additional $400 a week.
Dell'Isola shared with senators the Federal Emergency Management Agency's approval of Guam Labor's request for a $22.6 million grant, which will fund 75% or $300 of the $400 weekly lost wages benefit for some 25,000 island workers.
The remaining 25% of $100 will be shouldered by the government of Guam.
Aiming for $12M grant
Senators asked about the National Dislocated Worker program, which has allowed Guam to temporarily hire workers who lost their job because of COVID.
Dell'Isola said Guam Labor received $1.5 million for the program, which enables the department to hire about 200 temporary workers for six months for various COVID recovery efforts.
To date, the program has been able to hire 115 COVID-displaced workers, he said.
Their worksites have been at the Department of Public Health and Social Services, Guam Homeland Security, Department of Revenue and Taxation, Labor's PUA Processing Center, Guam Department of Education, and mayors' offices.
On Monday, Labor announced a new batch of hiring of contact tracers for Public Health.
Dell'Isola said Guam Labor submitted another grant application, this time for $12 million, under the Dislocated Workers' Program.
Besides temporarily hiring displaced workers, the funding will also be used to upgrade the skills of displaced workers so they can get into "demand occupations" such as medical coding and billing, heavy equipment operation and information technology.