老夫子传媒

A musician who lost all her unemployment documents when her home burned in a wildfire. An arborist who filed for unemployment assistance a year before the pandemic began. A tattoo artist who can鈥檛 prove he was working because he ran a cash operation.

These are just a few Californians caught in a state dragnet to recover money from fraudulent unemployment claims.

Late last year, California鈥檚 Employment Development Department launched a clawback program, requiring some 1.4 million people who received federal pandemic unemployment assistance to retroactively prove they were working or seeking work. That program, which ended in September, was aimed at helping people who don鈥檛 usually qualify for unemployment benefits because they are freelancers or small-business owners.

As of Jan. 4, one out of five recipients who received the notice have responded. The state says a majority have been deemed eligible and won鈥檛 have to repay, but some are unable to provide documentation, leaving them on the hook to repay benefits that could add up to tens of thousands of dollars. If they can鈥檛 pay, the state could collect the money in a variety of ways, such as wage garnishments or taking them to court.

鈥淭hey are going to want money back from me that I don鈥檛 have,鈥� said Donna Casey, a musician who could owe EDD more than $30,000 after losing her home in the August Complex fire in 2020. 鈥淲hat are they going to do to me, put me in jail? At least I鈥檒l have a place to live.鈥�

Policy experts , noting it would hurt poor Californians who were already disproportionately sidelined from the job market by the pandemic. Even former federal prosecutor McGregor Scott, hired by the state to lead a separate investigation into large-scale unemployment fraud, that the effort would recoup much of some including millions of dollars of state-approved payments to prison inmates. Advocates suggested letting claimants like Casey keep the money regardless of proof, but the state is holding firm.

That鈥檚 left many Californians in a bind.

Some who were contacted by EDD said they are terrified of losing their homes. Many are furious that the responsibility fell on them after they already received the money. And others simply don鈥檛 know where to turn for help.

Casey had lost gigs and stopped selling homemade jewelry at festivals when the lockdown began. Then she lost all her documentation when her house in Trinity County burned in a wildfire, just after her daughter died of a lung infection.

Unemployment was a lifesaver as Casey searched for work throughout the pandemic, including applying to an Amazon warehouse. But, at 67-years-old, she couldn鈥檛 lift enough to qualify for the job.

Casey, however, never thought she might have to pay back her benefits.

The state鈥檚 unemployment agency has noted that the repayment policy is a federal requirement, passed by Congress in the Continued Assistance for Unemployment Workers Act in 2020. The agency pledged to offer waivers if overpayment of benefits was not the recipient鈥檚 fault and repayment would cause extraordinary hardship, defined as any single-person household making under $1,351 a month or just over $16,000 a year.

None of the people CalMatters spoke with, however, were aware of such an option or how to apply for a waiver. They said it wasn鈥檛 in any of the agency鈥檚 communications to them.

Now living in Berkeley with one of her daughters, Casey has some photos of her old business cards that she鈥檒l send to the agency. She also hopes EDD will speak with the music groups she played with 鈥� but she worries that won鈥檛 cut it.

Similarly, at the start of the pandemic, Sasha Emery was living in an RV partly paid for by federal emergency funds after her Paradise home burned down. After finally getting into affordable housing during the pandemic, she signed up for unemployment when the few available jobs didn鈥檛 pan out.

When the notice arrived asking for proof or repayment, shock turned into tears. All Emery has to offer are records of her dire situation: food stamps, Medi-Cal documentation and potentially the federal assistance she received after the fire.

If a recipient can鈥檛 offer the necessary proof, and cannot repay the funds at once or in installments that could include 3% interest, . The agency could put a lien on property, take up to 25% of a recipient鈥檚 wages, withhold state and federal tax refunds or lottery winnings, deduct benefits from future unemployment or state disability insurance benefits, or file a lawsuit.

Prasad Krishnamurthy, a debt collection expert and professor of law at UC Berkeley, said the state isn鈥檛 bound by the same rules that constrain private collection agencies in pursuing debtors. That makes the government, said Krishnamurthy, 鈥渁 very powerful and aggressive creditor.鈥�

The debt could push Californians further into poverty, Krishnamurthy said.

Sam, an arborist who asked not to use his full name for fear of retaliation from the state, filed for unemployment at the end of 2018 after losing his San Francisco business. He received benefits for the next seven months. Then in August 2020, the EDD contacted him, telling him that he qualified for a federal extension. 鈥淚t has been automatically filed for you,鈥� the agency wrote.

At the time, Sam was grateful for the support, which allowed him to care for his mother, who suffered a heart attack at the beginning of the pandemic and has cancer.

In fact, he said, the agency held a virtual hearing to approve his eligibility. After that, he received $4,000 installment payments for benefits going as far back as January 2020. Now, with two ailing parents and no documentation to prove that he lost pay due to the pandemic, Sam may owe close to $30,000 in accrued benefits.

鈥淚t just kinda feels like I was set up,鈥� he said.

For others who ran small cash businesses, there was never a paper trail.

After Martin Davalos鈥檚 tattoo work dried up, Davalos turned to unemployment, which kept him off the streets, he said. Now, however, he has no proof to show EDD. He spent the money on bills, gas, food and rent.

鈥淪ure I would give it back,鈥� Davalos said, 鈥渂ut it鈥檚 gone.鈥�

This article is part of the , a collaboration among newsrooms examining income inequality and economic survival in California.