Welcome

Alabama Warns Refusing Work to Claim Unemployment Is Fraud (1)

April 24, 2020, 3:52 PM; Updated: April 24, 2020, 7:06 PM

Alabama’s labor department has taken a tough stance on workers who are reluctant to return to their jobs as some states reopen for business, warning that refusing work and continuing to claim unemployment benefits is fraud.

The department issued the warning in a statement released late Thursday that encouraged employers to report to the state any workers who refuse to return to work.

The state’s hard line comes as restaurants and other service businesses in a number of Southern states prepare to reopen, and as the U.S. Labor Department’s independent watchdog is paying close attention to how states handle the potential for fraudulent unemployment insurance claims. Alabama Gov. Kay Ivey (R) hasn’t announced a timeline for lifting business-closure orders that she issued in response to Covid-19, but the state’s shelter-in-place requirements are set to expire April 30.

The reopening plans in neighboring Georgia and Tennessee have drawn criticism in some quarters for coming too soon and raised questions about the impact on workers who don’t feel safe returning to work until testing is more widespread and the virus better contained. Fear of exposure isn’t likely to be an acceptable reason for refusing work and continuing to claim unemployment benefits, state and federal officials have said.

The Alabama labor department statement focused on workers who might choose to stay home because they are receiving more money through expanded unemployment insurance than their pre-virus base pay.

“It’s important for workers to know that if their employer reopens or otherwise calls them back to work, they must do so, unless they have a good work-related cause,” Fitzgerald Washington, Alabama’s labor secretary, said in a written statement Thursday. “Attempts to collect unemployment benefits after quitting without a good work-related cause can be considered fraud.”

The message stands in contrast to the position Georgia Labor Commissioner Mark Butler took after Gov. Brian Kemp (R) made an early move to reopen the state’s economy. Butler told state residents who aren’t comfortable returning to work that they should coordinate with their employers, which can continue filing claims on their behalf in some circumstances.

Nevertheless, Georgia’s labor department has said fear of the virus on its own wouldn’t be a valid reason for a worker to refuse a job and continue filing for unemployment.

Employees can arrange with their employer a gradual, partial return to work without losing eligibility for unemployment benefits, Butler said Thursday. Georgia is temporarily allowing unemployment recipients to earn up to $300 a week on the job while still receiving full state and federal unemployment benefits. Their state benefits will be reduced dollar-for-dollar for any earned income above the $300 limit.

Case-by-Case Basis

State and federal responses to the coronavirus have expanded criteria that qualify a person for unemployment assistance, but states still have a lot of discretion to grant or deny benefits on a case-by-case basis, said Andrew Stettner, a senior fellow who focuses on workforce protection policies at the left-leaning think tank The Century Foundation.

For example, workers who aren’t comfortable returning to their jobs might be able to cite a lack of “suitable work,” if their age or an underlying medical condition makes them especially vulnerable to the virus, he said.

“The idea that it’s individualized, it might be confusing, but I think it’s accurate,” Stettner said Friday.

(Updated with new reporting about states' discretion to deny claims.)

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.