Workers Will Keep Thousands in Extra Unemployment Checks

Feb 26, 2016

After a vigorous debate, a state board today voted not to try to recover nearly half-a-million dollars in unemployment benefits that mistakenly went out to workers two years ago because of a technical malfunction at Iowa Workforce Development  

The former director of the state agency that distributes unemployment benefits came under harsh criticism today at a meeting of the board of directors for IWD.

A state audit uncovered nearly a million dollars in unjustified benefits under Teresa Wahlert’s direction.    About half of that went to legitimate workers whose checks were bigger than they should have been.  

Some of the workers tried to give the money back but were told to keep it. 

Waterloo Democrat Bill Dotzler is a non-voting member of the board.   He urged the board not to try to collect the money now.

“I believe that Workforce Development should not go after these overpayments,” Dotzler said.  

By a vote of 4 to 1, the board agreed.  

Board member John Krogman represents employers who pay into the unemployment trust fund.   He was the only no vote.

“Just to say we’re not going to try to recover it sends the wrong message,” Krogman said.

The board decided to make a special case of the overpayments, though typically IWD would try to collect benefits that were incorrectly distributed.

Critics laid the blame for the overpayments squarely on Teresa Wahlert.

“This was something created by a former director,” Dotzler said. 

“We’re going to punish people for mistakes the agency made and tried to cover up,” said board member Ken Sagar who represents organized labor.

Current IWD Director Beth Townsend warned that going after the overpayments now would create ill will toward the agency, and generate a firestorm of complaints from the more than 1500 workers.

“I think we should assume that everyone who gets an overpayment is going to complain,” Townsend said.