Lawmakers call for Labor Dept. fix

Margaret Allen
Hays Daily News
A virtual legislative coffee Saturday morning streamed live on Nex-Tech, with, top row left to right, host Sarah Wasinger, Hays Chamber, and U.S. Sen. Jerry Moran's Kansas Deputy Director Mike Zamrzla. Bottom row left to right, Sen. Rick Billinger, 40th District; Rep. Ken Rahjes, 110th District; and Rep. Barb Wasinger, 111th District.

When Kansas gets its share of Joe Biden’s $1.9 trillion stimulus package, one Ellis County legislator hopes some money will help the state’s hard-hit unemployment fund.

Sen. Rick Billinger, R-40th Senate District, said that before the pandemic, Kansas had close to $1 billion in the fund. 

But more than $600 million in fraudulent claims, plus huge numbers of Kansans with legitimate claims, have taken a toll, he said Saturday during a virtual legislative coffee.

“That’s not state money, that’s employers’ money. That’s their fund,” Billinger said. “I’m hopeful that we will be able to help some there.”

Many area employers are faced with fraudulent claims, he said.

To a one, Ellis County legislators on Saturday reported frustration with the Kansas Department of Labor and its ongoing saga.

Rep. Barb Wasinger, R-111th district, said the Kansas House has passed bill 2196, which creates the unemployment compensation modernization and improvement council.

If passed into law, the council of employers and employees will look at what needs to be changed, and requires the Department of Labor to modernize its IT infrastructure. It also strengthens the penalty for fraud, and creates a fund so that businesses and non-profits are harmless for the fraud, Wasinger said.

“We all need to work together to get this fixed,” she said. “It seems like passing some legislation for it seems to put a fire under them, so hopefully we’ll get somewhere, and we need to clean up that mess.”

The virtual coffee was hosted by the Hays Chamber and The Hays Daily News. It was streamed live Saturday morning by Nex-Tech.

Speaking on the call for U.S. Sen. Jerry Moran, R-Kan., deputy state director Mike Zamrzla said it’s been estimated Kansas could get $1.56 billion paid directly to the state. Individual cities and counties could share an additional $1.15 billion, he said.

$600M in fraud

Kansas has paid out more than $600 million in fraudulent claims, while the department is on its third secretary, said Billinger.

Billinger said he became aware of the fraud a year ago. He recalled telling the Kansas Department of Labor then about a local implement dealer in his district who had claims filed on two of his employees with 30 years at the company.

“Well unfortunately, we didn’t pay very good intention at the Department of Labor, and it just kept going and going,” Billinger said. “It took them a year to even respond to this.”

Billinger said now he spends at least two hours a day on unemployment issues. He calls the department every day except Sunday.

“We don’t have anyone in the office. They are all working remote. I don’t believe the right hand knows what the left hand is even doing,” he said. “Unfortunately we paid $600 million in fraudulent claims, and we can’t get Kansans money that need it. We have people who have lost their homes, they’ve lost their cars, they’ve lost everything. I heard a week ago that someone committed suicide. They just gave up.”

Speaking with the most recent secretary of the department a week ago, Billinger said he mentioned that as someone who ran a business himself for 30 years, the first thing he would do is call everyone back to the office, put up Plexiglass, and vaccinate the employees as essential workers.

He blamed Gov. Laura Kelly’s administration.

“This administration has had more than two years, not once have I seen a request in our budget to upgrade the computers or anything else,” said Billinger. “It’s a sad day in Kansas what’s going on in the Department of Labor.”

False 1099s

Billinger said 1099s are now showing up in mail boxes, indicating the state is reporting to the IRS that individual Kansans received unemployment income that they didn’t actually receive.

Rep. Ken Rahjes, R-110th House District, said one resident in his district told him that her 1099 said the state had paid her $21,000 in unemployment, when in reality it was $2,150.

Those folks need to contact the Kansas Department of Revenue and request a 1099G, Billinger said.

“You don’t owe that money and you shouldn’t pay taxes on it,” Billinger said. “I think there are so many folks out there that have had fraudulent claims against them, you’re going to have to pay it unless you ask for this 1099G.”

Rahjes said people in Ellis County have asked him for help, and he submitted a list to the Kansas Department of Labor. He said he got a response one month later.

“Folks get an email from the Department of Labor that says “if something isn’t quite right, call us.’ That’s a joke. The Department of Labor says ‘We’re going to set up another hot line.’ That’s a joke.’” said Rahjes, referring to the inability to reach anyone in the department.

Brownback legacy?

The problem’s been decades in the making, he indicated, with many now pointing the finger at budget-slashing former Republican Gov. Sam Brownback. 

“I’m sure people are yelling at their screens saying it’s all about Gov. Brownback,” Rahjes said. 

“Well I still go back to the system that we had was working for the limited number. Nobody knew that we were going to have 1,000 times more people that were going to be filing claims to be out of work,” he said. “So let’s work on solutions. Was everything perfect before? Absolutely not. But let’s move forward. There are times for politics, there are times for zingers, and there’s time for healthy competition when it comes to political, but these are people’s lives.”

Wasinger said she not only spends hours a day on fraudulent claims, but also on those in her district not getting the unemployment they are entitled to.

“I have one gentleman that has been contacting me since early November,” she said. “It breaks your heart.”