Mississippi Casino Workers Accused of Fraud, Told to Pay Back COVID Unemployment Benefits

  • Mississippi Department of Employment Security claims people underdeclared gross earnings
  • People who received an overpayment have to pay back the sum, plus a 20% penalty
  • Casino workers have said that these issues largely came down to the MDES reporting process
  • Commercial casinos in Mississippi closed for two months in March 2020 due to the pandemic

 

unemployment form
Many Mississippi casino workers have to repay part of the state unemployment benefits they received early in the pandemic. [Image: Shutterstock.com]

Allegations of underreporting earnings

Many casino workers in South Mississippi recently received a letter stating that they have to repay part of the state unemployment benefits they got at the start of the COVID-19 pandemic. This Mississippi Department of Employment Security (MDES) letter states that each recipient was in violation of state law due to their failure to fully report gross earnings, mainly relating to workers failing to properly report their tips.

a 20% penalty will be levied if any week of the overpayment is determined to be fraudulent

The letter stated that a 20% penalty will be levied if any week of the overpayment is determined to be fraudulent. Treasure Bay Casino pit boss BJ Smith explained to local media that he received a letter on the last day that he was able to appeal the decision. His issue with the letter is not that it says that he owes taxes, but rather that it claims that he acted in a fraudulent manner. He said: “If I owe you the money, fine. Don’t put me in as fraudulent.”

Smith explained that he had filed a claim reporting just his base pay, as he had not yet received a pay stub for his tips.

Issues with the reporting process

Casino workers believe that aspects of the letter are not fair. Treasure Bay Casino and Hotel’s general manager Susan Varnes said that the unemployment payment issue comes from the timing of the reporting of base wages and tip-outs. She stated: “….individuals were required to report earnings on Sunday nights to MDES and may have reported their base wages only because they did not know until the following week what their tip wages were.”

Varnes offered to the MDES her help in clearing up these claims. She hopes that this would result in people being able to pay the difference if errors were found, without having to pay any penalty.

MDES told local media that it is just complying with state law in this matter

However, the MDES told local media that it is just complying with state law in this matter, which requires them to request repayment. Therefore, it says that everyone who received an overpayment needs to pay this money back. This can be done in one go or with a repayment plan.

Big demand for unemployment benefits

Each of the commercial casinos in Mississippi closed in March 2020 because of the escalating COVID-19 situation. They were able to reopen a couple of months later with certain safety protocols in place for patrons and workers.

There are 26 commercial casinos in operation in Mississippi, with over 13,250 people working in these properties as of November 2021.

Over 45,000 people in Mississippi had filed for unemployment benefits in the first couple of months of the pandemic. As a result, the MDES phone system and staff were overwhelmed and were unable to keep up with all of the claims.

Pre-pandemic, only about 1,000 people per week had been filing first-time claims statewide. According to an independent report, the MDES mistakenly paid out unemployment benefits totaling $118m in 2020. A lot of this was down to the staff being overwhelmed, with numerous protocols not being followed as a result.