- Legal States
Erik Gibbs January 17, 2022 4 min read
Mississippi Casino Workers Accused of COVID-19 Fraud, Must Return Benefits
Some South Mississippi casino workers recently received a letter from the Mississippi Department of Employment Security (MDES) they weren’t expecting. It told them that they have to repay certain state unemployment benefits received during the COVID-19 pandemic. At the same time, the MDES accused them of fraud.
Mississippi Goes After Casino Workers
All 12 Coast casinos were closed in March 2020. They reopened two years later, with safety precautions in place to protect customers and staff. According to the MDES, the letter stated that the employees had failed to report their gross earnings in accordance with state law. However, it doesn’t explain how they failed.
One of these letters was sent to BJ Smith, a pit boss from Treasure Bay Casino in Biloxi, according to the media outlet Sun Herald. He said that it arrived on the same day as the deadline for appealing the decision.
Smith doesn’t know how many others were told to repay their benefits. He claimed he was shown a stack of 40-50 copies of letters from employees when he visited Treasure Bay’s Human Resources department to learn what to do.
Smith stated that he wasn’t so upset that he had to replay the incident, but he objected to the Mississippi Department of Employment Security filing fraud claims in his claim.
An investigation by the agency revealed that Smith had been overpaid by just over $1,000. A penalty was then added to the total.
The letter stated that a 20% penalty would be applied if the overpayment was found to be fraudulent. Smith was assessed $167 for the penalty.
Smith is also not permitted to claim any benefits as of December 26 of last year as punishment. The letter stated that Smith was “inadvertently reporting his earnings.”
Smith stated that the unemployment office is basically telling casino workers “you lied” when in fact it is not what happened. He said that he and his coworkers filed their claim together with their base pay before they received their tips pay stubs.
“Nobody lied. We just used the information we had available,” he asserts.
Mississippi Unprepared to Handle COVID-19
In Mississippi, more than 45,000 people applied for unemployment during the first two months. The staff at MDES and their phone system couldn’t keep pace with the volume of claims.
About 1,000 people filed claims for the first time every week of the state’s existence before the pandemic started in March 2020.
After a July 2020 report stating that MDES had incorrectly paid $118 million in unemployment benefits in 2020, which was the first year of the pandemic, the review of unemployment claims was done.
According to State Auditor Shad White’s independent audit report, overpayments were not discovered due to MDES staff being overwhelmed by the large number of unemployment claims filed at the beginning of the pandemic.
The agency then waived many of its usual provisions, such as the one-week waiting period and the requirement to actively search for work, during the initial stages of the virus. The audit shows that claims were approved without the need for social security verification between March and May 20.
No Mercy for Workers
Most of the people who applied for unemployment benefits had never done so before and it was confusing. Add to this a system that wasn’t functioning properly and the situation becomes difficult to manage.
It was made even more difficult by the state’s reporting guidelines. Unemployment requests had to be submitted each week. However, in the case of many employees, the tip wages couldn’t be added until the following week because they weren’t known when the claim was filed. This means they could only report based on their base wage, even though Mississippi is now accusing them of fraud for doing so.
In actuality, it’s a case of neither the MDES nor the auditor understanding the reality of the situation.
It could get worse before it gets better. According to White’s report, the auditor recommends “further analysis of the overpayments of unemployment claims be performed in order to maximize the potential for recovery of fraudulent payments.”