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Department of Labor Unable to Act Against Employers to Fail to Make Unemployment Insurance Payments

by Cherri Carty on April 10, 2018

Officials from the Department of Labor recently told lawmakers in the U.S. Virgin Islands that understaffing in the DOL has prevented the department from pursuing legal action against employers who have failed to make their unemployment insurance payments. These delayed and missing payments have, in turn, delayed the payment of benefits to newly unemployed citizens.

The DOL representatives revealed this information during a hearing of the Legislature of the Virgin Islands’ Committee on Workforce Development, Consumer Affairs and Culture. At the hearing, the Department of Licensing and Consumer of Affairs, the Department of Tourism and the Virgin Islands Carnival Committee also all testified.

A look at the issue

Elton George, who is the director of the Unemployment Insurance Division, said that when employers do not make their required unemployment insurance payments, the Virgin Islands Department of Labor then begins garnishing the claimant’s financial records to determine the amount of the unemployment check. However, understaffing at the Department of Labor has led to none of the typical legal action being taken against delinquent companies. According to George, the delay has been made even worse by a larger than usual number of unemployment claims coming into the UID.

Virgin Islands lawmakers were not satisfied with the explanation. According to Senator Jean Forde, unemployment has increased dramatically in the wake of the hurricanes that hit the Territory last fall. As such, the Department of Labor should not have understaffing problems, especially considering the vacancies are fully funded. The positions must be filled to allow the Department to process unemployment benefits to help the people in need throughout the territory.

Virgin Islands media became aware of the issue when former employees of the Schneider Regional Center and Juan F. Luis Hospital told reporters they had not received their promised unemployment benefits since losing their jobs. Resulting investigations revealed widespread issues throughout the Virgin Islands with people not receiving the unemployment benefits they are owed.

Considering the harsh living conditions Virgin Islanders have had to deal with since Hurricanes Irma and Maria hit the Territory, it is even more important than it might typically be for citizens to get these benefits in a timely manner so they can afford basic living necessities, not to mention ongoing repairs to their properties.

According to Senator Nereida Rivera O’Reilly, some people who have lodged complaints with the government have not received any unemployment checks since October 2017—that’s months’ worth of missing payments caused by dysfunction in the government.

This is an issue affecting employers and employees alike. For more information about the state of the Department of Labor and how this issue will affect your business’s long-term planning, contact an attorney in the U.S. Virgin Islands.

 

Ravinder S. Nagi is a shareholder and Chair of the Labor and Employment Practice Group of BoltNagi Pc, a full service business law firm serving the U.S. Virgin Islands.

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