Photo: Flickr via jronaldlee
No one’s under the illusion that state labour departments are immune to human error, but it’s rare stories like New Jersey janitor John Holt’s that make us wonder just how many workers have fallen through the cracks. As Holt told the Star Ledger’s Karin Price Mueller, the state is asking him to return more than $19,000 in worker benefits he collected after losing his job back in 2010 – benefits he was repeatedly approved for.
For about two years, Holt was employed by Diocesan Housing Services, an entity that falls under the Catholic Diocese of Camden, a legal non-profit. The housing service itself, however, didn’t claim non-profit status at the time that Holt was hired.
That’s a crucial point to note, since for-profit companies are required to participate in state unemployment plans. As such, Holt’s wages were continuously garnished to cover unemployment and disability taxes throughout his employment.
When he applied for benefits, he was granted a weekly stipend of $227, which he continued to receive for nearly two years – until the checks abruptly stopped coming.
When Holt showed up at the state’s labour department to complain, he was told Diocesan Housing Services changed its business status to non-profit sometime during his employment. From that point on, they weren’t obligated to cover his benefits.
Now the state wants the $19,295 he’s collected back – even though his wages were garnished long before the company turned into a non-profit.
“I don’t understand how after collecting for 19 months it is decided that I shouldn’t have gotten anything and that I have to pay everything back,” Holt said. “What happened to my unemployment tax deductions?”
At this point, no one seems to know why. The state and Holt’s old employer are pinning the blame on one another.
The state maintains it notified the company about problems with Holt’s benefits several times, while a spokesperson from Diocesan Housing Services told Mueller the state screwed up by accidentally listing Holt on the payroll at another Diocese entity.
While both sides try to come to a resolution, the troubling part in all this is that Holt was never notified that his employer was opting out of the unemployment program. Under the The Unemployment Compensation Act, they aren’t required to do so.
There’s not much Holt could have done to prevent this nightmare, but it’s worth pointing out he was proactive from the get-go.
Not only was he was able to produce paystubs and tax documents proving he paid unemployment taxes throughout his employment, but he also showed up for at least two hearings to contest the claims against him.
Whether it’s the IRS, Dept. of labour or your doctor’s office, the worst way to react to clawback claims like these is to stick your head in the sand.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.