NLSLA Secures Relief for Thousands of Californians Wrongly Forced to Repay Covid-Era Unemployment Benefits
Los Angeles, CA — Neighborhood Legal Services of Los Angeles County (NLSLA), widely recognized for its disaster recovery efforts, announces a significant victory this week for thousands of Californians still grappling with the economic aftermath of the COVID-19 pandemic. Following years of advocacy and legal intervention, the Employment Development Department (EDD) has agreed to dismiss approximately 2,300 cases involving wrongful unemployment benefit “overpayment” claims, providing long-awaited relief to families who were told to repay funds they received lawfully during the height of the pandemic.
When the COVID-19 crisis hit, EDD suspended eligibility determinations so that unemployed workers could access urgently needed aid without delay. But years later, the agency began reexamining claims and issuing thousands of overpayment notices, even though many recipients had done nothing wrong, and in violation of the statute of limitations. Families that had already used their benefits for essentials like rent, food, and medicine were suddenly told they owed the state thousands of dollars.
NLSLA’s first client came forward in 2022 after receiving one of these notices. NLSLA successfully appealed the case and convinced the EDD Appeals Board to reverse the overpayment, exposing a systemic flaw in the agency’s process. Despite this victory, the EDD continued to issue similar notices statewide.
Working alongside advocacy partners, NLSLA threatened legal action and pursued negotiations to uncover the scope of the problem and ensure EDD canceled all unlawful overpayments. Ultimately, NLSLA confirmed that nearly 2,300 cases had been unlawfully reopened. Under Unemployment Insurance Code Section 1332(b), a provision that prohibits reopening cases within 30 days unless there is clear evidence of fraud, the reopened cases were indeed illegal. In all 2,300 cases, no allegations of fraud had been made or proven.
“These families did nothing wrong,” said Amy Yu, NLSLA attorney. “They received help during an unprecedented public health crisis — help that kept roofs over their heads and food on the table. Years later, they were told to repay money they had never owed. Righting this wrong restores a measure of fairness and stability to their lives.”
The affected individuals, many of whom had already repaid the state, will now be reimbursed. Based on average benefit amounts of $450 per week for up to 26 weeks, the financial relief will total millions of dollars returned to low-income Californians.
NLSLA was notified in early October that the EDD had completed the process of canceling the overpayments on the identified claims and refunding them all. If you believe EDD has unfairly targeted you, contact NLSLA at 800-433-6251.
Neighborhood Legal Services of Los Angeles County (NLSLA) provides free civil legal assistance to nearly 175,000 individuals and families annually. NLSLA fights for justice across Los Angeles County through direct representation, litigation, and systemic advocacy in the areas of housing, employment, healthcare, and family law.
