Settlement reached in class action lawsuit over pandemic unemployment benefit overpayments 

Over $22 million in refunds and waivers already issued to New Mexico workers

ALBUQUERQUE, NM | January 31, 2025 — A settlement has been reached in the class action lawsuit Duran v. New Mexico Department of Workforce Solutions (DWS), filed in the First Judicial District Court, resolving claims related to overpaid pandemic unemployment benefits. This settlement provides automatic waivers, individualized waiver applications, and refunds for many New Mexicans, providing relief to those who were charged with overpayments due to administrative errors during the COVID-19 pandemic. The plaintiffs are represented by the New Mexico Center on Law and Poverty and Ives & Flores.

On January 9, 2025, Judge Sanchez-Gagne approved the settlement, and a formal written order will soon be issued. DWS worked closely with the plaintiffs’ attorneys to reach this resolution, has temporarily suspended efforts to collect overpayments from class members, and has begun processing blanket waivers and refunds to provide relief to workers who have been facing the financial consequences of these errors. 

“The Department of Workforce Solutions faced unprecedented challenges during the pandemic, including a 10-fold expansion of benefits in 2020, compounded by another doubling in 2021, and an onslaught of shifting federal guidance. This lawsuit gave us the opportunity to look back at that period and find some tools to ease the burden of overpayments, which the Department assessed in a good faith effort to follow the rules,” said DWS Cabinet Secretary Sarita Nair. “I am grateful to our team for their tremendous work to ensure that anyone eligible for a waiver will get one. We urge all New Mexicans who received an overpayment of federal pandemic benefits to make sure their contact information is up to date so they can receive notices related to this effort.”

This settlement is particularly significant as it will forgive 100% of CARES Act overpayments to those who qualify. As a result, tens of thousands of New Mexicans who owe money to DWS will see their debts forgiven, sparing them from collection actions, such as liens, deductions from future unemployment benefits, and interceptions of tax refunds.

“This settlement is a major step toward addressing the challenges faced by workers during the pandemic,” said Stephanie Welch, Workers’ Rights Director at the New Mexico Center on Law and Poverty. “New Mexicans who lost their jobs through no fault of their own deserve to make ends meet, and they should not be burdened by circumstances beyond their control. This agreement is an important step in ensuring our community is treated with fairness and dignity, especially in a time of crisis.”

What happens next?

• Blanket Waivers: Many individuals will automatically have their overpaid benefits forgiven. DWS will review eligibility and determine who qualifies within 14 days of formal approval of the settlement.
• Individualized Waivers: Workers whose overpayment has not been fully forgiven or who are not eligible for blanket waivers will be given instructions on how to apply for an individualized waiver and will have two years to do so.
• Refunds: Individuals who receive a waiver and who have already repaid overpaid benefits will receive a refund. DWS will notify individuals regarding their specific situations in the coming months. 

“I’m relieved that this settlement is moving forward,” said Yohanna Gerges, a plaintiff in the case. “I struggled to make ends meet while trying to do the right thing by paying back the overpayment, even though I didn’t cause the mistake. It was hard to find legal representation to help me fight back. This feels like a fair solution, and it’s reassuring to see New Mexico taking care of its people during tough times.”

“We’re glad to have worked with DWS to address this issue and ensure that workers who were impacted through no fault of their own are treated fairly,” said attorney Adam Flores, with Ives & Flores. “This agreement will provide critical financial relief to workers who have been struggling for years with the fallout of these errors.”

Due to the large number of people affected, it may take several months for DWS to process all waivers and issue refunds. Workers are encouraged to stay in contact with DWS for updates on their specific cases. More information is available at https://www.dws.state.nm.us/Unemployment/Overpayment-on-CARES-Act-Programs. 

For some workers, the waivers and refunds will be processed automatically. However, some people may need to apply for an individualized waiver. DWS will contact those affected with detailed instructions on their next steps. The most important thing for impacted workers to do right now is make sure their contact information and mailing address is up to date with DWS to receive notifications and refunds.

The Duran v. New Mexico Department of Workforce Solutions lawsuit was filed in 2023 to ensure that overpayments made during the pandemic would be forgiven and that workers who had repaid benefits would be refunded. Federal extensions of unemployment benefits were lifelines for tens of thousands of New Mexicans who otherwise would have had no income during the public health emergency. State agencies administering unemployment programs nationwide faced significant challenges in quickly scaling up the program. These challenges led to errors in benefit determinations, resulting in DWS initially deciding that many individuals had been overpaid and subsequently attempting to collect those funds back.

The settlement reaffirms that everyone deserves fair treatment, especially those who rely on unemployment benefits to make ends meet during difficult times. It is vital that individuals who followed DWS instructions and received overpayments due to state errors do not continue to be punished for those mistakes.

For more information about the settlement: https://www.nmpovertylaw.org/ui/ 

For questions about how to apply for an individualized waiver, workers can visit the DWS website or contact the department directly.

For all media inquiries, contact:
Paloma Mexika, (505) 305-2559 | paloma@nmpovertylaw.org