Class-action settlement tied to pandemic unemployment overpayments could erase debts or return money collected by the state

Organ Mountain News report

ALBUQUERQUE - Nearly 30,000 New Mexicans may still qualify for unemployment debt forgiveness or refunds under a class-action settlement tied to pandemic-era benefit overpayments, according to the New Mexico Center on Law and Poverty.

The settlement stems from Duran v. New Mexico Department of Workforce Solutions, a lawsuit filed by the New Mexico Center on Law and Poverty and the Ives and Flores Law Firm against the New Mexico Department of Workforce Solutions.

Advocates said many workers received unemployment benefits during the COVID-19 pandemic and were later told they owed money back because of administrative errors. According to the release, the state intercepted tax refunds, withheld future unemployment benefits, placed liens on property, threatened wage garnishment and placed some workers on repayment plans.

The lawsuit sought to stop those collection efforts, forgive qualifying unemployment overpayments and refund money already collected from workers.

According to the organizations, about 60,000 New Mexicans became eligible for refunds or debt forgiveness under the settlement. Roughly half still have not claimed the relief.

“When DWS told me I owed them thousands of dollars back, I panicked,” class member Dimitri Viramontes said in a statement. “I did everything right when I applied, and I had spent all of the money on my rent and living expenses.”

The organizations said many people may not know they qualify because of outdated contact information tied to unemployment accounts.

They said affected residents live throughout New Mexico, including Albuquerque, Las Cruces, Santa Fe, Rio Rancho, Roswell, Jal, Clovis, Farmington and Los Lunas.

“Workers turned to this program for help during an unprecedented crisis and many were left worse off than before,” Stephanie Welch, workers’ rights director at the New Mexico Center on Law and Poverty, said in a statement.

People must apply for relief by Feb. 21, 2027. According to the release, debts could remain attached to unemployment accounts and future benefits could still be withheld if eligible workers do not apply.

People can check eligibility by logging into their DWS account or contacting the Department of Workforce Solutions. Additional information is available at New Mexico Center on Law and Poverty unemployment settlement page.