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Labor Briefed on Large UI Overpayments, Family Leave Timeline, Apprenticeship Expansion and AI Training
Summary
DLS flagged large unresolved unemployment‑insurance overpayments and other fiscal concerns; Labor leadership said collections have resumed and that family leave contributions will begin January 2027 with benefits in 2028, while unveiling apprenticeship intermediaries and a $2 million MD Train AI upskilling proposal.
The Department of Labor’s budget hearing highlighted a range of operational and programmatic priorities — and notable fiscal questions raised by the department’s analysts.
DLS analyst Connor Brown told the subcommittee that Labor’s FY2027 allowance decreases by $40.6 million to about $678.5 million, driven in part by UI administrative funding shifts and federal rescissions. Brown summarized key concerns: a large amount of UI overpayments that may be unrecoverable (an audit noted up to $760.7 million uncollectible because of statutes of limitation and paused recovery during the pandemic), the effect of two federal rescissions on modernization funding, and proposed BERA mandate reductions for several programs.
Labor leadership described active steps. Secretary Woo/Wu said the department has recovered more than $520 million in overpayments in 2025, resumed recovery processes with legally required notices and appeals, and restarted in‑person and call‑center services after bringing the call center back in‑house. The department acknowledged some pandemic-era cases are now beyond the statute of limitations but said it will pursue recoverable claims and continue collections.
On family and medical leave, Labor said employer payroll deductions are scheduled to begin Jan. 1, 2027, with benefit payments beginning in January 2028; the department said it will release contribution rates and soft‑launch employer registration in spring.
Labor also briefed the subcommittee on workforce initiatives: expansion of Earn Maryland, statewide cyber/AI clinic grants to provide hands‑on employer support, and a $5 million apprenticeship intermediary/accelerator program launched under the Raise Act that aims to expand registered apprenticeships beyond traditional trades into healthcare, finance and public administration. Labor proposed a $2 million MD Train initiative to upskill workers and small employers in practical AI adoption.
Committee members pressed Labor on a range of performance metrics — claims paid within 21 days, appeals timelines, amounts recovered since collection resumed, the amount of unrecoverable overpayments, and detailed plans for apprenticeship intermediaries. Labor committed to supply additional data and said many reforms were underway to modernize systems and improve service.
