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Second Judicial District Court in Reno, NV on Nov. 22, 2019. Photo by Mark Hernandez

A Washoe County judge says he will not move to declare the state to be in contempt of the court in a lawsuit over delayed unemployment payments, saying the state was showing encouraging progress on working through a backlog even though he remains concerned things aren’t moving fast enough.

The comments from Judge Barry Breslow came during a hearing Thursday to check in on the progress of an order he issued last week calling on the agency to release payments to gig workers who had experienced a reduction in work but had not suspended operations entirely. He had also ordered payments that had already started and then stopped to resume again, unless there was clear evidence of fraud, applicants had failed to file weekly claims or claimants were making too much money now.

“The court continues to be concerned that the progress, however, under the circumstances that people find themselves in here in Nevada, are moving too slowly,” Breslow said. “Whether that concern rises to the level that the court finds that [the state is] either abusing its discretion, or otherwise failing to comply with its obligations under the law — we're not there yet.”

Lawyers for the Nevada Department of Employment, Training and Rehabilitation (DETR) said that the state had complied with the order to release payments to gig workers, such as Uber drivers, who had their workload reduced. Claimant attorney Mark Thierman said he conceded that point, pending verification.

Apart from that, DETR’s attorneys said the agency counted 30,647 claims on which payments had started and then stopped. Of those, 7,407 had not filed weekly claims or had earnings high enough that it pushed them beyond the eligibility threshold.

There were 22,387 claims on which payments stopped because of flags for potential fraud. After potential review since the last court hearing, about 3,000 of those payments have been cleared for release and claimants may see the money as soon as Monday.

Thierman questioned whether DETR was doing enough to sort through the remainder of the claims on which there are indicators of fraud and call applicants to give them a chance to argue that they are legitimate. DETR officials said their efforts to communicate with applicants include a messaging system that they expect to get going in coming days to ask claimants for further documentation.

But Kimberly Gaa, head of DETR’s Employment Security Division, said many of the claims with flags appear to have more than just “whispers” of fraudulent activity. She said many of the flags are coming at the direction of the FBI, Secret Service and other law enforcement agencies.

“I'm not certain that there's a large group left within the fraud flags bucket that is not not fraudulent,” she said. “This is not just DETR saying we believe that this information is suspicious. It's getting reported to us by law enforcement.”

At the end of the two-hour hearing, Breslow directed court-appointed Special Master Jason Guinasso to continue working as an intermediary between the two parties, identify bottlenecks and prepare a supplemental report on what movement is taking place. Another hearing on the matter is scheduled for 9:30 a.m. on Aug. 20.

He said he might consider an order compelling DETR to change course “if the court is convinced at that time that progress is not being made, or that it's being made too slowly.”

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