Because some unemployment insurance cases require human intervention, even states with updated technology can barely keep up with the surge of unemployment insurance claims caused by COVID-19.
Jobless claims may be trending downward, but state unemployment insurance systems are still having trouble processing claims. In some states, officials believe staffing is as big of an issue — if not a bigger issue — than the technology behind the systems.
“It’s hard on a good day,” said Tara Hutchison, communications director for the Alabama Department of Labor.
According to the U.S. Department of Labor, initial UI claims went down, on average, during the week ending May 9. Nonetheless, states are dealing with far more claims than they expected for the year, and a few states, such as Georgia and Florida, experienced increases in cases the week of May 9.
To add insult to injury, UI fraud has emerged as a pressing issue for states. The New York Times obtained a federal memo that suspects a “well-organized Nigerian fraud ring” has targeted the UI systems in multiple states. Further, states such as Arkansas and Illinois have fallen victim to UI data breaches. Such attacks come just a few weeks after government groups, such as the National Governors Association and National Association of State Chief Information Officers, asked Congress to provide funding to address “cybersecurity and IT infrastructure needs due to the global impact of the novel coronavirus (COVID-19).”
While cloud-based solutions have helped states absorb some of the UI claim load, not all have modernized their infrastructure. Data from the Center for Digital Government* indicates that about half of state UI systems rely on outdated technology.
Some case studies appear bleak. Hawaii, for instance, may not be able to upgrade its obsolete mainframe UI system until 2021.
In Congress, some members have proposed funding to bring UI systems up to speed. However, Government Technology has been told by multiple states that tech can’t completely fix the UI predicaments they face.
Take Indiana, which launched its modernized UI system within the last decade. The state feels it has done almost everything it can do to improve its UI claim processing from a technological angle, said Josh Richardson, chief of staff for the Indiana Department of Workforce Development.
“I don’t think you could take it much farther than what we have in terms of the steps of the process that we can automate,” Richardson said.
Although modernized tech “clearly matters,” Indiana, like the rest of the country, still undergoes hardships dealing with the complications of UI claims. “The real struggle is UI is a really complex system,” Richardson said. “Some of the things that we do is subject to automation… but a lot of what our staff does is exception processing.”
In certain cases, staff must manually collect information in order to determine eligibility. For instance, an employer may say an individual quit a job and is thus not eligible for UI. A state employee must communicate with both the employer and employee in order to resolve the situation. Such determinations slow states down.
“Even if it’s a small percentage [of claims] that requires staff intervention, the numbers are still really large right now,” Richardson said.
Hutchison painted a similar picture for Alabama, which moved most of its UI system to the cloud before COVID-19. In the first two months of the current crisis, Alabama processed 450,000 initial claims, a number that exceeds the amount of such claims that Alabama processed in the previous two years combined. But even that outrageous statistic doesn’t fully capture how swamped the state has been.
“Taking an initial claim is not anywhere near as involved as continued claims or adjudicating issues,” Hutchison said.
As Hutchison puts it, states must give employers due process under the law when it comes to jobless claims, and navigating the intricacies of the law takes training. This reality explains how states can get backed up to a significant degree, regardless of whether they have implemented updated technical solutions.
“What you almost have to do is take trained people off the phones so they can train the new people,” Richardson said.
Other stories across the country further highlight the staffing problem. According to The Sentinel, Pennsylvania’s struggle with UI claims can be attributed to limited staff as much as it can be linked to the state’s outdated technology.
“[The Pennsylvania Department of Labor and Industry] went into the current economic crisis — whose unemployment spike has been a full order of magnitude steeper than the last downturn — with less than half the unemployment staff it had during the Great Recession,” The Sentinel reported.
Vox indicated that Georgia had to process about 1 million claims in a month with fewer than 1,000 UI employees, which is not even half of the UI staff that the state had during the Great Recession. This is why the Georgia Department of Labor created a rule that requires employers to “file partial claims on behalf of their employees whenever it is necessary to temporarily reduce work hours or there is no work available for a short period.”
But as the Vox story detailed, this type of mandate can lead to potential confusion for employers and employees, cutting deeper into the time of stretched-out staff in another way.
Both Richardson and Hutchison pointed out that state UI staffing is affected by the overall health of the economy. Over the last several years, states didn’t have much unemployment, so funding for staff wasn’t prioritized. The COVID-19 crisis thus raises a difficult question to address: how can states be prepared for a UI emergency if current economic indicators suggest that not as much staff is needed?
*The Center for Digital Government is part of e.Republic, Government Technology's parent company.