The pandemic helped states understand the gravity of legacy system modernization, but some were already beginning the process prior to COVID-19. The pandemic also revealed the need to be able to quickly change system requirements and address evolving fraud threats.
While states may leverage different systems to power their processes, many are modernizing with the same goal: a secure system with the capacity to meet current — and future — needs.
Ohio
Ohio’s modernization strategy is heavily focused on change management to support end users: both state employees and constituents.
The state is working closely with the private sector throughout this process. In addition to the system vendor, the state also worked with a third party to draft the requirements, another to improve customer experience and will be bringing on a vendor for testing, according to Ohio Department of Job and Family Services Director Matt Damschroder.
Ohio’s unemployment platform runs on the aging state mainframe system and uses COBOL programming language, he explained. Although the state had a modernization plan in place prior to the pandemic, heightened demand made the system’s limitations clear.
In January, Ohio announced it would be using GSI as its system vendor. The work is now underway, slated for a fall 2026 go-live date.
The state has begun awarding contracts leveraging funding for this fiscal year, and Damschroder said state officials are still exploring additional funding sources.
Users will enjoy new, customer experience-focused features, reducing the need for manual data input and offering greater timeline transparency. State employees will have streamlined access to system data.
The new system will enable efficient integration with other technologies or features the state wants to implement: “We’ll be able to very quickly start to take advantage of AI capabilities and those kinds of things without having to procure a whole new system,” Damschroder said.
Oregon
Although modernization is never entirely complete, Oregon has launched all parts of its new unemployment system on time and on budget, said David Gerstenfeld, former director of the Oregon Employment Department (as of press time, Gerstenfeld had moved to lead the state’s Department of Revenue).
The old platform was a COBOL-based mainframe system, which created several challenges. “It certainly wasn’t nimble enough to make the changes that we needed,” Gerstenfeld said.
Improved customer experience and more self-service options were driving goals, he said.
The state modernized its unemployment benefit system and unemployment tax system and implemented a paid family and medical leave insurance program after the state Legislature established it and added it to the project’s scope. These systems were part of one technology stack in one system that handles these interrelated programs, Gerstenfeld explained — an advantage for ongoing maintenance.
“And we still came in within that original budget and that time frame, even though we added an entire new benefit program to it,” he said. The work started in 2021, and the last major piece was rolled out in March 2024.
The state primarily leveraged funding it had saved from the American Recovery and Reinvestment Act (ARRA) of 2009. Oregon’s Unemployment Insurance Trust Fund enabled the state to save ARRA money specifically for modernization.
The new system saves employees time on data entry and improves the customer experience with more communication channels.
Future-proofing a system is not a one-time task, Gerstenfeld emphasized, but rather a “permanent status of continually modernizing.” The vendor regularly updates the system’s core functionality and gives the state insight into application process barriers that require adjustments. The state is also building internal teams responsible for ongoing program analysis.
California
The California Employment Development Department (EDD)’s comprehensive modernization effort, called EDDNext, is in its third year and aims to improve customer experience, modernize technology and enhance security.
“It’s a complete overhaul of how we do business and how we serve our customers,” said EDD CIO Ajit Girn.
He explained that the state uses a COBOL-powered mainframe system — developed for an unemployment insurance system that looks very different from today’s — to process most payments. Moving claims between multiple claimant-supporting systems causes inefficiencies, Girn said, and an integrated claims management system (ICMS) would better serve claimants.
That ICMS implementation is the heart of EDDNext. It aims to provide one system to serve all claimants, whether they are applying for unemployment, disability or paid family leave.
The department expects to select a vendor later this year and anticipates the project will take four years to complete.
EDD is looking for a solution that the vendor will maintain permanently as a partner of the state to ensure the system is continually improved through customer and employee feedback and other best practices.
“The continuous improvement is extremely critical,” Girn said.
The modernization is multifaceted, he said; it will improve customer-facing portals with features like increased language access, but there will also be greater harmonization between employees and constituents.
EDD has been funding this modernization process through budget change proposals, Girn said, emphasizing the Legislature’s support.
Already, many improvements have been made to the customer experience, and 80 percent of survey respondents report feeling positively about their UI claim filing experience. The most important impact? Payments are being made in a timely manner.
EDD works with other states through the National Association of State Workforce Agencies to share information and learn from others. “EDD is not alone in this transformation journey,” Girn said.
This story originally appeared in the Summer 2025 issue of Government Technology. Click here to view the full digital edition online.
