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New Federal UI Modernization Office to Aid State Systems

The U.S. Department of Labor created a new office intended to guide efforts to provide states’ UI programs with technology, funding and advice about tackling equity gaps, fraud and cyber attacks.

The federal government created a new office today that is charged with helping states improve the cybersecurity, fraud-proofing and accessibility of their unemployment insurance (UI) systems.

The new Office of Unemployment Insurance Modernization is housed in the Department of Labor (DOL) and equipped with $2 billion of American Rescue Plan Act (ARPA) dollars to fund its initial efforts to address some of the worst UI issues that have come to light during the pandemic.

In particular, the office aims to see qualified recipients receive benefits promptly and states trim down UI backlogs, catch and block fraudsters, and reduce disparities in who gets access to UI, such as those that may appear across different ethnicities, income brackets and races. The new unit will use technologies and strategies to tackle these issues.

Yvette Meftah takes the helm as the office’s director, joined by Michele Evermore — senior adviser on unemployment insurance for the DOL’s Employment and Training Administration unit — as deputy director of policy, DOL announced. The DOL is also expected to name a deputy director of operations and management and deputy director of technology.


The Office of Unemployment Insurance Modernization is tasked with putting into place strategic goals that the DOL outlined on Aug. 11, which include calls to provide states with more tools, funds and technical support.

The DOL has made clear it recognizes UI as a lifeline, stating previously that “the unemployment system has helped nearly 53 million workers stay afloat during a pandemic and economic crisis,” and has been “staving off an even deeper recession” by infusing more money into the economy.

But states’ UI programs often rely on outdated systems and are unprepared to withstand the sophisticated attacks launched by organized cyber criminals, the DOL said.  

Complexities can also arise when residents live in one state but work in one — or several — others. Some fraudsters have taken advantage of lack of transparency among states to wrongfully file for benefits in several different states using the same stolen identities.

The DOL aims to get better visibility into such situations by providing pandemic UI program administrators with fraud-fighting and cyber defense grants — but making the awards partially contingent on their agreeing to share data. This plan would see $100 million worth of Coronavirus Aid, Relief and Economic Security (CARES) channeled to grant recipients, while obligating them to share UI data with the DOL’s inspector general.


Federal plans also call for investing $140 million of ARPA monies into grants for boosting states' fraud-fighting capabilities. The funds could help states purchase identity verification software subscriptions, handle more data analytics, put cyber defense strategies into action and make other upgrades.

Other efforts would see the DOL set up blanket purchase agreements with three vetted technology vendors — LexisNexis, TransUnion and a collaboration between V3Gate and — under which the firms will help states verify UI applicants’ identities and monitor for suspicious behavior.

Federal agencies also plan to develop their own sets of tools, which will be made available to states wishing to modernize. The DOL and U.S. Digital Service are slated to collaborate over creating UI solutions that are intended to be easy for states to adopt and integrate.

The DOL isn’t focusing all its efforts into providing technology and money either, but also intends to offer expert advice. Tiger teams of professionals ranging from computer system engineers to behavior insight specialists will travel to states to review their UI programs. The experts can then advise about improving states’ abilities to accurately verify applicants’ identities, reduce fraud and serve residents more equitably.


Alongside blocking out cyber criminals, the federal government is also concerned with making services more available to legitimate applicants — and ensuring that all qualified residents can easily apply.

To advance this goal, the government also will provide $260 million worth of grants intended to fund various efforts to reduce equity gaps. These include strategies aimed at boosting public awareness, improving customer service, tackling backlogs and better reaching low-income residents. The three selected technology vendors are also expected to help states ensure their programs are accessible to residents with disabilities and different native languages.