Layoffs may be on the horizon. Is the unemployment insurance system ready? – InsuranceNewsNet

In the early days of the pandemic, United States’ a patchwork of state unemployment systems was given a real-world stress test—and it didn’t do very well. Outdated computer systems crashed, people couldn’t be reached by phone to ask questions or get information about their applications, and there were massive processing delays in many states.

Some states are still dealing with a backlog of claims and appeals from 2020 and 2021, when federal pandemic unemployment programs were enacted that greatly expanded eligibility and weekly benefits.

A strong labor market over the past year, with low unemployment and few layoffs, gave state systems something of a break from dealing with new claims, which fell to a record low of 166,000 in March. But with the economy slowing and layoffs increasing, jobless claims rose more than 50 percent for the first time since the start of the spring, to 260,000 in the week that ended Saturday. And on Federal Reserve predicts that the unemployment rate will soon rise as well.

So how prepared is the economy for further increases in jobless claims?

There is some good news for unemployment insurance or UI systems across the country Andrew Stettnerdirector of workforce policy in Century Foundation.

“The Biden administration, they’ve tried to get to low-hanging fruit,” he said, “trying to identify the business processes that are slowing things down, try[ing] to get states to fix them.”

He said some states have launched technology overhauls, but they won’t roll out until mid-2020. “We may have a recession before these new programs are put in place.”

Congress in case that Department of Labor with 2 billion dollars in pandemic relief funds through the American Rescue Plan Act of 2021 to help states improve their unemployment programs.

“We now have teams of experts in 24 different states,” explained Michele Evermore, deputy director of policy at Ministry of Labor user interface modernization office. “They actually get into the system, understand what the barriers are to paying benefits on time, paying them equally. We also released 140 million dollars for countries to fight fraud, which will also be a big help during the next crisis.”

Pennsylvania has already updated its unemployment insurance technology, he said Julia Simon-Michel, supervising attorney in the unemployment benefits unit at Legal Aid of Philadelphia. Simon-Michel also serves as co-chair of the Unemployment Insurance Task Force for National Academy of Social Security.

“Things are moving faster now than during the pandemic,” she said. “Unfortunately, that’s a pretty low bar.”

She added that the new system “tracks people to needing to use the Internet and an online portal to do everything related to their benefits,” from applying to updating information and appealing denials.

“While I’m sure there is some efficiency on the part of the agencies — because these technologies are built for the agencies — unfortunately, they’re not designed or built with claimants or employers in mind.”

The new system creates barriers in particular for low-income workers and immigrants, who may not have easy access to the Internet or English language skills, Simon-Michel said. “For most of the people we see, they’re still struggling to navigate the system, get to grips with new technology and it’s still very difficult to reach Ministry of Labor and Industry and get all kinds of answers.”

Meanwhile, there are widespread staff shortages in unemployment agencies across the country, he said Ministry of Labor Forever.

“They have been working overtime for several years. They suffer a lot of verbal abuse in the course of their work. And so we lost a lot of trained workers to unemployment insurance.”

As Evermore told a congressional hearing last week, “Turnover is very high, further reducing limited capacity. Unless we invest in staff and systems, they will be less effective in responding to the next crisis.”

Even if states work out their staffing and technology issues, there are still big differences between them when it comes to which workers are eligible for benefits, how much they get paid per week and how long they can draw benefits before running out of eligibility. benefits.

“The pandemic has really exposed long-standing systemic problems in the UI system,” he said Jenna Gehrysenior lawyer in National project on labor law. “It leaves too many workers, especially our black workers and women, completely out of the system.”

That’s because most states disqualify part-time workers, temporary workers, people who earned too little money in previous quarters, and independent contractors. And states are shortening the length of benefits, Gehry said — which nationally was 26 weeks before the pandemic began.

“We’re actually up to 13 states that now offer less than 26 weeks, with several offering only 12 weeks of benefits.”

States are also reducing eligibility by tightening job search requirements, for example The Stetner Foundation of the Century..

“Fewer than 3 in 10 unemployed people receive an unemployment check,” Stettner said, referring to the “receipt rate” in Department of Labor data, which was 28% in the first quarter of 2022. The receipt was more than twice what it was at the height of the pandemic — boosted by federal pandemic programs — and nearly 50% in 1980.

In some states like Louisiana, New Hampshire and Floridathe percentage of recipients in the first quarter of this year is below 15%. This figure was at or below 10% in Tennessee, Alabama, Mississippi and North Carolina.

Average weekly benefit levels also vary widely and are no longer boosted by federal pandemic payments, which range from $300 to 600 dollars per week in 2020 and 2021. The highest benefits were paid in the first quarter Massachusetts, Washington, New Jersey, Hawaii and North Dakota. The lowest benefits are paid Puerto Rico, Louisiana, Mississippi, Arizona and Tennessee.

Finally, despite recent technological improvements, most filers still wait a long time before benefits start flowing, said Simon-Michel of Legal Aid of Philadelphia.

“People are not getting paid right now at the most important time – it’s the first two months after someone loses a job, the first time a rent payment becomes due after you’ve stopped getting a salary,” she said.

According to a user interface datasheet published by Century Foundation, the federal standard is that state programs determine UI eligibility for 80% of claims within three weeks. Only six states – Oregon, Utah, Wyoming, Nebraska, Minnesota and South Carolina — meet that standard right now.