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

Back in the early days of the pandemic, United States’ the patchwork of state-run unemployment systems has been put to the real-world stress test—and not very well. Outdated computer systems crashed, people couldn’t get on the phone to ask questions or get information about their applications, and there were massive processing delays in many states.

Some states are still processing backlogs of claims and appeals from 2020 and 2021, when federal pandemic unemployment programs were implemented that greatly expanded eligibility and weekly benefits.

A strong labor market over the past year, with low unemployment and few layoffs, has given state systems some respite from dealing with new claims, which fell to an all-time low of 166,000 in March. But with the economy slowing and layoffs mounting, initial jobless claims since the start of the spring rose more than 50% — to 260,000 in the week ending Saturday. A Federal Reserve System He predicts that the unemployment rate will soon rise.

So how is the economy prepared for another surge in jobless claims?

There is some good news for unemployment insurance, or UI, systems across the country, he said Andrej Stettnerdirector of the workforce policy department in Foundation of the century.

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

He said some states have launched technology overhauls, but they won’t start until mid-2020. “We may have a recession by the time these new programs are in place.”

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

“We have now deployed teams of experts to 24 different states,” explained Michele Evermore, deputy director of policy at Department of Labor user interface modernization office. “They actually get into the system, they understand what the barriers are to paying benefits on time, paying benefits evenly. We’ve also issued 140 million dollars states to fight fraud, which will also be a big help during the next crisis.”

Pennsylvania has already overhauled its unemployment insurance technology, he said Julia Simon-Michel, supervising attorney in the unemployment office at Legal Assistance of Philadelphia. Simon-Mishel also serves as co-chair of the Unemployment Insurance Task Force National Academy of Social Insurance.

“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 who need to use the Internet and the online portal to do anything related to their benefits,” from filing claims to updating information and appealing denials.

“While I’m sure there are some efficiencies on the agency side — because these technologies were built for agencies — unfortunately, they weren’t designed or built with applicants or employers in mind.”

The new system creates barriers, especially for low-income workers and immigrants who may not have easy access to the Internet or speak English, Simon-Mishel said. “Most of the people we see are still trying to navigate the system, master new technologies, and it’s still very difficult to achieve Ministry of Labor and Industry and get any answers.”

Meanwhile, there is a widespread shortage of staff in employment offices across the country Department of Labor Still.

“They’ve been working overtime for several years now. They put up with a lot of verbal abuse in their jobs. So we’ve lost a lot of trained unemployment insurance workers.”

As Evermore told a congressional hearing last week, “Turnover has been very high, which further reduces limited capacity. If we don’t invest in personnel and systems, they will be less effective in responding to the next crisis.”

Even as states resolve their staffing and technology issues, there are still wide variations among them in which workers are eligible for benefits, how much they receive each week, and how long they can take benefits before they run out.

“The pandemic has really exposed long-standing systemic problems in the user interface system,” he said Jenna Gerrysenior staff attorney at National labor law project. “It leaves too many workers, especially our blacks and women, completely out of the system.”

That’s because most states disqualify part-time workers, temporary workers, people who made too little money in previous quarters, and independent contractors. And states have shortened the duration of benefits, Gerry said — which nationally was 26 weeks after the pandemic.

“In fact, we’re up to 13 states now offering less than 26 weeks, with some offering as few as 12 weeks of benefits.”

States also reduce eligibility by, for example, tightening job search requirements Stettner Foundation of the Century.

“Less than 3 out of 10 unemployed people are getting an unemployment check,” Stettner said, referring to the “earnings rate” in Department of Labor data, which was 28% in the first quarter of 2022. Income was more than double what it was at the height of the pandemic — supported by federal pandemic programs — and nearly 50% in 1980.

In some countries, e.g Louisiana, New Hampshire a Florida, the income rate in the first quarter of this year was below 15%. That number was at 10% or less Tennessee, Alabama, Mississippi a North Carolina.

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

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

“People are not getting paid right now at the most important time – which is the first two months after someone loses a job, the first time rent is due after you stop getting paid,” she said.

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