Lawmakers prod officials on backlog of unemployment claims

PMG PHOTO: PETER WONG - A beleaguered Kay Erickson, director of the Oregon Employment Department, as she fielded questions Saturday, May 30, from members of the House Business and Labor Committee during a virtual session about her agency's performance in processing unemployment claims during the coronavirus pandemic.

Oregon lawmakers have urged Employment Department officials to reach out directly to some of the tens of thousands of unemployed workers who have been unable to connect via telephone or online as claims mount during the coronavirus pandemic.

The legislators' comments came on Saturday, when members of the House Business and Labor Committee met for a second time in a week for virtual face-to-face questioning of agency officials about why it is taking so long to process some claims.

Before the hearing, Gov. Kate Brown said on Twitter: "The delays are unacceptable. I've directed @ORemployment to clear the backlog and clearly communicate claim status. My team will not rest until every Oregonian has received what they're owed."

Chairman Paul Holvey, D-Eugene, picked up on a written suggestion by Rep. Paul Evans, D-Monmouth, that Brown summon help from other state agencies including the National Guard.

"It's not acceptable for people to be waiting and waiting, only to get a busy signal. If that's our system, we need to be calling them proactively," said Holvey, who a retired labor-union representative.

"If it takes the National Guard, that is what needs to happen."

Agency officials said they would put on those calls some of the newly hired and trained employees. The agency has increased claims-handling staff from 100 to 700 since the first of Brown's stay-at-home executive orders in mid-March.

Director Kay Erickson said the agency focus has been on processing claims — the latest total is 445,000, although about 220,000 are receiving benefits. She said that until the pandemic, training averaged six to eight weeks; now basic training is condensed into a couple of days. For comparison, Oregon lost 147,000 jobs during the depths of the Great Recession a decade ago, and that drop took more than a year to materialize.

The agency already has announced an effort to whittle at the remaining 38,000 claims that are more complex, some of them requiring cross-checking of wages earned in other states.

"We simply don't have enough people to answer the phones in the way you are describing," Erickson said.

"We put the (federal) CARES Act programming ahead of some of the other work we would have spent on communications, for one thing."

David Gerstenfeld, another official, said some of the newly trained employees will be assigned to field simple questions on the phone.

He said of the 200,000-plus claimants without benefits, 73,000 have been deemed ineligible — though they may qualify under newer programs — 42,000 are eligible but need to file for a week of benefits, 11,000 are eligible but must claim benefits, and 19,000 are within the three-week window for completion of claims.

Rep. Margaret Doherty, D-Tigard, said half humorously that someone who lives nearby has been trying to get through to the agency to clear up an erroneous impression that he was a professional athlete, whose case would require special treatment.

"He was a good lacrosse player. But he wasn't that good," said Doherty, a former committee chairwoman who is leaving the Legislature after 11 years.

"It's not an easy process to get through. The question is: How can he get an answer … if he can't get through to anybody? I have nothing I can say to those people who call me."

New programs

In addition to a surge in regular claims — Oregon's official unemployment rate jumped from a modern low of 3.5% in March to 14.2% in April — the agency faces three new programs that Congress has passed as part of the CARES Act. One expands eligibility for workers never covered before, another extends benefits for workers whose payments are about to end, and a third increases benefits by $600 per week through July 31.

Gerstenfeld said a separate telephone line will be reserved for callers filing claims under a new program, known as Pandemic Unemployment Assistance, that will pay benefits to self-employed people, independent contractors, gig and part-time workers. Most are ineligible for regular benefits, but Gerstenfeld said their claims still have to be validated.

So far about 55,000 people have applied under this program since April 28. They qualify for a minimum benefit of $205 per week, for up to 39 weeks, and some eventually may get more.

The department started May 21 to process claims for 13 weeks of extended payments to people who have already exhausted their standard 26 weeks of benefits.

Holvey pressed but never got a specific answer from officials about what they need to make things happen quicker.

"We want to know where to put the resources to make it happen," he said. "As everyone knows, people are desperate."

Dissatisfaction

During the three-hour hearing, which got into internal details about the agency's workings, only state Rep. Jeff Barker, D-Aloha, joined a call earlier Saturday from U.S. Sen. Ron Wyden, a Democrat, that Erickson should resign.

"I'm sorry to say it," said Barker, a former committee chairman who is leaving the Legislature after 18 years. "But it just seems to me you've been overwhelmed, and maybe somebody else needs to take over the leadership of that department and try to get it up and running."

There was no audible response from Erickson.

Republicans did not engage in any verbal-bashing of Erickson, but a couple of them sought to pin blame on Brown and previous directors.

"I understand that Oregonians across the state are struggling," said Rep. Shelly Boshart Davis, R-Albany. "But I would point that the blame belongs on the priorities and decision-making leading up to the overwhelming of the Employment Department and the fact there was notice and there were audits."

Rep. Daniel Bonham, R-The Dalles: "We need swift action, not excuses. Oregon's unemployed workers deserve access to the benefits they have earned. The money is there, it's time to get these workers paid."

The Saturday session was devoted solely to questions from the legislators — some submitted before the meeting — and responses from the officials. During a committee meeting earlier in the week, the agency presentation consumed the entire hour allowed on the agenda.

Rep. Greg Barreto, R-Cove, suggested that the agency consider alternative ways to deliver money to laid-off workers, such as advancing loans repaid by their benefits. But Gerstenfeld said that while Oregon and other states run programs, they are bound by rules set by the U.S. Department of Labor, which can penalize states.

WorkShare

The officials also touched on WorkShare, a program started in 2016 to enable businesses to tap the unemployment trust fund to aid workers whose hours have been cut by 20% to 40%. Federal funds will pay all benefits through Dec. 26. Under the federal CARES Act, the range is now between 10% and 60%, although it may take changes in state law or rules for Oregon to adopt it.

"It has made it more appealing for reimbursing employers to use WorkShare than it ever has been in the past," Gerstenfeld said at an earlier hearing. "Because of that and the general economic crisis we are in, we are seeing a huge increase in the number of WorkShare plans."

Until mid-March, 168 employer plans affecting 3,018 people were processed during the past year. Since then,1,009 plans and 10,195 claims have been processed.

Gerstenfeld said WorkShare requires more data entries into the system. Holvey said Saturday that WorkShare is unlike the other programs run by the agency.

Other issues

Also discussed on Saturday:

• Antiquated computers: The Employment Department has a mainframe computer system that dates back three decades, and depends on COBOL, a computer language first unveiled in 1959. The agency has developed workarounds, but Erickson said, "They are not fully integrated with each other and have limited compatibility with today's technology." A modernization plan is underway.

• Waiting week: Gov. Brown says she wants the waiting week abolished so that benefits can get paid faster — something she repeated in her tweets — but it would require computer changes that Gerstenfeld said were deemed less urgent than processing thousands of claims.

• Fraud: The Washington State Employment Security Department recently disclosed that hundreds of millions have been paid out in fraudulent claims that are believed to have originated overseas, based on stolen personal information, though some money has been recovered. "Oregon is aware of these issues and is actively taking measures to prevent them," Gerstenfeld said.

But Rep. Brian Clem, D-Salem, a computer expert, said: "I find it ironic that Nigerians are getting unemployment insurance claims paid — though illegally — while other Americans can't get theirs."

pwong@pamplinmedia.com

twitter.com/capitolwong

Learn more

Link to Employment Department presentation May 27 to House Business and Labor Committee:

https://olis.oregonlegislature.gov/liz/2019I1/Downloads/CommitteeMeetingDocument/222016



Public testimony

Written testimony will be accepted by the House Business and Labor Committee until 5 p.m. Monday, June 1. Electronic testimony should go to hbl.exhibits@oregonlegislature.gov.

The committee staff says all documents will become part of the public record. The staff recommends that people make sure there is no personal identifying information included in any submitted document, such as Social Security or Employment Department identification or claim numbers.

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