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In This Issue

Key Developments

Debt Ceiling Deal Results in Rescission of DOL ARPA Funding for UI Modernization

Congress rescinded $1 billion of unobligated funds for modernizing the UI system as part of the Fiscal Responsibility Act of 2023, resolving the debt ceiling. Congress originally provided those funds to the Department of Labor (DOL) through a one-time $2 billion modernization appropriation in Section 9031 of the American Rescue Plan Act (ARPA).

The rescission will likely cause disruption to the planned spending from DOL that is using those funds to increase equity, improve timeliness, and prevent fraud through grants to state labor agencies. In addition, the DOL created the Office of Unemployment Insurance Modernization (OUIM) to guide the technology modernization effort. Early successes of OUIM include the deployment to 30 states of Tiger Teams, groups of technology experts across many disciplines to assist in developing modernization strategies, and learning around the best ways to use technology to improve UI processes across states. A previous bill that passed the House, HR1163, would have rescinded the unobligated ARPA funding as well as making other changes to the UI modernization efforts such as permitting states to seek overpayments from beneficiaries for up to 10 years. That bill faced a veto threat from the White House.
 

Federal UI Technology Modernization Strategy Released 

OUIM at the DOL announced a long-term technology modernization strategy for unemployment insurance, including additional grants to states. The new plan includes a focus on improving customer experience through modular, reusable, and flexible technology, multiple language access, assistive automation, and multiple options for  identity proofing. The plan was announced after OUIM worked with states over the past year to identify what “good can look like” in UI technology. The office has also been working with Stanford University on an artificial intelligence prototyping project. The effort continues to be funded through the remaining ARPA funding dedicated to improving timeliness and equity and reducing fraud.
 

New Developments on UI Modernization

The UI Technology Coordinating Coalition hosted a virtual conversation on April 13, 2023, focused on recent developments in UI modernization efforts. For the conversation, Andrew Stettner, the deputy director for policy and Larry Bafundo, the deputy director for technology of OUIM joined to discuss their efforts and progress in advancing UI technology modernization. In addition, Jennifer L. Phillips, the assistant deputy director of service delivery at the Illinois Department of Employment Security (IDES) joined to discuss updates to their UI system. With panelists from the state and federal government, attendees were able to hear first-hand from people who are working to implement modernization efforts, including insights they’ve uncovered. 

UI Tech Coalition Convenes as Part of Digital Benefits Network  

Federal Focus

DOL Releases State Toolkits on Adopting Automation and Increasing Equity

The Office of UI (OUI) within DOL’s Education and Training Administration (ETA) has issued two toolkits to help state labor agencies improve equity in their systems and accelerate the appropriate use of robotic process automation (RPA) tools for non-discretionary tasks. The toolkits incorporated lessons learned from Tiger Teams that worked in states to find ways that the user experience from both the claimant and agency staff perspective could be improved.

DOL OIG Issues Alert Memo on Biometric Technology 

The Office of the Inspector General (OIG) is calling on the ETA to issue specific guidance on how facial recognition technology should be adopted in the UI system to prevent fraud and reduce harm from the technology. At least 24 states have implemented facial recognition for UI claimants as a guard against wide-spread fraud, but research has found that such systems have racial and gendered biases which could mean fewer people of color are able to access UI. Also, it is unclear how vendors and state governments protect users’ biometric data from potential identity theft. According to the OIG memo issued in March, the goal of such guidance should be to increase equity, reduce fraud, and fill the void until comprehensive federal and state state standards are adopted. 

Tiger Team Updates 

At least 24 states have utilized DOL Tiger Teams to help pinpoint opportunities to improve UI delivery in the past year according to the ETA. Recommendations from the Tiger Team engagements included improving data metrics, process mapping, and increasing the use of Robotic Process Automation (RPA). Six states provided testimonials noting their engagements with Tiger Teams led to positive outcomes including additional funding, fraud prevention, and progress in understanding specific challenges at the state level.  

PRAC Releases State-by-State UI Fraud Map

The Pandemic Response Accountability Committee (PRAC) released a map showing UI fraud figures from 23 states during the pandemic. The data shows an estimated $59 billion of fraudulent UI payments. This calculation is based upon states reporting fraud from March 2020, but the ending recording date can be different and not reported. For example, California reported $18 billion in fraud but without an end date to its reporting period. Iowa reported $238,000 from March until June. PRAC calculated the total amount of UI benefits paid out during the pandemic through October 2021 was $655 billion. These totals are an attempt to document fraud as opposed to all overpayments, a number that the DOL OIG has estimated at a much higher level.

State Spotlight

CA, WA Workers Grapple with UI Backlogs and Overpayment Issues

The COVID-19 emergency health mandates have ended in California and Washington, but workers in those states who filed for UI during the pandemic still face challenges in claiming their UI payments. In California, as many as a million workers have contested claims. Their cases are under review by the California Unemployment Appeals Board for determination that could take up to two years to resolve. Even before the pandemic, between $500 million and $1 billion in UI aid was not paid to workers.  

Meanwhile in Washington, 115,000 workers face the prospect of having to pay back up to $1 billion in UI benefits if it is determined they were ineligible for benefits during the pandemic. There is a waiver program on potential overpayments, but it has not been widely advertised and only 14,000 workers have applied. For current UI claims the state is paying 64 percent of claims within 21 days, which is down from 93 percent in January 2020. 

Some States Using ID Proofing to Prevent UI Applications 

Data from the Beeck Center for Social Impact + Innovation indicates that nine states may be improperly preventing claimants from accessing the online application for UI benefits. The problem stems from the procedure in those states of requiring applicants to complete an identity proofing process through a separate vendor before they can access the benefits application. Claimants who struggled with the identity proofing were prevented from accessing the application itself. This appears to be inconsistent with DOL guidance, which only permits proofing at three points in the UI process, all after the initial application’s submission.

AZ Legislature Passes UI Reform Bill to Fight Fraud

Arizona passed a new law requiring enhanced crossmatching of a claimants eligibility with a broader set of databases before an initial or ongoing UI claim will be paid. The additional databases to check for claimant eligibility include the National Association of State Workforce Agencies (NASWA) Integrity Data Hub, The Centers for Disease Control and Prevention National Vital Statistics Systems Death’s Records Database and the Arizona Department of Corrections Inmate databases. If an individual who resides out of state makes a UI claim, the claim must first be verified according to the legislation. 

MA Fraudulent Initial UI Claims Skew National Jobless Statistics

In May, a surge in fraudulent UI claims in Massachusetts created the impression that the weekly national rate of new UI claims had increased. By the following week, it appeared that the surge was due to those fraudulent claims and the reported figures. The Massachusetts Department of Unemployment Assistance confirmed analysts’ suspicions, releasing a statement that it was detecting an unusually high number of fraudulent claims. The attempts to use stolen identities or gain control of the accounts of earlier users of the system were similar to some of the fraudulent activity observed during the height of the pandemic. Massachusetts may have been targeted because it has the highest potential weekly benefit for UI beneficiaries in the country.

Lessons From NJ’s Modernization of the UI System

The John J. Heldrich Center for Workforce Development at Rutgers, the State University of New Jersey, hosted a virtual forum analyzing and assessing the elements that are making New Jersey a leading state in reforming UI technology. The state is reimagining the claimant experience with a focus on improving equity, breaking modernization needs into smaller steps to accelerate innovation, and recognizing the interconnectedness of technology and policy. Panelists included NJ Department of Labor Commissioner Robert Asaro-Angelo and Chief Innovation Officer Dr. Beth Noveck, Heldrich Center Visiting Non-resident Scholar Michele Evermore and Waldo Jaquith of US Digital Response.

DOL Funding Supports Workers and Employers Access to State Systems

DOL awarded equity grants to four states in March to implement plans to remove systemic barriers related to age, race, and language proficiency in accessing the UI system. Florida, Mississippi, New Hampshire, and South Carolina all received the amounts they requested, totaling $20 million. In Michigan, the DOL awarded a grant to follow up on the work of the Tiger Team there to help employers when they interact with the system when paying UI premiums and providing required reporting.

NY Labor Department Faces Criticisms and Suit Over ID.Me Use 

The American Civil Liberties Union (ACLU) and New York Civil Liberties Union (NYCLU) filed a lawsuit alleging the New York Department of Labor has failed to turn over documents related to the agency’s use of ID.me to verify workers’ identities in order to receive UI. The suit notes the use of automated identity verification tools is problematic because of high error rates and potential bias, especially for people of color and members of other marginalized communities. It also cites the lack of oversight when it comes to protecting the biometric information of applicants because the data is stored with a private vendor. The department has also had complaints filed by workers to the Federal Trade Commission and the Better Business Bureau. In the complaints, workers explained difficulties with navigating the ID.me verification process, in some cases resulting in economic losses because they did not receive any UI benefits.

CO Creates UI for Undocumented Workers and CA Could Follow

Colorado moved forward on its plan to provide unemployment benefits to undocumented workers by selecting a vendor to operate the program. In a bill that passed the Colorado legislature and was signed by Governor Polis last year, Colorado became the first state in the nation to extend unemployment benefits to undocumented workers. The state accomplished this by creating a separate fund for these benefits and authorizing some of the UI premiums paid by Colorado employers to be transferred to that fund to support the new benefits. California’s Senate has passed a bill to offer similar benefits to undocumented workers there and it is now under consideration in the California Assembly.

MI Plans $78 Million Investment to Modernize UI System

Community Corner

Recoding America: A New Book Evangelizing Civic Tech For the American People 

It isn’t very often a book on improving government technology breaks through as a must read. But that is what Jen Pahlka has managed with her new book Recoding America: Why Government Is Failing in the Digital Age and How We Can Do Better. Pahlka was the former deputy chief technology officer under President Obama and is the founder of Code for America. In a recent opinion piece in the Washington Post, she cited how the New Jersey Department of Labor provides ideas for how technology implementation can be improved in the right way. Pahlka argues the key is not just spending big bucks on buzzy technology, but also investing in the people behind the tech in government agencies. Ezra Klein, a reporter from the New York Times said it is a book “every policymaker should read.” 

NELP Releases Reports on How to Improve UI 

The UI system is not prepared to handle the next recession and additional federal standards are needed for workers to gain equitable access to UI according to recent reports issued by NELP. If a recession happens in the near future, the system will be challenged to deliver on its twin mission of providing economic support to families to buy necessities and supporting the economy by sustaining consumer demand, noted one report released in April. 

Two other reports, released in June, outlined the need for creating new federal standards related to UI and suggestions for what those standards should include, such as ensuring 50 percent of eligible workers are able to access benefits and following federal plain language standards. NELP will host a webinar on these proposed standards on July 20. 

“An Unemployment System Frozen in Amber”

The American Prospect published a deep dive into the challenges and gaps of the current UI system. The piece, written by Bryce Covert, is unique in exploring how challenges currently confronting the UI system are rooted in the law's original Depression-era design as part of the Social Security Act. The law established UI as a partnership between the federal and state governments and not all workers were originally eligible. For example, it excluded agricultural and domestic workers from UI coverage. The unusual federal-state partnership has led to wide differentiation between state programs of benefit coverage and the amounts paid. This distinction separates the UI system from most other benefit programs in the United States that pay a uniform amount to those who qualify. That history leads to a discussion of the specific successes and failures of the UI system during the pandemic and asks how we can abandon the broken parts of the system to avoid future failures while capturing the successes to build them into the system going forward. (Many current and former members of the DBN’s UI Tech Coordinating Coalition were cited in the article.)

Contact

Reach our team at uitechconveners@georgetown.edu 

We look forward to hearing from you, 

Adam Bobrow and Marcus Courtney, Conveners of the UI Tech Coordinating Coalition
Ariel Kennan, Fellow, Digital Benefits Network
Shanelle Roberson, Community Manager, Digital Benefits Network
Oriel Gomez, Student Analyst, Digital Benefits Network
The Beeck Center for Social Impact + Innovation at Georgetown University

About the Coalition

The Unemployment Insurance Technology Coordinating Coalition is a community of practice of the Digital Benefits Network of the Beeck Center for Social Impact + Innovation at Georgetown University that engages cross-sector practitioners, including states, legal advocates, labor unions, technologists, think tanks, and other nonprofits through bi-weekly calls, annual convenings, closed-door sessions, research, and technical assistance in order to improve the technology delivery of the UI system.

Our Mission: Advance technological solutions at the federal and state levels with coordination between the two to ensure all eligible unemployed workers—and especially those from BIPOC groups that have historically been excluded from UI—receive their benefits on time.

Our Goal: Coordinate national experts and key state partners who are offering solutions of improved service delivery through new technology to offer coordinated solutions.