RICHMOND — Virginia’s unemployment insurance program now ranks worst in the country when it comes to quickly processing claims that require staff review — a backlog that has risen to more than 90,000 cases, according to the Virginia Employment Commission.
Applicants caught in the bureaucratic limbo have been left waiting as long as five months for the state to decide whether their claims are valid and to begin issuing payments. And at the current rate, U.S. Department of Labor data shows it could easily take more than a year for an applicant to exhaust the appeals process.
“It makes you feel like you’re alone and no one cares,” said Leola Webb, a 36-year-old office worker who lost her job in Northern Virginia when the coronavirus pandemic began. She applied for benefits in late May but said she received no aid and no word on whether she could expect help until last week, when the state finally contacted her to determine whether she quit or was dismissed.
After five months without a steady paycheck, her first deposit arrived last week with thousands in back pay, but she said the delay and lack of communication took a toll as she struggled to scrape together money for rent and bills. “It was like no one’s listening,” she said.
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A surge of business closures beginning in March stressed unemployment insurance programs around the country, but Virginia’s inability to keep up with new applications and benefits programs stands out.
In October, Virginia was one of the last states in the country to issue new $300 weekly supplements authorized by President Donald Trump. Only four of the 49 states that joined the program took longer to begin distributing the payments, a review by The Virginia Mercury found. Before that, Virginia was one of the last states to begin offering extended benefits for claimants whose regular unemployment payments had lapsed, a new program authorized under the CARES Act.
The commission blamed both delays on difficulty programming their 1980s computer system, contending they’re doing about as well as could be expected in the face of an unprecedented surge of claims that saw the state process more than a million applications for benefits.
And on some fronts, the state has done well. The vast majority of applicants — 86% — have gotten their first payment within three weeks, according to data collected by the U.S. Department of Labor between April and September, which shows only four states performed better. State officials have frequently pointed to the statistic as they’ve responded to a steady stream of complaints about swamped call centers and long waits for help.
‘A black hole’
But when it comes to quickly processing applications that can’t be automatically validated or are stopped after a first payment was received, Virginia’s federal rankings are abysmal.
The category includes claims flagged because there is a dispute about whether the worker quit without cause, is accused of refusing a job offer, or says they are unable to return to work because of medical or child care issues created by the pandemic. It also can include claims in which applicants made mistakes filling out applications, which consist of a confusing array of questions that officials acknowledge don’t reflect the current programs available or the unusual circumstances created by the ongoing health emergency.
The federal government expects states to make those eligibility determinations within 21 days, and during the pandemic, most states have seen their performance slip. But Virginia has met that threshold in just 9% of cases since April — a record worse than any other state and far below the current national average of 52%.
Those slow processing times are reflected in a backlog of unprocessed cases that grew from 60,000 in July to more than 90,000 in October, commission spokeswoman Joyce Fogg said, acknowledging that the agency is still working to process applications received in June.
Once a determination comes, an applicant has the right to appeal if they’re rejected. Here, Virginia once again earns a last-place ranking for how long it takes to schedule a hearing, with an average wait of 142 days — more than double the national average of 60 days. The only place where applicants are waiting longer for hearings is the Virgin Islands, according to the Department of Labor.
“People are falling into a black hole where they’re waiting a tremendously long time and have a hard time getting answers or information about their claims,” said Pat Levy-Lavelle, an attorney with the Charlottesville-based Legal Aid Justice Center who specializes in public benefits and has been helping clients with claims. The organization joined the Virginia Poverty Law Center in urging lawmakers to take action to address the problems — something that so far hasn’t happened.
State officials suggested Virginia’s poor performance in processing claims could stem from a decision they say they made early in the pandemic to prioritize helping people submit and complete applications, which in most cases can be automatically validated using state payroll data.
“We wanted to get people in the door and, if they’re eligible, get them benefits,” said Gov. Ralph Northam’s chief workforce officer, Meghan Healy. “And to be honest, we put our money in the call center staff and the processing staff, not adjudication officers.”
The state had 82 workers in its call centers and now has more than 750, some of whom work for third-party contractors, according to the commission. Meanwhile, its adjudication staff has grown by just 27 employees, from 47 when the pandemic began to 74 today.
Healy said the state has now begun shifting its attention to back-end issues with claims and is working to retrain employees to help with the backlog. She said the state also recently began a process to triage claims to separate simple issues, for instance a Social Security number that was entered incorrectly and needs to be validated with documentation, from more complex problems that involve interviews with multiple employers.
She said the commission didn’t take those steps sooner because they were still overwhelmed by the number of applications coming in.
But, more broadly, the commission blamed the backlog less on its ability to keep up with claims and more on the kinds of claims they’ve been getting since the state began reopening – applications from people they say simply aren’t eligible for benefits because they either voluntarily quit their job or refused one when offered.
“A lot of people don’t understand that they walked off the job because they said, ‘I’m afraid of getting the coronavirus,’” Fogg said. “Now, we all are afraid of that, but we have to take that chance. I’m in that category. But I still have to go to work and do my job because I would be refused unemployment.”
Healy shared a similar sentiment. “The numbers have bumped up a little just because we have some folks who have refused to go to work,” she said.
Of the 90,000 claims pending, Fogg said most involve questions about whether a person voluntarily quit or was fired for good cause — both of which would make them ineligible for benefits. Another 15,000 had their unemployment benefits cut off after an employer reported they declined a job offer.
She said the commission cleared another 27,000 pending applications last month in which an applicant would not be eligible for payments even if approved because they never submitted a weekly claim.
No recent statistics are available on the outcome of determinations, but data from before the pandemic began generally supports the commission’s assertion that many of the claimants in queue will ultimately be deemed ineligible. About 80% of people whose applications required review were rejected in the first three months of the year, according to the Department of Labor.
But that still leaves thousands of workers who are entitled to benefits waiting months with little in the way of a safety net.
Webb, who applied in May and only received her first check last week, said she got stuck in the backlog because her employer asked her to resign rather than fire her or lay her off. To stay current on her bills, she at one point began making and selling egg rolls out of a friend’s ice cream truck.
Other people could qualify if they quit or refused a job because a health professional directed them to quarantine during the pandemic due to an existing health condition, though Fogg stressed documentation would be required. The state also is granting benefits to people who have to stay home to care for a child whose school has shifted to virtual classes.
Amy Combs, a 35-year-old line cook from Smyth County, said she had her benefits cut off with no explanation after her former boss called her up to offer a job. She told him that she could only work Mondays and Thursdays, the days her 5-year-old daughter attends classes in person.
She said she relied on support from family members to stay afloat, but still struggled. A low point came when the town of Marion cut off her water, adding extra fees to her already overdue bills and making her worry she might lose custody of her daughter.
“If social services finds out you’re living in a home without water, they’ll take your child in a heartbeat,” she said.
While the Virginia Employment Commission says it continues working to hire more staff and find other ways to move through its backlog faster, officials say more significant changes will have to wait.
In July, 43 members of the General Assembly wrote expressing concern about the commission’s handling of the pandemic and offering support in the form of “legislation, additional funding and staffing, or a complete procedural review.”
In response, Commissioner Ellen Marie Hess said the commission would welcome additional financial support from the state and federal government.
“We are grateful for your interest in helping to secure these resources on behalf of Virginians during future budget negotiations,” she wrote, noting past plans to study the commission’s operations had been sidelined in favor of a study on casino gambling.
But over the course of the special legislative session called to address the economic impact of the coronavirus impact, proposals to free up staff to process applications and improve the commission’s technology failed. In the end, the budget included funding for a single new position at the employment commission: an employee tasked with responding to inquiries from lawmakers, whose offices have received a flood of constituent complaints.
As the session came to a close, some lawmakers said they no longer believed additional money would improve the agency’s staffing problems and that more in-depth study would be required before embarking on any major technological overhauls — views echoed by the employment commission, which has said its biggest hurdle to hiring more employees is finding people willing and qualified to take the jobs.
And in either case, many said they believed the worst of the crisis is behind them. “No doubt about it — April, May, June — it was Armageddon for our employment office,” said Sen. Chap Petersen, D-Fairfax City. “Since that time, the unemployment has just slowly kind of mitigated down, mitigated down.”
Virginians stuck in the backlog shared a different perspective. “Could they go 16 weeks without a paycheck and make it?” asked Combs.
The Virginia Mercury is a nonprofit, nonpartisan online news outlet based in Richmond covering state government and policy.