CT Department Of Labor: A Year In Review
CT Department Of Labor: A Year In Review
The Impact of Covid-19
(Wethersfield, CT) – Today, the Connecticut Department of Labor (CTDOL) released a comprehensive look at the impact of Covid-19 on the workforce, the unemployment system, and the agency.
CTDOL Commissioner Kurt Westby said, “The economic improvements expected now that the vaccine is out are a much-needed light at the end of a very dark tunnel. This past year has been nothing short of devastating for our workforce and our economy. Out of 1.9 million workers in Connecticut, COVID-19 sent nearly 580,000 of them into unemployment. Our 40-year old unemployment system was never meant to handle that kind of surge; it is with all thanks to the CTDOL benefits and technical teams that we kept that system running despite continued strain. We have a long way to go before we are through this—weekly claims filings remain five times above normal—but the CTDOL staff has done a herculean job to date, and I want to thank them for their commitment to our workforce.”
Governor Ned Lamont said, “The Connecticut Department of Labor faced extraordinary circumstances over the past year, and it isn’t over yet. I commend Commissioner Westby and the CTDOL leadership and staff for the work they’ve done on behalf of the more than half a million unemployed who needed them. Unemployment benefits are critical safety net programs during normal times; during this pandemic, these benefits have prevented additional disaster for many of our neighbors.”
Since March 13, 2020, CTDOL has received 1.4 million unemployment applications over the six programs it administers—volume normally seen over ten years. The system was overwhelmed by applications and filers who were new to unemployment and needed help navigating claims. There were nearly 580,000 unique filers who cycled on and off state unemployment benefits and any of the five federal unemployment programs that the agency stood up in response to the CARES Act, CARES Act II, and now the American Rescue Plan.
In the year prior to the pandemic, CTDOL had an average of 40,000 weekly filers. In May 2020, this number jumped ten times to nearly 400,000 weekly filers. It is now between 200,000-210,000 weekly filers.
As part of an emergency response to the surge in claims, the agency immediately moved staff from units throughout CTDOL and the American Job Centers to the phones, bolstering staff on this front line from 25 to 40, as an interim step until additional hires could be trained and deployed. Unemployment benefits are complex; new staff generally train in a classroom setting for about four months. Despite the complications presented by virtual learning, CTDOL trained more than 60 new agents in one month and put them in the (virtual) field with mentors. The agency continues to train and add staff to units including unemployment, appeals, tax, and more.
In addition to the staffing increases, technology and other infrastructure needed urgent upgrades. The agency phone system that once had four main customer service lines rolling into an unmapped network of secondary lines was expanded to add new claimant lines as staff was added. It served as an interim step prior to launching the federally funded Consumer Contact Center in July 2020.
THE CONSUMER CONTACT CENTER
The Consumer Contact Center has increased its efficiency nearly every week since its launch. Over the past nine months, more than 100 customer service representatives have handled about 812,000 cases through calls, email, text, and chat features. The unit reduced a 4-6 week application processing time at the height of the pandemic to 1-3 days, bringing the agency back to pre-pandemic application processing times and clearing hundreds of thousands of backlogged applications.
CTDOL Deputy Commissioner Danté Bartolomeo said, “The Contact Center is the backbone of unemployment operations for our customers. CTDOL, like labor agencies throughout the nation, experienced a deluge of claims as hundreds of thousands of residents who were employed one day found themselves unemployed the next. These first-time filers were unfamiliar with a complex unemployment system which was made even more complicated by federal program timelines. This is person-to-person work and it begins with the Contact Center.”
The Contact Center offers assistance in both Spanish and English and brought several new communications platforms online to improve customer service and efficiency. New services include call scheduling; text alerts; email and virtual chat; and a chatbot that uses artificial intelligence to direct users to forms and instructions and can link them to staff assistance when needed. The chatbot is continuously updated with new information and has been used nearly 713,000 times over nine months.
CTDOL Contact Center Director Angel Rivera said, “Our agents are working 10 hours a day and handling cases six days a week. Behind each case is a person who is experiencing very high stress and anxiety; agents work hard to solve their problems fully the first time they call. Customers truly appreciate the work—we’ve received so many thank you letters from people that underscore how important this work is to them.”
THE SHARED WORK PROGRAM
In addition to major changes on the unemployment side of CTDOL, the Shared Work program also got a boost from federal funding designated by both CARES Act laws. The program, established 20 years ago, experienced renewed interest with an early-pandemic U.S. Department of Labor decision to reimburse the Trust Fund for Shared Work employees rather than charge these costs to the employers. This provision has been extended under the American Rescue Plan.
Shared Work helps employers retain a talented workforce during economic downturns. Rather than laying off the workforce – and having to recruit, hire, and train new labor when the economy recovers – Shared Work employers are able to reduce overhead by temporarily cutting hours. Their employees keep their jobs at a reduced schedule, keep their benefits, and file for partial unemployment benefits for lost wages.
Shared Work Program Director Judi Luther said, “We’ve had great feedback from our employers and seen a major uptick in interest in Shared Work. This points to good news on the economic recovery side as we come out of the pandemic closures. When employees remain attached to their jobs it makes it much easier to bring that company back to full-strength.”
In the year prior to the pandemic – from March 2019 through March 2020 – the program served 288 companies and just under 2,900 workers. Over the past year, the program has grown to 1,434 companies with 32,647 employees participating.
THE AMERICAN RESCUE PLAN
The American Rescue Plan Act (ARP or ARPA), signed into law in March, extends provisions of the federal CARES Act II legislation. These extensions benefit the long-term unemployed and the business community, as well as impact 2020 tax filing. The American Rescue Plan is currently in effect for all filers with an approved unemployment claim. It extends the follow programs:
- Federal Pandemic Unemployment Compensation (FPUC) provides an additional $300 per week benefit for all claimants regardless of which unemployment program they use. Claimants receive the supplement automatically. It runs until the week ending September 4, 2021.
- Pandemic Unemployment Assistance (PUA) is extended from 50 weeks for a total of 79 weeks and ends the week ending September 4, 2021.
- Pandemic Emergency Unemployment Compensation (PEUC) is extended for 29 weeks for a total of 53 weeks and ends the week ending September 4, 2021.
Other Provisions of the American Rescue Plan
- Trust Fund interest waiver extension until September 6, 2021. This reduces the financial liability for Connecticut companies that pay a special assessment to repay interest on Trust Fund borrowing.
- Extends the 50% reimbursement provision for local and state government and nonprofit organizations until the week ending September 4, 2021.
- Increases the reimbursement rate from 50% to 75% for unemployment compensation paid after March 31, 2021 and ending on or before week ending September 4, 2021.
- Extends the 100% federal funding for Shared Work.
- Creates a tax exclusion for the first $10,200 in unemployment benefits for the 2020 tax year for all households with an annual income below $150,000.
MIXED EARNER UNEMPLOYMENT COMPENSATION
The Mixed Earner Unemployment Compensation (MEUC) program was established in CARES Act II for residents who have both self-employment earnings as well as W2 earnings. Over the next few weeks, CTDOL will notify claimants who may be eligible to apply.
- Eligible claimants will receive an additional $100 per week until the program expires the week ending September 4, 2021.
- Eligibility requirements include at least $5,000 in self-employment net earnings in the most recent completed taxable year prior to regular benefits. Ex. Filers for 2020 will submit 2019 tax documents.
- Claimants must apply for the program. Eligibility will be retroactive to December 27, 2020.
- State unemployment, Pandemic Emergency Unemployment Compensation, extended benefits, and other filers are eligible. The law excludes Pandemic Unemployment Assistance (PUA) claimants from MEUC.
- The program is 100% federally funded, employers are not liable for MEUC payments.
- MEUC, like most unemployment benefits, is taxable and could impact Medicaid and CHIP eligibility.
NATIONAL FRAUD PREVENTION
The agency, like its counterparts in other states, works hand-in-glove with state and federal law enforcement to prevent fraud. The new federal unemployment programs created during the pandemic have been a lifeline for claimants and have triggered increases in criminal activity, particularly within the PUA program. CTDOL has identified two primary types of fraud within unemployment programs: identity theft and attempts to steal Pandemic Unemployment Assistance (PUA) dollars by falsely claiming self-employment. Fraud prevention is a priority for the CTDOL, the USDOL, and other state labor agencies.
CTDOL Deputy Commissioner Daryle Dudzinski said, “Congress has made progress, but there is much more that needs to be done to stop fraud. Recently, multiple law enforcement entities joined forces in a coordinated, national effort to combat criminal activity in unemployment programs. State labor agencies are not equipped, resourced, or staffed to fight the sophisticated global crime rings that are currently targeting these programs. We thank our partners on the new taskforce and at USDOL for their work and collaboration.”
The U.S. Department of Labor and the Office of the Inspector General worked with federal lawmakers to tighten the program requirements in the American Rescue Plan, especially with the Pandemic Unemployment Assistance program which has been widely targeted by criminals.
Over the past year, CTDOL has confirmed approximately 100,000 fraudulent applications—primarily identity theft and false information—all of these claims were identified as fraud prior to being processed; there is no estimate as to how much unemployment funding was protected and there is no estimate yet as to how many fraudulent applications could have been processed.** The agency has seen several large waves of fraudulent applications that require considerable staff time to process as they are screened on a case-by-case basis. The most recent were early fall when one out of four applications was identified as fraud, and earlier this month when over the course of just a few days, 20,000 applications were fraudulent.
Commissioner Westby said, “Fraud is particularly expensive—not only does it cost money that businesses ultimately have to pay back to the Trust Fund, but it also creates delays by pulling staff away from processing legitimate applications. We’ve said from the beginning that the top priority during the pandemic is disbursing unemployment funding to claimants and all labor agencies are using every resource we have to ensure that funding is protected.”
In Connecticut, there are multiple new systems in place to help flag these applications for additional review. None of these processes are automated, CTDOL staff reviews each on a case-by-case basis, a time-consuming and labor-intensive process. To protect the CTDOL systems, filers, and programs, the agency follows the recommendations of law enforcement and does not identify specific fraud prevention mechanisms or protocols.
ADJUDICATIONS AND APPEALS
Once submitted, applications go through a verification process and may be held for any number of reasons. Among the most common are claimant errors on Social Security numbers and bank information. Applications may also be held if employers protest the claim. The agency has an adjudications unit that does the initial determinations on claims eligibility. Currently, the adjudications unit has more than 10,000 pending cases and a 40-day wait period.
Both the employer and the claimant may appeal a decision to award or deny benefits to the Appeals Division, an independent, quasi-judicial agency within the Connecticut Department of Labor.
The Referee Section of the Appeals Division holds formal evidentiary hearings. The referee can affirm, reverse or modify the original CTDOL decision on a claim, or send it back for further investigation. Over the past year, the referee section received 21,141 appeals—more than they received over the first three years of the Great Recession. This volume has created extended wait times, averaging 13 weeks for a hearing. Eleven new referees have been hired over the past year and the appeals division is in the process of hiring additional referees.
The Employment Security Board of Review, also part of the Appeals Division, decides appeals from referee decisions. The board reviews the record, including the recording of the referee hearing, and affirms, reverses, or modifies the referee’s decision. The Board can also send the case back to the referee for a further hearing or conduct its own hearing. They have received 1,737 appeals in the past year and currently have 221 cases pending with an average wait time of 50 days.
**Reporters, this release includes highlighted language related to fraud that clarifies that the agency identified 100,000 fraudulent applications and did not pay them out. The process of identifying these applications as fraudulent happens prior to processing the applications. There is no estimate as to how much funding was protected. There is no estimate yet as to how many fraudulent applications may have been processed.**