Gov. Ralph Northam on Tuesday ordered the Virginia Employment Commission to invest $20 million in upgrading its claims system and hire 300 more staffers to process complicated unemployment insurance claims, which have dogged the agency during the COVID-19 pandemic and led to a civil lawsuit.
In an executive directive signed Tuesday, Northam directed the agency to complete a full modernization of its insurance system by Oct. 1 and make immediate technology upgrades.
His office said in a news release that the state ranks sixth in the nation for the timely payment of benefits to eligible applicants, but a class action lawsuit filed in April alleged that Virginia is the slowest state in the nation when processing difficult-to-resolve claims. The pro bono lawsuit on behalf of five Virginia women was filed by the Legal Aid Justice Center, Legal Aid Works and the Virginia Poverty Law Center, along with Consumer Litigation Associates PC and Kelly Guzzo PLC.
Last week, U.S. District Judge Henry E. Hudson said in an order that the VEC and the plaintiffs had initiated settlement talks. The VEC has been under significant pressure during the pandemic and record-breaking unemployment claims since last March, with more than 1.6 million people filing initial jobless claims over the past 15 months. Along with more people filing for unemployment insurance, the VEC received thousands of phone calls and emails from people seeking answers and unemployment checks from both the state and the federal government.
A study on the VEC by the Joint Legislative Audit & Review Commission is set for November, but with state lawmakers asking for information sooner, the watchdog agency will give updates on the VEC’s status through the summer.
According to Tracey Smith, JLARC’s associate director, the commission had processed only 2.4% of claims that required additional review within 21 days, the benchmark that lands Virginia at the bottom of the nation in adjudicating claims, the U.S. Department of Labor reported.
“Virginia is a national leader in getting unemployment benefits to eligible individuals, but it’s clear that complex cases must be resolved more quickly,” Northam said in a statement. “That’s why I’m directing the Virginia Employment Commission to invest $20 million to significantly speed up its adjudication process and immediately implement long overdue technology upgrades. This action will address many of the issues that have caused delays and ensure that we continue to deliver relief to Virginians who need it.”
According to Northam’s directive, the VEC must increase the number of adjudicated claims being process per week from 5,600 to 10,000 by June 30 and to 20,000 by July 31. To accomplish this goal, the agency will finalize a $5 million contract for more than 300 officers. The VEC will also invest in its customer contact center, which has grown during the pandemic to handle calls from claimants. The 41-year-old benefits system will be updated with a $5 million contract to expedite work, with Oct. 1 as its targeted finish date.
Finally, Northam’s order says, the state will work with the Virginia congressional delegation to resolve a federal funding disparity, in which the state receives among the lowest amounts of federal unemployment funding in the nation, requiring Virginia businesses to pay more in federal unemployment taxes.