Unemployment Eligibility Systems Buckle under Pressure as Claims Skyrocket

Updated 4/17/2020

Unemployment numbers in the U.S. have continued to hit record-breaking levels week after week. Another 5.2 million people filed for unemployment benefits last week, bringing the total number of claims to 22 million, or roughly 13.5% of the labor force, since March 14. Today, the U.S. Department of Labor released official state employment and unemployment data for March. Unemployment rates in March were higher in 29 states and the District of Columbia, lower in three states, and stable in 18 states. Twenty-three states saw jobless rate increases from a year earlier, 3 states saw decreases, and 24 states and the District saw little or no change. The national unemployment rate rose by 0.9% over the month to 4.4 percent and was 0.6% higher than in March 2019. Indeed, the last four weeks have marked the largest and most dramatic rise in recorded claims since the Department of Labor began tracking this data in 1967. Yet, as businesses remain shuttered, many more Americans are expected to seek unemployment benefits in the coming weeks and months.

For a further breakdown of March 2020 unemployment numbers, please view the Excel attached to this article. 

States’ Response to Increased Unemployment Claims

As the U.S. grapples with this issue, it has become clear that many states’ unemployment eligibility systems are struggling to process the drastically increased applications, and disburse benefits accordingly. Furthermore, these difficulties come at a time when Americans who have been laid off don’t have many other job options to turn to, as businesses remain shuttered under widespread stay at home orders.

In New York, Governor Andrew Cuomo has described his state as being “deluged” with applications in recent weeks. New Yorkers are facing serious technical obstacles in their attempts to request unemployment benefits – the website crashes regularly, applicants on the phone are being placed on hold for hours, and people are waiting weeks for money they’re entitled to. Governor Cuomo recently apologized for these difficulties and pledged to hire hundreds of new staff to deal with the onslaught of filings.  

While New York continues to bear the brunt of the coronavirus pandemic, it is certainly not the only state dealing with technical difficulties related to unemployment insurance. Last week, Michigan’s unemployment website crashed after being inundated with a number of requests Governor Gretchen Whitmer never thought she would see during her time in office.

"My encouragement for folks is, keep attempting to get that application in," Governor Whitmer said. "But, know that we understand the incredible strain on the system, the incredible number of people that have been impacted and we are going to work to make sure people get the unemployment that they need to get through this crisis." Michigan is also planning to hire more employees – about 100 – to help process claims.

In Florida, users are growing increasingly frustrated with the state’s crippled unemployment claims system. “We’ve got to fix this. We’ve got to put all hands on deck to get this done,” said Governor Rob DeSantis. According to DeSantis, the state is working to make the process better by bringing in thousands of state employees from other agencies to help handle claims, and by adding 100 new servers to boost the capacity for the website.

Many other states are reporting similar upticks in filings, resulting in similar processing issues. Connecticut Governor Ted Lamont reported that the state is currently experiencing a “five-week lag time” in issuing unemployment payments. In Texas, the state’s Workforce Commission received 1.5 million calls in a 24-hour period as the state’s unemployment website crashed due to heavy traffic. The website was still inaccessible at the time this article was originally published. However, Texas has reportedly shifted 1,000 government employees from other departments to assist with unemployment claims and is looking to hire more.

CARES Act Expands Unemployment Benefits

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, expands unemployment insurance benefits available to workers, including those unemployed, partially unemployed, or unable to work due to COVID-19. This is being done in two major ways. First, individuals can receive an extra $600 weekly payment, in addition to the weekly benefit amount they receive under state law. Second, the maximum number of weeks an individual may receive benefits has been increased. While there are certain criteria and nuances to this benefits expansion, most individuals experiencing unemployment during this period will be eligible for the unemployment provisions under the CARES Act. Now, it is up to states to figure out how they can process applications in a timely, efficient manner.

Unemployment Insurance and GovWin

Although the coronavirus pandemic and its economic implications are unprecedented in U.S. history, states’ failure to address unemployment insurance claims could spur major changes to the systems and infrastructure used for this program. Many states’ unemployment eligibility systems are built on decades-old technology, which will need to be modernized or replaced to ensure that states don’t experience these types of issues in the future. For a comprehensive list of active opportunities related to unemployment insurance systems in GovWin, click here.  

Additionally, as Deltek continues to monitor this evolving situation, please visit GovWin’s Coronavirus Government Response Resource Center for the latest updates on unemployment and other issues due to COVID-19.