Unemployment in North Carolina

ProPublica details perhaps the worst state in the nation for unemployment: North Carolina.

A few highlights from the article.

Some state unemployment systems have long been designed to exclude applicants. . . . Among the worst, historically and at present, is North Carolina. At the end of 2019 — when the economy was humming and pandemics were the stuff of horror fiction — fewer than 1 in 10 jobless people in North Carolina received unemployment benefits. That’s the lowest rate in the country and well below the average of 26%.

* * *

In Massachusetts, 66% of new applicants got their unemployment insurance payments in March, compared with 29% nationally and fewer than 10% in North Carolina . . .

North Carolina made radical changes to its unemployment system by essentially reducing unemployment benefits, making eligibility much harder to obtain, and reducing employers’ unemployment taxes even further. So, like Wisconsin, North Carolina paid off its debts on its unemployment trust fund by 2015 (actually, Wisconsin paid off its debt by 2014).

The result, as detailed in the article, is an incredibly complex and confusing system for claimants to navigate.

While Wisconsin did not adopt all of the legal changes done in North Carolina, administrative policy choices in Wisconsin have succeeded in lieu of the missing legal changes in making unemployment here impossibly difficult.

Now, in the midst of the pandemic, folks in North Carolina are finding themselves without the vital economic support unemployment is supposed to provide. Unfortunately, many in Wisconsin have had a similar experience. The biggest difference from North Carolina has been in how the new governor has attempted to fix the unemployment system.

Such an attempt to reverse course is precisely what’s happening in North Carolina right now. Since March, Roy Cooper, the state’s Democratic governor, has signed several executive orders to temporarily remove some of the obstacles from the application process. The orders waive the requirement that applicants search for work; eliminate the one-week waiting period between filing for unemployment and receiving benefits; and allow employers to file claims for entire groups of workers who have been laid off. (The DES, according to Rhoades, its spokesman, has also acted to “improve its processes, technology and staffing levels to respond to the surge in claims,” including by adding an online chat feature and increasing staff from 500 employees to 2,600.) The orders show, Evermore said, that “when the government decides to clear away the roadblocks to paying benefits, it can.”

As noted here, North Carolina has even managed to get PUA benefits to its SSDI recipients, something Wisconsin cannot seem to accomplish despite admitting it is discriminating against the disabled.

Hat tip to Art Heitzer for bringing this article to my attention.

Delays are a choice

Wisconsin Watch reviews the stories of several claimants facing incredibly long delays in the processing of their unemployment claims.

Some perspective, however, is needed on what these stories reveal.

First, the story reports that around 150,000 claimants are still waiting for their claims to be decided. The May 2020 jobs report indicates that the workforce in Wisconsin is just under 3.1 million. Some simple math reveals that the number of workers with outstanding claims waiting and waiting is roughly 5% of the state’s entire workforce.

So, just like disabled workers, one out of every twenty people who work are WAITING on the Department to decide their cases after now nearly four months.

Anyone with eyes in their head should see with these numbers that the Department has a massive problem on its hands. A thousand more workers processing unemployment claims is not going to fix a problem that is systemic to the claims-filing process itself.

Note: the claims processing backlog continues. On June 9th, the Department was just processing appeals in unemployment cases that had been filed on May 9th. At present, the delay at the hearing office in processing documents submitted for a hearing is down from 14+ days to 10-12 days. In a best case scenario, I would not expect a hearing on an appeal filed today to occur until late September. Appeals I filed in early to mid- May have yet to be scheduled for a hearing.

Which gets to the second problem revealed in this story: why is the Department taking so damn long to process claims. Here is the official explanation:

Frostman, the workforce secretary, said his agency needed time to interpret federal guidance for the new program. By April 27, for example, state agencies nationwide asked enough questions to prompt the labor department to update its guidance. Another obstacle Frostman cited: DWD’s 1970s-era technology, a vulnerability that lawmakers and regulators have understood for decades but never bothered to fix.

Wisconsin Watch reports how a few other states have had claim-filing problems (though the actual delays in those other states are not like those in Wisconsin). Yes, every state has had processing problems given the number of claims being filed. After all, the number of claims at issue now is at Great Depression levels.

What is NOT mentioned in the article is how those states have quickly adapted and changed their claim-filing processes to streamline their decision-making and reduce the number of issues that has to be decided with each claim.

Michigan paid out $1 million in PUA benefits as of the week ending April 25th. APRIL 25th! New Jersey, which made initial headlines about its ancient COBOL system and was experiencing similar delays with its claims, now reports more than 1 million claimants paid out of 1.2 million workers with unemployment claims. New Jersey even offers explicit advice about how to answer weekly certification questions that is still lacking in Wisconsin.

Note: Wisconsin continues to report confusing numbers about weeks being claimed rather than the number of claimants being paid or denied benefits. The small print in these reports, however, reveals “approximately 141,110 unique claimants with around 232,576 issues requiring adjudication” that are still waiting on an initial decision.

And, states as varied as Ohio and Massachusetts were already making significant alterations to their claim-filing requirements as of March 17th. By March 24th, information on what states were doing in response to the pandemic was already available and known.

There was no federal guidance available then. Yet, somehow these states were acting in response to the major unemployment crisis they were facing. Certainly, no state has been perfect. But, at least these states and others were responding to the crisis.

In Wisconsin, the story instead has been a multiplication of issues for disqualifying claimants, like SSDI, job registration, and BAR barriers.

There is a timidity to the Department’s decision-making that is unique to Wisconsin at the moment. For whatever reason, the Department is attempting to maintain the status quo in the face of this pandemic. More bodies on the front lines, however, do not help when the nuclear bomb has gone off.

Policy choices with unemployment

Right now, there are many, many unemployment claims being filed in Wisconsin. But, the problems folks in Wisconsin are having with their claims arise to a great degree from policy choices being made about how those claims should be processed and how the Department decides to enforce federal and state legal requirements.

Last week, the NY Times Upshot examined claims data for all 5o states and concluded that, in general, states have made it harder to get jobless benefits.

The story included three charts indicating in various ways how unemployment eligibility and payments have changed for each state. Here are those charts with Wisconsin marked by a green dot. As evident in these charts, Wisconsin has made it much harder to get unemployment benefits.

Percentage of unemployed who receive unemployment benefits

Here, we see that in 2007 roughly 50% of Wisconsin’s unemployed received benefits in 2007. Now, in 2019, that percentage has dropped to around 30%. This drop is actually greater than the drop in Florida noted in the article. Indeed, it seems that only North Carolina, the other state noted in the article, had a greater drop.

making a claim versus receiving benefits

Here, we see that in the weeks from mid-March to mid-April 2020 in Wisconsin around 13% of the employees have applied for unemployment benefits. But, less than 10% of those applicants ended up receiving unemployment benefits. The change here is not that stark. But, Wisconsin does not fare all that well on this issue when compared to its neighbors Michigan and Minnesota.

Denial rates for failing to meet continuing eligibility requirements

Here, we see where Wisconsin has instituted another dramatic change. In 2007, less than 2% of weekly claims were being denied for failing to meet continuing eligibility requirements. In 2018, however, the percentage of claims being denied for this reason was nearly 8%, a four-fold increase.

Indeed, Wisconsin’s efforts on this front exceed that of Florida, a state notorious for creating these obstacles. And, while other states like Mississippi, South Carolina, and others were even more effective than Wisconsin in getting claims denied for these reasons, the shift in Wisconsin is even more extreme when considered in light of Wisconsin’s role in creating the unemployment in the first place.

Note: see this post for how states have used these obstacles to unemployment benefits to suppress growth in wages.

Essentially, Wisconsin and other states have completely turned away from the goal of providing economic security for the unemployed. It does not need to be this way. As evident in these charts, not all states are like Wisconsin, Mississippi, or Florida.

In 2007, unemployment in Wisconsin was once quite similar to Massachusetts. Today, the weekly benefit rate in Massachusetts is around $600 a week, and more than 50% of the unemployed still receive unemployment benefits in that state. Wisconsin took a much different path. The question is what path Wisconsin will take next.

Will Wisconsin continue to be like Mississippi and Florida and North Carolina? Or, will Wisconsin return to the kind of unemployment system the state originally created.

Good Cop or Bad Cop

Backlogs with claims

Unemployment claim-filing is up, way up.

Initial Claim-filing data

          2020      2019    ratio
w/e 03/14   5,698   5,587   1.0
w/e 03/21  69,342   5,216   13.3
w/e 03/28 115,679   5,640   20.5
w/e 04/04 103,226   5,173   20.0
w/e 04/11  65,654   4,619   14.2
w/e 04/18  56,038   4,624   12.1
w/e 04/25  48,630   4,570   10.6
w/e 05/02  39,278   4,146   9.5
w/e 05/09  35,134   4,026   8.7

Source: https://dwd.wisconsin.gov/covid19/public/ui-stats.htm

For the week ending May 16th, initial claims filed on Sunday alone (4,135) were more than all the claims filed the equivalent, entire week in 2019 (3,460). So, even as the trend in new claims is slowing, the numbers are still overwhelming.

Furthermore, this data only includes claims for regular unemployment benefits. Claims for PUA benefits are not included here. As of May 9th, the Department reports 72,695 of these PUA claims having been filed (none of these PUA claims have yet been approved, apparently).

My sources within the Department indicate that the Department is weeks behind on processing the documents claimants and employers are submitting by fax or by mail. And, by processing, I mean simply scanning the documents into the Department’s computer system and associating those scanned documents with the correct claimant and employer.

Note: as of mid-April: UCB-23 forms (weekly wage confirmation notices) were being scanned from 4/6/20 with ~16,000 in the queue; UCB-16 forms (separation notices) were being scanned form 3/30/20 with ~54,000 in the queue; ~40 mail bins dating from 4/10/20 had yet to have their contents even opened.

Even at hearing offices, it takes five to ten days from when a letter is faxed or received before the received documents are scanned and entered into the Department’s claim-filing systems.

Note: Accordingly, if you need to update your availability or a phone number for contact purposes, it is best to call the hearing office rather than sending a letter or even providing the requested form.

And, it appears that the Department is ignoring this backlog when deciding cases and scheduling hearings. I had a hearing on Monday, May 11th, in which there was only seven days notice. As a result, the documents I submitted in a letter dated May 5th were NOT available to the administrative law judge. Luckily, those documents were made available through other mechanisms during the hearing. But, if those other mechanisms had failed, the hearing would have had to be postponed until another several weeks had passed.

Claimants have also contacted me about their claims being denied for failing to provide requested documents. They did provide the requested documents on time, but the deadline passed without those documents being uploaded into the Department’s system. So, rather than account for this backlog, the adjudicator/investigator denied the claim because the requested documents were not yet available in the system and dinged the claimants for failing to respond on time.

In these ways, the Department is essentially penalizing claimants for its own backlog.

Given how the numbers of new claims continue to dwarf the claims filed in 2019, these problems will continue. Until the Department acknowledges this backlog, claimants will simply have to jump over these additional hurdles being placed in their path by the Department.

The claim-filing process should NOT be a contest, however.

Hurdles

Eligibility for PUA benefits

On April 14th, the Department released some initial guidance on PUA benefits — the unemployment benefits available to those who do NOT qualify for regular unemployment benefits.

As already noted, the Department will begin accepting PUA claims the week of April 21st.

Note: Scammers have popped up relating to unemployment claims. While you are entitled to representation for any part of the unemployment filing process, you should be extremely cautious about anyone who wants money up front or wants you to turn over your confidential claim-filing information.

The Department has severe penalties for those who do NOT keep their claim-filing information confidential. Because the unemployment claim-filing process is specific to each state, no one should be claiming they can assist you with your unemployment claim across state borders.

What are PUA benefits?

California’s labor secretary says it best:

The CARES Act also created a special program for this crisis called Pandemic Unemployment Assistance, or PUA. PUA provides federally funded benefits distinct from the UI program for certain individuals out of work or partially unemployed due to the COVID-19 crisis, including the self-employed, individuals who lack sufficient work history, and independent contractors. Federal guidelines on how to administer PUA came out on April 5 and include gig workers as an example of those eligible for PUA.

Under PUA, individuals can receive weekly unemployment assistance that may be equivalent to what individuals would get under UI (depending on their earnings and whether earnings can be verified). Those who get PUA also get the $600/per week additional payment added to UI for weeks they are unemployed from March 29 until the end of July. PUA benefits can cover people unemployed or partially unemployed due to COVID-19 from January 27, 2020 through December 31, 2020 depending on date of actual impact. In other words, it is retroactive to the time before the federal stimulus bill was passed and before funding was made available. The retroactivity means more money in people’s pockets and we are anxious to get that out. When you apply and your application is approved, you will get PUA benefits going back to the first full week of February as long as you can show that your inability to work was COVID-19 related.

Who is eligible for PUA benefits?

Applicants will need to provide self-certification (a statement of some kind) that they are:

(1) partially or fully unemployed, OR

(2) unable and unavailable to work because of one of the following circumstances:

  • They have been diagnosed with COVID-19 or have symptoms of it and are seeking diagnosis;
  • A member of their household has been diagnosed with COVID-19;
  • They are providing care for someone diagnosed with COVID-19;
  • They are providing care for a child or other household member who can’t attend school or work because it is closed due to COVID-19;
  • They are quarantined or have been advised by a health care provider to self-quarantine
  • They were scheduled to start employment and do not have a job or cannot reach their place of employment as a result of a COVID-19 outbreak;
  • They have become the breadwinner for a household because the head of the household has died as a direct result of COVID-19;
  • They had to quit their job as a direct result of COVID-19;
  • Their place of employment is closed as a direct result of COVID-19; or
  • They meet other criteria established by the Secretary of Labor.

OR are (3) self-employed (and have lost work), OR

(4) seeking part-time employment (if state law allows for benefits for PT workers) [Wisconsin’s benefit formula encourages part-time work when receiving unemployment benefits, but requires claimants to be looking for full-time work or as much work as possible for that individual given that individual’s physical limitations], OR

(5) do not have sufficient work history to qualify for regular unemployment, or otherwise do not qualify for state unemployment.

The Department will most likely seek verification of this information. So, a claimant stating that there has been a loss of work will need to produce receipts or pay stubs verifying that loss of work, as starting on the date the claimant claims the loss of work started.

This certification will also be made in light of numerous warnings about being made under penalties of perjury, that misrepresentation constitutes fraud, and that claimants will be subject to criminal prosecution for that fraud.

And, please understand that all of these categories are inclusive. That is, eligibility can be based on ANY one of these categories. Failure to meet one category does not mean you are excluded from PUA eligibility if another category makes you eligible.

Note: But, no one should think that quitting a job to collect PUA benefits is acceptable. According to the Labor Department: quitting a job in order to gain access is unemployment benefits is NOT a valid reason. “Individuals who quit their jobs to access higher benefits, and are untruthful in their UI application about their reason for quitting, will be considered to have committed fraud.”

Per UIPL 16-20, the guidance document for PUA benefits, here is some specific information for various scenarios.

Partial loss of work (category 1)

Throughout this federal guidance, it is repeatedly stated that eligibility for PUA benefits exists for a partial loss of work connected to the pandemic.

So, an employee who can still tele-work (generally, a disqualification for being eligible for PUA benefits because the person still has work options) for three days a week but was previously working five days a week before the pandemic will be eligible for PUA benefits for the two days a week they now can NOT work because of the pandemic.

In other words, eligibility for PUA benefits does NOT turn on a complete loss of work. All that you need to demonstrate is that there has been some loss of work connected to the pandemic.

To be a “covered individual” under PUA, an individual must also self-certify that he or she is otherwise able to work and available for work, as provided under state law, except that the individual is unemployed, partially unemployed, unable to work or unavailable for work due to at least one of the following categories described below.

UIPL 16-20 at I-3 (emphasis supplied). What this provision means, in part, is that all of Wisconsin’s job search and eligibility requirements will also apply for recipients of PUA benefits.

And, ALL claimants should understand that the US Dep’t of Labor asserts that the PUA benefits are very temporary. Someone in quarantine, for instance, should only be out of work for two weeks, according to the Labor Department. And, employees who have to care for children who are not in school can only claim benefits until the school year ends in early June. See UIPL 16-20 at I-7.

In other words, for each week claimed, expect to have to demonstrate that the loss of work at issue in your claim is still occurring.

Lacking sufficient work history (category 5)

an individual “lacking sufficient work history” means an individual (1) with a recent attachment to the labor force (2) who does not have sufficient wages in covered employment during the last 18 months to establish a claim under regular UC, and (3) who became unemployed or partially unemployed because of one of the COVID-19 related reasons identified under Section 2102.

UIPL 16-20 at I-3.

So, under this guidance, all three of these conditions must be met for someone who lacks the wages to qualify for regular unemployment benefits to receive PUA benefits.

The self-employed (category 3)

as defined in 20 C.F.R 625.2(n) means individuals whose primary reliance for income is on the performance of services in the individual’s own business, or on the individual’s own farm. These individuals include independent contractors, gig economy workers, and workers for certain religious entities.

UIPL 16-20 at I-3.

This category is probably the largest number of people eligible for PUA benefits. Anyone who gets a 1099 form or runs his or her own business will be applying for PUA benefits as self-employed.

This category will probably also be the most difficult in which to file a claim. Besides the certification about your lack of work that you will need to provide and sustain for every week you claim PUA benefits, you will also need to provide detailed information about your earnings as described below under Earnings questions.

And, for each week of your claim, you will need to document how much work you have done that week. For many, you will need to document having no work by establishing what requests or contacts from potential customers have NOT occurred along with demonstrating your availability that for those potential customer contacts each week. How the Department will carry out these requirements remains to be seen.

Interestingly, the Department “must identify individuals who are potentially eligible for PUA and provide them with appropriate written notification of their potential entitlement to PUA, including filing instructions. This includes notifying claimants who were found ineligible for UC as far back as January 27, 2020.” The Department “must [also] notify all appropriate news media having coverage throughout the state of the beginning of the PUA program.” UIPL 16-20 at I-14.

So, anyone denied regular unemployment benefits should receive notice about applying for PUA benefits. Apparently, this press release was the required notice to media. In comparison, other states have instituted social media campaigns and other kinds of notices.

SSDI recipients (category 5)

Wisconsin (as well as North Carolina) makes anyone receiving SSDI benefits completely ineligible for regular unemployment benefits.

So, if these individuals have lost work because of the pandemic and are NOT eligible for regular unemployment benefits, they should be eligible for PUA benefits.

Update (15 May 2020): At some point this week, DWD added the following to its PUA FAQ:

PUA-SSDI_2020-05-15

How the Department reached this conclusion is unknown and unclear. Luckily, someone contacted the Department last week, and they exchanged these messages. As evident in these messages, the Department is claiming that the prohibition in state law on unemployment eligibility for SSDI recipients governs federal PUA eligibility because federal law did not explicitly indicate PUA eligibility for SSDI recipients.

Furthermore, the Department has apparently decided that because there is no PUA eligibility for SSDI recipients because of the state law prohibition, the Department will NOT be issuing any initial determinations to SSDI recipients regarding a denial of PUA benefits. So, if folks wait for a PUA initial determination that never arrives, they will miss the appeal deadline regarding their denial of regular unemployment benefits which, according to the Department, governs their PUA eligibility. Then, many weeks later, if they try to appeal that first denial of their eligibility, they will need to indicate why that now late appeal should be excused for reasons beyond their control. Good luck with convincing the Department that you did not realize you were never going to get an initial determination concerning your eligibility for PUA benefits, since the Department just posted that cryptic Q&A cited above on its PUA FAQ.

Yikes. As someone else commented on this blog, this kind of procedural nightmare is “weaponized bureaucracy at it’s finest.”

So, anyone getting denied for unemployment benefits because of SSDI benefits should appeal as soon as possible. That denial determination is the only determination you will likely receive. If you do not appeal, you likely will lose all eligibility for PUA benefits even though the determination says nothing about PUA benefits.

As for the Department’s legal reasoning on claiming that state law governs on this issue, federal law and guidance plainly indicate otherwise. See this appeal letter I am sending in on these cases. The Department is simply going out of its way to deny the disabled eligibility for PUA benefits.

Update (29 May 2020): Fox6 has the following report that details the problems Wisconsin is creating for the disabled on this issue.

Loss of work because of COVID-19 illness (category 2)

Unless your employer has indicated you should not work because of your suspected or confirmed COVID-19 illness, you will need a confirmed medical diagnosis or a positive test result (yes, despite testing still being extremely difficult and rare) to indicate you cannot work because of your COVID-19 illness or the pandemic-related illness of a family member for whom you are providing care. See UIPL 16-20 at I-4.

If your own physical health makes you susceptible to COVID-19, you will need specific medical advice to stay away from work in order to qualify for PUA benefits. Your own judgment about your health is insufficient. UIPL 16-20 at I-5.

Loss of work because of business closure or governmental order (category 2)

A governmental order restricting travel in a way that prevents you from getting to and from work does qualify you for PUA benefit eligibility. UIPL 16-20 at I-5. A governmental order closing the place of business where you work also qualifies you for PUA benefits. UIPL 16-20 at I-6.

Interaction with paid sick leave or PTO

The availability of paid sick leave or PTO makes a claimant ineligible for PUA benefits if this paid leave completely covers the loss of work.

But, if this leave only provides partial coverage for the loss of work (and that loss is connected to a pandemic-related illness as described above), then you may be eligible for partial PUA benefits. UIPL 16-20 at I-7.

Conflicts between Wisconsin and Federal guidance

Conflicts already exist between Wisconsin and federal guidance about PUA benefits. So, expect eligibility issues to be a major factor in your case. For instance, compare these two Q&As (as of 16 April 2020):

Wisconsin
Q: Am I eligible for PUA if my work allows me to telework for pay?

A: No, if you have the ability to telework and be paid the same as you have customarily worked prior to the COVID-19 pandemic, then you are not eligible for PUA.

Federal
Q: My employer will let me work from home with pay. However, because my children are out of school and my spouse is working, I need to care for them and it is too difficult to work from home. Under Section 2102(a)(3)(A)(ii)(I)(dd) of the CARES Act, I self-certify that I need my kids to be at school in order for me to be able to work. Do I qualify for PUA?

A: You may qualify. The CARES Act does provide PUA to an individual who is the “primary caregiver” of a child who is at home due to a forced school closure that directly results from the COVID-19 public health emergency. However, to qualify as a primary caregiver, your provision of care to the child must require such ongoing and constant attention that it is not possible for you to perform your customary work functions at home. For example, if your employer allows you to telework and you are caring for a more mature child who is able to care for him or herself for much of the day, you likely would not qualify for PUA because you are still able to work.

In addition, you should bear in mind that the CARES Act provides PUA only when a child is home because of a school closure that is a direct result of the COVID-19 public health emergency. A school is not closed as a direct result of the COVID-19 public health emergency, for purposes of 2102(a)(3)(A)(ii)(I)(dd), after the date the school year was originally scheduled to end. That means that, once the school year is over, parents should rely on their customary summer arrangements for caring for their children, and will not, absent some other qualifying circumstances, be eligible to receive PUA. If, however, the facility that they rely on to provide summer care for the child is also closed as a direct result of the COVID-19 public health emergency, they may continue to qualify for PUA. Similarly, if there is some other reason under which they qualify for PUA, they will continue to be eligible to receive benefits.

In light of these conflicts, expect Wisconsin to follow its own guidance until you point out the correct federal guidance on the issue.

Update (21 April 2020): From Politico’s morning shift (see also this piece from Bloomberg News):

The Labor Department on Friday clarified major pieces of its guidance for the new Pandemic Unemployment Assistance program and said it would issue further follow-up instructions, following criticism the guidelines could leave out workers who should be eligible. Democrats and labor groups have pressed for more details regarding guidance documents issued by DOL meant to help states implement the program, which extends unemployment payments to gig workers and others who ordinarily would be ineligible for unemployment insurance.

Specifically, Democrats requested that DOL clear up confusion surrounding the eligibility of gig workers. In guidance issued by DOL earlier this month, that agency said Uber and Lyft drivers “may not be eligible” for benefits if they claim they’re “unable to reach” their place of employment, because app-based drivers don’t have a place of employment. However, DOL Deputy Assistant Secretary Joe Wheeler affirmed in a letter to lawmakers Friday that independent contractors who experience a “significant diminution” of work are eligible for the aid.

When do PUA benefits start?

Regardless of when you file your initial application, PUA benefit eligibility will be back-dated to the week you can show a loss of work. That loss of work week can start as early as the week ending 8 February 2020.

PUA benefits will end for everyone as of the week ending 26 December 2020, regardless of how many weeks of eligibility remain for any particular claimant.

Earnings questions

Unlike regular unemployment benefits, PUA benefits will range from a minimum of $163 to a maximum of $370 (the range for regular unemployment in Wisconsin is from $50 to $370).

But, the Department will still need to calculate your PUA weekly benefit rate (“WBR”) for this range, and this calculation is based on your earnings in a set of four previous calendar quarters.

Unlike California and several other states which will start paying out PUA benefits within a few days the minimum WBR while gathering more information to determine the specific WBR for claimants, it appears that Wisconsin will want all earnings information up front before issuing any PUA benefits.

So, because all earnings must be presented on a quarterly basis and then verified, expect the application process for PUA benefits to take several weeks at a minimum before any benefit payments are made.

Repayment concerns

Wisconsin’s DWD is aggressive on finding situations for which claimants need to repay benefits. See the discussion about eligibility for PEUC benefits and broad concerns about how the Department charges intentional fraud for unintentional claim-filing mistakes.

So, some folks may already be repaying unemployment benefits when this pandemic started. Here is some good news for these folks: per D.4.a.iii, the $600 PUC benefit is still available to you even if your underlying benefit is being intercepted for recovering an over-payment.

Individuals whose underlying benefit payments are intercepted to pay debts (e.g., overpayments) are eligible for the $600 FPUC, even if 100% of their weekly benefit amount is intercepted. Benefits intercepted to pay debts are considered to be compensation for the week.

UIPL 15-20 at I-6.

A successful claim?

Data provided by the Department indicates that the state has already been failing to approve most of the unemployment claims it has received:

      Weekly claims ratio  Benefits paid   Avg WBR  Year
3/15-4/6    589,616  3.8   $68,759,104.00  $116.62  2020
3/15-4/6    155,148        $39,597,111.00  $255.22  2019

Source

Despite an increase of ~4x in claims being filed, benefits paid are less than 2x the amount. So, the WBR per claimant is also less than half what was being paid per claimant last year for the same time period.

There three possible explanations for this rapid decline in payment amounts. First, many, many more lower-paid workers could be applying (who would have a lower WBR) and higher-earning folks are NOT applying. Second, DWD could simply be denying many more of these claims. Third, DWD could be so overwhelmed with claims that it is failing to act on all of these claims in a timely way.

Given how low unemployment benefits already are in Wisconsin (folks need about $13,000 in income to qualify and they get the max of $370 at around $32,000), it seems that the first explanation is highly unlikely.

The answer most likely turns on a combination of the last two possibilities. The question is which of these is playing the larger role — are more claims being denied or is the Department unable to keep up with all of the claims.

The best advice at the moment is to keep calling the Department about the status of your claim at least once a week. Make sure to talk to someone about the status of your claim. Do NOT expect that leaving a message will lead to a return phone call.

Update (17 April 2020): one of my sources indicate that the backlog is enormous. Only now are they starting to process claims that were filed during the week ending March 28th. These claims were filed during week 13, the second week of the pandemic-caused escalation in claims. We are now in week 16, and claims are STILL running ~12x higher than normal.

Update (21 April 2020): added news item about the Labor Department planning to provide additional PUA guidance to states.

Update (15 May 2020): added information about DWD’s denial of all PUA eligibility for SSDI recipients.

Update (29 May 2020): added additional info regarding a story on the SSDI issue by Fox6.

 

Implementation dates for CARES Act unemployment provisions

All states have reportedly signed agreements with the Department of Labor to implement the CARES Act unemployment provisions.

Here is when you can expect to start receiving these benefits, if eligible, for Wisconsin and a few other states and territories.

PEUC benefits

These Pandemic Emergency Unemployment Compensation benefits are available to anyone who is no longer eligible for other kinds of unemployment benefits from the date the state signed its agreement with the Department of Labor.

If a person exhausts PEUC benefits, they should be eligible for PUA benefits according to Labor Department guidance. See UIPL 16-20, § 4.a., last par. on p.4.

PUC payments

These $600 payments have started in some states. Anyone who receives any other kind of unemployment benefit — regular, EB, PUA, or PEUC — will also receive an additional $600 PUC payment through July 31st.

These payments, when they start, will be dated to the first week of the claim (minus any waiting week).

PUA

These benefits are for those who do NOT qualify for regular unemployment benefits (either because they lack sufficient earnings to qualify or have lost gig work/self-employment because of the pandemic.

Note: More on PUA eligibility in another post later this week.

As noted in the NY Times, there may be additional hurdles for these workers to satisfy before they are declared eligible by the states taking these applications.

These delays, in part, are occurring because of neglect and reliance on out-dated technology in managing state’s unemployment systems. For instance, Wisconsin is one of numerous states that still uses a mainframe computer application built on COBOL to process unemployment claims.

California Governor Newsom’s April 15th press conference revealed several important initiatives relating to both unemployment benefits and undocumented workers. First, an Executive Order issued this same day included:

  • helpful language about mis-classification of independent contractors who should be receiving UI in California under AB5;
  • a requirement that the state unemployment agency expand phone service to seven days a week, from 8am to 8pm;
  • new authority for the unemployment agency to streamline and automate the state’s work sharing program; and
  • an official announcement that the PUA program will start taking claims on April 28th (yesterday, CA announced that it will pay all PUA claimants the minimum PUA of $168 a week, plus $600 within 24-48 hours of when the individual files for benefits).

Second, the Governor announced a new $125 million Disaster Relief Fund for undocumented workers and families (which includes a contribution of $50 million from the philanthropic community) helping 150,000 undocumented Californians with grants to be disturbed by community-based organizations.

Other issues: reform, safety and health, and consumer protections

Michele Evermore of NELP advises that states can take several steps to make the unemployment claims simpler and more efficient.

  • using WARN Act layoff provisions to coordinate with unemployment (something Wisconsin already does to a limited extent)
  • making sure unemployment departments have access to claimants’ and employers’ tax filings for their employees (something I have recommended for years but which the Department has resisted).

And, to determine how unemployment interacts with the sick leave provisions, carefully review this complicated but still very useful flow-chart.

If you need guidance on worker safety and health issues connected to COVID-19, see this review of resources courtesy of NELP.

Help with consumer law issues arising from this the pandemic is available from the National Consumer Law Center.

Update (15 April 2020): Added info about California’s efforts to provide PUA and PUC benefits.

Filing problems in Wisconsin are not new

Reports emerged last week about how efforts in Florida to make claim-filing more difficult are now knee-capping unemployment eligibility during this pandemic.

Privately, Republicans admit that the $77.9 million system that is now failing Florida workers is doing exactly what Scott designed it to do — lower the state’s reported number of jobless claims after the great recession.

“It’s a sh– sandwich, and it was designed that way by Scott,” said one DeSantis advisor. “It wasn’t about saving money. It was about making it harder for people to get benefits or keep benefits so that the unemployment numbers were low to give the governor something to brag about.”

Republican Party of Florida chairman Joe Gruters was more succinct: “$77 million? Someone should go to jail over that.”

With hundreds of thousands of Floridians out of work, the state’s overwhelmed system is making it nearly impossible for many people to even get in line for benefits.

Those in Wisconsin now having great difficulty filing unemployment claims will recognize these same problems: language barriers, mandates for on-line only claiming procedures, difficult to non-existent ways to correct or add claim information that do not fit complex Department-sanctioned processes, legalistic explanations of requirements that have become more complex rather than simplified and clarified, and a near complete absence on social media of explanations concerning unemployment eligibility, processes, and requirements.

And, these problems continue during this pandemic. The Department has only now on the morning of April 6th released versions of its pandemic FAQ in Spanish and Hmong.

But, actual on-line claim-filing, completing job registration requirements at the job center website, and satisfying on-line workshop requirements at the job center website remain English-only.

Note: The Department’s “solution” for these language barriers is to allow a claimant to call for assistance from an interpreter. This assistance, however, depends on the claimant reading the English-language requirements on the website to the interpreter over the phone if the interpreter is outside of the Department (i.e., not a Department employee).

And, the CARES Act FAQ created by the Department is English-only for now. And, to see what the Department is advising about the PUA benefits available under the CARES Act, you need to click here in order to then click on this PDF chart.

All of this clicking and advice to keep re-visiting these website for updated information forces everyone in Wisconsin to keep searching and exploring for answers to simple and vital questions that to them concern how will they pay for groceries and rent next week. The Department should be doing better.

In other words, even if a claim is filed, these on-line requirements to create a resume (not just upload) and to complete required on-line surveys remain in place for receipt of unemployment benefits. The access problems created by these requirements are well-documented and long-standing.

In contrast to Wisconsin, New York has created an excellent flow chart for how all of the various pandemic-related federal benefits will operate in conjunction with regular unemployment benefits.

New York CARES Act flow chart

This chart is front and center in New York state’s explanation of CARES Act benefits and was available in Spanish from the start. Indeed, New York will start paying out PUC benefits this week to its claimants and is now accepting applications by self-employed individuals for PUA benefits.

Until there are changes in Wisconsin, these filing tips and this FAQ should be essential reading for everyone filing unemployment claims in Wisconsin.

Implementing CARES act unemployment provisions

Wisconsin’s Department of Workforce Development is reporting on its FAQ that is will take several weeks to receive guidance about the unemployment provisions in the CARES act and then probably another several weeks before those provisions can be implemented.

Note: The Legislative Fiscal Bureau has already released its analysis of the CARES act as well as the earlier Families First act. This analysis notes some key provisions of these laws that DWD has yet to address, notably employer experience rating for pandemic-related layoffs.

Wisconsin may not have the time to wait. The Economic Policy Institute reports that nearly 20 million are expected to be out of work soon. Current — and shocking — national unemployment figures released today support this prediction. Indeed, after two weeks we are already nearly a third of the way there to 20 million. NELP reports:

This week’s unemployment claims report, which reflects last week’s claims, is up to 6.648 million, up 3.341 million from last week’s historic—and shocking—initial claims report. This is again a truly unprecedented number. Unfortunately, far too many eligible workers who are trying to file for unemployment are still encountering long waits or can’t connect at all with the state unemployment agency websites. NELP urges states to ramp up their claims-processing capacity as quickly as possible.

The Dep’t of Labor data for Wisconsin is just as shocking:

Wisconsin DOL weekly claims

Note: Thanks to Colin Gordon of the Iowa Policy Project for this data and charts.

So, Wisconsin should expect that phone lines and on-line claims systems will continue to be crushed.

Other states are attempting to respond to this onslaught of claims in creative ways, ways that Wisconsin should give serious consideration to adopting:

  • Massachusetts has been holding virtual town halls daily, and once or twice a week in Spanish for those applying for unemployment. Nearly 70,000 have taken part in this option over the past week. Thousands can be on the phone or online at once and staffers take live questions.
  • Massachusetts has also already signed an agreement with the Dep’t of Labor for implementing the CARES act unemployment provisions.
  • New Hampshire has signed its agreement as well. This agreement will, according to the governor, allow New Hampshire to shift regular unemployment claims arising from the pandemic to the federally-funded PUA benefits, increasing the benefits for many as a result of the higher minimum for PUA benefits.
  • Washington state’s FAQ already has information about the federal benefits in the CARES act as well as how other federal benefits (such as tax relief payments) will interact with unemployment benefits.

Note: for a full run-down of what is happening in the state’s in regards to unemployment, see Unemployment Insurance Protections in Response to COVID-19: State Developments.

Finally, employees should be on the lookout for employers attempting to siphon away some of the benefits headed to claimants. Ohio is reporting numerous instances of employers not paying last paychecks and employers trying to avoid unemployment by reducing/zeroing out hours. Wisconsin law requires last paychecks to be paid to employees, and any loss of work because of a lack of work — whether the loss is partial or full and regardless of how the lack of work is labeled — entitles a person to unemployment benefits.

Claims and phone calls

Claims have sky-rocketed in the past few weeks, and the Department of Workforce Development has been providing daily updates on these numbers:

Before pandemic claims started

Week 11    2020  2019   ratio
Sunday      746   948   0.8
Monday    1,237  1,376  0.9
Tuesday     809   811   1.0
Wednesday   674   738   0.9
Thursday    710   711   1.0
Friday      985   786   1.3
Saturday    537   217   2.5
Totals    5,698 5,587   1.0

When pandemic claims started

Week 12    2020  2019   ratio 
Sunday    1,499   826   1.8 
Monday    4,392  1,329  3.3
Tuesday   8,603   818   10.5
Wednesday 14,988  725   20.7
Thursday  16,252  703   23.1
Friday    17,094  789   21.7
Saturday   6,514   26   250.5
Totals    69,342 5,216  13.3

Second week of claims

Week 13    2020  2019   ratio
Sunday    10,872  963   11.3
Monday    21,250 1,412  15.0
Tuesday   18,638  918   20.3
Wednesday 19,438  699   27.8
Thursday  19,489  672   29.0
Friday    18,386  748   24.6
Saturday   7,606  228   33.4
Totals   115,679 5,640  20.5

Third week of claims

Week 14    2020  2019   ratio
Sunday    12,136  878   13.8
Monday    24,664 1,248  19.8
Tuesday           859   0.0
Wednesday         642   0.0
Thursday          679   0.0
Friday            709   0.0
Saturday          158   0.0
Totals    36,800 5,173  7.1

Claims for week 11 were nearly identical to what was filed last year. Starting with week 12, however, claims started escalating and took off on Wednesday of that week. Nearly 70,000 claims ended up being filed then.

The trend continued into week 13. Nearly 116,000 initial claims were filed that week, over 20x greater than the claims filed for that same week in 2019.

Note: March and April are typically when initial unemployment claims are at their lowest, as many workers are returning to jobs after seasonal layoffs because of winter.

As evident here, yesterday saw the highest number of claims filed on any day so far, almost 25,000 in one day.

The question for all of us is for how long will this increase in claims continue. The evidence so far is that is that this spike is likely to be ongoing. The Department reports that during week 13 the Department received more than 1.5 million calls.

Despite statements by Department officials, there does NOT appear to be any automated phone system in place for people to file their unemployment claims by phone. The only information so far is how to apply on-line. And, the Department’s FAQ for applying for benefits states only provides this information:

Q: How do I apply?

A: Steps to Apply Online
1. Go to my.unemployment.wisconsin.gov
2. Read and accept Terms and Conditions
3. Create a username and password
4. Logon to access online benefit services
5. Complete your application

Folks are calling into the Department help lines, however, because the on-line system is complicated and difficult to use (an initial claim usually takes an hour to complete and can take several hours and multiple sessions to complete if there are any wrinkles to that claim). This complexity may work well when the system is hardly being used, but complexity gets in the way of a mass need in light of this pandemic.

So, folks are turning to phone lines reserved for assisting claimants with their on-line claims. And, this turn to phone calls is occurring in massive numbers, roughly 15x times than the already record number of initial claims being filed.

The Department’s request for people to use the on-line system does not fix this problem. People are turning to these phone lines because they either lack access to the on-line system in the first place or because they cannot navigate the on-line system despite having access to it.

Note: While closed, public libraries are keeping their wifi on. So, cars in parking lots in rural Wisconsin are now pretty common despite the libraries being closed. We all love our libraries. The Public Service Commission and the Department of Public Instruction have introduced a web-link for finding free wifi hot-spots in Wisconsin.

And, the phone system is also making matters worse [see update below]. Claimants are reporting that the social security number gatekeeper to phone support remains in place. Under this system, claimants are limited to only calling into the Department for help on certain days, depending on whether their social security number ends in an even or odd digit. So, claimants are calling on their wrong day, entering in their social security number, and then being kicked out but not realizing the reason why. So, they call again and again.

In other words, these claims will continue to climb, because there are still more folks trying to file an initial claim than those who have gotten through.

Furthermore, the Wisconsin Policy Forum indicates that the job losses in Wisconsin because of this pandemic are already devastating (25 to 30% unemployment in some counties) and have hit low-wage workers in rural areas of the state the hardest.

Unemployment may well be the only economic engine in this state for the next several months. The Department needs to realize its essential role sooner rather than later.

Update (2 April 2020): My sources within the Department report that the social security number gatekeeper was removed several months ago. So, people are getting disconnected simply because the phone-support system is being crushed with all the calls.

My insiders also report that many of the calls concern ID and password problems with the on-line system. Claimants do not recall their specific ID and password information and cannot get the answers to security questions right. So, they need to call to get on-line access and passwords reset after verifying their identity to staffers.

To handle all of these calls, staffers are now handling phone calls (if not their regular job to begin with) every other work day.

Also, my sources indicate that those who lack on-line access now have the option of filing their claim on the phone with the assistance of a DWD staffer on the phone. The problem right now is getting through on the phone, however.

Update (15 April 2020): The PIN reset issue for people who previously filed for unemployment benefits has been a major problem in many states. The solution for many, like in Wisconsin, requires that the worker contact an agency representative by phone to reset the PIN number, which then contributes to a backlog on the phones as well. Washington state has put in place an easier fix for resetting a workers’ PIN.

Update (17 April 2020): Added a web-link from PSC and DPI for finding free wifi hot-spots.