Laid-off workers skimped as state held up their money. Inside Idaho’s jobless-pay crisis
David Staats, Idaho Statesman
Published at | Updated at
(Idaho Statesman) – When she gave birth to triplets seven years ago, Tami Hanson quit her middle-school teaching job in the West Ada School District. When her husband died last year, she went back to work.
Hanson became a school security officer at Reed Elementary in Kuna and taught driver’s education for teenagers. When COVID-19 struck Idaho in March, the district furloughed her. She applied to the Idaho Department of Labor for unemployment compensation.
Things started to go wrong. Labor’s website told her that her application had raised an issue that would prevent immediate payment. It did not tell her what the issue was. The automated system told Hanson to go ahead and complete the certifications that each recipient must file each week to qualify for that week’s payment. After three weeks of obliging, with no payments and no new information, Hanson called Labor to straighten things out, or at least find out what was holding up her money.
She called the local number. “It was busy all the time,” she said. She tried the toll-free number. “It would ring twice and hang up. That was not fun.”
Tens of thousands of Idahoans had such experiences this spring and summer. They lost jobs as the coronavirus pandemic reached Idaho only to see their unemployment compensation claims stuck in bureaucratic purgatory. They faced weeks, often months, of anxiety as bills piled up. Checking accounts ran low. Sometimes food did, too.
These workers felt abandoned, and angry, when no one in Idaho state government called them back.
An Idaho Statesman examination of more than 1,300 state emails and other documents showed that Labor’s managers struggled earnestly to get on top of the problem. But the documents and interviews suggest that Idaho could have taken steps to solve it faster and with more attention to what applicants were asking.
Not only did the state struggle to resolve claims like Hanson’s, but Idaho was among the slowest states in the nation to begin making payments under three programs Congress approved in March to rush money into the pockets of people suddenly without incomes.
Gov. Brad Little bore much of the criticism for the state’s response. He says the crisis forced him to learn more about the regulation-laden world of unemployment compensation than he ever wanted to know. He says unemployment took up to half his time during the spring as he struggled to manage Idaho’s coronavirus shutdown and, later, its reopening.
“It was a mess,” Little told the Statesman in a hour-long video interview — an interview he described as “like reliving a train wreck.”
This is how state leaders got into trouble.
Friday the 13th: The first case and the emergency
As 2020 began, Idaho’s economy was strong. Incomes were rising modestly. The Treasure Valley’s boom was entering its ninth year. The unemployment rate was less than 3%.
Fewer than 2,000 workers per week on average filed unemployment claims. They were paid under regular unemployment compensation, a nationwide program administered by states under federal law, though states also have their own unemployment laws.
Idaho Labor had the staff it needed: enough claims specialists to handle routine application problems promptly, and enough higher-paid adjudicators to investigate and solve difficult ones within a few weeks.
Then came March. Idahoans’ worries mounted fast as the virus closed in. Shoppers stripped stores of toilet paper. People stopped dining in restaurants. Hotels emptied. Employers in the travel, restaurant, retail, education, manufacturing, personal care, entertainment and other sectors began to lay off workers.
On Friday, March 13, the same day authorities confirmed Idaho’s first COVID-19 case in Ada County, Little declared a statewide emergency. The next week, more than 13,000 Idahoans filed unemployment claims — a 1,200% increase in one week. The week after that, 33,000 did.
Congress responds: Paid sick leave, unemployment aid
Facing a nationwide crisis, Congress and President Donald Trump began to throw money at it.
On March 18, Trump signed a bill to provide two weeks of coronavirus-related paid sick leave at small businesses and to add 13 weeks of federally paid unemployment compensation after a worker’s regular, state-paid benefits run out.
A week later, Congress passed a $2.2 trillion virus relief package that included a $600 per week addition to state unemployment compensation from March 29 through July 25. That, like the 13-week extension, fell to state labor departments to dole out.
The law also included a third program: payments to self-employed people. That presented a special problem for Labor. The self-employed are not usually eligible for unemployment compensation. Employers pay a tax into the fund that compensates their workers who are furloughed or laid off. Workers do not pay a tax. There is no such tax on self-employed people, no state program to compensate them when their incomes collapse, and until this law came along, there were no records of self-employed people in Labor’s system. Other states faced the same problem.
Labor had a lot to do to carry out Congress’s aid programs. Even without them, applicants would have faced delays, because of the sheer number of claims triggering human reviews.
Deluge highlights shortcomings in Idaho’s claims system
To save money, Idaho Labor had stopped allowing in-person and telephone applications. The newly jobless had to apply online. Some claims went through with no trouble. The facts applicants provided matched records the workers’ employers had given the department.
But other claims triggered questions about the applicants’ eligibility. Those went into digital piles of claims to be reviewed. These people soon overloaded Idaho Labor’s phone and chat lines. Some tried calling hundreds of times, only to get busy signals or to be hung up upon automatically after staying on hold for up to an hour.
Labor received nearly 150,000 initial claims for unemployment compensation in the first 12 weeks following Little’s emergency order, and 42,000 went into pending status, by the department’s account.
The department gave applicants sometimes-conflicting advice. At times, officials acknowledged that Labor’s phone lines were jammed but said some people were getting through, so applicants could keep trying. At times, they urged applicants simply to wait patiently for someone to call them back. “When the department notifies a claimant there is an issue with their claim, the individual needs to wait for an agency claims specialist to call,” said a March 30 news release.
Applicants had no way to see online what had sidelined their payments. Some applicants raised concerns about the accuracy of Labor’s automated responses. Those responses sometimes said claims were incomplete even when the applicants had done their best to answer every question correctly.
(Idaho’s unemployment program places a high priority on preventing improper payments. Labor’s instructions alert applicants to the possibility of prosecution if they provide false information to obtain payments they’re not entitled to. A false report can bring a felony charge with a maximum fine of $50,000 and up to five years in prison.)
One self-employed Boisean, who asked not to be named, showed the Statesman in late May a string of emails detailing two months of attempts to follow Labor specialists’ sometimes-conflicting instructions. At one point, he said by phone, the information he placed into the claims system disappeared without explanation. He was told to re-enter it.
“I felt lost,” he said.
‘We can’t do this too long or we will fall behind’
Senior Labor managers at first underestimated the challenges. They were slow to seek outside assistance and to embrace offers of help. But they ramped up internally.
On March 23, Jani Revier, Labor’s director, emailed Bobbi-Jo Meuleman, Little’s director of intergovernmental affairs, to say the department was reassigning some workers to answer the onslaught of calls already coming in. “But we can’t do this for too long or we will fall behind in adjudicating claims,” she wrote.
Labor was hiring more workers, she wrote, “but those staff will have to be trained. UI (unemployment insurance) is very technical and you can’t just pull someone off the street or from somewhere else in the agency and have the(m) be able to answer questions accurately or correctly.”
On March 28, Revier emailed Meuleman with an update on Labor’s efforts to fit Congress’ new programs into its system. She said the $600 payments “will likely be two weeks to deploy,” the extended benefits “two to three weeks,” and the self-employed payments a month.
That timetable, never publicized, proved about two weeks too optimistic. The $600 payments actually took four weeks for the department to roll out, the extended benefits almost five, and the self-employed payments six. Revised timetables that were later disclosed publicly proved accurate for the $600 and self-employed programs and one week too optimistic for the extended benefits.
“We all lost a little bit of weight. There wasn’t much to eat here. … I did not have money to buy groceries.”
To help, the state Board of Examiners, including Little, approved cash overtime pay for 86 exempt Idaho Labor employees. Labor managers temporarily reassigned dozens of workers to help answer phones and do behind-the-scenes work. They began to hire more claims specialists — Labor has 46 now, up from 15 then, Revier said in an online video interview — and adjudicators, with 36 now, up from 25.
Idaho finally started making its $600 payments on April 24, beating only Connecticut, Wisconsin and Puerto Rico, according to a May 7 table prepared by the National Association of State Workforce Agencies. Idaho was again near the end of the pack when it made its first payments to the self-employed on May 11.
The $600 payments, the costliest of the three federal programs, were especially helpful to low-wage workers. Idaho’s regular state unemployment compensation covers 41% of a worker’s pay on average, according to Labor. Compensation lasts 10 to 20 weeks normally, 26 weeks in high-unemployment times like now. (Most states pay up to 26 weeks.)
Idaho’s weekly payments range from $72 to $448 per week, depending on how much a worker earned while employed. A full-time, minimum-wage worker gets the $72. Labor says the average claimant has received $266 per week for 13 weeks since the pandemic began, down from $316 earlier in the year, indicating that pandemic recipients generally earned less than people laid off previously.
For many workers with low-paying jobs in retail, hairdressing, home care, food service and other fields, the added $600 meant they would temporarily collect more than they earned at work. The $600 boosted minimum-wage workers’ payment to $672 (versus $290 working), the average claimants’ to $866, and the top-paid claimants’ to $1,048.
Of course, that was only if Labor delivered the money. Hanson, the school security officer and mother of triplets, said the state’s delays forced her to rely on family help and money she and her late husband had saved from past tax refunds.
“We cut back a lot,” she said. “My biggest thing was paying bills. I own my house, and I definitely didn’t want to lose it. … We did the bare minimum on food, just the staples. We did school lunches — that’s where we got milk. When you go pick up the school lunch, they have something for breakfast the next morning. That made it so I didn’t have to worry about feeding my children.”
Danita Center, a 63-year-old who lost her job at a Meridian call center, said she went 10 weeks without payment. She kept the Caldwell house where she lives with two siblings thanks to loans from a friend that eventually totaled $6,000.
“We all lost a little bit of weight,” Center said. “There wasn’t much to eat here. … I did not have money to buy groceries.”
Unpaid claims pile up from ‘unresolved issues’
Some colleagues offered Revier help. Janet Gallimore, executive director of the Idaho State Historical Society, wrote, “If there is anything I can do to support your efforts, please let me know.” Susan Buxton, director of the state Division of Human Resources, offered to have some Department of Agriculture employees temporarily reassigned.
“I really appreciate all the support that we received from our sister agencies,” Revier said in the video interview. Except for some skilled help from Idaho Tax Commission employees, though, she let the offers pass. Any loaned employees would need training, and she didn’t know how long Idaho Labor would be able keep them, nor how long they would be needed.
Vendors offered help too. Around the country, some states turned to private contractors to get them through the jam.
Rhode Island used Amazon Web Services, which set up a cloud-based service in 10 days. “Rhode Island also replaced call-center technology with the same system Amazon uses to handle call and internet volume during Black Friday sales events before Christmas,” the Wall Street Journal reported. “The cloud-based technology allowed the Rhode Island labor department to change from using 74 phone lines that left callers waiting for minutes to a system that can take 1,000 calls at the same time.”
Fast Enterprises, a Colorado software-for-government company that has a contract with the Idaho Tax Commission, made a pitch. So did Netacent, a Boise company that redesigned Alabama’s unemployment-insurance system in 2017 and said it could deliver Idaho Labor “a totally turn-key solution” for getting payments out in “a matter of days.” Other firms did too.
The vendors’ proposals went nowhere. “Our system is a homegrown system,” said Revier, who contends that it made more sense in the long run to reprogram that system than to buy or lease a commercial one just to get through the crisis.
“It did take a little bit longer to get it up and running, but in the long term, it will be more efficient,” she said.
Little says he was fully engaged, though records don’t show it
Little, meanwhile, was deeply involved in the state’s coronavirus response, his calendar shows.
But that calendar, more than 190 emails from the Governor’s Office and nearly 1,200 records from Labor, showed scant evidence that Little spent time on Labor’s headaches during the early weeks of the crisis. Little’s calendar shows no meetings with Revier to discuss unemployment until May 7, almost two months after he declared the coronavirus emergency.
Asked about that, the governor insisted that he and his staff were in regular contact with Labor, and that Revier took part in at least half of his recurring calls to legislators, mayors and county commissioners, where unemployment came up all the time.
“What was reflected on my calendar was a mere shadow of the amount of activity that was taking place from this office,” Little said.
The records also show just two emails between Little and Revier in the two months from the emergency declaration March 13 through May 8, the period encompassed by the Statesman’s request for Labor’s records, which was submitted May 9. (The department delivered its records on June 30.)
The first email came April 9, when Revier told Little that Idaho’s unemployment trust fund had enough money from employers’ taxes to pay 162,000 people for 12 weeks at an average of $375 per week.
The second came May 4, when Little showed Revier and Meuleman talking points he had developed for comments he planned to make the next day in a phone call to legislators and mayors, a town hall with AARP Idaho, interviews with morning hosts on Boise radio stations KIDO-AM and KBOI-AM, and a midday appearance on KBSX-FM’s “Idaho Matters.”
Revier did not want the governor’s office answering applicants’ questions. In an email to Joshua McKenna, the chief of Labor’s Unemployment Insurance / Benefits Bureau, she said that would be “dangerous.”
By mid-April, applicants began turning to social and news media to voice complaints about stalled payments. At an April 23 news conference, a Statesman reporter asked Little what he had to say to them.
“My heart goes out to them, particularly if they’re in a position where they can’t pay their rent and can’t buy groceries,” Little said. “We still have a ways to go, but we’re doing all we can with the Department of Labor to work as efficiently as we can.”
Yet delays continued. The pleas of people not getting their money became a recurring theme at Little’s May and June news conferences.
Little raised their ire at a news conference April 30, when he was asked about the backlog and said, “I believe a lot of the unemployment is caught up at this point in time. … I don’t think there’s that long of a wait.”
He quickly acknowledged that he had misspoken.
After that, Little acknowledged the backlog repeatedly. He just as repeatedly said that it wasn’t really his or Labor’s fault.
“I readily admit, we are behind, but so are almost all the other states,” he told reporters May 14.
He pointed a finger at Congress. “We are implementing programs that Congress passed,” he said on Idaho Public Television’s “Idaho Reports” on May 14. “Hopefully in the future we will have more input into what those programs are.”
He faulted U.S. Department of Labor regulations. In a reference to the program that paid self-employed people, Little said at a June 11 news conference. “We had mixed guidance from the federal government about how we confirm the employment of these people.”
“The state and federal government did fail, I readily admit that,” he said.
While he repeated “my heart goes out” several times, he implied once that applicants who complained were ungrateful after their payments finally arrived.
“Of course we always hear from the people that aren’t getting money, but then when they get a big check with six or eight weeks of back (pay), they’re mysteriously quiet,” he told reporters May 28.
Asked about that, Little told the Statesman, “That’s human nature.” He said staffers answering his office phones handled calls that were “pretty hostile.”
“Look, I don’t blame people,” he said. “They were scared. They knew other people who were getting their money. They weren’t getting their money.”
When applicants who got nowhere with Labor turned to Little for help, his staff usually forwarded their emails to the agency without replying.
Asked about that, Little said his office cannot and should not routinely handle the problems of state agencies. “We’re trying to direct them closer to where the issue would be resolved,” he said.
Labor hires a call center company to help
Little stood by Revier and Labor even as he chafed at the delays.
In an email to Meuleman on May 15, he wrote about a phone call he had just received from Alaska Gov. Mike Dunleavy. Little said he asked Dunleavy about Alaska’s handling of the payments to self-employed workers. “They are working 7 days a week!” Little wrote. “Hired 140 temps to handle calls. He said he is not getting calls on unemployment.”
Labor finally turned to Maximus, a call center company that specializes in serving government agencies, to help whittle the backlog. Maximus started with 30 call specialists on June 1 and was immediately overwhelmed. Revier now says the state should have launched the center with more people. By early July, the center was up to 120 specialists.
“I do think we did the best we could in the circumstances we were under.”
By late July, state officials were claiming victory at last, saying the 42,000 delayed claims through June 6 had finally been cleared.
That put Idaho ahead of some states, like California, Wisconsin and Pennsylvania, where sizable backlogs persist to this day.
As COVID-19 infections and deaths rise, layoffs have started to turn upward again, and new claims are coming in, many with the same kinds of problems requiring human review. Revier said she will wait to see how long to keep the center going.
Why couldn’t Idaho have contracted for a call center in late March or early April?
Little said officials then did not yet understand the problem thoroughly enough. He remembers sitting at his desk when an aide presented a projection from Labor suggesting that the backlog would not be solved until August. “I says, ‘That’s totally unacceptable,’” Little said. “’We’ve got to blow this thing up and rebuild.’”
It was a challenge to understand the complexities of the backlog well enough merely to come up with the August projection, he said: “We weren’t getting our arms around the problem.”
Revier said, “If I had to do all over again? Yeah, I would definitely engage with the call center sooner.” Then she added: “But I don’t know how much quicker we really could have gotten it done. Maybe a week or two.”
The upshot: Lessons learned, and ideas for the future
“There was plenty of room to have done something better,” Revier said. “I’m in no way saying we handled things perfectly. I do think we did the best we could in the circumstances we were under.”
To be sure, those circumstances were unprecedented. The average number of weekly unemployment payments nationwide topped 29 million in May, nearly three times as many as at the peak of the Great Recession, said Scott B. Sanders, executive director of the National Association of State Workforce Agencies, in June testimony to a U.S. Senate committee.
“No entity, public or private, would reasonably have contingency plans in place for this scenario to which states have responded, yet our member agencies have continued to work through these overwhelming workloads tirelessly, and with great dedication,” Sanders said.
But ideas for improvement are circulating. Little said he thinks some of them could help Idaho. Among them:
Covering the self-employed permanently. This would require some way to pay for them. Little says self-employed people “would love to be added, but they don’t want to pay into it.”
A more-robust software-based claims system that can prevent fraud and still dispense money fast. “At a minimum, we ought to write our software over at Labor, with the condition that if some program comes in like this, we can flip a switch and angle things in a different way,” he said.
Stronger fraud prevention — with a caveat. Little and Revier say fraudulent claims have mushroomed nationwide as criminals with access to applicants’ names and Social Security numbers seek to grab pandemic unemployment cash. Little says Idaho will prove to have managed its pandemic payments with one of the lowest fraud rates in the nation, but he says Idaho nonetheless needs to strengthen its protections.
“There were only a few states that had robust systems to (shut down) those fraud claims,” Little said at a news conference July 9. “We will implement those systems going forward.”
One big problem is that fraud prevention comes at the cost of speed. That worsened Idaho’s backlog.
“On my calls with the legislators, when they call and complain about it, I says, ‘Well, you’re the ones who put in all the fraud provisions,’” Little said. “’What would you think of my doing an executive order to waive that?’ Their heads all blew up. So we didn’t do that.”
Automated queries. Little says Idaho’s system should allow an applicant to receive an automated query immediately in response to a potential error, as some states already do. “Absolutely,” he said.
Right now, Little just wants a greater say in what Congress decides in coming days about additional relief. On Monday, as Congress and Trump were considering a new relief law, the governor began drafting a letter to Idaho’s congressional delegation urging that no burdensome new programs be assigned to the state like those in the $2.2 trillion relief law.
“Don’t saddle us with another one of those,” he said.
A less-bureaucratic response
“I am recently widowed with 7-year-old triplets. I’m the head of household and I need to be able to keep my house that I’ve owned for 23 years. Please help me.“
Perhaps most importantly, the pattern and consistency of applicants’ complaints suggests that the anxiety and suffering of laid-off Idaho workers could have been alleviated by a faster, more forceful deployment of personnel — including the use of outside firms, such as the call-center company — and a more effective plan to respond to applicants’ questions.
James Wilson, a Boise appliance repairman, went on unemployment in early spring. He returned to work after several weeks of not receiving payments, quit after a bad back prevented him from loading refrigerators, briefly took a maintenance job at a nursing home, quit that job when it had an outbreak of COVID-19, and now is on unemployment again, looking for work.
He contends state leaders did too little when it became clear in March that the virus would cause massive job losses. “They should have seen it coming,” he said. “They should have hired all those people they hired to catch up right away.”
Center, the Caldwell call-center worker, is still angry over the lack of communication. “Even just an answer” to her calls would have helped, she said by phone: “Yes or no? Can I expect to get paid? Something!”
Hanson, the Kuna school-security officer, says she is inclined to offer state officials the benefit of the doubt. Nonetheless, she too does not understand why the state didn’t react faster when the pandemic hit.
She also said she was “really frustrated and concerned” when Labor would not answer her questions. After four weeks of that, she emailed Little on May 4: “I am recently widowed with 7-year-old triplets. I’m the head of household and I need to be able to keep my house that I’ve owned for 23 years. Please help me.”
She never heard from Little. She did soon receive a call from the department. (She does not know if her email to Little had anything to do with it. A spokeswoman for Little said by email, “There is no record our office had a direct effect on Tami Hanson receiving a call back.”)
Hanson said she pressed the Labor employee who finally called her to explain what the problems were in Hanson’s application. One involved her furlough status, she said; the other involved a department requirement that her school’s closure dates be verified with the West Ada district. Once she got those answers, Hanson said, her frustration waned, even though another week or two passed before payments started.
“I felt better because I had the information,” she said.