SEATTLE — Amid concerns of recession and more layoffs in Washington later this year, the state’s unemployment system is still dealing with the burdens of the pandemic.
Workers who file for jobless benefits with the Employment Security Department still aren’t getting paid as fast as they were before COVID hit in early 2020. When problems arise, more than half of claimants can’t get through to the agency’s customer service.
The situation is even more dire for the roughly 115,000 who ESD says were overpaid in benefits during the pandemic and are now being asked to collectively repay roughly $1 billion. Although the ESD said in April that claimants could apply to have those overpayments waived, only 14,000 had applied as of this week — in part, some claimants say, because ESD hasn’t done enough to publicize the program.
“This was absolutely the first I’d heard about it,” said David Ullman, a Mountlake Terrace resident who was notified he must repay around $8,000 in pandemic benefits. Ullman, 46, said he spent months fighting to get the benefits in the first place, only to “get another letter saying that I need to repay the money.”
ESD officials say they’re stepping up efforts to publicize the waiver program, including a massive email and paper-letter campaign this month. But they’re cautioning claimants not to expect quick decisions and warning that, due to the complicated nature of each claimant’s case, it may take until next year to resolve the entire backlog.
“Our highest priority is ensuring that we make fair and consistent decisions, so people who qualify get the relief they need,” said JR Richards, director of ESD’s unemployment insurance customer support division, in an emailed statement Friday.
Much of ESD’s lagging recovery from the pandemic reflects a dramatic fall in its staff and other resources.
Most agency operations are paid for with federal funds, which are indexed to the number of claims the agency receives. Those federal funds soared early in the pandemic, as Washington and other states saw massive layoffs, but they’ve since dropped off dramatically.
As a result, ESD’s customer service staff fell from 964 in late 2021 to just 239 full-time positions now, of which only 200 are filled, agency officials say.
Staffing reductions have also affected call center performance, including long wait times, dropped calls and inexperienced call center workers, according to claimants.
“I couldn’t tell you how many times I did speak to [call center staff] who were, like, ‘I’m sorry, this is my second day,’” said Eddie Veevaert, a Monroe resident who received benefits after losing his job as a wireless sales manager early in the pandemic, but has since been told to repay more than $50,000.
For the month of April, 41 percent of incoming calls were answered — the most since September — but 20 percent were abandoned, also the most since September, according to data provided by ESD. Average hold times were 34 minutes, down from 39 minutes in January.
Agency officials expect substantial improvement since the April 20 rollout of a new phone system, which allows callers to schedule a callback rather than wait on hold, among other new functions.
The agency has also struggled to quickly pay benefits to new claimants. For example, in April, ESD paid 64 percent of new claims within 21 days, according to federal data.
While that’s a notable improvement over March and February, it’s still well behind January 2020, when ESD paid 93 percent of claims within 21 days despite a claims workload that was 53 percent larger than in April.
But perhaps the biggest pandemic hangover is the massive overpayments backlog.
Many of these claimants initially qualified for benefits but were later deemed ineligible, for reasons that ranged from failing to provide additional documentation to confusion over the state’s often complicated unemployment process, say claimants, agency officials and worker advocates.
Under a 2022 federal policy, ESD can waive debt for many of these claimants, but the waiver process generally requires often-intensive case-by-case review. To pay for that, state lawmakers this year approved nearly $12 million for a dedicated ESD team to process the overpayment caseload.
But even with the funding, questions remain.
Because the new funding isn’t available until July, ESD hasn’t processed any of the 14,000 waiver applications already received. That’s kept ESD officials from being able to estimate what percentage of overpayments they’ll ultimately be able to waive.
Rory O’Sullivan, a partner at Seattle-based Washington Employment Benefits Advocates, which represents claimants, said he and others are eager to see the results for the first batch of applications.
“If a high percentage of them are approved, that’ll be great,” O’Sullivan said. But for those with heavy overpayment debt, and who “were really struggling during the pandemic, and only got by because of the benefits,” being denied a waiver could be “really traumatic.”
The wait is agonizing for people like Florence Barrett, a Tacoma resident who owes nearly $6,400 in benefit overpayments. Barrett said she applied for a waiver soon after the application process opened in April, but so far, the agency “never even looked at my case.”
Those who are denied a waiver can appeal — but they’ll face yet another pandemic-related problem: a monthslong wait at the state Office of Administrative Hearings, which handles appeals.
Although the OAH has hired more temporary judges to handle the larger caseload, appellants can still expect to wait around six-and-a-half months for a hearing, down from nearly eight months in December.
Whether the waiver program will generate a new batch of appeals and even longer wait times is impossible to know at this point, said Brendon Tukey, division chief administrative law judge who manages the OAH’s unemployment insurance appeals caseload.
But Tukey notes, the possibility of extra appeals and longer wait times was unavoidable, given the state’s decision to try to help people with overpayments.
The state “could have avoided that overpayment backlog entirely by just not offering [waivers],” says Tukey.
But “a policy decision was made … we want to give people a chance for a second bite at a waiver,” he says. “And that just takes time.”