Policy Analysis | June 2020
Coronavirus Response at State Unemployment Agencies
Disclaimer: Employment figures prior to the passage of the CARES Act at the end of March do not include independent contactors and other self-employed workers who historically have not qualified for unemployment insurance. As a result, data following the enactment of the CARES Act will include previously ineligible unemployed individuals who now qualify for benefits, effective until the end of 2020. For more information on unemployment, see the SLC Policy Analysis “Unemployment in the SLC Region Amid the COVID-19 Pandemic.”
Since emerging in December 2019, severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)—the novel coronavirus that causes coronavirus disease 2019 (COVID-19)—has infected millions and caused catastrophic economic impacts. As of May 28, 2020, the coronavirus had infected 5.6 million and contributed to 355,000 deaths worldwide, including 1.73 million cases and more than 100,000 deaths in the United States.1 The infections, deaths and quarantine policies have had devastating economic effects. Prior to the outbreak, unemployment was on a multi-year downward trend, with the national unemployment rate below 5 percent for 42 consecutive months. March’s unemployment rate was 4.4 percent. One month later, the rate soared to 14.7 percent.2
This SLC Policy Analysis provides an overview of the federal CARES Act and explores how state unemployment agencies in Southern states have responded to increased unemployment claims associated with the coronavirus. California and New York, two coronavirus epicenters, have been included for comparison.
On March 27, 2020, the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to stimulate the economy through $2 trillion in forgivable loans and direct cash payments. The primary components of the CARES Act include the:
- Coronavirus Relief Fund to provide $150 billion to help state, local and tribal governments cover expenses related to the coronavirus;3
- Economic Impact Payment program to deliver direct payments of up to $1,200 for adults and $500 for children;4
- Paycheck Protection Program to cover payroll and benefit expenses for small businesses;5
- Pandemic Emergency Unemployment Compensation program to provide up to 13 weeks of unemployment benefits for persons have exhausted their federal benefits;6 and
- Pandemic Unemployment Assistance program to temporarily extend benefits to the self-employed, freelance workers, independent contractors and part-time workers until December 31, 2020. Previously, these workers were ineligible for unemployment benefits. As a result, states are adjusting their unemployment systems to accommodate these new classes of applicants.7,8
States have used CARES Act funding in numerous ways, including financial support for unemployment agencies, which have been overwhelmed due to the outbreak.
In March, the state unemployment rate was 3.0 percent. The following month, it quadrupled to 12.9 percent. In May, the state Department of Labor (DOL) announced that it would be opening a new call center in the coming weeks to handle the increased unemployment claims. In two months, the DOL issued approximately $1 billion in unemployment insurance payments to 267,000 Alabamians—more than the previous six years combined.9
From March to April, the state unemployment rate more than doubled, from 5.0 percent to 10.2 percent.10 The state Division of Workforce Services, with 200 employees answering unemployment-related calls, plans to hire more employees in the coming weeks and has started accepting calls seven days a week.11 On May 15, the state’s Pandemic Unemployment Assistance website was taken down after a security weakness was discovered in the website that exposed Social Security numbers, bank account information and other personal data. A cybersecurity firm was hired to investigate what caused the security breach. The website was reopened five days later with improved security protocols.12
California’s March unemployment rate was 5.5 percent. In April, the rate nearly tripled to 15.5 percent.13 Since the COVID-19 outbreak, the state Employment Development Department (EDD) redirected 1,340 employees from other state agencies to process unemployment claims. Employees are working seven days a week from 8:00 a.m. to 8:00 p.m.14 The EDD also is hiring more than 1,800 new employees to work in call centers, analyze wage documents and process the more than 5 million claims filed since the outbreak began. The department is aiming to expedite the hiring process, with successful applicants starting as soon as one week after their interview.15
In March, the state unemployment rate was 4.4 percent, before increasing to 12.9 percent the following month.16 In early April, Governor Ron DeSantis announced that the state is mobilizing up to 2,500 state employees to process unemployment claims and hiring 700 new employees to staff the state’s call center. The state also purchased new computer servers to improve system capacity. After the upgrades, the unemployment website now accommodates as many as 120,000 simultaneous connections. Previously, the site could handle 40,000 to 60,000 simultaneous connections.17
Georgia’s unemployment rate was 4.6 percent in March, growing to 11.9 percent in April, the highest unemployment rate on record for the state.18 In late May, the state Department of Labor (DOL) announced that it had issued more than $3.1 billion in state and federal unemployment benefits in the past nine weeks. From mid-March to late May, DOL processed more than 2 million initial unemployment claims. For comparison, the total initial claims processed in the previous five years was 1.7 million.19 Earlier this year, DOL had approximately 1,000 employees—less than half the amount employed during the Great Recession. Since the COVID-19 outbreak, DOL has hired several hundred new employees and recent retirees.20
From March to April, the state unemployment rate nearly tripled—from 5.2 percent to 15.4 percent.21 Prior to the COVID-19 outbreak, the state Office of Unemployment Insurance (OUI) had approximately one dozen employees. From mid-March to May 21, 792,000 Kentuckians (38 percent of the state’s workforce) applied for unemployment. With such a large increase in claims, the state hired more than 1,000 employees to answer phone calls. As of May 18, nearly 70 percent of OUI’s 1,161 employees are “Tier One” representatives, who can respond to general eligibility and unemployment program questions. Twenty-seven percent of OUI employees (315 employees) are “Tier Two” representatives, who can assist applicants with name and verification issues. Forty-six employees are classified as “Tier Three” employees, those with the most knowledge of and familiarity with the unemployment system. The state’s goal is to hire 250 new employees in the coming weeks and transfer 250 employees from other state agencies to process claims.22,23
In March, the state unemployment rate was 6.7 percent. In April, the rate more than doubled to 14.5 percent.24 From March 22 to May 22, the Louisiana Workforce Commission paid more than $1.8 billion in state and federal unemployment benefits to 493,196 Louisianans and hired additional staff to process claims.25, 26 Louisiana was one of the first two states in the nation to provide compensation under the aforementioned Pandemic Unemployment Assistance program.27
Mississippi’s March unemployment rate was 5.1 percent. In April, the rate more than tripled to 15.4 percent.28 Before the coronavirus pandemic, the state Department of Employment Security (DES) received 1,000 claims or less on an average week. Since the outbreak, the state’s highest weekly total of claims received was 46,000. In April 2019, DES received 4,778 unemployment claims. In April 2020, the state received 157,712 claims, paying out $72.6 million in unemployment compensation.29 To cover some of the administrative costs associated with the increase in claims, DES may seek CARES Act Funding for costs not covered by the U.S. Department of Labor.30
The state unemployment rate in March was 3.9 percent, rising to 9.7 percent the following month.31 From March 15 to April 11, the state Department of Labor (DOL) received approximately 340,000 claims. The DOL processed 76 percent of those claims, with most unpaid claims still falling within the employer protest period—the 10-day period an employer has to contest an unemployment claim.32 During this period, the DOL hired temporary employees and redirected employees from the Department of Higher Education and Workforce Development to process unemployment claims.33,34 In May, the Department received a $1.33 million grant from the U.S. Department of Labor as part of the Humanitarian Jobs Grant. The grant will help fund the creation of up to 100 temporary positions to assist in coronavirus recovery efforts. The jobs include delivering groceries and medicine, contact tracing, healthcare work and job center services.35
From March to April, the state unemployment rate more than tripled—from 4.1 percent to 14.5 percent.36 To address the increase in unemployment claims, the state Department of Labor increased the number of employees processing applications from 400 employees working five days a week to as many as 3,100 employees working seven days a week. With more employees processing applications, the application call backlog has been reduced from 275,000 to 4,300.37
The state unemployment rate in March was 4.3 percent, increasing to 12.2 percent in April.38 Prior to the coronavirus outbreak, the state Division of Employment Security (DES) received approximately 3,000 claims each week. Since the outbreak, DES has received around 100,000 claims per week, a 3,792 percent increase.39 On May 7, DES announced that it is adding 1,000 employees to a private call center under contract to help process claims. With these additional new hires, DES will have around 2,600 employees working to process unemployment claims.40
Oklahoma’s March unemployment rate was 2.9 percent in March, more than quadrupling to 13.7 percent the following month.41 From March 15 to May 6, the Oklahoma Employment Security Commission (OESC) paid $432,998,341 in state unemployment benefits to 432,076 applicants. During the same time, OESC paid an additional $258,079,934 in federal Pandemic Emergency Unemployment Compensation. According to Secretary of Digital Transformation David Ostrowe, OESC provided more unemployment benefits in the first three weeks of the coronavirus outbreak than during all of 2019. In May, the commission discovered a number of fraudulent claims and is working with the State Bureau of Investigations and the Federal Bureau of Investigation to identify the persons or organizations responsible for the claims.42 On May 19, the OESC transferred control of their information technology services to the state Office of Management and Enterprise Services.43 As of May 22, nearly 15,000 claims have been identified as potentially fraudulent.44
The state unemployment rate was 3.2 percent in March, before climbing to 12.1 percent in April.45 From mid-March to mid-May, the state Department of Employment and Workforce (DEW) received 486,149 unemployment claims and paid more than $1 billion in unemployment compensation. Call centers at DEW now average 80,000 calls per week.46 To accommodate the increase in claims, call centers are operating six days a week.47
In March, the state unemployment rate was 3.3 percent. In April, the rate increased to 14.7 percent.48 The state Department of Labor and Workforce Development (DLWD) added nearly 500 new employees to process the increased claims and plans to launch a virtual chat agent to answer basic unemployment questions.49 An executive order issued by Governor Lee on April 3 grants the commissioner of DLWD the authority to require expedited information to process unemployment claims. (This limits the employer’s window to contest a claim from 10 days to four.)50 In late May, DLWD announced that it will hire more employees to scan mailed-in applications and up to 87 new employees to process and review claims that require advanced expertise. Currently, the state has a backlog of more than 22,000 claims and is seeking guidance from the federal government on how to process individuals who have not previously been eligible for unemployment (self-employed, freelance workers and independent contractors).51
Texas’ unemployment rate was 5.1 percent in March, rising to 12.8 percent the following month.52 The Workforce Commission’s unemployment benefit system uses a mainframe computer built in the 1990s to process claims. Last year, the Legislature allocated $40 million to replace the mainframe system with a cloud-based system, but the coronavirus pandemic hit before the two- to three-year conversion process commenced. The mainframe system was upgraded from five servers to 20, the most the system can accommodate, to handle the increase in claims.53 Additionally, the Commission added four new call centers, redirected 350 staff members from the Legislature, and hired 1,500 new employees to receive calls and process more than 1.75 million unemployment claims.54
The state unemployment rate in March was 3.3 percent; more than tripling to 10.6 percent in April.55 As of May 28, the state’s Employment Commission hasn’t started providing unemployment compensation under the Pandemic Emergency Unemployment Compensation (PEUC) program, a component of the federal CARES Act. According to the U.S. Department of Labor, Virginia is one of 19 states that has not yet commenced making PEUC payments. The commission estimates that 25,000 to 35,000 Virginians are eligible for PEUC compensation and is reprogramming a system first implemented in 1985 to accept PEUC applications, aiming to begin sending payments in July.56
In March, the state unemployment rate was 6.0 percent; increasing to 15.2 percent in April.57 Before the coronavirus outbreak, WorkForce West Virginia received approximately 3,500 claims each month. Since the outbreak, the agency has received 40,000 claims each month. To accommodate the increase, WorkForce West Virginia added call center staff, additional call centers, an automated chatbot to answer basic unemployment questions, and contracted with a private vendor to process Pandemic Emergency Unemployment Compensation claims.58 From March 16 to mid-May, WorkForce West Virginia processed more than $600 million in unemployment claims.59
1 “Coronavirus (COVID-19),” May 28, 2020, Google News, https://news.google.com/covid19/map?hl=en-US&gl=US&ceid=US:en.
3 “The CARES Act Provides Assistance for State, Local, and Tribal Governments,” U.S. Department of the Treasury, https://home.treasury.gov/policy-issues/cares/state-and-local-governments, accessed May 28, 2020.
4 “The CARES Act Provides Assistance to Workers and their Families,” U.S. Department of the Treasury, https://home.treasury.gov/policy-issues/cares/assistance-for-american-workers-and-families, accessed May 28, 2020.
5 “The CARES Act Provides Assistance to Small Businesses,” U.S. Department of the Treasury, https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses, accessed May 28, 2020.
6 Gay Gilbert, “4 Things to Know About Unemployment Benefits Under the CARES Act,” May 11, 2020, U.S. Department of Labor Blog, https://blog.dol.gov/2020/05/11/4-things-to-know-about-unemployment-benefits-under-the-cares-act.
7 Jean Folger, “Pandemic Emergency Unemployment Compensation (PEUC) and How to Apply,” April 7, 2020, Investopedia, https://www.investopedia.com/pandemic-emergency-unemployment-compensation-peuc-definition-4802046.
8 Jennifer Cook, “Pandemic Unemployment Assistance (PUA) and How to Apply,” April 7, 2020, Investopedia, https://www.investopedia.com/pandemic-unemployment-assistance-pua-definition-4802064.
9 Brian Pia, “53,000 people should receive weekly unemployment payments following weekend website glitch,” May 26, 2020, ABC News 33/40, https://abc3340.com/news/abc-3340-news-iteam/53000-people-should-receive-weekly-unemployment-payments-following-weekend-website-glitch.
11 Tony Holt, “State pledges to ease process on jobless aid,” April 29, 2020, Arkansas Democrat-Gazette, https://www.nwaonline.com/news/2020/apr/29/state-pledges-to-ease-process-on-jobles-2/.
12 Lindsey Millar, “Arkansas PUA website back online, investigation continues,” May 20, 2020, Arkansas Times, https://arktimes.com/arkansas-blog/2020/05/20/arkansas-pua-website-back-online-investigation-continues.
14 Elisabeth Buchwald, “State employment offices are undergoing hiring sprees to process the influx of unemployment claims,” April 30, 2020, Market Watch, https://www.marketwatch.com/story/state-employment-offices-are-undergoing-hiring-sprees-to-process-the-influx-of-unemployment-claims-2020-04-28.
17 Anne Schindler, “DeSantis responds to 'unacceptable' unemployment claim process, hires hundreds to help,” April 6, 2020, First Coast News, https://www.firstcoastnews.com/article/news/health/coronavirus/desantis-responds-to-unacceptable-unemployment-claim-process-hires-hundreds-to-helpgov/77-9ccd489e-f0c6-4c7c-8398-1b3e2c1ca351.
19 Kathleen Sturgeon, “GA Records All-Time High Unemployment Rate Due To Coronavirus,” May 28, 2020, Patch.com, https://patch.com/georgia/canton-ga/georgia-records-all-time-high-unemployment-rate.
20 Josh Green, “Your questions answered about filing for unemployment in Georgia during COVID-19: severance, payouts, federal help, and more,” May 13, 2020, Atlanta Magazine, https://www.atlantamagazine.com/news-culture-articles/your-questions-answered-about-filing-for-unemployment-in-georgia-during-covid-19-severance-payouts-federal-help-and-more/.
22 Matthew Glowicki, “Yes, Kentucky staffed up its unemployment phone lines. But many can't fix your problems,” May 18, 2020, Courier Journal, https://www.courier-journal.com/story/news/investigations/readers-watchdog/2020/05/18/kentucky-working-increase-expertise-unemployment-workers/5198153002/.
23 Bill Estep, “Another 47,000 apply for unemployment in Kentucky as residents struggle to get paid,” May 21, 2020, Lexington Herald-Leader,https://www.kentucky.com/news/coronavirus/article242883051.html.
25 “Gov. Edwards Issues Statement on Louisiana's April Unemployment Rate,” May 22, 2020, KATC ABC News, https://www.katc.com/news/covering-louisiana/gov-edwards-issues-statement-on-louisianas-april-unemployment-rate.
26 “State unemployment rises to 14.5 percent due to COVID,” May 23, 2020, Avoyelles Today, https://www.avoyellestoday.com/breaking-news-news-covid-19/state-unemployment-rises-145-percent-due-covid.
27 “COIV-19 April 2020 State Data,” May 22, 2020 Louisiana Workforce Commission, http://www.laworks.net/PublicRelations/PR_PressReleaseDetails.asp?SeqNo=2498&Year=2020&Month=5.
29 “MDES releases unemployment rate for April 2020,” May 26, 2020, WJTV-12 News, https://www.wjtv.com/news/mdes-releases-unemployment-rate-for-april-2020/.
30 Sarah Ulmer, “Jackie Turner talks unemployment claims during COVID-19 pandemic with Y’all Politics,” May 14, 2020, Y’all Politics, https://yallpolitics.com/2020/05/14/jackie-turner-talks-unemployment-claims-during-covid-19-pandemic-with-yall-politics/.
32 Jacob Barker, “Tens of thousands of Missouri jobless await unemployment payments,” May 1, 2020, St. Louis Post-Dispatch, https://www.stltoday.com/business/local/tens-of-thousands-of-missouri-jobless-await-unemployment-payments/article_e9907435-301c-5f92-8678-0f0408c9e5b9.html.
33 “Office of Workforce Development shifts focus to COVID-19 recovery efforts,” May 18, 2020, The Rolla Daily News, https://www.therolladailynews.com/news/20200518/office-of-workforce-development-shifts-focus-to-covid-19-recovery-efforts.
34 Lauren Trager, “Frustration builds for those having trouble getting unemployment benefits in Missouri,” April 28, 2020, KMOV-4, https://www.kmov.com/news/frustration-builds-for-those-having-trouble-getting-unemployment-benefits-in-missouri/article_adbc4c38-89a5-11ea-824a-b7b87918df8e.html.
35 “Humanitarian Jobs Grant will offer employment during COVID-19 Recovery,” May 14, 2020, Missouri Department of Higher Education and Workforce Development, https://dhewd.mo.gov/newsapp/newsitem/uuid/a08e4b9c-e551-4111-896d-f4253706318c.
37 Elisabeth Buchwald.
39 Steve Sbraccia, “NC senator says help is on the way for state’s overwhelmed unemployment system,” May 14, 2020, WNCN CBS-17, https://www.cbs17.com/community/health/coronavirus/nc-senator-says-help-is-on-the-way-for-states-overwhelmed-unemployment-system/.
40 “State to add 1,000 to unemployment call center as hundreds of thousands still wait for benefits,” May 7, 2020, WBTV-3, https://www.wbtv.com/2020/05/07/state-add-unemployment-call-center-hundreds-thousands-still-wait-benefits/.
42 “The Oklahoma Employment Security Commission Issues Update on Unemployment Claims,” May 6, 2020, Woodward News, https://www.woodwardnews.net/community/the-oklahoma-employment-security-commission-issues-update-on-unemployment-claims/article_a8ab5514-8f99-11ea-9584-b36dd91d7504.html.
43 Nolan Clay, “Oklahoma Employment Security Commission makes change to deal with unemployment claims backlog,” May 19, 2020, The Oklahoman, https://www.tulsaworld.com/business/oklahoma-employment-security-commission-makes-change-to-deal-with-unemployment-claims-backlog/article_cccc0d34-b23c-54f6-9618-40842602bbc6.html.
44 Jack Money, “Coronavirus in Oklahoma: OESC Interim director claims progress on unemployment claims, but won't clarify how much,” June 2, 2020, The Oklahoman, https://oklahoman.com/article/5663682/coronavirus-in-oklahoma-oesc-interim-director-claims-progress-on-unemployment-claims-but-wont-clarify-how-much.
45 “Half of SC’s hospitality jobs gone; jobless rate hits record,” May 23, 2020, The Associated Press, https://www.wistv.com/2020/05/23/half-scs-hospitality-jobs-gone-jobless-rate-hits-record/.
46 Noah Feit, “More than $1.35 billion in unemployment benefits issued in SC as jobless claims rise,” May 21, 2020, The State, https://www.thestate.com/news/state/south-carolina/article242891671.html.
47 “South Carolina unemployment claims fall again, but they're still high,” May 14, 2020, WRDW-12 News, https://www.wrdw.com/content/news/SC-unemployment-claims-decrease-again-570467451.html.
48 “COVID has a staggering impact on Tennessee unemployment,” May 23, 2020, Clarksville Now, https://clarksvillenow.com/local/covid-has-a-staggering-impact-on-tennessee-unemployment/.
49 Siobhan Riley, “Making it in the Mid-South: What you need to know if you’re still waiting on unemployment benefits,” May 26, 2020, Fox 13 Memphis, https://www.fox13memphis.com/news/local/making-it-mid-south-what-you-need-know-if-youre-still-waiting-unemployment-benefits/FB7ZU3MXRJFRRL22O5SYOFTM4Y/.
50 “COVID-19 Timeline,” Office of Governor Bill Lee, https://www.tn.gov/governor/covid-19/covid19timeline.html, accessed May 29, 2020.
51 Jessica Jaglois, “The Investigators: TN Department of Labor says federal guidance for unemployment could have been more ‘clear’, ‘timely’,” May 27, 2020, WMC5 News, https://www.wmcactionnews5.com/2020/05/27/investigators-tn-department-labor-says-federal-guidance-unemployment-could-have-been-more-clear-timely/.
53 Clare Proctor, “Texas had plans to replace its outdated unemployment system. The coronavirus pandemic hit first,” May 19, 2020, The Texas Tribune, https://www.texastribune.org/2020/05/19/texas-unemployment-benefits-coronavirus/.
54 Elisabeth Buchwald.
56 Sarah Rankin, “Virginia lags in implementing extended unemployment benefits,” May 28, 2020, The Associated Press, https://www.startribune.com/virginia-lags-in-implementing-extended-unemployment-benefits/570832262/.
58 Kara Leigh Lofton, “Facing Unprecedented Unemployment Claims, How WorkForce West Virginia Is Adapting,” May 28, 2020, West Virginia Public Broadcasting, https://www.wvpublic.org/post/facing-unprecedented-unemployment-claims-how-workforce-west-virginia-adapting#stream/0.
59 Jeff Jenkins, “WorkForce WV corrects “system issue” so benefits can be paid to 2,300 PUA claimants,” May 20, 2020, West Virginia Metro News, http://wvmetronews.com/2020/05/20/workforce-wv-corrects-system-issue-so-benefits-can-be-paid-to-2300-pua-claimants/.