Virginia Governor Ralph Northam Wednesday directed the Virginia Employment Commission to invest $20 million to dramatically expand the agency’s ability to process complicated unemployment insurance claims.
The governor’s Executive Directive 16 requires the agency to add 300 new adjudication staffers, make immediate technology upgrades, and complete a full modernization of the commonwealth’s unemployment insurance system by Oct. 1, 2021.
While Virginia ranks sixth in the nation for the timely payment of benefits to eligible applicants, the governor’s action will speed up the resolution of cases flagged as potentially fraudulent or ineligible. These cases represent approximately four percent of all claims.
“I’m directing the Virginia Employment Commission to invest $20 million to significantly speed up its adjudication process and immediately implement long overdue technology upgrades,” the governor said. “This action will address many of the issues that have caused delays and will ensure that we continue to deliver relief to Virginians who need it.”
Virginia’s unemployment system has remained one of the lowest-funded systems in the country for generations. In fact, Virginia ranks 51st out of 53 states and territories for the amount of federal funding it receives relative to what Virginia businesses pay in taxes. The problem was hidden by years of low unemployment and a consistently strong economy, but the pandemic has highlighted this reality.
Despite being underfunded, the commonwealth’s unemployment insurance (UI) system has successfully distributed $12.9 billion in benefits to more than 1.3 million eligible Virginians since the pandemic started.
If an individual’s initial claim is flagged for potential ineligibility or fraud, federal law requires the Virginia Employment Commission (VEC) to adjudicate the claim before proceeding with payment. Most individuals that are placed in the adjudication process are ultimately found ineligible for benefits.
Executive Directive 16 directs the VEC to take four immediate actions to adjudicate claims faster:
Set a clear goal for resolving unemployment insurance claims. Governor Northam has directed VEC to increase the number of adjudications being processed per week from 5,700 to 10,000 by June 30 and to 20,000 by July 31, 2021.
Continue investment in customer contact centers. Since the onset of the pandemic, VEC has quadrupled its customer service capacity to provide information and support to Virginians with questions about their claims.
Modernize the benefits system. Historic claim volume during the pandemic had previously delayed VEC’s progress in modernizing its 41-year-old benefits system. The agency has resumed the project, executing a contract for $5 million in state funding for technology upgrades. Oct. 1, 2021 has been set as the target date for completing the final phase of the system.
Collaborate with the Virginia congressional delegation to resolve federal funding disparity. States receive unemployment support from the federal government. The amount is based on how much Virginia businesses pay in federal unemployment insurance taxes. For Virginia, that ratio is among the lowest of all states, and an increase typically requires businesses to pay more in taxes. This formula has underfunded Virginia’s unemployment insurance system for years with respect to upgrading technology and maintaining staffing levels.
Virginia has made a wide range of additional assistance available to those whose employment has been impacted by COVID-19. Low-income Virginians should refer to the Virginia Department of Social Services CommonHelp for guidance on applying for food, cash, childcare, and other assistance.
Support is also available through the Virginia Career Works Referral Portal for those interested in workforce training, going back to school, or getting a job. This includes $36 million in funding through Governor Northam’s ‘Get Skilled, Get a Job, Give Back’ (G3) Program, which makes tuition-free community college available to low- and middle-income students who pursue jobs in high-demand fields.