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Along with a profusion of apologies about the breakdown of Vermont’s unemployment insurance system, the Scott administration has something else for Vermonters who are still waiting for financial relief: a check for $1,200 if the problems aren’t fixed by Saturday night.
Gov. Phil Scott, appearing Friday at his three-times-a-week briefing on responses to the coronavirus pandemic, promised that if the DOL system isn’t accepting claims properly by Saturday night, the state will send that money directly to people who have been trying to get through online and by phone since businesses started closing in mid-March.
Scott, who on Wednesday with interim DOL Commissioner Mike Harrington publicly apologized for the system’s failure, said he knows that the state’s attempts to fix the problems haven’t gone far enough.
“With that in mind, I’ve given the Department of Labor until Saturday night to clear the backlog of eligible claims,” he said. That doesn’t include new claims arriving through the federal government’s Pandemic Unemployment Assistance program, which is designed for first-time filers who are self-employed or independent contractors.
“If they don’t, beginning on Sunday I’ve authorized the Treasury to start writing $1,200 checks to send to anyone who is still in need, on that list,” Scott said.
Harrington made a pledge of his own at the news conference to the Vermonters who have tried for weeks to successfully file claims: Dozens of new call center workers and a new vendor will speed things up at the DOL, starting next week.
“The system we are building is on a much more stable platform with a known vendor, so I have very minimal concerns about it being able to take load and capacity,” said Harrington, who has become a target for Vermonters frustrated with the state’s slow action on unemployment claims. “It’s designed for us to much more easily manipulate it on the back end. The ultimate goal at this point is to do everything we can to move people through this process as quickly as possible, following up if there are issues.”
Before the Covid-19 crisis, Vermont’s unemployment rate had been hovering around 2.4% for several months, with about 500 people filing unemployment claims each week. The DOL’s unemployment system was unprepared for the massive job losses that happened almost overnight in mid-March and continued mounting as the governor closed businesses to stem the spread of the coronavirus, creating an unemployment rate loosely estimated at around 20%.
Complicating the DOL’s response was a provision of the $2 trillion CARES Act stimulus package, passed by Congress in late March, that gave states the option of providing unemployment payments to independent contractors and others who are normally not eligible to file for unemployment.
The result was a system that crashed repeatedly as Vermonters tried to get through to file their claims. The self-employed received an array of mixed messages about how and when they could file; Harrington promised Friday that those who haven’t been able to get through would find a clear path starting next Tuesday.
Steve May, a clinical social worker in Montpelier who is at home with his 4-year-old son while his wife works in the health care field, ran into problems when his Social Security number was rejected.
“It said I had to use the claimant assistance line, and then you wound up in a holding pattern for days,” said May, who spent most of three weeks on hold before getting through on Friday morning. “Fortunately for us, we’re able to multitask,” he said of time with his son.
Harrington estimated Friday that 80,000 Vermonters tried to file unemployment claims in the initial days of the pandemic’s shut-down phase. He said at the press conference that along with the state’s out-of-date mainframe computer system – variously described as being 20 or 30 years old – the state has had trouble working within the limitations set by the federal government regarding which claims can be approved. As part of the CARES Act, every person receiving a state unemployment check will also receive $600 weekly from the federal government.
Federal regulations designed to prevent fraud are “incredibly rigid and limit our ability to act quickly,” Harrington said. “Over the next few days, we’ll push and might at times veer outside federal guidelines and get Vermonters help quickly.”
Harrington also apologized again.
“I want to tell Vermonters I am sorry and we are sorry. We recognize the struggle that many are going through,” he said. “While we’ve done a lot to add to our capacity under these incredible and unthinkable circumstances, it simply hasn’t been enough to meet the challenges we face. We know the pain too many Vermonters are feeling.”
Harrington said about 34,000 Vermonters have between them 50,000 claim issues that have been flagged for processing. Over the last two days, he said, the state has developed a plan to process tens of thousands of claims to eliminate the backlog and remove the issues that are holding up the claims.
“We will no longer let those flags stop payments to Vermonters,” he said, adding that 90% of the problems can be cleared up in the next few days. “To be clear we will follow up, we’ll protect the integrity of the system and the program.”
The department is also adding 40 people, borrowed from other state agencies, to its claims call center next week, and as many as 70 call center representatives from an outside vendor, a Reston, Virginia, company called Maximus, Harrington said.
This all means that by Tuesday, many Vermonters whose claims have been stuck in the system will get their first benefit payment as early as Tuesday if they have direct deposit.
If the DOL can’t clear those claims, those 34,000 Vermonters will receive $1,200 checks from the state. Harrington said the number will be smaller by Sunday, when the checks go out.
“We hope … we’ll be able to give the governor a much smaller number of people who are still in limbo and waiting,” Harrington said.
As for sole proprietors and the self-employed, their wait will continue for a little while longer. But Harrington said help for them is in sight. He estimates 40,000 to 60,000 Vermoners are eligible under the Pandemic Unemployment Assistance program. Many who were originally told they weren’t eligible for unemployment assistance probably are, said Harrington. That system will go live on Tuesday, and the DOL has pledged to email all of the people who have tried fruitlessly to apply so far. Benefits will be retroactive to the week of March 29.
Phil Winsor, a CPA who practices in Bridgewater, is waiting to apply until he sees advice on the DOL’s website that the new system for the self-employed is functioning as it should.
Winsor understands why it is taking the DOL so long to create a functional system to provide benefits to the self-employed for the first time.
“In a perfect world, when government tries to do something, they are generally not very fast,” he said.
That said, he’s not fully confident the DOL will be ready for his application Tuesday.
“I predict that they will be ready to go, and the system will crash within — I’m going to give it less than an hour,” he said. “I hope I’m wrong.”
