Lawmakers Press State Officials on Unemployment Benefits as Expanded Federal Payments End

Lawmakers probed Department of Labor officials on Wednesday about languishing unemployment claims. File photo by Danielle E. Gaines.

With supplemental federal unemployment benefits slated to end next week in Maryland, state lawmakers sharply questioned Department of Labor officials Wednesday on their plans to resolve ongoing customer service issues and insisted the agency fully implement a recent emergency bill intended to enhance the unemployment claim process. 

There are still 24,109 pending unemployment benefit claims, which makes up 3% of total claims received in recent months, according to Tiffany Robinson, the Maryland secretary of Labor. Most of these claims have been disputed by an employer, which are the most complex cases and take a long time to investigate, because the department serves both the employers and workers, she said.

Lawmakers called the backlog of cases unacceptable. 

“It’s great that we’ve [addressed] 97% [of claimants], but it’s that 3% that we continue to hear from,” Del. Ned Carey (D-Anne Arundel) said during the Joint Committee on Unemployment Insurance Oversight hearing on Wednesday. 

“The issue is — people don’t know when [their unemployment claims] are going to be resolved, and that’s the frustrating part for them,” Carey said.

“I thought we were supposed to do that as part of Del. [Lorig] Charkoudian’s House Bill 1002,” he added, referring to legislation to expedite the unemployment claims process.

The virtual meeting came after Gov. Lawrence J. Hogan Jr. (R) joined 24 other Republican governors to end supplemental federal unemployment benefits in their states two months earlier than the Biden administration and Congress had intended. 

Starting July 3, Maryland will eliminate its $300 supplemental weekly payment for traditional jobless applicants and its $100-per-week payments for “mixed earners,” usually gig workers who have multiple sources of income and are traditionally ineligible for unemployment benefits. 

Resuming July 4 is the state’s work-search rule, which requires unemployment claimants to complete three “re-employment activities” per week, such as submitting a job application and attending a virtual recruitment event. 

Republican leaders have argued that jobless benefits create a disincentive to seek work, but a recent analysis shows that workers in the dozen states that have already ended federal aid are looking for jobs with less intensity than in other areas. 

HB 1002, sponsored by Charkoudian (D-Montgomery), is an emergency bill that was enacted into law this year without the governor’s signature and requires the Maryland Department of Labor to reduce bureaucratic hurdles in an effort to facilitate the approval of unemployment benefits, such as by establishing a single point of contact to prioritize resolving claims that have not been completed within eight weeks.

The bill also requires the Labor department to provide claimants with a status update at least once every three weeks and to submit a comprehensive plan to the General Assembly by June 1 to ensure there is enough staff to answer questions by telephone. 

But “there are still so many people that really are out there in limbo…they’re not getting a real person talking to them,” Donna Edwards, the president of Maryland State and D.C. AFL-CIO, told committee members.

Since the passage of the bill, the Maryland Department of Labor has re-trained 400 staff members to do higher level work and resolve issues like identity theft over the phone, while the department undergoes its traditional recruitment process to hire more staff, said Dayne Freeman, the assistant secretary for the Division of Unemployment Insurance for MDL. 

Each claimant is assigned a case manager as their “one point of contact,” in compliance with Charkoudian’s bill, Robinson said. Case managers should communicate with individuals at least every week, but that does not always happen, Robinson conceded. “We are constantly and continually training our staff in how to communicate and provide substantive updates to our constituents,” she said.

To address outstanding claims after July 3, MDL has increased benchmark expectations for agency staff, instituted mandatory overtime hours and created incentives for employees to exceed their work expectations, Freeman said. 

In the face of criticism for ending federal benefits early, Maryland Labor department officials announced on Monday that they had found 508,000 “potentially fraudulent” new unemployment insurance claims in the past six weeks. Since the start of the pandemic, Maryland has found 1.3 million fraudulent claims, Hogan said in a statement. 

But Del. C.T. Wilson (D-Charles) decried the lack of clarification of “fraud” — whether it was from identity theft or from people who are working and collecting benefits. 

“It is very misleading to continue to hear about this fraud in such massive numbers and think of our citizens as basically trying to take advantage of a system,” Wilson said. He exhorted MDL to provide more nuanced information on unemployment fraud claims that differentiates between the two interpretations of fraud. 

There are also claimants who are eligible for unemployment benefits but are being incorrectly flagged as fraudulent, Wilson said. “My worry is — it seems to be going on for weeks, weeks and now months, where these individuals have been flagged and have contacted me,” he said. “They’re losing contact with their case managers for weeks on end.” 

It should take between 10 and 21 days for MDL to resolve those incorrect fraudulent flags, depending on where the flag comes from, Freeman said.

But people still seem to be having difficulty and delays when uploading identification documents, Carey said.  

Freeman told the legislative committee that the department hired a new vendor, Lexis-Nexis, to accelerate the fraud review and identity verification process, which will not require a claimant to upload documents as often. 

“By early fall, we should be in good pre-pandemic shape,” she said. 

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