CLS Litigation Director Sharon Dietrich submitted the following testimony before the Pennsylvania House Labor and Industry Committee on March 10, 2021. The testimony highlights problems with Pennsylvania’s Unemployment Compensation and Pandemic Unemployment Assistance programs that are preventing eligible applicants from receiving benefits, and proposes solutions to these problems.
Members of the Committee, I am Sharon Dietrich, Litigation Director of Community Legal Services, Inc. (CLS). Thank you for asking me to address you today about the administrative breakdowns in the administration of the Unemployment Compensation (UC) and Pandemic Unemployment Assistance (PUA) programs (together, “the unemployment programs”) by the Department of Labor & Industry (DLI).
Legal Services Programs statewide are on the front lines of the chaos experienced by thousands of unemployed Pennsylvanians who cannot get or keep their unemployment benefits. The Department has been fond of telling you about the hundreds of thousands people who have received benefits during the pandemic. Frankly, this positive spin is insulting to the many thousands of people whose benefits have been interrupted (often repeatedly) or never even begun. Many thousands of Pennsylvanians cannot access their benefits, even with advocates (and your own constituent services staffs) assisting them. And the situation is not getting better; it is getting worse.
I don’t doubt that the administrators of the unemployment programs are well-meaning. And I know that they have been working unfathomable hours, day after day, to keep the programs going in what has been a historic challenge to an administrative system. But far too many unemployed Pennsylvanians have been left behind, and they are suffering. We legal aid advocates hear heartbreaking stories, day after day, from people who should be getting benefits. A year into the pandemic, things must change.
Unfortunately, DLI has produced little useful data about the scope of the problem, especially on the PUA side, where the situation concededly is blurred by widespread fraud. But we all have enough experience with the demand from people seeking help to know that this problem exists. CLS alone has served 1,954 unemployment benefit claimants since the pandemic began. Our case handling, along with my more than 30 years of UC experience, deeply informs my perspective.
In our experience, common characteristics of the people who have been deprived of unemployment benefits, usually without due process, include the following.
- People who are disadvantaged by the premium put on technology, because they lack technological skills or must maneuver by smart phones rather than computers (if they have any digital access at all).
- Workers with low literacy skills, who must navigate websites for information rather than being able to reach a representative on the phone, which often leads to errors with their claims.
- Workers who have both regular UC and PUA eligibility, who are often stuck between programs with no information about how to move forward.
- Immigrant workers, for whom limited English skills and repeated demands that they upload proof of work authorization put them at even greater risk than the average unemployed person of not being able to obtain benefits to which they are entitled.
- Young workers, who have been hit hard by unemployment during the pandemic and are more likely to have shorter work histories, be facing housing instability, or lack extensive documentation – all issues that make them disproportionately likely to be cut off from benefits.
Nevertheless, the problems that I will describe are not unique to just these groups nor limited to one location. While I have been representing Philadelphians over the last year, I have done so remotely from a rural home in Berks County. People here have been asking me for help, same as those who formally are my clients.
In my testimony, I will highlight the biggest problems in the UC program, the PUA program and both programs, from the perspective of Legal Services staff, unemployed groups, and even Facebook groups comprised of claimants. I will also suggest solutions, although as these are primarily administrative problems, the solutions clearly need to come from DLI.
Problems in the UC program (including the PEUC and EB extensions)
1. Adjudications of whether separations are disqualifying take more than half a year and often arrive late or not at all.
Claimants who were laid off from their jobs should rejoice at the nature of their separation. Everyone else needs an “adjudication”: were they fired for willful misconduct, quit without good cause, or had a time period where they were not able and available for work? This part of DLI’s operation remains mired in delay.
- Claimants regularly wait more than six months for a determination. A client of mine was so beaten down when she recently was disqualified after seven months that she said that she could not withstand an appeal. We consistently hear from claimants that they were never contacted by the Department as part of an investigation, having watched their phones for a call that never came.
- Determinations often arrive in the mail late, and sometimes do not arrive at all. The late notice often leaves the claimant with almost no time to comply with the 15-day appeal deadline, if it arrives before that deadline at all. While some of this delay can be attributed to the well-documented problems of the US Postal Service, some decisions do not appear to have been timely mailed by DLI. The UC Referees have been made aware of this issue and may still allow the late appeal, but many claimants give up and do not even try to appeal when they receive the determination after the deadline.
2. Confusion about the extension programs and the end of the UC benefit year is widespread.
- Currently, a claimant might receive 24 weeks of Pandemic Emergency Unemployment Compensation (PEUC), then 13 weeks of Extended Benefits (EB). If only claimants experienced this sequence so straightforwardly and clearly communicated. Claimants sometimes end up in the wrong extension program, sometimes even in PUA. DLI needs to create a clearer path. The welfare system long has implemented a “no wrong door” approach to benefits applications. The UC system also should proactively route claimants in the right direction rather than letting them fumble in their attempt to move forward.
- Confusion about the extension programs will be exacerbated by exhaustion notices that DLI has begun sending out that mark the end of benefit years that began with the pandemic last March. The “Notice of Exhaustion of UC Benefits” states that the claimant can file a new claim after the benefit year ends. What it does not do is mention that if claimants are not eligible for a new claim, they can continue to collect the extension programs after the benefit year. This notice likely is alarming and confusing hundreds of thousands of people unnecessarily. It is Attachment A. New Jersey has notified the public that they need not file new claims, because they have designed a seamless process for evaluating expiring claims. By contrast, Pennsylvania has not put out any public statement about this situation, as of this writing.
3. PEUC transitions are painful.
Since the December 2020 extension of the CARES Act, obtaining PEUC benefits has been a mess. In many cases, new PEUC claims are not built unless someone intervenes with DLI staff (as everyone knows, a difficult proposition). They then may need to wait for or again seek assistance to get weeks to claim, and then wait more weeks to be paid. The lack of communication often causes claimants to unnecessarily file the one-page PEUC application or go to the PUA system out of the mistaken belief that is how they must get the extension. Other claimants are sent notices that they must file in another state instead of receiving PEUC, with little explanation or guidance. Again, the communication to claimants in this predicament is almost non-existent, causing great anxiety about whether and when payments will finally emerge.
Problems in the PUA Program
The widespread problems in the PUA program may best be demonstrated by the existence of a PUA Claimants Facebook group in which 22,000+ members attempt to assist each other. To be sure, the PUA program has been beset by criminal conspiracy fraud through identity theft. Nevertheless, so many intractable barriers have been established in this program that it is a wonder if anyone new to the program receives PUA these days. Indeed, we advocates with almost a year of experience with the PUA program struggle to get benefits for our clients whom we know to be eligible. And our clients from last year return over and over, as they are beset by new problems with their claims. PUA income, even if you start to get it, may be interrupted at any time.
1. Verification demands shut out all but the most able.
Verification demands by DLI claims examiners are, without doubt, the biggest stumbling block in the PUA program. PUA was established by Congress as a program centered on self-certification and with minimal documentation requirements, so that unemployed people could get this vital assistance as soon as possible. Since then, the federal government has required documentation of three eligibility criteria: (1) the identity of the claimant; (2) proof of employment or self-employment at some point after January 2019; and (3) base year income if the person seeks more than the minimum benefit.
Nevertheless, the lists of documents being demanded by claims examiners have increased by the week, it seems. Moreover, individual claims examiners seem empowered to request whatever they want, and then make determinations based on their own proclivities, rather than any clearly outlined policy. Attachment B shows a list of requested documents made to one claimant. While it is at the far end of the spectrum, there are plenty of other examples that are close.
- Most of the documents demanded are not supported by the CARES Act or federal guidance. As noted, federal documentation requirements concern only two issues (and a third if more than the minimum benefit is sought); the remaining eligibility criteria are to be verified by self-certification. But examiners routinely demand more, such as requiring proof of 2020 income or paystubs even though a claim was filed in 2019.
- Examiners often unreasonably demand certain types of documentation, even though federal law requires claimant choice on the documentation they submit. Claimants frequently are unable to produce the precise documents demanded. I think, for instance, of my client who was asked to provide a letter from her former employer that she was laid off from a restaurant because of the pandemic (an issue for which DLI is not permitted to demand documentation), which she has been unable to procure because the owner died and the restaurant closed. Many other claimants do not have easy access to their tax returns, especially if they have had pandemic-related housing instability.
- Duplicate demands are made for documents already uploaded to the PUA dashboard. Large numbers of immigrants have been unable to receive any of the CARES Act extension of 11 weeks of benefits because of the demand that they upload proof of work authorization to their PUA dashboards. This has caused confusion among the many who already had done so previously. Moreover, for those who have uploaded the same document for the second time and alerted DLI, no action has been taken to approve their benefits. On a different issue, one of my clients was asked to both upload identity documents and prove his identity through ID.me, even though he previously had done so. In essence, he was asked to prove his identity four times, as both uploaded documents and ID.me verification are supposed to prove identity. These duplicative requests suggest that examiners are paying no attention at all to claimants’ prior efforts toward compliance.
- Claimants are often given four days to produce the documents, with no effective notice of the demand. To add insult to injury, this deadline is often given after they have waited months for any response from DLI as to why their benefits have been interrupted. These demands arrive as messages in claimants’ PUA dashboards; unless the claimants signed up for an email notification of a dashboard message, chances are that they do not even know there is a message in their dashboard within four days. And if they do, they may not be able to acquire the documents in that short time frame.
- Even documents that have been produced may be rejected arbitrarily. For instance, we have seen letters that claimants produced from their employers rejected as “fraudulent” for no good reason, certainly without contacting the writer to verify.
These demands on PUA claimants often seem designed to create a basis to disqualify claimants, rather than work with them so that eligible people receive their benefits. At best, these actions are callous toward desperate and frustrated people who are trying to hang on during a pandemic.
One of CLS’s cases this week aptly illustrates the utterly illogical nature of these documentation requests. An older client we had identified as having issues with his PUA dashboard was sent a request through the dashboard to provide more documentation of his attachment to the workforce. We told DLI that he could not access the dashboard and needed assistance with that issue. Months went by and no assistance was provided, despite multiple follow-up attempts. Now, he has been issued a disqualifying determination based on not responding to the dashboard message he could not access.
2. Bringing cases to the attention of claims examiners does not resolve them, but results in new “issues” being identified.
Both we legal aid advocates and members of the Facebook group have increasingly noticed this phenomenon in recent weeks. Commonly, claimants are unable to resolve their identity verification, even though they have uploaded identity documents or verified with ID.me. When DLI is reached to try to resolve the impasse, suddenly multiple new issues appear on their dashboards rather than benefits being released. This unfairly punishes claimants who encountered identity flags, as opposed to others who have not had their cases examined with a fine-tooth comb.
3. Claims are “in progress” for endless periods of time, violating due process and federal law.
When claimants’ payments are stopped (or sometimes never paid out after application), they usually enter a kind of purgatory in which their PUA dashboards show that their claims are “in progress.” Although that phrase suggests that maybe things will be fine sometime in the future, they almost never are, unless the claimant or an advocate can bring the situation to a head with DLI.
This stasis is in violation of the Due Process Clause and the Social Security Act provision requiring the payment of benefits “when due.” CLS had negotiated these legal issues with DLI in the fall, resulting in a technological fix that was supposed to continue payment of ongoing claims while investigation proceeds on open issues, until DLI issues a determination. However, we continue to see claims that go “in progress” with no apparent end in sight.
4. Backdating requests have been pending for months.
Backdating PUA claims was supposed to be a routine process, and earlier in the pandemic, it was. However, backdating has ground to a halt, with people now waiting, many since the end of summer, for completion of what should be a simple process. Even worse, DLI’s delay has further complicated these claims as these claimants are often exhausting their benefits going forward, instead of being granted the back-benefits that came with the vital $600 weekly supplement. See Attachment B again.
5. Overpayments are being collected illegally.
Under the Pennsylvania Unemployment Compensation Law, non-fault overpayments may be collected only by offsetting benefit payments by one-third. 43 Pa. C.S.A. Sect. 804(b). However, Geographic Solutions, Inc. (GSI), DLI’s technology contractor, has been offsetting non-fault overpayments at rates of 50%, and sometimes 100%. Additionally, many claimants have received illegal “early exhaustion” notices. DLI previously agreed that these offsets violate state law. However, DLI has been hard pressed to get GSI to correct this error in its programming.
GSI’s failure to correct this illegal offset is especially galling, given that the company was responsible for many of these overpayments when it erroneously double-paid more than 30,000 PUA claims last summer. This issue is a microcosm of GSI’s intransigence in making technology adjustments requested by DLI to come into legal compliance. Many thousands of Pennsylvanians are paying the price in hardship caused by these overpayments, especially those who have yet to receive a dollar of the December extension of benefits as a result of the 100% offset/early exhaustion notices.
6. Payments cannot be located.
Many PUA claimants do not have eligibility issues with their claims, but still do not have access to their money. The reason may be the result of actions by DLI, the PA Treasury Department, US Bank (Treasury’s debit card contractor), or even obstacles after payment has been issued. For instance, checks or a debit card may have been lost in the mail or stolen in transit. Treasury or the bank may have held up payment because they are investigating identity (even though DLI has already verified identity before authorizing payment). While these problems often should be easy to trouble shoot, they are not, because claimants cannot reach DLI, Treasury, or the bank, or cannot get a straight answer to where their payment is. The PUA system also fails to identify the method of payment, which has caused many claimants to not even realize that they never received checks mailed over the summer or that they are missing a debit card (because they believe they are not being paid because money has not been deposited in their bank account).
7. 1099Gs issued by DLI are wrong.
With the issuance of Internal Revenue Service Form 1099G for PUA benefits earlier this year, large numbers of people found themselves potentially saddled with erroneous tax liability. Some were identity theft victims, both those who had no prior notice that a claim had been filed in their names, or, like a client of mine, previously had reported fraud to DLI. These people face the easiest fix, with specific guidance from the IRS Commissioner that they can file their tax returns without reporting such income if they file a fraud complaint.
Others are less lucky. One of my clients received a 1099G that did not reduce his gross income to account for money that he had paid back to DLI after receiving an unexpected payment from his employer while he was on layoff. Many others received 1099Gs with amounts much higher than they ever received, potentially because payments went missing or because DLI clawed back the funds. These claimants face the additional problem of as much of $20,000 of income reported to the IRS that they have not actually received. To date, we are not sure how or when these situations will be rectified by DLI.
Problems in Both Systems
1. No way to communicate with DLI.
For years, getting through to DLI staff with problems or questions has been difficult. During the pandemic, getting through on the phone often has seemed almost like a lottery. Emails go unanswered for so long that much water is under the bridge in the meantime, and they do not substitute for the back-and-forth of a discussion.
Mostly obviously, this inability to communicate prevents problems from being resolved, including very simple ones. I have had clients who went long periods waiting for their benefits, only to learn that the money was on a debit card in their possession. Weeks of hardship could have been avoided, if only effective communication was a possibility. Similarly, many claimants applied to multiple programs, including PUA, because of this lack of communication because they reasonably believed the government would pay their claim in the correct program.
Inability to communicate with DLI staff also has meant that claimants cannot get answers to questions and understand their rights and responsibilities in these complicated programs. For instance, if claimants understood the extension programs and whether they will continue to receive benefits, much anxiety could be eliminated
2. Inadequate communication from DLI.
Claimants sometimes can get information relevant to their cases from DLI’s website or Facebook page, but not always. The more information that DLI can make available to claimants, the better. For instance, if after the December extension DLI had made more information available about expectations for implementation of PEUC, from the building of claims to their ultimate payment,, much hardship, confusion and anxiety could have been avoided.
Often, communications with claimants is not written effectively. For instance, when DLI sends a message alerting people of the request to clear their identities through Id.me, the hyperlink to the message is, “Verify Your Identity to Access Your PA Pandemic Unemployment Assistance.” We asked DLI to clarify the relevance of the hyperlink by instead communicating that using the link would allow claimants to unfreeze their benefits, as well as simplifying the text of the message itself. This request was not accepted, on the grounds that GSI was unlikely to make the language change. Similarly, DLI has attempted to send general updates about CARES Act benefits to every claimant in the PUA program – but did not make clear it was a standard message sent to every claimant, causing massive confusion among claimants who then went to apply for other unemployment programs listed in the message because they thought it was intended solely for them.
3. No way to escalate unsatisfactory interactions with DLI staff.
When claimants finally are able to reach a DLI representative after assiduous efforts, they still are often disappointed. They may be given no information, but are told that they will hear from an examiner. That call never comes, and the whole process must start over again, repeatedly. Or the examiner does not resolve the issue, especially in difficult cases. There is no place to turn for a better solution, other than to keep trying to call or emailing and hoping for a better response.
The same happens to us advocates. By contrast, in the welfare system, advocates can go up a chain of command or to a district liaison. We have no choice for escalation below the top managers in the UC system, which means that we are often going in frustrating circles.
4. Movement between the UC and PUA programs is laborious.
To begin, people often are unclear which program they should be in. Many claimants inappropriately applied for PUA because it seems like the right program given that they lost their jobs because of the pandemic, not understanding that with base year eligibility they should receive benefits from UC. Or they mistakenly believed that they needed to apply for PUA to receive the $600 supplement from the summer. The GSI-built PUA system incorrectly paid these claimants instead of identifying that they should have been on UC.
Moving from PUA to UC is especially difficult. PUA benefits are often now stopped when UC base year wages are detected after a quarter change. The dashboard then lists the issue as “other program eligibility.” This language fails to communicate to most people that they should file a UC claim. Even when DLI acts to facilitate this movement, it is with little communication and does not provide a clear path to restoring PUA benefits if the person turns out to be ineligible for UC. If UC benefits are provided, there may need to be backdating, which must be requested individually. There may be an overpayment in the PUA system, which should be handled internally with an adjustment between the UC and PUA programs, but often is not. And when it is, the notice on the PUA portal is not updated, leading claimants to believe they may owe thousands of dollars in non-fraud overpayments, when in reality it could be a few hundred dollars. Finally, many claimants may be owed money when they switch to UC, as they have a higher rate on that program, but if few if any received those payments.
Recommendations for Corrective Action
Here are my recommendations for change from my perspective as a knowledgeable outsider.
The General Assembly should meet DLI’s financial needs for adequate administrative funding.
I do not know whether and to what extent DLI’s current funding is insufficient. But if DLI needs additional financial resources, the General Assembly should provide them. Funding can be allocated from employee contributions to the UC Trust Fund, rather than requiring general revenue appropriations. In the past, such allocations have been made via the Service and Infrastructure Improvement Fund (SIIF). Even if tens of millions of dollars are needed, such an amount is a modest imposition on a trust fund that deals in the billions of dollars annually even when the economy is robust.
An infusion of resources is needed in program operations with chronic problems.
Operations that appear to be starving for resources include the following.
- Interviewers to communicate directly with claimants (and employers).
- UC examiners to catch up on the immense backlog of non-monetary determinations (that is, whether separations are disqualifying).
- PUA staff to catch up on backdating requests.
Assistance must be provided for people facing difficulty with DLI’s technology.
- A “help desk” should be created to help the public, including people having trouble resetting passwords or uploading documents and people who must use smartphones that are not compatible with DLI’s programming.
- Work arounds must be created for people who do not have access to computers or smartphones. Currently, an Extended Benefit or PUA claim can be started only by computer. Electronic filing cannot be the only option.
DLI program administration must improve.
- DLI must more effectively triage the systemic problems. It is unclear whether any triage models have been applied to DLI operations, but onboarding of new staff should be done in a manner that supports triage, such as training a specific group of new examiners to only handle backdating requests.
- DLI must right size and standardize its verification demands on PUA claimants. This change is perhaps the single most important action needed to avoid denying PUA benefits to eligible people. Documentation should be demanded only where required by federal law or guidance. If claimants are unable to provide it, DLI examiners should make “collateral contact” to help where feasible. Making collateral contact has been the welfare department’s policy on verification for decades.
- DLI’s supervision must improve. A structure that allows claimants and advocates to escalate where there has been no satisfaction is essential. Moreover, DLI must conduct focused audits for quality assurance on key issues, such as verification.
- DLI’s communications with claimants and the public must improve. Some improvements have been seen in recent months, but there is a long way to go.
- DLI and Treasury should create a “Get My Payment” resource for PUA claimants. The IRS has such a resource on its website for tracking stimulus payments. Similarly, the State should create such a resource for PUA payments, so that a claimant knows the medium of payment (debit card, direct deposit or check), the address to which a debit card or payment was sent, the date it was sent, and, if payment has been purposefully withheld, who can provide information about the reason and what steps can be made obtain payment.