State battles backlog of unemployment claims

DOVER — The COVID-19 pandemic changed the employment status for many Americans, leaving those affected to rely on unemployment insurance benefits to stay afloat.

In 2020, the unemployment rate in Delaware soared from 4.8% in March to 13.4% in April, leaving many residents wondering from where their next paycheck would come.

As a result of the nationwide crisis, then-President Donald Trump signed into effect a $2.2 trillion economic stimulus bill called the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act. Under the act, states were given the option of extending unemployment compensation to independent contractors and other workers who are typically ineligible for unemployment benefits.

As America adjusted to life during the pandemic, provisions were made to the CARES Act throughout 2020. Of these provisions, programs like Federal Pandemic Unemployment Compensation and Pandemic Unemployment Assistance further broadened the qualifications to receive unemployment benefits.

The PUA program allowed individuals, such as self-employed workers, independent contractors and gig workers, who did not qualify for regular unemployment compensation and were unable to continue working as a result of COVID-19 the opportunity to receive unemployment benefits.

The FPUC program allowed states to provide an additional $600 per week payment to individuals who were collecting regular unemployment compensation.

With many Americans relying solely on unemployment benefits for their weekly pay, there was an unprecedented spike in the amount of unemployment claims both state and nationwide.

Starting in 2020, a backlog resulted due to the combination of understaffing and the overwhelming number of claims.

But according to Alejandro Bodipo-Memba, Delaware Department of Labor communications consultant, an increased number of fraudulent claims have also been to blame.

While Mr. Bodipo-Memba said no numbers were available, the Delaware Department of Labor has been working with the Division of Unemployment Insurance to prevent the fraudulent cases from reaching the vetting process. Determining which cases are legitimate has prevented some from receiving benefits, as holds placed on unemployment claims have slowed the process.

“Fraud continues to be a national problem that many states are grappling with. Here in Delaware, DOL has been aggressively combating the escalating number of incidents of unemployment insurance fraud over the past year,” Mr. Bodipo-Memba said. “Our system of risk assessment to thwart organized fraudsters from stealing monies from Delawareans that are entitled to unemployment insurance benefits has been challenged. But fortunately, we’ve been able to use technology to address the issue.”

The Delaware Division of Unemployment website warns claimants of a phishing scam, sent via text, that prompts them into providing information such as their identification, Social Security number, tax information and email address.

The website warns that the Division of Unemployment does not send text messages to claimants and to avoid any potential links associated with these texts.

To prevent these fraudulent claimants from adding to the backlog, the Delaware Department of Labor has began working with ID.me, an online service that helps certify their identities, Mr. Bodipo-Memba said.

“We began using tools like ID.me to help our specialists shepherd legitimate claimants through our system to receive the services they are seeking from our Unemployment Division. In addition, we have increased our number of employees and contractors working on fraud-related issues significantly over the past year,” Mr. Bodipo-Memba said.

Although the Delaware Department of Labor and the Division of Unemployment Insurance have made strides in addressing the backlog as well as the number of fraudulent claims, Mr. Bodipo-Memba hopes their efforts will soon pay off for all legitimate claimants as well.

“We understand that claimants are frustrated by these issues, and we know we’re not where we want to be in terms of backlogs,” Mr. Bodipo-Memba said. “Moving forward, we are committed to our long-term strategic modernization plan that will bring in more sophisticated technology to help decrease the numbers of claimants that have been impacted by fraudsters.”

Staff Writer Joseph Edelen can be reached at jedelen@iniusa.org Follow @JoeEdelenDSN on Twitter