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Director: 'I do apologize' to thousands with claims; but House panel wants to probe further.

PMG PHOTO: PETER WONG - The House Business and Labor Committee heard Wednesday, May 27, from officials at the Employment Department, whose performance in handling unemployment claims has drawn criticism, although more than 90% filed since March have now been processed. Oregon lawmakers will get a new chance to question officials about the much-criticized performance of the Employment Department in handling a record number of claims during the shutdown of business activity in the coronavirus pandemic.

The House Business and Labor Committee has scheduled a session from 9 a.m. to noon Saturday, May 30, which will be livestreamed on the Oregon Legislature's website.

Members on Wednesday, May 28, heard from two agency officials, who did virtually all the speaking during an hourlong presentation that allowed no time for questions.

A spokesman for the House Majority Office released a statement Thursday:

"Chair Paul Holvey was unsatisfied with what the committee heard from Oregon Employment Department Director Kay Erickson and her deputy David Gerstenfeld and asked the House speaker (Tina Kotek) yesterday afternoon to provide an additional opportunity to hear from them to further answer the committee's questions."

In addition to processing a record 400,000-plus regular unemployment claims since Gov. Kate Brown's executive orders took effect in mid-March, the agency has had to handle three new programs passed by Congress that extended benefits and expanded eligibility.

Also, 38,000 of the 400,000 claims still remain unprocessed. A processed claim, however, does not mean that the person is receiving benefits. About 224,000 have received a payment so far.

"I appreciate the new programs you are having to manage, which is difficult," Holvey said when he closed the meeting Wednesday. "But we still have a lot of people in need … and we need to help people as quickly as possible."

Rep. Shelly Boshart Davis, R-Albany, protested the lack of time for direct questioning of the officials in a statement she issued after Wednesday's meeting. She said she has heard from many who have been unable to get through to someone at the agency.

"The horror stories are endless and have been well documented by the press," she said. "I am incredibly frustrated that lawmakers were not given an opportunity to ask questions of the department's leadership."

Public apology

In her opening statement Wednesday, Erickson offered a public apology.

"We have done a lot. We have accomplished a lot. And yet there is still much more to do," she said.

"To our customers, I know in these uncertain times, waiting for confirmation of your unemployment benefits can be agonizing. For the thousands of Oregonians who are still waiting, I do apologize. In the coming weeks, we will be doubling down on our efforts to get to a better place."

On Tuesday, Erickson announced a new effort (Project Focus 100) to process the remaining 38,039 claims of more than 400,000 that have been filed since March 15. The agency has processed about 90% of the total, though some people still await benefits because of unresolved issues. The agency goal is to process 90% of new claims within three weeks of filing.

She said some of the most experienced claims processors — the total staff has jumped from 100 to 700 in recent weeks — will be assigned to resolve what are often the most complex claims.

During the Great Recession a decade ago, Oregon lost 147,000 jobs at its low point, which took a year to reach.

"We are doubling down on the people who have been waiting the longest to get them benefits quickly," Gerstenfeld said. "But it is not possible to do all of the work at once."

New programs

The new effort takes in two other programs passed by Congress in the CARES Act, which was signed March 27.

The Employment Department is one month into processing claims from a newly eligible group of workers — self-employed people, independent contractors, part-time and gig workers — but also required states to determine whether they qualify for regular benefits. So far about 50,000 people have applied. They qualify for a minimum benefit of $205 per week, for up to 39 weeks, and some may eventually get more.

The department started May 21 to process claims for 13 weeks of extended payments to people who have already exhausted their standard 26 weeks of benefits.

"These programs added layers of complexity," Erickson said. "We were asking people who worked for us for just weeks to quickly navigate those systems using our current technology." Under a third program, all recipients will get $600 per week on top of their unemployment benefits through July 31. There are no extra requirements for people to qualify.

The Employment Department presentation took an hour, and it was the first time officials faced a legislative committee.


The officials also touched on WorkShare, a program started in 2016 to enable businesses to tap unemployment benefits to aid workers whose hours have been cut by 20% to 40%. Federal funds will pay all benefits through Dec. 26, and under a federal law, the range is now between 10% and 60%.

"It has made it more appealing for reimbursing employers to use WorkShare than it ever has been in the past," Gerstenfeld said. "Because of that and the general economic crisis we are in, we are seeing a huge increase in the number of WorkShare plans."

Until mid-March, 168 employer plans affecting 3,018 people were processed. during the past year. Since then,1,009 plans and 10,195 claims have been processed. Gerstenfeld said WorkShare requires more data entries into the system.

Other issues

On other issues:

• Antiquated computers: The Employment Department has a mainframe computer system that dates back three decades, and depends on COBOL, a computer language first unveiled in 1959. The agency has developed workarounds, but Erickson said, "They are not fully integrated with each other and have limited compatibility with today's technology."

• Waiting week: Gov. Kate Brown said she wanted the waiting week abolished so that benefits can get paid faster, but it would require computer changes that Gerstenfeld said were deemed less urgent than processing thousands of claims.

• Fraud. The Washington State Employment Security Department recently disclosed that hundreds of millions have been paid out in fraudulent claims that are believed to have originated overseas, based on stolen personal information. "Oregon is aware of these issues and is actively taking measures to prevent them," Gerstenfeld said.

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Learn more

See the Employment Department presentation to House Business and Labor Committee.

NOTE: Story is rewritten to reflect new hearing by House Business and Labor Committee scheduled Saturday, May 30. Clarifies that House Majority Office, not the House speaker, released the statement.

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