Lawmakers propose fixes for Virginia’s beleaguered unemployment insurance program

By: - December 24, 2020 12:03 am

Virginia’s state flag flies in Richmond. (Ned Oliver/ Virginia Mercury)

Lawmakers say they plan to propose legislative fixes next month to speed unemployment claims in Virginia, which ranks last in the country for quickly processing applications that require staff review.

The legislature’s Commission on Unemployment discussed the proposals in a Wednesday meeting, outlining bills that, among other things, would reduce the program’s reliance on paper mail and prevent the state from stopping benefits once they’ve started without first investigating.

“All of the legislation … is aimed at helping things go more smoothly, with the goal of starting to get the wheels moving for you but also preparing Virginia to weather a storm like this in the future,” said Del. Sally Hudson, D-Charlottesville, a labor economist at the University of Virginia.

Currently the agency is required to deliver certain communications on paper through the mail, which Hudson says slows the process down while costing the Virginia Employment Commission unnecessary postage fees. Hudson told the commission Del. Kathy Tran, D-Fairfax, plans to introduce bills that would allow phone and email communications as a stand-in “when appropriate.”

Hudson said she also plans to introduce a bill that would require more timely responses from employers contesting employees claims. She said currently businesses can blow deadlines four times, at which point they’re assessed a $75 fee. She envisions tightening that to one missed deadline before employers forfeit the right to appeal a claim for that worker.

Two other proposed bills would give the state more leeway to forgive overpayments in situations where doing so would violate standards of “equity and good conscience” and codify a recent executive order issued by Gov. Ralph Northam that ended the practice of stopping unemployment benefits based on employer appeals before the appeals are adjudicated.

“Once VEC starts paying money to a claimant, it shouldn’t stop just because an employer asks for an appeal,” Hudson said. “The claimant should continue receiving their benefits until someone has actually decided in the employer’s benefit. It’s kind of an innocent-until-proven-guilty standard.”

Some of the proposals are likely to face pushback when the General Assembly convenes next month. Del. Lee Ware, R-Powhatan, worried businesses would be saddled with the cost of overpayments that were forgiven. “Who picks up those costs?” he asked.

Hudson responded that if the state’s process is running efficiently, there would be few overpayments to forgive and they would be identified and stopped faster.

On the issue of late filings from employers, a lobbyist representing small businesses suggested they deserved some leeway as they were struggling with layoffs amid the pandemic. “Many are small employers with no HR departments,” said Nicole Riley, director of the Virginia chapter of the NFIB, which represents small businesses. “I think the reason why you saw opportunities for employers to have multiple notices is because many small business owners probably missed the first ones.”

More than a million people applied for unemployment benefits in Virginia since the pandemic began, according to Department of Labor statistics. While many claims that can be automatically validated using payroll data and are uncontested by employers have been paid within two weeks, thousands of other applicants have been forced to wait months for staff to review their claims.

The agency reported at the meeting that they are still working on processing applications backlogged in July.

Gov. Ralph Northam recently issued an executive order that his administration said started payments to 70,000 people still in the backlog, though they will be required to pay that money back if they are ultimately deemed ineligible.

Advocacy groups applauded the efforts but urged Northam and lawmakers to go further. Pat Levy-Lavelle, an attorney at the Legal Aid Justice Center, told members of the commission that he’d heard from clients who should have begun receiving payments as a result of Northam’s order but are still waiting and unsure where to turn.

He suggested pulling adjudication staff from other state agencies to help with the backlog and bringing in the National Guard to help with staffing if necessary.

“We’re talking about ordinary Virginians and their families, and they have nothing left,” he said

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Ned Oliver
Ned Oliver

Ned, a Lexington native, has been a fulltime journalist since 2008, beginning at The News-Gazette in Lexington, and including stints at the Berkshire Eagle, in Berkshire County, Mass., and the Times-Dispatch and Style Weekly in Richmond. He is a graduate of Bard College at Simon’s Rock, in Great Barrington, Mass. He was named Virginia's outstanding journalist for 2020 by the Virginia Press Association.