‘We saw unprecedented frustration’; General Assembly advances unemployment insurance reforms

Two years after the COVID-19 pandemic swamped Virginia’s unemployment insurance program, lawmakers are advancing reforms they hope will address breakdowns that left thousands waiting months for essential aid.

“We saw unprecedented frustration and failure,” said Sen. Jeremy McPike, D-Prince William, as he presented the legislation late last month. “I know this is something no one wants to repeat.”

The bills, which have now passed both the House and Senate, act on recommendations made last year by legislative auditors, who issued a scathing report that faulted management failures and poor oversight by former Gov. Ralph Northam’s administration.

Among other things, auditors found management and administration officials took no serious steps to increase staffing until more than a year into the pandemic. And the report says Northam’s administration blocked some early steps explored by the agency.

To avoid a repeat, lawmakers now plan to create a board to keep closer tabs on how the agency is handling unemployment claims and tack backlogs. Current General Assembly oversight has focused almost entirely on issues affecting businesses, namely the health of the trust fund used to pay benefits and the payroll taxes necessary to fund it.

The legislation also directs the commission to develop a resiliency plan detailing how to quickly increase staffing the next time claims surge.

And it requires officials to further reduce reliance on paper records and correspondence by requiring employers to provide information about claims electronically. A common complaint among employers has been that they’ve received letters asking them to verify claims after the deadline to reply.

Finally, it creates an ombudsman to help people making their way through the employment process.

McPike said he planned to pursue additional reforms through the budget process. The legislation is being carried in the House by Del. Kathy Byron, R-Bedford.

The reforms represent the first significant movement toward addressing problems with the agency despite more than a year of complaints by people seeking help, a last-place federal ranking for resolving problems with claims and a class-action lawsuit that led a federal judge to briefly intervene in the state’s handling of claims.

Advocates applauded the steps even as they said more work remains. Pat Levy-Lavelle, an attorney at the Legal Aid Justice Center who works with clients seeking benefits, said he continues to hear from people struggling to access benefits.

“It’s encouraging that legislators in both parties recognize that there’s a lot of work to do in making the Virginia Employment Commission an agency that’s better able to respond to downturns and deliver essential benefits to Virginia families,” he said.