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Politics & Government

Officials say they’re continuing to fight fraud involving Pennsylvania's beleaguered unemployment system

The Department of Labor and Industry addressed the problem publicly after being contacted by Spotlight PA.
Jelani Splawn
/
Spotlight PA
Pennsylvania's Department of Labor and Industry is shown in this undated file photo.

State Labor and Industry officials said Wednesday the agency is continuing to fight fraud that has plagued Pennsylvania’s unemployment system, as well as making progress on whittling down a backlog of unemployment claims.

“While this caseload is still higher than normal times, it is much more manageable, and we are actually beginning to see a light at the end of the tunnel,” Labor and Industry Secretary Jennifer Berrier told state House members in a hearing.

Lawmakers wanted to hear from the department to get an update on its efforts to fight fraudulent claims, the ongoing rollout of a new benefits system, the wind down of major federal unemployment programs last month, and other issues, said state Rep. Jim Cox, the Republican who chairs the House Labor and Industry committee.

Since the department launched Pennsylvania’s new unemployment compensation system in June, more than 525,000 claimants have been paid nearly $3 billion in benefits, Berrier told lawmakers. Overall, since March 2020, the agency has disbursed more than $51.5 billion in aid, between traditional UC and the temporary federal pandemic programs.

Several of those federal programs ended in September – Pandemic Unemployment Assistance benefits, Pandemic Emergency Unemployment Compensation benefits, and Federal Pandemic Unemployment Compensation benefits. With the expiration of temporary federal programs last month, roughly 572,000 people in Pennsylvania were no longer eligible for any unemployment aid, Berrier said.

The state’s unemployment system struggled last year with a massive surge in jobless claims due to COVID-related shutdowns, and this year with a backlog of thousands of Pennsylvanians continuing to wait for payments and constantly busy phone signals when claimants called the department for assistance.

Berrier said Wednesday the department's adjudication backlog has been reduced to 91,826 pending determinations, down from around 320,000.

The state has also struggled to distinguish between fraudulent and legitimate claims, which some said led many unemployed Pennsylvanians to deal with cumbersome verification systems designed to root out fraud.

In June, the state’s main unemployment computer system got a $35 million upgrade that aimed to update its decades old programming. While making it easier for the out-of-work to file claims and get paid, the update also led to more fraudulent claims, though state officials subsequently rolled out additional verification measures.

Sharon Dietrich, litigation director at Community Legal Services of Philadelphia, said the department’s use of a digital program used to sort out legitimate claims from fraudulent ones, is a technology-intensive process that requires numerous documents, and is hurting people who are legitimately out-of-work.

“People who are not acting fraudulently at all are desperately trying to find their way into the program or get benefits paid,” she said. She also said the department is still suffering from ongoing constant busy signals that keep callers from getting through.

“The inability to speak to people remains an immense challenge,” Dietrich said.

Multiple legislators Wednesday said they had heard from constituents who were unemployed and receiving aid, but who had had their accounts “hijacked” – with payments diverted to the bank accounts of fraudsters.

“I’m just going to ask again for you to truly prioritize these claims for folks who through no fault of their own, had a fraudulent claim and then desperately need these payments,” said Rep. Leanne Krueger, a Delaware County Democrat. “Waiting more than a few weeks when these are payments and benefits they paid into, and they need this money to pay their utility bills and their mortgage, it's putting people in a very challenging situation. So anything you can do to speed up the process for those who still need benefits, I think it's truly urgent right now.”

Officials also faced questions Wednesday from legislators about worker shortages in some industries.

Berrier said she believed some of the issues faced particularly in the leisure and hospitality sector had to do with workers reevaluating career choices.

“What we're uncovering through different studies is that people are evaluating their work, the work that they do and especially during the pandemic. I think it's caused a lot of people to reflect inward,” she said. She also said a lack of daycare is a barrier to many workers.

Berrier was also questioned by legislators regarding if a former employee would be eligible for unemployment compensation if they quit because of a COVID-19 vaccine mandate.

That situation would be treated like any other voluntary quit or discharge, said Deputy Secretary for Unemployment Compensation Susan Dickinson.

It's very much on a case-by-case basis,” Dickinson told lawmakers. That involves figuring out if the situation was a quit or a discharge and who initiated it.

“If we determine that the person quit, then the burden of proof is on that person to show that they had a good reason to quit. If the case is discharge, then the burden of proof is on the employer to show that the discharge was necessary. And, you know, along those lines of questioning, then you have to look and see, OK, you know, what was the mandate? How is it portrayed to the staff? You know, how does it play into the business that they do? This is why adjudication cases take so long, because you need to get all of these answers, and there's a lot of questions that have to be asked. And of course, it's on a very individual basis,” she said.