Governor Northam directs Virginia Employment Commission to speed up processing of unemployment claims

On May 18, 2021, Governor Ralph Northam directed the Virginia Employment Commission to invest $20 million to dramatically expand the agency’s ability to process complicated unemployment insurance claims. Executive Directive Sixteen requires the agency to add 300 new adjudication staffers, make immediate technology upgrades, and complete a full modernization of the Commonwealth’s unemployment insurance system by October 1, 2021.

While Virginia ranks sixth in the nation for the timely payment of benefits to eligible applicants, the Governor’s action will speed up the resolution of cases flagged as potentially fraudulent or ineligible. These cases represent approximately four percent of all claims.

“Virginia is a national leader in getting unemployment benefits to eligible individuals, but it’s clear that complex cases must be resolved more quickly,” said Governor Northam. “That’s why I’m directing the Virginia Employment Commission to invest $20 million to significantly speed up its adjudication process and immediately implement long-overdue technology upgrades. This action will address many of the issues that have caused delays and ensure that we continue to deliver relief to Virginians who need it.”

Virginia’s unemployment system was set up to benefit businesses, not workers, and it has remained one of the lowest funded systems in the country for generations. In fact, Virginia ranks 51st out of 53 states and territories for the amount of federal funding it receives relative to what Virginia businesses pay in taxes. The problem was hidden by years of low unemployment and a consistently strong economy, and the pandemic has highlighted this reality.

Despite being underfunded, the Commonwealth’s unemployment insurance (UI) system has successfully distributed $12.9 billion in benefits to more than 1.3 million eligible Virginians since the pandemic started. Approximately 85 percent of Virginia applicants receive unemployment benefits within the first 21 days, making Virginia sixth in the nation—and first in the Mid-Atlantic region—for delivering unemployment benefits to eligible individuals.

If an individual’s initial claim is flagged for potential ineligibility or fraud, federal law requires the Virginia Employment Commission (VEC) to adjudicate the claim before proceeding with payment. Most individuals that are placed in the adjudication process are ultimately found ineligible for benefits.

Executive Directive Sixteen directs the VEC to take four immediate actions to adjudicate claims faster:

• Set a clear goal for resolving UI claims. Governor Northam has directed VEC to increase the number of adjudications being processed per week from 5,700 to 10,000 by June 30 and to 20,000 by July 31, 2021. This will be accomplished, in part, by finalizing a $5 million contract for over 300 additional adjudication officers. VEC is also coordinating with the Virginia Department of Human Resource Management (DHRM) to identify employees across Virginia’s state agencies who can temporarily support VEC.

• Continue investment in Customer Contact Center. Since the onset of the pandemic, VEC has quadrupled its customer service capacity in order to provide information and support to Virginians with questions about their claims. Governor Northam has directed VEC to expedite an additional contract for services and staff to augment the current expansion.

• Modernize the benefits system. Historic claim volume during the pandemic had previously delayed VEC’s progress in modernizing its 41-year-old benefits system. The agency has resumed the project, executing a contract for $5 million in state funding for technology upgrades. October 1, 2021, has been set as the target date for completing the final phase of the system. VEC will be implementing additional technology upgrades for customer service in the coming weeks to increase capacity.

• Collaborate with the Virginia congressional delegation to resolve federal funding disparity. States receive unemployment support from the federal government. The amount is based on how much Virginia businesses pay in federal unemployment insurance taxes. For Virginia, that ratio is among the lowest of all states and an increase typically requires businesses to pay more in taxes. This formula has underfunded Virginia’s UI system for years with respect to upgrading technology and maintaining staffing levels.

“As Virginia’s chief workforce official, I am always thinking about the Virginians behind the unemployment numbers,” said Chief Workforce Development Advisor Megan Healy. “As we move into the next phase of our recovery, the Governor’s actions will create additional capacity for processing the historic number of claims with indeterminate eligibility.”

Virginia has made a wide range of additional assistance available to those whose employment has been impacted by COVID-19. Low-income Virginians should refer to the Virginia Department of Social Services CommonHelp for guidance on applying for food, cash, childcare, and other assistance. Support is also available through the Virginia Career Works Referral Portal for those interested in workforce training, going back to school, or getting a job. This includes $36 million in funding through Governor Northam’s ‘Get Skilled, Get a Job, Give Back’ (G3) Program, which makes tuition-free community college available to low- and middle-income students who pursue jobs in high-demand fields.

“Starting the pandemic with low federal support and record low UI claims, the VEC has faced a greater than 1000% increase in workloads,” said Commissioner Ellen Marie Hess. “I am proud of the work our team has done and continues to do in the face of truly unprecedented demand. Weekly claims still exceed pre-pandemic levels, but each and every day, the dedicated public servants of the VEC continue marching forward and serving their fellow Virginians.”

The full text of Executive Directive Sixteen is available here.