Unemployment insurance (UI) is an integral part of the Labor and Employment industry, and it's been a challenging few years for state workforce agencies in the U.S.

After a couple of whirlwind years, meeting new faces and old contacts in the Windy City was great during the 2022 NASWA Summit. This year’s summit was the largest ever, with over 700 attendees and vendors.

With surging inflation and COVID-19 (and its continued effect on the global supply chain), it hasn't been the easiest few years for the labor and unemployment industry (UI). Time and again, agencies were put into complex and challenging positions where they needed to meet the needs of claimants today while keeping an eye on planning for tomorrow. Legacy unemployment insurance systems have been tested and stressed to the breaking point, and a debate over a national unemployment insurance system has been renewed.

Fraud continues to be a problem for many state workforce agencies. Unemployment claims surged after the onset of the COVID-19 pandemic. This rise in claims also saw a sharp increase in the number of fraudulent payments. The U.S. Department of Labor recently announced its distribution of $500 million to assist states with combating unemployment insurance (UI) fraud and equity challenges.

When the global Coronavirus pandemic hit the U.S. economy in early 2020, the U.S. unemployment rate spiked. New legislation complicated benefits distribution as new systems, new business rules, and new processes were stood up at a moment's notice to deal with the crisis. Of course, one objective for all Sagitec's customers was performance—we needed to serve the hundreds of thousands of people accessing our applications every day.

Since the pandemic, State Workforce Agencies (SWAs) have been moving toward online solutions and call center services. However, these approaches could not meet the demand generated by the pandemic. Interactive Voice Response (IVR) systems were challenged under increased load. This led to SWA’s searching for ways to increase customer service during these unprecedented times.

With the unprecedented pass of the federal CARES Act to deal with the economic impacts of COVID-19, State Workforce Agencies (SWAs) across the nation scrambled to develop systems that could quickly accommodate millions of Americans suddenly eligible for unemployment benefits.

Sagitec alerted the Maryland Department of Labor (MDOL) of potential fraud activity after identifying a spike in out-of-state Unemployment Insurance (UI) claims including regular and pandemic claims.

Most unemployment insurance systems are still crumbling under high claims volumes and calls.  One of the primary root causes is the legacy systems and code base that many state workforce agencies continue to use to this day. According to an ITSC study released in September 2019, only 16 states have fully modernized their tax, benefits, and appeals systems.  Additionally, regardless of modernization status, all state systems are struggling to meet the needs of their citizens.  

The Maryland Department of Labor Division of Unemployment Insurance saw a total number of 108,508 new insurance claims for the week of April 4. This number is a spike of 29% from last week's numbers and call center hours and operations are not able to handle the spike. Unemployment insurance claim numbers are increasing in an unprecedented manner given the Coronavirus pandemic across states. While the department has taken measures to address this by asking citizens to submit claims based on their names and days of week, it is also urging people to file claims online.