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VEC heeds warning, delays new IT system until November for testing

VEC heeds warning, delays new IT system until November for testing

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In February, people lined up at a Virginia Career Works center in Chesterfield County for a chance to talk to someone from the Virginia Employment Commission about jobless aid.

JLARC Director Hal Greer summarizes the agency’s interim findings on the Virginia Employment Commission

The Virginia Employment Commission is resetting the countdown for launching a new information technology system to help people file and follow their claims for unemployment benefits.

Instead of launching the new system on Oct. 1, the commission now plans to wait until early November to allow consumers to test the technology before launch and train staff on how to use it.

“All eyes are on this IT solution,” Secretary of Labor Megan Healy said Tuesday. “We want it to be perfect before we roll it out.”

The precautions heed warnings by the Joint Legislative Audit and Review Commission last week that the state should make sure the system is ready before making the transition from the antiquated information technology system that has been one source of the problems that have plagued Virginia’s unemployment system during the COVID-19 pandemic.

The staff of the legislative watchdog agency said the VEC had tested the new system with its own staff, but not with consumers who will have to use and rely upon it. An interim report to legislators on JLARC also noted that the VEC had begun training its staff on Sept. 13, so training was incomplete with the fast-approaching date for launching the system.

“I would say it’s a smart investment of added time to ensure these efforts ultimately pay off,” said JLARC Associate Director Tracey Smith, who oversees the staff study, with a final report due to the commission in November.

The delay also does not alarm advocates for unemployed Virginians, who are counting on the long-delayed modernization project to make it easier for people to file for unemployment benefits, track their claims and resolve disputes over paperwork or eligibility.

“We’re hoping they’re taking more time to do it right,” said Pat Levy-Lavelle, an attorney for the Legal Aid Justice Center.

The center is one of five legal organizations representing unemployed Virginians in a class-action federal lawsuit against the VEC over long delays in processing unemployment claims and resolving disputes. The organizations reached a settlement agreement with the state in late May that requires the VEC to show substantial progress in addressing problems in the system, including the long-delayed replacement of a computer system that dates to 1985.

U.S. District Judge Henry Hudson has declined to dismiss the case, despite the state’s success in resolving almost all of the 92,000 disputed claims addressed in the settlement. On Tuesday, Hudson granted a joint motion to allow the advocates and state to file a status report on Oct. 15 on the benchmarks necessary to judge the VEC’s progress and resolve the case.

The judge said the report must include the number of “first level” appeals currently pending before the VEC of decisions made on eligibility for benefits.

The interim JLARC report found that the VEC is taking twice as long to hear those appeals than the national average and far more than the U.S. Labor Department standard.

Gov. Ralph Northam directed the VEC in May to take steps to resolve the issues in the federal lawsuit, primarily over the backlog of claims awaiting adjudication. The agency has been overwhelmed by 1.9 million claims since the pandemic began.

Those steps include completion of the IT modernization project, which was supposed to be done last year but was paused because of the pandemic and flood of claims after more than 400,000 Virginians lost their jobs because of the public health emergency.

The three-phased project began in 2009 but the second phase, affecting employer taxes, was not completed until late 2015, three years later than originally planned. The third phase, affecting unemployment benefits, has been delayed because of what JLARC described as “insufficient staff and project management, COVID-19 workload, technical challenges ... and [the decision] to pause project.”

VEC officials say they have been hamstrung by reliance on federal funding through payroll taxes, which has lagged behind other states with smaller populations. State taxes generally do not pay for VEC operations, although Northam and the General Assembly provided $15 million in the current budget to help the agency resolve its problems and complete the project.

The JLARC interim report found that the unemployment insurance system has relied on antiquated technology and paperwork that require “inefficient and slow manual processes.”

The current system also makes it hard for consumers and VEC staff to track unemployment claims and avoid mistakes or fraud.

The new system will allow people to register and apply for unemployment insurance benefits, file weekly claims, see payroll tax documents, calculate benefits, and view payment history and issues that may block them from receiving benefits.

“By modernizing the system, VEC has laid the foundation for a more efficient delivery of benefits and services to the citizens of the Commonwealth of Virginia,” the agency said in a notice posted on its website.

One concern JLARC raised about the pending transition to the new system is the “blackout period” of five to seven days while the agency transfers case files and data. During that period, the public won’t be able to file new or continuing claims, and the VEC won’t be able to process them.

The VEC hasn’t set a firm date for the new system to launch, although Healy said it could occur as early as Nov. 2.

VEC spokeswoman Joyce Fogg said, “We are still assessing potential options, but our primary focus is to take a few more weeks to allow for more time on testing and training to ensure the best possible outcome.”


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