Unemployed workers waiting 6+ months for benefits after ESD claims backlog is cleared

10/2/20

Background

Hundreds of thousands of workers in Washington have lost work as a result of the COVID pandemic. And although our state and federal governments responded by passing crucial policies to expand unemployment benefits, the system has failed to provide benefits to tens of thousands of unemployed workers. Many have been left without income for months, throwing them into deep financial crisis in the midst of a pandemic and economic crash.

Far too many workers are structurally excluded from benefits because of their documentation status or other federal rules which currently bind the state’s unemployment system. But thousands of others who are eligible have been victimized by an entirely avoidable system failure: delays and errors in the Employment Security Department’s processes which have kept them from receiving unemployment payments.

Over six months into the crisis, ESD claims they’ve corrected course and cleared their backlog of applicants, releasing weekly progress reports that appear to prove they’ve reined in delays.

But the reality is that many workers who applied as early as March still haven’t received a single payment, or even a meaningful response from ESD.

The underlying reason that so many eligible workers have gone unpaid is that ESD’s system automatically prevents payments on any claims it flags with errors, inconsistencies, or missing information — no matter how trivial and regardless of who is at fault for the error. Even minor issues — for example, a mismatch in reported work hours, or an inaccurate report that a claimant is receiving retirement benefits — can create an automatic flag. Once a worker’s claim is flagged, it’s either placed in “adjudication” or denied. From there, workers are forced to wait until an ESD specialist manually reviews their case before they can be approved and paid.

For some workers, getting a specialist to review their case took months. And for some, that review never came.

What is ESD’s mission statement? It would be to pay out as little money as possible, to make the system as convoluted as possible, so workers give up. They make it very easy for people to report their neighbor’s fraud, or for employers to call and deny claims. But not for workers who are owed money to get through.

- Beth, unemployed worker whose claim was in adjudication for six months

The purpose of the unemployment system is to provide income support to people who lose work — and when the system fails to fulfill that mandate, the impact is severe. In July, Working WA surveyed over 1000 unemployed workers about their experiences with ESD and the impacts of delays. Nearly half reported having below $100 in their bank account at some point since March, and 42% had been unable to afford groceries or other basic household items. Many workers have had to take risks that should be entirely avoidable — 1 in 10 reported having to return to work despite health and safety concerns or COVID risk factors due to ESD’s failure to pay their benefits.

And the impacts will be long-felt, even if ESD manages to eventually pay all those who are waiting. Claimants are maxing out credit cards for basic expenses, turning to lower-wage work with fewer protections to make up for lost income, even facing homelessness. Even if they ultimately get all the backpay they’re owed, the choices they’ve been forced to make will shape their financial future for years to come.

ESD’s system failure affects all of us, and its impacts will continue to ripple across our communities. It deepens racial inequity: communities of color face both higher rates of unemployment and a lower likelihood of getting payments they apply for. And it harms public health: many who should be eligible for unemployment, due to COVID risk factors or unsafe workplaces, have been forced to return to work anyway.

“It’s hard enough to get through the system — it’s been even harder for many of my friends and community members. Many immigrants are really struggling because they’re not getting their money and they have these additional barriers to pushing their way through the system — they don’t speak the language, and they don’t want to raise a fuss because they’re fearful for undocumented family members.”

- Alma, unemployed worker who was incorrectly disqualified

Workers have been raising the alarm about these impacts for months, and reporters have brought numerous issues to light. In response to massive pressure, ESD launched a PR campaign and announced “Operation 100%”, a plan to manually clear their backlog by mid-June. When they failed to meet their target, they set July 31 as a new deadline to sort through the backlog.

Workers who had gone months without income eagerly awaited a call from ESD. On August 3, ESD announced they’d met their new targets and resolved “all claims” filed between March 8 and June 18 that were still awaiting payment.

But many workers continue to wait. The people profiled in this report include many who should have been on the “Operation 100%” list ESD outlined — but they still hadn’t been paid when ESD announced they’d resolved those cases. Some are still stuck in adjudication. Others have been incorrectly denied, or received “approval” but never paid out. Some had their claims disqualified as a result of ESD’s hasty fraud-response measures, which used a profiling system to stop payments on 200,000 claims until a specialist could verify their identity.

And all of the cases detailed here are unaccounted for in ESD’s reporting — making it difficult to assess the accuracy of their public reports. Based on the data the agency is releasing about its progress, it’s possible ESD is not even fully aware of the scope of the problem or how many workers have slipped through the cracks of their system — and that the agency has no plans to address these outstanding claims.

This failure isn’t simply the result of a strained agency that needs time to adjust to demand. It’s the result of a system that defaults to denying workers rather than paying them.

This whole system seems so broken. But I think it’s intentional. It’s meant to be this convoluted and have this many hoops people need to jump through to get relief. The only thing that’s changed is how many people have to jump through those hoops right now. It’s designed to do exactly what it’s doing — keep people from getting paid.

- L., unemployed worker who was denied one day before ESD’s operation 100% deadline

And the change that’s needed is a systemic one too. Rather than doubling down on their unsustainable case-by-case approach, ESD must address the structural causes of these delays. They must make their system default to paying benefits, not withholding them. They must provide transparent public reporting of claims and reasons for non-payment. And they must agree to revisit cases until they can ensure each case has been correctly resolved.

These changes won’t make up for the damage that has been done already. But they’re necessary steps to create accountability to the workers who went months without payment, and those who are still waiting despite ESD’s public claims that they have been resolved. These workers’ stories highlight the need for urgent change to meet the needs of the current crisis, and a permanent overhaul to make this vital safety net work for workers.

Case reports

The reports below come from twelve workers whose cases appear to have fallen through the cracks in ESD’s system. Most of them applied for unemployment in March or April, and as of publication, still have not been paid. Click through to read their stories, which highlight the barriers individual applicants can encounter in their application processes, and reveal inaccuracies in the data ESD is publicly reporting about their progress.

Bobby — gas station clerk, Port Orchard

Couldn’t file until June because his info was stolen by a fraudster & his account was locked — and then had his claim denied because he couldn’t log in to provide verification to ESD.

Jose — restaurant server, Seattle

Has been in adjudication multiple times over five months, and still isn’t receiving payments despite being approved.

L. — paratransit driver, Seattle

Has been stuck in adjudication due to missing information from her employer since she applied in April.

Ruby — bakery production assistant, Kent

Uploaded documentation to verify her identity in May, but was automatically disqualified for lack of verification — and is now receiving overpayment notices for a claim from 2019.

Alma — self-employed, Tacoma

Provided all her self-employment documentation to apply for Pandemic Unemployment Assistance, but was put into adjudication — and then told she owed $4000 on a claim from 2015.

David — restaurant worker, Seattle

Was asked several weeks after applying to upload a copy of his Social Security Card, which he had to request via mail because he didn’t have a copy — putting him in adjudication since March with no payments.

Beth — marketing manager, Burien

Was in adjudication, without payments, from March until September due to ESD’s failure to handle a flag on her account that arose because she moved to Washington in 2019.

Kelsie — bartender / barista, Olalla

Went through a formal appeal & was told she would receive benefits through Pandemic Unemployment Assistance in June — but still hasn’t had her account updated or been paid.

Kidane — gig worker, Seattle

Had his Pandemic Unemployment Assistance claims disqualified due to a minor error — and was then declared ineligible due to his green card expiring.

Janice — office administrator, Federal Way

Had her claim denied & declared fraudulent for not uploading documentation to verify her identity — despite being told by an ESD agent that she’d provided the required info — and did not see resolution until after ESD claimed they had resolved all such cases.

Albert — RV salesman, Spokane

Applied on March 23 & still has yet to receive a single payment after a minor error in reporting retirement benefits.

Abdul — restaurant server, Seattle

Applied in March & has seen no payments or communications from ESD — except erroneous notices that he’s been “overpaid” on a previous claim.