Tennessee hires second private firm to process unemployment claims,

The Tennessee Department of Labor and Workforce Development recently contracted a second private company to help the state process thousands of unemployment claims that continue to pour in each week.

The department entered into a renewable contract with Vaco, a business staffing and solutions company with an office in Brentwood. Vaco will provide 100 employees to assist with “tier one” support, according to department spokesman Chris Cannon. The new employees began training this week.

Since the Tennessee economy began to bear the full force of coronavirus-related business shutdowns in mid-March, thousands of Tennesseans have reported waiting for multiple weeks to receive unemployment benefits and struggling to reach representatives for answers.

The department of labor first contracted Accenture, a professional services provider, in early April as first-time unemployment claims skyrocketed to unprecedented weekly highs. The company provides about 400 employees that have assisted the department with call center support, claims processing and both live and virtual chat support, Cannon wrote in an email to The Tennessean.

Hiring Vaco will allow Accenture employees to focus on providing more specialized, “higher tier” support for those who have filed unemployment claims, according to Cannon.

Since March 15, 740,123 Tennesseans have applied for unemployment benefits. Of these, 243,405 filed weekly certifications to continue their claims in the week ending July 18.

As of July 4, 14,830 Tennesseans had been waiting for their unemployment claims to process for more than 21 days, including 25 people from March and 3,037 from April. Another 35,300 have been waiting for their benefits for fewer than 21 days.

“Like many states, when the unprecedented surge in new unemployment claims started in late March and early April, department leadership took a proactive approach and onboarded additional resources as quickly as possible to help manage the historic spike in unemployment,” Cannon wrote. “The department has steadily increased the utilization of this third-party support and continues to assess the situation and add even more workers to help the state provide unemployment benefits to Tennesseans.”

The Tennessee Department of Labor and Workforce Development was quickly overwhelmed by the sudden spike in new unemployment claims in late March and early April.

Cannon said the department had to hire large numbers of support staff, and quickly. Hiring new state staff would take more time.

The CARES Act allows states to use coronavirus relief funds to hire thirdparty companies to assist in COVID-19 response efforts.

“The influx of unemployment claims will eventually subside and there will no longer be a need for nearly 1,000 individuals to provide customer support and process claims,” Cannon explained. “When this happens, the state can easily revert to pre-pandemic staffing levels.”

Other states have hired third-party firms to help tackle backlogged unemployment claims. Kentucky Gov. Andy Beshear announced June 30 that the state hired Ernst and Young, a national accounting firm, to assist with more than 56,000 unresolved claims, according to WDRB.com. Illinois Gov. JB Pritzker hired Deloitte Consulting to assist the state in processing unemployment claims in a late April contract totaling $12.7 million.

The state labor department’s contract with Accenture is renewable each quarter. The contracts are paid in monthly bills based on the number of hours worked by Accenture and Vaco employees.

In April, May and June, the state paid Accenture a total of just over $4.3 million.

“The department has steadily increased the utilization of this third-party support and continues to assess the situation and add even more workers to help the state provide unemployment benefits to Tennesseans.”

– TENNESSEE DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT SPOKESMAN CHRIS CANNON