Ohio was third-worst state for paying unemployment benefits

COLUMBUS — During the first year of the coronavirus crisis, Ohio was the third-worst state in the nation when it came to paying traditional unemployment benefits in a timely way, according to a new federal study.

A report released Tuesday by the U.S. Department of Labor’s Inspector General found only 43% of Ohio- ans — 356,790 of 826,516 — who filed claims for traditional unemployment ben- efits between April 1, 2020, and March 31, 2021, began receiving them within the first three weeks of their eligibility.

Among the states, only Florida (39%) and Hawaii (30%) were worse at making timely payments, according to the report. In addition, Puerto Rico and the U.S. Virgin Islands paid benefits promptly in only 34% and 9% of cases, respectively.

By contrast, Minnesota — which received only about 42,000 regular unemployment claims during that year- long period — paid 90% of its claims in a timely manner, the report found. In Illi- nois, where 1.3 million applicants filed claims during that period, about 76% were paid within 21 days.

The U.S. Employment and Training Administration, part of the Labor Department, set a standard that states should begin payments to at least 87% of claimants within 14 to 21 days (the 14-day standard is only for states that, unlike Ohio, do not require a week- long waiting period before issuing benefits). Only five smaller states — Minnesota, Wyoming, Louisiana, North Dakota, and Rhode Island — exceeded that standard for traditional benefits, the report found.

The findings illustrate the widespread problems Ohioans faced with obtain- ing unemployment bene- fits during the first year of the pandemic, as the state’s already underfunded unem- ployment office was deluged with an unprecedented number of claims thanks to busi- ness closures. Many state residents waited weeks or even months to start receiving benefits, and a lot of Ohioans encountered lengthy delays when trying to contact the state’s overwhelmed call center to fix the problem.

On top of paying traditional unemployment claims, the Ohio Department of Job and Family Services also was responsible for paying three other types of special federal coronavirus unemployment benefits to more than 1 mil- lion Ohioans thrown out of work by the pandemic.

Another problem was fraud: as of May 2021, scam- mers stole about $462 million via bogus unemployment claims filed during the COVID-19 crisis – $441 million in federal Pandemic Unemployment Assistance payments, and $21 million in traditional unemploy- ment benefits, according to OD JFS. At the height of the problem in early 2021, tens of thousands of claims were being flagged every week for possible fraud.

In May 2020, then-od JFS Director Kimberly Hall told state lawmakers that a circa2004 computer system and bureaucratic rules were also to blame for the delays in issuing payments.

Ohio was set to have its computer system replaced by next year, but that work was placed on hold a few weeks ago after two top executives with the Minnesota-based company hired to do the work were charged with stealing trade secrets from a former employer to build their software program.

In the past year, Ohio’s ongoing unemployment claims have been trending downward, especially as the federal pandemic benefits ended in the fall of 2021. Last week, about 8,000 new claims and 28,000 ongoing claims were filed in the state. The latter number was the lowest weekly total since the mid-1980s, according to OD JFS spokesman Bill Teets, and is about one-tenth of the continued claims paid in the first few weeks of 2021.

In a statement Tuesday, Teets said OD JFS has taken the lessons learned during the pandemic to make improvements to Ohio’s unemployment claims system.

“We have a robust suite of anti-fraud detection tools, have brought greater flexibility in how we manage claimant calls, and have instituted a number of customer service features such as intelligent routing and callback features,” Teets said. “Our goal is to continue improving the customer experience, and institute systems and processes that will help us be better prepared for the future.”