A months-long backlog of unemployment claims still haunts the Department of Labor and Industry, and top officials told the Senate Appropriations Committee that more money could help them catch up.
In Gov. Josh Shapiro’s proposed budget, the department would see an 11% funding increase, about $90 million. Nancy Walker, the department's acting secretary, said the additional dollars will pay for more staff to clear a backlog of more than 35,000 claims.
“Our first priority was to look at (unemployment claims) and see how we can make that process better,” she said.
The department has already made strides to improve staffing. Walker said 137 workers will start mid-April to handle initial unemployment claims, which are then processed by examiners. As it stands, the wait time when calling can take more than an hour.
“Obviously, we need to improve that situation,” she said.
Backlogs have built up for claims and potentially fraudulent claims alike. In June 2022, the Department had more than 33,000 fraud cases to work through, as The Center Square previously reported.
To reach residents who are trying to file claims, the department has also sent workers to CareerLink offices through a program called UC Connect, where claims workers meet people face-to-face to guide them through the process.
With more money and infrastructure in place, Walker said the department could answer calls answer calls in real time and eliminate the backlog by August.
Department officials also spoke of creating a “pizza tracker,” similar to when someone orders a pizza online, so claimants know the status of their request. Residents could see where their application stands, the requirements they need to complete, and what to expect next.
“I think improving those transparent metrics up front for claimants and showing them where they are in the process would go a long way toward, perhaps, not having as many calls or visits to district offices,” Deputy Secretary for Unemployment Compensation Maria Macus said. “Right now, that (backlog) is my priority — those folks need closure.”
Employers who skirt the law are a priority for officials, too.
“My UC tack shop is very interested in staffing up to be able to conduct more audits that would lead to identifying those employers who don’t comply with the unemployment compensation law,” Macus said.
Worker misclassification — when businesses inappropriately treat workers as independent contractors to reduce payroll and other costs — was another priority.
“The economic impact of the misclassification of workers is probably the greatest criminal activity throughout the state besides the drug trade,” Sen. Devlin Robinson, R-Pittsburgh, said.
The unemployment compensation trust fund has lost $91 million, Walker estimated, with more than 48,000 employers misclassifying workers, about 259,000 workers annually.
“It’s a huge impact — not only to businesses that are losing bids because they’re being outbid by folks that don’t have employment costs, but taxpayers,” she said.
State law has “so many different definitions of employee,” she said, and the department has recommended creating a uniform definition for an employee to reduce misclassifications.
