State Unemployment System Flounders As Thousands Await Late Payments

Feb 8, 2021

Although Congress extended jobless benefits in late December, the state Department of Labor and Industrial Relations’ out-of-date computer system has created delays in processing certain claims.

As a result, thousands of Hawaii residents have gone more than a month without unemployment benefits.

They are people like Catherine Neal, an East Hawaii resident who works as wildlife biologist. For the past 10 years she has been travelling around the country to work seasonal conservation jobs, most recently on Kauai, before returning to Hawaii Island.

That work dried up with the COVID-19 pandemic. Travel restrictions and a federal hiring freeze led to the job she had accepted with the Fish and Wildlife Service in Maine  being cancelled.

In a phone interview with HPR, Neal said she has since exhausted her unemployment benefits.

“January 2nd was my last payment,” she recalled.

Neal should be eligible for the unemployment extension passed by Congress in late December, but more than a month later still has not been paid.

She says a representative of the State Department of Labor and Industrial Relations told her that technical problems with the department’s ancient computer system created a backlog in processing claims.

Neal is far from alone. People struggling with unemployment have directed outrage and frustration at the DLIR over social media in recent days.

Others say the process of obtaining unemployment benefits is so demoralizing that it discourages people from applying.

“Really this whole process has been discouraging and overwhelming, it just almost feels not worth it,” said Shannon Matson, a Puna resident who spoke with HPR.

Matson operates a yoga retreat in East Hawaii, which she closed last year due to OCVID-19 health concerns.

She recalled that it took her  around nine months of filing claims to finally receive unemployment payments through a CARES Act program for self-employed workers called Pandemic Unemployment Assistance. The first funds were not deposited into her account until January 2021, after first applying in April.

Her partner is now in the same position as Catherine Neal…waiting for the state to start payments under the federal extension.

The delays have wrecked the couple’s finances. They are using Matson’s unemployment check to pay credit card debt, which she says is now significant.

“Our credit was great before COVID, we had never missed a payment on anything. And this past year has pretty much destroyed our credit,” Matson said.

It is not clear exactly how many residents are being impacted, but the number is likely in the tens of thousands.

Figures from the federal Bureau of Labor Statistics indicate that some 68,700 people in Hawaii are currently unemployed, giving the state a nation-leading unemployment rate of 9.3%.

The problem appears to be affecting workers filing for regular unemployment insurance who exhausted their benefits before the federal extension, known as Pandemic Emergency Unemployment Compensation, was signed into law in late December.

The delays are not unique to Hawaii. As reported by Marketplace, workers in states around the country are experiencing similar challenges.

Out of work Hawaii residents are still baffled that almost a year in to the crisis, the state still appears unable solve the problem in a timely manner.

Officials with DLIR say that a major reason for the delay is that former-President Trump did not sign the extension into law until after the previous programs had expired, meaning states had to stop payments to claimants who had exhausted their benefits.

But the Governor David Ige’s Labor Director says there are also serious technical challenges closer to home.

“We don’t have programmers who actually understand the computer language used to program this application,” said DLIR Director Anne Perreira-Eustaquio in an interview with HPR.

Perreira-Eustaquio noted that in addition to problems finding coders who can create a new application for the latest federal extension, her department’s information technology infrastructure is so old that rushing could crash the entire system, leaving even more unemployment claimants high and dry.

She could not provide an estimate on when the work would be complete.

Last week the Labor Department signed a contract with Boise-based Solid State Operations to modernize it computer system, although the short term delays will likely persist.

While that new system will not be ready for months at a minimum, Perreira-Eustaquio says it will represent a substantial improvement from the current problem-plagued process.

“We’re creating a fully functional web-based application system, with interface applications for both claimants and employers, as well as the appeals process that claimants go through if they want to appeal a determination made by the Department,” she explained.

However that is of little solace to unemployed workers struggling to survive without jobless benefits right now.

Some are being driven to leave Hawaii altogether, something economists have been warning about for months, as faster-recovering states on the mainland attract Hawaii workers and accelerate the state’s trend of population decline.

Hawaii Island biologist Catherine Neal said she is already considering it.

“I’m basically going to give myself until spring here and if nothing pans out, I’m going to really think about going back to the mainland.”