Officials: Overhauling Kentucky’s outdated technology for jobless claims could take years

Published 5:50 am Wednesday, June 23, 2021

Overhauling Kentucky’s outdated technology for processing jobless claims could take up to three years, the state’s labor secretary said Tuesday as lawmakers delved into problems with the pandemic-stressed unemployment insurance system.

The state is in the “latter stages” of selecting a contractor to take on the task of “reworking and rebuilding” the claims-processing system, Labor Secretary Larry Roberts said.

“If we can modernize our system, that’s going to make a big difference,” Roberts told the legislative task force that began reviewing problems with the unemployment system.

In the meantime, Kentucky labor officials are looking for ways to make more immediate improvements, he said. That’s because of the longer timeline needed to replace the system’s antiquated computer system, which is expected to cost around $40 million.

“It may take two to three years to make that an outcome,” Roberts said.

Like other states, Kentucky was overwhelmed by record waves of claims for jobless assistance caused by the coronavirus. Tens of thousands of Kentuckians found themselves in limbo for months as they waited for their jobless claims to be processed. Even with most virus restrictions now lifted, lawmakers continue to forward complaints from constituents awaiting jobless aid.

The legislative review comes amid a transition at the Labor Cabinet. Roberts is retiring at the end of June, and Gov. Andy Beshear selected veteran state official Jamie Link as the next cabinet secretary. Roberts declined to talk to reporters after his appearance before the legislative task force.

The task force’s co-chairman, Republican Rep. Russell Webber, urged cabinet leaders to seek business sector input to “get it right the first time” in reworking the unemployment system.

“I don’t want to see us repeat the last year again, with a system that was overwhelmed,” he said.

Tom Underwood, state director of the National Federation of Independent Business, told lawmakers that the pandemic had “laid bare across state government how archaic the IT systems are.” He urged lawmakers to allocate federal relief money to update the technology systems. The legislature’s next regular session will begin in early January.

The legislative task force will meet several times, hearing from stakeholders, before presenting its recommendations on how to improve the unemployment insurance system. Republican Sen. Michael Nemes, the panel’s other co-chairman, called it “a very personal and emotional issue.”
“We’re here for a very important issue but we’re not here to find blame,” he said. “We are here to find what’s going on and what we can do for the future” to improve the system.

For the past year, Republicans have criticized the Democratic governor for the unemployment system’s problems. Beshear has pointed to budget and staffing cuts that hobbled the system well before he took office. Beshear’s administration eventually hired an outside company to help work through the claims backlog. That outside work cost the state about $14.5 million.

With the state’s unemployment rate falling, Republican Rep. Phillip Pratt questioned why the Beshear administration decided to reopen a series of regional offices to provide in-person unemployment insurance services.

“Even though the unemployment rate is down, and it’s improving, there’s still a backlog (of cases) that needs to be worked,” Roberts replied. “And until we get all those cases worked, there’s going to still be that need” to provide that type of service.

The task force also delved into problems caused by fraudulent claims for jobless aid.