WASHINGTON — A surge in federal unemployment aid after businesses closed in U.S. states and territories exposed a major flaw in how the local systems used to distribute the assistance, including the outdated system in Nevada.
Sen. Ron Wyden, D-Ore. and Rep. Steven Horsford, D-Nev., filed legislation Monday that would help modernize the state unemployment systems to more efficiently respond if a similar type of future disaster hit the country or a specific region.
“It’s not a one size fits all,” said Horsford, a member of the House Ways and Means Committee and the House sponsor of the bicameral modernization bill to update unemployment systems.
Horsford said it would help each system in states like Nevada to upgrade with new technology and programs to handle an onslaught of unemployment claims, which is what happened when the coronavirus swept the nation and forced a shutdown of businesses.
What happened in Nevada, Horsford told the Review-Journal, was “an unprecedented number of people trying to access the state unemployment program, all at the same time.”
“It overloaded the system,” he said said.
Wyden, chairman of the Senate Finance Committee, said the Unemployment Insurance Technology Modernization Act would help upgrade systems to avoid widespread delays and weed out fraudulent claims.
The system in Oregon also left many people waiting for needed aid, Wyden said.
Horsford said some of the systems operating were developed with technology from the 1960s and unable to handle the volume when workers were left jobless and waiting for benefits to “provide a roof over their heads and put food on the table.”
Nevada was particularly hit hard by the pandemic because the state relies so heavily on the tourism, hospitality, entertainment and gaming industries. Even now, the states’ 9.2 percent unemployment rate is second highest in the country, according to the Bureau of Labor Statistics.
Modernization would help the Nevada Department of Employment, Training, and Rehabilitation increase functionality, speed up claims processing, reduce the time necessary to implement new programming, and improve overall efficiency, officials from the agency said.
They note that since the pandemic, the unemployment insurance program has experienced a record number of claims in its 80-year history.
Even though the Nevada system has been operating during the pandemic “there is no doubt that a new, modernized system is necessary,” state unemployment officials said in a statement.
Specifically, the bill would require the Department of Labor to develop, operate and modernize technology to improve unemployment compensation.
The bill also seeks to ensure that new technology capabilities would not rely solely on automated decision systems that may produce biased results.
Congress is currently weighing a $1.9 trillion relief package that includes funds for programs and increases federal unemployment insurance funds, but not money to improve the systems developed by states.
Horsford said he is hopeful that the modernization bill he introduced with Wyden may wind up in another large recovery package that Congress is expected to tackle later, and perhaps under budget reconciliation rules in the Senate that allow for a simple majority vote.