WA unemployment program still struggling, 4 years after COVID

When Jason Lockhart had to file for unemployment in early March, the Mason County man assumed the state’s unemployment system was done with the delays and disruptions of the pandemic era. 

Instead, Lockhart, who left his job as a construction account manager to seek mental health treatment, found himself trapped in a COVID flashback. 

Nearly a month after applying, benefits haven’t arrived, said Lockhart, who has struggled since his wife died in a car accident last year. Repeated calls to the Employment Security Department — 43 on a recent Wednesday — have gone mostly unanswered.

Lockhart, who endured a similar claims ordeal in 2020, was so frustrated at one point he Googled “what’s wrong with Washington ESD?” which merely took him to news stories about the agency’s surprisingly persistent woes. After four years, Lockhart said, “I would have thought that they would have gotten the process streamlined a little bit.”

Lockhart’s bewilderment isn’t unique. While the number of Washingtonians filing jobless claims — around 5,000 a week — has long since dropped to pre-COVID levels, many applicants are still seeing pandemiclike problems. 

Since the start of the year, just 62% of Washington applicants got their first benefit payment within three weeks. That “timeliness” rate is not only below the U.S. average of 79% — it also lags the 91% average Washington boasted in the decade before COVID, according to U.S. Labor Department data.

Simply filing a claim can be challenging. ESD’s claims system, launched in 2017, isn’t mobile-friendly. A new $4.5 million customer service phone system that was expected to improve access is often swamped.  

Dollar for dollar, Washington still has one of the nation’s most generous unemployment safety nets. Weekly benefits last year averaged $704, among the highest in the U.S., with a current maximum of $1,019. And in Washington, benefits typically cover 50% of claimants’ lost wages, well above the national “replacement” rate of 43%, according to federal data. 

When it comes to actually accessing those benefits, though, Washington often falls short.

The share of unemployed Washingtonians who received benefits in 2023 was 34%, according to federal data. That’s ahead of the U.S. average of 29%, but it’s behind other wealthy, progressive states like Oregon, California, New York and Massachusetts, whose combined rate last year averaged 47%. It’s also well below what Washington’s rate has been historically. 

“Our benefits system is very generous — if you can get benefits,” said Anne Paxton, attorney and policy director with the Unemployment Law Project, a worker advocacy group based in Seattle and Spokane. 

In a new report, the group notes that workers in Washington who seek unemployment benefits face numerous barriers that hurt access and which may disproportionately affect claimants with disabilities and others in marginalized communities. 

JR Richards, director of ESD customer support operations, said the agency has already fixed a number of obstacles for claimants and is working hard on others. But she concedes ESD has a lot of work to do before the next economic downturn.

“Our commitment is to equitable, accessible services,” Richards said in an interview last week. “And that means working to uncover where we’re falling short and to improve it.”

Pandemic hangovers

Many of those shortfalls are directly tied to the pandemic. 

ESD says tardy payments, for example, stem in part from budget and staffing shortfalls that have come as federal funding, which spiked during COVID, has receded, even as the agency’s labor costs have risen. As of March, ESD had 212 customer service staff and trainees, versus 271 in January 2023 and 938 in December 2021.

“Washington has created a more progressive [unemployment] system, but the federal funding does not match,” Richards said.

ESD’s workload, meanwhile, still reflects pandemic-related problems.  

Employment fraud, which cost Washington and other states billions of dollars in pandemic benefits, remains an elevated threat that eats up staff time and slows claims processing. ESD’s fraud team now spends 70% of its time trying to verify claimants’ identity. Even with improved anti-fraud technology that has reduced “false positives,” some claimants are still flagged erroneously. 

ESD is also still dealing with the tens of thousands of claimants who got pandemic benefits they weren’t eligible for — often through no fault of their own — and who have applied to have these “overpayments” waived. As of March 21, ESD had processed nearly two-thirds of 47,000 waiver requests, and most waivers have been granted. 

More challenging, claimants themselves now behave differently than they did pre-COVID in ways that have increased ESD’s workload. 

For example, because ESD’s claims system isn’t mobile-friendly, many claimants who try to apply via smartphone — roughly half of all applicants now — end up bailing out and calling customer service to apply, Richards said.  

Similarly, fewer claimants are applying online than the agency predicted. Richards speculates that many people who struggled with ESD’s online system during the pandemic still have “a lot of trauma and concern” and fear that even a small mistake will delay benefits or get flagged for fraud. So they, too, end up on the phone. 

That describes Lockhart, the Mason County resident. He was determined to talk to “somebody that could walk me through” the application, even though that meant hours of repeat dialing “in the hopes that the phone will ring through and you’ll be put on hold,” Lockhart said. “So yeah, it is quite a process.”

These new patterns mean call volumes that ESD’s new phone system wasn’t designed to handle. During the peak winter claims season, ESD estimates it would have needed an additional 135 staffers to answer all incoming calls. 

The result: Although callers who get through spend less time on hold — 16 minutes in February versus 36 minutes a year ago — a larger share of callers still get a high-call-volume message, according to ESD data. 

JT Smith, a Seattle software engineer, said she filed for benefits after getting laid off late last year, but “never was directly able to speak with anyone from ESD.” Smith waited nearly two months for her first payment and just last week got a response from ESD to a message she’d sent months ago asking for help. 

No easy fixes

ESD’s problems have the attention of state lawmakers. Many have been flooded by calls and emails from desperate constituents and are ready to find funding for ESD’s staffing shortfall and outdated technology, said state Rep. Liz Berry, D-Seattle, who chairs the Labor & Workplace Standards Committee. She notes that legislators “were pretty exasperated” that ESD’s claims system wasn’t mobile-friendly.

Once ESD finishes a more detailed proposal, Berry said, lawmakers will focus on “what next steps to take to advocate for the resources.”

But lawmakers and labor advocates say Washington’s unemployment system faces more complicated challenges that predate COVID. 

Consider Washington’s comparatively low share of unemployed workers receiving benefits.

According to ESD, that lower rate partly reflects the state’s healthier economy; Washingtonians tend to file for fewer weeks of unemployment than workers in other states.

But the lower percentage also reflects the state’s comparatively strict eligibility rules, ESD said. For example, Washington has long been one of the only states where claimants need to have worked a minimum period — 680 hours — in the “base” year prior to applying for benefits, which automatically excludes many part-time workers.

But in 2003, Washington’s eligibility rules got even stricter following a lobbying push by state employers. 

In Washington, as elsewhere, unemployment benefits are funded by employer taxes, which are partly determined by the benefits paid to each employer’s workers. Before 2003, Washington’s unemployment benefits, and taxes, were both around twice the national average, as a share of total payroll, according to a 2006 study by the Urban Institute.

Among other changes, the 2003 law narrowed the number of situations in which workers could voluntarily quit and still get benefits.

While many employers regarded that change as a major victory, advocates like the Unemployment Law Project’s Paxton say it helped shift Washington’s unemployment system toward a less generous stance.

That shift has been exacerbated by other obstacles for claimants that, though not always deliberate, are no less material, Paxton said. 

These obstacles range from language issues for non-English-speaking applicants to an application process so complicated that few first-time claimants can navigate it without assistance, Paxton said. And within some marginalized communities, workers may not even be aware unemployment benefits exist, Paxton said. 

All told, since 2003, the fraction of Washington’s unemployed population receiving benefits has averaged 34%, down from around 50% in the 1990s, according to federal data. During that same period, the combined average in four other wealthy progressive states — Oregon, California, New York and Massachusetts — was 42%.

Encouraging signs

Despite those depressing statistics, there are positive signs.

ESD was among the first state unemployment agencies to join a federal unemployment “navigator” program that partners with in-state organizations in historically underserved communities.

ESD is also testing ways to build awareness of benefits among “historically marginalized” workers who’ve lost their jobs. The agency also recently won a temporary waiver for interest charges on pandemic-era overpayments.

More broadly, there appears to be political appetite for deeper changes in unemployment policy. Last year, state lawmakers expanded eligibility for benefits for voluntary “quits,” including for people who leave a job to care for a family member. 

This year, a bill to extend unemployment benefits to striking workers narrowly fell short — thanks in part to pressure from Boeing, which feared its workers would be encouraged to walk out, according to Berry and other lawmakers. But Berry says the measure has enough support to pass next session. “We’re going to get it done,” Berry said.

In the meantime, some claimants are finally getting through. On Thursday, Lockhart said he actually got a call back from an ESD customer service rep, who assured him his benefits had been approved.

“I was speechless,” said Lockhart, who has burned through his savings and often has to choose between groceries and gasoline.

Still, after so many delays and frustrations, Lockhart said he won’t stop worrying until he sees the money in his bank account. “I’m optimistic, but I’m not going to run out and spend my last 10 bucks just yet.”

The date that Jason Lockhart filed for unemployment has been updated based in new information from Lockhart.