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Audit: Wisconsin below federal unemployment appeal regulations

Posted at 6:04 PM, Aug 02, 2021
and last updated 2021-08-02 23:49:32-04

A report by the Legislative Audit Bureau found the state of Wisconsin's unemployment agency fell below federal standards for determining unemployment appeals during the pandemic.

The report, which was part of the bureau's Fraud, Waste and Mismanagement Hotline Semiannual audit, says federal regulations stipulate state unemployment agencies need to make 80 percent of unemployment appeals determinations within 45 days.

Starting in June of 2020, the department fell below that threshold, and it continued throughout the year, into 2021.

In May of 2021, the Department of Workforce Development only made 17.5 percent of appeal determinations within the 45-day window, according to the audit.

The rate at which claimants appealed went up as well, the audit says, from 10 percent of all denials before the pandemic to 20 percent of denials during the health emergency.

Wisconsin was not the only state to fall short of those regulations, according to the audit. Among four other Midwestern states, Illinois, Minnesota, Indiana and Iowa, Wisconsin ranked third for determining May of 2021 appeals. None of them met that 80 percent standard. Illinois came the closest at 75.5 percent.

The I-Team has reported on the appeals backlog for months, which became a second backlog after the initial backlog of unpaid claims was cleared just before the end of 2020.

Appeals are creating a second unemployment backlog in Wisconsin

Emails obtained by the I-Team in an open records request showed the department's top unemployment officials knew an appeals backlog would form well before the first backlog was cleared.

Records show DWD appeared to know unemployment appeals would pile up

Appeals wait times continue to be lengthy, some saying they waited months for a hearing. One example was captured in the audit, reading, "...in September 2020, an individual filed an appeal ... We found that an appeal hearing was not conducted until March 2021."

The I-Team spoke to others who won their appeal but did not receive their benefits for weeks after.

Unemployed winning appeals but still waiting for benefits - Samantha Serchen

According to weekly snapshot data posted on the DWD's website, 13,282 appeals are awaiting a scheduled hearing, and 4,425 have been scheduled. The average wait time for a hearing is 58 days.

We reached out to the DWD for comment on the audit, and they shared the following statement with us:

"The Department of Workforce Development appreciates LAB's guidance as the UI system moves forward with long overdue technology infrastructure upgrades. When the COVID-19 pandemic triggered an unprecedented surge of claims, DWD responded in a number of innovative ways -- staffing up call centers, hiring UI application adjudicators and deploying other personnel. At the height of the pandemic, the department hired, contracted with or reassigned some 1,900 individuals. However, while this enabled DWD to respond to approximately 7 million calls per month, DWD leaders recognized that staffing alone was not the solution to handle the surge and Wisconsin turned to Google Cloud to eliminate the backlog.

To move forward, DWD is now planning the first phase of the UI system modernization project to obtain an omnichannel customer contact management solution that efficiently tracks and manages all customer contacts (phone call, online chat, chat bot, text messaging, social media, etc.). The system will allow claimants to efficiently file claims by phone and receive an appropriate and timely response to inquiries, whether generated by staff or the system. DWD is also reviewing RFP responses for phase 2 of the UI system modernization project.

This comprehensive effort to modernize the antiquated, 1970's UI system focuses on the challenges experienced by claimants and businesses during the unprecedented claims load. Going forward, insights gained from workforce listening sessions, business roundtables and other public engagement will help drive additional improvements."

The audit recommends the DWD hire additional staff to deal with the backlog of appeals to comply with federal regulations, and report its plan to the Legislative Audit Committee next month. The department has accepted those recommendations.

We shared the audit findings with an unemployment attorney that handles appeals, and he says what stands out to him is the rate of 20 percent appealing their denials. He says those who have been denied unemployment benefits should be mindful of their options and pay attention to the deadlines to appeal.

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