Organization calls on Shapiro to focus on fixing ‘broken’ unemployment system

About 18 months ago, Cara Simpson began receiving letters that stressed her out. The letters came from the state’s Department of Labor and Industry, which claimed she’d been overpaid thousands of dollars in pandemic unemployment assistance. 

At the bottom of the letters was a dotted line and the bolded phrase “DETACH AND RETURN THIS PORTION WITH YOUR PAYMENT. MAKE FULL PAYMENT NOW TO AVOID COLLECTION ACTIVITIES.”

Then the amount: $10,972.

Simpson read the letters as a threat, and they alarmed and confused her. “How is this possible?” she said. “Was I a victim of fraud?”

She’d applied for unemployment in August of 2019 and had received benefits for several months. Then came COVID-19, and the department guided her into a program called Pandemic Unemployment Assistance. She received only one payment, then the benefit stopped. She tried contacting the department by phone and email but was unsuccessful. Months later, she received a check for about $4,500 for missed benefit payments. Then nothing arrived until the letter. She has since received several others, all with similar wording.

On Tuesday morning, Simpson stood on Fifth Avenue, Downtown, and held one of those letters in the air as an example of the state’s broken unemployment system. She was one of about three dozen people who attended a public event in which the Mon Valley Unemployed Committee presented a “white paper” that detailed the system’s failures and outlined a path forward. Simpson, who worked as a certified nursing assistant, lost her job after experiencing a health issue. She now serves on the board of the Mon Valley Unemployed.

The organization is urging Gov.-elect Josh Shapiro to focus on fixing the system when he takes office in January.

The white paper, produced by Keystone Research Center, says the unemployment compensation program, weakened by staff cutbacks before 2020, became overwhelmed by demands created by the COVID pandemic. As a result, benefits were often delayed or denied. A new IT system implemented in 2021 failed to fix many of the problems, the paper says. Too many workers didn’t receive benefits within the federal time frame designed to keep unemployed people from losing homes and cars.

Bob Snyder, an employee at Union Electric Steel in Burgettstown for 38 years, said he and his co-workers experience periodic layoffs. The most recent occurred in July, and he quickly applied for unemployment. He waited months and learned of his approval three weeks ago. “They called at 10 a.m. and said you’ve got unemployment,” he said. “There was no reason given for the delay.”

Many of his co-workers have yet to receive benefits, he said. Snyder is expecting another layoff near the end of the year. This time, he said, he’ll be using his vacation time. That way he’ll be certain to receive income.

Thousands of people, like Simpson, receive letters demanding they pay back “overpayments” and threaten to take IRS tax refunds and put liens on property. In some cases, the department threatens to pursue criminal prosecution.

Shapiro, the white paper reads, “should seek to restore basic confidence in our UI system and then modernize it so that more people get the benefits they deserve — promptly — and more effective assistance landing a good new job.”

Problems date back years, the paper states. The system suffered from inadequate IT systems and staff cutbacks before becoming overwhelmed by pandemic-generated need.

The paper calls for a number of specific fixes. Among them is a broadening of eligibility, a full and adequate staffing of call centers, and assurance of timely benefit payments. In addition, the department should make its communications readable at a “newspaper” level so they can be easily understood, and detailed so those who are denied can fix certain issues without waiting for an appeal hearing.