As unemployment claims skyrocketed after the state shut down businesses to mitigate the spread of COVID-19, Wisconsin’s unemployment office was inundated with millions of calls — as many as 40 per second some weeks.
Department of Workforce Development Secretary Caleb Frostman said the state unemployment office has responded to the unprecedented demand for benefits with upgrades to technology, expanded call volume capacity and staff increases.
However, the response has come with its share of growing pains, including clogged phone lines for some claimants and a “technological malfunction” this week that saw some people accidentally receive an extra $600 in federal unemployment insurance payments.
Before the COVID-19 crisis, Frostman said, the department handled about 25,000 claims a week. But by the end of last week, the department had reached about 340,000 claims in a six-week span.
As call volumes grew, the department also closed down in-person job centers due to social distancing requirements.
The initial spike in calls crashed the call system on multiple occasions, sometimes for hours at a time, but Frostman said expanded telecom capacity has helped manage the influx.
“The call volume is still severe enough where a lot of people will sometimes get a busy signal or a call will get dropped,” he said.
Unemployment claims appear to have peaked at more than 24,000 a day at the end of March, so there might be some light at the end of the tunnel. In addition, Gov. Tony Evers has slowly been easing restrictions on his “safer at home” order, allowing more businesses to offer more services.
Evers plans to keep the order in place until May 26, although a GOP-led lawsuit currently in the Wisconsin Supreme Court aims to suspend the order.
But Frostman said the department will continue to add staff to better handle claims.
Before COVID-19, DWD’s unemployment office had about 500 employees. About 100 new staffers have been reallocated to the department from within DWD or from other state agencies, and Frostman said he hopes to reach a staff of about 1,000 people within the next couple of months.
“If it continues to slow it would probably curtail some of the things we need, but at this point, there have been so many claims that, even if the dial was turned quicker, we would still have a fair amount of work to get done for the weeks that have been claimed thus far,” Frostman said.
Officials say they’ve corrected an error that resulted in unemployment claimants accidentally receiving an extra $600 in federal benefits.
On Thursday, DWD noted a “technological malfunction” had disbursed double Federal Pandemic Unemployment Compensation payments into claimants’ US Bank accounts. To fix the problem, the federal and state unemployment insurance payments were subsequently removed from the accounts.
Just over 39,000 claimants received the double payments Wednesday, although most errors were fixed before reaching the claimants’ bank account.
Just over 2,300 claimants with US Bank accounts may have noticed the double payments, but DWD officials said Friday all errors had been corrected.
“We worked really hard to clear that quickly and our team still is working hard to figure out exactly what happened and how we can prevent that from happening again,” Frostman said.
Jobless rate climbs
Earnings determine a claimant’s state benefit rate, with the maximum weekly payment capped at $370. DWD began disbursing the additional $600 in weekly federal payments earlier this week. The federal funds are retroactive to the week ending April 4 and will be available through July 25.
DWD’s unemployment insurance division received almost 480,000 applications and distributed more than $290 million in state unemployment benefits since March 15.
In addition, the department reported that, of the nearly 1.2 million unemployment claims received between March 15 and April 25, almost 750,000 had been paid. The number of claims processed in that five-week period is equal to the number normally processed by the department during an eight-month span.
The state’s unemployment fund balance was more than $1.92 billion at the close of February, up from less than $600 million in 2007, before the last recession hit.
State unemployment benefits are funded through payroll taxes on employers and used to provide temporary benefits for qualifying workers who lose their jobs.
About a year ago, in April 2019, the state recorded its lowest unemployment rate ever at 2.8%. The unemployment rate in February was 3.5% and in March, it was 3.4%.
However, the data used in the most recent preliminary unemployment estimates was collected before the COVID-19 pandemic — and subsequent “safer at home” order — closed down many businesses across the state.
In April, DWD officials estimated the jobless rate had skyrocketed to nearly 27%, using the same assumptions regarding the economic impact used by Moody’s Analytics. At the time, DWD projected that about 725,000 Wisconsin residents — employed by 48,000 private businesses — were out of work due to the pandemic. Some 109,000 people were unemployed before the outbreak.
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