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State assigns final unemployment claims in backlog; Amy Pechacek appointed DWD secretary
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State assigns final unemployment claims in backlog; Amy Pechacek appointed DWD secretary

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Amy Pechacek

Pechacek

The Department of Workforce Development reported Wednesday it is processing the final unemployment claims in the state’s more than nine-month backlog caused by the COVID-19 pandemic.

In addition, Gov. Tony Evers announced that Amy Pechacek, who took the helm of the department about three months ago as transition director, has been appointed to the role of department secretary.

Pechacek told the Wisconsin State Journal on Wednesday the remaining 5,000 claimants who have been waiting longer than 21 days — the threshold for when a claim is considered a part of the backlog — have been assigned for adjudication. There were more than 100,000 claimants in the backlog in September when Pechacek arrived at DWD.

DWD also is processing another roughly 9,000 additional claimants, but that is considered the department’s regular workload, Pechacek added.

“This is really a testament to the team of folks I have at DWD,” Pechacek said. “This was a monumental effort to get through this, but failure was not going to be an option for me, just given the amount of people that were waiting and are in need of these benefits. We couldn’t let this go on any longer than it has.”

As of Dec. 26, more than 590,000 claimants in Wisconsin had been paid more than $4.68 billion in unemployment benefits since the pandemic began, according to DWD.

Senate Majority Leader Devin LeMahieu, R-Oostburg, said in a statement that DWD’s claim that the backlog had been cleared was “completely disingenuous.”

“The reality is, thousands of people’s claims were simply shifted into DWD’s broken adjudication process, and struggling families are still left waiting,” he said. “If this is what we can expect from Evers’ new political appointee, it will be difficult to gain consensus towards confirming her.”

Under former Senate Majority Leader Scott Fitzgerald, R-Juneau, Senate Republicans refused to take up formal votes on three of Evers’ department heads — Department of Health Services Secretary Andrea Palm, Department of Transportation Secretary Craig Thompson and Department of Safety and Professional Services Secretary Dawn Crim. Former Tourism Secretary Sara Meaney, who left her position in November, also never received a formal vote from the Senate.

Republicans in the Senate also voted last year to fire former Agriculture Secretary Brad Pfaff — who in November was elected to the Senate.

Pechacek, who previously worked as Department of Corrections deputy secretary, joined DWD in mid-September after Evers fired the former department secretary, Caleb Frostman, over ongoing frustrations regarding the state’s backlog of unemployment claims. The department has faced skyrocketing unemployment claims since shortly after the COVID-19 pandemic began.

The backlog has prompted criticism and calls for action from state Republicans who have blamed Evers’ administration. DWD officials have said an unprecedented number of claims, paired with GOP-authored unemployment laws, have complicated the adjudication process and exacerbated delays.

“The DWD has faced historic levels of claims, hindered by antiquated technology and burdensome bureaucracy created by those who always intended to make it harder for folks to access these vital benefits,” Evers said in a statement.

“Amy understands that during these challenging and unprecedented times, Wisconsinites are depending on a government that works for them and does so quickly and effectively,” he said. “I have great confidence in her leadership and ability to move the DWD and our state forward.”

Long wait on claims

Clearing the state’s backlog of claims has taken more than nine months, despite DWD staff increases and contracting with third-party call centers.

At the time of Frostman’s firing, DWD had logged about 6.5 million weekly unemployment claims since March 15. Of those, almost 11% — or 713,000 claims among nearly 100,000 Wisconsinites — were still being processed.

All told, DWD has processed about 9.1 million weekly unemployment claims since March 15. To compare, DWD handled 7.2 million claims between 2016 and 2019. Last year the department handled a little more than 287,000 claims.

“We’ve done more than four years of work in nine months,” Pechacek said.

In an audit released earlier this month, the nonpartisan Legislative Audit Bureau found DWD was responsible for 11 of the 13 weeks it took, on average, for the department to resolve initial unemployment claims filed in the early weeks of the pandemic. The most common reasons for delays involved instances when DWD had not resolved issues despite having all the necessary information to do so, according to the audit.

In September, the audit bureau found that of the 41.1 million telephone calls received by DWD call centers between March 15 and June 30, only 0.5% ultimately were answered. The vast majority of calls were blocked, while some callers hung up before receiving an answer.

Pechacek told the State Journal in November she hoped to clear the backlog by the end of the year. Of the remaining 70,070 people waiting for benefits at that time, about 60,000 were considered to be part of the adjudication backlog.

DWD strategies

DWD took a major step forward in processing claims in November with a partnership with Google to help remove more than 100,000 holds on backlogged claims, while tens of thousands of additional claims were expected to be resolved in the coming weeks. Pechacek said the partnership helped expedite the processing of claims through predictive analysis.

In addition to the Google partnership, Pechacek has required some DWD employees to work mandatory overtime and this week DWD announced it would update the unemployment application process to include more user-friendly language this coming spring.

Long-term department goals include securing funding for a full modernization of the state’s decades-old unemployment system, which has struggled to quickly process the unprecedented number of claims during the pandemic.

An agency budget request filed by DWD in September lists replacing the state’s system, which uses the 60-year-old COBOL computing language, but did not include a specific funding request. Evers said a more detailed request will be fleshed out in his 2021-23 biennial budget process.

DWD has evaluated several options for modernizing the system, and the National Association of State Workforce Agencies Information Technology Support Center has estimated a potential modernization effort to cost $50 million to $70 million and take three to five years.

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