Members of the Kentucky General Assembly’s Unemployment Insurance Reform Task Force met Tuesday with leaders from the state’s Labor Cabinet and representatives from the business community to discuss changes needed in the much-maligned system.
Tom Underwood, Kentucky state director for the National Federation of Independent Business, said that fraudulent claims have been a chronic issue for members since the pandemic began.
As an example, he cited his wife’s business that helps manage nonprofit trade organizations. He said her business received notice of an unemployment claim for one of her clients that has never had an employee.
He added that many of the 4,000 NFIB member small businesses in the state are so small that they don’t have a human resources staffer or department. While an overhauled unemployment website may help provide more information, Underwood said having small business liaisons at regional career centers to help them with their issues and rights would be welcomed.
Since the pandemic began in March 2020, Kentucky’s unemployment system has been overwhelmed due to the number of claims filed. That’s led to several issues, including some claimants waiting months to get paid, some getting overpaid and wasteful and fraudulent claims getting approved.
The Beshear administration has blamed the problems in the unemployment system on cuts the Bevin administration made as well as an antiquated technology system that needs to be overhauled.
Labor Cabinet Secretary Larry Roberts told the Task Force that his office is in the latter stages of a request-for-proposal process with vendors to bring a new system into place. Currently, the state has allocated $40 million of the $60 million for the new system.
Roberts also said it will likely take a couple of years for that system to be implemented.
Among the recommendations the NFIB gave the state was to dedicate American Rescue Plan Act funding toward bringing the state’s unemployment technology system. Doing so would help bring that system “into the 21st century,” Underwood said.
“That is one-time money from the federal government for infrastructure, and we think that is desperately needed as demonstrated during the pandemic,” he added.
Other ways the unemployment system can reduce waste and fraud would be for employers to be contacted when a claimant reports they’ve filled out an application or received a job interview.
Underwood said a two-way system would then verify if a job seeker actually went to the interview.
