The crush of unemployment claims because of the coronavirus pandemic, the implementation of a new processing system and changes in leadership hit the Nebraska Department of Labor with a "perfect storm" this year, a report by the state ombudsman found.
As such, the ombudsman's office fielded 576 complaints against the Labor Department through Dec. 1 — roughly 30 times the number it normally receives, according to a Dec. 3 report shared with the Journal Star.
About 20% of the complaints filed with the ombudsman's office this year have been about the Department of Labor.
Most of the complaints focused on staffing issues, including turnover of adjudicators — those responsible for determining who is eligible to receive unemployment insurance benefits — mandatory overtime and deteriorating work conditions.
In four of the last six years, for example, the turnover rate for adjudicators has topped 30%, Deputy State Ombudsman Carl Eskridge noted, which "would result in the replacement of all adjudicators after three years."
Several Department of Labor staffers told the ombudsman's office they were compelled to work 51-hour weeks — nine hours Monday-Friday and six hours on Saturday — to process the spike in unemployment claims, as well as to begin implementation of a new processing system.
They say they worked that schedule for months, beginning in the fall of last year, without any additional compensation.
While the department said "a significant number of staff have voluntarily worked over 51 hours weekly," the increased workload caused adjudicators to suffer from "high levels of stress, PTSD and job-related medical and mental health issues," the report states.
The stress was so bad that one employee told the ombudsman they left the Department of Labor and took a $1,000 per month pay cut for a job that allowed them to leave work and be home with their family at the end of the day.
Employees also said on-boarding staff from other areas of the Department of Labor and hiring contract workers during an initial rush of claims brought on by the COVID-19 pandemic exacerbated problems within the unemployment office.
"As the contracted workers were unfamiliar with the world of (unemployment insurance) benefits, the contracted workers required immediate and ongoing training in order to provide any significant benefit to the overwhelmed system," the ombudsman found.
Once those contract workers began doing more work of the adjudicators, the adjudicators began to notice more errors being made, the report states, "either by failing to provide benefits where benefits should have been paid, or in paying benefits to claimants who were not qualified."
On Wednesday, the Nebraska State Auditor said it had found numerous errors with the Labor Department's processing of unemployment claims during the pandemic, ranging from paying out fraudulent claims, to paying inmates ineligible for benefits, to overpaying state employees.
In response, the state Labor Department said it believed it had administered pandemic unemployment programs in line with U.S. Department of Labor guidelines, and the ombudsman's report noted the agency has processed 77% of all unemployment claims within four weeks this year.
The decision to fast-track claims, while resulting in more errors, "was not an unreasonable strategy," the report concluded.
But the ombudsman's report also said a focus by supervisors on pushing adjudicators to fill "unrealistic" and arbitrary quotas also pushed more employees out of the job.
"Rather than being driven to provide quality service, staff indicated that they are instructed to take shortcuts, fast-tracking claims before quickly moving on to the next issue, while there were still unresolved issues needing to be addressed with the prior case," it said.
Current and former employees also described frustration with the unemployment insurance processing system built by Geographic Solutions, which received a $34.7 million, no-contract bid from the Labor Department in 2017.
The system was frequently down, including on Saturdays during mandatory overtime work, and was prone to mistakes, requiring staff to correct the errors, the ombudsman wrote.
Employees also noted, however, that the system was able to deftly handle various federal programs during the pandemic, which sped up the processing of claims during a difficult time.
Eskridge presented the findings of the ombudsman's investigation during a 90-minute meeting with Labor Department administration last month.
During that meeting, department leaders indicated they were taking steps to reduce adjudicator turnover and mandatory overtime, and had heard concerns of the staff regarding the use and training of contracted workers.
Asked for comment by the Journal Star, Labor Commissioner John Albin said the high turnover rate precedes the current management team, adding the unemployment benefits team "had not met timeliness or quality standards in years."
"During the COVID-19 pandemic, Gov. Ricketts' administration has appropriately raised expectations for the performance of his team," Albin said in a statement. "NDOL embraces the governor's commitment to efficiency and effectiveness, customer service and accountability."
Mandatory overtime has been discontinued after more staff were hired and contract workers were brought on, the commissioner added.
Albin also said the complaints about the department's switch to the Geographic Solutions system last year "are primarily limited to employees who object to the ability of the new system to better measure individual performance."
With more than 96% of unemployment claims being filed online, Albin said the Labor Department's previous software system would not have been able to move to the federal CARES Act program.
Lincoln Sen. Matt Hansen, who chairs the Legislature's Business and Labor Committee, credited the Labor Department for responding quickly when senators brought concerns from constituents about a delay in receiving unemployment benefits.
The pandemic, he added, exacerbated some problems that appear to have been plaguing the agency long before COVID.
"We've probably been asking the Department of Labor to do too much with too little," Hansen said, adding he believes lawmakers should appropriate more state funds to hire additional staff.
Doing so would cut down on mandatory overtime, the need for contract workers, and improve outcomes for those seeking unemployment benefits, Hansen said.
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