Indiana buried in unemployment appeals backlog

Editor’s note: The Indiana Lawyer/IBJ Media participated in an Indiana Department of Workforce Development webinar last month seeking lawyers to serve as administrative law judges for unemployment appeals. IL did not participate in the reporting of this story.

 LaShonna Wallace was employed for most of her life. But last fall, she said, she had to give up her job to care for her dependent granddaughter after child care became impossible to find amid the pandemic.

Wallace filed for pandemic unemployment assistance through the Indiana Department of Workforce Development but was denied. Now, she counts herself among the thousands of Hoosiers who have had to wait for months without unemployment compensation as their appeals drag through one of the nation’s most backlogged administrative legal systems.

“It’s been scary,” Wallace said. “If it was just me, I could go [live] practically anywhere. I could stay in my truck, but I have this little girl.”

Wallace worked as a nurse aide at an assisted-living and rehab center in Marion. She had been putting in 60 hours a week since the pandemic started in March 2020.

Then in September, she said, her child care fell through and she could not find an open alternative.

Her employer would not cut back her hours, Wallace said, so she was forced to leave her job.

Wallace filed in October for pandemic unemployment assistance to tide her over until she found other work. Her claim was denied two months later.

She appealed the decision in January because, under the pandemic unemployment-assistance program, the loss of child care related to the pandemic qualifies as a reason for unemployment insurance for the time being, according to information posted on DWD’s website.

This week, she finally got her chance to argue her case before an administrative law judge and was awaiting a decision as of Indianapolis Business Journal press time.

Her case is among more than 17,000 pending appeals in Indiana, according to DWD spokesman Scott Olson. Only California, Texas and Virginia — states with much larger populations — have more.

Nowhere to turn

For Wallace and many others, lack of child care is a huge hurdle in returning to the workforce. Indiana is down about 290 child care programs as a direct result of the pandemic, said Jessica Fraser, director of the Indiana Institute for Working Families.

Middle- and low-income families are especially struggling, even with unemployment insurance and stimulus checks. And delays in receiving unemployment due to Indiana’s appeal backlog isn’t helping, Fraser said.

“This idea that some people have in their head that people are fine because we have stimulus checks and unemployment — that’s not the case,” she said. “Unemployment insurance and stimulus checks help, but if you’re a mom, your monthly expenses go up.”

Ranae Lucas of Wabash found herself in a situation similar to Wallace’s — struggling to figure out how to continue to provide for herself and her two grandchildren.

Lucas worked as a waitress at a local restaurant, where she was temporarily laid off early in the pandemic.

She drew weekly unemployment vouchers with no problem for most of 2020, even when she returned to work. She still qualified for unemployment assistance because her hours were cut.

Lucas said her problems began when she was fired because she had to miss work to quarantine after being exposed to COVID-19.

She said she made errors on the income documents she needed to file and was confused by the process. As a result, the state flagged her weekly pandemic unemployment assistance vouchers and suspended her benefits. In September, the state denied her regular unemployment insurance claim.

She appealed and has waited nearly a year for a hearing, she said. Her weekly vouchers suspension was lifted months later, in May, but she has received no back pay.

Before the pandemic, Lucas had never applied for unemployment benefits, and she said navigating the complicated online process of filing a claim each week was a challenge.

“I didn’t know what I was doing,” Lucas said. “They penalized me for it.”

In the last 10 months, while she’s waited on an appeal hearing, Lucas’ utilities have been shut off several times, she lost her car and she might lose her house. She said she reaches out to local church groups to help with her expenses.

Flaws in the system

Kristin Hoffman, an attorney at Indiana Legal Services and director of the Worker Rights and Protection Project, said DWD was unprepared to handle the massive amounts of claims that resulted from the pandemic.

As many as 1.3 million unemployment claims were pending weekly at the end of last year, and thousands more people than usual are still on unemployment because of the pandemic.

In the two years before the pandemic, Olson of the DWD said, the department received and disposed of 12,000 to 13,000 appeals a year. In the last year, DWD has received about 61,000 appeals and disposed of 42,000.

The unemployment appeals process rarely had backlogs before, Hoffman said. Part of the current deluge, she said, is the result of an overly complicated and confusing system, fraught with “glitches and errors,” that the state requires Hoosiers to use to file for unemployment.

Claimants have to apply online to first receive unemployment insurance, then fill out weekly vouchers online to receive weekly benefits. And making even a simple mistake in that process, like a misspelling or not uploading a document properly, can lead to a claim denial.

At that point, the only way to continue the claim process is to file an appeal, Hoffman said. She has dealt with a number of clients who made simple filing mistakes and are now stuck in the appeals backlog. Some have waited up to a year to get a hearing, she said.

Some claimants might also have to appeal more than one filing glitch, and each one has to be heard separately, making wait times even longer.

“The system is so segmented that it fosters additional delays,” Hoffman said. “We need a system that permits the correction of mistakes.”

DWD has said it is combatting unprecedented levels of fraud, which the online system is built to flag.

More than 25% of applicants who go through Id.me, the company that verifies the claims, are identified as fraudulent, DWD Commissioner Fred Payne and other state officials said at a press conference in July. Payne said at the time that the security measures have blocked more than $236 million in fraud payments, but it is unclear if those payments include people with legitimate applications.

To try to fix the backlog, DWD is advertising to hire more administrative law judges, both part time and full time. The agency had 17 before the pandemic, Olson said, and is up to 60 now.

Hoffman said the backlogs need to be addressed at the root of the problem, though.

“These tech issues are existing at every single level,” she said. “The fact that mistakes are so easily made adds to the issues at the administration level to the investigator level that then pours into the appellate level.”

Payne said at the July press conference that the DWD appeals process takes 12 to 18 weeks now. He told reporters it was difficult to speak about specific appeals because each case has different circumstances.

About 27% of Indiana cases pending as of the end of June had been sitting for 121 to 180 days, according to U.S. Department of Labor data.

Olson said 85% of unemployment claims are covered in 21 days and that, if someone is waiting longer, it’s because of a complication. As of July 17, 126,351 claims were either being initially processed or were waiting for an appeal hearing.

Few answers

Both Wallace and Lucas have tried communicating their concerns with DWD but have heard little back.

Wallace said she sent email after email, and even reached out to her state lawmakers.

“It’s just the same old story,” she said. DWD “would send me emails with the same response: They’re behind, they’re behind, they’re behind.”

Lucas said the people she did talk to could not give her answers about her appeal or her suspension of pandemic unemployment assistance.

“They don’t tell you anything. They just say, ‘Monitor your page,’” Lucas said.

Wallace is looking for a new job to fit her schedule, but many times she’s been told she’s overqualified for retail jobs because of her 30-year background in health care.

“They act like they’re desperate for help, but they’re not hiring,” she said. “I want to work. I have to work.”

With an ongoing labor shortage nationwide, some have blamed the increased pandemic unemployment benefits for keeping workers at home.

That includes Gov. Eric Holcomb, who elected to end the federal pandemic unemployment benefits early in June, citing “help wanted signs posted all over Indiana” as a reason. The benefits have since been reinstated by the courts, pending a legal battle over whether Holcomb had the authority to end the assistance early.

Lucas also said she is struggling to find a job that pays enough for her to live. She said she filled out dozens of applications, but her options are limited without a car.

Hoffman said the lengthy appeals process is putting people in a financial hole they can’t get out of.

“The whole unemployment system is supposed to run as a safety net,” she said. “If we’re waiting five or six months to get an appeal, then what’s the point?”•