1. Welcome to Workforce 3 One U.S. Department of Labor Employment and Training Administration Webinar Date: March 30, 2016 Presented by: Office of Unemployment Insurance U.S. Department of Labor Employment and Training Administration

2. Gay Gilbert Administrator Office of Unemployment Insurance Employment & Training Administration U.S. Department of Labor 2#

3. Elizabeth Vasquez Meeting Facilitator Management Consulting Associates 3#

4. Daryle Dudzinski UI Director of Labor Operations Connecticut Department of Labor 4# Maria Mejias Director, Statistical Sampling Jaye Turney UI and RID Policy Texas Workforce Commission Neil Gorrell Employment System Policy and UI Director Washington State Employment Security

5. Jason Dean UI Division Director Roy Padilla UI Deputy Director New Mexico Department of Workforce Solutions 5# Josh Richardson Chief Operating Officer Kate Shelby UI Director Indiana Department of Workforce Development

6. Daryle Dudzinski UI Director of Labor Operations Connecticut Department of Labor 6#

7. Initial Claim Call-Center Central Office Operations Adjudications Employer Charging Benefit Payment Control (Integrity) UI Operations

8. Employer does not provide separation packets (pink slip) to separating employee Must verify Lack of Work in specific cases (based on policy, omit seasonal and other separations) Name – Wage match ID Verification Early detection of eligibility issues Schedule eligibility hearings (two-thirds of all initial claims require adjudications) ACH / Debit Card, two business day delay Alternate base period wage requests and wage audits are manual

9. Through IVR, some questions are answered by claimant, followed by claimant-to-representative question and answer Reduced CSR / Claim Intake reps (Oct 2015 layoff) Intake remains a manual process Integrity info provided at intake (RTW, Efforts, ETC) <1% of all initial claims through the internet process

10. ICON, UCFE, UCX, IB/CWC, processing through auto and manual initiatives Pension recipients, manual letter process Child Support Intercept, semi automated, but manual entry in UI program Shared Work is a manual program but administered with excellence Reviews each ‘higher’ authority eligibility decisions for appropriate action Monitor returned mail for legitimate claim Monetary determinations for special programs

11. One (Electronic) hearing schedule utilized for all hearings but schedule fills up quick; usually fifteen days wait for hearing Adjudicate by telephone (~96%), mail (~3%), and in-person (~1%) Claimant / Employer statements taken, read back and certified process Finding of facts are manual, reference statute, regulations and precedent case law Data entry page created, then manual input to different document system, or mainframe Manual entry of decision, stop removal, release of held weekly claims, post message

12. Detect eligibility issues through employer protests Unit makes all (manual) decisions pertaining to chargeability protests Processes employer appeals by obtaining adjudication decision, attaching the employer appeal, and forwarding to the ‘higher authority’ Monthly bills to non-contributing employers Liability review with protest options Quarterly charges to contributing employers Liability review with protest options Engages TPA involvement

13. Prevent Overpayments SSA verification through batch process NDNH (SDNH) letter to claimant about new hire and educate on fraudulent activities Monetary inserts (top ten) Publicize UI fraud arrests Partnership with Chief State Attorney for fraud arrest and prosecution initiative Integrity Software

14. Detect Overpayments Return-to-work crossmatch Prison Crossmatch Quarterly wage crossmatch Representative detected, manual audit generated Any duplicate crossmatch select will be omitted to prevent duplicate request (of wages) from employer Surveillance (vendor)

15. National Directory of New Hire: Employer reports new hire Claimant certifies weekly claim beyond such new hire date Auto wage audit to employer Auto (RTW) letter to claimant New hire info noted in UI mainframe for staff review

16. Recover Overpayments Cash in-person / check by mail Credit card / ACH (auto schedule or one time) Offset of current UI payments Treasury Offset Program State Income Tax Intercept program (DRS) Garnishment program Prosecution Program Manual offline check process to refund claimants when recover exceeded debt

17. Garnishment Program: direct to court (online filing with BPC juris number, and credit card payment): served by State Marshal to employer; employer provides garnished wages to Marshal, Marshal to CTDOL. State (DRS) and Federal (IRS) Income Tax Intercepts: robust weekly collections for outstanding UI overpayment debt; DRS will recover both fraud and non-fraud overpayments (includes penalty and interest).

18. Assistance Center: DUA claims, 1099 tax documents, wage and UI documentation, subpoena, and other BAM: ‘putty’ tool, case review to determine strengths and weaknesses, ‘peer’ reviews UI-Tech: TRA (manual), federal extension processing, debit card resolution, technical areas / other UI-Test: IT projects (business requirements, test script writing, user accepted testing, deployment, post deployment) Assist with UI Modernization effort

19. Benefit Rights Interview / Booklet Weekly certification question ‘Top 10’ monetary insert REA / RESEA Profiling

20. Welcome to Workforce 3 One U.S. Department of Labor Employment and Training Administration Contact Information Unemployment Insurance - Benefits Daryle Dudzinski Director of Labor Operations Tel: (860) 263-6571 Email: daryle.dudzinski@ct.gov

21. 21# Maria Mejias Director, Statistical Sampling Jaye Turney UI and RID Policy Texas Workforce Commission

22. As interpreted by DOL, the “when due” requirement requires balancing promptness and accuracy by holding payment no longer than the end of the week after the week in which the issue arose AND ensuring accurate payments. DOL’s non-monetary determination regulations requires states adhere to timeliness and accuracy standards. The presumption of continued eligibility requires states to make payment if unable to make a timely determination. Although states issue eligibility determinations using DOL’s guidelines for quality and timeliness, the BAM requirements, also established by DOL, may characterize them as improper. Decisions overturned on appeal, attributable to meeting the ‘when due’ standard cost the Texas Trust Fund $17,046,868.00 per year.

23. Texas law allows an employer 14 days to respond to a Notice of Claim Application, leaving little time to complete the investigation. DOL guidelines require written contact requests to give 7 days or phone requests to give 48 hours. Separation errors make up 2.4% of the Operational Rate. Removing errors attributed to employer error would reduce the Operational Rate to 4.1%. DOL standards require states to issue non-monetary determinations within 21 days and within 14 days of the first payable week.

24. Day 1: Initial claim taken Issue Detection Date Day 2: Employer Notice mailed giving 14 days to respond. Day 16: Employer Response received on last timely date. Day 17: Contact employer for additional information 48 hour deadline Day 21: Determination issued Day 18: Employer responds. Contact claimant for rebuttal. 48 hour deadline Day 20: Claimant responds. Staff has 4 days from the date the response is received to issue a determination. Timeline above assumes the employer and claimant immediately respond to contact request. Day 1: Continued claim filed, reporting a new job separation Issue Detection Date Day 2: Claimant contacts Tele- Center to give details of job separation. Day 3: Employer Notice mailed giving 14 days to respond Day 4: Contact employer for additional information. Employer does not want to give information before 14 day deadline Day 21: Determination issued. All disqualifying decisions result in overpayment Day 18: Employer Response received on last timely date. Contact claimant and employer for information and rebuttal. 48 hour deadline Day 20: Claimant and employer respond. Day 7-10: Payment released pending completion of the job separation case. Payment is released prior to a determination if staff are unable to get the necessary information within 7-10 days. Timeline above assumes the employer and claimant immediately respond to contact request.

25. TWC is not able to prevent Work Search errors because the claimant is responsible for providing accurate information when filing. TWC takes steps to minimize the number of errors by: Notifying claimants of the minimum number of work search activities required each week, along with guidelines for acceptable activities. Requiring the claimant to provide the number of completed activities when filing a continued claim and reminding the claimant of the minimum number required. TWC Workforce Boards set a minimum number of weekly activities based on economic conditions in the area, ranging from 1 to 10 per week. Texas’ work search requirements are flexible and designed to optimize a claimant’s return to work. They were never intended to artificially inflate the state’s OP rate. As part of the weekly audit of 1,500 work search logs, TWC sends two notices to request a work search log and contacts the claimant to clarify answers before ruling any ineligible determination. In UI, failure to provide a log when requested is treated as a reporting issue because there is no evidence of whether the claimant did or did not conduct a proper work search. The week in question is held ineligible, and an overpayment created, using a reporting determination.

26. TWC uses New Hire information for our Return to Work process. The New Hire data does not prevent improper payments because the information is provided after the fact due to the lag in getting information from the employer. If a claimant requests payment for a benefit week after a recorded New Hire return-to-work date, and does not report earnings, TWC instructs the claimant to contact us to provide further information. Due to the delay in receiving new hire information, the claimant may have already been incorrectly paid.

27. Any predictive analysis used does not impact the overpayment rate because it takes place after the fact. TWC uses an automatically weighted, predictive analysis process, featuring selectable evaluation criteria. Each criterion is given a weight; the weights are totaled and that amount is compared against a pre-determined threshold. This case-weighting feature allows TWC to use selected claim elements as predictors of potential fraud. Criteria includes prior fraud determination, prior earnings correction, previously reported earnings, previous crossmatch hit, and dollar amount. Hits below the threshold go down a “non-fraud path” where an earnings correction notice is mailed to the claimant. Hits above the threshold follow a “fraud path” where a case is created for staff to investigate whether fraud occurred.

28. New Hire – Information provided is helpful for detecting overpayments but is not conducive to preventing all overpayments. DOL requires a presumption of eligibility. Customers continue to be paid benefits before the new hire is reported by the employer. BAM characterizes this as improper, although states are following DOL guidelines. Quarterly Wage Reports provide wage information well after the claimant returns to work. States are unable to use the wage information as reported by the employer because DOL does not allow prorating. Incarceration vendor provides county and city jail information. Federal prisoner data is not included (PUPS).

29. When discussing meeting ‘When Due’ requirements, we must also consider the impact of the BAM program, which drives the states’ improper payment rates. BAM has significantly more time to complete the BAM review. They are not held to the “when due” guidelines or non-monetary determination and first payment time lapse standards. BAM has additional requirements for contacting claimants and employers, such as directly contacting an employer who uses a Third Party Agent or using multiple methods to contact the claimant. BAM confirms the claimant listed the minimum required work search activities and verifies each activity. However, UI confirms the claimant listed the minimum required, but only verifies one of those activities. If the claimant fails to submit work search information when responding to the BAM audit questionnaire, the result is an improper payment. However, UI considers a failure to provide a work search log as a reporting issue and would issue a reporting ineligibility for the week in question.

30. The Improper Payment Rate, as determined by the Benefits Accuracy Measurement (BAM) audits, is not an “error rate” and should not be characterized as such. Overpayments and underpayments are discovered after the fact, typically with information not available at the time of payment decisions. This is a structural disconnect given the long-standing requirement to issue payment ‘when due.’ States with stringent or complex provisions tend to have higher improper payment rates than those with simpler, more straightforward provisions. As such, states that have more stringent requirements for claimant reemployment are penalized.

32. Neil Gorrell Employment System Policy and UI Director Washington State Employment Security 32#

33. Operational issues echoed in other states (i.e. Connecticut) Legal decisions constrain our ability to make certain changes that would effectively reduce improper payments Technology programmed to automate speedy payment, with few opportunities to intervene Appeals process can extend the time before we can initiate collection on improper payments

34. Court found that the “when due” requirement was violated where the state suspended payment of benefits pending employer appeals form eligibility determinations favoring the claimant. “…‘When due’ was intended to mean at the earliest stage of unemployment that such payments were administratively feasible after giving both the worker and the employer an opportunity to be heard.” UIPL 1126 (June 14, 1971) directed states to change laws and procedures to satisfy decision: Pay benefits promptly, regardless of pending appeals Provide reasonable notice for fact-finding hearings

35. 1982 court decree found that once a claimant has been paid or received waiting period credit, they have a constitutional property right to payment even when we question their eligibility. Court prohibited ESD from holding (pending) payments to claimants when we questioned their eligibility, without first providing “adequate notice” and “an opportunity to be heard”.

36. Technology must be programmed to pay timely; older systems not as nimble as modernized systems: Questions in claim re earnings – the words we use, the way the screens direct answers drive inaccurate reports from claimants Claims with errors being held in system will still process and pay at end of week, creating overpayments down the line Inadequate error checking in current system (claimant reports 30 hours worked, $10 earned) Conditional payments are ~20% of all improper payments in Washington

37. Whether or not in good faith, errors in reporting earnings take time to resolve Claimant files for prior week, in which they had earnings; may not report earnings correctly Wage audits by investigations unit begin after that quarter’s wages are reported (up to 4 months later); Issues set on claim several weeks in arrears; may influence course of claim in intervening weeks.

38. Strong work search law, with quirks: No ability for ESD to require claimant to produce evidence of meeting the work search requirement in first five weeks of claim Three contacts per week minimum, little grace afforded for mistakes or invalid contacts A one-week review that identifies problems can become an “all weeks” review – strongly drives overpayments for these claimants These overpayments can be very large in recessionary times when programs like EUC are in effect

39. Several levels of review and appeal: Redetermination of decision within ESD Administrative Appeal to the Office of Administrative Hearings (OAH) Petition for Review to the Commissioner’s Review Office (CRO) Judicial review by Superior Court, possible reconsideration By the time we receive a decision from OAH, claim has progressed at least 6-8 weeks beyond the week in question; may affect overpayment for intervening weeks. #

40. Neil Gorrell Employment System Policy & UI Director Washington Employment Security Department (360) 902-9303 ngorrell@esd.wa.gov

41. Jason Dean UI Division Director Roy Padilla UI Deputy Director New Mexico Department of Workforce Solutions 41#

42. Operations Center with Tax, Claims and BPC staff Operation’s Work Strategy Mondays is heavy call volume and all CSA’s take calls As early as Tuesday, CSA IVR is skill-based call routing system English and Spanish Tax and Claims Specialist Unit: Responsible for unique business processes IPC, FPC, TRA Coordinator, DUA Coordinator, CWC Adj, IB6 Billing, Appeal Remands, Workers Comp Claims

43. Business Analyst Unit Liaison between Program staff and IT Submit System Change Requests User Acceptance Testing Maintain System documentation and Standard Operating Procedures Call Flow and Work Flow Coordinators In-House UI Trainer CSA-Basic Training Adjudication Training Toolbox Talks Tax Training Custom Training

45. Currently taking about 1,200 claims per week ~59% filed online and 41% filed through Call Center If filing online, claimants must register in reemployment system before UIA link is available SSA/Alien Validation performed real-time Issues are detected real-time and claimants must complete all fact finding Separation issues are detected for all base period and last employers

47. Currently about 14,000 CC are filed per week ~89% filed online and ~11% filed through Call Center 2 Work Search contact details are required Union, approved training and 4 week LOI claimants exempt Detect WS issue Risk Assessment Rating (RAR) Calculated Treatment Streams: Control Pop-up Messages Pop-up Messages and other Other Reemployment Plan

48. Workflow Coordinator to monitor and assign work Work items are assigned by skillsets and Adj. profile Most workflow is Push and can pull too Some auto adjudication (non-IP lack of work) 2015-4 USDOL Core Measures: First Payment: 92.8% 21-Day Timeliness: 93.8% BTQ Separation: 90% BTQ Non-separation: 96.7% Random Work Search Audits-40

49. Cross Match Investigations New Hire (NDNH and SDNH) Wage Cross Match NM Department of Corrections Tip and Lead Prioritize cross match by Improper Payment rating Manage Fraud Scheme Team: IBM Analyst Notebook Identity Theft Fictitious Employer Lock Claims

50. Managed by BPC Supervisor Process All UI Payments (Tax and Benefits) Collection Methods: TOPS (Benefits only and Tax by the EOY) State Tax Intercepts Garnishments Offsets IRORA 8606 Liens for Employers and Claimants Refunds

51. BAM Audits Paid (480) 76% Denied (450) 83.5% Data Validation MOD 3 Tax Benefits BTQ USDOL (60 Quarterly) Internally (1 per adjudicator weekly) SQSP: USDOL and Internal Stakeholders

52. Implemented an integrated UI system January 2013 99% of UI benefit payments are electronic Data Analytics Predictive Model and experimenting with Social Economics: Nudges Prioritization of Cross Match workflow Work Search Audits POC with Appriss in next few months UI Integrity Center of Excellence funding award RESEA in all Workforce Field Offices Capturing IP addresses and Session ID Blocking Foreign IP Addresses In-house OIG Agent

53. Josh Richardson Chief Operating Officer Kate Shelby UI Director Indiana Department of Workforce Development 53#

54. Improper Payment Rate: 9.64% Benefit Year Earnings Separation Issues Miscellaneous: Able and Available Other Eligibility Other Deductible Income

55. Quality: Separation Quality: 79.31% Non-Separation Quality: 75% Overpayment Detection Tools National and State Directories of New Hire Jobs for Hoosiers Program Fraud Detection Tools

56. Benefit determinations often involve three parties We cannot force employers to respond timely or at all “When due” means we have a time limit on initial determinations We cannot wait forever for employers to respond We must make a decision on the best available information “When due” means we have a very restricted time limit on continued claims determinations Decisions must be issued within 7 days We cannot stop benefits while investigating issues on continued claims Data and information lag times Data for important crossmatches is not provided in real time

57. Employer’s failure to respond to a request for information “When due”: we cannot hold benefits forever while waiting for a response Data lag

58. 58#

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