Why did Florida take three months to pay overdue unemployment claims?


Herald/Times Tallahassee Bureau

It took Florida officials more than three months to decide to pay overdue jobless benefits to about 10,000 unemployed workers, many of whom went without checks since October because of a defective online registration system.

When faced with a similar challenge, California officials started cutting checks after just three weeks.

Two states, two glitchy websites, two vastly different timetables on when to pay overdue benefits.

“This just emphasizes the corporate mind-set here under Gov. Rick Scott: Let’s make sure poor people don’t get the extra $5,” said Florida Senate Minority Leader Chris Smith, D-Fort Lauderdale. “California decided that it wanted to take care of its residents. Florida had them wait through Christmas, the New Year, most of January.”

Both states have recently launched websites that process unemployment claims. Both sites were designed by Deloitte Consulting and struggled with error messages, long wait times, and disconnected sessions.

But while California announced in September it would pay claims first and verify them later, Florida waited until Saturday — more than three months since the CONNECT website launched — to reach a similar conclusion.

From how Florida officials tell it, their decision was possible only after getting clearance by federal officials who have ultimate authority in how the money is spent.

“The U.S. Department of Labor today granted (Florida’s) Department of Economic Opportunity the authority to move forward” with the payments, said the DEO’s executive director, Jesse Panuccio, in a statement on Saturday, adding that claimants would be responsible in reimbursing the state for overpayments.

DEO spokeswoman Jessica Sims didn’t respond to questions asking for clarification, so it’s unclear why Florida relied on federal authority to make the payments.

California officials did not. And the U.S. Department of Labor instructs states that in situations where payments can’t be made in a timely manner, as the federal Social Security Act requires, they make payments based on “a presumption of continuing eligibility.”

Instead of cutting checks to unemployed Floridians, Florida officials paid $500,000 in overtime to state workers to try to process claims.

The state later announced it was hiring an additional 250 people to review and verify claims, while hiring a total of 80 people to help staff phone centers, at a cost of $165,000 per week.

The result: Florida officials spent hundreds of thousands of dollars on staff to prevent the state from paying unemployment benefits to people who might be ineligible.

“That sent up flags for us that Florida saw that as its first remedy,” said George Wentworth, senior staff attorney at the National Employment Law Project, a non-profit that advocates for the unemployed. “If you were spending money like that to process tens of thousands of backlogged claims, it would still take weeks and months.

“Meanwhile, the savings aren’t clear,” Wentworth said.

This reluctance to “presume eligibility” underscores Florida’s sensitivity to those who pay for jobless benefits: Florida businesses. While the federal government subsidizes Florida’s unemployment system, including salaries and the $63 million CONNECT website that administers claims, Florida pays benefits from a trust fund that’s financed by taxes on employers. Rates levied on companies vary between a minimum of $47.20 per employee to $432 per employee. In 2009, the unemployment crisis drained the trust fund, requiring Florida to borrow from the federal government, which could have triggered higher tax rates on businesses.

But thanks in part to a 2011 law pushed by the Florida Chamber of Commerce and supported by Scott, the demand on the trust fund was lessened by making it harder for the unemployed to gain access to benefits.

The new law requires recipients to take a 45-minute skills test and file proof every week that they’ve sought work from five employers, the highest number required in the nation. The law also cut the number of weeks people are eligible for unemployment assistance based on the state’s unemployment rate and makes it easier for the state to deny benefits for “misconduct.”

Currently, Florida offers 16 weeks of benefits because the state’s unemployment rate sits at 6.4 percent. If the unemployment rate drops, benefits drop, too.

In the months after the 2011 law went into effect, the rate of those unemployed receiving benefits fell to 15 percent, one of the lowest in the nation. After CONNECT launched, it dipped to 13.4 percent.

Michael Van Sickler can be reached at mvansickler@tampabay.com.

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