States Modernize Outdated Unemployment Technology Post-Pandemic

With unemployment claims returning to pre-pandemic levels, states across the country are seizing the opportunity to modernize outdated technology infrastructure that proved inadequate during the unprecedented strain of massive unemployment rolls and fraudulent claims over the past two years.

According to Government Technology, New Jersey, Kansas and California are undertaking ambitious technology upgrades to unemployment systems that date back to the 1970s in order to improve efficiency, cybersecurity and customer service.

“Despite our unemployment rate returning to historically low levels, Kansas is still using antiquated equipment to work through pandemic-related claims, claims maintenance adjustments, overpayments, and fraud identification and migration,” said Kansas Governor Laura Kelly in a letter to the U.S. Department of Labor seeking $4.5 million in federal funding for a $48 million modernization initiative.

Kansas has contracted with Tata Consultancy Services to update its mainframe system to include more self-service options, data access and automation. “Fraud prevention and cybersecurity will also play big roles in the planned updates,” the report read.

Meanwhile, California was hit with billions in fraudulent claims by people taking advantage of relaxed eligibility rules during the pandemic. “It happened in a lot of states, in fact, though the scale was uniquely large given California’s population of nearly 40 million residents,” according to the report.

Rita Gass, CIO of the California Employment Development Department (EDD), told Government Technology her agency has undertaken some 200 IT projects over the past 18 months, including creating an entire cybersecurity division “to not only increase digital protections but do so in a way that consolidates and unifies cybersecurity functions across multiple areas of EDD.”

The EDD is currently working on a $100 million project called EDDNext to modernize its dated systems. “Existing systems are stable and able to continue to process claims and provide service,” Gass said. “However, the customer-centered, advanced fraud mitigation and security enhancements EDD wants to achieve will require a modern platform.”

New Jersey has already upgraded its unemployment system with a mobile-friendly application that reduced the average time to complete an application by 47 minutes. But the state acknowledged more work needs to be done.

“NJDOL will continue to call for federal action to reform the underlying unemployment laws and regulations that bog down so many New Jersey workers when assistance is most needed,” the department said, according to the report. “Additionally, NJDOL will continue its work developing groundbreaking digital workforce development tools to better serve New Jersey employers, workers and job seekers.”

The upgrades underscore the need for technological improvements across all areas of government. “Indeed, technology upgrades are a dire need across our government, and must be undertaken in a broad and holistic fashion,” said New Jersey state Senator Andrew Zwicker last year, as quoted in Government Technology.

While the pressure of the pandemic may have passed, states are still grappling with the aftermath of increased claims and fraud. By prioritizing modernization projects, they hope to be better prepared for any future crises.