The Oregon Employment Department says the new, $106 million computer system that goes online Monday is more nimble and customer friendly than the obsolete system it has used since the 1990s. That rigid technology hobbled the agency during the pandemic recession, delaying jobless benefits by weeks or months at the height of that crisis.
The employment department is shutting down most services this week to prepare for the upgrade. When the new computers go online at 8 a.m., Monday, the employment department promises a more responsive, secure system with better tools for communicating with the agency.
But the new computers arrive at a moment when the employment department’s performance has again deteriorated, amid a surge in fraudulent claims and after a steep drop-off in federal support as pandemic-era funds dried up. The agency says the number of staffers working jobless claims has fallen by about two-thirds as a result.
The employment department’s new computers end a 15-year technological ordeal but both the agency and its critics agree the new systems aren’t enough to overcome all the department’s challenges.
Lawmakers and claimants expect far more from the department today than just putting benefits checks in the mail, according to David Gerstenfeld, the agency’s director.
They want prompt service in many languages, he said, for a range of benefits programs. And the department must continually guard against cyberthieves, armed with their own technological upgrades.
“We’re underfunded for old ideas of what customer service looks like,” Gerstenfeld said.
Ancient History
By this point, Oregonians know the painful story of the employment department’s computers: The state received $86 million in federal funds to modernize its computer systems in 2009.
But under three successive governors, the employment department endured years of mismanagement and infighting that prevented it from actually undertaking the computer upgrade.
That left Oregon especially vulnerable when pandemic-era layoffs unleashed a flood of jobless claims – 89,000 in a single week, and more than 600,000 claims in the first five months after COVID-19 hit the state. Oregon’s archaic computers were unable to adapt when Congress enacted new programs to broaden eligibility for aid.
The result was tens of thousands of people going without aid for weeks or months as the old computers mailed out form letters with outdated information, directing people to call disconnected phone lines for help.
By some measures, Oregon was among the slowest in the nation to pay jobless benefits.
The new technology is designed to prevent future debacles.
The employment department says the new system, called Frances Online, will address some of the agency’s biggest issues because it’s far easier to program and customize than the old, COBOL-based platform it replaces.
“Frances Online is more agile, it’s more efficient, it’s more secure. And we do anticipate that the system will work well for most claimants,” said Lindsi Leahy, director of the department’s unemployment insurance division.
Built by a Colorado company called Fast Enterprises, the new computer system should enable the employment department to quickly adapt to changes in federal benefits programs. The agency plans to implement online communication tools designed to make it less frustrating to track the status of a claim or to find someone to answer questions.
The department hopes that if people have fewer problems filing claims, and can find answers to their questions without having to call for help, that will free up staff to work the most difficult issues more quickly.
The agency expects to be able to identify bottlenecks in claims processing and rapidly redesign its systems to make them easier to use.
“We’re not looking at this as modernization is done,” Gerstenfeld said. “We’re now into a mode of constantly evolving the system and making adjustments, using the data of hearing from customers what the pain points are and making adjustments.”
The new computer system uses the same Frances Online technology as Paid Leave Oregon, the family leave program Oregon that launched in September. Claimants have reported persistent issues with the new benefits, complaining of difficulties with identity verification and slow claims payments.
The employment department, which administers Paid Leave Oregon, says many of those issues aren’t the fault of the new computer system but reflect the complexities inherent in setting up an entirely new program of state benefits. The employment department says it has learned from Paid Leave Oregon’s rollout and expects a smoother deployment for the revamped unemployment insurance system.
Regression
It’s fortuitous that the new computers are coming online at a time of relatively low unemployment, though the coming weeks could bring a surge in claims.
Nike is beginning a major round of layoffs that could eliminate hundreds of Oregon jobs. And UPS is preparing to lay off more than 300 when it closes a sorting operation in Portland.
The employment department says the new system is built to handle large layoffs but that people should anticipate an initial slowdown in service as staff and claimants familiarize themselves with the new technology. It could take weeks for everyone to get up to speed.
Even after that, the employment department is tempering expectations.
The agency’s performance had improved dramatically beginning in 2021, as the jobless rate returned to historic lows and as the agency adopted new procedures in response to its pandemic failures. The employment department promptly paid the vast majority of legitimate claims through last summer, according to federal data.
But then performance began slipping again, despite the low jobless rate.
Laid-off workers were again spending hours on hold trying to reach the agency – or not getting through at all. And delays in benefit payments have been getting more common.
Meanwhile, the employment department continues to face a slow-moving lawsuit that accuses it of depriving claimants of due process when the agency seeks to claw back overpaid pandemic benefits. The suit has been mired in Oregon’s courts since 2022 but a ruling could come any day.
The employment department blames its deteriorating performance metrics on two factors: Elevated levels of fraudulent claims and the falloff in federal operating funds at the end of the pandemic.
“We don’t have enough money to have the number of staff that we need in order to administer the program and provide the customer service that we want to,” Leahy said.
The employment department is hoping to boost its own funding by diverting $45 million from the state fund that pays jobless benefits, money the agency wants to use to hire more staff to administer its programs.
Oregon has a record sum in its unemployment insurance trust fund, nearly $6 billion, and legislators appear poised to support the additional funding. A bill to allocate the money sailed through the state House last week with only one vote of opposition. House Bill 4035 now awaits a hearing in the Senate.
The employment department is getting far less attention from Oregon lawmakers than it did during the pandemic, despite the agency’s recent slide in performance. That may be because comparatively few people are out of work and collecting benefits. Oregon is fielding just 2,700 new claims for assistance each week.
But Rep. Lucetta Elmer, R- McMinnville, said she doesn’t believe the employment department has put its problems behind it.
Citing the pandemic-era overpayments and troubles with Paid Leave Oregon, Elmer called on the governor’s office to do more to ensure the employment department acts efficiently. And Elmer said the Legislature must hold the agency accountable.
“While I certainly hope the implementation of the new computer system helps the Oregon Employment Department’s response time to Oregonians, I do not believe a technology upgrade addresses the root problem - a lack of management and oversight,” Elmer wrote in an email.
The employment department says the computers are an important milestone toward meeting federal performance benchmarks, but only that.
Over the coming months, Gerstenfeld said the agency will evaluate how much its performance improves with the new computers and new state funding. He said the department will evaluate whether even more money diverted from the trust fund would help it hit those performance benchmarks.
Quality service, Gerstenfeld said, “is what we think the public wants.”
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