Correction to This Article
ยท A Feb. 5 Page One article about delays in unemployment benefits incorrectly reported how long Maryland has to pay benefits to remain in compliance with federal guidelines. Maryland's measure of timeliness is based on the percentage of first payments made within 21 days, not 14 days. For the final quarter of 2008, Maryland made 92 percent of first payments within the required 21 days.
Deluge Is Holding Up Benefits to Unemployed
Decline in Funding Forces Staff Cuts as Claims Swell

By Chris L. Jenkins
Washington Post Staff Writer
Thursday, February 5, 2009

Thousands of people in the Washington area and hundreds of thousands more across the country are waiting longer than they should for unemployment benefits at a time when they need the money the most because rising joblessness is overwhelming claims offices, records show.

The problem is compounded by a simultaneous decrease in federal funding, which has reduced staffing at some local government offices. The result is that the District and many states, including Maryland and Virginia, are failing to meet federal guidelines that require timely processing of unemployment claims, appeals and benefit payments, the records show.

It's likely to get worse. Figures released yesterday by the U.S. Bureau of Labor Statistics show that Washington area unemployment has hit its highest level since August 1993. The jobless rate climbed to 4.7 percent in December from 3 percent a year earlier and 4.4 percent in November. That's well below the national average of 7.2 percent but still a burden for claims offices.

Carrie Kenworthy of Manassas has experienced the problem. She was laid off from her $80,000-a-year job as a mortgage loan officer in 2007. Then she tried to file for an extension in unemployment benefits in July. The Virginia Employment Commission denied her claim three times. Her appeals took more than two months because of a state backlog in cases.

Her benefit extension was approved last week, but not before she had been evicted from her three-bedroom Gainesville townhouse and sold most of her possessions. Yesterday, she was notified that she is being evicted from her new apartment in Manassas.

"You talk about a nightmare," Kenworthy, 45, said as she flipped through the sheaf of documents she used to prove her eligibility for benefits. "We're not on welfare. We're not looking for handouts. We worked for this, and we have to go through all this hardship just to pay our rent."

Officials in all three jurisdictions acknowledge the problems and say they are doing the best they can. But the tightening economy and budget cuts are affecting them as well.

"In short, we just don't have the staff," said Coleman Walsh, chief administrative law judge for the Virginia Employment Commission.

The problems are nationwide. Web sites and phone systems in some states are buckling under the strain. Electronic claim filing systems in New York, North Carolina and Ohio crashed recently because of the heavy volume and technical problems.

The problems have become so severe that legal aid offices in Northern Virginia, for example, report that complaints from people seeking unemployment benefits from the state have tripled since early last year.

"They keep coming," said R. Peyton Whiteley, a lawyer for Legal Services of Northern Virginia, referring to phone calls from distressed, recently laid-off workers. "People can't get to speak to someone, people getting bounced off phone lines, people don't get their money on time, people don't get their money at all. . . . It goes on and on."

Federal guidelines mandate that Virginia offer appeals hearings to 80 percent of denied applicants or employers within 30 days. In December, according to the U.S. Department of Labor, the state processed 4.3 percent of the possible 1,319 cases. In Maryland, where federal guidelines require 60 percent compliance in 30 days, the state processed 10 percent. The District, also with a 60 percent requirement, handled 24 percent.

Guidelines also dictate that states pay 87 percent of beneficiaries within 14 days of approving a claim. In December, Maryland paid 77 percent of claims in that time; Virginia and the District each paid 74 percent of their claims on time.

"We know what this means for people. They are out here waiting for their money," said Joseph P. Walsh, acting director of the District's Employment Services Department. "But when you have the kind of unprecedented increases in unemployment insurance claims, your compliance numbers will turn on a dime."

Unemployment insurance programs are funded by taxes paid by employers. Some of the tax revenue goes to the federal government, which, through a funding formula, reallocates it to states to pay for the administration of their programs.

The problems are most acute in Virginia, which has the lowest unemployment in the region. The federal government has gradually been cutting the amount of money it sends to the state because it has had relatively low unemployment and provides fewer benefits to unemployed workers. The decreased funding last year forced the state employment commission to lay off 157 of its 1,109 employees and close five of its 37 workforce development offices, including one in Fairfax County. At the same time, unemployment insurance claims statewide increased nearly 84 percent from December 2007 to December 2008. Claims were up 136 percent in Northern Virginia.

In Maryland the number of new claims increased 31 percent from December 2007 to 2008. In the District, new claims increased 32 percent over that time.

Virginia officials said they have been trying to compensate for the staffing shortage by encouraging more people to apply online for benefits and developing an automated phone system to help customers with their claims. But the phone system has been overwhelmed, too, and advocates said workers shouldn't be required to have access to a computer to get their benefits.

"The access issue really starts from the beginning," said Carolyn Kalantari, a staff lawyer with the Legal Aid Justice Center, a public interest law firm in Charlottesville that has been compiling complaints. "If you don't know how to use the Internet, you're in big trouble."

All of this translates into months of frustration and headaches for those already dealing with the trauma of job loss. In Kenworthy's case, she was initially found eligible for $347 a week after she was laid off from a Fairfax mortgage company 18 months ago. She worked several sales jobs after her benefits expired, but work never picked up in the real estate market. By July she realized she was eligible for a benefit extension that could help her weather the worsening economy.

But her application was denied. She appealed, and the state awarded her $71 a week in benefits in November. But she knew the amount was wrong, so she appealed again. It took more than two months to get an appeals hearing and finally, on Jan. 29, she received a letter notifying her that her initial claim for $347 a week had been approved -- retroactive to July. Her total amount in delayed unemployment wages: $6,940.

She is happy about the money but bitter about the process and its impact on her life. "You can't quantify the humiliation of eviction, begging bureaucrats and bad credit . . . for something that was preventable," she said.

Virginia officials said the problems have started to gain attention in Washington. Joyce Fogg, a spokeswoman for the state employment commission, said the state has received funding for an additional 140 positions to help ease the backlog. Unfortunately, many new employees won't be hired and trained until April.

That will be too late for Kenworthy. In an e-mail yesterday, she wrote: "Sheriff was just here I have until 8 a.m. Monday morning . . . homeless."

Staff writer Terri Rupar contributed to this report.

View all comments that have been posted about this article.

© 2009 The Washington Post Company