Oklahoma's unemployment rate has more than doubled in the past few months as COVID-19 and weakness in the energy sector have combined to put increasing numbers of workers out of jobs. In just over two months, the Oklahoma Employment Security Commission has expedited the claims process and dramatically reduced the pending claim backlog. KGOU's Dick Pryor and eCapitol's Shawn Ashley talked to OESC interim executive director Shelley Zumwalt about the agency's big challenges and how the agency is changing to meet the demand.
Dick Pryor: This is Capitol Insider, your weekly look inside Oklahoma politics, policy and government. I'm Dick Pryor with eCapitol news director Shawn Ashley. Our guest today is Shelley Zumwalt, interim executive director of the Oklahoma Employment Security Commission. Thanks for joining us, Shelley.
Shelley Zumwalt: Thank for having me, Dick.
Dick Pryor: For people who may not know - what does the OESC do?
Shelley Zumwalt: Yeah, the OESC provides unemployment benefits to claimants that apply. We recently, with the CARES Act, acquired some new benefit programs, including pandemic unemployment assistance, FPUC and PEUC, which is an extension in addition to traditional UI unemployment benefits.
Shawn Ashley: You were named to the top leadership position at the agency in May when unemployment was skyrocketing because of the pandemic and because of declines in the energy sector in Oklahoma. You immediately had to address an avalanche of unemployment compensation claims that were needing to be processed. When you joined, how many claims were waiting to be processed?
Shelley Zumwalt: There was one hundred and twenty-nine thousand.
Shawn Ashley: And what were you able to do to get that backlog under control?
Shelley Zumwalt: There was a crisis situation and we had to execute. So, we quickly broke up that 129,000 claims into sections and did low-hanging fruit first and then continue to move down the line. And then on the back end, the PUA claims were on a new system, so making that system talk to the mainframe, we are seeing a lot of issues with that. And over the past two months, we've managed to work through those issues so that we can now take a look at the transformation of the agency off of that mainframe from 1978.
Shawn Ashley: A lot of individuals were concerned about their unemployment insurance benefits. Some of them lined up at your office. Then you went out into the field. How did you address those beneficiaries there?
Shelley Zumwalt: Great question. And we were serving claimants at the Will Rogers Building for a short amount of time as a necessary measure, because basically people were showing up, we're not going to turn them away. And that quickly became something where we needed to address it in a different way.
And that's how the claims events kind of came about. We did them first in Oklahoma City starting on July 1 and finished up last week in Ardmore. We had them going from 7 a.m. to 7 p.m., later than 7 p.m. some nights. And there were long days. But honestly, most of the people that showed up there were people that I don't know if they would have ever had success, you know, working their way through the unemployment system independently.
We saw people that had that needed interpreters to navigate the system. We saw a lot of people that their computer skills were not what they needed to be to be successful in the system. So, we would fix whatever issue was, you know, plaguing their claim and then sit with them and work through when they file those weeks, because every week you have to file a new claim. And I think that's the piece of the system that is the kicker here…is you know, it's almost like you start over again every week. And if you answer a question wrong that puts your claim in a pending status. And I think educating people and being with them face to face is really the key to helping them be successful in the system long-term.
Shawn Ashley: As you move forward do you think that's something you can address technologically or will there still be a need for this in-person interaction in certain cases?
Shelley Zumwalt: I think that tackling that problem is going to be actually key for the agency to move forward. And we are looking at the existing 5/39 Plan. That was the modernization plan that the legislature appropriated money to the agency for. They were about a year into that. And I've got…we're looking at that a lot to see how we can navigate that plan, but also shrink it to a fraction of the time so that we can make the system easier for people. I think, though, there will still be people that need that face-to-face interaction. But we also have 28 locations all over the state at American job centers that people can go to and get that face-to-face interaction. The claims events, the large things were because I knew we needed to knock out a good amount of people on the front end so we could free up that phone volume because we were seeing our phone lines get overwhelmed. So those 10,000 people we helped with, the claims events are no longer in that volume calling on the phone. So, I think it was, you know, really one of those “how can we do the most good in the quickest amount of time?”
Dick Pryor: About how many pending claims do you have per week now?
Shelley Zumwalt: This week we're at 11,000, but it's, you know, somewhere in the five to twelve thousand range usually. So that's down from a 129,000. And I think that's a good number. The goal isn't to be at zero. There should always be pending claims because employers are going to contest claims. People are going to put information in there that we've got to look at again. You know, if your wage information is higher than what the Tax Commission says you’re making, then we need to look at that and do some investigating. So, I think that that is a healthy number, considering the amount of claims we’re processing
Shawn Ashley: Unemployment benefits are paid out of the Unemployment Insurance Trust Fund. With the additional people unemployed and receiving benefits, what impact has that had on the trust funds?
Shelley Zumwalt: So, our trust fund…we were really lucky in that we were ranked, I believe, number five in solvency in the nation going into this. There are currently eleven states, three of which are in billion-dollar deficits. And I think there's eleven that have now gone into borrowed status because their trust funds have been depleted. We are not there. I think ours is a little bit unique. We do have one thing that's important, though, when we hit the twenty-five, if we go under twenty-five million in that fund, then there is a surcharge that is added to employers. And I know there are many people listening that they hear that and they cringe, but I want to say that we're working with the governor's office and Secretary David Ostrowe to make sure that CARES funding will be supplemented so we don't hit that surcharge.
Dick Pryor: OESC has also had to address fraudulent claims. Has that abated?
Shelley Zumwalt: This is an issue all over the nation. We had a couple of things that were going on that we've now solved that have virtually eliminated a certain type of fraud scheme, and that was funds getting taken off cards when they were in transit. Basically, a card would be mailed to a claimant. And as that card is getting to the claimant, a fraudulent actor would come in and take the funds off of the card and direct deposit it into a bank account that obviously only they know about. It's a heartbreaker and at the beginning of when I got here, I could tell when that story was going in that direction, when I was listening to claimants. And it just it's like an oncoming train.
You're like, “this is horrible… I know what's happening here,” because they would say, “well, I got my card and there's no money on it, you know,” and oh, my gosh. So, what we did is we now require a card in hand to initiate that direct deposit. So, you have to have that CVV code. Additionally, we identified two banks and one financial services organization where we saw the majority of those transfers going to and we cut off all transfers to those three places. And so, we virtually eliminated that one type of scheme. The other thing we have in the works that we start beta testing next week is digital I.D. verification. And I think this is the one that's gonna stop those fraudulent claims that come in from overseas and, you know, maybe just outside of the state, because it will require on a regular interval for people to have a picture selfie and their identification at the same time within a certain amount of time so that we can verify their identity when they are entering claim information.
Dick Pryor: What should people do if they receive a fraudulent claim?
Shelley Zumwalt: Great question. And we are working with the AG’s office on that. The AG's office has a whole section on fraud. And on that web page, you can find the form that you need to fill out that immediately once you fill that out it goes into a database, stops a claim. No funds will be paid out. And if you have received a card, cut it up. And then the other thing I would say to that is - this is Shelley citizen who has had her identity stolen - get credit monitoring or freeze your credit. Do it because that means someone has your information and that is not the last time they will use it.
It's a horrible situation. I hate hearing about it. The other thing I want to say is this is not a breach of OESC’s data system. This is a breach that probably happened two, three years ago when Experian had their data breach or any of the financial institution breaches that happened. So, please know it's not a breach of OESC’s system.
Shawn Ashley: Initial unemployment claims are dropping. It was down more than 30 percent a week ago. Do you see that trend continuing?
Shelley Zumwalt: You know, we saw unemployment go down to 6.6 percent in June. And that was that was great to see because it was down from 12.6 percent. I don't know if that is going to hold as much. I think we saw the job growth in June was more significant than May, but I don't know if that trend continued in July. We got the numbers nationally today and it was at 10.2, which is down a little bit, so that was encouraging. I think at this point we've seen the initial claims go down. We've seen continued claims go down. So that's telling me that people are either returning to the jobs that they had or finding new ones and that we're having less people that are newly unemployed. So, I think at this point, my hope is that we're staying steady and we can see growth in the coming months. But I don't know if July is going to see the same gains that we did in June.
Dick Pryor: The federal government's six-hundred dollars per week unemployment benefit enhancement under the CARES Act expired on July 31st. What help is available to people who were receiving those jobless benefits but who now are not?
Shelley Zumwalt: Yeah, Dick, that situation is really at the federal government level. That benefit was defined by them and the end date was defined by them, as well. Right now, that benefit is, you know, ended until they start a new one. I think just continuing to buy your unemployment claim or your PUA claim at this point, staying on top of that, is what I would recommend. But honestly, that benefit really is not under the state's control. So, we just wait along with everyone else to figure out what we need to implement.
Shawn Ashley: Recently, you implemented the state extended benefit program. What does that do?
Shelley Zumwalt: Yeah. Great question. Give you a little bit of historical data, because I know you guys love it. The last time that benefit was initiated was 1982, the oil crash back in the early 80s. It is now being replicated here and probably some different circumstances, but also we're seeing similar benefits triggered. This is basically a state benefit that's only available to traditional unemployment seekers. And this is after they have exhausted UI and exhausted that federal extension and then they are automatically put on SEB, which is the state extended benefits. And this is a benefit that is up to 13 weeks and there's basically a calculation that goes into place and the claimant is allowed the lowest of those three calculations. So, it's usually less than they were then they were receiving on traditional benefits. But it is an extension if we see these people who have had job issues for a longer amount of time.
Shawn Ashley: You mentioned earlier the expedition of the 5/38 (sic) project to improve your system there. When do you think you will be able to get that accomplished and what will it do for someone who needs to apply for unemployment insurance benefits?
Shelley Zumwalt: Of all the things we've done, probably secondary only to the claims event, I'm really excited about the transformation we're going to do with this project. And I say transformation because before it was a modernization and the goals and the benchmarks for what would be accomplished were pre-pandemic. And I honestly think, Shawn, had we not done the due diligence to look at this from a pandemic perspective the gains that would have been made if we didn't make changes would not fit the new reality we're gonna be in. That was a modernization plan. This is a transformation plan. What we will announce and we're looking to kick off here later this month and we will obviously get ahold of legislators because we know that they have a stake in making sure this works. But the net benefit will be this program will operate in a 2020 world, you know, knowing what the, you know, the volume that the agency has experienced. So, I think we're doing the responsible thing by looking at that from this perspective. And I'm really excited about it. I think it's going to be a great announcement.
Dick Pryor: What should workers do when they are recalled to work and what happens if they decide not to return, which might happen?
Shelley Zumwalt: Yeah, that great question. I get asked that one a lot. And if your job calls you and says we have your job for you, and you deny and you say “no, no, thank you,” then you do not qualify for benefits. That is a law that we follow and your employer will then report that you declined it and then you're not eligible for benefits. So, if you get recalled to work, please go. You know, I'm sure your job needs you. But you also should know that you don't qualify for benefits anymore. So, it'll be a different reality if you reject your job.
Shawn Ashley: In addition to overseeing the state's unemployment insurance benefits and services, the OESC works with other agencies and organizations to help match workers with jobs. OKjobmatch.com, I noticed, lists more than 20,000 available positions. If people have lost their jobs due to the pandemic or the crunch in the oil industry, there are opportunities out there.
Shelley Zumwalt: Absolutely. And, you know, there's in addition to those jobs, there's 20,000 jobs that are on OKjobmatch, there's also training opportunities, I think, especially with the oil and gas industry we're looking at what are the retraining opportunities that we can use utilizing the skills that some of these individuals have.
The job market obviously is going to be trouble for a little while. There are certain industries that will probably never come back to pre-pandemic levels. But I think that it's important to remember that the goal is to get you back to where you're gainfully employed. And that's our goal, as well. We work with Oklahoma Works to do this. We have Oklahoma Works individuals in those American job centers. So, when you're going to get help for your unemployment, there's also reemployment services there as well.
And so, I think on a couple of different levels, that's where, you know, we're helping to try to find reemployment services for people. Additionally, right now, we have waived the work search requirements in unemployment, but that won't go on forever. And so, I think getting in that habit of looking for employment, seeing what opportunities are out there, will probably benefit everyone.
Dick Pryor: It is definitely a hectic and nerve-wracking time. Shelley Zumwalt, interim executive director of the Oklahoma Employment Security Commission, thank you for visiting with us.
Shelley Zumwalt: Thank you for having me.
Dick Pryor: And that's Capitol Insider. You can hear more of this conversation at KGOU.org. If you have questions, e-mail us at email@example.com or contact us on Twitter @kgounews. You can also find us online at firstname.lastname@example.org and ecapitol.net. Until next time, with Shawn Ashley, I'm Dick Pryor.