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Why the VEC still uses a system from the 1980s

Posted at 1:23 PM, May 18, 2021
and last updated 2021-05-19 12:26:17-04

RICHMOND, Va. -- When Seon Kennedy was let go from his management job at a Henrico rehab center in January, he never expected to still be waiting to receive his unemployment benefits in May.

“Right now, I’m [owed] a little over $10,000 and that's my benefits and the extra $300,” Kennedy explained.

The Virginia Employment Commission (VEC) told the Richmond father of three that a scammer attempted to claim unemployment benefits in Tennessee and Texas using his social security number.

“I’ve never lived anywhere else in the United States other than Virginia,” Kennedy said. “I didn't ask for my identity to be stolen. Criminals did it and I just feel I’m being punished for somebody else's decisions.”

While the VEC conducts a fraud investigation, Kennedy has been forced to wait.

“I’ve called and pleaded to them, look, I’m in jeopardy of losing everything. Can somebody help me?” he asked.

He is not alone.

Numerous CBS 6 viewers told the CBS 6 Problem Solvers that they've emailed and called the VEC daily while struggling to get their benefits.

The CBS 6 Problem Solvers uncovered documents proving VEC leadership knew about flaws within their systems for years.

VEC Overpayments

In November 2010, Virginia’s Auditor of Public Accounts issued a review of unemployment benefit overpayments within the VEC.

“We received a legislative request in February 2010 to analyze overpayment activity at the Virginia Employment Commission to determine the amount of overpayments attributable to administrative errors. We were also asked to determine what issues contribute to the administrative errors such as software, lack of training, or improper supervision,” the report stated.

The state report revealed VEC’s primary systems were more than 25 years old and were limiting management’s abilities to obtain timely information and react to changes in the environment.

More than a decade later, not much has changed.

10-year Upgrade Project

The CBS 6 Problem Solvers also discovered the VEC has been working to upgrade its benefits system for the past decade.

It is called UI Mod or Unemployment Insurance Modernization Project.

The total budget for UI Mod is $58.5 million, with $49.1 million coming from the Reed Act funds and the remaining $9.4 million coming from the Employment Commission’s penalty and interest fund.

The Problem Solvers wanted to know why it has taken so long to implement this new system.

Dr. Megan Healy, the Chief Workforce Advisor for Virginia Governor Ralph Northam, oversees the VEC.

“We are in the process of having a modernization upgrade. That was actually going to be last June in 2020. We had to put that on hold in March,” Healy explained. “The last time we modernized our system was in the 80s, so we are a little behind, but we are working hard to get that system up and running by the end of the year.”

Healy argued, before the pandemic, Virginia’s unemployment rate was one of the lowest in the nation. VEC saw one-tenth of the cases in 2019 than it did in 2020.

“We had 10 years of claims in one year,” Healy stated.

Understaffed and Underfunded

She told the CBS 6 Problem Solvers that the VEC has been understaffed and underfunded for years since the agency was not seen as a priority.

Healy said staff fixed issues with “band aids” instead of rehabbing the modernization project.

An analyst from the financial website WalletHub recently told the Problem Solvers that while many states updated their outdated unemployment systems during the pandemic, Virginia has not.

They’re working to fix that.

“I was even talking to our deputy commissioner today. He's in the basement pulling cables so we can have more people and employees within our basement. So, it's all hands on deck. They are extremely busy working evenings, working nights. We’ve done tens of thousands of overtime pay, they are extremely busy,” Healy explained.

The VEC has since tripled its staff and working to add additional employees through contractors. Virginians who are eligible for unemployment receive the benefits within 21 days more than 84 percent of the time.

It’s the cases with issues that are taking the longest to resolve.

Confidence in Leadership

Dr. Healy was asked whether she still has confidence in VEC leadership and Commissioner Ellen Marie Hess.

"She’s been in state government for a while. Again, this is 10 years of claims in one year. She’s working hard, many nights, many weekends, as well as her team and bringing her team on board," she responded. "I do think she’s doing a fantastic job."

Sen. Tim Kaine (D-Virginia) admitted Congress gave states a huge undertaking during the height of the pandemic.

“When we passed the CARES Act, we basically, as Congress, mandated three significant changes to unemployment," Sen. Kaine said. "First, extra weeks of benefits. Second, an extra benefit amount. Third, and this has been the most complicated one, we funded and then gave states a directive to expand the universe of eligible employees way beyond those who traditionally have been eligible for unemployment."

For the first time, part-time workers, the self-employed, independent contractors, and gig workers were able eligible for unemployment.

“But now look, we are a year past passing the CARES Act, so VEC should be able to now do this, and we shouldn't still see the backlogs we are still experiencing,” Kaine stated. “These dollars for unemployed people are for people who are hurting and people who are hurting can’t afford to wait.”

Seon Kennedy Waits

Kennedy spoke to the CBS 6 Problem Solvers via Zoom in front of pictures of his children that hang on the walls of his Richmond home.

He said he can’t wait much longer.

“If it goes any longer, I don’t think we are going to be living here,” he said.

Watch for Problem Solvers Investigations Tuesdays on CBS 6 News at 11 p.m. Click here for more of our investigations or to submit a tip to the Problem Solvers.

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