Investigate the Virginia Employment Commission’s Leadership for Fraud, Waste and Abuse

Investigate the Virginia Employment Commission’s Leadership for Fraud, Waste and Abuse

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Abigail A started this petition to Office of the State Inspector General Hotline Office of the State Inspector General and

As certain sectors of the economy came grinding to a halt during the COVID19 pandemic, thousands of businesses across Virginia faced the tough decision of reducing staff or closing their doors entirely. As a result, hundreds of thousands of Virginians faced unemployment, the vast majority through no fault of their own. 

At the beginning of the pandemic, each state was faced with an unprecedented number of newly filed unemployment claims. Understandably, many state employment agencies struggled to process claims in a timely manner and deliver payments to qualified applicants. After the initial chaos, most states successfully redirected resources and updated policies aimed at getting benefits out to qualified applicants as quickly as possible. This was not the case in Virginia.

The Virginia Employment Commission (VEC) is responsible for providing benefits for unemployed Virginians who meet the state's strict eligibility requirements. The weekly benefits provided are only a small fraction of the salary that individuals had been receiving at their previous places of work. The average weekly benefit amount in Virginia is far below most other states in the country and the maximum amount a recipient can receive is barely above minimum wage. But for many, the money is absolutely critical for survival. Without it, many are unable to feed their family, pay for their children's doctor visits, or keep their electricity on. 

Before the pandemic, the Virginia Employment Commission was already one of the worst performing state employment agencies in the country. The agency was understaffed to meet pre-pandemic workloads and running on a 35 year old software system when Covid hit. Eight years prior, the state government funded a massive IT upgrade that was intended to be implemented immediately but that upgrade never happened. Instead, the antiquated, highly inefficient system relied heavily on paper, mailed communication, and manual data entry.

During the height of the pandemic, Virginia ranked 49th in the nation for resolving disputed unemployment claims, taking 163 days on average. Many of the issues in dispute were incorrectly ruled initially or the result of simple clerical errors by VEC staff or former employers. As a result, thousands of Virginians who qualified for benefits did not receive that money for 5 months or more.

Despite these issues, the management at the VEC failed to increase staff until over a year into the pandemic despite falling behind and failing to meet federally-imposed guidelines each state must meet for processing claims and determining eligibility. After facing external pressures from a class action lawsuit filed by the Southern Poverty Law Center and Legal Aid Justice Center, the VEC felt they had no other option but to pay benefits out to all applicants who had been waiting longer than 21 days for a decision on their claim. As a result of the VEC's inability to process claims on time from the outset, the agency doled out over $1 billion in incorrect payments.

Many of those payments were distributed to Virginians who believed they met eligibility requirements for receiving unemployment insurance. After all, they began to receive weekly payments after submitting an application and received no communication from the VEC that indicated they were not eligible. As a result, tens of thousands of ineligible recipients received weekly payments for months on end.

These ineligible recipients of payments from the VEC behaved in much the same way as qualified recipients, focusing on applying and interviewing for jobs that paid well and were a good fit. If ineligible recipients had known they were unqualified for benefits, most would have behaved differently during the time they received payments. Instead of focusing on applying to jobs that paid similar wages to their previous positions, they would have accepted the first job available to them, simply as a means of paying bills and putting food on the table. Because the VEC failed to provide a decision on claimants' eligibility for the program in a timely manner and instead sent money out to unqualified recipients, thousands of already struggling Virginians were instructed to pay back the money they received in error. Often, the amount owed exceeded $10,000 and was to be paid back with interest in 30 days time. 

As of December 2021, thousands of qualified Virginians have not received a single payment of unemployment insurance, despite many losing their jobs over 4 months ago. In fact, it is common for applicants to wait over a year to receive their first payment. While waiting for payments, qualified claimants often suffer devastating financial hardships as a result of the negligence from the management at the VEC.

Despite lengthy wait times, Most qualified unemployment claimants will eventually receive the payments that are owed to them. Unfortunately, for many, it will be too late. Thousands of formerly productive and successful workers now find themselves behind on bills, at risk of losing their home, facing bankruptcy, and even facing homelessness. It will take years for them to get back on track with bills or fix their credit and older claimants might even be forced into delaying retirement. Unlike the Virginians who were ordered to pay back payments made in error with interest, the VEC does not face similar repercussions for denying people their deserved benefits for months on end. No interest will be paid on benefits due to claimants for months and sometimes even years before they receive payment.

Plea to State Legislators and the OSIG

State legislators and the Office of the State Inspector General, it is time to act. The management of the VEC should be investigated and held responsible for the mental, physical and financial damages that thousands of Virginians have faced as a result of their malicious negligence. While VEC Commissioner Ellen Marie Hess raked in over $164,000 last year for running one of the least successful state agencies in the country, thousands of struggling Virginians did not receive a penny of what was owed to them. 

In addition to the obvious issues plaguing the VEC, the unprecedented level of fraud occurring at the VEC needs further investigation and oversight. Many in the media have theorized that the level of rampant fraud at the VEC could only occur as a result of an inside job. Regardless of the cause, the management was undoubtedly aware of the fraud much earlier than they admitted. Disturbingly, they took no actions to inform unemployment recipients that their data had been stolen or investigate how the breach occurred and how to stop it from occurring in the future. In the meantime, unemployment recipients who have been defrauded had their payments stopped suddenly and without warning. While the fraud is investigated and the claimant's identity is verified, payments are paused for months on end while a deputy adjudicates the matter, a process that should take a few minutes at most. These victims of unemployment fraud are punished for an action that occured through no fault of their own. 

This fraudulent activity and any actions taken after the fact needs to be investigated. It is unclear what management knew about the cause of the fraud, when they knew it, and what, if any actions were taken to cover it up. It is very possible the actions of management were both malicious and criminal. Both Commissioner Hess and Secretary Healey have made deceptive and contradictory statements to the media about the cause of rampant fraud, often blaming claimants and taking no accountability. 

Plea to Pro Bono Attorneys, Legal Aid Groups and Civil Rights Advocates

In the past two years, thousands of Virginians have had their livelihoods ripped from them and now face extreme economic hardship and devastating financial implications that will follow them for years to come if no one steps up to help. The class action lawsuit filed earlier this year had a profound impact in holding the VEC's feet to fire. However, since the judge's imposed September deadline to adjudicate at least 95% of claims that had been stuck on hold, the agency has fallen behind again. The backlog is growing and the agency is not working at the same pace as they were in the summer months when they were forced to perform and meet specific milestones. Quite frankly, the progress made as a result of the lawsuit, was still far below an acceptable standard for performance.

The VEC is reporting to various media outlets that their new online system has solved all of the agencies' problems. In reality, the new system has caused more problems than it has solved. Claimants were unable to file weekly claims or reach the support line for two full weeks while the system was launching even though they were told it would only be a few days. The new system is also slow and buggy and is barely an improvement from the old system. Additionally, since launch, the system has gone down for several days each week unexpectedly and without warning for "maintenance". Many claimants are unable to access the new system and customer support has not been trained appropriately on how to help them. 

Unemployed claimants still need help desperately. They have nowhere to turn and legal recourse seems to be the only thing that pushes the management at the VEC to do what is right or at the very least, what is expected of them. 

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