Rachael Kendrick at her Stanwood home office April 30. (Olivia Vanni / The Herald)

Rachael Kendrick at her Stanwood home office April 30. (Olivia Vanni / The Herald)

Anger boils over a year into Washington’s unemployment mess

Legislators and locals agree, the Employment Security Department failed when people needed it most.

EVERETT — More than a year into a pandemic-driven unemployment crisis for the ages, lawmakers and those who lost their jobs say Washington’s Employment Security Department still can’t get its act together.

The struggles are well-documented.

Hours on hold, long benefit delays, hundreds of millions of dollars paid in fraudulent claims and a whole bunch of unanswered questions.

In a matter of months last year, Washington’s unemployment resources were overwhelmed as the near record low jobless mark skyrocketed past peaks of the Great Recession. As the economy ground to a halt, Snohomish County saw its 2.8% unemployment rate in February 2020 reach a high of 19.3% just two months later.

Rachael Kendrick, of Stanwood, is one of thousands of people caught in the mess since the beginning.

After four decades in the service industry as a waitress, bartender and chef, Kendrick, 55, was laid off at the onset of the coronavirus pandemic.

Last August, Kendrick told The Daily Herald waiting months for unemployment put a kink in her family’s lives as they waited for tens of thousands of dollars in unpaid benefits.

Eight months later, Kendrick said that struggle still remains her daily reality.

“This should not be that difficult,” she said. “No one was equipped for the pandemic, but come on.”

Last month, a bipartisan committee of legislators spent more than an hour chastising ESD leadership during a state auditor’s review of the agency’s performance.

“I feel like we just get a dog-and-pony show dance every time,” said Sen. Bob Hasegawa, D-Seattle, opening the floodgates of the Joint Legislative Audit and Review Committee’s criticisms. “We’ve got people who are on the edge and are being bumped into homelessness and all kinds of dire consequences for their families, just because, for no other reason, their benefits aren’t being processed in a timely manner.”

The hearing came weeks after the state auditor’s office released a new set of reports detailing the department’s calamitous year.

In the 70 pages of audits released on April 13, officials detailed the $13.6 billion in unemployment benefits paid out last year, including at least $647 million which went to imposters from as far away as Nigeria. As of March 2021, the department recovered $370 million from bad actors.

The state employment agency lacked an anti-fraud team capable of stopping widespread scamming and to make matters worse, some of the fraud prevention tools were offline at the start of 2020, according to the performance audit. Reports also noted that directives attached to the federal relief programs allowed less stringent verification requirements that made fraud easier.

“The agency was wholly unprepared for the massive degree of imposter fraud committed in 2020,” the performance audit said. “Its existing tools were simply not able to prevent or even detect the fraud from the outset.”

On average, from April to October last year, claims took 22 days to payout. However, 13% of claims took more than seven weeks to complete, 8% were waiting longer than 10 weeks.

The agency’s customer support was also highlighted. According to the report, callers were on hold for more than two hours on average, if they could reach the line at all. Last March, only 6% of calls were answered, meaning hundreds of thousands of callers were left out of luck.

“Since late fall of 2020, ESD’s call center has only been able to handle a small share of the volume of calls it has received from Washingtonians trying to get answers about their claims,” the performance audit said. “ESD officials have said they are taking steps to address this, but it has not been enough.”

Left without other options, many disenfranchised workers reached out to their representatives.

“The bottom line is our offices, we had to be part of ESD and our assistants effectively were doing, in my opinion, what ESD should’ve done,” said Rep. Vicki Kraft, R-Vancouver.

The lone local lawmaker on the audit review committee, Sen. Keith Wagoner, R-Sedro-Woolley, was underwhelmed by the results.

“I just learned that we lost an arguable amount of money, except that it’s big, and that the bad guys are more clever and sophisticated than our team is and maybe we’ve put some plugs in those holes and maybe not, because we won’t know until next time,” he said during the hearing.

Wagoner said he still hears from constituents in the rural 39th District who feel like they didn’t get a fair shake from ESD, but eventually gave up on collecting the money they deserve.

In Stanwood, Rachel Kendrick is one of those unfortunate folks.

After being laid off, Kendrick stayed home, following all the state guidelines to protect family members from COVID-19 in her multigenerational household.

She applied for unemployment benefits and waited for the money to roll in. And she waited. And she waited. In total, almost five months before seeing a dime.

“I waited 20 weeks initially with nothing,” Kendrick said. “We were failing.”

She said calling the department’s customer support became her full-time job. “Hang up, redial, hang up, redial, hang up, redial,” she said, all to be placed in a hold queue that may or may not be answered.

“The times you could get through, you couldn’t get anything accomplished,” Kendrick said. “The luck of the draw with the dial and then you couldn’t solve anything.”

When the money finally came, Kendrick said she received only about $12,000 of the more than $22,000 she believes the state owed her in back pay unemployment.

“What do you do? Do you get mad?” she said. “No, what good is it going to do? You’re already in the middle of all this virus and everything going on. If the money is going to come, you’re just going to be damn thankful you’re getting anything, which is really, really frustrating to say.”

The family went into survival mode, Kendrick said, taking care of necessities, making the big payments and spending wisely to eke by. When your situation gets that dire, she said you really find out what you can live on.

To make matters worse, Kendrick was one of many folks who received an overpayment notice containing little explanation and demanding thousands of dollars be returned.

“Here sets in panic again,” she said. “All of us haven’t endured enough?”

Last week, lawmakers said the repeated errors have eroded confidence.

“While you may be working on things, just recognize our constituents are still having problems,” Rep. Ed Orcutt, R-Kalama, vice chair of the committee, told the department’s leadership. “We are the ones that get yelled at when an agency messes up, so if you hear us getting mad at you, it’s because our constituents are getting upset to us, with you.”

Washington’s benefits system wasn’t the only one to falter.

California was hit hard by impostors, distributing $11 billion in fraudulent payments, with an additional $19 billion under investigation. According to Associated Press reporting, small states like Alaska and Wyoming kept fraud to several hundred thousand dollars, but other populous states like Massachusetts and Ohio also lost hundreds of millions.

Oregon officials wouldn’t disclose the amount lost in unemployment insurance theft saying it could provide further opportunity to exploit the system.

In the wake of the disaster, Washington’s Employment Security Department updated its fraud prevention portfolio by hiring consultants, improving online tools and implementing a stronger anti-fraud staffing structure.

The agency hired about 900 more employees from March to October last year, the audit said, including tripling the number of people responsible for processing claims and quadrupling the number of fraud investigators.

The auditor’s reports offered no formal recommendations, but encouraged the department to continue addressing its fraud and customer service issues.

Earlier this year, the department’s commissioner, Suzi LeVine, exited the role for a position in President Joe Biden’s administration. Cami Feek, the acting commissioner, was not present for last month’s committee hearing.

Instead, Nick Demerice, public affairs director for ESD, absorbed the condemnation on the agency’s behalf.

“I think there is broadening recognition that the unemployment insurance system was the wrong tool to pay people to stay home and stay healthy, it simply is not designed for it,” he said. “Agencies across the country were forced to make this tool work as best as we could.

“What we discovered throughout this crisis is there is no silver bullet. There is no simple solution to clear out the backlog and take care of the issues,” he said. “It has to be incremental.”

Representatives were left unsatisfied and without a resolution for those who’ve endured the missteps.

“I’ve never had an experience in government like this where people are not here to be accountable for their direction of an agency,” said Rep. Jake Fey, D-Tacoma.

Kendrick didn’t mince words. “They failed us.”

She said the department needs to step up its game, revamp the system and deliver a big, fat apology to the people it let down.

“They had made so many mistakes that essentially we were all going to pay for it in the state of Washington,” Kendrick said. “It didn’t matter whether you had worked for a day or 40 or 50 years, you were just caught in a vicious cycle of their system being so poorly set up to handle anything of this capacity.”

Ian Davis-Leonard: 425-339-3448; idavisleonard@heraldnet.com; Twitter: @IanDavisLeonard

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