Legislature(2019 - 2020)Anch LIO Lg Conf Rm
04/22/2020 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Unemployment Insurance | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
Anchorage, Alaska
April 22, 2020
3:33 p.m.
MEMBERS PRESENT
Representative Ivy Spohnholz, Chair
Representative Sara Hannan (via teleconference)
Representative Andi Story (via teleconference)
Representative Mel Gillis (via teleconference)
Representative Sara Rasmussen (via teleconference)
MEMBERS ABSENT
Representative Louise Stutes
Representative Zack Fields
COMMITTEE CALENDAR
PRESENTATION(S): UNEMPLOYMENT INSURANCE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
PATSY WESTCOTT, Director
Division of Employment & Training Services
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Provided an update on the Unemployment
Insurance Program's response to COVID-19.
LENNON WELLER, Economist
Research & Analysis
Administrative Services Division
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation on
unemployment trends.
ACTION NARRATIVE
3:33:29 PM
CHAIR IVY SPOHNHOLZ called the House Labor and Commerce Standing
Committee meeting to order at 3:33 p.m. Representatives Hannan
(via teleconference), Gillis (via teleconference), Rasmussen
(via teleconference), and Spohnholz were present at the call to
order. Representative Story (via teleconference) arrived as the
meeting was in progress.
^PRESENTATION(S): Unemployment Insurance
PRESENTATION(S): Unemployment Insurance
3:35:24 PM
CHAIR SPOHNHOLZ announced that the first order of business would
be a presentation from the Department of Labor & Workforce
Development (DLWD) on issues surrounding unemployment in the
state of Alaska.
3:35:59 PM
PATSY WESTCOTT, Director, Division of Employment & Training
Services, Department of Labor & Workforce Development (DLWD),
stated that prior to the onset of COVID-19, Alaska was
experiencing record low unemployment. During that time, the
Unemployment Insurance (UI) Program's call center had 44
frontline staff to process new claims. In response to the
workload increase caused by COVID-19, DLWD diverted staff from
other programs and brought back 27 retirees and former UI
employees to respond to calls and adjudicate issues.
Additionally, the department onboarded 100 short-term,
nonpermanent staff from an Anchorage temporary staffing agency,
Workplace Alaska, and the Alaska Labor Exchange System
(ALEXsys). She noted that shortened training sessions were
implemented to expedite the onboarding process. She reported
that 75 percent of the calls they receive are completed from
start to finish, while 25 percent are referred to a more
experienced UI staff member. Furthermore, the call center hours
have been expanded and staff is working overtime, including
weekends. She said they have submitted a request for 100
additional short-term, nonpermanent employees to fulfill the
anticipated workload increase in other areas of the program.
She conveyed that training new staff while respecting CDC
guidelines and social distancing has been a challenge. She said
they identified additional training spaces to provide a safe and
clean environment to accommodate the requirements. She turned
attention to the workload. She noted that her data will differ
slightly from the numbers that Mr. Weller provides because exact
numbers from recent days are considered embargoed until the
U.S. Department of Labor (USDOL) releases their information.
3:44:51 PM
CHAIR SPOHNHOLZ sought clarification why solely Mr. Weller can
provide exact information.
MS. WESTCOTT explained that Mr. Weller can provide exact
information as of April 4, 2020, because those numbers have
already been released by USDOL. She further noted that the
numbers she provides are approximations as of April 20, 2020.
She added that she cannot provide exact numbers until that data
is released by USDOL.
CHAIR SPOHNHOLZ asked why the information cannot be provided
before it's released by USDOL.
MS. WESTCOTT said it's a requirement of USDOL. She noted that
the exact numbers could be shared if this were not a public
meeting.
3:46:25 PM
MS. WESCOTT reported that from March 1 to April 20, 2020, the
department processed 57,000 new claims for unemployment, of
which 40,000 have been paid. She approximated that there are
12,000 individuals who don't qualify for regular unemployment
insurance; however, they may qualify for the Pandemic
Unemployment Assistance (PUA), which is a program for the self-
employed, independent contractors and gig economy workers.
Furthermore, there are approximately 11,000 individuals who have
exhausted their regular unemployment insurance and are
potentially eligible for the Federal Pandemic Unemployment
Compensation (FPUC). Additionally, she reported that $83
million in benefits have been paid. She turned attention to
program changes. She explained that HB 308 included provisions
that waived the work search and registration requirements. She
said that the changes were effective on March 1; however, they
were not put into production until April 3, which resulted in a
group of people who filed during that time to be denied per
those issues. She said they are working to reverse that. HB
308 also waived the one-week waiting period, which went into
production on April 15. She stated that the department
retriggered all previously served waiting weeks on April 17,
with payments disbursed on April 20, 2020. She noted that the
programming for the increased per-dependent weekly benefit
another provision of HB 308 has been challenging and is not
yet in production.
CHAIR SPOHNHOLZ inquired as to the timeframe for implementing
the new dependent allowance.
MS. WESTCOTT said she doesn't have one. She explained that the
difficulty regarding the change to the dependent's allowance is
that it has a definitive start and end date; however, the system
isn't designed to apply changes to someone's monetary
entitlement for only part of their benefit year. She said the
programming team is considering coding this change similarly to
the additional $600 payment provision.
CHAIR SPOHNHOLZ questioned whether UI beneficiaries will be able
to receive back payments once this problem is solved.
MS. WESTCOTT assured Chair Spohnholz that all [retroactive] UI
payments will be made whole.
3:53:37 PM
REPRESENTATIVE HANNAN asked for the meaning of the term
"production" in the context of these programs.
MS. WESTCOTT explained that once a change is put into production
it is live and effectively part of the current payment
distribution system.
REPRESENTATIVE HANNAN asked what people can do if they have
continuously been denied.
MS. WESTCOTT said individuals who are applying for unemployment
insurance don't need to do anything other than continue to file.
She explained that if they filed a new claim between March 1 and
April 3, 2020 and were denied due to work search waiver and
registration requirements, they will receive a new notice of
allowance once the status of their claim is reversed.
REPRESENTATIVE HANNAN asked about the self-employed, independent
contractors and gig economy workers who became eligible under
[federal legislation].
MS. WESTCOTT explained that once the Pandemic Unemployment
Assistance (PUA) program is in production, they will run a
crossmatch from the regular UI system to establish claims for
those claimants in the PUA system. Those claimants, she said,
will receive a different notice advising them as to whether they
are, in fact, eligible for the PUA. She encouraged workers in
that sector to continue to file on the regular UI system so the
department will have record of that data to convert to the PUA
system. She announced that the department is starting to accept
applications specifically for the PUA program; however,
applicants will need to provide proof of income, wages, or
earnings from the year 2019 to show that they were attached to
the labor force. She noted that there is information on the
department's website about the application process.
CHAIR SPOHNHOLZ clarified that HB 308 was an expansion of
Alaska's unemployment insurance benefit, while PUA is part of
the federal Coronavirus Aid, Relief, and Economic Security
(CARES) Act. She summarized that people who applied for
traditional unemployment insurance benefits after April 3 will
be approved. People who applied before April 3 will receive
back payments if they are eligible and were denied. She said,
"we are flying the plane at the same time they are building the
plane." She added that in the coming weeks, the increase in the
per-dependent benefit will be accommodated; however, the date is
still to be determined.
4:02:41 PM
MS. WESTCOTT returned attention to the federal programs. She
explained that the Federal Pandemic Unemployment Compensation
(FPUC) program adds $600 a week to the regular unemployment
benefits that people already receive. FPUC, she said, went into
production on April 10, with first payments disbursed on April
13. She noted that the first payable week was April 4, and
every eligible claimant has been caught up. The Pandemic
Unemployment Assistance (PUA) program for self-employed,
independent contractors and gig economy workers is under
contract with a vendor to implement a stand-alone system to make
the payments. She added that they started to accept
applications on April 20. She explained that another provision
of the CARES Act, the Pandemic Emergency Unemployment
Compensation (PEUC) program, extends the eligibility period by
13 weeks. She said that this is important in Alaska because
there is a sector of seasonal employees who typically work in
the summer and file for unemployment in the winter. These
workers have almost exhausted their regular unemployment
insurance benefits. The PEUC program will add 13 weeks of
regular unemployment compensation, including the additional $600
from FPUC, for those who have exhausted their regular benefits.
4:06:25 PM
MS. WESTCOTT addressed several enhancements that have been
implemented, such as weekly versus biweekly filing, so that
individuals can receive payments on a weekly basis, which went
to production on April 9. Watson, a virtual chat feature, was
added to the unemployment insurance website on April 17 to
answer questions about unemployment insurance and the new
federal programs. A third enhancement, she said, is the My
Alaska help desk in partnership with the Department of
Administration (DOA) to troubleshoot issues that filers may
have with getting through MyAlaska to file a claim.
4:09:15 PM
MS. WESTCOTT turned attention to funding. She said the
department received $1.45 million upfront from USDOL for
increased administrative costs due to workload, as well as $72
million to accommodate the additional $600 weekly payment. She
added that they submitted a supplemental budget request (SBR)
for the FPUC implementation costs and are working on SBRs for
PEUC and PUA, which are all federally funded. She noted that if
work is available to individuals and they refuse it without good
cause, it is considered fraud. She stated that there are stiff
penalties for fraudulent activity against the program. She
emphasized that the intent of the program is to pay individuals
who are unemployed through no fault of their own.
4:11:52 PM
REPRESENTATIVE RASMUSSEN asked how the UI program will know if
individuals are engaging in that kind of fraudulent activity.
MS. WESTCOTT explained that the UI website has extensive
information on how to report potential fraud. Additionally, she
said, the program is actively engaged in reaching out to
employers to notify them of their ability to report fraudulent
activity. She added that that they also have an investigative
team and a quality control team that conduct random audits on
all claims that are filed.
REPRESENTATIVE RASMUSSEN asked if the division has adequate
staff levels for auditing, given the substantial increase of
Alaskans on unemployment insurance.
MS. WESTCOTT said one of the reasons she requested an additional
100 employees is to add positions to the Benefit Payment Control
(BPC) unit for exactly that purpose.
4:15:06 PM
REPRESENTATIVE HANNAN asked if people who need to stay home to
take care of their kids are still eligible to collect benefits.
She questioned whether that would be considered fraudulent
activity.
MS. WESTCOTT said there are provisions in federal law regarding
refusal of suitable work and a lack of good cause. She added
that when work is refused, good cause must be considered, which
will change in each situation.
4:16:58 PM
CHAIR SPOHNHOLZ clarified that when the legislature expanded
access to unemployment under HB 308, it clearly identified
Alaskans who need to stay home with their children because of
childcare or school closures. She said that was one of the
categories of Alaskans that the was intended to be covered by
unemployment insurance under HB 308.
REPRESENTATIVE HANNAN echoed her colleague's sentiments. She
asked if the burden of proof would fall on the parent.
MS. WESTCOTT said she can't give a definitive yes or no. She
explained that the department would look at each individual
circumstance and consider whether the parent has alternatives
for childcare, for example, which is required by USDOL.
4:19:07 PM
REPRESENTATIVE HANNAN sought clarification on how the additional
$600 payment from the federal CARES Act will be delivered to
recipients.
MS. WESTCOTT explained that it will show up as one payment
combined with the regular unemployment benefit that people
already receive.
CHAIR SPOHNHOLZ asked if Alaskans are concerned about working
because they feel their workplace is unsafe. She asked how the
UI program is dealing with those situations.
MS. WESTCOTT said they have received a few inquiries along those
lines and haven't issued any determinations because the idea of
reopening the economy just came up. She stated that each
circumstance is different and that she can't definitively say
who will be approved or denied. She emphasized that they would
look at the threat of exposure very seriously, adding that some
individuals are in a more vulnerable population than others.
CHAIR SPOHNHOLZ opined that people who are more vulnerable to
complications from COVID 19 should have access to wage
replacement.
MS. WESTCOTT agreed.
4:24:30 PM
LENNON WELLER, Economist, Research & Analysis, Administrative
Services Division, Department of Labor & Workforce Development
(DLWD), provided a PowerPoint presentation on unemployment
trends during the COVID-19 pandemic. He directed attention to
the chart displaying initial claims in the past 53 weeks on
slide 2. He explained that pre-COVID-19, benefit claims were
trending between 800-1000 on a weekly basis; however, the week
that ended March 28, 14,590 people filed initial claims for
benefits.
MR. WELLER continued to slide 3. He indicated that the chart
shows initial claims filed in the previous six weeks. He
pointed out that the six-week total is 50,153 initial claims.
He addressed March claimants on slide 4. He said that that
14,245 claimants received at least one week of benefits in the
month of March.
4:30:34 PM
CHAIR SPOHNHOLZ asked if the terms "initial claims" and "new
claims" are being used interchangeably.
MR. WELLER answered yes.
4:31:00 PM
MR. WELLER directed attention to slide 5. He said that the week
beginning March 15 is when most of the new claimants filed. On
slide 6, he addressed a breakdown by industry of new claimants
that were paid at least one week in March. He pointed out that
a majority of those claimants worked in the foodservice
industry; health, accommodation, transportation, and trade were
also largely represented by the claimants. He continued to
slide 7, which showed claimants by geography with claims
beginning on March 1. He indicated that Anchorage makes up
nearly half of these individuals, with a total of 2,067
claimants, as Anchorage has the largest number of jobs in the
foodservice, retail, trade, and healthcare industries.
4:34:26 PM
MR. WELLER directed attention to slide 8. He pointed out that
on an annual average basis in calendar year (CY) 2019,
approximately 60 percent [of new claimants] are male; however,
the majority of new march claimants are female. Furthermore,
between 60-70 percent of claimants in both categories do not
claim dependents. He addressed claimants by age group on slide
9. He said the new March claimants tend to skew younger than
the CY 2019 claimant population. He said this could be
reflective of the industries that COVID-19 has impacted. Slide
10 shows the two categories of claimants by base period
earnings. He explained that the COVID-related group the new
March claimants tend to skew lower on the earnings scale,
which could also be related to the disproportionately impacted
industries affected by COVID-19.
4:37:54 PM
MR. WELLER directed attention to slide 11, which shows the
unemployment insurance benefit costs from January through July
2020. He said that in January through March, between $8 million
and $10 million is paid out in benefits. He pointed out that in
April through July, the forecast predicts upwards of $40 million
[per month] will be paid in benefits.
4:39:01 PM
CHAIR SPOHNHOLZ asked how long the state could continue to pay
that much more in unemployment benefits.
MR. WELLER said as of April 20, the fund reflected $474.1
million, which means it would be just under 8 months before the
fund would be insolvent at this level of benefit costs.
4:42:18 PM
REPRESENTATIVE STORY questioned whether an individual who bought
inventory for their business in the tourism industry would
qualify for unemployment.
MS. WESTCOTT encouraged the individual in question to get in
touch with the Department of Commerce, Community & Economic
Development (DCCED) regarding federal programs that offer small
business loans and to file a claim for regular UI. She added
that to be eligible under the Pandemic Unemployment Assistance
(PUA) program, he or she would be required to show an attachment
to the labor market in 2019 in order to qualify. If the
individual were not self employed in 2019 and employed through
other means, he or she could qualify for regular UI, despite
trying to venture into the self-employment sector.
4:46:08 PM
CHAIR SPOHNHOLZ pointed out that people who own small businesses
should be eligible to apply for the Small Business
Administration (SBA) loan program. She noted that it ran out of
funding; however, the federal government is expected to refund
the program again this week. She said there are a lot of
options for small businesses, adding that hopefully, every
Alaskan business will have access to those programs. She
directed attention to the DLWD publication, "Alaska Economic
Trends April 2020" [included in the committee packet], which
provided ample information on unemployment and impacted
industries.
4:49:06 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:49 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Director Westcott's remarks before HL&C 04.22.2020.pdf |
HL&C 4/22/2020 3:15:00 PM |
Unemployment Insurance |
| Dept. of Labor UI Presentation 04.22.2020.pdf |
HL&C 4/22/2020 3:15:00 PM |
Unemployment Insurance |
| DLWFD April 2020 Alaska Economic Trends Magazine.pdf |
HL&C 4/22/2020 3:15:00 PM |
Unemployment Insurance |