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After ‘perfect storm,’ nearly all valid unemployment claims cleared, Md. official says

State Labor Secretary Tiffany Robinson, shown at a 2020 news conference with Gov. Larry Hogan, says that her agency has cleared “98% of legitimate and honest (unemployment) claims” since the start of the pandemic. (The Daily Record/File Photo)

Maryland’s labor secretary said her agency has all but cleared a backlog of “legitimate and honest” unemployment insurance claims but still faces a fraud tsunami.

Speaking to the three-member Board of Public Works on Wednesday, Labor Secretary Tiffany Robinson said her agency continues to dig out from “a perfect storm” caused by the COVID-19 pandemic over two years ago. She said her agency has cleared “98% of legitimate and honest claims” since the start of the pandemic.

“The dilemma that we face is an entirely new workload that our agency had never had pre-pandemic, which is really due to the tidal wave of sophisticated digital fraud that came with all the federal pandemic programs,” Robinson said.

Between May 16, 2021, and May 21, 2022, call center agents received an average of nearly 760,000 calls per month. Many are currently answered in under two minutes.

Robinson said a growing number of the calls, including those that go to a fraud hotline, are “fraudsters trying to push their way through the system.”

Historic levels of layoffs driven by the pandemic overwhelmed the state’s unemployment system.

The agency that faced severe backlogs and was sued by some who filed claims now has 1,800-1,900 “legitimate claims” awaiting adjudication, Robinson said.

Robinson addressed the board as her agency sought an extension of a contract to provide call center workers. That contract, Robinson said, frees up state employees to review claims.

The agency’s problems were compounded by an aging and failing online filing system. Displaced workers filing claims faced hours-long waits to speak to a state agent to file or learn the status of a claim.

In addition to updating its online and mobile claims operations, the department contracted with Austin, Texas-based Accenture for specialized agents to handle the volume of calls.

The board approved the original contract for nearly $19.6 million in April 2020 and has since approved five modifications or extensions. Those new agreements increased the number of agents to almost 2,000.

The modification approved Wednesday increases the total value of the contract not to exceed $356 million.

“The price you listed will not be the price we pay,” Robinson told the board.

The secretary said the agency has already reduced the number of call agents about 60%, to about 711 agents.

“We continue to scale it down as we get through the barrage of claims and by the end of the six month extension we won’t pay anywhere near the option we listed in the contract,” she said.

The extension unanimously approved by the board will be in place until the department hires a new vendor that will be ready to handle the next wave of unemployment filings.

“There is talk of a recession,” Robinson said, adding that over the next six months “we want to make sure we have the ability to scale up and scale down. We continue to hope to scale down.”

But Robinson said they don’t want to be caught flat-footed again.

“We didn’t have the resources for the 5,000% increase in (call) volume,” she said. “Having a vendor on board like this is how we will do that.”