Several years after a state audit revealed billions of dollars were lost to unemployment insurance fraud in New York due to an outdated system, that system is finally being upgraded.
The New York State Department of Labor announced Monday, Sept. 28, that their 50-year-old system for processing unemployment insurance claims, or Unemployment Services, will undergo several days of upgrades in early November.
An audit completed and released by the New York State Comptroller's Office in 2022 revealed the Labor Department's failure to replace the system contributed to at least $11 billion in payments lost to fraud between April 2020 and March 2021. The Labor Department at the time asserted that number was instead $4 billion, but said they couldn't release the underlying
data related to that estimate because it was protected information.
In an interview with the USA TODAY Network last week, New York State Department of Labor Commissioner Roberta Reardon said the unemployment fraud that took place in the state during the pandemic was a "very specific kind of identity fraud," and with the current system, the department stops 97% of fraud attempts "before any money goes out."
The audit also found that state officials disregarded warnings about the out-of-date system as far back as 2010 and didn't address issues identified in a 2015 state audit of the system.
So, why has it taken the Labor Department so long to make these changes? While Reardon didn't directly answer the question, she said the upgrade is a "massive undertaking."
"One of the things that people don't realize is we have billions of records from decades of (unemployment insurance) that we have to keep," Reardon said. "We can't just throw them away. So all of that record keeping had to be translated into the new code and then transferred into the new system."
"It is a very articulated system," Reardon later added, "so the development is very, very specific."
Here's what to know about the system upgrades.
How long will the upgrade take?
According to the Labor Department, the upgrade will begin at 5 p.m. on Monday, Nov. 2. The entire process is expected to take between nine and 12 days.
Will the upgrade limit access to the state's unemployment services?
Yes, all online and phone-based unemployment insurance services will be temporarily unavailable, the Labor Department says. To prepare for this service disruption, labor officials are asking New Yorkers to file any new unemployment insurance claims, certify for weekly benefits and access or update their account information before 5 p.m. on Nov. 2.
New Yorkers will experience benefit payment delays due to the upgrade, but the Labor Department says they will receive all of the payments they're entitled to receive after the upgrade has been completed and they file or certify for benefits in the upgraded system.
"There will not be any missing money for anyone," Reardon says. "I was an actor before I was commissioner. So, obviously, I was on unemployment often, and I understand the anxiety that goes along with it, and it can be a really difficult time."
However, the upgrade won't affect electronic filing for NYS-1 and NYS-45 through the New York State Department of Taxation and Finance, and businesses can continue to file those documents through the department once Unemployment Services is available, according to the Labor Department.
Labor officials are also reminding customers to continue completing and recording work search activities during the upgrade period in order to stay eligible for unemployment insurance benefits. Career centers will be available virtually by appointment during the upgrade period for job search assistance.
How much will the upgrade cost?
The Labor Department's Unemployment Services system upgrade comes with a $188 million price tag, according to Reardon, which is coming from a combination of state and federal money. But, she says, the money has been spent over the course of almost a decade, as they've taken on the "largest transition of a UI system in the country."
"It's built specifically for the state of New York," Reardon stressed. "This is not something you can buy off the shelf. And that's one of the reasons why lots of states are slow to improve their systems because it is a massive investment."
How will the upgrade help New Yorkers?
According to the Labor Department, after the upgrade, most users will be able to complete the entire claims process online. Here are more ways the upgrade will benefit New Yorkers.
- Customers will be automatically prompted to provide all of the required information before filing a claim, reducing the frequency of claim delays.
- Customers will be able to file and certify claims from any device, including their smartphones, and view the status of their claim, send and receive messages and upload paperwork online using their existing NY.gov account. This will ultimately shorten customer service wait times, labor officials say.
- The system will be compatible with assistive devices and technologies like screen readers, making it easier for New Yorkers with disabilities to access unemployment services.
How will the upgrade help New York businesses?
The system upgrade will allow businesses to have 24/7 access to the system to make payments, view and update account information, add third-party representation and respond to requests for information about claims filed against their account. All of this will help reduce overpayments and underpayments, says the Labor Department.
Businesses in New York will also have better access to rate and financial information. And filing agents, powers of attorney and third-party representatives will be able to add and update customer information online once the upgrade is complete.
Reardon is calling it a "huge change" and that the system will feel "modern," yet "very familiar."
How do I certify in the new unemployment system?
Once the update is complete, Reardon said if you're already in the system, use the same login you've always used; you do not have to create a new one. If you're a new customer, you will have to create a login.
Then, you'll need to go in and certify for the weeks you missed during the upgrade.
"We don't want anyone to be surprised; we want people to understand what's happening," Reardon said. "People will not lose any money that is owed to them. If they miss a check during the period when they can't go in and certify, then they will go in and certify for that check."
Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers' taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.
This article originally appeared on Rockland/Westchester Journal News: NY unemployment insurance system to be upgraded in November
