The Oregon Capitol building in Salem. Photo: Chas Hundley
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Governor Kate Brown fired the head of the Oregon Employment Department on Sunday, responding to the department’s long delays in delivering jobless benefits to out-of-work Oregonians and the agency’s inability to communicate the status of workers’ benefits claims.
“In the middle of this pandemic, the continued delays from the Oregon Employment Department in delivering unemployment insurance benefits to thousands of out-of-work Oregonians are unacceptable,” Brown said in a statement. The governor said she had asked for and received the resignation of Kay Erickson, who had run the department since Brown appointed her to the post in 2016.
“This is an unprecedented crisis, and the problems at the department demand an urgent response,” Brown said. She appointed Erickson’s deputy, David Gerstenfeld, to serve as interim director, and said she expects “proactive communication with claimants" and a timeline for addressing the department’s claims backlog.
The employment department struggled through a series of leadership crises in the years before Erickson took over. She steered the department through a period of relative calm afterwards, as the state’s jobless rate fell to an all-time low of 3.3% and the agency had relatively few benefits claims.
When the pandemic hit, though, the employment department was quickly overwhelmed as more than 440,000 Oregonians filed for jobless benefits and the state’s unemployment rate spiked to an all-time high, 14.2%.
The department, relying on an antiquated computer system from the 1990s, was unable to keep up with the volume of claims or adapt its technology to accommodate changes in the jobless program. Although Oregon received $86 million federal funding for a computer upgrade in 2009, and successive audits warned the department was unprepared for a spike in jobless claims, work replacing the computers isn’t due to be complete until 2025.
Since the pandemic hit in March, the department’s phone lines have been hopelessly overloaded. For well over two months it has been impossible for the vast majority of laid-off workers to fix issues with their applications or to learn the status of their claims.
Most callers get only busy signals, and the few that get through spend an average of more than three hours on hold -- and sometimes many hours longer. Even among those calls, though, fewer than half ever reach a claims processor.
The department said Saturday it has a 10-week backlog to fix complex claims that require adjudication, but did not say how many claims are in that category. Thousands of claims have been pending for more than a month, though, and many workers say they have been waiting for benefits since March.
Mary Geddry is a freelance publisher and website designer in Coquille whose business cratered last winter as the pandemic hit. She first applied for jobless benefits in March, when Congress expanded the unemployment benefits program to include self-employed workers like her, but has received no checks -- or even confirmation of her claims status -- from the state.
“I have no idea whether they’re even receiving my weekly update. There’s no way to check. There’s absolutely no way to call. I mean, you can’t get through," said Geddry, 64. She said she has credit card bills, a car payment and a mortgage payment and has been negotiating with the lenders to defer payments while she waits on her benefits.
“I honestly don’t know what to expect or when to expect it. I’m like a lot of other people," Geddry said. "I could be contributing to the local economy if I had any money.”
On Sunday, she said Erickson’s firing seemed like a step in the right direction but she’s still not sure what to expect from the state, or when.
“(Erickson) obviously wasn’t able to adapt to sudden changes,” Geddry said. "I don’t know that she’s 100% responsible but it seems like they need to get somebody in there who’s able to adapt to this crisis.”
For several weeks, as the employment department’s problems mounted, Erickson refused successive requests for interviews to discuss the situation. She broke her silence Friday with a telephone press conference but was unable to tell reporters how much the department owes workers.
The state has paid out $1.5 billion in jobless benefits since the middle of March, but at least 200,000 claims haven’t been paid. Many of those are from workers ineligible for benefits or from those who are receiving checks through other programs, but the department acknowledged this week it has no clear idea how many people it really owes money to.
The governor apologized for the department’s lapses in April but had been silent on the subject for more than a month as the crisis mounted. Members of the Legislature and Oregon’s congressional delegation grew increasingly critical of the department during that time as constituents flooded their offices with urgent calls over unpaid jobless claims.
On Saturday, U.S. Sen. Ron Wyden called for Erickson to resign, and she faced a three-hour grilling from state legislators who held a special committee hearing to examine the department’s problems. Lawmakers convened the unusual Saturday hearing after Erickson spent a Wednesday hearing on an hourlong presentation on the history of the unemployment benefits program and recent changes, allowing legislators no time for questions or comments.
Wyden heralded Erickson’s exit on said it provides a “much-needed” opportunity to address the employment department’s backlog.
Gerstenfeld, the newly appointed interim director, has been with the employment department since 2009 -- most recently as director of the paid family and medical leave insurance division. Before that served as director of the unemployment insurance division.
The governor’s office said neither Brown nor Gerstenfeld were available to answer questions Sunday. Charles Boyle, a spokesman for the governor, said “Brown has directed interim Director Gerstenfeld to take any measures necessary to clear the backlog of claims with extraordinary urgency and to communicate regularly about the progress the department is making.”
“We expect him to use any and all expertise from the public and private sectors needed, and for proactive communication with claimants to begin immediately,” Boyle said in an email. “Whether the issue is computer programming hours, fielding the calls of Oregonians, or processing claims, Gov. Brown expects solutions from the department, with a timeline to get the job done.”