Interim Employment Department director hears 'clear message' to end mounting backlog

David Gerstenfeld

The acting director of the Oregon Employment Department confirmed Wednesday that overpayments have been made to some people who are working reduced hours, but who also draw unemployment benefits under a state program that offsets their wage losses.

David Gerstenfeld said errors are inevitable in the Work Share program, which relies on manual data entries by employees into the agency’s three-decade-old computer system that generates payments.

When he took over as acting director June 1, after Gov. Kate Brown requested and received the resignation of his predecessor, the agency reported that Work Share covered 168 participating employers and 3,000 workers in the previous 12 months. Gerstenfeld said the current Work Share figures are 1,500 participating employers and 52,000 workers.

From a low of four employees earlier this year, Gerstenfeld said about 100 within his agency are assigned now to Work Share.

“We know there are some overpayments; there always are,” Gerstenfeld said in a weekly conference call with reporters. “It’s probably going to be at an increased rate, because we have so many new employees who don’t have as much experience and we are working so hard to get so many people their benefits with a number of brand-new programs.”

Work Share itself is not new. Under the program, participating employers can tap the state’s unemployment trust fund to offset reductions of 20% to 40% in workers’ hours. Employers then pay higher taxes into the fund in the future. (The federal law authorizing Work Share programs allow a range of 10% to 60% in reduced hours, but Oregon would have to pass another law to make that happen.)

But under the CARES Act, which Congress approved and President Donald Trump signed March 27, Work Share benefits are paid by the federal government (through Dec. 26) and employers are not liable for higher unemployment trust fund taxes. Any unemployment benefits that workers receive beyond $2,400 are taxable on individual or joint income tax returns.

About $36 million has been paid out so far under Work Share, whose recipients also have qualified for the extra $600-per-week benefit payments that ended July 25. Congress is in a stalemate over whether those extra benefits will continue, and if so, in what form.

Though Gerstenfeld offered no specific figures, he said he doubted the Work Share overpayments are a big problem.

“We know it is not a massive, widespread increase,” he said. “We have seen some issues where manual data entry is causing overpayment. As soon as we find them, we address them. We do recoup those overpayments.”

Gerstenfeld said if the overpayments are small, the agency can recoup them simply by labeling them as advances on future benefit payments, which then would be less. Overpayments, however, are errors that the agency can legally ask workers to repay.

Gerstenfeld did report substantial progress in his agency’s processing of claims from workers who had been ineligible for unemployment benefits until Congress included them in the CARES Act. They are self-employed people, freelancers, independent contractors, gig and temporary workers.

The CARES Act requires state employment agencies to determine whether they qualify for regular benefits first.

Between March 15 and July 29, the agency reported 533,300 claims for regular benefits — only 1,061 in this category were pending, all filed in July — and 111,680 claims by newly eligible workers under what is known as Pandemic Unemployment Assistance.

Of a claims backlog of 70,000 in early July for the latter program, the agency now reports 19,000 pending claims, being worked on by a staff of 420. Gerstenfeld said the processing has gotten faster partly because of a new Google-developed application introduced July 17 on an agency website, and partly because many claims are duplicates of previous filings.

Still, many complex claims require adjudication, which Gerstenfeld said is taking an average of 12 to 14 weeks.

He said he is still cautiously optimistic that the agency will meet its target date of Aug. 8 to eliminate the backlog of these claims.

“We are absolutely committed to getting benefits to people as quickly as possible, and on keeping our employees safe while they focus so hard on doing that,” he said.

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