Out-of-work Coloradans continued to file for unemployment benefits last week, but unlike the week before, the state’s system handled thousands more applicants after implementing technology upgrades and staggering filing periods by last name.
Between Monday and Thursday, 61,000 applications came through, according to the state Department of Labor and Employment. The numbers don’t include Friday’s filings.
“We’re continuing to see some improved performance in our online claims-taking system (in terms of) stability and processing those claims, thanks to our last name filing system, and some other expansion efforts around capacity and stability,” said Cher Haavind, the agency’s deputy executive director and agency spokeswoman, during a media call on Friday.
That’s a good thing with the federal stimulus package that was approved by U.S. House on Friday. Unemployment pay would be opened up for the first time to gig workers, independent contractors and the self-employed.
“It expands benefits, quite frankly, to anyone out of work,” Haavind said.
As Colorado battles the coronavirus, government mandates forced the closure of new categories of businesses almost daily, starting March 14 with ski resorts. But as more workers tried to file last week, fewer submissions were making it through as users were met by outages, lost submissions and a reminder to “Save Often.”
After all was said and done, the state’s labor agency said, 19,745 new unemployment claims were successfully filed between March 14 and 21.
That figure is 750% higher than the previous week’s 2,321. It also means that more than 160,000 attempts made at filing two weeks ago were unsuccessful as people tried numerous times to file.
The labor agency began working on technology to increase the number of pathways into the system so more people could file successfully. Other efforts included staggering applicants by their last names, so people with last names beginning with A through M would file one day, and N through Z would file another. The agency also ramped up its call center and Monday added 90 workers to take claims by phone.
That resulted in 45,000 applications filed between Monday to Wednesday, which was more than double the number filed last week. Applications are considered preliminary as the agency verifies wages and eligibility, so the numbers reported to the U.S. Department of Labor may differ.
“We aren’t seeing many (if any?) system errors within the application so that’s also encouraging,” Haavind wrote in an earlier email. “We had been taking the servers down each night, but I think we are no longer doing that.”
Unemployment up nationwideColorado’s newly unemployed helped the nation hit its highest level of initial unemployment claims in recent history, according to the U.S. Department of Labor’s weekly report released Thursday.
The federal agency reported 3.3 million unemployment claims for the week that ended March 21, with “Nearly every state providing comments cited the COVID-19 virus impacts,” the report said.
In the previous week, 282,000 initial claims were filed. The nation’s previous high was 695,000 in October 1982.
The federal emergency stimulus package also gives everyone on unemployment an extra $600 a week for up to four months. On average, Coloradans on unemployment receive $400 a week, so this would boost their weekly earnings to $1,000.
And for the first time, this would pay benefits to independent contractors and gig workers, who had been excluded from unemployment compensation because they don’t pay into the system.
Colorado’s labor agency, however, advised workers in these expanded categories to wait to file for unemployment until after the plan is final and the agency can integrate the new status into the system. Otherwise, those applicants would be denied because they are not yet eligible.
The state labor agency said that once it received federal guidance on the Pandemic Unemployment Assistance, it will begin accepting claims. It will also backdate and back pay claims as set out in the law. More information is at coloradoui.gov.
Separately in the federal recovery plan, most American adults would also receive a $1,200 check from the government, plus $500 for each child, to offset lost income due to coronavirus containment.
Keep operating vs. laying off employees
The Colorado Department of Labor prefers employers consider alternatives to layoffs, such as its work-share or job-attached programs, which allow employers to either reduce worker hours or temporarily lay off with the expectation the employee would return to the same job. Either program still provides unemployment compensation to workers. The federal emergency plan also sets aside $350 billion for loans to small businesses who, if they keep employees on staff and keep the place running, would see their loans forgiven.
Tony Gagliardi, state director for the NFIB organization that represents 7,000 small businesses in Colorado, said his members don’t want to lay anyone off. But they can’t continue to operate with no revenues and only the promise of a federal loan that would be forgiven should they keep operating.
“I’m getting calls from my members in Colorado in Wyoming asking, ‘Do I lay off now because I can’t hang on much longer.’ They’re doing everything they can to keep their employees working,” he said. “The uncertainty just exacerbates the problem, and employers are not going to be taking on debt until they know for certain that part of the debt is going to be forgiven or they can afford to service the debt.”
Colorado companies that do lay off workers because of COVID-19 interruptions won’t be penalized with higher unemployment insurance premiums in the future, as is typically the case. The state is categorizing coronavirus layoffs as a social charge, so unemployment pay comes out of the state’s general unemployment trust fund, which had $1.1 billion before the pandemic. All of the state’s 160,000 employers pay into the fund.
However, keeping the business running with a full staff probably doesn’t make sense for many retailers and restaurants that have scaled back as government orders have been issued to help slow the spread of the virus. Laying off workers may be the right thing to do in this unusual event, said Mac Clouse, a finance professor at University of Denver’s Reiman School of Finance.
“Until (employers) can open the doors again, they don’t have anything that they can use to pay these people. And so for the benefit of the employee, they will be able to get unemployment if he or she has been fired or laid off or furloughed,” Clouse said. “(It’s) giving a little more certainty for them with what they can expect for at least the next few months, as opposed to just not knowing whether they’re going to get a paycheck from the small business where they work.”