The massive Unemployment Insurance fraud during the pandemic, including the estimated $11 billion loss by the California Employment Development Department has apparently triggered federal legislators to act. This month they introduced the Unemployment Insurance Technology Modernization Act to help solve the problem.

One of the bill sponsors, Congressman Steven Horsford (Nevada) provided the following rationale.

“State unemployment insurance systems have been neglected for decades, with many running on technology from the 1960s. The consequence of these broken systems has been millions of jobless workers waiting months to receive their benefits, and struggling to keep a roof over their heads and put food on the table. These outdated systems are also susceptible to attacks from organized criminal networks that have stolen billions of taxpayer dollars from the program. It is clear that an upgrade is long overdue.”

“Rather than invest in 53 state systems, the Unemployment Insurance Technology Modernization Act would invest in federal technology capabilities all states could use to administer their unique unemployment insurance programs. Not only will this approach ensure that all states have access to modern, state-of-the-art technology, but investing in a single set of technology capabilities is far more cost-effective than building 53 separate systems.”

Specifically, the Unemployment Insurance Technology Modernization Act:

– – Requires the U.S. Department of Labor to work with technology experts to develop, operate, and maintain a modular set of technology capabilities to modernize unemployment compensation technology.
– – States will be able to use all of the capabilities or choose to use only those capabilities that meet their needs.
– – The updated technology will help states ensure timely and accurate delivery of payments and better identify fraudulent claims.
– – Prioritizes user experience, including by requiring consultation and testing with claimants, employers, State workforce agency staff, and other users.
– – Requires a study to evaluate unemployment insurance technology needs, with an emphasis on program accessibility and equity.
– – Establishes a new Department of Labor Digital Services Team to expand the Department’s ability to assist states with technological issues.
– – Ensures the use of best practices in cybersecurity, procurement, and transparency during and after the development of the technology capabilities.
– – Includes accessibility requirements for online claim-filing systems.
– – Ensures that the new technology capabilities do not rely on automated decision systems that may produce biased results without impact assessments and public input.

According to the language of the proposed Act “Not later than 2 years after the date of enactment of this section, the Secretary shall develop, operate, and maintain a modular set of technology capabilities to modernize the delivery of unemployment compensation.”