The Department of Labor's new Office of Unemployment Insurance Modernization is tasked with managing the $2 billion already allotted to UI initiatives by the American Rescue Plan Act.
To help states modernize their unemployment insurance benefits systems, the Department of Labor is standing up a new office to provide oversight and management, help prevent and detect fraud, promote equitable access, ensure timely benefits payments and reduce backlogs. The Office of Unemployment Insurance Modernization is tasked with managing the $2 billion already allotted to UI initiatives by the American Rescue Plan Act.
Labor Secretary Marty Walsh has been vocal about his commitment to solving chronic problems in the UI space, which intensified after the onset of the pandemic. States faced both more claimants and increasing numbers of fraudulent claims with many still administering their UI program with legacy technology.
A central role of the new office will be implementing a UI modernization plan announced by the agency earlier in August. It splits the $2 billion investment from the American Rescue Plan into different types of grants for states.
For starters, $260 million will be doled out as "equity grants," meant to be used to improve customer service and claimant outreach, reduce claims backlogs and improve access for low-income claimants.
The agency will give $140 million to states in the form of "fraud grants" administered by DOL's Employment and Training Administration. That money will cover the subscription costs for identity verification tools, the establishment and expansion of data analytics and the implementation of cybersecurity defense strategies.
As part of that plan, DOL will work with states on identity verification via a blanket purchase agreement with three vendors for cross-matching technology that will verify the identity of applicants when they file for unemployment insurance and will flag any suspicious activity that comes up after someone has filed.
The agency is also working with the U.S. Digital Service to create a set of modular tech that states can use as they modernize. That idea that DOL be a central source for modular tech solutions states can piece together to modernize has been pushed by some lawmakers in Congress.
This article was first posted on FCW, a sibling site to GCN.
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