New Jersey Selected as Pilot State for Federal Unemployment Improvement Project

TRENTON – The New Jersey Department of Labor and Workforce Development (NJDOL) announced today it has been chosen by its federal partners at U.S. Department of Labor (USDOL) and U.S. Digital Service (USDS), housed in the Office of the President, as a pilot state for modernization and improvement of the federal unemployment insurance system.

The goal of the Claimant Experience Pilot is to design an application system that provides equitable and timely access to unemployment benefits for eligible workers, while rooting out identity theft and other fraud issues that have bogged down state unemployment systems throughout the COVID-19 pandemic. The other pilot state partner is Arkansas.

“The Department of Labor is committed to working with our federal and state partners to develop an Unemployment Insurance system that is efficient and scalable so qualified workers can access benefits when they need them most,” said U.S. Secretary of Labor Marty J. Walsh. “Through our collaboration with U.S. Digital Service and our first state cohorts, Arkansas and New Jersey, the Department of Labor will address some of the most common challenges claimants face when accessing state UI systems.”

New Jersey was chosen to lead this national effort for several reasons: The state consistently leads the nation in the percentage of unemployed workers who successfully receive benefits; NJDOL has established a successful working relationship with USDOL and USDS; it has received an extraordinary number of unemployment applications (2.4 million) since March of 2020; and it found innovative solutions to paying benefits during the past 21 months, a time of unprecedented demand.

“The pandemic shed a light on the challenges and shortcomings of the federal unemployment system. With this announcement, New Jersey will be at the forefront of modernization, and permanent, meaningful reform. This administration and our partners in the federal government will work hand-in-hand to bring more equity, fairness, and accessibility to our workers – especially in times of unforeseen hardship,” said New Jersey Gov. Phil Murphy.

“No state was spared from the deluge of unemployment claims nor from the difficulties of implementing numerous new federal unemployment benefit programs created to assist workers during the COVID-19 pandemic,” said Labor Commissioner Robert Asaro-Angelo. “Today, with resources from our federal partners at U.S. Department of Labor and U.S. Digital Service, New Jersey is proud to join our counterparts in Arkansas to modernize and streamline the cumbersome unemployment system, and pilot a model modular system for the entire country.”

New Jersey’s Chief Technology Officer, Christopher Rein, said: “New Jersey understands how essential it is to service our residents with modern and efficient technology; and given the strong interconnections between state and federal systems in providing unemployment benefits, being selected as one of two states to work with our federal partners on the new UI technology is both a challenge and an honor. I look forward to working with Commissioner Asaro-Angelo in this venture.”

As New Jersey’s Chief Innovation Officer, Beth Simone Noveck, noted: “We have an opportunity to raise the bar for what should be expected from a critical government service that provides stability to families and individuals in times of great need. The human-centered approach that has been successfully applied over the past decade to improve the delivery of services in areas ranging from veterans benefits to vaccine access will now be applied in a federal-state collaborative pilot effort to ensure our state’s unemployment insurance system is equipped to meet the needs of workers and their families.”

Commissioner Asaro-Angelo recognized early in the pandemic the need for federal reforms to streamline and simplify the cumbersome and sometimes arbitrary criteria claimants are required to meet each week to continue to receive benefits. In September 2020, he wrote a letter to New Jersey’s Congressional Delegation outlining critical reforms needed at the federal level, some of which are now being tackled under this pilot program from the Biden Administration.

“The current system is inefficient and needlessly difficult to navigate, and it implicitly classifies some forms of work as less ‘deserving’ of unemployment benefits than others. I say this even as our Department consistently leads the nation in the percentage of unemployed residents who receive benefits in a state that has the highest percentage of workers who were eligible for traditional unemployment insurance.” He added, “These changes to the system can help us deliver benefits more efficiently and fairly in the future – all the time, not just at the height of a crisis.”

While states mobilized quickly to implement crucial new federal pandemic unemployment programs, agencies across the nation were hamstrung by inflexible technology that was not built to handle the crush of claims we received nor the dozens of changes to the federal programs made during the pandemic.

Though these difficulties were often mistakenly attributed to computer system glitches, the issues most often occurred because of the web of complex federal laws and processes that require us to verify workers’ information, receive and review wage records – often from multiple parties and multiple states – verify identities, and make sure only those eligible for benefits receive them. Despite all this, the overwhelming majority of unemployment insurance benefits filed in New Jersey are paid without issue or delay.

In the past 21 months, New Jersey has distributed more than $36 billion in COVID-related benefits to workers.

The Claimant Experience Pilot starts early next year, focused on creating a user-friendly entry to the system with an integrated identity verification component, which is now required, but is a completely separate step.