Three months after shutting down the hair salon in her Gardiner home, Lisa Thibeau is still waiting for the unemployment benefits she was promised for complying with Gov. Janet Mills’ order to close nonessential businesses.
Morgan Osnoe of Glenburn hasn’t been able to return to work as a nursing home CNA. She was out on maternity leave when the coronavirus pandemic hit, forcing her to stay home and home-school her kindergartner and care for her infant.
And Heather Mills of Biddeford stopped receiving benefits when the state’s unemployment system was hit with massive fraud. It took her three weeks to get them reinstated.
They’ve all struggled to get through jammed phone lines at the Maine Department of Labor. When they have gotten through, they’ve been unable to get clear, consistent answers about why their claims are delayed or how much longer they must wait. Often the person answering the phone blames a computer glitch for their problems.
Thousands of Mainers are facing unreasonable waits for the unemployment benefits they were promised for following official state orders that closed nonessential businesses to help reduce the spread of the highly contagious virus that causes COVID-19. Many people have lost their patience and have grown frustrated and angry with the Department of Labor.
For the Mainers who have lost their jobs or cannot yet return to work, the stakes could not be higher.
“I have to choose what bills to pay and it’s screwing up my credit,” said Osnoe, who has been relying on her credit cards to stay afloat. “I don’t know how much longer I can wait before things start getting taken. That’s the hard part.” Last Tuesday her vehicle was repossessed.
An in-depth examination of the unemployment problems by the Portland Press Herald/Maine Sunday Telegram has found:
• The technology supporting the system for filing and processing unemployment claims has been plagued with problems since it went online in 2017. Some lawmakers called for an investigation soon after the system was launched but dropped the inquiry after an initial report from the government’s watchdog agency.
• Staffing problems exacerbated the situation. The flood of thousands of claims that came this spring, after years of low unemployment, overwhelmed the system and the employees tasked with handling them. The Department of Labor still hasn’t fully staffed up.
• A wave of fraudulent claims has worsened things. An understaffed office has been forced to weed through thousands of illegal claims, causing legitimate claims to be delayed and leading to unreasonable wait times for unemployed Mainers to receive their benefits.
• The Department of Labor has failed to properly communicate with people who have trouble getting benefits. Many unemployed Mainers say they get error messages when they try to log in, and when they call they usually can’t even reach a human. When they do, they’re unable to get answers.
• Gov. Janet Mills’ administration has not cooperated fully with the Legislature in addressing the problems, in the eyes of some lawmakers. Labor Commissioner Laura Fortman didn’t show up for a hearing to discuss the problems. Mills has said she wanted Fortman to stay focused on getting benefits out to people.
The pandemic has put the state’s new cloud-based unemployment system, ReEmployME, back in the spotlight.
Some lawmakers are calling on the state to revisit its participation in a four-state consortium that hired an international technology company based in India – Tata Consultancy Services, or TCS – to build and maintain the system and online application platform. Democrats largely blame former Gov. Paul LePage, who launched the program in 2017, for technological and staffing issues. But they are frustrated that those problems have not yet been fully addressed by Mills, who was elected governor in 2018.
Fortman, however, said in an interview that the system is running fine and the real problems have been a lack of trained staff to process claims and build new computer programs so people not typically eligible for unemployment benefits can receive benefits during the pandemic. Expanded unemployment benefits were part of the CARES Act passed by Congress in March.
Fortman said Maine has excelled at delivering benefits to Mainers and would “vehemently disagree” with anyone who suggests otherwise. She pointed to a national study ranking Maine as one of the top 10 states for processing initial unemployment claims in March and April.
“We have done a remarkable job, given the onslaught of claims and the unprecedented nature of what we and every other state is experiencing,” Fortman said in an interview only hours after her first legislative briefing in over a month. “I am incredibly proud about what staff at this department has done and been able to accomplish.”
But lawmakers in both parties are turning up the heat on the department. When Fortman failed to testify before the Legislature’s Labor and Housing Committee last month, Republicans on the committee called for her resignation. Democrats, meanwhile, are considering a variety of actions to force the department’s hand, ranging from legislation to using the Government Oversight Committee’s power to issue subpoenas.
Sen. Justin Chenette, D-Saco, who chairs the oversight committee, described the administration’s efforts to sideline the Legislature as “an affront to our democratic society.”
“Ultimately the buck stops with the governor, and I have the upmost respect for her,” Chenette said. “I really hope they hear our concerns about this and completely and utterly change course, particularly when it comes to the Department of Labor. You have to be transparent. You have to respect the Legislature. You can’t treat us like the evil stepchild.”
A ROCKY ROLLOUT
The unemployment insurance program was created in the 1930s in response to widespread unemployment during the Great Depression. The program is governed broadly by federal law, though states can and have adopted specific policies around eligibility. States are charged with administering the program.
Benefits paid to displaced workers are funded through taxes on employers, while the federal government provides administrative funding through a formula that’s pegged to the unemployment rate in each state. In other words, the lower the unemployment rate, the lower the federal funding.
The Great Recession of 2008 highlighted the need for most states to update their computer systems, so the federal government provided grants to help fund the costs.
In 2013 Maine joined a four-state consortium – with Rhode Island, Connecticut and Mississippi – that received $90 million in federal grants to fund an upgrade to its old computer systems. The idea was that combining efforts would reduce administrative and maintenance costs.
Mississippi, which holds the original contract with TCS, launched its system in August 2017. Maine modified Mississippi’s system and launched its program four months later. State officials said at the time it was a “faster, more efficient” claims system that connects unemployment and job matching services, making it easier to put people back to work.
The system went online in the middle of winter, when unemployment claims are cyclically high in Maine, given the seasonal nature of the state economy. Problems arose immediately. People had to file claims either on a computer or over the phone, but they were easily locked out of their accounts for entering the wrong password and had to call someone to get it unlocked. And people faced long wait times trying to reach claims representatives on the phone.
Sen. Shenna Bellows, D-Manchester, was one of the first legislators to raise concerns about the ReEmployME system, shortly after it was launched. She still maintains contact with whistleblowers within the Department of Labor, who continue to talk about problems with the system.
“The department is not running the computer system – the computer system is running the department,” Bellows said. “From the very beginning, I have had concerns with the ReEmployME system. It wasn’t functioning well with low employment. The state desperately needs to ramp up its technological expertise and bring in people who understand computer systems to provide additional support and bring about resolution to these challenges.”
Bellows and Rep. Ryan Fecteau, D-Biddeford and the assistant House majority leader, called for an investigation into the rollout of the system in March 2018 after whistleblowers exposed weaknesses. The whistleblowers also claimed that more than 1,000 phone messages from people seeking help were destroyed and not addressed.
The Government Oversight Committee voted that month to launch an inquiry. A year later the committee received a preliminary report from the government watchdog agency, the Office of Program Evaluation and Government Accountability, which concluded that it “may not be helpful” to review the program, because LePage was leaving office.
Chenette said OPEGA was busy investigating the shortcomings of the Department of Health and Human Services’ child protection system after two young girls were killed. Committee members were also confident that Mills would fix the issues, he said.
Now, some lawmakers want to revisit the issue. Fecteau said in a June 20 opinion piece in the Press Herald that he wants the state to review the unemployment insurance (UI) system and move away from hiring consultants like TCS.
“I am frustrated with the far too many issues presented to us by this $90 million UI system since its launch,” Fecteau said. “I firmly believe TCS developed a faulty product.”
TCS’s media representative in the United States and Canada did not respond to emails requesting an interview.
Under normal circumstances, a person who loses a job files an unemployment claim online or over the phone, and then files weekly certifications. If there are no issues, the claimant can begin receiving benefits within 10 to 14 days. If additional information is needed, the Department of Labor interviews the applicant and/or the employer.
In March, the system got overwhelmed. When the pandemic hit, Gov. Mills ordered nonessential businesses to close and ordered residents to stay home. The move, while necessary to slow the spread of the contagious coronavirus, quickly put tens of thousands of Mainers out of work. The sudden influx of unemployment claims overloaded the system and overwhelmed a skeleton staff that was already struggling to keep up with claims.
Labor Department spokeswoman Jessica Picard said she did not know how many of the 4,000 to 5,000 weekly first-time unemployment claims are being processed within the normal two-week time frame.
Several labor groups, including the nonprofit Maine Equal Justice and the AFL-CIO, set up a Facebook page to help people file claims and help the state identify common hurdles people faced. The goal was to identify systemwide fixes that would release large batches of claims languishing in the system.
The group discovered nearly a dozen “buckets” of people having trouble. Those buckets include people who received severance or bonus payments from their employers, accidentally answered a question wrong and couldn’t fix it, worked in more than one state, or worked for an employer while being self-employed.
“We get hundreds and hundreds of people messaging us on Facebook,” said Andy O’Brien, a spokesman for the AFL-CIO. “As time has gone on, the questions are getting more difficult.”
One common complaint, he said, is that the state is telling people they just have to wait longer for the benefits without providing any timeline, which adds to their stress while they’re struggling to pay for food and rent.
“It’s just an incredibly dire situation,” O’Brien said. “A lot of these people are working poor, so skipping one paycheck is bad enough. But when you have gone nine to 10 weeks without income, it is just a disaster for these people. And the amount of anxiety, pain, stress and frustration is just unbearable for these people.”
Fortman denied that representatives have been telling people they simply have to wait.
“That’s not an acceptable answer,” Fortman said. “That’s not what we’re doing. We’re working every single day to improve the system we have here.”
She said most of the people still waiting for benefits have “incredibly complicated circumstances” and those cases take time – and people – to figure out.
Unfortunately, the state is short on both.
One of the primary reasons people are having to wait for claims to be processed is a shortage of skilled workers, Fortman said. She said the unemployment office was “grossly understaffed” even before the pandemic.
Fortman said she approached the Legislature in February, a month before the pandemic hit Maine, to request more money to administer the unemployment program. The federal funding formula, she told lawmakers, pays for only two-thirds of the staffing needed to operate the system, because Maine’s unemployment rate was so low. Lawmakers approved Fortman’s request.
When nonessential businesses were ordered closed, the state had only 13 people trying to answer as many as 250,000 calls a day – a call volume driven by the fact that people could not leave messages and were told by an automated message to keep calling back.
The state entered into a contract with SaviLinx, a Maine-based call center, to help answer calls, Picard said. That contract, which cost $140,000 a week, took effect April 10. Within 10 days the state had 100 people answering the phones.
It normally take three months of training before a claims representative can begin answering phones on their own, so the state instituted a tiered calling system, Fortman said. Call center workers with limited training and knowledge of unemployment law answered most of the calls and sent the more complicated questions to the 13 trained employees.
“There was no magic wand to wave and bring in deeply knowledgeable unemployment insurance specialists,” Fortman said, adding that the state continues to train workers. “For government, we’re moving at the speed of light.”
The state is hiring more workers, but that process will take months, Picard said. Maine plans to double staffing in its unemployment compensation bureau to 273 by the fall, adding eligibility specialists, claims adjudicators, fraud investigators, accounting specialists, hearings officers and other positions.
But Chenette, the senator who leads the oversight committee, said the state should have also tapped into its existing workforce and Maine needs an emergency plan to prevent future staffing issues.
“There is no reason we cannot be redirecting some of the 10,000 state employees to be working the phones and training them accordingly,” Chenette said. “I still have constituents who cannot reach a live person at the Department of Labor. That’s unacceptable.”
The state’s skeleton staff would soon have a big problem to confront – widespread fraud by organized international criminal gangs. Their solution would further delay claims.
A WAVE OF FRAUD
The U.S. Secret Service warned states in May that the organized criminals who had stolen people’s personal information from a variety of data breaches at private companies were filing false unemployment claims. Maine began suspecting fraud was inflating unemployment claims in late May and took drastic measures to address it, including freezing all payments for two days.
Prior to that, the state had expedited decisions on 19,000 claims and eliminated a 10- to 14-day waiting period to determine eligibility in late April to help ease the backlog of claims. The state was hit with its first wave of fraudulent claims the week of May 28.
By July, the state had canceled more than 71,000 fraudulent claims. Fortman said the state is still investigating how much was paid out in fraudulent claims. CNBC reported June 16 that Maine had the highest rate of fraud per capita in the United States.
Those drastic fraud-prevention measures, however, caused nearly 11,600 people with legitimate claims to have their claims canceled and flagged as potentially fraudulent. They weren’t told why their payment suddenly stopped.
Many people with legitimate claims were not aware they were part of a fraud investigation until they checked their unemployment accounts and saw that their payments had been scheduled for the year 9999. Many people had their claims suspended for far more than 48 hours.
That was the case for Heather Mills, a 41-year-old Biddeford resident who lost her job as a pet food merchandiser on March 21. Her benefits were suspended for three weeks because of the fraud investigations – far longer than the two-day estimate the state had provided.
Mills had no idea her claim had been flagged until she logged onto her account to see why her benefits hadn’t arrived and saw the 9999 payment date. Nor did she know what to do about it, because the state never contacted her. News reports suggested claims would be released in a matter of days, but that didn’t happen. She then tried to call the state, but an automated voice kept telling her to call back. And she did – 72 times by her count.
Mills saw a June 3 post on the Department of Labor’s Facebook page telling people with 9999 payment dates to email personal documents – driver’s licenses, passports, Social Security cards – to the state so their claims could be reinstated. Mills did that, even though she worried that it was a scam. Her benefits were reinstated a week later.
The whole process took a toll on her.
“The juggling all of this – not having a date and not knowing what you’re going to do. It puts you in this complete panic,” Mills said. “It’s just constant worry and constant wonder about how you’re going to make ends meet. It’s just scary.”
At the same time, many people who had fraudulent claims filed in their names haven’t been properly told so, said Sen. Bellows. She said she personally received letters saying she had been approved for unemployment, even though she was still working, and the letter did not contain any mention of potential fraud and what should be done.
“I think how we’re handling this fraud is a recipe for disaster,” Bellows said.
Bellows also criticized the department for making people email sensitive documents rather than providing a secure online portal. Fortman defended the practice, saying the department frequently handles personal information this way and that no one has had their personal information stolen from the state.
Inadequate communication is one of the biggest complaints about the system.
At first, people struggled to get a human on the phone. When they did, the representative – likely a call center worker – would either not know the answer or say something that would later be contradicted by another employee. Call transfers to supervisors would get disconnected. Some claimants said they encountered rude representatives who told them they just had to wait longer for the system to process their claims.
Many people came to rely on the “Maine Unemployment Insurance Assistance” Facebook group operated by Maine Equal Justice and the AFL-CIO to seek information about claims, especially when they were flagged for fraud.
Lawmakers have criticized Fortman for not holding regular briefings, depriving them of information needed to help constituents navigate the process.
Fortman conceded that the department, like most agencies and private corporations, could improve communications with claimants and lawmakers. She said the department has since assigned three representatives to handle claims that are elevated by lawmakers.
“My priority was getting benefits out to people,” Fortman said. “The communication can be improved and will be improved going forward.”
Lisa Thibeau was forced to shut her hair salon when the state ordered nonessential businesses closed March 24. Small-business owners are not usually eligible for unemployment, but they became eligible under the CARES Act.
Thibeau said she still hasn’t gotten a clear answer about whether she will receive Pandemic Unemployment Assistance benefits for her lost salon revenue and has considered giving up the effort.
“We had to tap into our savings, which dwindled our savings down, because that was a huge wage that was in my family,” she said. “They shut you down and you do what they tell you to do. and then they don’t hold up their end of the bargain.”
Senate President Troy Jackson, D-Allagash, said the Department of Labor “was decimated under the previous administration – I don’t think anyone can argue that.” But Jackson, a professional logger who got into politics after helping lead labor protests on the Maine-Canada border, said the LePage administration’s actions do not excuse the problems dragging on for months.
Jackson said desperate constituents showed up to his house one night asking for help.
“It’s the worst-case scenario to have someone stopping by your house pleading for help and to not be able to help them,” he said.
Fortman said in a June 18 interview that there is nothing structurally wrong with the ReEmployME system, which costs Maine $6.2 million this year, though she admits it’s not user-friendly.
One of its drawbacks, Fortman said, is it cannot be used on mobile devices. She said she’s committed to improving the system so it’s easier to use. She said her department was in the process of improving the public interface when the pandemic hit and plans to continue those efforts as soon as possible.
“Although it performs its core functions, I wouldn’t have chosen this public interface,” Fortman said. “It is not meeting the needs and expectations of Maine workers and employers. It did not have broad public testing before it was launched, and has had criticisms since it was implemented.”
While some lawmakers want the state to revisit its participation in the consortium, Fortman said TCS has been “incredibly responsive” to the state’s request for system fixes. She said in recent months the state has submitted about 300 tickets a month to fix either systemic issues or address individual cases, of which about 75 percent get resolved within the same month.
While some Democratic lawmakers blame LePage for inadequate staffing in the unemployment office and the issues associated with ReEmployME, Sen. Stacey Guerin, R-Glenburn, who serves on the labor committee, said those attempts are “disingenuous.” She said the initial system glitches were fixed, which is why state watchdogs decided a full inquiry wasn’t warranted.
Guerin said she has constituents who haven’t gotten their benefits and are not able to get any information from the department. She said weekly briefings for lawmakers are no substitute for live questioning, because the administration can easily dodge tough questions – such as the total amount of fraudulent benefits that have been paid out and why the state hasn’t partnered with private companies, such as Google or Amazon, to improve its phone or computer systems.
“Having updates, you can put a shiny face on your failure by emphasizing your successes within the failure of the system as a whole,” she said. “And that’s what I have seen in those updates.”
LOOKING FOR FIXES
Chenette, the Democratic chairman of the oversight committee, said that once lawmakers can safely reconvene, a package of bills may be introduced to force the administration to be more transparent and collaborative with lawmakers, who have largely been sidelined under the governor’s emergency proclamation.
Fortman and other administrative officials had briefed lawmakers several times early in the pandemic. But those briefings were stopped after reporters learned they were being done without public notice and in violation of the state’s Freedom of Access Act, which requires elected and government officials to conduct businesses in a public forum.
She appeared before the Labor and Housing Committee on May 6 but did not attend a meeting in June, after widespread fraud had been detected and the state canceled benefits to at least 7,300 people with legitimate claims.
Gov. Mills’ office did not respond to an interview request. Her press secretary referred a reporter to a previous statement explaining that the governor had directed Fortman not to testify because she wanted her to focus on getting benefits to people who needed them and because lawmakers were disrespectful of the commissioner during a previous hearing.
Press Secretary Lindsay Crete suggested that lawmakers should do something more productive than criticizing Mills and the Department of Labor about a problem they’re already trying to fix.
“What would be appreciated is if lawmakers dedicated their time and talent into strengthening the basic infrastructure of government outside of a pandemic, rather than attack the Department in the middle of one about problems it is already hard at work trying to fix,” Crete said in a written statement.
Both Republicans and Democrats were incensed when Fortman did not show up to answer questions. A couple of Republicans called on Fortman to resign.
Fortman has since told lawmakers that she would resume weekly briefings. The first occurred June 18.
During those briefings and in interviews, Fortman has repeatedly mentioned Maine’s performance compared with other states.
Maine was ranked the sixth-best state for getting unemployment benefits out to applicants in March and April, according to the Century Foundation, a progressive, left-leaning advocacy group.
Michele Evermore, a senior policy analyst for the National Employment Law Project, an advocacy group for low-wage earners, said every state is struggling to handle the surge in claims and build new programs for people not previously eligible. She said Maine was one of the few states in the country to update its system and make “good-faith” efforts to improve it.
Evermore said most of the 16 states that have updated their unemployment systems have done it through a consortium, and none of the rollouts have been smooth, she said.
Maine and Mississippi are the only two states in their consortium to have launched new programs. Rhode Island stopped working with the consortium in 2018, because of delays and testing concerns. When the pandemic hit, Rhode Island turned to Amazon Web Services and Brown University for help reprogramming its system, so it could administer benefits under the Pandemic Unemployment Assistance program. That program was up and running nearly a month before Maine’s.
Bellows, who leads the labor committee, said she doesn’t care how Maine ranks nationally.
“My concern is when I talk to constituents who have fallen into debt, are behind on their bills and are desperate to get help for their families – they’re not interested in whether Maine is in the Top 10 or Top 25 in the country,” Bellows said. “They want to know what steps Maine is taking to make system improvements.”