Nearly everyone who interacts with New York’s decades-old unemployment benefits system agrees it’s in need of a major makeover.
That’s why advocates for those receiving benefits are largely pleased that the state Department of Labor is beginning an overhaul of the system on Monday. It’s a painstaking process that will require the state to migrate more than 5 billion business records to a new apparatus in a move that promises to make the byzantine apparatus more user-friendly.
But the massive changeover comes with a major snag: The state will shut down the entire unemployment system for several days. It’s a dramatic move that means tens of thousands of people could see their payments delayed for at least a week.
Jean Stevens, director of the benefits law project for Volunteers of Legal Service, a Manhattan-based nonprofit that offers free legal advice to those navigating the unemployment system, said the temporary pause is “a huge concern for most of the people we’re talking with.”
“They're really struggling to get by and they really rely on these benefits,” Stevens said. “They really need them to pay their bills, to pay for gas, to put food on the table. So every week is really important to them.”
About 106,000 people claimed unemployment benefits totaling $67.6 million for the week ending Oct. 17, according to state Department of Labor data. Of those, 50,206 — or 47% — were from New York City.
It’s easy to see why the unemployment system needs an upgrade.
The interface is outdated, doesn’t work on smartphones and it's only active during certain hours of the day. Calls to the help line are known to drop during peak hours. In certain instances, businesses are required to fax — yes, fax — information in. And the technology on the system dates back to the 1970s and 1980s, with some functions requiring a key punch — a long-obsolete data processing tool — to operate.
The new system is expected to fix all of that and become easier to use, allowing people to certify for benefits on their phone or tablet with a more modern interface. It’ll also have a feature that will allow anyone to check the status of their claim without having to call in. State Labor Commissioner Roberta Reardon calls it the “pizza tracker.”
The whole thing has cost the state about $188 million to build and implement, according to the Labor Department.
The upgrade has been in process since at least 2017, and has had significant fits and starts. Most notably, it was disrupted by the COVID-19 pandemic — a period of time that saw the unemployment system grind to a near-halt under the weight of more than 1 million claims for benefits in March and April 2020.
“The build has taken a very long time, but we are ready,” Reardon told Gothamist. “And when we go live, this will be a significant upgrade. This is the largest transition of [an unemployment insurance] system ever in the United States.”
The shutdown is scheduled to begin at 5 p.m. Monday and last for nine to 12 days, according to the state Department of Labor.
The state is encouraging people to file for their weekly unemployment benefits before the Monday shutdown to avoid a delay in payment, at least for the first week. The pause will not result in anyone losing their benefits; they can certify for back payments after the new system comes online.
”If you're already collecting and you certify before 5 p.m. on November 2nd, that claim will be processed as usual and your money will land in your bank account probably by the end of that week,” Reardon said.
But those who rely on the payments say that even a temporary delay could force them to make difficult financial decisions in a time where they’re struggling to find work.
Magaly Irizarry, who has been collecting unemployment since May, said a delay will “affect me tremendously” because she’s relying on the benefits to meet her credit card and mortgage payments. She said she’ll try to certify before the shutdown to avoid that.
“I think they should have another way of us getting our payment,” said Irizarry, who spoke with Gothamist at the Bronx Workforce1 Career Center. “They should have another way of us certifying.”
Kenneth Johnson, who was at the Bronx career center and has just begun receiving unemployment benefits, said the shutdown could mean he pays his bills late.
“I won’t be able to certify right then and there,” he said. “If there's a bill that's due, it’ll just have to wait until I get the money.”
Reardon said the Department of Labor considered migrating to the new system in parts. That move would’ve required a series of shorter shutdowns, rather than one longer one. But ultimately, Reardon said the all-at-once approach was determined to be the best option.
Gov. Kathy Hochul said she, too, questioned whether the shutdown was necessary. But she said she’s convinced it’s “the only way we can do the proper transition from the old system to the new.”
”We know it's not ideal, but this has been a many, many, many year process to try and take this antiquated system out of the '60s and '70s and to make it more efficient and better for our recipients,” Hochul told Gothamist on Wednesday. “After a short-term pain, there's going to be a long-term gain.”
Hochul said the Labor Department has assured her the outage won’t be any longer than 12 days, and possibly even shorter.
“We have to do it right,” the governor continued.
