Correction: This article originally stated Oregon has paid 4 million in unemployment benefits since march, this number is 4 billion. This article has been updated with this number.
The Oregon Employment Department announced on Thursday, Sept. 10, a vendor was chosen to replace its unemployment benefits technology: a Colorado company called Fast Consulting that has provided similar systems to Washington, Michigan and other states as well as a separate system for the Oregon Department of Revenue.
Fast Consulting has experienced issues in the past with fraud detection in Michigan and Washington, but Michele Evermore with the National Employment Law Project told OregonLive that it’s difficult for unemployment benefits technology to work seamlessly despite vendor.
Oregon has not yet negotiated terms of its contract with Fast Consulting, so the selection is not final. The project is set to be completed in 2025 with a budget between $80 million and $123 million.
Oregon received $86 million in federal money to upgrade its computers in 2009, but didn’t begin choosing a replacement system until 2017, giving themselves an eight-year timeline to finish the project.
The pandemic shed light on the antiquity of the employment department’s current computers and how they affect efficiency. The current systems are from the 1990s and have proved to make processing the surge in unemployment claims more difficult.
Partly due to the old system, hundreds of thousands of Oregonians have been left waiting weeks or months for benefits during hard financial times caused by the COVID-19 pandemic. According to OregonLive, the old system routinely rejects legitimate claims, sends out erroneous mailings, and requires manual adjustments to thousands of applicants before they can be processed.
Oregon has paid $4 billion in employment benefits since March and has addressed the majority of claims filed during the pandemic, but many Oregonians are still waiting on their benefits to be adjudicated or resolved before being paid.
The employment department’s technology has also been incapable of adapting to the benefits program Congress authorized in March. Oregon hopes to begin paying the money in November, but if it fails to do so, it could miss an end-of-year federal deadline – meaning the state and unpaid workers would forfeit the money.
New computers won’t completely solve the state’s current issues with unemployment payouts, but it could prevent similar future problems.
Fast Consulting’s rollout in Michigan in 2013 ended up going badly when the company built the state’s MiDAS employment system which incorrectly rejected 34,000 legitimate jobless claims for fraudulence. However, the company’s rollout in Washington went better after learning from the mistakes made in Michigan.
However, as OregonLive reported, Washington’s system suffered a blow this past spring when the state paid $576 million in fraudulent claims amid the pandemic layoff surge. Evermore chalked that up to the state’s prioritizing quick payments over fraud detection, not a defect of Fast’s system.
By Cara Nixon