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Kentucky unemployment office cannot find workers

Officials with the Kentucky Labor Cabinet told state lawmakers this week that the Division of Unemployment Insurance is having a difficult time finding workers.

The issue, which was discussed in an Unemployment Insurance Reform Task Force, is happening because of the way 90 jobs were funded in the budget passed earlier this year. Gov. Andy Beshear requested staffing to help what he said was an agency that had been gutted by the prior Bevin Administration and then overwhelmed in early 2020 by the amount of COVID-19 related jobless claims.

The General Assembly used one-time federal funding for those positions, Labor Secretary Jamie Link told the panel. That means the positions aren’t guaranteed to roll over into the next budget.

“One of the impediments that creates is the ability – like many employers across the state right now – to attract talented staffing to come work and, and address this issue,” Link said.

The Democratic Beshear Administration is seeking more than $8.4 million in state funding to make the 90 positions permanent. However, the plan was met with concerns by the Republican-led legislature.

State Sen. Mike Nemes, R-Shepherdsville, a task force co-chair, said the Bevin Administration’s intent was to remodel the unemployment system into career centers. Nemes, who worked in the Labor Cabinet under Gov. Matt Bevin, said the centers would be staffed with counselors who would provide a wider range of services than just accept unemployment claims.

State workers who previously held jobs in the unemployment department were retained elsewhere, state Rep. Russell Webber, R-Shepherdsville, the other co-chair, said.

State Sen. Ralph Alvarado, R-Winchester, recalled the legislature offered to give the unemployment office staff from the Legislative Research Commission last year that could have been trained and handling some of the unresolved issues that have plagued the system during the pandemic. However, he said that the administration turned down that offer.

“That’s my concern is that we’ve had an opportunity for manpower, for temporary manpower to help during this time,” said Alvarado, who asked Link to take the offer to Beshear again. 

The inability to find workers for those positions is the latest obstacle for the unemployment department that has struggled to pay outstanding claims since the beginning of the pandemic nearly 17 months ago.

In addition to being understaffed, Beshear has pointed to an antiquated processing system that was ill-equipped to handle a program that was expanded significantly due to business closures tied to the pandemic.

The state issued a request for proposals for a new system in January 2020, but after a vendor was selected, additional requirements were added to the system after unemployment systems became the targets of cyberattacks. Link said that added millions more beyond the initial cost of $40 million, prompting the vendor to withdraw.

As the cabinet prepares to issue a new solicitation, Link said the state is trying to participate in a U.S. Department of Labor project that would create a “core unemployment insurance system” that handles federal requirements and be flexible to account for state needs.

If Kentucky is accepted into the project, Link said that would allow the federal government to cover some of the state’s costs for the new system.

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