Fibs, fraud, and frustrations: North Carolina’s unemployment program draws more scrutiny

Fibs, fraud, and frustrations: North Carolina’s unemployment program draws more scrutiny

- in News, Top Story
Claire Niver, Pepsi Bottling Ventures

Claire Niver, a senior vice president with Pepsi Bottling Ventures, told legislators last week the global pandemic has had a “monumental impact” on the North Carolina-based company.

Niver described in detail how the company hand-made 1,600 masks for frontline workers and created a partnership with Jim Beam so employees would have a ready supply of hand sanitizer when it was unavailable in most stores.

“We had no layoffs and no furloughs. We are an essential business,” Niver said proudly.

But throughout 2020, the company found it harder to keep existing workers and recruit new ones because of mounting fears about COVID-19.

Since the pandemic began, the company reported 550 positive employee cases or about 21% of its workforce Niver said. “We’ve lost the equivalent of 21 years of work due to quarantines.”

While federal COVID relief dollars helped Pepsi initially offset some losses, she noted that there were fewer applicants for vacant jobs. “I think there was a lot of fear at that point. And there was a lot of disincentives to work as well.”

Niver said Pepsi also recorded an uptick in unemployment claims.

“There was a lot of incorrect information flowing from DES (Division of Employment Security.) To be fair, they may not have understood fully,” Niver explained. “Our employees believed if they quit and claimed COVID, then unemployment benefits were automatic.”

Others thought they would be eligible for benefits if their hours were reduced.

Niver told members of the Governmental Operations Subcommittee on the Use and Distribution of Federal COVID Funding that she became increasingly frustrated as she tried to sort out erroneous claims with the Division of Employment Security. “I tried to reach someone at DES to discuss this. Are we unique? I could not reach anyone at DES,” Niver said.

In July 2020, Niver said she received a letter at her home acknowledging her own claim for unemployment benefits. “As an employer we also received that notification that a claim had been filed on my behalf. And so as an employer we reported ‘Nope, this is fraud.'”

She said it took nearly a year — until May 2021 — before DES dismissed the case, with the other Claire Niver from Georgia never appearing.

“All in all, an unfortunate waste of time and money,” Niver, the Pepsi senior vice president, said.

Niver emphasized to lawmakers that DES needs improved systems, enhanced training for its own employees, and a much better website. “The functionality of this system is sporadic and slow. It does lock up and when it does, you lose your work.”

Pryor Gibson, head of the Division of Employment Security

Pryor Gibson, head of the Division of Employment Security, tried to address some of those concerns when it was his turn to testify.

Gibson acknowledged the division was unprepared for the onslaught of jobless benefits claims in the early days of the pandemic.

“It wasn’t so much the amazing staff at DES made mistakes, it’s just that the job ahead of them there was no way to fiscally or physically get it done the way it should have been. And we admit that.”

Gibson was appointed to fix problems within the beleaguered division in May 2020, replacing Lockhart Taylor.

Gibson said he understands the frustrations of employers like Niver, as well as those anxiously waiting to learn the status of their unemployment claim.

“We should have been a lot more offensive in letting people know if you make a mistake you’re gonna get to the back of the line,” Gibson said. “And unfortunately, we got to tell a lot more people if you make a fib, we’re gonna find out and it’s gonna cause you a lot of grief later.”

Gibson explained that DES has now paid claimants more than $13 billion in benefits while administering nine state and federal unemployment programs.

Over 18 months, more than 1.5 million North Carolinians applied for unemployment benefits. One million qualified and 520,000 were deemed ineligible.

Under state law, all claimants are required to make three work search contacts each week and keep a detailed records of them.

Sen. Todd Johnson

“How does DES track or monitor improper payments, specifically overpayments of the UI benefits?” Senator Todd Johnson (R-Union) said.

Gibson said overpayments can go undetected for weeks.

“When you have 53,000 claims in a day, by the time you get it through a 40-year-old Social Security match system at the federal government, go through the federal tax system and then run through the North Carolina Department of Revenue and give the employer time to respond and make sure their side of the equation is heard, it takes a long time.”

“In terms of recoupment, percentage-wise what’s been the success rate?” Johnson said.

Gibson replied that in the 20 months of the pandemic DES has collected roughly $75 million in this group of overpayments.

The tens of thousands of people who received overpayment notices in the last few months are unlikely to be eligible for waivers unless state lawmakers change policy, Gibson said.

Sen. Tom McInnis

“There is a big movement nationally in Congress to try to figure out a way to do waivers for a great number of people, especially below a certain amount of money,” Gibson said.

Sen. Tom McInnis (R-Richmond) suggested the situation was better when jobless workers speak face-to-face with an NC Works officer at the county level.

“I think we might have thrown the baby out with the bath water when we consolidated everything based on the computer model,” said McInnis, in acknowledging those who don’t have high-speed internet at home to file their claims.

“It’s just a check we don’t have the money to write,” Gibson replied. “We could ask our friends  in the legislature for the money, but we know how thrifty y’all are.”

Sen. Joyce Krawiec

“I think the reason we’re here is that we sent a large number of questions to the agency and didn’t get answers back,” said Sen. Joyce Krawiec (R-Forsyth). “What was the reluctance to answering questions?”

Gibson said there isn’t enough time to respond to all the people keeping a watchful eye on the Division of Employment Security.

“Office of Inspector General, U.S. Department of Labor, our state auditor has been in our business for over a year and she’s making our life miserable,” Gibson said. “I can’t even go to the bathroom without calling Beth Wood.

“We have so much going on in our agency, we literally have to pick and choose whether we are gonna get fussed at by y’all or fussed at by the Department of Labor. And the Department of Labor – no offense – sends us the money.”

Gibson is urging lawmakers to reconstitute the unemployment insurance commission during the interim legislative session.

“We have to at least work in a way that you can know what we’re up to, so that we are making decisions that you as policy makers want us to make.”