CBS 58 Investigates: Thousands waiting for unemployment checks due to computer system, appeals backlog

MILWAUKEE (CBS 58) -- Processing unemployment claims is still a huge issue facing Wisconsin. Tens of thousands of people aren’t getting payments and state officials are telling them they just have to wait.

There are two big reasons why people are stuck waiting for unemployment payments. One reason is DWD still hasn’t implemented pandemic unemployment programs passed back in December by Congress. The other reason is there is still a backlog of appeals.

As the clock ran out on pandemic unemployment programs in December, Congress passed a benefit extension.

“[The new relief bill] provided me a lot of hope, and I figured salvation, to hospitality workers like myself that have been out of work for a long time,” said Peter O'Malley, who worked in the hotel industry and is waiting for pandemic unemployment payments.

Fast forward to March, and Peter O’Malley and tens of thousands of other people in our state are still waiting for unemployment money.

“It’s so frustrating,” O’Malley said. “People are starving. They’re getting evicted. They have bills.”

Here’s the problem: in order to pay out the federal benefits passed at the end of last year, the Wisconsin Department of Workforce Development has to reprogram its computer system.

“It starts with having this very old, 50-year-old mainframe system, that doesn’t allow us to do things at the same time,” said Mark Reihl, the unemployment insurance division administrator for the Wisconsin Department of Workforce Development.

In February, DWD launched a tracker on its website so people could find out when to expect benefits.

Pandemic Emergency Unemployment Compensation is for people who’ve used up regular unemployment benefits. That program is expected to launch March 4.

Pandemic Unemployment Assistance and Mixed Earners Unemployment Compensation won’t happen until the end of April. Those are programs for individuals who are self-employed, have limited recent work history and others not covered by regular unemployment.

“We are frustrated,” Reihl said. “I wish the Department of Labor could just send us a software program we could plug in, but until we have a modernized IT system, that’s not going to change.”

DWD doesn’t know exactly how many people are waiting for the benefits, but an estimated 35,700 people may qualify for Pandemic Emergency Unemployment Compensation and another 14,000 for Pandemic Unemployment Assistance. 

Legislation approving a new IT system passed the Legislature last month, but it will take years to get the system up and running.

“We’re dealing with an unprecedented situation,” said Nicholas Yurk, an employee rights attorney at Allan Olson Law Firm. “The solution isn’t a new computer system so much as it is structural, in related to the questions and reasons for denial and the various hang-ups that people encounter during the process."

Yurk says in addition to computer system problems, thousands of people were denied benefits last year and there is a backlog of appeals.

“That’s one of the issues we’ve seen with the adjudication timeline being sped up and that backlog being cleared, it resulted in probably a lot of denials, that if the department were working at regular capacity, would have been avoided,” Yurk said.

DWD says there are about 19,000 people waiting for appeal hearings.

Yurk’s advice to anyone filing weekly claims -- make sure you understand the forms and call DWD or an attorney if you have any questions before you file.

“The easiest way to avoid problems is to avoid triggering a review in the first place,” Yurk said. “And so it’s better to review your initial application.”

But that advice doesn’t help people like O’Malley, who did it right and are still stuck waiting.

“I’ve had to borrow money from family members,” O’Malley said. “I’ve had to scrape what I had in my savings to make it last and try to move forward. But I’m literally my last thread.”

There are potentially more problems on the horizon. Congress is working to pass another relief bill with more unemployment benefits, and DWD may need to reprogram the computers again. If that happens, people could be waiting several months before they get those benefits.