In a recent panel discussion led by Acting Secretary of Labor Julie Su, members of Congress, leaders from Connecticut's Department of Labor (CT-DOL), and representatives from business and labor, gathered to discuss the monumental efforts underway to modernize Connecticut’s Unemployment Insurance (UI) program and bolster funding of the state’s UI benefits against future crises. The conversation, hosted at the Connecticut DOL headquarters in Wethersfield, CT on January 26, 2024, emphasized collaboration and innovation as essential parts of the ongoing UI transformation journey.
From the U.S. Department of Labor, Acting Secretary Su was joined by the Director of the Office of Unemployment Insurance Modernization (OUIM) Andrew Stettner and the Deputy Assistant Secretary of the Employment and Training Administration (ETA) Lenita Jacobs-Simmons. Danté Bartolomeo, Commissioner of the CT-DOL, opened the panel by acknowledging the steadfast support of federal partners, who have invested millions in modernization and workforce initiatives in Connecticut and across the nation.
Connecticut Congressman Joe Courtney and Congresswoman Jahana Hayes then underscored the pivotal role of DOL in strengthening the state's workforce through UI system modernization. Congressman Courtney also lauded Connecticut's pioneering efforts in implementing the Shared Work program (in place since 1992), which has helped businesses prevent layoffs by allowing them to temporarily reduce employee hours and use partial UI benefits to supplement wages and has been replicated by half the states.
Lessons from the Pandemic and Vision for the Future
In her remarks, Acting Secretary Su commended the CT-DOL staff for their efforts during this challenging period. She also articulated the lasting lessons learned during the pandemic, emphasizing the indispensable role of UI benefits in safeguarding individuals and communities during times of crisis. The distribution of over $850 billion in UI payments to over 50 million Americans—with many states facing a 3000% increase in UI claims virtually overnight—highlighted the critical importance of these benefits in sustaining livelihoods and stimulating local economies. In fact, studies indicate that every dollar invested in UI yields up to a $2 contribution to the economy.
“The unemployment system was like a house with a leaky roof,” said Acting Secretary Su. “The government ignored the leak for more than a decade, because, when unemployment was low, we could. But when the storm [of the pandemic] came, the predominant approach of chronic underfunding proved detrimental. Despite calls to overhaul the system in 2020 and 2021, you can’t repair a damaged roof in the middle of a storm... That’s why now is the time to take action to make these overdue repairs.”
Acting Secretary Su went on to highlight how quickly the economy has rebounded after the COVID-19 pandemic, with 23 straight months of unemployment under 4% – a trend not seen since the 1960s. She emphasized that for UI to exercise its irreplaceable role in lifting unemployed Americans through economic crises and averting prolonged “scarring,” states and the federal government need to take advantage of good economic times to execute badly needed modernization projects.
Acting Secretary Su also pointed to the federal government’s commitment of $1 billion aimed at enhancing timeliness, equitable access, and fraud prevention throughout UI programs across the nation. Part of this effort has included the deployment of expert multi-disciplinary Tiger Teams to provide recommendations that address states’ immediate needs and areas for improvement in operational processes and customer experiences, while also targeting solutions that combat fraud and expand access for eligible claimants. Tiger Teams have provided over 378 personalized recommendations to 36 states, including Connecticut.
Modern Technology Solutions for Connecticut’s UI System
Panelists discussed the many benefits of the ReEmployCT system, the state’s new unemployment benefits and tax system. Launched in 2022, it replaced the agency’s 40-year-old technology, and transitioned many system components online for both claimants and employers, reducing the reliance on traditional mail or fax. The ReEmployCT system, developed with major funding from the Department, is part of a consortium of states including Connecticut, Maine, and Mississippi that jointly maintain the system.
Of the many advantages of such “shared technology,” Commissioner Bartolomeo cited the significantly reduced price tag of the overhaul—from $80 million to $60 million—because of the consortium structure.
Daryle Dudzinski, Deputy Commissioner at CT DOL, also spoke of how ReEmployCT helped process 258,000 UI claim applications and 50,000 business applications through increased automation, including new account creation and bringing new forms online.
A critical component of the CT system is SIDES (State Information Data Exchange System), a web-based system that supports a streamlined transmission of information requests between state UI agencies and employers and/or Third-Party Administrators. With the support of the Tiger Teams engagement and funding, Connecticut was able to keep the SIDES system functioning throughout the transition to the modern ReEmployCT system in Summer 2022, ensuring a consistent user experience for the state’s employers.
Rich Siegel, President of the Unemployment Tax Management Corporation, also highlighted how SIDES has helped Connecticut avert fraudulent claims sooner while ensuring prompt payments.
Other panelists continued to emphasize how multi-state collaboration through consortiums and technology-driven solutions is heralding a new era of efficiency and transparency in UI administration.
Additionally, Alexa Tapia, Unemployment Insurance Campaign Coordinator at the National Employment Law Project (NELP), spoke of the importance of ARPA funding towards UI modernization in states like Connecticut. ARPA is precipitating equity-enhancing system improvements and promoting recognition of the importance of making UI accessible to all eligible unemployed, regardless of background. She emphasized the importance of taking decisive action to address the low rate of unemployed individuals receiving benefits – under 30 percent nationally.
Collaborative Efforts to Rebuild and Stabilize Funding for CT’s UI Benefits
As the discussion drew to a close, stakeholders underscored the importance of fostering an adequately funded and stable UI program. Connecticut's legislature passed Public Acts 21-200 and 22-67, which promote long-term solvency of the fund that dispenses Connecticut’s UI benefits. At a time when most state UI taxable wages bases do not exceed $15,000, due to the low federal base of just $7,000, Connecticut raised its taxable wage base from $15,000 to $25,000, effective January 1, 2024, and indexed it annually to inflation after that. This ensures the stability of the state’s UI trust fund and helps prevent Connecticut from having to borrow from the federal government to finance regular UI benefits when unemployment rises in the future.
Reflecting on the success of the collaboration between business, labor, and legal services to tackle the long-term solvency of the state’s UI benefits and develop a solution that would work for all stakeholders, Shawn Coyne, Vice President of Human Resources at the Electric Boat Corporation, said, “We had a focused mindset. We knew we had a problem, and we knew we had to fix it.”
Collaborative efforts to tackle solvency challenges and promote workforce development initiatives reflect Connecticut's unwavering commitment to equitable economic prosperity. Connecticut exemplifies the kind of leadership needed to ensure that assistance provided by the American Rescue Plan Act can help unemployment insurance systems flourish.