Wisconsin’s antiquated unemployment insurance program is in the middle of an $80 million makeover. But officials are already planning for how they’ll keep that new system running smoothly after the four-year project is complete, the head of the Department of Workforce Development said on a call with reporters Tuesday.
The system’s flaws were revealed in 2020, when a flood of claims from newly unemployed Wisconsinites early in the COVID-19 pandemic overwhelmed the outdated system. In 2021, Gov. Tony Evers announced he’d spend $80 million in federal pandemic relief funds to modernize it.
Since then, the department has added a trilingual chatbot and an artificial intelligence-powered “super adjudicator” named Judy. Soon, there will be an online portal where employers can file taxes and submit the documents needed to get workers their benefits, and a “cloud-based flexible system” will replace one that still uses a 60-year-old computer language that few programmers today know.
In September, the project got an additional boost with an $11.25 million grant from the U.S. Department of Labor.
The department is on track to complete the modernization by 2025 as planned and within budget, DWD Secretary Amy Pechacek said in December.
But while the new system will be “fully modern,” the state will need to continue to budget money “to make sure that we never find ourselves … 50 years behind in technology again,” Pechacek said.
“It's no longer once in a generation we update a system and wait 50 more years until it's completely outdated. We are really going to be looking at this on an annual basis to continually update technology.”
Delays and disparities
At the time the pandemic hit Wisconsin, those applying for unemployment benefits could only submit their required documents by mail or fax. Once the documents arrived, they joined a “mountain of paper” that DWD staff had to enter by hand into a system that still ran on a “Nixon-era mainframe computer,” Pechacek said.
The system used COBOL, a programming language that was created in the 1950s and fell out of favor decades ago. “This UI system was antiquated,” Pechacek said. “I'm talking about the black screen with the green blinking cursor where you have to press F5 to navigate around.”
By September 2020, the department had a backlog of 770,000 claims waiting to be paid.
Delays weren’t the only problem. In an analysis of payouts of the Pandemic Unemployment Assistance program, which provided benefits to part-time, temporary and self-employed workers who don’t typically qualify for traditional unemployment, federal watchdogs at the U.S. Government Accountability Office found stark racial disparities.
From January 2020 through April 2021, Black applicants were about half as likely to receive benefits as white applicants, while Hispanic or Latino applicants and Native American applicants were approved only slightly more often, they found. Wisconsin officials told the watchdogs that they did not know what caused the disparities.
The current overhaul is designed to address both types of issues by making the system easier and faster to use for applicants, employers and the DWD staff who process claims. There’s already a new portal for applicants to check the status of their claims, along with a separate employer portal so the DWD won’t have to mail an applicant’s former boss to request the paperwork they need.
To carry out the biggest part of the overhaul, DWD hired Madison-based software development and user experience design company Flexion to combine “off-the-shelf software and cloud-based solutions” with “significant custom software development,” DWD wrote on its website in September 2021.
The system has already incorporated two AI tools. In November 2020, DWD hired Google to create a “predictive analytics tool” that would help staff sort claims and clear the backlog. Trained on a few million previously adjudicated claims, Judy the Super Adjudicator reviewed each claim and determined which were likely to qualify. Those that Judy deems likely ineligible received a full review from DWD staff, Pechacek said. A month later, the backlog was gone.
“Our approach was the first of its kind in the nation and has been validated through numerous audits and reviews,” Pechacek said.
Meanwhile, Mattie Moo, the chatbot the department launched in 2021 to answer common questions from job seekers, now has a second job working for unemployed applicants. Online, she can answer more than 100 questions 24 hours a day in English, Spanish and Hmong. By phone, she can help applicants in English or Spanish when the human staff aren’t staffing the phones.
The department has also hired Wisconsin nonprofit United Migrant Opportunity Services to do outreach to help more people learn how to apply for benefits. That effort, funded by a $3 million grant from the Department of Labor, targets several specific groups: farmworkers, Wisconsinites who are not fluent in English, tribal members, and those who live in certain “historically underserved” rural and urban areas.
Other efforts to make the process more accessible include rewriting its application in plain language and adjusting the contrast on the website for people with color blindness or low vision.
The department is also looking for ways to reach the hundreds of thousands of Wisconsinites who don't have internet access or a smartphone to file their claims, Pechacek said.
Modernizing in phases
The department chronicles progress on the project online with quarterly updates, which offer a window into its “iterative” or phased approach. Instead of implementing a “big commercial, off-the-shelf” software upgrade that would “tie us to that software for generations,” Pechacek said, DWD is updating the system’s computer code “module by module.”
That's the way the Department of Labor recommends states modernize their unemployment systems, Pechacek said. Already, officials from several other states have asked how they can follow Wisconsin’s lead.
With this strategy, Pechacek said, the state will “own” and maintain its own code, allowing it to update the system and accommodate new federal mandates without waiting for a technology vendor to come back.
“Our process has been really endorsed as the correct way to keep the government in line with their mission of serving people, and not be beholden to a tech giant and a pre-existing software system.”
