On May 19, Governor Ralph Northam directed the Virginia Employment Commission (VEC) to invest $20 million to dramatically expand the agency’s ability to process complicated unemployment insurance claims. Executive Directive Sixteen required the agency to add 300 new adjudication staffers, make immediate upgrades to technology, and complete a full modernization of the commonwealth’s unemployment insurance system by October 1, 2021.
While Virginia ranks highly on a national scale for the timely payment of benefits to eligible applications, the Governor’s action will speed up the resolution of cases flagged as potentially fraudulent or ineligible. The cases represent about four percent of all unemployment claims.
If an individual’s initial claim is flagged for potential ineligibility or fraud, federal law requires the Virginia Employment Commission (VEC) to adjudicate the claim before proceeding with payment. Most individuals that are placed in the adjudication process are ultimately found ineligible for benefits.
The commonwealth’s unemployment system was originally set up to benefit businesses, not workers, and it has remained one of the lowest-funded systems in the country for generations. In fact, Virginia ranks 51 out of 53 U.S. states and territories (including Guam, Puerto Rico, and the U.S. Virgin Islands) for the amount of federal funding it receives relative to what Virginia businesses pay in taxes. The problem was hidden by years of low unemployment and a consistently strong economy, but the pandemic has brought the reality to light.
Despite being underfunded, Virginia’s unemployment insurance (UI) system has successfully distributed $12.9 billion in benefits to more than 1.3 million eligible Virginians since the pandemic started. Approximately 85 percent of Virginia applicants receive unemployment benefits within the first 21 days, making Virginia sixth in the nation—and first in the Mid-Atlantic region—for delivering unemployment benefits to eligible individuals.