Unemployment benefit activity finally ebbing
June 23, 2011
The pressure on Idaho’s once-broke Unemployment Insurance Trust Fund is finally easing, but the impact of the worst recession since World War II is still being felt.

Regular unemployment benefit payments have been running below year-earlier levels for the past 18 months for both the number of recipients and amounts paid weekly. Regular benefits totaled just under $3.5 million for 15,000 jobless workers during the third week of June, less than half the amount paid during the same week in 2009 to nearly 27,000 workers.

But even that two-year decline leaves the state’s unemployment program at levels unprecedented before the recession that began in December 2007. During the third week of June 2006 when Idaho was in the midst of a significant economic expansion, less than $1.3 million in benefits was paid to 5,700 jobless workers.

To some extent, the declining pressure on Idaho’s regular benefit program is the result of workers exhausting their 10- to 26-week allotments without finding jobs and moving to federally financed extended benefits. Nearly 16,000 jobless workers received extended benefits during the third week of June.

In addition, over 10,000 unemployed workers have exhausted all benefits without finding jobs. Federal extensions run from 29 to 73 weeks.

The latest report from the New York-based Conference Board, a business think tank, showed there were still nearly four unemployed Idaho workers for every job opening in the state. Jobs listed with the Idaho Department of Labor’s 25 local offices have also been down dramatically from pre-recession levels.

The department has also been aggressive in ensuring that benefits only go to workers who qualify and that businesses pay the taxes they owe to finance the program.

During 2010, the department’s workforce consultants handled 20,000 disputed claims for benefits, ruling against the claimants and for the employers in 58 percent of those cases. Over 2,300 benefit claims were denied on grounds of suspected fraud, and nearly 5,000 because the claimant failed at some point in the process to actively look for work or take acceptable job offers.

Over the last four years, the department has recovered more than $16 million in benefit overpayments from claimants.

Even before benefits are paid, the department denied the claims of nearly four of every 10 workers who had been fired, a higher denial rate than 28 other states and 2 percentage points higher than in 2008 as the recession was just taking hold.

Benefits were denied to three of every four workers who quit their jobs. Benefits in those cases were allowed in cases where people quit for medical reasons, intolerable workplace conditions or similar circumstances.

At the same time, with unemployment insurance tax rates for employers at their legal maximum and the trust fund still owing the federal government $202 million it borrowed after going broke in 2009 and 2010, department audits of over 500 employers last year uncovered more than 1,000 workers who had not been properly reported for tax purposes. Those audits produced $7 million in wages that should have been taxed – and ultimately were.

Employers have immediate, around-the-clock access to the department to monitor their unemployment accounts, update business data like addresses and communicate with department staff in a secure environment on issues like benefit claims. This tool can help keep unemployment insurance costs under control, especially in the worst of times, but so far only about a tenth of Idaho’s employers have chosen to use the system that has been in effect for the last four years.