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Less than one-third of Hawaii’s unemployment claims have been paid since March 1

  • CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM 
                                Fewer than one-third of Hawaii’s unemployment claims have been paid since March 1, when COVID-19 started wreaking havoc on the state’s economy. Zippy’s on Kapahulu Avenue has a banner for its temporary closure.

    CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM

    Fewer than one-third of Hawaii’s unemployment claims have been paid since March 1, when COVID-19 started wreaking havoc on the state’s economy. Zippy’s on Kapahulu Avenue has a banner for its temporary closure.

The state Department of Labor and Industrial Relations has paid less than a third of the unique unemployment insurance filings that it has received since March 1, when COVID-19 started wreaking havoc on the state’s economy.

DLIR spokesman William Kunstman told the Honolulu Star-Advertiser on Monday that the department received 221,731 unique filings out of 309,765 unemployment filings received between March 1 and and April 26. Total filings are higher because some frustrated workers have filed more than one application.

DLIR has processed 181,846, or 82%, of the unique filings but so far has paid claims for only 65,252 filings.

As of Monday, DLIR’s backlog consisted of 116,594 in processed claims that were still pending payment and another 11,759 claims with filing errors that haven’t been processed yet.

Sonia Hara, who was laid off March 21 from her job as a Hilton Hawaiian Village Waikiki Beach Resort housekeeper, is among the tens of thousands of state applicants still waiting for their first check. It took Hara until April 3 to get into the overwhelmed DLIR system to create an unemployment claim, which as of Saturday was still pending.

“I haven’t received anything yet and no details are available,” Hara said. “I’m a single mother. I need money to pay the rent and meet my basic needs.”

Hara said many of her co-workers are in the same boat. However, some of those with less seniority, who filed for unemployment sooner, have gotten their first checks.

In March, DLIR distributed $15.6 million, representing 29,992 weeks of unemployment insurance payments. From April 1 to Friday, DLIR distributed almost another $116.5 million in state unemployment insurance trust money and federal money.

Pre-COVID-19, the average weekly benefit was $515. Kunstman said DLIR hasn’t had time to analyze the average weekly individual benefit during the pandemic. However, it’s likely to be higher, since the department has begun to distribute CARES Act federal plus-up funds, which give claimants an extra $600 weekly for up to four months.

Kunstman said the additional capacity provided by operations at the Hawai‘i Convention Center helps in attacking the backlogs.

“If eligible, any individual can expect benefits in fifteen days,” he said. “However, if there are any mistakes on an application, then it requires either manual or interactive follow-up. Applications are complicated, it is quite easy to use the DBA (doing business as) as your employer or not report accurate total wages earned.”

Of the pending claims, so far 78,054 have required interactive correction, and 38,540 have required manual correction, Kunstman said.

Since March 1, DLIR has denied about 28,126 applicants, or roughly 13% of its unique filings.

Some of the those denied might be eligible for federal pandemic unemployment assistance. The federal funds, which were approved as part of the CARES Act, offer support for self- employed, independent contractors, gig economy workers and freelancers. The PUA program also might cover some people who are seeking part-time work, lack sufficient work history or otherwise don’t qualify for regular unemployment compensation or extended benefits.

But the state won’t distribute any PUA funds until it builds a new system to handle the claims, which don’t fall under the state unemployment insurance trust. Kunstman said Monday that the PUA system has entered the testing phase, and “we hope to announce an update to the early May target day in the near future.”

State Sen. Sharon Moriwaki (D, Waikiki-Ala Moana-Kakaako-McCully- Moiliili) said she has some questions for DLIR Director Scott Murakami, who is expected to address the Hawaii Senate Special Committee on COVID-19 at 11 a.m. today.

“We’ve been pushing, but the system doesn’t push very fast,” said Moriwaki, whose districts were particularly hard-hit by the pandemic lockdowns that collapsed tourism.

“The director is just beside himself. They were trying to fix the bad computer system before, but lawmakers didn’t give him the money. He didn’t have enough staff,” she said. “It’s the perfect storm.”

Moriwaki said other state departments have augmented DLIR staff, but she wonders whether a third shift could be added to speed claims processing.

Hara recommends reducing website traffic by allowing employers to make claims for their workers in batches, which would reduce individual traffic and streamline employment verification steps.

State Sen. Laura Thielen (D, Kailua-Lanikai-Enchanted Lake-Keolu Hills-Maunawili- Waimanalo-Hawaii Kai-Portlock), who volunteered to assist DLIR in processing claims last week, said she’s sent suggestions to Mura- kami, Gov. David Ige’s Chief of Staff Linda Chu Takayama and the Senate’s COVID-19 committee.

Thielen proposes reducing call volume by assigning days of the week to callers based on their last name. She also thinks it might be prudent for DLIR to advise people to wait until they get approved for a claim before starting their weekly/ biweekly certification.

“People are complaining that they can’t get through on the phone and they can’t get into the system to certify their claims,” she said.

Thielen also wants the state to consider issuing nominal payments, especially for PUA applicants, even while claims are processing.

“This is an insurance system, so I think there is kind of a fiduciary responsibility to be cautious with how it goes out,” Thielen said. “But I would encourage the state to be willing to step out of the traditional comfort zone to get payments to people quicker even if that means maybe taking a risk and even if that means the state may end up having to cover some of the payments themselves.”

Thielen said if the state doesn’t get money into the hands of people now, it could face dire longer-term community consequences.

“Too many people are living paycheck to paycheck, and now we’re into the second month,” she said. “There’s only so long that you can tell people to hang on.”

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