Maui’s initial unemployment and disaster unemployment assistance claims have soared to more than 15,000, and the state’s multimillion-dollar project to strengthen the unemployment insurance safety net and prepare it for the next economic downturn is back at the starting block.

State Department of Labor and Industrial Relations spokesperson Bill Kunstman said as many as 13,179 initial unemployment claims were filed on Maui from Aug. 10 to 30. Kunstman said federal disaster unemployment assistance claims (DUA), which were made available Aug. 24 for certain Maui beneficiaries beginning the week of Aug. 13, already have exceeded 1,237.

He said it’s too soon for DLIR to provide a breakdown of how many of these claims have been approved or denied or are in pending status.

“It’s certainly a huge spike (in 21 days), and we didn’t even have DUA until Aug. 24,” Kunstman said. “It’s a significant amount of people affected. We’ve been over there, and it’s really striking to be there in person. You see acres of rental cars gleaming in the sun when you fly in — it’s kind of heartbreaking.”

The island’s unemployment crisis is expected to worsen and the University of Hawaii Economic Research Organization is estimating Maui losses at $13 million a day, raising concerns that the system could become overwhelmed as it was during COVID-19. This level of unemployment on Maui has not been seen since the pandemic plunge, and Kunstman said the state is only at the stage of asking for proposals from vendors to take on the roughly $87 million Hawaii Unemployment Insurance Modernization project.

Kunstman said DLIR canceled the project after Public Consulting Group, a third-party conducting the project’s statutorily required independent verification and validation process, recommended to either pause the project or to terminate the contract and re- procure due to litigation that arose between Solid State Operations and its software vendor Netacent.

“After reviewing the advantages and risks associated with each option, we decided the vendor would not realistically meet their required goals and deadlines and that the best way to move the project forward is to procure another vendor to develop and implement the web-based application to replace the aging, legacy mainframe system,” he said.

Kunstman said DLIR paid SSO about $1 million based on milestones met for the HUI MOD contract, which was awarded in January 2021. He added, “Wherever possible, we will reuse any work products and results developed to date to implement as part of the new program.”

Kunstman said he could not comment on the project’s new timeline as it is currently in the request for proposal process.

However, Public Consulting Group estimated in its April 2022 IV&V report that terminating SSO’s contract and re-procuring it would likely increase modernization costs $20 million to $40 million and delay the modernization by at least two to three years.

Kunstman said the HUI MOD project is needed because the “current legacy application on the mainframe needs replacement.”

“The new platform will include benefits, tax and appeals; a robust fraud component, additional capacity to service Limited Eng­lish Proficiency persons, and other information technology improvements to better serve claimants and employers in an up-to-date, user-friendly web interface,” he said.

State Rep. Scot Matayoshi (D, Kaneohe-Maunawili-Kailua), who chairs the House Labor and Government Operations Committee, said he is hopeful that the upgrade will be ready in time for the next disaster.

“With global warming increasing, storms and all kind of fires and natural disasters, we are sort of waiting for the next big one to hit. But the good thing about the other contract falling through is that this new contract we have going out for bid now is a much more robust one. It’s a much more thorough overhaul of the UI system,” Matayoshi said.

State Rep. Sean Quinlan (D, Waialua-­Kahuku-Waiahole), who chairs the House Committee on Tourism, said he was disappointed to learn Friday that the upgrade ran into red flags. He expressed concern that relying on an old system again means using technology from 40 years ago, which increases opportunities for fallout and hiccups, especially during the mass unemployment event from the Maui wildfires.

“This is personally very upsetting. During COVID I dealt with all the unemployment claims in my district. I was personally calling back every single one of my constituents and spending six, seven, eight hours on the phone every day with people who were crying, people who you know personally. It destroyed me,” he said. “I hope that if DLIR needs more resources that they will not be shy about asking.”

Kunstman said after the onset of COVID-19, $2.8 million in pandemic federal funds was allocated to stabilize and harden the upfront web application, and an additional $2.7 million in federal funding was provided to the Office of Enterprise Technology Services to upgrade the current mainframe system and applications.

“With these enhancements to the upfront web application, we do not expect to experience the same filing issues that arose during the unprecedented unemployment circumstances that occurred during the COVID-19 pandemic,” he said. “Although the Maui wildfires have created significant economic disruption, it is on a vastly different scale than occurred when the state and nation were closed down during the COVID-19 pandemic.”

Kunstman said to date, the situation in Maui hasn’t resulted in major challenges to the call center and online application system.

“Typically, a majority of valid, eligible claims are paid within 21 days,” he said, adding that regular unemployment insurance and DUA applicants have up to 26 weeks of availability.

He added, “Current staffing levels are sufficient to address the increase in claims at this time.”

He said six staff members have been deployed to the Hyatt Regency Kaanapali to process DUA claims, which are funded by FEMA and apply to those who do not qualify for unemployment insurance and lost work as a direct result of the disaster.

Kunstman said DLIR added a questionnaire on the front end of the DUA site to help simplify the process by screening out people who would be eligible for regular unemployment insurance.

The Maui Claims Office and the American Job Center in Maui have remained open to assist claimants, he said. In addition, DLIR staff are stationed at the Disaster Recovery Center at University of Hawaii Maui College and assisting claimants.

Matayoshi said Maui legislators have complained that their constituents have experienced difficulties navigating the system.

“I passed these on to DLIR just to make them aware of the friction points in the system, and they are working on that,” he said. “One of the major points for Maui is that when your house is ash, you don’t necessarily have an internet connection that is reliable, you don’t necessarily have documents that are reliable to prove your identity.”

Matayoshi said in the first week after the fire, Maui legislators also reported that constituents were having problems submitting their applications successfully.

“They would log on and fill out part of the application. They might get kicked off. They would call sometimes to the call center and the call would be dropped because Maui is in a bit of a crisis right now,” he said. “When they would call back or get through again, the person woudn’t have the part of the application that they had already gone through.”

Matayoshi said DLIR has been working hard to respond with call centers. DLIR also moved up the launch of a partnership with the U.S. Department of Labor and the U.S. Postal Service to offer unemployment insurance claimants the ability to provide the identity proofing required to continue or initiate a claim for unemployment insurance benefits through two new sources: Login.gov and USPS in-person proofing.

However, some problems remain.

Cecila Arcilla, a Unite Here Local 5 member who applied for unemployment after she lost hours as a telephone operator at the Sheraton Maui, said the system can be confusing, especially for older workers or those with language barriers.

Arcilla said one common challenge is that backdating a claim requires calling DLIR. She said some representatives allow her to do three-way calls so that she can translate for the multiple claimants that she is assisting; however, others require her to call each time, which means going back into the line again and again.

Arcilla said phone calls also are required to figure out whether disaster relief, which some employers have graciously given in the form of gift cards, grants and extra pay, is included in weekly earnings.

“I have calls from other members who say it’s hard to stay on the line. They are so traumatized with what happened,” Arcilla said. “They are frustrated. They are going through a lot, and if they do it wrong they could miss out.”

Paul Maloney, who was displaced from his home after the Lahaina town fire, which also cost him his job as an executive sous-chef when Fleetwood’s on Front Street burned, said filing his unemployment insurance claim took about an hour. However, Maloney added that processing was delayed at least four days because the unemployment insurance site and the state job-seekers’ site HireNet were not communicating properly. He said he had to upload four resumes before the system would stop threatening to invalidate his claim.

Kunstman said HireNet registration and work search requirements for claimants on Maui have been waived for the week beginning Aug. 6 “in light of the economic circumstances arising from the disaster as well as the limitations caused to the telecommunications and transportation infrastructure.”

He said he didn’t know exactly when the HireNet waiver was implemented and that it was entirely possible that early applicants might have had problems because of the bandwidth.

Maloney said Friday that he still had not gotten confirmation that he was approved for unemployment insurance, and added that he is still waiting for his first check.

“It’s frustrating. I can just imagine people who have lost everything trying to do this. You’ve got all these things to do and you have to keep messing around with unemployment,” he said.