Executive Summary

The 2021 CARES Act helped keep 12 million families out of poverty and reinforced the nation’s wounded economy during the COVID-19 pandemic. But states faced fresh challenges as they struggled to deliver the new and expanded unemployment benefits the legislation provided.

Processing jobless claims and efficiently delivering benefits can be an issue for states during periods of stability. But even as the pandemic forced states to abruptly confront a steep increase in unemployment, the CARES Act presented them with fresh complications by creating new types of federal benefits they had to quickly administer. For example, the new law established pandemic unemployment assistance, which made self-employed and gig workers eligible for benefits for the first time.

A federal government study last year found it took states too long to get new, extended jobless benefits to people who’d lost jobs during the pandemic.[1] States encountered problems including complicated language in benefit applications that resulted in inaccurate responses on forms, slowing benefit payments and forcing state workers to spend time investigating and correcting those problems. 

Even so, the pandemic and the government response revealed valuable lessons states can use to handle future unemployment surges. That experience shows that in the first 200 days of 2023, states can take steps that would make their handling of benefit applications more efficient, reduce the burden on state workers and — importantly — better serve out-of-work people seeking aid.


This memo lays out meaningful actions states can take in the first 200 days of 2023 to strengthen their unemployment systems and improve how they serve jobless people who need assistance. These steps can also improve how taxpayer dollars are spent and help state officials and workers do their jobs. 

Take proactive steps to prevent future unemployment backlogs      

Help prevent future claims backlogs and other snags in the system by better measuring the number of pending applications and determining where in the process problems are occurring.

Evaluate identity verification solutions for equity and fraud

Improve how people’s identities are verified to guard against fraudulent applications, while getting benefits to qualified applicants and making sure disadvantaged communities aren’t disproportionately excluded.

Ground progress in measurable improvements, not modernization

Assess unemployment system improvements with data that measures how well the public is actually being served, not simply whether a mainframe computer has been updated with better technology.

Focus on quick wins that can improve the customer experience

Focus on improving how beneficiaries are served by prioritizing efforts in user experience and unemployment claims processing.


Every $1 spent on unemployment insurance under the CARES Act created $1.61 in local spending, according to a Bureau of Labor Statistics study. This helped keep the economy afloat during the pandemic. Nearly one in four workers relied on unemployment insurance to weather the pandemic, with insurance claims peaking around 30 million in late June 2020. Less generous unemployment benefits would have made the recession even worse, demonstrating how necessary these benefits were to families.

Yet states have faced significant challenges delivering these benefits. 

Coming out of the last recession, the American Recovery and Reinvestment Act of 2009 provided up to $7 billion for states to modernize their benefit programs. But in 2016, the Government Accountability Office, Congress’ nonpartisan auditor, asserted that only 40% of states had completed successful updates of their unemployment systems. 

Underscoring that disappointing performance, the experiences of states delivering unemployment insurance during the pandemic provided little evidence that the $7 billion in federal incentives had helped states improve the delivery of benefits. 

The U.S. Department of Labor Inspector General’s 2021 report highlighted that it took far too long for states to disburse payments — an average of 50 days under pandemic emergency unemployment compensation, which let states extend jobless benefits by up to 13 additional weeks. States also didn’t always follow federal Department of Labor guidance, leading to unnecessary hardship for workers while increasing improper payments.

During the first year of the pandemic, New Jersey and Arkansas worked with the U.S. Department of Labor to streamline complicated language that made it hard for people to apply for jobless benefits. That complication had caused some applicants to unintentionally submit inaccurate forms that took additional effort by state workers to investigate and correct. 

In response to these challenging experiences some states are prioritizing broad improvements that point toward a future when beneficiaries can navigate the application process more easily. Payments could begin the same day applicants file, and anti-fraud measures could curb benefit and identity theft without preventing legitimate claimants from seeking help. These states are starting to gather reliable metrics that track how well they are serving applicants and how equitably they are doing it across all populations.


The federal Office of Unemployment Insurance Modernization was created in September 2021.  It is attached to the Secretary’s office within the U.S. Department of Labor and works closely with the Employment and Training Administration, Office of the Chief Information Officer, and the Office of the Assistant Secretary for Administration and Management. The office recently released example initiatives and sample code from states and territories that agencies can implement to improve accessibility and claimant experience. This Office is part of an overall effort within DOL to help states strengthen their systems and operations. 

The DOL has approved Equity Grants to 31 states and the District of Columbia, totalling more than $157 million to date.[2], [3] Broadly, there are seven topics states can address using the grants: claimant communication, equity improvements through technology, translation services, data analysis to understand equity disparities, plain language communication, backlog reductions, and workflow analysis.

The DOL has also deployed technical assistance teams, known as “tiger teams,” to 30 states to work with state labor agencies in developing custom solutions to address equity, timeliness, and fraud prevention. The tiger teams are composed of multiple experts in areas like computer engineering and project management. The DOL has allocated $200 million for tiger team deployment. Equity recommendations have included a focus on improving plain language and providing better translations in communications to claimants. Timeliness and fraud prevention recommendations have focused on increasing automation for making determinations and improving cross matching efforts using the National Association State Workforce Agencies (NASWA) Data Hub.


Below are meaningful steps that state leaders can take at the beginning of 2023 to improve the resilience of their unemployment systems and the quality of the customer experience. In the first 200 days;

  • Take proactive steps to prevent future unemployment backlogs;

  • Evaluate identity verification solutions for equity and fraud;

  • Ground progress in measurable improvements, not modernization;

  • Take action to improve the customer experience.


Large claims backlogs can pressure state officials to make bad decisions about how to fix a systemic problem. 

During the pandemic, many states hired hundreds or thousands of new employees to answer phones and process claims. They then realized, too late, that these new hires could not get up to speed fast enough. Experienced claims processors spent so much time training new hires that states were processing fewer claims than they could before the new hires.[4]

States can avoid these mistakes by using the suggestions below to test the impact of potential changes before implementing them. 

Develop a real-time claims progress dashboard

Develop a real-time, easy-to-understand visual display of the number of jobless claims awaiting agency action and their progress as they move through the state system. Such a dashboard can help a state understand the amount of work in the queue and how many claims are in a backlog — typically defined as awaiting agency action for more than 21 days. 

Administrations are accustomed to using retroactive reports manually generated by humans. But relying on real-time dashboards can help prevent surprises like a huge backlog or secret waiting lists.[5] Making the switch to real-time data requires a culture shift, a transition that will take time. States can set deadlines with individual departments for converting their manual reporting to real-time dashboards. While it is unlikely that a backlog will reach zero, data on how long it takes to service claims can help measure operational efficiency and how well customers are being served. 

States can set targets to distinguish between routine backlogs and those that suggest a serious problem. The threshold for a problematic backlog could be when only 80% of all claims are processed within expected timeframes. 

Real time dashboards can also pinpoint where applicants might have unintentionally fallen out of the process, such as by not completing their claim because they were confused by the process. Dashboards can help states learn where they must improve customer service. A dashboard that refreshes key metrics at least daily can help leaders address upticks before they become a crisis.

An effective system will count all claims awaiting agency action at every step of the process, including unopened mail. It should err on the side of helping applicants, such as by counting claims if officials are unsure whether to do so. And it should at least meet the federal Department of Labor’s standard that at least 87% of claims should be paid within 21 days of submission.

The State of California defined its backlog in the Employment Development Department Strike Team Detailed Assessment and Recommendations (in Appendix A). Once leadership made the backlog a priority, it took California approximately seven weeks of concerted effort to define and instrument its backlog dashboard. 

Develop a working burndown chart, and test its capacity for sudden increases

Spreadsheets called burndown charts can help estimate how long it will take a state to process a current workload. These charts can help states develop plans for handling inevitable future surges in unemployment claims. 

A burndown chart will show the number of claims at each step in the process, the time it takes a worker to complete each step and the number of worker-minutes available daily for each step. The charts can also show how much additional work each step of the process generates, another useful planning tool for states. 

The spreadsheet should calculate how many days it will take to process the claims that come in today. This can let states adjust factors like the number of trained employees or employee hours they’ll need. It can also reveal changes they can make in their processes. For example, if a state lacks capacity to conduct certain required interviews, it could decide to waive some interviews.

Burndown charts can also help states identify opportunities for automation, such as steps like password resets that could be performed by strong systems. The goal is not to replace humans with computers but to ensure that eligibility specialists can focus on their most important task — approving claims for people who qualify. 

Set key performance indicators (KPIs) for processing unemployment claims

States can improve how they process unemployment claims by using data that measures progress toward improving the customer experience. The best goals are aimed at the desired outcome, not the overall process itself. For example, instead of saying “use cloud computing,” a key performance indicator should be, “the website is up at least 99.9% of the time.”

It is best to start small, because having too many key performance indicators can make it hard to prioritize. Consider selecting three major indicators and work with the unemployment agency on how to define and report them. Wherever possible, seek real-time dashboards, not human-generated reports.

Examples of indicators that can help reduce claim backlogs and other service problems include the number of claims in the backlog and average processing time. 

Helpful data can also be collected on how frequently people don’t complete applications, average time on telephone hold, how often problems are resolved during their first contact with the agency, how many applications are erroneously rejected and how often people appeal an initial eligibility decision.

Have a plan for standing up an integrated command center

These can be a way to make strategic, timely decisions during both crises and periods of stability. An integrated command center should be highly visible across the organization and have the authority to make decisions and changes rapidly.

Rather than setting up an integrated command center once a crisis erupts, it would be better to start it in advance so there is a functioning team ready to handle future problems. 

States that lack an integrated command center can start on a smaller scale. Rhode Island regularly reviews the 400 codes that kick applications out of the automated process to manual review. This helps them identify opportunities to increase automation. 

A command center works best when it is chaired by a single individual with sufficient authority. Meetings should rely on the real-time data and reports described above. 

A well run command center, staffed with program and technical experts was a critical part of the solutions credited with fixing HealthCare.gov, the Obama administration’s website for registering for Affordable Care Act coverage, which crashed when it was initially unveiled in 2014. The HealthCare.gov rescue team, which subsequently became the California Unemployment Strike Team, has written best practices for running an integrated command center.


One of the most important pillars of an unemployment insurance process is an effective, highly automated identity verification process with thoughtful “escape hatches” to trained workers if needed. That helps fight fraud while providing the self-service that people expect.

There are two main types of unemployment insurance fraud. Benefit theft is when a person provides false information to increase the benefits they receive in their own name. Identity theft is when a criminal impersonates a different person to obtain benefits. 

Before the pandemic, only about 1% of unemployment fraud was identity theft.[6] But during the pandemic, the number of fraud cases involving identity theft exploded.[7] Pandemic Unemployment Assistance, which made self-employed and gig workers eligible for unemployment benefits, suffered because many states had ineffective identity verification methods. Until the pandemic, identity verification fraud for jobless benefits was harder because applicants had to provide verifiable information about their former job. 

But the Pandemic Unemployment Assistance Program made identity theft that led to fraud easier because the identity information needed to apply relied on easily obtainable information like names and Social Security numbers. In many states, criminals’ neatly formatted spreadsheets of tens of thousands of stolen identities sailed through automated claims systems. At the same time, desperate, real claimants who typed “Kathy” instead of “Kathryn” on their application were held up for months awaiting manual review prior to payment.

Many states took measures to strengthen their identity verification methods during the surge of pandemic unemployment claims. While these measures helped decrease the flow of fraudulent claims, they also put in place new barriers to rightful claimants.[8]

Evaluate your identity verification solution for equity and effectiveness

The National Institute of Standards and Technology (NIST) is the federal gold standard for secure identity verification. States can see if they meet these standards, such as enabling two factor authentication, by checking independent auditing bodies like the Kantara Initiative for a list of NIST-compliant vendors. States can also look to this recent publication by the Cybersecurity & Infrastructure Security Agency for practical guidance on implementing multi-factor authentication. NIST recently released draft updated guidance, and is accepting feedback through March 2023, with full adoption of the updated guidance in federal fiscal year 2024.

Applicants should be able to reach a trained worker the same day they apply, either through a wait time, call back or appointment scheduling feature. This can help make sure applicants having problems with an automated verification process can get additional help from a worker. The Kantara Initiative also has information about which providers make workers available to applicants when needed.

People should be able to verify their identity in person, such as at state offices or United States Postal Service locations and at United Parcel Service stores. States’ Department of Motor Vehicles (DMV) are another potential option.[9] Per REAL ID requirements, in-person applicants without a valid ID (e.g., with an expired license) can use their birth certificate for identity verification. 

People who do not have a bank account often have difficulty passing identity tests that rely on credit histories. States should evaluate solutions that claim to rely on data in records alone with a skeptical eye — 45 million Americans have little to no credit history.[10] This data has also been compromised via prior breaches for most banked Americans. NIST has advised states to not rely solely on knowledge-based proofing. 

Other best practices to improve identify verification include:

  • Set an expectation for completing identity verification the day the process begins. This should be possible whether an individual is relying on an automated process or a trusted referee, a trained customer service agent to help prove the individual's identity.

  • Accept all variations of people’s names and make sure the process is provided in multiple languages. Over 67 million Americans speak a language other than English at home.[11]

  • Align state and vendor incentives, such as by paying for identity verifications which are completed, not just attempted.

  • And retain records appropriately. Follow National Archives and Records Administration document retention guidelines for retaining copies of the underlying identity documents.

Monitor for equitable outcomes

When many applicants drop off at the identity verification step, it may mean the system is successfully preventing fraud. But it could mean people are too confused by the process or have run into other problems. Auditors have flagged some states for using identity verification methods that systematically disadvantage certain communities.[12] States can prevent this by:

  • Using NIST identity verification standards, which are routinely improved for equitable outcomes.

  • Gathering data on the total numbers of people applying. Audit fraudulent and high-risk claimants to ensure fraud estimates are accurate and are not masking poor service.

  • Measuring jobless claim results by race and ethnicity and investigating disparities. Look for disparities in rates of denial, appeal and award, and also the rate at which applicants are denied based on identity verification alone.

Build sharing opportunities across state agencies

Sharing data across agencies can reduce the burden on staff, save the state money and improve the public’s experience. States that have compliant identity proofing at one agency, like the Department of Motor Vehicles or tax board, may be able to rely on that identity proofing when individuals apply for unemployment. 

Governors can ask agency officials for a list of places where their state verifies identities online and how it’s done. If a state’s unemployment agency does not use identity proofing from other state agencies, ask why. Be sure to avoid expanding any existing identity verification processes that are not compliant with best practices. 


Newer technology is not inherently better than older technology. There are ways to assess whether modernization of technology and other changes are making actual improvements in how states deliver jobless benefits.

Center the lived experience of claimants and staff who use the system

To enhance the unemployment program so it works for the people who use it, states must involve actual users in every step of the process. Nava — a public benefit corporation that helps government agencies modernize their systems and improve user experience — conducted research that has shown that communicating with applicants during the process can decrease stress and workload for call center workers.[13]

State officials can look for user research activities in procurement statements of work. When checking in on how a project is going, routinely ask how the public is responding, what the agency did to address people’s concerns and how constituents responded to those updates. 

Employees and contractors who use the systems should also be consulted from day one to get their improvement ideas and buy-in.

Tie funding and approval of multiyear improvement projects to key performance indicators 

States can measure how people are being served in unemployment benefit systems to encourage a state’s unemployment agency to start with small but meaningful changes that staff and claimants can feel.

Some states make funding contingent on agencies achieving goals. Before approving a 10-year, billion-dollar budget, a state might require a series of smaller projects that demonstrate success, as measured by performance data. This provides feedback faster than a decades-long, big-bang modernization plan could and allows leaders to change course when results do not meet expectations.

Adopt an iterative approach to technology updates 

Resource-strapped states may be relieved to learn that new technology isn’t an all-or-nothing decision. No state has ever fully replaced a legacy mainframe system in unemployment or any other benefits. 

Instead, states can gradually replace a mainframe with newer technology. It’s more effective than multiyear planning projects that are meant to design a “perfect” end-to-end future solution.

States using best practices initially focus on improving just one part of the unemployment insurance process, such as checking claim status or filing lower-level appeals. Or they might move first on beginning an innovative new process like same-day payments or gig worker wage verification.

When doing this, states should redesign the process to reflect users’ experience and what they’ve learned from using data to measure progress. This step is likely to involve a lot more business process and policy redesign than technology.

The redesigned process should exist outside of the old system mainframe a state is working to replace. If the mainframe has constraints that hurt user experience, make the improvement with the new technology with the least amount of integration necessary between systems.

For example, Rhode Island’s mainframe cannot store names with special characters like apostrophes. Instead, they provide claimants an inclusive name input field where users can enter their names accurately, and then the new field stores a separate version of that name that can be read by the mainframe. The name is changed behind the scenes to transmit to the mainframe.

To help make these step-by-step improvements, states could appoint a product manager. This person would own the end-to-end process and help leadership make informed decisions based on key performance indicators.

For more background, states can learn from New Jersey’s success using an iterative approach to procurement.


Provide a way for people to track the status of their claim

To reduce contact center volume and increase public satisfaction, make it easier for claimants to track their own claim status. Many states including North Carolina and Oklahoma have improved how claimants can do this. 

The most successful claim status trackers feature self-service online and by phone, have plain-language explanations of claim status and what to expect next, give clear steps for claimants when they need to take action and provide “push” updates by email or text messages. 

During the pandemic, some states were able to start self-service claim status trackers in a matter of weeks. 

To get started, states can review the information that front-line call center agents are able to easily provide over the phone. Then look for ways to make that information available for self-service. Once the status information is translated to plain language, advertising it to claimants can significantly reduce call volumes and allow staff to prioritize the cases that need more specialized assistance.

Implement tools for real-time monitoring of system reliability

Monitoring all systems involved in processing unemployment claims can provide valuable information about downtime, slow response times and error rates. If a website is down or there are slow response times or other problems, leaders should be able to see this on a dashboard in real time, not learn about it from constituent calls or an after-action report.

Tools for monitoring systems are not particularly expensive and require little maintenance. If it will take significant time to get long-term solutions in place, consider free or low-cost tools that can at least regularly ping a site or application to ensure that it is up and running.

Call center agents should have access to a dashboard tracking outages. It creates a much smoother experience if they can immediately verify an outage to callers versus trying to troubleshoot many individuals’ connections.

Use plain language for applications and instructions on how to use them 

This can make the unemployment system much easier for people to use and reduce the workload on agency staff. 

For advice, states can ask local nonprofits and grassroots organizations to highlight their constituents’ biggest challenges navigating unemployment applications. They can also consult frequently visited state agencies like the Department of Motor Vehicles and community-based service providers for more help in using clear, plain language in English and languages common to the area. 

There is a common misconception that any language at the state level must be approved by the U.S. Department of Labor. But in fact, the federal government is trying to take steps to clarify that states can use their own language without approval. 

States do not have to start from scratch when developing plain-language materials for unemployment. Here are some resources to build on:

Use inclusive lists of names

Most unemployment benefit applications might reject people based on their real names because of issues with a name’s length or special characters like hyphens. Common names like Wu or O’Brien will encounter problems in many systems: Wu might have too few characters or the apostrophe in O’Brien might trigger an issue. 

To prevent this, states could try giving this list of real names to their unemployment division to have them confirm all these real names work in your current system.


The first 200 days of 2023 are key for states to understand their unemployment systems and to benefit from quick wins that demonstrate their ability to make improvements. After showing they can bolster services to people and understand how proposed changes would improve their efficiency, states can begin even more ambitious upgrades. 


While every state has its own rules and processes for unemployment claims, there are many shared goals and steps. Rather than tackling every possible improvement from step one, states can learn from each other and collaborate. This can be as simple as testing plain-language application form questions in one state while another tests the best options for an automated contact center menu.


It would be smart to pick one specific part of the system and improve it at every level — considering the process, policy, user experience and technology — then use data to measure how effectively the changes are working over time.

But this approach should not be used only once. States should continue improving their unemployment systems, piece by piece, over time. 

It could be tempting to fall back into multiyear planning efforts for “big bang” or “rip and replace” improvements for subsequent problems. Subsequent processes may hit unforeseen challenges or be harder to fix. Support from state leaders to stay the course will be key to deploying a better unemployment system that meets the needs of beneficiaries, taxpayers and agency workers.