Florida unemployment office, the ‘poster child’ of delayed benefits, cuts 1,000 workers

Florida’s unemployment office is cutting nearly 1,000 workers from its call center — around a quarter of its representatives — at a time when the state’s jobless claims continue to rise and long wait times persist.

The Department of Economic Opportunity, which administers unemployment benefits in Florida, ended contracts with two companies that supplied hundreds of contractors to field phone calls from laid-off workers.

The firms, AECOM and UDT, respectively, had around 800 and 155 representatives working on the account, according to department spokeswoman Paige Landrum.

They collectively represent about a quarter of the Department’s customer service representatives. It is unclear whether additional workers will be hired.

The reason for the cuts is hazy. The Florida unemployment office maintains vendor performance was lagging, while the third-party agencies hinted the reason was due to state funding shortfalls.

But the claw-backs come at a time when the nation’s unemployment rate, though slightly improved over the last two months, remains at a level higher than any other time since the Great Depression.

Around 32 million Americans are collecting unemployment benefits, according to the Labor Department. That’s about five times the peak during the Great Recession a little over a decade ago.

Nearly 890,000 people were receiving aid in Florida as of July 4, according to Labor Department data. That’s more than double the figure two months ago in early May. Another 129,000 people applied for benefits last week.

“I don’t know how Florida doesn’t need more people,” said Linda Stewart, a Florida state senator. “Our unemployment rate is going up, not decreasing.”

“[The state] has done somewhat of a good job at paying out people,” said Stewart, a Democrat. “But for every thousand who get their money paid out, we have another thousand furloughed or laid off.”

Florida has paid about $10.1 billion to 1.7 million eligible applicants since mid-March, according to the Department of Economic Opportunity. About 3% of eligible claimants remain unpaid.

All state unemployment offices have been strained by an unprecedented number of benefit applications and a deluge of phone calls.

States were staffed according to unemployment levels that had been at their lowest in a half century prior to the coronavirus pandemic.

They’ve had to ramp up operations quickly to handle a recession that hit faster than any previous downturn amid widespread stay-at-home mandates.   

But Florida has been “the poster child” of poor state administration, especially earlier on the crisis, according to Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research.

It has taken some out-of-work residents months to get paid — not unlike the experience of some in other states.

And some have had to wait hours to get through to a representative on the phone, according to Stewart, whose said her office functions as a quasi-unemployment call center for constituents.

Florida’s governor, Ron DeSantis, a Republican, who oversees the Department of Economic Opportunity, replaced the head of the unemployment division in April, with the stated goal of improving administration.

Stewart fears the recent cuts to call-center representatives will significantly cut the number of phone calls fielded by the Department.

But it’s hard to judge if the situation will get worse, she said, since the Department has indicated it will offer more training to its remaining staff.

It’s also “prioritizing vendors who have fully trained representatives to handle all claimant issues, are meeting or exceeding contractual performance expectations and providing high-quality customer service to Floridians,” a Department spokesperson said, referring to the state’s unemployment system.

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“The Department will continue to monitor resource demands and needs to ensure service levels for Floridians will continue to improve,” the spokesperson said.

Meanwhile, UDT, one of the contractor firms, said it “has been continuously reassured that performance is not the reason for the termination,” according to a company spokesperson, who said its contract will end on July 23.

Rather, it appears state funding for operations may have been part of the issue, according to an official with AECOM, the other vendor.

“AECOM stands ready to assist the State and the DEO should their needs change or funding to support this type of operation become available,” a spokesperson said via email.